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#4486852 - 08/12/17 08:43 PM Why new car dealers have a bad rep
fdcg27 Offline


Registered: 09/25/09
Posts: 14499
Loc: OH
It's really a bad rap.
I'll leave the used car end of the business out of the discussion, since each used car is an individual example, while all new cars of any given model are identical. New cars are fungible goods.
Now, most people don't get mad when they realize that they paid double for an item of clothing compared to what they see it on clearance for four or five months later. Most don't get angry when they see the price of a good imported cheese or a decent or very good wine.
Why do people get all bent out of shape when they buy a new car?
Probably because the clothing retailer won't negotiate price with any buyer nor will the high-end grocer haggle over the price of a fine cheese or wine.
With cars, everything is negotiable, from the selling price of the car to what's included in that price as well as the cash value given for any trade-in.
If a buyer walks in with no idea of the going low retail on a new car nor any clue as to a realistic wholesale value on his trade, then he is asking to get hosed.
It is not the job of the dealer to give every buyer a stellar deal, rather it's the job of a buyer to figure out what a good price is and to refuse to pay more.
I don't think that we can blame new car dealerships for trying to get every last dime out of a buyer. I think that a buyer needs to take some responsibility in educating himself as to what a good selling price is before walking in the door.
If buyers did their homework and knew what they should be paying, I think there'd be a lot less disgruntlement with dealerships, since paying too much is really the buyer's fault.
Caveat emptor!
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#4486868 - 08/12/17 08:56 PM Re: Why new car dealers have a bad rep [Re: fdcg27]
bbhero Offline


Registered: 03/20/15
Posts: 3305
Loc: Virginia
Overall I agree with you on this about how the customer needs to educate themselves about the car market. I do think the business side of the transaction has some responsibility in not totally ripping off someone as well. Making money at a reasonable rate versus making a massive profit margin at the customer's expense is not right either.
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#4486869 - 08/12/17 08:59 PM Re: Why new car dealers have a bad rep [Re: fdcg27]
danez_yoda Offline


Registered: 07/18/09
Posts: 247
Loc: texas
Its because new clothes or a piece of cheese is <$100 most of the time.

New car rips are thousands of dollars.

Everything from lusterizing sealant, rustproofing, $300 floormats, and. Oh you cant get that feature with adding all the other features you dont want. Sure you can, just order it that way.

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#4486890 - 08/12/17 09:30 PM Re: Why new car dealers have a bad rep [Re: fdcg27]
Superflan Offline


Registered: 04/28/15
Posts: 165
Loc: Reunion Island
In my country, dealerships pays their sellers based on 3 mainly 3 things: the price finally paid, in which there's the sellers commission, a fixed fee by car model, and... a bonus at the end pf 6 months if a goal as been reached (selling 12 B model, etc)

I think that this economic model is partially responsible of the negotiable nature of cars, because the sellers are tempted to reduce their variable part almost to zero... to reach the goal and get the huge cash bonus
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#4486891 - 08/12/17 09:36 PM Re: Why new car dealers have a bad rep [Re: fdcg27]
3800Series Offline


Registered: 08/02/14
Posts: 1424
Loc: Gulf Coast, MS
General rule of thumb if they agree it's a bad deal. I kid but I think most people dislike it because they are forced to go to a dealership for a new vehicle. You just can't walk up to plant and ask for one off the line for a predetermined price everyone pays.

It gives more power to the seller and in general buyers are brought up believing they are in power. The roles switch in this equation and it leaves them feeling disadvantaged. New vehicles cost a lot so it's seen as an investment. If you buy the piece of clothing that goes on clearance it's over. You have already moved past that purchase.

With new vehicles you get reminded each time you pay your lease/loan. I think the fact that it drops but 1/4th - 1/5th instantly also plays a role. You're not promised a deal but you can most certainly get hosed.

Dealerships do a lot to nickel and dime you anyways. You argue over a price you are forced to play their game and once you get a price that your satisfied with they give you 10 mins to think about your new vehicle before they send a guy in for a second round most new buyers never expect. Which is the options it's just a game and many people don't enjoy it.

I'm not complaining don't take it as that I'm just speaking on the consumers side.

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#4486899 - 08/12/17 09:45 PM Re: Why new car dealers have a bad rep [Re: fdcg27]
demarpaint Offline


Registered: 07/03/05
Posts: 28310
Loc: NY
I agree with most of what you wrote, however here's the rub. A car dealer wants to sell a car for as much as he can, that's business 101, it's a fact of life. It's up to the consumer to get the best deal. My problem is when they outright rob a customer by packing a deal with junk that a customer didn't approve, tossing papers at him/her hoping they sign them w/o looking. I just helped a friend who got screwed by a local Toyota dealer when he went in to buy his lease. He was offered what he thought was an attractive rate, and agreed to it. A few days later he looked papers over and there was an extended warranty in the tune of $3,500 which he didn't agree to or want packed nicely into the deal. He was shuffled papers and signed them. The man is 80 years old! It was bothering him since the math didn't work, so he called me. I saw they packed in a warranty. He called and complained and they point blank told him that he signed the papers. I helped him draft a letter, and we informed them the Nassau DA, and all the local news channels were getting a call if they didn't make it right. A few days later new paperwork was drafted and he got the right monthly payments. Not all people check, and not all people will fight the fight to get their money back.

Pushing to sell a car for as much as they can is their job, ripping off naive or elderly people is wrong. Not only do you have to know how to negotiate a deal, you have to know the little tricks that are used to rip you off and avoid them. Rant off!
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#4486911 - 08/12/17 10:05 PM Re: Why new car dealers have a bad rep [Re: fdcg27]
HangFire Offline


Registered: 08/21/13
Posts: 2357
Loc: Central Maryland
Originally Posted By: fdcg27
It's really a bad rap.
I'll leave the used car end of the business out of the discussion, since each used car is an individual example, while all new cars of any given model are identical. New cars are fungible goods.


Yes, used cars are different, and new cars are essentially fungible.

But new cars are not identical. One might last 500K and the one beside it could be a total lemon. Or vice-versa. The option list won't tell you which is which (unless it's a 3.8L Taurus or PowerStroke 6.0 or something like that).

Anyway, as has already been said, it's easier to rationalize away a $50 loss than a $5,000 loss.
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#4487072 - 08/13/17 06:29 AM Re: Why new car dealers have a bad rep [Re: fdcg27]
fdcg27 Offline


Registered: 09/25/09
Posts: 14499
Loc: OH
...and, we have the ultimate weapon at our disposal.
A casual walk to the door along with a comment to the effect that you'll check competing dealer X will often bring a swift collapse in selling price.
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#4487074 - 08/13/17 06:36 AM Re: Why new car dealers have a bad rep [Re: danez_yoda]
skyactiv Offline


Registered: 03/02/13
Posts: 3288
Loc: The Midwest
Originally Posted By: danez_yoda
Its because new clothes or a piece of cheese is <$100 most of the time.

New car rips are thousands of dollars.

Everything from lusterizing sealant, rustproofing, $300 floormats, and. Oh you cant get that feature with adding all the other features you dont want. Sure you can, just order it that way.


Most manufactures went to packages long ago. As an example, the Jeep Wrangler has 13 different versions and you cant order the heavy duty suspension to the base model.
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#4487091 - 08/13/17 07:17 AM Re: Why new car dealers have a bad rep [Re: fdcg27]
madRiver Offline


Registered: 07/11/15
Posts: 2806
Loc: New England
1) a dealer tries to extract the most amount of money/take advantage at every aspect and opportunity (loans, price, fees, insurances, warranty) within a purchase.
2) dealers all lie or extend truth to make sale
3) the sales staff is completely fake in being nice to you. The only reason for that is to make you more likely to purchase
4) dealer sales staff is the worst kind of salemen possibly IMHO the uneducated sort. It feels similar to talking to someone at cell phone kiosk at the mall

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#4487114 - 08/13/17 07:47 AM Re: Why new car dealers have a bad rep [Re: fdcg27]
Bud Offline


Registered: 06/04/02
Posts: 1257
Loc: Texas
You have the ultimate weapon at the dealership. Your feet. Walk out the door if you are not satisfied. Dealerships are in business to make money, and no matter how good of a deal you brag to your friends about, they still made money off of you if you buy from them.
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#4487119 - 08/13/17 07:56 AM Re: Why new car dealers have a bad rep [Re: Bud]
fdcg27 Offline


Registered: 09/25/09
Posts: 14499
Loc: OH
Originally Posted By: Bud
You have the ultimate weapon at the dealership. Your feet. Walk out the door if you are not satisfied. Dealerships are in business to make money, and no matter how good of a deal you brag to your friends about, they still made money off of you if you buy from them.


Yep!
...or, they got rid of something with some weird combination of powertrain and option packages that's been sitting in inventory forever that happened to be exactly what you wanted.
_________________________
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#4487133 - 08/13/17 08:34 AM Re: Why new car dealers have a bad rep [Re: fdcg27]
SteveSRT8 Offline


Registered: 10/10/08
Posts: 18570
Loc: Sunny Florida
Amamzing how few here really understand car buying. First of all, all stealerships do not lie. But unfortunately most of them do, and will do almost anything to get you to sign on the dotted line. And secondly, all new car deals are cash. Every one. Either you pay or the bank pays.

Our local Dealer for servicing our trucks under warranty is a hopeless case. Deceptive sales practices and poor service department. We have only bought one truck there and are unlikely to even consider them in the future.

OTOH, our Chrysler dealer is amazingly easy to get along with. Superb buying experience and fantastic service. But in my nearly 50 years of experience purchasing many cars and trucks they are an exception...
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#4487690 - 08/13/17 06:41 PM Re: Why new car dealers have a bad rep [Re: SteveSRT8]
fdcg27 Offline


Registered: 09/25/09
Posts: 14499
Loc: OH
So you think that it's okay to use a dealer you like for the purchase and then expect good service under warranty from a local who you didn't make a dime for?
Sorry, but that's an unrealistic expectation.
If you know anyone in the business personally, you can hear some hilarious stories about buyers lying, both in the purchase process and in seeking repairs under warranty resulting from either their own neglect or abuse.
Any service writer can tell you many amusing stories about customers either running new cars out of oil or running the FF until the engine seized and then expecting a new engine under warranty.
Some manufacturers will actually cover this as well.
The dishonesty is not limited to the dealers. I've never been dishonest with a dealer just as I never deal dishonestly with anyone else. I've in turn never had any dishonest practice from any car dealer.
People deal with you as you deal with them.
If I get a bad vibe from a dealership, I turn around and walk. If a sales guy follows me, I just tell him that I'm unemployed but need a new car. That backs them right off.
_________________________
17 Forester FF
12 Accord LX 69K SS 0W-20
09 Forester 95K M1HM 10W-30
01 Focus ZX3 118K PP 5W-20
96 Accord LX 104K T5 10W-30
95 BMW 318i 163K D1300

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#4487790 - 08/13/17 08:12 PM Re: Why new car dealers have a bad rep [Re: fdcg27]
javacontour Offline


Registered: 06/26/03
Posts: 9886
Loc: Illinois
I wonder how much of it comes down to experience and expectations.

When I was 20 something, I'm sure I was taken advantage of. I think I all but threw a tantrum in a Mazda dealership. Today, some three decades later, I know more. I have different expectations. Some of them are from dealing with dealers (and teenagers) and some from experience.

I try to avoid the opportunities to stretch the truth or outright lie to me.

For example, I negotiate the out the door number. One number. I make it clear that is the number we are talking about.

Little room left to throw a curve in at the end of the deal.

I get my financing or my bank book from the wife pre-approved. If someone were to say I had to pay 18% interest on the 2018 Flux Capcitormobile, I'd know better.

If it's a used car and something is needed, like a second key fob and security key, I know to get a "We Owe" voucher.

I have no expectation that I'm going to be better than those who negotiate deals every day. Instead, I decide to control what I can control. If I like the deal, I buy and enjoy the car and stop looking at the deals others claim to get. If I don't like the deal, I don't buy.

It really is that simple.

But then, I guess I have one other advantage. I have 5 cars in the home fleet. I seldom feel the urgency that I have to have a car today.

I can be more picky and not take the first deal that gets me a mediocre car at a bad price.
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