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Comment by jeffbee | Hacker News Reader

Why do people get all worked up over a difference ± a few hundred dollars on a very expensive purchase? When I want to buy a car, which I admit rarely happens, I look at the advertised price and if I'm willing to pay that price then I call the dealer and if I'm not, I don't. If the paperwork shows up with a different number on it then I tell them to leave, and it's their time, not mine, that was wasted.

I just really don't get the whole haggling thing. If you want a lower price, wait until one is being advertised, or substitute a different model, or get a bicycle.

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> Why do people get all worked up over a difference ± a few hundred dollars on a very expensive purchase

The size of the purchase shouldn't affect how worked up you get about a few hundred dollars of overcharge, only the regularity with which you make the purchase. For example let's say you buy a new TV and a new car every 5 years. Let's say the TV "should" cost $500 and the car "should" cost $25,000. Why would you be ok with paying $25,500 for the car but not with paying $1,000 for the TV (or, maybe you're ok with both?)

Yes, the difference absolutely does not matter. Most people who own cars have experienced a big exogenous shock in operating costs due to fuel recently, that would have more than wiped out the average advantage from negotiating. Furthermore, the unforeseeable supply shortage greatly benefited existing car owners, again much more than any reasonable amount of haggling could have done. And other exogenous factors such as housing costs will have been far more important to the lives of car purchasers than the nominal prices of cars. I mean, have you ever tried to buy a house? That shit is crazy.

The one and only way to save money on cars is to not buy them. The true cost of car ownership is massively, woefully underestimated by virtually all drivers. 1% or 2% difference on the nominal purchase price amounts to nothing in the big picture.

> Most people who own cars have experienced a big exogenous shock in operating costs due to fuel recently, that would have more than wiped out the average advantage from negotiating.

This is a ... weird way to look at it.

The increase in fuel costs affects you roughly equally whether you negotiated or not - so it's not at all a factor in the decision making process (unless simply not owning a car is an option). I mean, the price of goods went up a lot too due to rising fuel costs, but we don't consider those when buying a car, right?

> The one and only way to save money on cars is to not buy them.

Ah, your reasoning makes sense now. Unfortunately, not buying a car is not an option for many.

> 1% or 2% difference on the nominal purchase price amounts to nothing in the big picture.

I would strongly recommend taking a course (or reading a textbook) on engineering economics. Your way of thinking is precisely what they caution against. If anything, the fact that things have gotten quite expensive makes it more important to cut costs where you can.

I might agree with your last sentence but not the rest of it. Car owners systematically underestimate the total cost of ownership by ~50% (i.e. the true cost is ~2x the perceived cost). Under those conditions it is completely bizarre that buyers agonize over 1-2% of the purchase price. It would make sense to micromanage that purchase price if, and only if, the rest of your expenses are known and managed to very unusual accuracy.

https://www.nature.com/articles/d41586-020-01118-w

> Car owners systematically underestimate the total cost of ownership by ~50% (i.e. the true cost is ~2x the perceived cost).

Fortunately, that's not me. I've been keeping all financial records for all non-cash transactions for over 15 years, and so I know exactly what I've spent on my car - fuel, repairs, addons, everything. I've posted breakdowns far down in my comment history (perhaps in the last year - not sure).

What I can say: It's not even close to whatever Edmund's TCO calculator reports - so I'm a bit wary of these estimates. I'm not frugal, and I'm not a car guy, and I do whatever the mechanic suggests.

How do you overcome the uncertainty? I paid MSRP for my current car, $23500 in July 2020. Since then it has depreciated at -$300/month. That is to say, net of energy, insurance, and annual taxes my real cost of ownership has been -$150/month. I am being paid to own this car. But no amount of analysis could have told me that at the time, and a difference of $500 either way on the purchase would have been utterly irrelevant to my happiness and well being.

A recurring theme keeps coming up in your comments:

The notion that the amount you can save is only $500. As several commenters have pointed out, it could be a lot more (pre-pandemic).

> But no amount of analysis could have told me that at the time

That you are "making" money on this car is irrelevant to the analysis. Just as totaling the car within a few months of buying it is irrelevant to the analysis. You'd still have anywhere from $500 to $3000 more in your pocket regardless of the amount (or direction) of the appreciation. You'd still get the negative depreciation you're getting now.

Again: I really recommend reading an engineering economics textbook.

> a difference of $500 either way on the purchase would have been utterly irrelevant to my happiness and well being.

Well clearly, if $500 is irrelevant to your happiness, then it is irrelevant to your happiness. No one is trying to convince you otherwise. What people are pointing out is that the $500 (likely a low estimate) you are down has the same financial impact on you as buying a Pepsi and getting charged an additional $500 for the single Pepsi. That the latter case may make you upset (or not) is up to you. We're not trying to make you feel better - we're pointing out the financial outcome is the same.

Of course, if you're simply trying to say that it's not worth $500-3000 spending the effort to get a better deal - that's totally fine. But that should be phrased as "$500 wasn't worth the hassle" as opposed to "It shouldn't matter because it is a small percentage of total ownership cost".

That's one of the many biases explored by behavioral economics. People absolutely look at percentage premiums even though it's the absolute numbers that "should" matter--issues like fairness aside.

The article answered that question:

> I found some trucks that were literally priced $10,000-$15,000 over MSRP, and I encountered many of the shady business practices that the FTC is now trying to ban.

because it's not ± a few hundred dollars, it's thousands of dollars, and claiming online that it's one price and charging a lot more once you get there

Charging over MSRP for cars that are in high demand and short supply is not "shady" or even slightly odd.

It sounds like you don’t purchase cars much if you think the price difference is only a few hundred dollars.

I went to look for a car recently and, ignoring the Covid shortage fee increase, they added a mandatory $1200 for some bs paint protection and an additional $1400 for some gps anti-theft that would, “pay for itself with insurance savings” (lol).

That’s an additional $2600 on every car ignoring all the other bs they try to sneak in.

Here’s something fun: go look up the reviews for all dealerships nearby and read for yourself how many talk about price bait-and-switches, mandatory fees, etc.

I agree. It's why Carmax did well even pre-internet delivery companies. Were they the cheapest? No, but the prices were fine, you could shop online, and no one did any hard sales job.

I hate the dealership experience and games they play and have always wanted to buy from carmax.

However , I have yet purchased a car from carmax, because they have been typically over $3.5K+ overpriced , for the same year ,model, and equivalent condition that I can get it at the scummy dealers.

Typical car shopping experience. Now this has to be modified a little depending if its a buyers or sellers market. However for the most part

1. Determine the car ,model,year, and condition of the car I want.

2. Browse carmax and set that as my highest price.

3. Email and go to local dealers and offer $3.5K- below carmax asking price than add tax and title to submit your offer as and out the door price.

4. Some don't responded but some do .

5. Go to dealerships ones that said they can do it at near the end of the month.

6. Then expect for them to do the bait and switch and send you to the backend manager who plays online games on his laptop for about an hour pretending to do something when they are really just trying to break you down. So when the manager comes into play I typically say great just give me a call or I come back after a couple of hours. so I don't wait there for no reason.

7. Manager plays the if he sold me the car for what I asked then they would be out of business. Then I say why did you agree to it and either I stay firm on my original offer or go up 500 bucks. they typically still don't approve at this stage which is expected and fine so I walk knowing they already have my contact information.

8. Play the wait game . Typically 1 or 2 weeks later I get a call back. They Agree for my original counter offer.

9. I go back in to sign the paperwork

10. The carsalesman is all giddy and sends me back to the manager and financier to close on the deal.

11. I get back and I see additional charges such as dealer fees and other bs which I say thank you but no thank you and the offer I submitted was out the door price. Sometimes I walk out again or they remove the charges .

fun stuff but like I said playing the stupid game has saved me $3.5K most times. The key is willing and having the time to play the stupid game with them, willing to walk, and not have an immediate need for a car.

There have been also times where I have been less willing to haggle on the price but even then I can typically get the car 1.5K below car max with little effort. When I buy new its a little trickier but I never pay anywhere near the msrp.

> Why do people get all worked up over a difference ± a few hundred dollars on a very expensive purchase?

Because $500 lets you buy $500 worth of goods whether you are spending $1000 or $30000.

Also, the difference can be a lot more than $500. I've known people to save a few thousand dollars.

> I just really don't get the whole haggling thing. If you want a lower price, wait until one is being advertised

I waited till too long to learn how to negotiate, and once I started doing it, I understood why your strategy is quite suboptimal. With dealers, it's simple: If you don't haggle, you will always pay more. The price you can get with successful haggling is often lower than the price will ever be advertised, in any nearby dealership.

Also, while haggling seems like a pain, it can actually save time. A friend was once buying a used BMW, and he wanted a price a few thousand dollars less than the dealer was offering. Just asking for that lower price didn't help. So he told the dealer he had found a dealer with the price he was looking for, but it was all the way in a nearby town and he would rather just by it locally. The dealer then agreed.

There was no dealer in another town selling at that price. I wondered why the local dealer didn't ask for proof. The likely reason: It wasn't an unreasonable price, and the local dealer knew that if the buyer could afford to wait, he will find a dealer somewhere selling at that price. There was utility in him getting rid of this car rather than wait for another buyer.

Haggling can save you a lot of time. The only reason I go to private party for used car is you'll almost always get better deals there. But I do pay a price: I have to wait a lot longer on average.

There aren't a lot of other contexts in which I can effectively make $500-2000 for being willing to talk to an annoying, but harmless, person for an hour while saying "no" a lot.

The buying experience really varies depending on what end of the market you're at. A high volume Honda dealer will almost certainly have a very different buying experience than a low volume corner buy-here-pay-here lot, and a different revenue model. The former often won't haggle with you, and the latter is trying to pay their bills via margin off a small number of purchases by customers who don't have much ability to shop around.

I don't like being ripped off. I don't like it whether it's a mugger, or a car dealership, or a bank.

I also don't like being lied to. I don't like being told the deal is X for $Y, and finding out later that it's X for $Y + $Z. In fact, one of my major rules is that I don't do business with people who lie to me.

It’s not always a few hundred. On popular models it can be many thousands.

ive gotten 8k off of MSRP from haggling. haggling via email is very easy (this was in late 2020 before the car situation got crazy though)

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