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

In reply to wae :

So the Subaru dealer needed to hit a number to get your business, but you walked into Saturn and paid sticker price. Saturn had a bigger markup than Subaru ever did, but convinced the public they were "different". 

wae said:

I've lived in and around the IT sales world for a couple decades and I don't really think the new car dealers are anything special in terms of the sales process if you take a bit of a macro view of it. 

In my B2B sales experience from both sides of the table, there are an equal number of horror stories of sales reps gouging customers, selling things that customers don't really need or want, and playing all sorts of dirty tricks to get the deal closed as I think you'd find with car salesmen.  But on the flip side, I've dealt with a majority of reps who want to get the deal done by making sure that the customer is getting good value for their money and is treated right so that they don't have to coerce them to come back.  And my guess is that those stories would also appear in equal percentages among car sales interactions but they make really boring tales to tell at parties.

Here's a primary difference:  In the B2B sale there's usually a professional purchasing department looking out for the interests of the buyer and the organization should be setting the rules of engagement.  There's still a lot of shenanigans that go on, but it's on a different level.  (Like sending the the VP of IT to the superbowl ahead of the acquisition cycle).

This is different than an average car buyer that is pretty clueless about how the whole process works and just want new wheels they can afford vs. slimy sales professionals (not suggesting all car sales people are slimy, but far too many are...)

In reply to Steve_Jones :

Yeah, it wasn't really an even comparison.  AWD v/s FWD, wagon v/s sedan.  My number I was willing to pay on the Sube was more than the nut for the SL2 so I was stretching my budget a little to go up to that and didn't really think they'd be able to go that low.

But, you're spot-on about how Saturn worked.  Everything sold at MSRP, but the car was priced okay.  It's been a minute, but I think it was lower than what you'd be able to negotiate a Corolla or Civic down to but more than a Neon or a Cavalier.  Personally, if the price is fair, I'm okay with not having to negotiate it down.  To me it's not about how much money the other guy makes as long as it's a fair price.  Right now, it sounds like a fair price for a car is MSRP if you're lucky and usually MSRP+. 

But like you said, when you go in primed for a fight, it's got a higher percentage of being an unpleasant experience.  At least with Saturn you knew that the sales process was going to be more about add ons, financing, and adding option packages and stuff more than a game of trying to figure out how low they'll go while they try to guess how high you'll go.

Jesse Ransom said:

Steve_Jones said:

I've pointed out before, the manufacturer has no interest in direct to consumer, as the dealership is their customer, not the end buyer.

Ford would seem to differ on that point.

https://arstechnica.com/cars/2022/06/ford-wants-to-sell-evs-online-only-with-no-dealer-markups-says-ceo-farley/

A previous Ford CEO said the same stuff, and put a lot of things in place to do so. Every dealer was required to have certain website, and process, because Ford would be 100% direct to the consumer within 2 years. 
 

That was in 2002.....

In reply to Steve_Jones :

A fair point, though I think you'd agree that doesn't sound like "no interest."

In reply to Jesse Ransom :

I agree, but I see it more as they're telling the public what they want to hear, for the benefit of the shareholders...

As long as there's "a plan in the works" people move along to the next thing

wae said:

In reply to Steve_Jones :

Yeah, it wasn't really an even comparison.  AWD v/s FWD, wagon v/s sedan.  My number I was willing to pay on the Sube was more than the nut for the SL2 so I was stretching my budget a little to go up to that and didn't really think they'd be able to go that low.

But, you're spot-on about how Saturn worked.  Everything sold at MSRP, but the car was priced okay.  It's been a minute, but I think it was lower than what you'd be able to negotiate a Corolla or Civic down to but more than a Neon or a Cavalier.  Personally, if the price is fair, I'm okay with not having to negotiate it down.  To me it's not about how much money the other guy makes as long as it's a fair price.  Right now, it sounds like a fair price for a car is MSRP if you're lucky and usually MSRP+. 

But like you said, when you go in primed for a fight, it's got a higher percentage of being an unpleasant experience.  At least with Saturn you knew that the sales process was going to be more about add ons, financing, and adding option packages and stuff more than a game of trying to figure out how low they'll go while they try to guess how high you'll go.

I went into the Saturn Dealer who didn't have what I wanted but jumped right on getting it from another dealer who did have it.  And they delivered it to my dealer while I was doing the paperwork.  Because of the miles added in delivery they gave me a $300 discount which saved me a little more in sales tax.  
I received was nothing but respect and helpful.     

Jesse Ransom said:

In reply to Steve_Jones :

A fair point, though I think you'd agree that doesn't sound like "no interest."

Also, a number of states have laws making that essentially impossible for internal combustion vehicles.  AIUI, those laws are (at least in many cases) written such that either EVs don't count, or they don't count if put them in a new "brand" rather than putting "Ford" on the outside.

As I said earlier, I don't see how the Tesla model of multi-week waits between purchase and delivery is going to work to sell commodity vehicles.  That doesn't really say anything about the ownership of the "car lot" though -- you could replace franchised dealerships with Ford-owned "car lots" with test-drive-and-buy-same-day in the style of the Apple store and it would work fine.

One guy just wants "the best deal", another just wants a "fair price", but no one knows exactly what those are, do they?

In one case a guy can get in on a special mfr's plan, what would he consider the best deal if he couldn't?

Another says a fair price currently is MSRP, but what will it be in 2 months, and how is that determined?

This is my point, every one wants a "deal", but when everyone starts buying at MSRP from the mfr, will you all be getting "a deal", the "best" deal, or a "fair price" by your own definitions? At that point will you still be able to negotiate? anything? or will you be getting "screwed over" just like you feel you are now?

And still no one has addressed the elephant in the room, what do you do with your trade in?

Someone pointed out that Ford (or any MFR) would rather sell 500 cars a year to 3000 dealerships than 1 car to 1,500,00 people......and you're right. Same goes for trades, no mfr is going to deal with your trade in.

I bought my first new car from a dealer in 1976 and had no idea what I was doing, but I sold it back to them a year and two trips to the body shop later...,

2001 I bought a Ford Focus from a dealership with 5-year, zero interest. I never took it back to the dealer after I bought it. 
 

I took my wife's E46  convertible to a dealer with a top issue and they quoted a $3,000 repair that wouldn't have fixed it. I ended up fixing it with a $3 roll of wire from Autozone.

I'm currently talking with a dealer on a new Ford Ranger. The owner is an SCCA member and racer, and came with many recommendations, so I'm optimistic.  

I don't want a "deal", I want a vehicle. I don't know why this is so hard for some people to understand.

There is a portion of society that likes doing the dance of negotiation, but I truly believe they are the minority. Most of us would rather just show up, see the price, and decide if it's worth paying or not.  If the dealer model goes away, then MSRP is no longer 'suggested',  it becomes the default price.

Have you ever shopped racing equipment? Ever notice how every place sells the same harness or whatever for the same price unless it's an old item on closeout? You either pay the price, or you buy a different brand. Doesn't matter who you buy it from, so the service you get will matter more than the price. 

In reply to ddavidv :

Every vehicle has a price posted. You can decide if it's worth paying, or try to negotiate, but it's right there. Dealers need to post competitive prices online because the competition is on the same web page, yet the first thing 99% of people say walking in is "I know you can do better". At that point the dealer is not playing games, the customer is. People here accept the price Carmax puts online, but not the one the local Ford dealer puts online, why?

I generally don't buy from dealers, either new or used.  I bought our Cayenne diesel from the dealer, it was slightly used.  I think I could've done a bit better on it price wise but at the same time I wasn't jerked around and it was a clean transaction.  On my R I did buy it brand new and got a slightly better (maybe $300) deal on it than my friend, I used USAA's pricing tool.   Again, pretty easy transaction.

For the Land Cruiser I found it privately and then used a local car broker to handle the transaction.  Why?  Well, they handled all the paperwork, transporting it from California to Colorado and took in the R on trade, so I got the tax savings.  Well worth their fee, at least to me...

ddavidv said:

I don't want a "deal", I want a vehicle. I don't know why this is so hard for some people to understand.

There is a portion of society that likes doing the dance of negotiation, but I truly believe they are the minority. Most of us would rather just show up, see the price, and decide if it's worth paying or not.  If the dealer model goes away, then MSRP is no longer 'suggested',  it becomes the default price.

Have you ever shopped racing equipment? Ever notice how every place sells the same harness or whatever for the same price unless it's an old item on closeout? You either pay the price, or you buy a different brand. Doesn't matter who you buy it from, so the service you get will matter more than the price. 

  A car may be a commodity at one price and a bargain at a lower price.  When I've bought in the past I usually found out the price the dealer paid and offered that.  Or ordered one for slightly over invoice.   
    Working for dealerships I understand never to trade in a car.

    I broke that rule once in my life.  I had a basic Nova that cost me $100, dragged it home and fixed it at no cost, just a few hours. 
  Then spent another few hours cleaning it, detailing it.   
 It was my wife's car for the summer and she loved it.  The right size, an automatic with power steering and brakes.  And a pretty sunshine yellow she loved.   
      In October I bought a few year old Corvette and forced the dealer to give me $600 for it against a price below wholesale on the Corvette.  Reminded him of floor plan costs over winter.   Corvettes are lethal in the winter on snow or ice.   
 

MiniDave said:

One guy just wants "the best deal", another just wants a "fair price", but no one knows exactly what those are, do they?

In one case a guy can get in on a special mfr's plan, what would he consider the best deal if he couldn't?

Another says a fair price currently is MSRP, but what will it be in 2 months, and how is that determined?

This is my point, every one wants a "deal", but when everyone starts buying at MSRP from the mfr, will you all be getting "a deal", the "best" deal, or a "fair price" by your own definitions? At that point will you still be able to negotiate? anything? or will you be getting "screwed over" just like you feel you are now?

And still no one has addressed the elephant in the room, what do you do with your trade in?

Someone pointed out that Ford (or any MFR) would rather sell 500 cars a year to 3000 dealerships than 1 car to 1,500,00 people......and you're right. Same goes for trades, no mfr is going to deal with your trade in.

Tesla takes trade ins and so does Rivian.  No reason there needs to be an independent dealer to handle the trades. Tesla, it appears, just sends the cars to auction.

As someone who negotiates for living I have a different take on these interactions.

I let them know what I do for a living and ask them where they need to be. If they can't work with that I thank them for their time.

We haven't bought a car in 8 years but those interactions were fine. On my wife's Santa Fe I called out the sales manager on a mark up they added. He hesitated and I asked him if that's were their margin was. He confirmed it was and we had a nice pleasant conversation after that.

We have impeccable credit which nets better treatment.

A few years back we went to look at a used car for our son and the dealer had a couldn't be bothered attitude. It was pretty much a den of douche baggery. I also got the impression that this dealer was one of many that grind the sales staff.

If cars weren't a necessity dealers would have to work a little harder to treat people better. 

With all that said I don't see dealers going away anytime soon.

ddavidv said:

There is a portion of society that likes doing the dance of negotiation, but I truly believe they are the minority. Most of us would rather just show up, see the price, and decide if it's worth paying or not. 

While I agree about the minority/majority comment, I worked at the largest nationwide no-haggle used car dealer for a decade. The number of people that came in expecting to haggle, despite a national no-haggle advertising campaign, was mind boggling. Many of them would be absolutely irate when we wouldn't budge off our price. To some extent, haggling, at least on cars, is baked into American's DNA 

I like haggling over the price when buying a new vehicle.  All of those people that can't be bothered to work a little to get a better deal on a huge purchase leave some room for me to get a better deal. If we all paid the same price, I'd be paying more. Thinking through my history, I've had the full spectrum of experiences. . The one thing I have never done was reward a bad dealer with a sale. Thinking back though, I don't know how much the differences in my experiences had to do with the different dealers or my different tactics. 
 

I've never bought a vehicle on the first try. I've tried to buy at local dealers, both out of convenience and to support the local community, but it has never worked out. My first trips to the dealer are to confirm the make, model, and options that I want. Until that is decided, I don't want to talk about the sale. Nothing to talk about until I make my decision. Take care of me and respect my wishes, I'll come back to you. Try to sell me whatever is on your lot despite not being what I'm looking for, and you are just wasting both of our time. Once I know what I want, I research to find out what I want to pay. I am very direct- this is the vehicle I want, this is what I'm willing to pay. I just need a yes or no, and I will purchase or move on. I've never had that work locally, but I've had a 100% success rate when casting a wider net. I don't know if my local dealers just suck and I found good ones by searching, or if those other dealers treated me better because they knew I was serious, or if it was a little of both. But I've bought all of my cars from dealers 1-2 hours away after I found the specific car I wanted, called them, told them what I wanted to pay, and said I'd drive over and buy. Every time it was an easy buying experience with the car ready and waiting for me with the bare minimum BS. I have often received calls back from my local dealers accepting my price days later- after I've already bought elsewhere. 

GRM Forum 2022: Dealers and their crooked-ass salesmen are the biggest douchebags in the world and deserve to die.  Here's all my bad experiences, I can't wait till  they're gone. The manufacturer direct model will be so much better.

GRM Forum 2032: Remember the good old days when you could test drive to your heart's content, drink free coffee while negotiating the price down and walk out with a sweet deal?  Some of those salesmen were great guys who went to bat for us, here's all my good experiences. These manufacturers are totally screwing us. I sure miss the good old days.

In reply to Peabody :

GRM Forum 2035: isn't it sweet that we can order our George Jetson Copters from our phone and get it delivered?  Shoot, I've been waiting for this since 1970.

You're both wrong, sorry.

GRM Forum [insert year here]:  Depreciation is for suckers.  Only idiots buy new cars.

Also GRM Forum [insert year here]:  Why U no make cars we want?

Steve_Jones said:

In reply to ddavidv :

Every vehicle has a price posted. You can decide if it's worth paying, or try to negotiate, but it's right there. Dealers need to post competitive prices online because the competition is on the same web page, yet the first thing 99% of people say walking in is "I know you can do better". At that point the dealer is not playing games, the customer is. People here accept the price Carmax puts online, but not the one the local Ford dealer puts online, why?

The last time I tried to buy a car at the price the dealer put online, the fine print was two miles long and nearly impossible to read on their terrible website.  In order to get that price I would have had to have been at least a former military service member that also graduated from college in the last 6 months.  Borderline predatory practices.

While I was there talking to them about that, I test drove another car.  I liked it, but I didn't pursue it in any way.  They asked me what it would take to get me to leave with that car, and I threw out a number.  They took it.

I didn't walk in demanding better.  I walked in hoping to get the berkeleying price they posted.  Am I happy I got a "deal" on the car I did buy?  No.  I'd much rather there be a posted take it or leave it price, and zero sales people to deal with.

Name any normal retail purchase where people say "man, I wish this was more like buying a car from a dealership."

If that were the case for anyone but dedicated hagglers, I'd think there was some possibility that we'd miss dealers when they're gone. But it's just not the case. It's a model that most people hate, and mercifully hasn't spread to many other things.

I really don't get all this.

There is a sticker price on every car.  Decide if the vehicle is worth that much to you, including any dealership paperwork fees.  Then pay that amount and don't ask for a discount if you don't want to haggle.

If it's not worth that much to you, don't buy it.

And like someone (I believe frenchy) said above, don't reward douchebag dealers with your business.