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Comment by drblast | Hacker News Reader

They can make money because used car dealerships are an anachronism run by sales morons who are hoping to find a bigger fool to siphon money off of.

Interacting with a car dealership feels like you're walking into a poker game with "sucker" stamped on your forehead.

I recently tried to buy a barely used Lexus from a Lexus dealer and couldn't believe they used the same bullshit New Jersey Pontiac dealer tactics to sell me the car that were dated and transparent in 1987.

The only easier industry to disrupt is probably furniture or mattress sales.

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>The only easier industry to disrupt is probably furniture or mattress sales.

I walked into a mattress store recently, and was absolutely horrified. It's very obvious what their tactics are. The sticker price on everything was easily 3x what the cost of a decent bed/mattress should be, to the point it was obvious none of the clientele in there would be paying that full price upfront. They only talk about everything in terms of "monthly payments". It's very obviously just a scheme to trap poor people who can't just put an $800 mattress on a 0% credit card into making 5 years worth of payments and interest on something they can't afford.

Buying a mattress is aggravating, but my experience has been rather different. Maybe I went to different types of stores, I don't know. I did notice that each store/chain seems to sell very similar mattresses that are somehow technically different models so you can't directly compare prices.

First mattress I bought had a sticker price of I think $850 plus tax. Ended up haggling and paying $550 cash (tax included) for the mattress with a cover included.

Second mattress I bought had a sticker price of around $2800. Haggled down to $900 after tax again with a cover included. It was significantly better than the first one.

Both were queen sized, included delivery and offered haul-off.

>Second mattress I bought had a sticker price of around $2800. Haggled down to $900 after tax again with a cover included.

You have great negotiation skills

My negotiation skills are okay, but mattresses have absurd markups.

Sales guy said $900 was the wholesale price, but I highly doubt that. I'm sure they still made at least a few hundred dollars on the sale. I've heard the wholesale price on a $3000 mattress can be as little as $300.

I went to such a store, couldn't believe the prices and number of salesmen. I literally walked across the street and was shown something half the price, and when I asked for something cheaper, they showed me something cheaper.

The lesson I learned was to never buy something from a brand you hear constantly on the radio. You'll end up having to pay for all that advertising.

I think this every time I hear Geiko ads.

We ended up finding a local place where they manufacturer the foam mattresses in-house. Rather than pick and choose which model you like, you pick among options. There are 3-4 firmnesses. You can choose the firmness on each side of the bed. You can choose thickness of the mattress. You can choose exterior quality also. In the end the finished product looks as good as the major manufacturer and costs half the amount. They also get it ready and delivered in 2-3 days.

You'd be surprised how much "old boy network" stuff is involved in used cars. Calculating taxes is a giant pain (and no one except CarMax has even solved this problem as far as I can tell). Some states have extremely draconian laws, especially those relating to the environment (which are arguably in the public's interest) and those relating to state inspection (which are arguably just a glorified protection racket). Not to mention, having a full lot with reliable used cars is quite capital intensive. And a used car company needs pretty solid knowledge about which cars to actually turn around and which to dump, so they don't actually sell a lemon to retail consumers.

What's the argument for state inspection being a "glorified protection racket"?

The usual argument is that it's just a waste with no safety benefit. Some states that previously required annual inspections have eliminated them, and traffic deaths per mile driven haven't increased.

In certain states, the number of permits to perform state inspections is capped. New entrants who want to perform inspections (which a used car dealer will typically need to do) have to either wait in line indefinitely or buy up an existing permit-holder.

State inspections may improve vehicle safety at the margin. However, when state inspection permits are treated like taxi cab medallions, the cost-benefit comparison becomes a bit skewed.

>Calculating taxes is a giant pain

Depends on the state. In Georgia, you can go to the Department of Revenue's site, punch in a VIN or year/model of a car, and get the exact ad valorem that would be due when buying a car. It makes it pretty trivial to figure out what your ballpark out the door price should be before you even start negotiating and avoids letting the the dealership make negotiations revolve around monthly payments.

I have my issues with how Georgia does AVT -- it's paid on any car when first registered in the state, including a car you already own when moving in -- but it's kind of ridiculous that at least being able to easily know what the state is going to charge you isn't standard across the board.

Yes, of course it depends on the state. CarMax operates in 41 states.[1] Given that some customers are known to cross state lines in order to purchase vehicles, CarMax likely calculates taxes for every state except Alaska and Hawaii. In some states, the tax rules are arcane enough that they depend on the municipality as well.

1. https://www.carmax.com/stores

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