Motor Trend has been running a short series on how car dealers do business in the internet age. If you haven't been to a new or used car dealer in 20+ years, things have changed and it hasn't gotten any easier to keep from being taken. As always, it's an asymmetric relationship--they deal with people all the time, you visit car dealers relatively infrequently. This installment is about discounts and very low advertized prices, https://www.motortrend.com/features/dealer-discounts-add-ons-fees-car-buying
In the first installment of the How to Buy a Car series, I talked about the changes that have taken place in car sales over the past three decades or so due to the internet. To recap, in the old days, everyone started high and negotiated down to the lowest price. Both buyers and sellers understood this. But thanks to the internet, that rule has fallen by the wayside. Because everyone shops on the internet first before ever leaving their house, the dealership that gets the business is the one with the lowest prices. The new rule is, "Lead with the Lowest Price and They'll Come."
[...]
When you get to the dealership, the salesperson sits you down and asks you a series of questions."Are you a member of Cheapco or similar big-box wholesaler?"
When you answer no, the salesperson draws a line through that discount.
"Are you a recent college graduate, or will you be graduating in the next year?"
You're 35 years old. You answer no. The salesperson draws a line through that discount.
...
Instead of paying $49,000, the crazy price that brought you there, your price just jumped four grand. (You probably won't see every one of these discounts used at the same time, but you get the idea.)
More details and some suggestions on how to prepare before you visit the dealer at the link.
[I'm curious if the experience dealing with automobile dealerships and sales people is similar around the world --Ed.]
(Score: 4, Funny) by Anonymous Coward on Sunday February 01, @07:43PM (1 child)
I'm curious if the experience dealing with automobile dealerships and sales people is similar around the world
Across the universe... Flying saucer dealers are the same
(Score: 3, Insightful) by corey on Monday February 02, @10:53PM
I bought a second hand car a month ago from a dealer. It was decent, not much has changed since the last time I did, around 8 years ago. No discounts etc as mentioned in the summary. They asked if I needed finance, and if I wanted ceramic paint coating.
(Score: 2) by VLM on Sunday February 01, @08:51PM (1 child)
I seem to recall the Costco discount on my wife's van paid for about a decade of costco fees. And if I put enough "pay your bill online" using their credit card I get cash back... Essentially, I shop there for free.
(Score: 2) by JoeMerchant on Tuesday February 03, @02:09AM
We got the same from Dodge for a Farm Bureau membership ($500 rebate for a $50/year membership), in 1999.
🌻🌻🌻🌻 [google.com]
(Score: 5, Informative) by owl on Sunday February 01, @08:52PM (5 children)
The only way you get to level the field against these tricks is to go in, up front, ready to stand up and walk out.
Then, as the sales-slimeball runs down his "you don't get these discounts" list, when he/she gets to the end, you point out that this new, 4K larger price, is not what was advertised, stand up and start walking out. You'll be amazed at how often those discounts can still be applied afterall when you threaten the sales-slimeball's commission by walking out.
(Score: 5, Touché) by JoeMerchant on Sunday February 01, @09:16PM
>The only way you get to level the field against these tricks is to go in, up front, ready to stand up and walk out.
Exactly this.
And, most of them will let you walk out. Once in a while, one won't - and that's your new dealer.
🌻🌻🌻🌻 [google.com]
(Score: 5, Interesting) by VLM on Sunday February 01, @09:50PM (3 children)
If you're physically present, you already lost, just like any other brick and mortar, spending a half hour driving there and parking is a big investment they know ALL about the sunk cost fallacy.
Do it by phone or email or online. Don't waste time and gas in person. "Hey I'm emailing the 3 dealerships closest to me I'm willing to pay $xyz for an abc and whoever responds back first I'll take it, easiest sale you'll have all month". Remember they're on a monthly quota.
Also you're not getting a discount on a fad vehicle thats out of stock. Thats why they keep stock levels low and only stock cars that are optioned up, so thats a bit of a rock and a hard place. If you can find a new 2025 or, somehow, a new 2024, you'll get a better deal.
(Score: 4, Interesting) by JoeMerchant on Sunday February 01, @11:21PM (2 children)
>If you're physically present, you already lost, just like any other brick and mortar, spending a half hour driving there and parking is a big investment they know ALL about the sunk cost fallacy.
For groceries, or clothing, or even Best Buy level electronics, I would agree.
For a $10K+ vehicle purchase, I can drive all up and down car dealer row all day long just browsing, that's not a sunk cost, that's just getting a feel for the market.
Our previous purchase was sitting on the lot with a $11.5K advertised price, and we were in a take it or leave it mood, we came back the next day, they had raised the sticker on the window to $13.5K (because they saw us looking at it the night before, I would guess). We offered what they were asking, they played jack-a-round, I explained that I understand sales tax, road tax, plate tax and jackass tax, and what I want for this deal is $12K and drive it away, all taxes included in that $12K, so that's the deal they wrote, then they proceeded to a high-pressure extended warranty sale looking for another $4K which we said, no, no, no, NO, NO, NO!!! to, and 30 minutes later we were driving off with our new (to us) car, $12K.
The most recent purchase had a problem of uniqueness - my wife really wanted _this one_ and wasn't hiding that very effectively from the dealer, I should have just driven her home and then struck the deal, but there were complications with that, which I'm guessing cost us an extra $1000 on the final deal (of $30K). Basically, we ended up paying what was on the windshield sticker, plus sales tax, and giving them our 25 year old truck for free in trade. Again with the high pressure extended warranty sale - this time I let my wife tell them no for 30 minutes, then teased them by sticking my head in the office to ask an unrelated question, they launched into the sales spiel again and I just nodded for 5 minutes until he finally stopped to take a breath and I asked "did she not make it clear? No warranty, period." It was kind of a bummer, because a couple of years earlier that old truck would have fetched $8K or more on the open (COVID truck shortage) market, but that shortage had eased - otherwise our $30K low miles 2019 truck would have been $40K or more - I'm guessing after a lot of sales effort we might have gotten $2K-$3K out of the old truck in the then-current market, but the dealer probably shipped it off to auction for $1K or less... Also, there was the factor of: to get $3K out of that truck would have required 4+ hours of washing, vacuuming, detailing... it had lived under a tree for 15+ years and not been in the baking sun for over a year when we drove it to the used car lot - there it sat in the sun while we negotiated and all the organics that had collected during that year baked in the sun with the windows rolled up, the smell upon opening the door was impressive... that can be cured, but by giving it away in trade, we didn't have to, and we didn't have to play new extra tag games, etc.
🌻🌻🌻🌻 [google.com]
(Score: 2) by VLM on Monday February 02, @02:56PM (1 child)
I think you would enjoy CarMax, that being almost entirely the opposite of your story, except for the fact carmax is a spawn of Circuit City and they push post sale extended warranty extremely hard just like IIRC circuit city used to.
Ironically, electronics extended warranty deals are usually awful, but the car business is so awful top to bottom that the carmax deal is supposedly relatively good compared to the rest of the industry.
Reliability is SO expensive in the car business. I'd almost rather own eleven of your old truck than the one new replacement. It would be like the "car of the month club".
(Score: 2) by JoeMerchant on Monday February 02, @03:32PM
> I'd almost rather own eleven of your old truck than the one new replacement. It would be like the "car of the month club".
We have 4 vehicles, and at least 3 of them have been serviceable at any given time for the past 20 years. (I suppose we only had 3 10+ years ago, so the number was 2 then, added a 1999 to the fleet around 2016).
That newest $30K truck refused to start one evening as we were trying to leave to some party or something - instead of even thinking about it, we just swapped over to the 2002 sedan parked next to it which very nicely transported us there and back and I could diagnose the battery issue at my leisure the next day.
We tried to feel better about getting ripped off on the trade in value of our old truck by telling ourselves that somebody is getting a great deal at auction with that one, hopefully somebody that needs a good truck but can only afford auction prices.
🌻🌻🌻🌻 [google.com]
(Score: 5, Interesting) by DadaDoofy on Sunday February 01, @09:45PM (2 children)
If you have the cash to pay for the car up front, or a way to borrow the cash independently of the dealer, you can f**k the dealer the same way they f**k you.
Go in to the dealer and set up a reasonable deal based on dealer financing. Ask for 60 months, 72 months or whatever is the longest the offer. Do your homework in advance so you know what the car is actually worth. Negotiate, test drive, negotiate some more, and when they go away to "check with manager" be prepared to wait them out. You should set aside a whole day to do the deal, as it may be necessary.
When the salesperson inevitably comes back from more unseen negotiations with the manager at a higher price, get up and walk out. The salesperson will follow you out the door and beg you to accept the previous, lower price. Accept it. After another long delay, you are finally asked for your signature. At this point, a not a moment sooner, you tell them you changed your mind and will pay cash for the car - same price take it or leave it. Now the part that was going to make all the money for them is gone. They have invested hours in the deal as well. Hours that could have spent selling cars to someone else. They have to cave or risk zero return on that investment. Chances are they will cave.
This has worked for us three times. Oh and make sure to go in at the end of the month (February, with 28 days is best), when they are desperate to hit their numbers.
(Score: 2) by JoeMerchant on Tuesday February 03, @02:14AM
The flipside: we lived in Miami and wanted to buy a pickup truck in 1999. We walked in with the Dodge website printout for the truck we wanted and the sales staff just laughed and said: "that truck doesn't exist" (not telling us that the custom order window was closing in 2 weeks...) They showed us a bunch of trucks with carpet and power windows and other things we didn't want that cost 50% more than the truck on our printout - we, of course, walked out. They don't want to bother with "little fish" like us, they want somebody who's willing to pay 50% more to start with because they can jack them up even higher for 3-4x the commission of what they might make on us.
Other dealers, in other towns, were much more reasonable - explained about the custom order window, and we actually got lucky and found the truck we were trying to custom order on a lot in my dad's town, so we flew there - bought it and drove it home.
🌻🌻🌻🌻 [google.com]
(Score: 3, Interesting) by weirsbaski on Wednesday February 04, @12:40AM
I've done (almost) that- buy a car, and sign up for dealer financing just to get the associated discount. Then pay the loan off in full when the first payment comes due.
(Score: 1, Touché) by Anonymous Coward on Sunday February 01, @10:46PM (1 child)
I find the ad for the car online. I check it over in person. Cash/check is handed to the seller. Too poor to know all this other stuff; square boxes, magic discounts. All products have a price point you see by shopping around.
If I went somewhere and they tell me a strangely higher price, I'd tell them to fuck off.
(Score: 2) by JoeMerchant on Monday February 02, @03:40AM
Last new vehicle we purchased was in 1999 - it actually went rather smoothly - $18K for a brand new full sized V8 pickup truck seemed fair enough to me at the time. There were some incentive wrinkles that brought that down $1000 - $500 for a Farm Bureau member rebate program, another $500 from the factory because they were trying to boost their numbers or whatever... I think part of why it went so smoothly is because the vehicle we wanted happened to match a vehicle that a customer had custom ordered, then backed out on several months earlier, so we were buying this odd bird off their lot.
The used market is a slightly different beast, and I almost always encounter a vehicle with an advertised price which mysteriously increases after any interest is shown in it... the advertised price (of vehicles we're bidding on) tends to be around the KBB or other reference "fair price" point for the age, miles and condition, but then there's a 10-15% hike between the phone call asking if it is still available and when you show up for the test drive - that's never the price to pay.
Then there's the common ground between both markets: junk fees galore - I only acknowledge state taxes as legitimate, calculate them for myself, make a "final offer" at whatever price I think is fair and tell them to call it whatever they want to call it on their paperwork, this is the amount of the check I am willing to hand you in exchange for a tagged and titled vehicle in our name - you're the car dealer, you figure out how you'll reach that number without going over.
We did put a reservation in on a new Ford Maverick a few years ago, they were accepting the reservation orders but not taking deposits - and eventually (when we bought the other truck) we just canceled the deal because after more than a year on their "wait list" they never produced a vehicle to sell to us. I suppose they always had people willing to pay more than the price we agreed to (which was their internet advertised price for the configuration...)
🌻🌻🌻🌻 [google.com]
(Score: 5, Informative) by bzipitidoo on Monday February 02, @06:44AM (4 children)
Both manufacturers and dealerships treat potential buyers like they're totally superficial morons. I've tried piercing that mindset, and it's just no good. No matter how much you show them that you understand cars, and how practical you are, they'll keep talking as if you're begging to be allowed to impress your friends and coworkers with the newness and luxuriousness of their top of the line ride. The website dangles paint colors, seat materials, fancy rims, and such like bling in front of you, as if that's the most important thing about a vehicle. No, damn it, I want hard data. Durability. Fuel economy. Cost of various parts. If it burns gas, can I use the cheapest gas, or does it require premium? That's the kind of stuff I want to know.
The only thing I care about with paint color is that it be a light color, preferably white, the better to reflect sunlight and keep the interior cooler. Unless I move to a cold climate, then I'd prefer a black car. I also prefer to avoid colors that auto insurers believe are indicative of riskier driving, such as bright red. On that front, I have heard brown is the least expensive color to insure. To me, a car is strictly utility. Yeah, I had a Metro. People did try to mock me for it, but I simply didn't care what they thought, and barely noticed the mockery. They could tell they were not getting to me, which baffled and frustrated them. How dare anyone not have the same values!
The one time I looked into buying new, 4 years ago, I became so frustrated with all the bull that I decided to go back to used cars. I have never bought a new car in my life. Always buy used. Buying new is for idiots or the stupid rich.
(Score: 3, Insightful) by Thexalon on Monday February 02, @03:56PM (3 children)
Regarding new vs used: I did in fact buy my latest car new. It was the first time I'd ever done that, and I was in a very good financial position or I wouldn't have done it, but I couldn't help but notice that I've had far lower maintenance costs so far on it than the used ones I've bought over the years, and it's kept a surprising amount of its value over the years (as far as I can tell from reviews and such, I did in fact pick out a good model with some excellent mileage). It turns out that there are a lot of ways to keep issues off of CarFax reports, and make them not obvious even if you take a good look at the thing and pay attention during your test drive.
That said, my main advice, whether new or used, would be that if you aren't a car specialist but you have a friend who has either been a mechanic or a car salesman, arrange to bring them along when looking at any prospective vehicle. They'll know what to look for, they'll know the tricks that get pulled, and be able to help you negotiate a lot. Also, if you're a female-type human, bringing a "beard" along will help, even if you're the one who actually knows what you're doing. I also found it very useful to everyone involved if you do some online research in advance and start the conversation with the dealer with something along the lines of "I'm interested in these specific cars you say you have, and would like to look at them". You'll learn a a lot about how weaselly the dealer from their response to that, and also make it harder for them to steer you in another direction than what you want.
And yes, most of the stuff that dealers tend to emphasize are completely pointless when it comes to actually driving the thing. No surprise there, they're trying to sell feelings, not specifications, just like most other businesses.
"Think of how stupid the average person is. Then realize half of 'em are stupider than that." - George Carlin
(Score: 2) by bzipitidoo on Monday February 02, @08:01PM (1 child)
Used cars of course have a very wide range, from nearly new to needs a complete rebuild for more money than a new car would cost. But at least there is data on which models and years proved to be lemons. With a new car, you're relying on the reputation of the manufacturer, and you won't know until a few years after you bought it whether this is the year they decided to cheapen the heck out of everything, or some higher up got stuck on a dumb idea or two and forced it into the car. Best that can be done there is that if it's a model that has not been significantly changed for at least 3 years, and those earlier year models are good, then it's reasonably safe to say the current year model will be good.
I found the whole new car experience insulting, and that's why I walked without getting one. Further, cars of the 2020s are terrible with the nannying, and I hate that. Every 5,000 miles, the system is programmed to put up the scary and extremely annoyingly unspecific warning to take your car to the dealership for Required Maintenance. Or it just lights up the little outline of the engine. Now, if there's a real problem, I appreciate the warning. But I want more. Why can't it just tell me the codes? Why do I have to have an ODBII code reader? If the car lights up the engine light just because the mileage reached some set amount, I don't need that. In that case, it doesn't say what maintenance is supposedly needed, and a code reader won't tell you that either. I could live with it, but the main problem with such messages is that it scares the wife. She's the one putting on the look of Extreme Worry, and asking, How Could I? How Could I Neglect Her Safety?!? I tell her not to fall for their manipulations, but she puts too much trust in them. Insists on going to a dealership. Why can't we at least go to an independent shop? Oh, but the car requires super sekret formula fluids that only the dealer has! If you don't use Recommended Fluids, we can't guarantee that your car will work! Of course the dealer charges way more than they ought. The infuriating thing is that they dared to try manipulating my wife, and had entirely too much success.
Another bit of annoying nannying is forbidding you from changing settings or reading texts from your linked phone while the car is in motion. So, fine, the message is read on the phone. No reason why the passenger can't fiddle with settings and read texts, but the nannymobile won't allow it. Just this week, ran into tire pressure nannying. Oh noes, the pressure is only 29 psi! But wait, this was on a cold morning. I nevertheless pumped up the tires to 36 psi. And although the dash said right there that the minimum recommended pressure is 35psi, it still showed those 36psi readings in red. Huh? Shrug and move on. But the wife asked me to let some air out of the tires, because red! As the day warmed up, the pressure readings rose to 40psi, and the system finally changed the red numerals to white. I mean, sure I want the tires inflated within the optimum range. But I could do without the false alarms.
Anyway, one other thing on the maintenance: An EV has an order of magnitude less maintenance than a gas burner no matter how new it is.
(Score: 2) by Bentonite on Tuesday February 03, @02:16AM
Until several years later, where the proprietary software decides to kill itself, or destroy the battery (or prevent you from just swapping out a dodgy cell if a single cell dies in the battery pack) and then get ready to pay a fortune.
A EV with standardized parts that ran free software would be very reliable and require little maintenance and could easily be fixed if anything wore out or broke - but why would any manufacturer produce a car that really lasts and is easy and cheap to maintain and repair?
Gas burner? ICE's burn liquids unless the fuel is LPG.
(Score: 2) by JoeMerchant on Tuesday February 03, @02:53AM
I bought a Miata new in March of 1991 for $14,067. By October of 1992 it was nearly paid off, but I needed more down payment for a home purchase mortgage, so I went to refinance it... after 19 months and 25,000 miles (I drove it a LOT that first year), it had a loan value of: $15,000. Miatas are also super easy to maintain, particularly if you don't mind turning a wrench yourself once in a while. I have only replaced 2 soft tops over the years (one on the 1991 and another on the 1999 we bought around 2015) and those I paid a pro to do, I also paid a pro to install the intercooled turbocharger system and do the ring and pinion ratio swap when the limited slip diff went on, but when it came time for the V6 engine swap I was 60/40 partnered with a mechanic friend (and his shop's lift), and regular maintenance - even things like radiator swap and timing belt changes - aren't all that daunting to do yourself - as long as you are O.K. with the car not running for a day or two while you figure things out / get all the parts.
Dealer maintenance? Gives me the heebie jeebies - I really don't like dealers working on our vehicles.
🌻🌻🌻🌻 [google.com]
(Score: 4, Informative) by SemperOSS on Monday February 02, @07:24PM
I live in Europe and that sales tactic is outlawed here. If there are any conditions on the price, it has to be stated up front, same goes for hidden charges.
That said, prices are generally higher in Europe in part due to the VAT (sales tax for the American cousins) that can be an eye-watering 25%! (I've got an eye on you Denmark … and on you Sweden … and well, my third eye, on you Croatia.)
Open Source Solutions and Digital Sovereignty is the new black
(Score: 1, Interesting) by Anonymous Coward on Monday February 02, @09:18PM
I've worked with the same sales person at the same dealership for the past 20 years or so. I call him up, tell him what I want including options, etc. He checks stock, looks around locally, and if nothing else, orders it directly from the manufacturer. We negotiate a price based on the invoice plus a reasonable markup. Sales and/or the GM have already talked to finance and it's a quick deal with no attempts at shenanigans. I'm reasonable and they're reasonable. We both win with a minimum of effort. They've probably made up for it in my repeat business and my referrals over the years for sure.