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When a dealer says "My online prices are rock bottom, because we must complete on the virtual playing field"....how full of sh*t are they? Entirely, or just a little?
Except the total lack of market transparency means that MSRP is a made up number.
Quote:
Originally Posted by Hollywood
How do you feel about real estate agents?
The same-I addressed this earlier and don't want to veer further off topic, but real estate agents are even more galling in that even the thin arguments that support the car dealer model don't translate. There is no manufacturer who ships the house overseas to it's destination, no factory trained technician to service it, and no warranty work to be done. Within minutes I can find out 90% of what I need to know about the house (taxes, neighborhood, recent sales, comps, school district, etc...) and the other 10% I find out when I get there. Again, hopefully continued greater access to technology will eliminate the need to pay a 7% commission to someone whose usefulness these days is limited to knowing the code on the lockbox hanging out front.
It's okay for the service department to charge somebody 120 bucks an hour to pay a mechanic 20 bucks an hour to fix their car (that's about a 600% markup) but making 5% on a 50,000 car is robbing them blind
this is how the general public thinks
They've got to be making more than 5 percent or they wouldn't be in business.
Depends on the product - computers, very minimal. Stereo stuff, massive - sometimes over 50%. TVs and associated stuff, still pretty good - anywhere from 15% to 60%.
That's called "buying the car at MSRP". As stated before, you are free to go into any car dealer, offer them to buy any car at MSRP, and you'll be out of there quickly. No hassles whatsoever. They'll even bring the car to your house if you want, and sign the paperwork in your living room. I've seen it done many times. You won't have to leave your couch.
Hah, they'll still try to stick you with useless add-ons, warranties, etc. They see a whale that is willing to pay MSRP as an opportunity to upsell more and more. No chance you're getting out of there in an hour.
You'll be up to your eyeballs in them trying to sell you new carpeting, leather, navigation, car wax protectant, johnson rods, blinker fluid...because you're the sucker who is paying full price
Exactly. Should I have to pay a $500 document fee on top of all this also?
Don't forget $200 nitrogen filled tires or $400 window etching or $300 Scotchguard
Yes I can and do say no to these things. But why bother with the shenanigans. Don't offer junk like this in the first place.
If you don't ask, you'll never get it. There's nothing wrong with asking for it. It's when they try and force it on you or won't be reasonable about pricing that it becomes an issue.
But don't be upset that a business wants to sell ancillary items to increase profits. It's called running a business.
Car dealers/manufacturers are solely responsible for this mindset and here is why: Everyone knows that you cannot walk into a Supermarket, Home Depot, a Wal-Mart, or for that matter, log-on to Amazon, and negotiate. If you want something, you either pay the price on the tag/sticker and take possession of it, or not. Car dealers and car manufactures created this whole circus of smoke and mirrors negotiating around car buying, so while a consumer can walk into a store and be confident that he's not paying any more (or any less) for a box of Wheaties at Piggly Wiggly in Arkansas than a guy at Shop-Rite on Long Island, the same is not true for a consumer shopping for a car.
Consumers hear wildly inflated MSRPs, then have to sort through the noise of "WE'LL GIVE YOU A CHECK FOR $5000 BACK," or "WE'LL GIVE YOU $5000 OFF THE DEALER POSTED PRICE," "WE'LL BEAT ANY PRICE" or any of the other shell game tactics used, so they have very little ability to determine whether or not the price they're paying is fair. If there were such a thing as a "Toyota store," if I really wanted to be thorough, I could call the "Toyota store" in my town and find out the price of a new Corolla. If I then called five other "Toyota stores" across the country and was told the exact same price, I could be confident that I was paying a fair price that was determined by the market.
You can log on to Edmunds and see the general fair market price in about 30 seconds. Gee, that took a lot of effort.
You aren't concerned about your time or a "fair" price, you just don't want to be "beaten" by another person in negotiations.
Is it true some manufactory have a hold back which is given to the dealer if they achieve a set target customer server result?
I bought ten new cars from a dealer of semi luxury Asian brand. I was in and out in less than an hour and the deal was always cut with the 'GM' both looking at a screen with all deal variables show to me real time as we finalized the deal. I didn't see invoice on the screen but knew it from my preparation. My dealer always cut the 'msrp' to give me a good deal and lowered the usual price me lower if they had 'monet in the trunk' he called it from the manufacturer as a rebate. I bought from them even after moving away because the didn't waste my time and treated me well. My salesman showed me the car choices in terms and introduced me to new features after making it ready for me. The reliability of this brand was bullet proof. After the GM moved on the owners would give me the same deal as he did. I recommended this operation to many friends and work associates which sold another dozen cars. I saw value add and a very efficient operatiot.
I was aware of results of the store. Even as one of the second tier and slower selling brands the dealer did well. He made most money from used car sales and service. Service operation wasn't large and relied on scheduled maintenance for most work. The profitability is highly related to allocation of fixed cost like re facility itself which he allocated to new car ops for his a alysis.
I never saw how much the customer service hold back was. The GM knew my hyper nature and handled me accordingly. He also had business cards of a competing dealer he would send a few rare buyers who would demand a no profit deal then give low customer service marks on top of no profit, he would send them to the next dealer because his comp depended on ratings and profit margin as well as sales volume. My sales guy did 20 new cars most months.
Except the total lack of market transparency means that MSRP is a made up number.
The same-I addressed this earlier and don't want to veer further off topic, but real estate agents are even more galling in that even the thin arguments that support the car dealer model don't translate. There is no manufacturer who ships the house overseas to it's destination, no factory trained technician to service it, and no warranty work to be done. Within minutes I can find out 90% of what I need to know about the house (taxes, neighborhood, recent sales, comps, school district, etc...) and the other 10% I find out when I get there. Again, hopefully continued greater access to technology will eliminate the need to pay a 7% commission to someone whose usefulness these days is limited to knowing the code on the lockbox hanging out front.
If we were not useful, we would have been eliminated a long time ago. The market says we are worth it, and so we are worth it. Your opinion or protest is irrelevant. People keep paying us, and the Internet has only increased our business and market penetration, not decreased it. Travel agents are gone, real estate agents are very much here to stay.
However, our industry is better than the hustlers who live in the world of car sales. Because you don't have to use us. You can do it all by yourself and not pay us a cent if you don't want to and have the requisite knowledge and experience.
No such luck in the Hustler's World of Car Sales. You buy through a dealer or you don't buy at all. So you have to play their stupid game and you are forced to wander through their smoke and mirrors and you are forced to descend to Foggy Bottom.
The world of car salesmen "behind the scenes" is much like the stock market hustlers in the movie "The Wolf of Wall Street" or the real estate hustlers in the movie "Glengarry Glen Ross". The car hustlers HATE the public, but DEPEND on the public, which makes them HATE the public even more. The whole system is sick and should be eliminated.
However, I'm weird, but I enjoy the car buying game. I am a car salesman's worst nightmare, and I enjoy playing that role.
My thoughts just wandered to those obscene and stupid Brad Benson ads. I would ride a horse before I'd buy a car from that hustler.
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