Will dealerships soon be a thing of the past? | Column

In reply to MiniDave :

It's not so much the prices paid, it's the upselling. The general B.S. and sliminess.  

I hated my VW dealership so much that I vowed the car would get traded in for an Acura after the 3rd warranty trip. Fortunately, it never needed any warranty work.  I wouldn't even take the car to them for recall work.  I managed to find out what the recalls were for and did the work myself if I felt it was needed (one recall I flatly refused to do because I knew what the "fix" was).  For example, buying the brake light switch for $5 and replacing it myself was a lot easier to deal with than taking the car to a dealer. 

I get that a dealership is a business and it needs to turn a profit, but if they want to keep customers, don't be a dick about it.

MiniDave said:

How would your dealership experience go if you just walked in, picked one out and paid sticker for it? Cause that's what you're talking about doing once the dealership model goes away....

Yes that is exactly what I want like 99% of other things I buy. Just have a price and lets pay the price. I don't want to spend my life haggling.

MiniDave said:

How would your dealership experience go if you just walked in, picked one out and paid sticker for it? Cause that's what you're talking about doing once the dealership model goes away....

This is exactly how I've bought the last two Mazdas, using their S-Plan. 

For the 2021 Rf I just got last year, I was literally in the dealer for <30 minutes.  I had sorted everything out ahead of time with a 5 minute phone call and some text messages.   The worst part of the experience was 15 minutes with the finance guy/sales manager convincing him that I really DIDN'T want their extended warranty crap or any add-ons while my wife sat there amused at his attempts to keep trying.  Yes, I know cars are complicated.  No, I'm not afraid to replace parts. I knew to the penny exactly what price I was going to be paying for the total cost of owning the car before I got down there (tax, title, tags, interest rate on my loan, etc.).  I got a fair price, they got a fair price (I hope, it's their problem if they didn't from Mazda Corp).   There was no negotiation further than "my credit union will give me X.XX%, can you beat it with your own financing?"

If I could have done it without the extended warranty fear session BS, I happily would have. 

I've bought a frankly disturbing amount of new vehicles from dealers (15ish).  3 times I didn't feel like I was being agressively lied to or tricked or in some way taken advantage of.  It had 0 to do with the price I paid for a car or got for my trade.  I get it, dealer gotta make money that overhead don't pay for itself.  I don't worry about if the price I pay is +/- a few hundred from where I really want to be.  It was just completely due to the way things are misrepresented, upsell at every opportunity, lies from the dealer etc.  It's just not a pleasant experience. 

I would gladly pay 1-2% more to come in, test drive a car, look at options, choose a car, figure out how it's going to be paid for, sign my name and get my car.  I don't care if they get the same $1000 net off me, just make it less painful and annoying. 

I don't know, I've never had a bad buying experience at a dealership, because if they start with any bullE36 M3 during the initial 'just looking' visit, I immediately walk out and never go back.

Admittedly I've never been in a position where I had to buy a car today so I could get to work tomorrow.  Maybe that is more of a luxury than I think.  I also live in an area with 3-4 dealers of any given brand within an hour's drive, so there's no need to tolerate that kind of crap, sir.

frenchyd said

I think you are confused.  

Nope. They were celebrating absolutely berkeleying people. I saw the net profit listed on the Reynolds and Reynolds screen in some cases. These people were evil mother berkeleyers.

In reply to nocones :

You are dealing with a fear based system.    Salesmen are fired if they don't pressure you etc. 

        I do all my shopping on line.  And issues like extended  warranty, etc etc  I deal with them on line where you have all the power. All you have to do is hang up.   

  If I want to drive something first I go in ask for the test drive with the upfront stipulation I'm not ready to buy.   I'm trying to decide between this and a couple of different brand competitors.  I'm not  giving them my keys  for security or a trade in appraisal. I'm not trading this one in ( even if I am ). On the test drive    A red one will be the same as a white or green one. So you don't have to test drive every dealers car.  

  If I'm going to trade something in don't try to save time.    It just won't work that way.  Go back and deal on line where you can just hang up. Tell them you are buying it outright.  Yep lie!    Once you have all the numbers finalized including sales tax and documentation fees license cost etc. 

 Tell whoever you're working with to print out the numbers and send them to you.   
  Do that with every dealer of that brand of car you can find.  4-5 final numbers.  
   
Start with the best deal first and you've changed your mind.  What's your trade in worth. ( again on line,  take photos, be honest and don't oversell it, dents take picture,  rips in upholstery  carpet stain,  open the hood with the engine running.  So they can see and hear it.  
 

  Now you're  ready to buy. Any changes ? Get up and walk away.  

In reply to jimbob_racing :

Ive heard plenty of gloating over absolutely screwing people over. Including the sales manager himself verifying what the salesman told me on this one berked up deal. 
dummy walks in and wants an explorer sporttrac. They work him up the first deal which is of course completely bloated for negotiating room. Its monthly payment was like 650$, probably close to twice a good deal. Dummy says "ok". Sales manager then has to try to make that number work. He proudly told how he had to add in everything he could, protection package, gap, everything he could do that wasnt super obvious. When done he got close but still could not fluff enough to get to their offer, so they made the guy "happy" by giving him a lower monthly payment while absolutely berkin the life out of him.  He was quite proud of himself. 

these people would work over their own close family members to make profit. 
 

then there is the stuff they would all say about attractive women customers.  Not going into that.

jimbob_racing said:

These people were evil mother berkeleyers.

I'm in industrial sales and I get paid on commission. My last job was a $30,000 base salary and the rest is commission - sell at the highest profit margin the customer will pay and don't lose the business, also go find new business.  

The pricing is subject to market pricing (what the market will bear) but if you call me Saturday morning I'm juicing the price to cover my services of delivering on Saturday morning.  

So some of this is business in general.

In reply to TJL (Forum Supporter) :

Stupid should hurt. Sometimes that's physically, sometimes that's financially.

TJL (Forum Supporter) said:

In reply to jimbob_racing :

Ive heard plenty of gloating over absolutely screwing people over. Including the sales manager himself verifying what the salesman told me on this one berked up deal. 
dummy walks in and wants an explorer sporttrac. They work him up the first deal which is of course completely bloated for negotiating room. Its monthly payment was like 650$, probably close to twice a good deal. Dummy says "ok". Sales manager then has to try to make that number work. He proudly told how he had to add in everything he could, protection package, gap, everything he could do that wasnt super obvious. When done he got close but still could not fluff enough to get to their offer, so they made the guy "happy" by giving him a lower monthly payment while absolutely berkin the life out of him.  He was quite proud of himself. 

these people would work over their own close family members to make profit. 
 

then there is the stuff they would all say about attractive women customers.  Not going into that.

Yes there are dealerships where that is the norm.  Those are the dealerships where the ink is barely dry on who owns it. Because when the market is down you survive on loyal customers who are treated respectfully.  
       It doesn't take much to figure out which are which.    No brand is immune from the shake down artists even a good dealership will  occasionally get them.  
   So you can't be stupid and expect people not to take advantage of you.  Walk in not knowing anything except how to sign your name?   Yes you'll pay list price and get unneeded extra's.  But that's life.  
 Stupid ignorant people pay too much for cars,  houses,  computers, furniture,  and a whole bunch of stuff. 
      I believe I'm an honest person.   But if you come in and want a good used truck.  I'll tell you you can have a new one cheaper than a 2 year old used one.   If you give me the time required I'll lay it out for you.   Yep!   The new one is $500 a month the used one is $525 a month. 
   Yes,  the used one will be paid off in 4 years. The new one is paid off in 5 years.  Same equipment I can even get you the same color.  
 OK,  yes let's drive the used one and I'll get the paperwork started on it.   
  I want to dope slap them.  Hey! it's 2 years newer and has a full warranty.  You said you keep your  vehicles 5 years typically.     New vs Used?    Cheaper!!! ?????? 

In my experience, The more "upmarket" a dealer is,  the less they judge the book by the cover, or try to play games.  At the Aston dealer, I've shown up in dirty cargo shorts and a t shirt.  They practically begged me to take the new model out for a drive, no questions asked.  At the Chevy dealer, dressed better, they wanted to pull a credit report before even considering it.   Same feeling when "going home to think it over" and when pushing add ons.

Extreme examples, and YMMV, but thats been my experience as a general rule. 

I've worked in sales and as a general rule I think that sales professionals get too little respect.  But I think the reason for it has a lot to do with the way that car salesmen and dealerships handle customers.  There are some lines that get crossed all the time by car dealerships that  should never be crossed by truly professional sales people.

OK:

- portraying your product in the best possible light

- negotiating price vs. utility to optimize the value equation for the customer

- creating urgency to get a transaction done

- upselling features that may create extra value for the customer

NOT OK:

- arbitrarily manipulating price then obfuscating your work behind an impenetrable wall of documents

- bait and switch

- fear tactics; selling solutions to false/imaginary problems

- predatory lending tactics

- misrepresenting features or deficiencies

- etc.

At the end of the day, sales ethics is a thing.  In more professional business settings it's a hard requirement.  It's a shame that most people's view of salesmen is based on car salesmen.  There are some good ones out there but IMO they are few and far between.

I've said it before but:

Teslas are specialty products, they are *different* than most cars in the market and people are willing to jump through hoops to purchase them.

Most cars in the market are not specialty products, they are commodities.  This means that people don't really care which one they get, as long as the price is reasonable and it meets their needs.  Manufacturers have much less leverage when selling these products than when selling specialty ones;  the more headaches they put in the way of a potential customer buying one, the more likely that customer is to go to their competition.  Why would Joe Consumer wait a few weeks to get a Camry when Honda is willing to sell him an Accord today?  You've been able to order cars for decades and basically nobody does it, despite the ability to get exactly what you want and usually at a discount.  The convenience of NOW is important.

So no, dealers aren't going away for the new car market in general.

codrus (Forum Supporter) said:

You've been able to order cars for decades and basically nobody does it, despite the ability to get exactly what you want and usually at a discount.  The convenience of NOW is important.

In my experience, special ordering meant paying sticker price.  Negotiating on something the dealership had already invested in and was paying interest on is how you got discounts, because they had capital tied up in that inventory and their ROI was dropping every week it sat on the lot.

Nowadays, it seems you pay sticker or higher for everything and you hope you like what you can get.

In reply to cbaclawski :

I bought my Nissan Frontier used from a Porsche dealership and it was the best car buying experience I have ever had. No games just right to the price and after we got everything figured out over email I was in and out of the dealership in 30 minutes after the test drive and looking it over. 

My experiences with car dealers at the sales level and at the service level here in central va has been abysmal. Both areas of several dealers i have had association with have been openly dishonest and combative to deal with whether it was during the purchase process or during warranty claims. I'll never buy another new subaru from the local dealer because both sales and service make no effort to truly serve the customer. Their attitude about handling a warranty issue on the BRZ i owned was so negative and combative that I will never darken their door again for service or ever buy another vehicle from them. The local Toyota and Honda dealers also get similar negative marks for bad behavior. If every one of them went out of business here it would be of little consequence other than giving me cause to smile and raise a toast to justice done.

Duke said:

codrus (Forum Supporter) said:

You've been able to order cars for decades and basically nobody does it, despite the ability to get exactly what you want and usually at a discount.  The convenience of NOW is important.

In my experience, special ordering meant paying sticker price.  Negotiating on something the dealership had already invested in and was paying interest on is how you got discounts, because they had capital tied up in that inventory and their ROI was dropping every week it sat on the lot.

Nowadays, it seems you pay sticker or higher for everything and you hope you like what you can get.

 

I've always special ordered everything I bought.  I've always got the dealership down to to a few hundred dollars of profit.    Oops!  In 1967 I tried to buy a COPO  Corvette for $100 over invoice.   And wasn't able to complete the deal back then because I hadn't figured out how it works between the dealership and the factory.  
  I later did just that, ( figure out the process).   
  Yeh,  I worked for dealerships and know how dealerships work.  So ask if you want to know how it all works.  

codrus (Forum Supporter) said:

I've said it before but:

Teslas are specialty products, they are *different* than most cars in the market and people are willing to jump through hoops to purchase them.

Most cars in the market are not specialty products, they are commodities.  This means that people don't really care which one they get, as long as the price is reasonable and it meets their needs.  Manufacturers have much less leverage when selling these products than when selling specialty ones;  the more headaches they put in the way of a potential customer buying one, the more likely that customer is to go to their competition.  Why would Joe Consumer wait a few weeks to get a Camry when Honda is willing to sell him an Accord today?  You've been able to order cars for decades and basically nobody does it, despite the ability to get exactly what you want and usually at a discount.  The convenience of NOW is important.

So no, dealers aren't going away for the new car market in general.

 

Well put.   
 One further point.  Dealerships are a cushion.   Factories need to keep producing to be efficient and excess inventories need to go someplace and dealer lots are the answers.  
      If we all place our orders directly with the factory.  The factories will need to start and stop based on popularity of the vehicle and the economy.    Economically that won't work.  

ShinnyGroove (Forum Supporter) said:

I've worked in sales and as a general rule I think that sales professionals get too little respect.  But I think the reason for it has a lot to do with the way that car salesmen and dealerships handle customers.  There are some lines that get crossed all the time by car dealerships that  should never be crossed by truly professional sales people.

OK:

- portraying your product in the best possible light

- negotiating price vs. utility to optimize the value equation for the customer

- creating urgency to get a transaction done

- upselling features that may create extra value for the customer

NOT OK:

- arbitrarily manipulating price then obfuscating your work behind an impenetrable wall of documents

- bait and switch

- fear tactics; selling solutions to false/imaginary problems

- predatory lending tactics

- misrepresenting features or deficiencies

- etc.

At the end of the day, sales ethics is a thing.  In more professional business settings it's a hard requirement.  It's a shame that most people's view of salesmen is based on car salesmen.  There are some good ones out there but IMO they are few and far between.

Well put.   I went into car sales because I was a car guy.  I wanted to help people make smart decisions.  But most people didn't want that.  They wanted the Blue one with the payments of $XXX PER MONTH. 

    I quickly learned that 2 years was the absolute outside limit if you wanted  to preserve who you were and not give in to the more baser urges and pressures in the business 

I was lucky in that someone I sold a car to ( actually a fleet of cars)  hired me because of my skills and ethics.  That moved me up the ladder.  
  

Duke said:

codrus (Forum Supporter) said:

You've been able to order cars for decades and basically nobody does it, despite the ability to get exactly what you want and usually at a discount.  The convenience of NOW is important.

In my experience, special ordering meant paying sticker price.  Negotiating on something the dealership had already invested in and was paying interest on is how you got discounts, because they had capital tied up in that inventory and their ROI was dropping every week it sat on the lot.

Nowadays, it seems you pay sticker or higher for everything and you hope you like what you can get.

My experiences with ordering something that was in general availability have been that the dealer was very willing to deal on it.  They know that price is pretty much the only thing they have to work with, because someone who's willing to wait for a special order isn't likely to be fazed by the idea of driving to the next-closest dealer to get a better one.  They take a deposit and it's an easy, no-work, guaranteed sale.

Duke said:

I have only seen Tesla... boutiques? ...galleries? ...whatevers? ...inside shopping malls.  I guess they have a few demonstrators out in the parking lot?

On the Carvana model, I'm not going through the effort of making them drag a car to my house unless I'm 75% certain I'm willing to buy it, and I'll never be 75% certain without having already test driven one.

 

I guess it depends on the area but in alberta in Edmonton abd Calgary they appear to be similar to a normal dealership atleast in appearance. Dint know how much product they have or if it's all just demos but they did take over the location of a former infini dealership here in Edmonton.

ChrisTropea said:

In reply to cbaclawski :

I bought my Nissan Frontier used from a Porsche dealership and it was the best car buying experience I have ever had. No games just right to the price and after we got everything figured out over email I was in and out of the dealership in 30 minutes after the test drive and looking it over. 

Chances are you dealt with one of the many decent honest salespeople.  
while others on here have dealt with the other type of salesperson.  
     I'm curious  why would one person always have a bad experiences  while others have good experiences?  
   Is it possible  that the one group  comes forward with an open mind rather than convinced they are going to be screwed, that might have something to do with it?  

frenchyd said:

Chances are you dealt with one of the many decent honest salespeople.  
while others on here have dealt with the other type of salesperson.  
     I'm curious  why would one person always have a bad experiences  while others have good experiences?  
   Is it possible  that the one group  comes forward with an open mind rather than convinced they are going to be screwed, that might have something to do with it?  

IME, "luxury" brand dealerships (like Porsche) tend to be a lot less slimy than less expensive brands.  They're not going to give you a better deal, but they tend to be more polite and less dishonest about it.