While sitting around waiting for 20 minutes "cooking" in a dealership waiting for the man to come back with a price for a used car, I heard 4 other salesman standing around, pretending to be customers, laughing and making fun of people who had come in to buy a car. Some pretended to be gangsters who had to "go geyt sum monnah frum muh baby mommah's couch". Another pretended to be school teachers who had to pay the down payment with 3 different checks. It was disgusting. I left after it was obvious that the man was making me wait for no reason, and when I left, he sent me a text message with a price for a base model, used car, for ABOVE the new price not 100 feet away from his desk, at the dealership next door.
It was a very abusive process. I've never been in another situation where you ask how much something costs, and they say "make an offer!"
That's like going into Walmart and asking how much a TV is, and they say "What's it worth to you?"
Gross. I felt like I was dealing with conmen from the start. I will never buy another car from a dealer.
Tesla has the power to lead the way into eliminating these middlemen monsters and I hope they see more support in that regard.
Note: I needed a pretty specific car because I'm extremely tall and I'm having back problems from having to slouch in normal sized cars. Because of this, I had limited options in the way of dealers.
Some other stories, I had a friend when buying one of his cars it was a month long negotiation. I would be in his office, the phone would ring he would pick up say "No" and just hang up on the sales guy. Pretty hilarious actually.
Another friend walked into the dealership, money in hand and told the guy a price and that he had 45 minutes before he had to go back to work. He said it was awesome watching the salesman run all over the lot in the heat, but the deal got done.
If someone does not want to negotiate, CarMax is okay. The prices are not the best, but they are clearly shown online and the buying process is dead simple.
I accompanied another friend to a motorcycle dealer. He had previously negotiated the price of the bike and brought cash in that amount. He puts the cash on the counter, and the salesman starts running this game about how the owner really likes that bike and doesn't want to sell it, except at a higher price, and all this. The buyer reaches into the giant stack of cash -- thousands of dollars in $20 bills always seems like a lot of money -- counts out a thousand dollars, and puts it in his pocket. He says the remaining amount of money is the most he's willing to pay after hearing the salesman's story. The salesman disappears, comes back and desperately tries to close the deal at the original price, but eventually has to settle for the money that's literally on the table.
There is almost nobody more desperate than a car salesman, so dealing with them is actually pretty easy.
That was my first job, but I've had dozens since and nowhere else have I seen such unambiguously shady and downright illegal behavior occur under one roof, almost entirely by the senior management and higher. The rank and file weren't too bad. Every one of them would tell me to learn all I could there, but go back to college so I wouldn't have to do what they did for a living.
It's too easy to demonize people who I'm sure don't want to be engaging in this bullshit in the first place.
I'm sure there are sales staff who get off on shafting customers, but I don't think you can say it's all of em.
Too many times I had to work with friends/family who were outright lied to by those desperate to close a sale.
I used them to basically order the car I wanted over the internet. I browsed their site, found the cheapest one in their inventory, and paid to have it shipped to my local Carmax. They called me to let me know the car was there and I went and test drove it. The price was set, so no haggling, and just friendly service. It was the best experience and probably the only way i'll buy a car again.
Check it out next time... it really was surprisingly good service...
ps. I've had the car for 6 years and ended up being an overall terrific buy...
No way is "children require cars" a uniquely American perspective. I have a lot of in-laws in urban China and the ones who are now having children pretty much universally buy cars if they didn't already have them. I lived in France for several years and I don't think I knew anyone with children who didn't own a car. Look at just about any city on the planet and what do you see? Cars, cars, and more cars. Cars as far as the eye can see.
Car culture is not an American thing. It's a first world thing, where "first world" includes the wealthy parts of the third world too. Now, it's certainly possible that this is not necessary, but that's how it currently is all over the place. If you want to change it, you won't get anywhere if you think that it's somehow unique to a single country.
In any case, it looks like the answer is more or less "yes." The difference in car ownership per capita is not that different between the US and many other first-world countries:
But this counts a lot of vehicles we wouldn't consider "cars," like tractor trailers. If we just look at passenger vehicles, it seems that the US is nowhere near the top:
The discrepancy is pretty big and this doesn't fit with what I'd have thought. Plus the source is not available. But other sources corroborate:
So not only is the US not unique in being in love with cars, we're not even the most excessive at it. Maybe the next time somebody feels like getting all nationalistic about criticizing car culture, they'll point the finger at Italy, Germany, or France before they decide to aim for the US.
From the comments to that article, there seem to be some questions around what vehicles exactly are being counted and whether the methodology is consistent from country to country (e.g. pickups are probably quite a bit more common in the US than in western Europe). You could also argue that per capita isn't really the best measure and you may consider adjusting for income measures, demographics, and urbanization.
That said, there's a stereotype of Americans as a car culture where people drive everywhere and western Europeans as living in the core of medieval cities and walking/biking/taking transit everyplace. And that stereotype doesn't hold up.
Nope, in Japanese cities rents are very expensive, and if you want to have space for more than one kid you either need to start doing three jobs to afford a bigger place, or start packing and leave further away where a car is much more likely to be needed. You only have efficient public transportation inside the large metropolitan centers, once you are a little out of that, your options drop progressively.
Do the math.
Citation needed. Oh wait, there is none, because you are wrong.
You may get by with public transportation for commuting and taking the kids to school, but unless you want to get stuck at the house on weekends, you will need a car, unless you want to live in the city center.
Sounds like a mostly American perspective to me. I'm Norwegian, living in the UK, with a 6 year old son. I did consider getting a drivers license (never felt the need for one before) when we had our son, and it was a bit tiresome when he was too little to walk, but I don't feel a need for it any more. Maybe I'll get a drivers license one day, but I don't bet on it (I'm 40 and have done just fine so far)
Certainly there are plenty of people in Europe and elsewhere who see a car as a nice convenience that becomes even nicer to have when you get a kid, but I don't know many people that see it as a necessity.
And of course, since you never got a driver's license you don't know what you're missing (and works around it)
E.g.: you have to pay/ask for someone to get something slightly oversized (either a store delivery or get a taxi), and/or doesn't have access to cheaper stores.
Pet transportation is limited.
You're pretty much dependent on others to places not covered by public transportation (and of course, this limits where you can live, and convenient public transport nearby implies a more expensive place).
Of course, for some people this makes no difference, and things like Uber make it easier nowadays.
My local tram network has 2 types of tickets: (a) Adults or (b) Children/pets.
I live in the UK in a small town and can not imagine having kids but no car. Most of my friends find having a car is essential even without kids (though I prefer to not have a car unless 100% necessary).
On my own I am fine with public transport, but anything between walking around the village or going to a big city isn't really covered by public transport.
Anyway, for day-to-day travel and commuting, even with children, cars are not required in a medium sized city like Edinburgh.
One interesting (albeit off-topic) point she and her husband made to me was that having kids in push-chairs/buggies suddenly makes you appreciate the issues that disabled people in wheelchairs must have all the time for access to buildings.
But essentially depending upon others to get out of the city for the weekend to anyplace that isn't likely an other city? Or being able to travel to destinations outside of towns/cities without having someone along who can drive? I'd find it incredibly limiting. In fact, I'm in the midst of planning a couple of hiking weeks in the Pacific Northwest that would be utterly undoable without renting a car.
Whatever works for you of course. I just can't imagine it.
There are buses, trains and trams to the countryside.
(With some notable exceptions like Germany)
I'd love to be wrong but there's a huge gap between works pretty well on highways and can negotiate city streets to an arbitrary location without a human present.
That's a very, very common scam. The "Finance Guy" (or the Sales Guy's Manager) - saying never come back again. Sometimes they'll even say how they screwed up, and lost money on this deal. Sometimes they say they may have to sue to get some money back...
It's all an absolute complete scam. Car Dealers have been doing this for 50+ years, and they pass down the techniques and drama to new sales teams. They will never, ever do a deal that they aren't completely happy with.
And the "mistakes" (also a super common technique) are almost always placed on the deal so that the person buying the car takes away satisfaction at having "fixed" tiny parts of the deal.
My cousin was a car dealer, and, while I love her to pieces, when she started talking about her job and their attitudes towards customers ("Buyers are liars"), I absolutely understood how just filling a role can change how you fundamentally behave (see: http://en.wikipedia.org/wiki/Stanford_prison_experiment for more details)
Your last scenario, btw - is actually the exact way to buy a vehicle from these jerks. Do the research, find the absolute best price, end of month/quarter/year dealer incentives included, and then find a dealer that's rated well for service - and give them a Yes/No offer, all in (including shipping, transfer, paperwork, whatever the hell they want to make up - you don't care, just as long as the bottom line is less than your number) - and a time limit. If they can't do the deal within the time limit, no drama or discussion, just go to dealer #2.
There was an episode of This American Life about car dealerships that everyone here should really listen to .
In that episode they did close deals where they were losing money, but hoping it would make them meet their monthly sales goal (set by the supplier), which would result in a bonus that would put them in the black.
You should revisit your first three paragraphs to understand why people are okay with Carmax's prices. Buying a car should not be war, it should not be a hassle, and you should not have to wonder the entire time how you're going to get screwed.
Disclaimer: I have bought over 11 cars from Carmax for myself and family; never once have I been dissatisfied. Next car is a Model S or X.
It's pretty simple, they're willing to pay extra to avoid negotiation
> Buying a car should not be war, it should not be a hassle, and you should not have to wonder the entire time how you're going to get screwed.
Why not? If you have a business idea ("it shouldnt be a hassle!") then go for it. But if you think negotiating is unfair, well, yeah, of course it's unfair. File that next to "The Spurs lost" and "I'm not married to a supermodel."
So you accept and encourage car salesmen to take advantage of people with poor negotiating skills (or people that are easily manipulated)? Do these people deserve to have their money taken from them, or does their lack of skill mean that they shouldn't be buying a car at all?
"Should" car purchases be negotiations? Well, they aren't at all dealers or with all brands but it's the way things have evolved in the US generally. I don't consider it right or wrong in some general sense; it's just the way things are. And there are other options for those who choose not to negotiate although they probably won't be quite as good a deal as an aggressively negotiated and shopped around for purchase.
Not for too much longer.
In a culture where people haggle constantly (or at least more frequently), then a larger portion of people will have the relevant skill set to navigate these waters. I guess you could "solve" it by building haggling into the culture, but you could also "solve" it by forcing car dealerships to normalize with the way that most other average purchases work.
Negotiation costs time and stress. If one has more money than time and stress tolerance, it makes sense to pay to skip the negotiation.
1. I can sit around a dealer for a couple hours and save a couple thousand bucks: that's $500-$1k/hr. Pretty good (e.g., worth my time).
2. I get to practice my negotiation skills. This has gotten fun. And while I will likely never be in the position of negotiating for large amounts (e.g., sale of a business), in that instance a 10% delta could equate to hundreds of thousands of dollars.
I bought a pre-owned car a couple months ago from a high-end, reputable dealer. They pulled the "that guy over there is interested in the same car" trick. I was tempted to go over an introduce myself (should have). Instead I told them the color wasn't my first choice and they should sell to the other guy. I was told the manager came over to "say goodbye" (no he wasn't), so I stood up and put on my coat. We reached a deal. My wife was freaking out. It was fun.
i'd say it means the market isn't being allowed to work or even exist in the first place, which is the whole point of this discussion. 'going for it' is exactly what the establishments are trying to keep Tesla from doing.
The war analogy is apt. Burn every bridge. Don't just be ready to walk, walk. It's an all day process, but it can save you literally thousands of dollars. One of my old managers went to the lot, looked around for the least saleable car, and made a standing offer for it. They called back a couple of times with higher prices, he declined. Turns out at the end of the month, they have to make a quota and would take his deal.
Two dealerships wasted my time by revealing more fees after I'd already driven out, but that was fine because there was another dealership with the same offer, and they stood by it.
Buying used, it seems like cars bought directly from the owner can be had for about $3k less. It costs dealerships a lot to inspect, clean, and warehouse cars, plus pay all their high pressure salesmen.
It's simply not how humans interact with each other. Every person I ever meet face to face has a significant power over my emotions.
thanks to http://www.truecar.com. I don't know if they still help you get a good deal, but I was able to use the best deal in my area from truecar.com and bring it to someone else that was closer to me and they beat that price. I'm not sure if I got a really good deal but I ended up paying less then MSRP with taxes and fees included, so I was happy.
Everyone paying the same price with no middlemen is my preferred model.
Lol why is buying something a war? I've gotta say, things can seem pretty backwards sometimes in the US.
The best victory is the one in which you do not actually fight.
If one side chooses to play dirty, your options are to:
1. Concede the battle and lose.
2. Walk away.
3. Up your game and win the best possible deal.
Isn't there a middle-ground? I don't want to abuse or be abused in some social game; I merely want a box with wheels to convey me from work to home and back.
I love negotiating with car dealers. I know their game and can be as much of an asshole as they are. A few rules:
- Always tell them you have two hours to get out of there
- Set an alarm for 1 hour
- Give them hell if things are not moving by the hour mark get up and get out of the office. You need to be angry (non violent)
- I prefer to have 30% to 50% down payment if financing. Things move much faster this way.
- Do your research
- Do NOT EVER be in love with a particular car
- Do not inject emotion into the process. Think Jedi Knight.
- Do not tolerate delay techniques. Demand that the manager come out and close the deal, no stupid back and forth
- Be a bigger asshole, imagine you care about cockroaches more than them
- have fun
- Sorry ladies: Don't go in ther with your wife or girlfriends unless they agree to the rules of the game and not to inject emotion into the negotiations
- Drill it into your head: You don't have to buy that car that day.
It really sucks that this is the culture. It is what it is. You can either have fun with it or be a victim.
The insurance industry has practically eliminated the pressure of competition from the part of the medical industry that they care about, which allows them to effectively fix prices.
IMO health care providers should be forced to charge one price, regardless of who's paying. That way it wouldn't take a lawyer and a quant to figure out with even 99% certainty what something will actually cost, and the insurance companies would each fight to lower prices for everyone.
It's totally nuts that there is no-one in, say, a hospital, who can tell you what you're going to pay for a given procedure. They can (sometimes) give you numbers, but they'll practically never even be what ends up on the bill, let alone what you'll personally pay.
You were. Salesmen, especially car salesmen, are bullshitters in the Harry G Frankfurt sense. They are indifferent to the truth. They will say whatever they need to say to get you to buy a car. Know this going in. I don't understand, though, why there is this idea that direct sales would result in a better deal.
Middle-men are expensive. Using them, a few people will get better deals and a lot of people will get screwed.
Further, people understand that car dealers are independent entities, and that car salesmen are relatively independent actors within them. So if you get screwed over buying a car, you'll think "I'm never going back to Bob the salesman again" which he couldn't care less about because you're probably not buying another car for years, and he has plenty of fresh meat to feast on. At worst you'll think "I'm never going back to Steve's Honest Honda Sales again" which is a bit of a hit to Steve (assuming you tell your friends) but not a big deal.
If you bought directly from Honda they have a much greater interest in making your experience a good one. They want you to come back to them for your next car in five or ten years. They want you to recommend Honda to your friends and family. Even if those friends and family are in another city or even another country, your recommendation directly affects Honda's bottom line.
This won't eliminate scumbaggery, obviously. But it's bound to improve things.
If direct sales were possible, dealerships would have to offer better prices or go out of business. If I could order a Honda Civic from honda.com directly for $20k, that gives me a good base bargaining position in the dealership. As it is we have the nebulous concept of the MSRP, which isn't very helpful.
http://www.edmunds.com/car-buying/confessions-of-a-car-sales... (2009 update)
Corporate IT sales. Try to get a straight answer for buying 100 + Switches, Servers, etc. It's ridiculous. The only reason someone hides their pricing structure, is so they can over charge some people.
Very similar to the grocery store leaving bad fruit hidden out with the good fruit in hopes someone will buy it without checking.
To the point where there's a /r/sysadmin weekly "Am I Getting Fucked Friday" thread where people can post quotes they're being given for hardware because there is no truecar.com for corp IT sales.
Personally, I stay away from dealerships, and used car lots.
The only time I ever got a good deal at a dealerships is when I walked into a dealership on Van Ness Ave. There were all the usual cast of characters(Sales personnel). They were all checking out my friend. Yes--she is attractive, but they were like Wolfs. We were both hung over, and she needed a car for Monday. She has 20 grand she could spend. I used to sell cars in college, so I kinda knew the game. I told her we need to split up.
While they were fawning over my friend, I overheard a small fight in the back. A disgruntled guy came out and walked right over to me and said, "I hate this fu--ing place. I moving to Oregon tomorrow with my girlfriend." I called my friend over. The $22,000 black Honda she was about to buy was dropped down to 15,000 out the door with the assistance of the disgruntled salesman. The car was stolen a month later.
She ended up paying $25,000 for the same car at a different dealership. I sometimes wonder if I was conned with the fight in the back room, but it was a good deal? And the guy should go into acting--if it was all set up?
(I miss you WH! I wish we were still friends! My email is on the Internet.)
With a manufacturer direct sale you don't know what a reasonable price because they would never have to tiers of pricing which could be found out and exposed as so called "invoice" and similar pricing is done with regular car dealers.
I also do not support direct sales where dealerships have throughout the years established the brand in question. Now for new brands who are wholly unrelated to a current established brand I take no issue with. However to say that GM or Ford should be able to bypass the dealership model which they already abuse with must carry and demo rules would not be remotely fair as the customer relationships were established not by GM or Ford but instead by the dealers.
However I do not support the idea that manufacturers or their assigned dealerships should be the only businesses who can repair or service any part of a vehicle.
As for car buying, doing it this week. Never once in thirty years and a dozen cars or motorcycles have I ever had an issue buying or selling car. The majority of horror stories come from used dealerships serving people who cannot afford down payments or the like.
dealerships helped establish brand loyalty for older car makers and that investment needs some protection from poaching of customers
with a manufacturer direct model you never know if you are getting a deal and have convince yourself irrationally that you are
Right, but it would eliminate overhead and economics says that reduces cost because Ford isn't going for maximum profits, it is going for acceptable profits in the marketplace.
My particular issue of needing a particular model aside, the manufacturers are still competing with manufacturers. If Tesla has done nothing else, he has shown that if there is a niche that isn't being filled by the manufacturers, that startup can compete.
If the manufacturers overprice their cars, they create a niche for someone to move in on. Their current pricing model reflects this, but the dealership era is the past. They came about when car companies were going out of business all of the time and people wanted to deal with someone who had been in their town for a long time. They wanted to buy the exact something they could see and warranties were nearly useless.
Now we have the internet. If Ford screws someone over in Florida, California hears about it the same day.
Because of the competition that the internet has created, dealerships have had to move closer and closer to a 3% profit on sales or lose business. This has put many dealers out of business already. It is only a matter of time. I hope.
Selling me a car would have been a great deal for those guys as my wife insisted that we do every repair at the dealership. Trust me the purchase price was nothing next to the maintenance outlay over the following decade for that lemon.
Still the guys closest to me when presented with the paperwork from another dealership for an already closed deal and the question "Would you care to match this price for another one?" started the "OK, cool your jets here while we go talk about nothing in the ``manager's'' office for twenty minutes" game.
I walked out and bought at the next closest dealership which gladly accepted the deal. It was simple math. As an hourly contractor those guys were literally taking money out of my pocket every minute they wasted.
And really, that's how it works now, it's just more difficult. "Invoice" price is a lie that the car manufacturers and dealers collaborate on to screw you. It does not reflect the actual cost to the dealer in any way. The only reason that number exists is to make you feel like you got such a good deal that you fleeced the dealer, while they laugh all the way to the bank.
There must be some sort of way to disrupt this whole price negotiation shenanigans. Whoever has more information should be obliged to name the price.
I'm vaguely aware of one single other place this happens: street-walker prostitutes. The parallel is pretty solid, actually.
I recently bought my first used car since 2007. The first dealership I went to is still in the past: "You know, before you go, I've just remembered I've got another one in the back that would be perfect for you....", overpriced, etc. The second dealership I went to simply pointed us toward the computer with a searchable inventory with all the information about the cars, prices, and additional fees explained. The way a purchase should be. Knowing the value of the vehicle beforehand made it easy know the additional cost due to the convenience of not searching on craigslist for weeks and weeks for some random "best deal", and driving out of the lot that day with a clean, serviced vehicle.
Of the past 5 cars I've bought, only one was from a dealership: a certified pre-owned Audi, that was two years old at the time I got it. Still sure I got robbed, but it wasn't by too much.
If you buy used, you really don't know what you are getting. If you want to play backyard mechanic, go for it. Me, I just want my car to work.
I've bought this sort of car off someone it lasted twenty years (I drove it for eight) because both the previous owner and myself were on the same page about repairing and protecting it.
One great way to filter this is to understand why they are selling the car. Good reasons lead to good cars.
-no longer needed, change in family scenario
-business car sold every X miles
Those were the reasons I got when buying my daily runner vehicle. The guy would buy cars with his rental company, which then rented them to his business. Maintenance and all that got done on the vehicles on schedule, and when it's time to cycle out the vehicle for a new one, he sells.
So far, I've got 150K of my miles on that vehicle, and it was maintained, full dealer service, which I kept up on. One of the best used deals I've had so far. Since I've all the records, I know I've got some basics to get done in the next 50K. No big deal.
Another thing to do is research the models and overall performance. Calling in the service departments, or your local mechanic can yield some good info.
I just got another used car to become the daily runner. Reason was a death in a family, car no longer needed. That's a potentially good reason.
Turns out that model of car was released as a V6 and V4. The V6 is an outstanding runner with few problems and a modest maintenance schedule. The V4 is just pissy, not the same kind of car. I got the V6, and will need to have some preventative maintenance done in the next year or so. The prior owner kept up on that with service records.
This is a no brainer to continue. I'll have my mechanic take a good look, and recommend the "make it go 80K" with few hassles work. This will probably cost $1K or so. Given the price of the car, the total investment is well worth it.
Both of those work well for cars less than 10 years old and under 100K miles or so.
For newer ones, it's a bit harder because the failure data might not be out there yet. I tend to avoid that scenario, buying new, or buying old enough to make getting the necessary things done totally worth it.
Some older vehicles are more or less time tested. I have one of those too. It's the backup car that costs me almost nothing. I loan it out sometimes too, if somebody needs a runner for a short time. It's long paid for, runs great, and just isn't worth much, so it's all low risk. I have 360K miles on that old car. Paid $1500, and $500 or so every few years to maintain. That was my rainy day, "have to get there" or "they need to get there" car, and it has served us well. That model is known for very long service life, and the purchase reasons?
-damaged front axle due to accident
-they got new car
In every other way, that car was perfectly maintained. The guy I got it from did the axle work, and sold it cheap as a runner, due to it's cosmetics. Wonderful purchase!
To me, that under 5 years old used market is where a lot of the risk is. Buying ones that are 5 to 10 years old, where the reason for selling the car makes sense, the driver / maintenance profile is sane, etc... is much lower risk.
Additionally, the lower overall costs in that range mean there is plenty of room to invest a little common sense maintenance without feeling like it's all too much money. So, that's my sweet spot. I really don't value higher end / expensive cars enough to own them.
They sure are fun to gawk at and drive once in a while though!
What I've typically done is identify something like:
-small engine, high reliability, good MPG, clean.
For cars, 4-10 years old, you can set a price, say $2500. This will put you in a reasonable age range, as that price is low enough to filter out returns, newer vehicles. Set a minimum of $2k. Double all of that for nicer cars that aren't just runners.
Hit craigslist, and friends to find some cars. Research a few of those, and you will center in on one you like.
Then drill down on that car, looking for plausible deals. Call 'em, get their reasons, go visit, talk to them to judge who you are buying from, see the car, and go from there.
It's perfectly ordinary to get a car inspected. You can arrange that ahead of time with your mechanic. Figure out a deposit, or whatever makes sense.
Got a friend who can test drive? That helps too. There are a number of things I do on a test that helps filter out problems. I'll put a couple here:
1. Start the car and let it idle for a long time, until it comes up to operating temp. This takes 10-15 minutes. If it acts irregular, dies, begins to run rough, smokes, it's probably got some issues. Continue, until the fan comes on.
While it's idling, lift the hood, examine things. If it sounds funny or odd, it is. If you see leaks, there are. Simple common sense things here.
2. Get in the car, blast the heat. It should be right there, hot.
3. Blast the AC, if it has it. Should be there, cool in about a minute.
4. With a friend, try everything out. Lights, features, radio, whatever. Test all the electric options.
5. Time to drive the car. Take it out on the road and drive normally for a bit. It should perform like a reasonable car.
6. Find a long stretch of road, put the car in second gear, then drive about 30 MPH for a good mile or two. This will stress the engine, and doing this will filter out cooling system issues, and the engine should be smooth.
7. Exercise the car. Speed up, and use the brakes hard. If it's got ABS, that system should trigger.
8. Take some corners, handle the car a little. Make sure you go fast enough, say 70 MPH, and it should not shake or shimmy.
What you're describing is a problem with sales people, not the dealership model. Generally, when you have sales people who make commission and who have price flexibility, you will get this type of attitude.
Assume we cut dealerships out of the equation tomorrow, what makes you think the manufacturer won't have the same sales people on the floor pushing the product?
What you're looking for is a fixed retail price on the product, so you don't have to worry about negotiations. Tesla happens to have that but not all manufacturers would necessarily make the same choice.
My bank offers pre negotiated prices on new cars that are decent and well under the sticker price.
You can also get the current Consumer Reporte car guide and walk in with that in your hand. It has the invoice price and recommends a fair price for each model. This gives you a much stronger position.
And then there was the dealership in Houston (his town) that took the time to write "HA HA HA!!" and fax his offer back.
Despite the distance he drove to El Paso.
A dealer can sell a car they paid $30,000 for for $25,000 and still make $5,000 on the deal once everything is considered - it's just a lot of the additional revenue is very indirect, and not at all easy to associate with any particular vehicle.
And, negotiations with car dealers is frustrating, because they will waste your time, and frequently insist they have to go talk with their "Manager", or "The VP of Sales", or "Call the head office to get permission to make an exception on this deal, because they need it to make quota" or whatever bullshit they are spinning that particular day.
If you want to make your life simple, just go to CarMax. Alternatively, if you really like playing this idiotic car dealer game, then do a couple days research on the net, research the best prices that other people have paid, taking into account timing around end of month/quarter/year, factor in when the new model may be coming out as well - set your price - and then just offer it with a yes/no to dealers, starting with your favorite dealer, and working your way down.
Car buying in the US is a really miserable experience. I'd be cheering for Tesla to succeed if for no other reason than that it helps to put the existing dealerships out of business.
Which says to me the truck was never worth what they were asking. And that makes me suspicious about just how good a truck it might be -- did they use a bunch of cheap parts that let them drop the price that much, that easily?
Manufacturer, in theory, could pull out and close down the shops during financial downturns (which with US companies seems to happen every few years), leaving a bunch of owners stranded on service and spare parts (in pre-Internet days). A local dealer would be financially independent from the manufacturer, and provide needed liquidity for the car maker, the theory goes.
Selling an automobile based on a list price offers less potential for profit than all of the other things that dealerships do. They find numerous ways to milk customers out of money during a sale by jacking up the price of the car or shafting people on trade-in value. Aside from that there's financing and dealership servicing, both of which can come show high profit margins.
arguably... Craiglist has led the way, and earlier.
do you want to see ads from dealers? or from private owners? or both? your choice
The FTC, TechCrunch, and the mainstream media are ignoring another aspect of the protectionist legislation that is put in front of Tesla customers: not only can't you BUY a car in a number of states, you can't get SERVICE on one either.
For example: New Mexico. The NMADA (New Mexico Automobile Dealers Assocation) has made sure there are laws on the books that make it impossible for Tesla to not only open a store in the state, but also they can't open a service center. Even though on Tesla's own website it shows a map with a "Coming Soon" icon for a service center in Albuquerque, it really isn't coming any time soon because the law forbids Tesla from opening a service center. So owners in New Mexico are kinda screwed. Some of them don't even realize it. If you are a Tesla owner in NM, and you need service some day, you have to call Tesla and have a service person come from either Phoenix, AZ or Denver, CO -- 7+ hours away by interstate. And if your car has to be taken back to one of those service centers, you're looking at significant expense because of the flatbed transportation. Not to mention hassle.
All this to protect a bunch of sleazy old boy network car dealers who don't want Tesla educating the New Mexico public about how bad they have it with dealerships and service centers.
I wish the FTC would talk about the service angle as well.
Is it stated anywhere that this is what will happen, and the customer will be liable for the cost?
The ordering experience was literally walking to an mac in the back part of the store and bringing up teslamotors.com.
No paperwork, or shenanigans. We were actually talked down from a few options we were thinking of based on the sales person saying that they weren't quite worth the cost if it wasn't something you were interested in(leather seats, winter package).
Closest experience I've had was when I bought a Saturn ages ago. No hassle, just here's the price and features we offer.
Detroit better look out because if Elon has his way Tesla is going to eat their lunch.
1. Detroit as a city, and the industry that built it, is dead and gone. Nothing will bring it back. The auto dealership network across the US has tried to adapt to changing technology too many times to count, and apparently is still waaay behind.
2. Tesla _might_ not successfully disrupt the auto industry, all by themselves. But like sharks, once there's blood in the water, it's only a matter of time. Many businesses want a piece of the US auto market -- and I mean "want" like a shark wants its next meal. I personally think Tesla is here for the long haul and has a huge first-mover advantage.
3. The only question is what this means for the infrastructure. Refueling stations. Brick and mortar parts stores. Parts websites. Tooling industries. Inspection and emissions and repair businesses, both brick and mortar and online. Imports. Dealerships. Financing. Fleet management. Warranties. Lawsuits. US Department of Transportation regulations and the political power structure that surrounds it.
Tesla will almost certainly make some mistakes. But so far the trend has been extremely positive.
Is this literally 100% because the US is so corrupt that car dealers are just making laws that make them money? Or is there a sliver of an argument here that has merit?
I neither live in the US nor own a car, so the idea that Toyota can't tell you a Toyota or whatever is bewildering.
Meaning, Ford sells a dealership the Los Angeles region. The dealer spends money advertising how great Fords are in the local market. Sales go up. Ford decides to open its own dealership in Los Angeles and compete directly with that dealership.
The law was useful a long time ago. However, it shouldn't apply to manufacturers who don't have dealerships that need protection. Entrenched businesses are using that law to keep out competition.
So yes, it is a form of corruption, but it is not fair to characterize the entire US economy this way.
Hey how about that three-tier system for alcohol distribution? Perhaps that should go away too, yeah?
Ken Burns' documentary about prohibition explains it really well.
It's not that it's only one brand of beer. It's just that of the 10 options - they're all owned by the same mega corp.
grain from farmers -> make beer -> spent grain back to farmers to feed cattle
I fail to believe that "competition" was a problem because the infrastructure required to distribute beer far enough to kill the competition did not exist. Yes, perhaps the brewery and bar were owned by the same person and they didn't allow the competition's beer, but there were no laws stopping the other brewery from opening their own bar.
And the fact is that today every brewpub I've ever been to has guest taps and beer from other breweries. I've never been somewhere that refuses to sell anything but their own.
The real problem today is that thanks to the three-tier system being completely controlled by MillerCoors/InBev it is VERY difficult to get your new product into bars and stores. The documentary Beer Wars covers this very well -- better than I could in this posting.
tl;dr three-tier may have served a purpose 75 years ago, but it has been holding back competition and hurting consumers for at least 50 years.
(At one point large towns also had their own local mayonnaise, too!)
It's absurd in premise that you can go to a dealership and look at a hundred vehicles; six of each make, of varying colors - all sitting there, with the dealership and the automaker praying they get sold.
Keep one of each model for viewing and test driving. Take orders and customizations. Pick your vehicle up in a week, save 15% (thanks to vast reduction in waste, and the elimination of the middle-man sales commission).
I had a conversation with the publisher of Forbes almost 20 years ago about this concept. It's sad so little progress has been made in that time.
Hell, even buying a Tesla means you have to wait a month or two for your new car to arrive.
Many car purchases are made when the old car is dead, and it's hard to wait a week in that case. Plus a week is probably optimistic for production, and if assembled overseas, delivery is also going to be lengthy.
Perhaps, as a class that get a lot of practice in price negotiation, their land tends to be the most expensive to buy, so it's the last to be sold for development.
The information would be especially interesting near zero. I imagine, though, that it'd be hard to find a city in North America without any car dealerships, so it'd probably be easier to do an analysis on European countries with some cities that don't have cars at all.
I am not sure what cities that would be.
With cartel pricing, they also employ a lot of people with decent pay and little qualification. Dealerships are great places to dump political and other friends who need s job.
In states where Tesla can sell direct to consumers, the showroom has sales people who can talk to you about buying a car, and sit next to you to answer questions as you do so at teslamotors.com.
In other states, the showroom does not have sales people. The staff can answer questions about the car, but not about purchasing (pricing, financing, etc). If you want to buy one, they direct you to visit teslamotors.com.
In no case are people in a state prevented from buying a Tesla car. The buying experience is the same everywhere: go to teslamotors.com, configure and order a car, and either pick it up or have it delivered to you after it's been manufactured.
As for the legal aspect, the federal government does have the ability to regulate interstate commerce, and federal law preempts state law. When there is no federal law, however, the states are free to regulate in that area. If Congress were to enact a law guaranteeing the right of manufacturers to sell direct to consumers, this would preempt the state laws prohibiting it, and Tesla could have sales people in all its showrooms. IANAL.
First, Tesla does actually have some cars you can just buy and go. They're (currently?) the minority, but they're there. They're starting to sell used Teslas, and they also have "inventory cars" which are showroom, test drive, and loaner cars which have finished their corporate service and are ready to be sold.
Second, test drives are pretty key to the whole process (even if you can't test drive the specific car you buy, most people want to test the model) and even that gets caught up in this whole nonsense. Until recently, you couldn't even get a test drive in Virginia. I had to go into Maryland to try one out. Tesla had a showroom in Virginia but they couldn't even let you drive one, let alone sell you one.
Third, in states where they are allowed to sell, you can configure and purchase on site rather than online. The effect is the same, and they're basically just punching the order into the computer for you, but for people who prefer buying from a real person it can matter.
Fourth, taxes and registration are different depending on how you bought it. When I bought mine in Virginia, I had to take delivery in Maryland, and the sale was actually processed in DC. I had DC temporary tags, and I had to handle Virginia registration and pay Virginia sales tax on my own at the DMV. Now that they can sell directly in Virginia, they can handle registration and sales tax themselves, which saves a decent amount of hassle.
Finally, it can affect the post-sales experience in extreme cases. For example, New Mexico is so strict about this stuff that they won't even let Tesla open a service center. You can buy one there, but you'll have to go extremely out of your way to get it serviced.
Does anybody know the backstory of this customer protection?
My very first time in a dealer was in '88, and I bought a Sprint, the little 3 cylinder car, for something like $5K and change. The total finance amount was 12K! And I was young too.
Oh well, that actually was a great little commuter car, and I got much more than that 12K out of it, but knowing how shitty the dealer was just chapped my ass big. Never did forget it. Won't either.
While the kids were growing up and I was paying the house off, I really didn't see any need for new cars. Just bought reasonable used ones, mostly for cash, and that really saved me a ton. But we eventually ended up wanting an SUV for the dogs, camping, kids, friends.
During the years I was away from the dealers, I moved from a pure tech role to one with a heavy sales / consulting component. Turns out I was ready, and went to battle. The people here saying it's war really aren't kidding. I think the no bullshit fixed price dealers are OK, but that price really isn't all that good of a deal. It's just not painful. Good for them to offer a reasonable offering to the market.
Sadly, I wanted a Ford, which meant going to an older school type dealer. Slimy as hell. For what it's worth, I've put the overall strategy here on Quora: http://www.quora.com/What-are-the-best-bargaining-techniques... Lots of good tips on that question overall too. Online, etc... I think the share means you can read all the question answers for that shared question.
It's an ugly process, and it took me about 8 hours to buy that car. I had to do things like when they left me, I would leave too, going to the other end of the lot after getting my free coffee, and just staying there waiting for them to trudge out there, only to walk all the way back, and do it again. It's actually funny in hindsight, but maddening at the time.
Or, I would end up in ego contests: "Are you man enough to buy this car?", to which I actually said, "Only if you aren't such a bitch I would be embarrassed to admit buying from..." good god. But that worked. Got the manager with the brass rings and went to town on the deal proper. Nothing reasonable was going to happen as long as I was dealing with the front end bruiser. Sad.
The Expedition I wanted was MSRP at something like $42K? Maybe $40. I got it for $31,500 and that's one hell of a lot of margin. My guess on the invoice on it was in the high 20's, btw and I got them to show it to me after about 4 hours. But the pain was not over!
The owner of this dealership had a very hot daughter doing contracts. She wrote one up, leaned into me hard and said, "since I know you so well already, how does this one look?" Also funny looking back, but maddening at the time! I had to cross out lots of ugly numbers, and that was because they had packed all that money back into the contract! Worse, had I not been dealing on the front end, some people probably get the ugly treatment on both, paying way too much for the car too.
Since then, I've helped a few people get cars. I ask for a percentage of what I get out of the price of car. I've gotten $1K pretty easy, with people actually wanting to pay me more, which seems to me a great indicator of just how painful dealer purchases really are.
Tesla isn't interested in any of this. They want to make a great car, ask an appropriate amount for it, and sell it to people who see the value. Nothing at all wrong with that, and if these dealer clowns had any soul at all, they would be working double overtime to build trust rather than abuse it at every turn.
There isn't anything in this process I find redeeming. Go TESLA! Edit: Actually, that's not true. If one is into the brutal sport of it, doing battle with a dealer to score a sweet price on a car they worked way too hard to sell can be gratifying, but this really isn't high value for the vast majority of people.
I'm not really a vindictive sort of person, but man! Many dealers have something ugly coming their way, and I hope they get it big. To the few out there doing a fine job of it, I'm sorry. The company they keep must be absolutely terrible.
And this $6800 tron like gas powered tricycle with 84mpg - https://www.eliomotors.com/
I wish the best for them, but that 84mpg is an estimate for an engine that hasn't been built yet and might be outdated by the time it gets produced. (If it ever does.)
Can this thing provide the crash protection of a normal car? If not, why not get a normal MC?
If you didnt know exactly what you wanted in a vehicle again, a middleman would be helpful.
If you know what you want and just want to buy the damn thing, you dont need a middle man.
At the pace they make changes to the car it really doesn't make sense for them to manufacture large batches and those not interested in waiting can pick up an inventory/CPO.
Their 2016 target is 100,000 cars or 33 cars per hour by 2016. So for example they'd have to both double their plant capacity then get 50% better at making cars. Seems like a tall order but perhaps doable for a guy like Musk :)