New technology and old tactics have made buying a car a death march of deception
prospect.org
prospect.org
My rule when buying a car from a dealer is refuse everything they try to sell you. They will basically hold you hostage up to and including telling you that you are being foolish and irresponsible for refusing warranties and gap insurance and whatever else. (I even have had them take my wife aside to tell her how irresponsible I was being). But you have to ride it out.
There's no such laws in place requiring independent dealerships in Canada. Aside from the usual direct sales car companies, Genesis dealerships in Canada are all owned by Genesis Canada and I can order a car direct from Genesis. Yet most of the big names in cars operate with independent dealerships, as well as practically every motorcycle manufacturer as far as I know. In fact, Mercedes-Benz Canada just sold off all their Toronto dealerships to a AWIN/Zanchin [1] and AFAIK it wasn't because they were forced to.
I don't have any real insight into why this is the case. Most I can say is that if direct sales was so lucrative for car makers, one has to wonder why they didn't take advantage of it here. That being said, FortNine released a video on why motorcycle dealerships work this way; I suspect a lot of it applies to cars as well: https://www.youtube.com/watch?v=meHYBhcpdvQ
[1]https://media.mercedes-benz.ca/releases/release-048f50ed0ac9...
The manufacturer gets cold hard cash for the vehicles, now. They are off the books except for the warrantee.
I’m not familiar with the “Rivian shit show”.
Don't fret too much, they won't survive much longer.
Customers should have the option to buy from a factory and to buy from a dealership.
Maybe I need a car now or want a curated selection instead of infinite choice, but I also want to buy from the factory and get my dream car or work truck in the exact specification I need without the dealer markup.
By allowing the choice they would be forced to compete and that should be good for the customer!
I considered it a win-win situation, since it left me with more money in the bank, the sale person got their kick backs from the finance company (they proceeded to give me the free replacement car mats and other freebies associated with the finance deal), and I got positive credit ratings.
But yes, what a pain.
Asset-backed securities are a strange world of value based on value that can either lead to market collapse (because someone misvalued them, see 2007-2008) or market efficiency (because more people can afford debt for stuff).
> the sale person got their kick backs
I don't understand why this is your concern, to the point where you were willing to take on debt to satisfy this stranger's arbitrary incentive.
Please don't take this the wrong way but I think you might want to revaluate if it really was a win-win, or rather if you caved to their pressure tactics and now you're lying to yourself about it.
Dealerships exist because the automakers wanted them, and those laws exist due to the automakers' foul play.
Automakers want to make cars. They don't want to manage stores, deal with thousands of different municipalities' rules for selling and registering vehicles, repair vehicles they've already sold, or store millions of cars in inventory until they're sold. They let someone else do all that, and it lets them run their factories at a nice even pace with essentially guaranteed buyers for their output.
Automakers did, in the 1990s, start to get jealous of the money their dealerships were making on the back of their products. Ford and GM both opened factory stores competing directly with their own dealers. They knew just where to open those stores and what to sell at them, because they had full knowledge of where their successful dealers were, and what they were best at selling at those dealerships. The franchisees were taking all the risk in selecting sites and financing inventory just for their franchisor to swoop in and undercut their business with their own store next door.
That unfairness is what led the dealers to lobby for those state laws banning the automaker from competing with its own franchisees.
If the dealerships don't like it, they should learn advanced engineering and industrial manufacturing, and make their own cars. If they can't, then they should have been let to fail since they couldn't adapt.
A franchise had the capital to make their own restaurant but chose to be subservient to a franchisor instead. That's on them. Owning a business has great rewards, but is supposed to have great risk too.
It is time we brought the risk back. Policy the is cut throat to business is good policy. Businesses should be ravenously competing, failing, and going bankrupt. There should be no bailouts. There should be no patents. It should be survival of the fittest -- as it is for the poorest of society.
“I’m a lawyer. I have a pre-approved loan. Give me your best and final offer.”
And that worked! We were in and done in less than five minutes.
Sadly, not everyone can use that technique.
Just remember these simple things when buying a car at a dealership
1. Don’t play 4 square, cut to the chase. If they ask if youre paying cash or financing say you are open to either option, but focus on the bottom dollar
2. Whoever you’re talking to is not the person you’re negotiating with, they are just a front. This is the case with most retail sales including windows, flooring, siding, and curtains. The first time the guy pauses and has to ask or talk to a manager is the first time you’ve actually negotiated anything. The first time they “ask their manager” they might just go for coffee. Don’t just accept that they leave their office to talk to the manager, watch where they go. Find a reason for them to leave the room at least 3 times.
3. Even if you don’t think you are you’re going to end up in “the box” it’s harder to say no to a female statically so you may end up with a woman. Don’t be hung up on gender, ask questions, don’t get bullied. If your question doesn’t get answered, don’t move to the next topic.
4. Just watch the movie “Used Cars” it’s fun. Do not think it’s all a joke
5. In the words of “Casino” (1995) . It’s all been arranged to get your money.
You’ll be a lot happier and richer.
Most people don't have the skill to understand what excellent condition is, and it can often look the same as about to die condition.
Yes... car sales are complex and not straight forward.
[0] of course a lot of things are not covered by it, as the manufacturer claims it's "wear and tear" related, but that's the usual scumbaggery, and applies to new cars in the same way anyway
I haven't bought new for a while though. My current one was like 12% of the new price at 12 years old and works fine.
I don't shop at dealerships that do that shit. It is an old manipulation for suckers. I grew up running around a Ford dealership. The sales people had a book that showed the complete financial picture of each vehicle and they knew what they needed to sell them for. Anything else is a game that is playing your ignorance and leveraging your inexperience.
You are the buyer, you ultimately are in control because you are the one paying for the car. You can buy a car for a fair price at a dealer, but you have to have a strategy and understand who you are dealing with, or you will get played like a fiddle. Walking out is your superpower. If they pressure you to sign a "statement of commitment" to buy a car, or if they ask you to sign anything that's not the actual sales contract for the specific vehicle you are buying, walk out. If they say you can't see the contract before you sign it, walk out. Do not sign anything until you've gotten your final deal in place, and do not sign if they then try to change something. Get up and head for the door. At that point they are as vested in the sale as you are. The salesman is already thinking about what his commission will be.
Many states have a 48 or 72 hour "buyers remorse" law where you can unwind a car purchase even after you've signed the contract. Find out if you have that and understand how it works.
Do not fall in love with a car. It's a car. There are thousands of others for sale right now. If you can't make a deal on this one, there are many other cars and many other dealers.
I don't buy cars at dealers anymore. I'm just not willing to sit through the lies, bullshit, and games, even when I know it's coming. I buy from private sellers, and pay cash. Some of the cars have been better than others, but they have all been far better deals in terms of total costs during the time I've owned them than any new car has been.
Finance lies at the heart of this. I am sure a savvy cash buyer, or one using a bank loan pre approved not through the car company can do better but the point of the article is they know how to exploit young, naieve and keen buyers. People who don't have that cash, or pre-approval, and who will believe a trusting, smiling, wide eyed adult.
Net present value and delayed gratification/cost are a thing. We're chimps. We want the two bananas now, not a banana tree for life.
As the saying goes, a banana is hand is worth two on the tree.
Seriously though, car sales is cut throat and it's do or die. The people who walk in there thinking they are going to be the "good one" are out the door in a minute.
The cost sheet also makes then spell out exactly what the cost and the extras are on the vehicle.
None of the last several cars I owned were from a regular dealership buy. One was a private sale. One was an ex-rental, bought from the rental company's sales division. And the last one was from CarMax. Of course, the price was right every time to seal the deal, but articles like these certainly did influence my choice.
Regardless of what you think of Tesla, the old car cartels need to die because of how anti-consumer they are.
Unfortunately, it is, and his management is style is such that I can't trust he won't randomly destroy the company one day.
This is completely false. All auto glass is UV rated.
Have any sources at all that show "no stalks" is more dangerous?
Basically anytime you see an agency rule being used to enforce something now you should presume it wont hold up in at least one federal district.
I recently bought a car of carvana it was a mixed experience. On one side it was fantastic to have an upfront price, click a few buttons and be done with it. It. But on the other side when I got to see the car in person it was not in very good shape and things were wrong that they did not show me on the website. In fact is in the shop right now for mechanical issues. I would completely ignore their 150 point inspection. It's a joke. Be fully prepared to refuse the car and to select a different car. Pay close attention to shipping fees as well.
5/10 experience and still better than a dealership.
Just can't stomach driving to the dealership for routine maintenance, having to deal with such a predatory culture.
I wonder if traditional auto cos are aware of the opportunity cost of dealerships. The cost is growing
> Just can't stomach driving to the dealership for routine maintenance, having to deal with such a predatory culture.
Ummmm, are you sure you've done your research and due diligence on the Tesla maintenance and repair experience? They are, ummmm, widely regarded as more predatory than pretty much every other manufacturer/dealership.
Honestly, if you're paying cash, it's not a big deal. I bought a car a couple years ago. At the time, there wasn't really any point in haggling on the car's price given how in short supply everything was. I got them to toss in some extra trade-in to cover the "factory options" on a car that wasn't even built yet--with the proviso that they had a deal if they agreed to it. I took a very discounted extended warranty which may or may not have been a good deal but it was cheap.
The whole thing, including test drive, took me maybe 30 minutes. I said "no" quite a few times but it was hardly a pressure-packed negotiating session.
Some tried to play the typical games but several gave me a really good price right off the bat. I ended up paying about 12% under MSRP without having to haggle. I arranged a pick up time, showed up, filled out the paperwork, paid the agreed upon price and was out of the dealership in about an hour.
All I hope is that by the next time I need my next car dealerships still do business through email.
I mean, it's hard to argue with the common refrain "when am I ever going to use calculus?" that you often hear from high school kids, but then nearly everyone in the US buys a car at some point and there is no simple guidance or courses for that. Why can't schools have a short class that teaches:
1. Never sign something without reading it first. It's scary to me how many sales situations (e.g. a gym membership, house closing, etc.) give you stacks of paper with the implicit (or not so implicit) understanding that "nobody actually reads all this".
2. Understanding who is on your side and who isn't, legally.
3. Understanding common negotiating and pressure tactics.
etc.
Seems like a course in these important life skills could be done in a couple hours at most yet most of us only learn these lessons if we have family members who teach them to us.
I have an hour on my lunch break and I just want a gym membership. Am I supposed to take it home and spend 2 hours reading through fine-print legalese that I won't be able to parse the subtlety of anyway? Or find and hire a lawyer to review the document? You can say "find another gym" but what about when they all do that?
Turns out we probably should've gotten something else at that particular juncture due to life circumstances, but the process itself was painless.
Perhaps the best part of the "service experience" is not having to go in for oil changes, brakes, and all the other stuff legacy cars require.
When I do walk in to get something checked out, I get an estimate via the app and can chat with someone before even dropping off the car, which is nice. Tesla servicing has been a good experience for me so far, and does make me want to order another Tesla when our ICE car dies a couple years from now.
Tesla (and maybe Rivian) don't feel like they'd do that. You order what you want, you get exactly that. I hope I never have to deal with a dealer again.
That said, the same seems to be happening to e-bikes in the bad direction. They've gotten expensive. You have to take what the dealers have or order through the dealer as the manufacture doesn't take direct orders. Then you have to pray the dealer doesn't sell the bike while you wait. That seems less likely with a bike but it's annoying that you have to go through a middle-company.
Never financing from dealership again.
We bought a van recently. It arrived with no weird extras, at a price that seemed fair, and we never even talked to a dealer (I researched models online). She charged us about $400 for the broker service and we picked up the van at her office.
It seems like it’s just the dealer financing that forces you into this murky slimy world of dealer sales departments.
Trump has immunity for “presidential actions” as ruled by his friends at Supreme Court.
Dealerships got in law that consumer protection cannot regulate them.
Supreme Court ruled that favor done after cannot be called “corruption” and is “gratuity”.
We mock Russia, but corruption also runs deep in US at the highest levels.