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Sigh. They did. It is called the MSRP. If it makes you feel better, drop the "S".
Riiiiight.
Quote:
Originally Posted by Badfish740
Can we please stop acting as if MSRP is a number that's grounded in reality? It's an artificially inflated starting point and nothing more. I'm betting that if you actually were able to analyze the number of cars nationwide that sold for MSRP it would be exceedingly low, which would prove that it's higher than the market would normally bear.
Exactly. MSRP has never been a "set" price. The vast majority of new cars sell for less than MSRP. That's a fact that even Tourian can't dispute. (Oh who am I kidding, he'll try.)
If we took used cars out of the equation, and let dealerships just be service oriented, and no sales, then the MSRP would actually have some meaning as the manufacturer set the price. A person buying in TX would pay the exact same as someone in North Dakota for the same model with the same options. There'd be no need for haggling, worrying about whether you got a good deal or not, and you could eliminate salesman completely.
Frankly, the system only exists today the way it does is because of all the independent dealer owners. If they were suddenly relegated to doing service only, it would hurt their bottom line, or so they think. On the flip side, I think you'd see a rise in the number of new cars sold if more people didn't have to go through a haggling experience over pricing, and could just go test drive a similar model they want to buy at a dealership, then go home and order their model online or even at the dealership.
The manufacturer could give the dealership owner money as a percentage of the sale, instead of the sales team having to try to maximize dealer profit.
If you disagree with a point I've made, then refute it.
i meant to say Co-sign. Stupid iPad.
I will lightly disagree on the Best Buy thing as bringing up what they say they mark up any certain item isn't relevant since their entire cost structure kills that.
I will lightly disagree on the Best Buy thing as bringing up what they say they mark up any certain item isn't relevant since their entire cost structure kills that.
Gotcha. Yes, there are exceptions. I didn't work there personally either, I just know from the discounts my friend received (granted, it was probably 15 years ago.)
But their total markup could be anywhere from 40-100%... but actual profit of course is far lower. A person can usually buy the same item cheaper online somewhere... and that difference is due to the cost structure you mention.
If the dealers were removed from the equation and the cars were just sold at factory outlet stores the manufacturers would have to respond to market forces and price accordingly. Instead of the consumer having to cajole the dealer into selling the vehicle at market price, the market would dictate the price the vehicle. Manufacturers who set their price too high would be stuck with inventory that wouldn't be sold until the price was lowered to a price the market would bear. Again, it's hard to believe that high school level economics is escaping people on this thread.
Bad Idea
It would be a race to the bottom in terms of quality. Cheapest wins.
We would end up with the equivalent of the Yugo.
I've had enough of that **** from Walmart.
I have purchased and leased my last 6 or 7 cars without stepping into a dealership except to A) test drive the vehicle (and I explicitly told them that I was there to ONLY test drive, that I wouldn't be discussing price/negotiating at all-- literally test drove the car and then drove off in my own car afterwards) and to B) sign and drive away with the vehicle.
I've also helped a half dozen friends negotiate car deals the same way, all over the country-- it's seriously fun for me; so much so that I've honestly considered negotiating car deals for others as a business.
Three of the vehicles I purchased were CPOs-- 2 of which I purchased sight unseen without ever going into the dealership and had shipped to me from over 1000 miles away; one for a Yukon XL Denali and the other for a Saab 9-5 Aero Wagon; they both were seriously AMmazing deals and I was able to see zillions of photos and all of the service records-- otherwise it wouldn't have been worth the risk.
ALL of my negotiating was done over email and/or phone, almost always with the internet sales department-- if a dealership won't deal with me over email and/or phone, then I move on to the next one-- especially for new vehicles (they're a commodity, after all!); I generally use the excuse (which is true!) that I have three small children and I genuinely can't get to the dealership without the kids tagging along and between hockey and softball, that it's unlikely that I can get in there at ALL-- that usually gets them more willing to deal with me over the phone
I use both TrueCar and and Edmunds' forums to determine what I could reasonably expect to pay for a new or leased vehicle-- for used, it's a bit trickier as KBB isn't a great guide, but it's better than nothing-- also comparing vehicle prices on cars.com, carsdirect.com, etc.
I tend to be SUPER nice when negotiating; the whole "you get more flies with honey" thing is definitely true -- and first ask them to give me their best price-- before asking them to beat whatever price(s) I already have. I also use their own tactics against them and make them sweat it out, much like they do when they hold you hostage and talk to their manager (I always hang up after saying "I will consider the offer and discuss with my husband", even if the deal is the best one I've received)-- and make my husband into "bad cop" and say that he's the one that is holding up the deal, if they can please make both their life and mine easier by lowering the price to get him to agree. Little do they know that my husband couldn't care less-- he definitely has a big say in WHICH cars we buy, but the negotiating is all my gig.
There's zero reason to go in and play the dealer's game-- and no excuse for not doing a bit of homework when there's SO much easily found info out there. Just my $.02!
Car sales is a psychological game. For those who excel at it, the skill they have is to read the profile each customer presents. Some are the dealmaker, who have to feel that they have won something. Some want to be pampered. Others, like me, want to be left the hell alone to choose what I like. My bad dealer experience was looking at a Ford Fusion. I wanted to trade my old car, had a realistic valuation on trade, plus some cash down, ran the price through an amortization calculator to check the payment, at interest reasonable for my credit tier. I knew exactly what I wanted and could afford. The salesman wouldn't talk price at all, just said, how much can you afford for the payment? I said I would discuss payment with the finance people, I just wanted him to take me for a test drive. He started again about how the payment would be at least this much, and if I couldn't afford it that there was no point in a test drive. He could show me a Focus. I said, "I don't want a Focus". I walked off. He followed me across the lot wailing "Why you waste my time?"
The best salesman I came across figured me out as soon as he pointed me towards a Dodge Stratus
and I said "those are ****." He said to me "you look at whatever you like, and we'll make it happen."
I picked two to test drive, he let us drive both of them. We filled out a credit app, and I gave him a payment amount that I was not willing to exceed. Both cars were priced above what I thought I could afford using the amortization calculator. (This was our first financed vehicle after getting married. We were young and vulnerable.)
The next day we faxed them pay stubs and w-2's.
The day after, he called us and said come get your car, and the payment was under budget by $40.
I don't know what he made or didn't make on that deal, but at Christmas he got a good bottle of Scotch and a C-note from me
It's all about letting your customer tell you what they want. They do that with more than words.
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