People in business for a quick buck give everyone else in their field a bad name. They fully deserve the reputations they receive. More than a few CEO’s and their boards have ruined— are ruining– their companies by combining short term thinking and personal greed. To expedite their demise, more people should vote with their feet, and avoid mindless profiteers. That said, take it from the manager of an average sized Honda store: not all car dealers are crooks.
Before I argue my point, take a look at Honda invoice prices at KBB and Edmunds (our customers do). Clock the difference between dealer invoice and what the site says you should pay. Then consider the cost of opening a dealer’s doors every day; from heat and light to payroll to bathroom tissue. Running a car dealership— even one as successful as ours– makes a savings account look like a sweet investment.
Our geographical area is currently experiencing astounding growth rates. Despite the enormous amount of footfall on the showroom floor (and the need to keep the wolf from our door), despite the temptation of making hay while the sun shines, we stick to our basic values. Respect the customer. Don’t swing for the fences; if you miss, you’re out, and you look like an ass in the process. Play it straight, play it safe and get on first. Put another way, a little of something is better than a lot of nothing.
When a hot product like the Civic Si or new CR-V hits the showroom floor, I do not allow the sales staff to charge over the Manufacturer’s Suggested Retail Price (MSRP) to customers who “gotta have it now, no matter what.” We only accessorize showroom cars for the sake of selling; we don’t cram high-profit dealer add-ons down peoples’ throats. On the finance side, our staff has been trained to educate and discourage customers who want to borrow for more than sixty months.
It’s easy to understand why some car dealers lose faith and jettison their dignity. The traditional adversarial relationship between a dealer and the customer leads many customers to feel it’s OK to “screw the dealer back.” We have to put wheel locks on cars with alloys since they seem to walk off on their own. We get burned from time to time by unscrupulous customers who trade in vehicles with smoked transmissions, or the engine knock that gets masked by adding axle oil into the engine.
I feel sorry for the domestic dealers faced with cynical customers, saddled with large inventories, surrounded by closely placed dealers of the same line/make. The temptations to cut corners are many; only personal integrity and long term thinking will stay a desperate dealer’s hand.
In college, I drove a Dodge Ram Van. Something on the front of the engine puked; I don’t remember what. But what I’ll never forget what happened next. The mechanic tore the front of the engine apart to replace said part– and failed to notice the drive belts were starting to dry rot. Two days after I picked it up, the alternator belt snapped.
I brought the Ram back, showed my receipt and asked why I wasn’t told I needed belts. I would have bought them without question if they replaced them the first time. The dealer replaced all the belts for free without hesitation. And I was willing to pay. Dealers face those sorts of decisions every day. The good ones make the right call. The bad ones don’t.
It must be said that bad dealer service often starts with a dysfunctional relationship between dealer and manufacturer. If you look at sales figures, the brands who grow consistently are the ones who share a partnership mentality with their dealers and vendors. The ones who don’t, well, if it weren’t for state franchise laws, what would have happened to all those Chrysler/Dodge dealers who refused to accept the goofy vehicles sitting in the infamous “sales bank?”
Those of you who call for disbandment of the franchise system should click on the link to Dealer Magazine below, and see just one of the challenges U.S. dealers face when working with manufacturers. That said, there’s no question that a dealer’s biggest enemy looks out from the mirror each and every morning. They must decide whose interests are paramount. They must decide who they are, and what they stand for.
I believe that my reputation is worth more than the almighty buck. I live by those words, and the words of author and sales trainer Dave Anderson. "Are you just making money or are you making a difference? Focus on making a greater difference and you'll find yourself making more money as a result." Before you download your dirty dealer stories, remember this: we’re not all greedy bastards.
True all dealers may not be dirty bastards but that is not the problem in my opinion. The problem is that no other manufactured product is sold the way autos are.
Contrary to what all the dealers and auto salespeople’s protests, the vast majority of people do not wish to purchase their products including cars as if they were in a middle eastern bazaar.
The preferred method of buying products is pretty universal. You know like the way everything else is sold.
What is so freakin hard to understand about that. I know we are stuck with what we have due to the laws being what they are thanks to the success of the car dealers’ lobbyists over the years.
Can you imagine having to negotiate everything we have to buy?
Hey mister How much is that shirt? “Well that depends how much do you have.”
For the first time in my life I actually purchased a car on the same day that I looked at the car. I bought a Scion. Prior to that I purchased three cars. Each time I purchased the car the next day after I had tried to purchase the car, when the dealer called back and said Oh well we can sell you that car after all for that price.
There is nothing more insulting and demeaning than having someone look you in the eye and lie. Unfortunately, the current process involves that with the sales people looking you in the eye and trying to sell down from the list price. That wouldn’t be so bad but every dealer now has their little add on price sticker over and above the MSRP. Yes I know that it is a game and I am actually pretty decent at it but “THE TRUTH ABOUT the car buying process” is that it is the way it is because “YOU THE DEALER MAKE MORE MONEY THIS WAY”. I use to be in business so please don’t cry me a river about how hard it is because I know how hard it is.
You are correct. I have had nothing but great experiences with my Saturn Dealership in Marietta, GA. As a small business owner, everyday I have to ask that question…Am I helping or hurting? Carma will get you every time.
Believe it or not, folks, I’ve had more good luck than bad from dealers over the years; it’s the Detroit manufacturers that I no longer will have anything to do with. That said, the absolute “last straw” for GM was an $80 bill presented by a mega-Chevrolet dealer who refused to do the job right (replace warped brake rotors) and after “turning” them the 3rd time (within the supposed bumper-to-bumper warrantee), presented me with the bill. So not only will I never go back to this dealer, I will never buy GM for the rest of my life – and I told them that at the time I paid them their $80.
Also once at a Mazda store, I felt like the fly in the spider web while just shopping. But I left that place, never went back, warned off others, and now they are out of business.
Overall, I have to agree with Rick. Thanks for a nice write-up and hopefully, reminder to the many of us who go out and buy cars, that it is not simply a one-sided thing. Just like anything with human beings, it is what you make of it.
If you like a dealership and how they treat you, then tell your friends. We want to encourage this type of dealership to survive.
And yeah, in reality, mark-up of automobiles is ridiculously small in percentage terms, compared to virtually anything else in retail, or in housing, for that matter.
I paid MSRP for my Toyota Prius (I won’t pay more) and don’t mind that I did. I want my dealer to be there next year to service the car. So far, I don’t need them there to do any warrantee work, the car has been perfect.
I don’t mind paying for excellent quality and a good personal relationship with my salesperson, Greg, who is still there too. I even pop in just to hang once in awhile and say, hey. (I also snag a new brochure just for fun, too). Once he was talking with a prospect, I wheeled up and he asked me if the prospect could check out my car (there were no Prius’s on the lot). Sure, why not? We aren’t buddies, Greg and I – don’t go for a drink on Friday after work or anything, but if I need something I know he’s there for me. And I’ll go on back for my next Prius (you know, the post-2008 one which will get 80 mpg instead of 50 mpg, be faster, have more room, etc.) Also we have a relationship with a salesman at the local Honda dealer, since my wife is looking at the possibility of getting a Civic Hybrid in a few years. I’ve already gone around and started the relationship with Charlie. It took almost 18 months before I could even get a Civic Hybrid out to test drive, because they were all spoken for when they arrived.
I’d like to put in a good word for Fitzgerald Auto Malls, a one-price dealership that posts its prices on its web site (fitzmall.com). They carry lots of non-luxury marques, but not Ford/LM and Honda. They have stores in Maryland, Pennsylvania, and Florida. My two purchases with them were very pleasant.
If you want a 2006 DTS despite yesterday’s review, they’ve got a few for $5k below invoice = $7-$8k below MSRP.
Mr. Korallus, in over 40 years of dealing with domestic and foreign dealers (whatever those are these days) I would suggest that your dealership is in a rapidly shrinking minority.
I have not bought new for quite a few years now and have thoroughly enjoyed the used vehicles I’ve bought without ever having to step foot into the dealer’s door. I’m happy to have allowed that first customer to take the hit on the depreciated value of the vehicle as well.
I am also in a shrinking minority – I do all of my own maintenance and I buy OEM parts (when needed) online to avoid the insane local dealer mark-up. The last thing I will do is toss the keys to a service rep and hope for the best or trot down to pay $17 for a standard grade 8 caliper bracket bolt.
Kudos to you though, for working to maintain integrity against the almight dollar. As a small business owner I made a choice long ago to treat customers fairly as a first priority. Yes, there always jerks, but it’s amazing how many people are great to work with. I also agree 100% with you that selling many things at reasonable profit is way better than that swing for the fence on a couple of items.
Shermin: How about this perspective? How many other products can you negotiate down from the listed price?
That said, we respect our customers and their needs. We listen, identify the proper vehicle, and offer a fair price from the outset without dealer add-ons. Frankly, there are times I wonder why I’m in this business. Several times per week, I am personally confronted by individuals operating on the assumption that I am a liar or a thief. Ultimately, these people usually end up at one of the many unscrupulous dealers nearby, who give them exactly what they expect.
I would say the writer’s dealership is part of a very small minority of dealers. we have bought several cars here in the Atlanta area (Ford, Chrysler, Nissan and Honda), and they all employ the same tricks:
– $200 pinstripes
– $150 wheel locks
– $400 window tinting
– etc.
I don’t get angry about this anymore. I politely state that I will not be needing these extra’s, and to please remove them either from the vehicle or from the invoice. Most comply.
Also, I found that the sales and service departments are two different entities. Do not expect better or faster service just because you bought a vehicle at that dealership; they just don’t care whether you have been a customer for 5 years or five days, or not at all.
One of the problems with not having an upfront discussion on buying a car with a dealer is the trade in. If the dealer tells you what it’s really worth (especially if it’s most domestics) you will run from the showroom shreiking. Also, because you know the reail of your used car does not mean a dealer can give that to you unless you pay list price for his new one. The customers unrealized expectations for his car make the purchase of the new one a bad experience.
Hopefully, in my lifetime, a large chain of dealerships in Maryland will set a precedent and close their doors at 7:30 every evening and of course ,close on Sundays.
Jim Schaeffer “How about this perspective? How many other products can you negotiate down from the listed price?”
Look Jim I’ll give you the cow just give me my magic beans.
Seriously though, the system as it currently exists forces your customer (me) to jump through hoops to basically prove that I am not a rube.
The reason being, is that if I am a rube and take your initial selling price or even anything close to it you make more money.
Going back to my example of a shirt. I don’t want to have a shirt with an artificial MSRP of 30 dollars that I know that I can get for 20 dollars and then have to jump through hoops to get it for 20 dollars.
If they want 20 dollars simply charge 20 dollars but unfortunately we all know it can’t be that way. I’ll even pay you 25 dollars but simply make the process like everything eles I buy.
I also don’t want to talk to the shirt sales manager after I am told there is no way we can sell you that shirt for 20 dollars Mr. Lin. I also don’t want to waste hours waiting at the shirt store to see if I can buy the shirt for 20 dollars.
The worst part is being called back and being told ok we will sell you the shirt for 20 dollars. Oh but we have to sharge you 5 dollars for the extra stitched monogram and fabric protectant.
Now here is an honest question don’t you basically let the customer sit and wait and not get back to him to see if the customer will crack or get up and leave. Everytime, up until my Scion purchase. It was haggle with salesman, salesman writes up my offer to take to sales manager…..wait….wait…..wait more… lo and behold they come back with their original offer with a slight reduction instead of accepting my offer. Rinse and repeat several times, eventually salesmanager after hours comes in to take his turn. I actually overheard the salesmanager at one dealership say to the salesman “Let me show you how its done.”
I had two honda’s previosuly. I loved the cars. I actually like the dealership. They treat me nice. They are couteous, they are profesional but they make me jump through hoops and they basically force both themselves and myself to play that stupid game.
Mr. Korallus seems to run a good shop, but he’s not near me and I don’t do Hondas. Still, he is, as others have noted, an endangered species. I think it’s great–admirable even– that he approaches business the way he does. However, while there are other dealers like him, they are, in my experience, few and far between. 25 years ago a district sales manager for VW whom I worked with at the time said, “The only thing that exceeds a dealer’s ego is his greed.”
That seemed right then and it does today. My own philosophy is that there is pretty much no such thing as a good car dealer. Virtually all seem to be in the business of hosing their customers one way or another.
Sure, it’s expensive to run the business, but that doesn’t mean a dealer has to take advantage of its customers, tack on spurious and questionable charges and treat customers with thinly veiled contempt, or as the next “mark” to walk in the door. The song and dance of negotiating is about as much fun as a root canal at most stores. I don’t mind a little horse trading, but the process at most dealerships is ridiculous–and I’ve sat on both sides of the table.
And the sales department is hardly the worst part of “the dealer experience.” I find the average service department best described as legalized theft and more like cruel and unusual punishment for customers. The objective in the average service dept is to take advantage of the customers’ ignorance.
I do some of my own wrenching so I know how cars work. Yet I’ve had dealer service writers and managers tell me the most outrageous things and what I really “need” to have done. Then there’s the BS stuff like oil conditioners, engine additives and other crap they nickel and dime customers over–even when the owner’s manuals of the cars they service specifically state such products are unnecessary.
All a car owner wants is a little honesty. The few dealers who treat their customers with courtesy and respect and give good advice get customers for life. And the rest just wait for the next sucker to walk in the door.
I buy used or CPO cars (let someone else take the 1st hit on depreciation). I use a dealer for service only until the CPO warranty is used up, then I go to an indy mechanic or DIY. My indy treats me with respect, courtesy and values my business. And he’s had it for 12 years. My car dealer isn’t worth the drive except I don’t want hassles should the CPO warranty need to be used for repairs. And when it expires, the dealer will never see me again.
If anyone is interested, Edmunds ran a great piece where a journalist went undercover and worked at a couple of dealerships and wrote up his experiences. Though he doesn’t say explictly, he worked at a high-volume Honda delership and a Saturn dealership. The Honda one sounded insane.
I’m not saying Mr. Korallus’ dealership is like this, but they certainly sound like very disfunctional places. A twisted world onto themselves.
http://www.edmunds.com/advice/buying/articles/42962/article.html
I have no problme with my new car buying experiences, maybe because i’m no longer surprised by much. On the other hand, the service department is used only for preserving a warranty.
Mr. Korallus, well said. I usually have a positive sales experience, but I make sure to deal with a Fleet Manager who isn’t interested in making a commission directly off my purchase. I’ve met a few front line sales people who are good, but they’ve been at more premium dealers. I’ve probably had the best experience at a moderately-priced dealer when I took a friend to a Honda and Saturn dealerships. There must be something about those company cultures that’s more customer-centric.
Service/Parts departments? That’s another story. They all seem to overcharge, as if dealers know that’s the only place where the margins are decent. I am thrilled when I can find online OEM parts for 30-50% less than my local dealer, even more so when the warranty’s expired and I can take the car to a local non-franchised mechanic.
When I went looking for the SI, I was quoted $4,000 over MSRP. I walked out, and bought another car, swearing never to walk into another Honda dealership again. (Mind you, I ended up at Acura across the street…)
I’m not saying I’m right; I’m saying I’m stupid. However, to me, the badge branded the dealership as well as the car. Creepy.
Excellent piece, Rick.
While I understand the difficulty running a dealership, I just don’t think the current model is sound. (In the internet age, why the f*!(#($#&^> can’t I buy an OEM part direct from the manufacturer!!!)
Not that I have any solutions – given 50 different franchise laws.. Didn’t Ford prove that corporate owned dealers don’t work?
Research helps – good dealers are gems. I go out of my way to use mine.
Definetly explains things here by the Jersey Shore. In the past 12 months, the local Honda and Acura dealerships have been sold for unreal amounts of money, while (one of the) the massive Ford/DCX stores and and a smaller DCX store have gone out of business.
I’m with Mud. Never never again. I can’t walk into a dealer without my blood starting to boil. Because ignorance is bliss.
During my last attempt to buy new the first words out of my mouth were “No trade cash deal.” I either got dumb looks or “Uhhhh…We don’t do that.” And this was at Honda dealers.
My response: Dealers don’t want to make some money – they want to make all the money. All they have to do is sell me that car and they make some money. But they also want the money from the trade and financing (and accessories and service and…)
That’s just my experience and opinion. Your mileage may vary. The bonus is that I avoid the new car depreciation. Let some one else get the bugs worked out. Japanese cars have just become too durable for their own good.
Never never never again.
Last year I was about 100 miles from home when my brakes failed. The little town I was going through (Peebles, Ohio) had a Dodge dealership so I pulled in.
The service manager said I blew a brake line and it “wouldn’t be much money” to fix. I said, do I get a written estimate? “No need”. I said, “so what is ‘not much’, like $100?” He said, oh, that or less than that.
Given my loathing of the Dodge dealer I bought the vehicle from in Columbus, I was figuring on getting ripped off without an estimate. But I couldn’t drive it without brakes.
Well, it took them 3 hours to get the rusty parts off my old Dakota. The service manager says, well, with all the labor it was over $100, but I promised you it would be less than $100, so I’m only charging you $96.
I about fainted.
The next time I need something, I might just drive 100 miles to Malcom Chrysler-Dodge. (And I work next door to the Dodge dealer in Columbus). Other dealers should take a lesson from this.
John
I feel all of your pain, I too have been disgusted with the car buying experience and even when I have had to purchase cars from so called good people, church members or fellow rotary club members.
I finally concluded that this is not just car dealers that are doing this, it is happening in all aspects of commerce now, even when the price is posted. Try getting some objective advice about investing your retirement money. Or try to get an honest and objective opinion about the house or condo you are looking to purchase. Why are real estate agents still claiming to be your friend when in fact they represent the seller. Have you purchased a house lately, espeically one of with new construction that was built in 6 weeks. Try making a claim on your homebuilders warranty. It will make car buying look easy.
My solution, easy let’s get rid of all this feel good crap selling and get back to here are the specs, this is what our product can do and here is what we charge to buy it. Nothing more nothing less. Businesses are even using this approach to confuse us in the marketplace. Product offereings are often shown with comparrisons to the competition, what is missing though is full dislosure of the fees and administrative costs that are buried somewhere in the small print.
Thank God the Congress didn’t pass the privatization of Social Security, because then there would have been the largest welfare transfer of wealth from individuals to wall street bankers in the history of commerce.
It’s sad to say but “Caveot emptor” Buyer beware has become increasingly more imporatant in this information age as it ever was. And be wary of the feel good marketing ala the service industry. There are hidden fees and charges for all of that service too. Granted Lexus has capitalized on this to a great extent, people pay more for the attention they receive when buying a Lexus and they actually believe they recieved a better car, but they could have bought a much less expensive Toyata and had the same thing, but only those that read the specs and take the time research the cars know this, the majority of people just want to feel good about their purchase and are willing to pay for that feeling.
Sherman talks about buying shirts and compares it to buying cars. Well, I buy my shirts on line. I know my size, I know what I like, click and I’m done. That’s also how I buy computers and almost anything else I purchase. Why not cars as well? I know the law locks us into this antiquated system but will someone tell me what a car salesman adds to my purchase experience? He’s just another cost I have to pay for. I know what I want, the salesman doesn’t give me any useful information and no salesman has ever told me that I would be better off going for a less expensive model or option set. All they try to do is talk the price up.
The fact that cars are purchased today the same as they were in my grandparents’ day is absurd. I once heard automobile retailing refered to as the “slum of American capitalism”. Truer words were never spoken.
Now I’m going to scare the crap out of all of the car manufacturers and dealers in the United States and come right out with this thought, after reading Ken Strumpf’s comments above, about buying everything online.
Yeah, me too. I buy online. It sames me hassle (traffic sux in Traverse City Michigan – we have a winter time population 500% that of 1970, with ONE – read it and weep – ONE additional major 2 lane road since 1970 – PLUS an additional 500% increase in population in the summer time).
Here’s the scary part. Some Chinese automobile manufacturer ‘could’ decide to sell cars online, and sell parts and allow customers to obtain warrantee work, through some company such as Sears, which has ‘automotive centers’ all over the country.
It’s not like car dealers generally actually “fix” cars any more, anyway. Most “mechanics” are just parts changers, now.
The smart Chinese company could also enroll some company such as Enterprise – free loaner delivered if the car needs to stay at the shop.
If they could back up the ease of selling (one price, everyone pays it – online – find your own financing) with a good warrantee worth the paper it’s written on and quality as good as Hyundai,
GM, Ford and DCX would be out of business within 5 years.
Gottleib realestate differs in that every piece of inventory is unique as opposed to mass produced items. In the words of Bruce Williams the radio host make sure you have a real estate attorney go over any deal first.
Glenn here is another way that doesn’t get rid of the dealer. Toyota basically made a new car line, Scion. They offered their existing dealer network an opportunity to become a dealer for this new car line. The only catch is they have to sell this new car line with no haggle pricing. What dealer is going to turn Toyota down? Now what if Toyota or someone else did this and were to gradually stop replacing the older models in the car line sold traditionally and the car line sold with no haggle pricing instead were to receive the replacement models? Gradually the entire car line would be sold by the no haggle method. Just a thought on my part.
“The fact that cars are purchased today the same as they were in my grandparents’ day is absurd.”
My guess is that the stealers..er, dealers have figured out this makes the most money for them. I am reminded of a gullible woman once who leased a car, saying, “I didn’t ask about anything else, they wouldn’t advertise it if it wasn’t best for me.” Yeah, right.
John
Now what if Toyota or someone else did this and were to gradually stop replacing the older models in the car line sold traditionally and the car line sold with no haggle pricing instead were to receive the replacement models? Gradually the entire car line would be sold by the no haggle method. Just a thought on my part.
Didn’t Oldsmobile try this? Just before they went out of business?
The selling of cars is corrupt. I knew someone who worked at a dealership. He said you can absolutely buy a car at invoice price. How? A little something called “holdback”. The dealer will STILL make money even if they sell you the car at invoice. If they won’t sell to you at that price, walk out and find a dealer that will.
Also, use the weather to your advantage. In the winter when they haven’t had a customer in weeks and you walk in wanting it at invoice. They’d be insane not to let it go at that price.
Read every last word of this and don’t forget about the holdback!
http://www.edmunds.com/advice/incentives/holdback/index.html
I do not know which is sillier, dealers quoting ridiculous MSRP prices, or buyers still bragging about how much less than MSRP they paid.
I almost bought a Saturn once just because of the dealer experience. More foam in the back seat would have done it.
When I check into a hotel, I do not negotiate with the clerk starting with the rack rate price on the back of the room door. Neither does he/she start at that inflated price either.
I have no sympathy for the troubles involved in running a new car dealership. I have not seen many in the bowels of poverty even when the second and third generations have made a good run at getting there.
I don’t remember Oldsmobile doing no hagle pricing. I bought a Honda Accord in 2000. I checked out an Oldsmobile Intrigue and it was a traditional dealer. I remember them having the Alero, Intrigue, Aurora and Bravada and a mini van which was decent lineup. As a matter of fact I think they killed the wrong division as the oldsmobiles seemed like decent cars to me.
From the New York Times, Dec 9, 1992: Oldsmobile, struggling for buyers amid lingering rumors of its demise, yesterday announced a sale of two well-equipped versions of the Cutlass Ciera at no-haggle prices. The General Motors Corporation division said it would offer its two Ciera S sedans through September at $13,995 and $14,995. Ciera has been Oldsmobile's best-selling car since 1985; the new prices are $2,150 and $2,500 under sticker prices, respectively. The were hoping to capture some of Saturn's succcess with no-haggle pricing. They tried expanding the concept to other models over the next few years but it was too little, too late.
Here’s one for Ripley’s “Believe it or Not”. Only “some Oldsmobile lines” were no-haggle. I still “shopped” GM back in the day so I remember this.
Now, can you imagine how Oldsmobile dealers would have only wanted to hire schizophrenic sales people? “Now, sir, which car did you look at? Oh, that one? OK, that’s fixed price.” “Oh, that one? Well, you know, we only have one of those left and can I make you a deal – but only today!”
I have good and bad experiences with dealers. The best dealer I have ever dealt with :-) was Marin Subaru/Mazda where I bought my current Mazda6s. The salesmanwas respectful and as far as I could tell negotiated in good faith. Yes we did some back and forth on the price and the money they would give me for my trade-in (I had been trying to sell my current car, a Saturn Vue privately with no luck for the past month). Eventually, we reached an agreement that I felt comfortable with. By contrast was the Mazda Dealership in Santa Rosa, CA. There, I think I experienced all of the classic c— that dealers are notorious for. At the end after we were unable to reach an agreement and I was walking out the door, the salesman told me he could take another $500 off his final, can’t-go-below-this-price, price. By that time, I’d had it. I got on-line and found where they were going to be getting the car from, Marin Mazda, and went there. I ended up getting the car I wanted for $1,000 less than the Santa Rosa dealer’s final price as I walked out the door. Funny thing is, if they hadn’t put me through the wringer, I probably would have paid that final out the door price. If you live in Marin County, California, I highly recommend checking out Marin Mazda/Subaru the next time you are in the market for a car. Unlike some dealers, they seem to be honest and straight with their customers; at least they were with us.
About a month ago, I was at a dealership with my wife looking at Mustangs. Her Cobra is over 10 years old and she’s about ready for a new car. When we got there, we made it clear that we had no intention of buying a car that day and were just looking to see what was available now. The young salesman who greeted us said that would be fine and started to show us the various types of Mustangs that they had from the Mustang GT to Saleens to various “stages” of Roush Mustangs. Then he got called away and a more experienced (slimy) salesman took over. The worst was as we were leaving after getting some brochures. The sales manager came out. He didn’t seem to understand the word no. His actions ruined the experience for us and as a result, we are much less likely to buy our new car from this dealer even though they have a selection and inventory that can’t be beat. You may say that we took up a lot of their time. But the fact is if we had our way, we would have been in and out of there in less than an hour, and we made it clear at the beginning that we were just looking to see what was available but would not be buying that day. By his action of trying to get us to buy a car that day after we unequivocally said no, that sales manager likely cost his dealer a sale this year or early next.
Yeah that sounds like GM’s typical problem, half assed shotgun approach a little of this and a little of that. You either do no haggle pricing or don’t do it
Thank you for a dealership’s perspective, Rick.
:-)
Looks like a link to this Editorial has shown up at The Detroit News site, along with links to other TTAC Editorials…
From:http://info.detnews.com/autosblog/readinglistarchive.cfm
“03/13/2007 – Car Dealers Are Not All Greedy Bastards — The Truth About Cars”
Appartently, along with dealerships, there’s not much total profit in a car for the manufacturers:
“The 2006 Harbour Report showed Honda’s average profit per North American-made vehicle was $1,215. That figure was nearly five and a half times that of DaimlerChrysler ($223) and a world ahead of Ford ($590 loss per vehicle) and General Motors (minus-$2,496).”
Above is from: http://www.reliableplant.com/archives/article.asp?pagetitle=Honda%20and%20the%20Toyota%20shadow&articleid=5195
Paul V. Arnold, Editor , “Honda and the Toyota shadow”. Reliable Plant Magazine 3/2007
Full article:
http://www.reliableplant.com/archives/article.asp?pagetitle=The%20Honda%20Way&articleid=5198
“The Honda Way”. Reliable Plant Magazine 3/2007
Finally, Honda does seem to “get it” that the customer is what it’s all about. To back that up, the following is the Honda CEO’s reaction in reference to Toyota seeming to be driven primarily by growth:
“Honda CEO Takeo Fukui reacted as sharply as any GM executive. ‘When auto companies start talking about the volumes they want to sell, that shows those companies are not valuing each individual customer,’ Fukui told reporters.”
The above quote is from
“Honda sneaks up on Big Three” at http://www.detnews.com/apps/pbcs.dll/article?AID=2007703090400
Thanks for the nice Editorial.
Well, let me tell you how it can be made to work from the customers point of view.
1) I will no longer buy a car from a domestic manufacturer.
2) I will not buy a car from a dealership that belongs to an “auto group”, ie even if it takes going to a different city I will look for a dealer that is owned by an individual.
3) I will deal with the principal, bargaining is fine if you get her done in 5 minutes and write the check.
jackc10:
March 13th, 2007 at 12:01 pm
When I check into a hotel, I do not negotiate with the clerk starting with the rack rate price on the back of the room door. Neither does he/she start at that inflated price either.
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Actually hotel rates are negotiable. Have you seen all the sites with bargain hotel rates? Think you can’t negoitiate those prices on the spot? Think again. I attended a negotiation seminar where the speaker did this all the time. Didn’t matter what kind of hotel it was either. Obviously if there is competion just up the street it helps. He also said that it would suprise you at just how much the price of products and services are negotiable. Peoples biggest mistake? They just accept the price without asking/barganing for a discount.
Glenn A says
“Here’s the scary part. Some Chinese automobile manufacturer ‘could’ decide to sell cars online, and sell parts and allow customers to obtain warrantee work, through some company such as Sears, which has ‘automotive centers’ all over the country.”
I’d be there in a heartbeat, Glenn. My skin just itches at the thought of walking into a car dealership and meeting my new best friend and his sales manager. Of course, some politicians would complain about Chinese taking high paying jobs away from Americans.
I’d like to see a change in the system. Some people really need a dealer’s help in deciding what they should buy, some don’t. For me all I need is a place where I can test drive the car and take my bank check. By the time I step into the dealer it’s for only one of two things; to test drive the car and look at it in person. Or I have done that and now with my internet negotiated price I just need to pay for it. I feel bad for the salesmen wait for ups because they will never get any money from me.
While I applaud the author for bringing his inside knowledge and letting us know there are still good dealerships out there the fact remains that the car buying experience is essentially a competition. The wants of the customer and the wants of the salesperson are at odds. One wants to buy and the other wants to sell its true but the customer wants the cheapest price while the salesperson wants the highest price.
Actually going to a dealership without pricing and haggling right there is a terrible idea. Some dealers can and will give you a good price some can’t or won’t. The best way is to find this out and go to a dealer that has the vehicle you want for the price you want.
What might help is a fleet sales mentality where the sales person is paid on how much volume they sell as opposed to how much they make on each sale. Then the focus is to say this is the best we can do on the price, it’s the lowest we can go right up front take it or leave it. No going to talk to the sales manager, yada-yada.
If a no-haggle dealership were to list that they sell for invoice price with no additional feels minus any factory customer incentives, marketing support etc. Then I’d happily buy from them because that is the price I’m going to pay and not penny more, it would just mean a whole lot less work.
What might be helpful is to know exactly what a dealer pays on a specific model including floorplan costs, holdback and anything else. Now I know some of that is not going to be touched, the dealer needs to make some money but it would help in the selling process to be transparent.
I would think that there is little or no money in retail sales but more from doing warranty and related repairs.
It’s funny how everyone loves to roast the car dealership for haggleing over the price, yet everyone complains about how much the cars cost. For most people a car and a house are the two most expensive things they’ll ever buy, and these are the only two things most people have a say in setting the price.
I’m not certain, but I’d be willing to bet that the markup percentage on a car is significantly lower than the markup percentage on any other item that you will purchase in your lifetime. We all ‘know’ that it’s only pennies to provide you a cup of cola at a fast food place, but happily pay $1 or more for it without ever thinking about it. We all love to get a deal and save 40 or 50% on something, or even get it on closeout at 70-80% off the original price. Don’t you think the retailer is still making money even at those “fire sale” prices? I’ll bet he is. And don’t even get me started on fireworks where the wholesale prices are calculated in the 1/1000 of a penny for $10 retail items.
How many of you go out and do research on the wholesale price of a shirt, factor in some overhead, allow the merchant to make a profit, then go to the mall, check the retail price of the shirt, and if it’s above your calculated “minimum profit” pricing, walk away? If it’s a locally owned shop, you may be able to talk to the owner and negotiate a new price with him, but forget it for any of the big-box chains – nobody there can or is allowed to think.
If fixed, no-haggle pricing for cars worked that well, and was profitable for dealers & manufacturers, Saturn would still be doing it, it would have spread to the rest of GM, and everyone else would have copied it.
I, for one, would like to at least have the *opportunity* to knock $5k off the price of a $20-50k purchase, not just be told “take it of leave it” with no option anywhere.
Oh yes, I’m not a dealer, or salesman. I just relish the joy of a little bit of ‘hand-to-hand combat’.
We all ‘know’ that it’s only pennies to provide you a cup of cola at a fast food place, but happily pay $1 or more for it without ever thinking about it. We all love to get a deal and save 40 or 50% on something, or even get it on closeout at 70-80% off the original price. Don’t you think the retailer is still making money even at those “fire sale” prices? I’ll bet he is.
Freeman:
As a former fast food manager (I worked my through college), I can tell you that fast food and the resturant industry as a whole aim for a profit of 10% to 15% of gross sales. Materials cost is typically 50% of the price, labor 15% to 20% of the price, and the rest is fixed overhead items like utilties and rent. These numbers might not be true for high end restaurants (never worked in one), but it certainly applies to the fast food and cafe chains. A good fast food chain restaurant in a medium sized city (40,000 to 100,000) will have gross sales of around $1 million. If they meet their sales and profit goals, that translates to $100,000 to $150,000 in profit before taxes; this is on a $1 million plus investment (franchise fees, equipment, etc.). Yes, they may make a large percentage profit on drink sales, but the profit on that $.99 burger is miniscule or nothing. It’s there to get you in the store and buy a drink to go with it; so, they can meet that 10% to 15% profit goal.
In retail stores, when the price is slashed 70% to 80% they are just trying to get it out of the store; they aren’t making a profit. Kind of like when you buy that 06 model year car in March of 07 and get it below invoice. The dealer is looking to just get it off the lot, so it won’t cost him any more money. Paying full price for clothes is like paying the sticker price for a car. It’s the hot new design that all the “In” crowd are wearing; so, the manufacturer and the retailer can mark it way up and make a huge profit. However, for each of the gotta’ have items there are many more that don’t sell. For a store that stays in business, it all balances out in the end to where they make a decent profit. Too many bad purchasing decisions (or poor location, poor service, etc.), and you’re out of business.
To follow up what Free Man said, the other reason that no-haggle pricing is problematic is that it’s not applicable to used cars, either the used car you’re trying to buy or the used car that you want to trade in on your no-haggle new car purchase. As with real estate purchases, every used car is unique from a value perspective, so no-haggle pricing won’t work.
As for the new-car game, I just avoid it by only buying used. Cars are so reliable nowadays that the only real advantage of buying a new car over a slightly used one is that you get to pick the color.
Rick, thank you for sharing. Trouble is, we don’t know which dealers are greedy bastards and which are not. So we need to go in assuming all dealers are until we discover different on our own.
My lease agreement review:
Q: “What is this extra $400 for?”
A: “dealer reserve”
Q: “oh, you mean profit?”
A: “uh, yea”
Q: “please remove it”
A: “sure, must have been lefover from the last deal”
Also, Oldsmobile did start dabbling with one price selling BUT they never comitted to it. There was talk about combining Oldsmobile and Saturn but GM never pulled the trigger. GM should have dropped Buick and kept Oldsmobile which had all new product and a better raison d’etre. Only reason they didn’t was because they had damaged Oldmobile’s customer base plus Buick was profitable and more difficlut to kill as a result. Sad days for me.
FreeMan “If fixed, no-haggle pricing for cars worked that well, and was profitable for dealers & manufacturers, Saturn would still be doing it, it would have spread to the rest of GM, and everyone else would have copied it.”
I thought Saturn was still doing it. As to why the other dealers are not doing this. I will repeat myself because THEY (The dealers) make more money doing it the traditional way.
And it is not a good thing from the customer experience viewpont. If I see an ad for a shirt I expeect to find the price is as advertised. In autos I don’t even look at the ads because they are meaningless.
How many other goods are there where the advertising of price is really totally irrelevant and not related to the actual purchase price?
How would you like it if everything was sold in this manner?
The fact remains virtually everything that is a mass produced consumer good is not sold this way.
I don’t want to see an ad for a two shirts for thirty dollars and then go and find out that they only had 2 shirts at that price and every other shirt there is more expensive.
I don’t want to walk into walmart and see everyday high prices written on everything and then try to bargain it down. If you like fine but most people don’t.
GMrefugee I had heard the same thing and I think it is a tragedy. GM could have killed two birds with one stone so to speak by combining Oldsmobile with Saturn. Saturn was starved for more product. The Alero, Intrigue and Aurora in my opinion were the most import like GM cars.
I always thought they should have killed Pontiac. Keep Buick as a traditional American type car with the existing Olds and Buick customer base and build your import type cars with Saturn.
Wordsworth:
I was posting that I did not negotiate from the rack room rate on the back of the door at a hotel. I look at the clock and ask about the room rate, talk some, and then pull out my AAA card. I did not need a seminar to learn that. It might help that my wife used to be a travel agent.
The rack rate actually is charged during times of maximum crowds, Mardi Gras, Super Bowl, etc, just like MSRP is when a hot car first comes out.
But for a routine purchase I ignore the MSRP just like I ignore the rack room rate.
GMrefugee:
‘Also, Oldsmobile did start dabbling with one price selling BUT they never comitted to it. There was talk about combining Oldsmobile and Saturn but GM never pulled the trigger. GM should have dropped Buick and kept Oldsmobile which had all new product and a better raison d’etre. Only reason they didn’t was because they had damaged Oldmobile’s customer base plus Buick was profitable and more difficlut to kill as a result. Sad days for me.’
I wholeheartedly agree about keeping Olds instead of Buick.
I owned a ’99 Intrigue (DOHC 3.5) for 6 years (sold it to my sister). It was by far the best midsize sedan GM had at the time in terms of value for dollar, performance, design. I was heartbroken to find out that my car was to become an orphan. And angry to hear that GM was giving up on a promising new lineup.
Where, oh where, was the d@mn marketing for this brand? I can count on one hand the number of ads I saw in print and TV combined for any of Olds’ last products. They let a good line die, which could have improved along the road that Caddy is taking right now.
Back on topic,
I once went to the local Pontiac dealer to test drive a GTO, I was half-heartedly considering it to replace my lemon Coooper S and at the very least wanted to get behind the wheel of one. I told the saleskid I wanted to test drive only. Not looking to buy today. They didn’t have a stick-shift, so I drove an auto. The kid tried for the next 30 minutes after the drive to sell me a car and I had to give him the same line, “Not buying.” Finally he brought his manager over who gave me a price on a GTO, for me once again to say “Not buying.” He had a lot more sense than the kid and figured out pretty quick that I was not going to buy.
I prepared for the worst (that I would get hassled this way) and was able to stay cool about it, but the new kid on the floor was definitely eager to make a sale. His more experienced boss read me pretty clearly.
Vote with your feet! GMREFUGEE: talk to your friends, family and co-workers, ask them who treated them with respect and honesty, then go there. See also Megan Benoit’s comments in her editorial on Internet selling, we embrace that business model. To the poster who suggested Sears back a Chinese carline: not long ago, a couple Sears stores in our metro area got into trouble for selling unnecessary service repairs, be careful what you ask for, you might get it. Someone else commented basically commented that there are good and bad in all walks of business (and life). Migrate towards the good, let karma sort out the rest…
I’ve had excellent treatment at the local Honda and Acura dealers where we purchased our last two new cars. In my experience around 10-20% of car dealerships are a decent place to do business. I’ve resolved myself to only doing business at places where I am treated with courtesy and respect.
Someone should write an editorial demanding to know why so many car buyers put up with horrible treatment and continue to buy cars at places which have no business being in business.
May I ask what added value a dealer brings to the customer? What’s the reason for existence of a dealer *sales* organization?
I’m happy to do my research online, pay to rent a car to test-drive (directly or as part of the manufacturer’s costs), pay to buy the thing from wherever I get the best price, and pay to have it maintained.
I just don’t see what value this particular sales channel is getting me, the consumer, any longer.
Sherman Lin: The worst part is being called back and being told ok we will sell you the shirt for 20 dollars. Oh but we have to sharge you 5 dollars for the extra stitched monogram and fabric protectant.
No that is not the worst part. The worst part is them calling you after you have bought the shirt from somebody else for $20. Then they tell you ‘well, we could have saved you all of the trouble! We would have sold it to you for $20!’
This is called “damage control.” They hope that you will not be talking to people in town about the clowns that wanted $25 (after wasted hours and hours of dickering) for the $20 shirt you purchased elsewhere.
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Hippo: Well, let me tell you how it can be made to work from the customers point of view.
1) I will no longer buy a car from a domestic manufacturer.
2) I will not buy a car from a dealership that belongs to an “auto group”, ie even if it takes going to a different city I will look for a dealer that is owned by an individual.
3) I will deal with the principal, bargaining is fine if you get her done in 5 minutes and write the check.
I disagree with point #2. Here is an example of an individually owned Honda/Toyota/Lexus/Acura dealer that I would NEVER do business with:
http://www.sec.gov/litigation/litreleases/lr19252.htm
noley: 25 years ago a district sales manager for VW whom I worked with at the time said, “The only thing that exceeds a dealer’s ego is his greed.”
noley the above link is a living example that your VW district manager was right.
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ihatetrees: Research helps – good dealers are gems. I go out of my way to use mine.
I buy my new Hondas from a Honda dealer that is one additional hour away from the nearest Honda dealer, in another state even. The nearest Honda dealer uses every filthy dirty freakin’ trick in the book. The other Honda dealer only goes through the requisite hoops jumping. I do not mind driving this distance because my warranty problems with my Hondas have not been anything like my warranty problems with my GMs.
BTW, what is your beef with trees?
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After being shafted by GM I am now a true blue Honda man. Not that I am in love with Honda stealers dealers, I just think Honda offers the best new car value for those who can do without Honda’s problematic automatic trannies.
My Accord now has 104k miles and it is due for new timing belts, OEM NGK platinum plugs, and a valve cover gasket. I will be buying the parts from the Honda dealer, but not from the nearest Honda dealer for $173 + tax. (As mentioned, I am not in love with Honda stealers dealers.) I will be buying original Honda parts from an online Honda dealer for $119 + shipping.
Sajeev Mehta: I am thrilled when I can find online OEM parts for 30-50% less than my local dealer, even more so when the warranty’s expired and I can take the car to a local non-franchised mechanic.
I am aslo thrilled this way. I will be taking the timing belt parts to a local independent mechaninc who enjoys a stellar reputation working on foreign cars.
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rtz: The selling of cars is corrupt. I knew someone who worked at a dealership. He said you can absolutely buy a car at invoice price. How? A little something called “holdback”. The dealer will STILL make money even if they sell you the car at invoice. If they won’t sell to you at that price, walk out and find a dealer that will.
I actually asked a Chevy dealer about the holdback when I was negotiating on a prizm. The salesman went berzerk, yelling and hollering about why they do not give away the holdback. He yelled and yelled and yelled and about how he has got a customer’s waiting list for new trucks that was an arm long and he doesn’t have to take crap from anybody. Well, guess what, good luck selling those gas guzzlers now. And no, I did not buy anything from that stealer dealer.
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jerry weber: One of the problems with not having an upfront discussion on buying a car with a dealer is the trade in. If the dealer tells you what it’s really worth (especially if it’s most domestics) you will run from the showroom shreiking. Also, because you know the reail of your used car does not mean a dealer can give that to you unless you pay list price for his new one. The customers unrealized expectations for his car make the purchase of the new one a bad experience.
And this pricing of trade-ins is one of the stupidest things about the way dealers do business. I take much, much better care of my cars than most other folks. For example, I change the manual tranny fluid and the brake fluid in my Honda SOONER than the Honda required intervals, and I have my receipts to prove it. Who the hell else does this?
But what I get for my car at trade-in is not a penny more than anybody else who changed their dyno (non synthetic) oil every 15k miles. The only thing that maters to their used car appraiser is how the sheet metal and interior looks for wear/tear. They couldn’t care less about the extra time and money I use to take care of my cars. And then they think I am some kindas prima donna for not trading-in with them.
When I sell my cars I show people my receipts for all work/maintenance done, printouts on KBB wholesale/retail, and then I ask them to bid high on my car, cause I got other lookers. Everything I do is on the up and up. I get a great price for a well maintained vehicle, and my buyers have the piece of mind of knowing that their used car has received stellar maintenance.
There is a lot of good comments here, but some of it seems a bit off.
Manufacturer- Dealer relations: I treat them like they were the same people. Just like many here said they do. Nothing is worse to the customer than to have them blame one another and say they can’t help. No one is a bigger hero than the one that tries to get the system to do the right thing for the customer, in spite of the system.
Service Relationship: The fact that the service relationship has seperated from the sales has made the dealers worse (and the buyers). I dunno how to fix it, but it has worsened the whole system for everyone.
State Laws: We are the voters. Don’t like the dealership system, tell your legislator to stop mandating them. A freer market would likely be good for all.
No Haggle: Bull, bull, and bull. The only thing worse is the “no commissioned sales people” schemes. Most buyers WANT to haggle, or they think they are getting the shaft. Also, all used cars, and thus trade-ins, are unique. There must be haggling on their value, as there is no better way to determine their value. There is always a commission if there is profit. Someone in the dealership is making variable income, so turning the sales person into a clerk is just moving the commission up the chain. Likely to a guy with two rows of teeth who will get even more profit while the clerk is doing the showing and testing of the next pigeon, err buyer.
I have seen too many people buy the discount rather than the better product (aka better value). It does neither party any good to buck the trend if it causes the buyer to get less value. Saturn’s scheme worked because it was a niche aimed at the right target. Ford would stop selling trucks in Texas tomorrow if it tried the same thing.
I believe its one of those things that gets a lot of comments from a vocal minority. Haggling is here at least until the baby boomers are done buying.
My experience is the domestic dealers contain more sleaze bags than any of the foreign ones. Honda was impeccable, Dodge and Ford more like pathetic. Toyota was great too, it’s interesting how quality of vehicle also pertains to quality of dealer/dealership.
To allen5h:
Well, looks like that fella pulled a Martha Stewart, but it doesn’t change the way I look at it except to say that there may well be individually owned car dealerships out there with whom I will not do business either.
BTW, how come you guys seem to have a HTML editor to post and all I get here is a plain editor no matter how I change the settings. It used to work fine before they changed the website format.
Well, this is one buyer who doesn’t want to haggle. My negotiation/bluffing/lying skills are terrible. So I stand no chance of getting a “good deal” against people who do that every day. In fact, it just angers me that I have to do this on such an expensive purchase. I don’t need to prove my manhood by dueling with a salesman. He’s going to win. It’s like me challenging Michael Jordan to a dunk contest — a pointless and futile gesture.
Now doing the research on what car to buy is fine thanks to the Internet. But having to deal with the sales people is a nightmare. The worst car I’ve owned was a Saturn. But it was a pleasure to buy. And it did do what it was meant to do — get me to my destinations at a very cheap price. And both my other cars were bought at places with minimal talking by the sales force. They basically got a sale by leaving me alone.
I personally look forward to the coming bankruptcies of the Big 2.5 just to see all the dealers getting burned. Why the auto industry puts it’s customers in the hands of ripoff artists is beyond me.
I must say that the only time I was satisfied with the purchase of a new car was when I purchased a Japanese car. but still, I dread the whole process. My last purchase was an old Nissan I bought from an individual on Cars.com. Sure, It needed work but I knew it. I’m at the point where I’d rather fix up a used car with 100k on the odometer than deal with the hassle of dealing with the dealer or their service department – and depreciation.
Oldsmobile brings up some memories. My parents owned Buicks and Oldsmobiles for years. With mixed results. Their last Oldsmobile in the mid-eightys was junk. Luckily they had purchased the extended warranty and it paid off. GM had the audacity to write them a letter complaining of the costs to repair this car. I flat out stated their next car would not be a GM car. And it wasn’t.
Well we are 10 years in the future. And my parent’s best friend buys a 1995 Oldsmobile 98 Regency and I cant tell you how unimpressed I was. He paid 30K for this car as at the time as they had gone Saturn and it was a pay one price deal.
Around 2001 the Olds owner was getting antsy and wanted a Cadillac or Lincoln. I’ve heard this before…But I had rode in the 98 and was very impressed with the comfort and ride. Long story short–He traded in the 98 for a Lincoln and I bought the Olds.
It is a great car. Its drive like a luxo-barge and gets decent gas mileage. The only mechanical problems have been a new radio, a battery and a fuel pump. It is 13 years old.
Landcrusher: "Most buyers WANT to haggle" I disagree. There will be haggle on trade in as no the condition of the trade in varies. You cannot justify haggling on a 30,000 dollar identical mas produced items. Re read both this and the other dealer editorial comments section. Viretually all the problems stem from the current system which involves haggling. There is something fundamentally wrong with a system when you see people repeatedly put a brand their shopping list because they do not wish to buy it from a specific dealer due to mistreatment. This mistreatment almost always stems from the fact that the dealer makes more money in the current system. They will not stop some of their people from playing games tricks etc because they make more money by playing games and tricks etc. They do this because there are more rubes out there than there are informed shoppers but they make us all jump through the hoops to prove we are not rubes before they will give us the magic beans at the price we desire.
In my comments following Megan’s editorial, I mentioned how buying a new car was pain-free by using the internet / e-mail.
Not mentioned was one visit to a Honda dealership that was anything but pain free. After e-mailing this particular Honda dealer and corresponding with their “Internet sales manager” we went to see them in person. We were told to ask for this person by name.
We never met the “Internet sales” person (a woman) upon arrival, and we never met her. Instead, we were handed off to a sales person (a kid, really), and got launched into the typical back and forth with the sales manager, who remained hidden in a back office. The sales kid ran to-and-fro with offers, counter offers, yadda, yadda. This consumed nearly 3 hours of time!
Due to all of the chicken scratching on the paper the kids ran back and forth with, we ended up with a misunderstanding regarding the value of our trade in (a 1996 Civic). Long story short, we ended up ripping up the contract and walking out.
Aside from the trade in, we were paying cash for a new 2006 Civic. Should be an easy process, no?
You’d think when paying cash (sans financing), that buying a new car should not be such a circus.
We finally bought the new car from a different Honda dealership, which also had an Internet Sales Manager.
This time, he was a real person, and the process went smooth as silk.
At one point, the (real) Internet Sales manager came out to greet me.
When I told him the story (above), he said: “It should not be that difficult.”
To use part of this site’s name, that is certainly The Truth.
Thus, at one Honda dealership, where the Internet sales person was not empowered, nor to be seen, the process went badly.
In summary, there are truly Internet-savvy dealerships, and there are those that are nothing more than (Internet-based) posers.
Caveat emptor.
Mr. Korallus,
You start off your editorial by asking readers to look at the difference between invoice price and what consumers actually pay for Hondas.
You know very well that dealers don’t pay invoice. You pay invoice less holdbacks, typically 3% or about $1,000 on a $30K Pilot.
I define a greedy bastard as someone who lies to cheat people out of more money. What’s your definition?
Here’s a few of my personal dealer experiences:
When our seven-year-old Acura was due for a timing belt, we called for prices and found that the original dealer offered a good price. Since we bought it there, they gave us loaner privileges (yes, even after all this time). Someone dropped-off an ’07 MDX at our house, took our car to the dealer (50 miles away), cleaned it after the service, and returned it to our driveway. When we originally bought it, they matched the lowest price we found and gave us a year’s worth of free oil changes and car washes.
At Mazda, we bought a sub-compact a few years ago. On delivery day, the dealer tried to sell all the high profit extras. He tried to sell gap insurance (on THIS deal?! huh?!) and said, “it’s only an extra $10/mo.” Now, come on, it’s a budget purchase, if $10/mo is no big deal then why don’t YOU pay it for me! I arranged it through the internet to avoid this kind of s*** and they STILL made me run a gauntlet!
We’re now looking for a Mustang. We’re using email & phone to weed out the undesirables. It’s amazing that so many of them still use the old tactics with e-customers, but several have been straightforward, no-pressure, enjoyable conversations. We’ll see how it ends, but I don’t think they’ll get close to our Acura experience. It’s too bad Acura doesn’t make a convertible.
I doubt that it’s as simple as a mid-luxury line being more customer centered than a standard line. I also don’t care. Regardless of whether you have a lot of money, buying a car is a big purchase. It’s usually a reward after hard work and sacrifice. Like some of the other posters, I don’t like a lot of haggling and b***s***. I’d rather use the internet to seek out the worthwhile cars and dealers. However, it’s a real shame that we can’t simply stop-by a dealer, look around a lot, get some info, and go home to think about it.
Bottom line: Buying any car is a big event and it should be an enjoyable experience. I applaud dealers such as the author and my Acura dealer. Maybe someday they can be the rule instead of anomalies.
I was fortunate to buy my 2004 Silverado Duramax from an excellent dealer. Not only was I treated with respect during the efficient and pressure-free buying process, but the dealer invites all new buyers to a buffet where the staff is introduced and the warrenties and maintenance requiremnts reviewed. As a result, I drive an extra 40 miles for service at this dealer. I am always treated courteously and efficiently.
This dealer is family-owned and community involved. I truly feel for them as they are stuck with the non-truck Chevy line.
They do move a lot of trucks and I have a lot of respect the GM truck line. Wish I could afford the new Duramax LT Silverado! I would be up there in a flash.
Having grown up in metro-Detroit, it amazes me how different the customer experience is between the 2.5 and the “foreigners” from coast to coast. The companys’ cultural differences really shine through. Admittedly, not all Honda/Toyota/Acura/Lexus dealers are perfect angels, but whatever that percentage is (51%? 75%? 99%), it crushes the 2.5 (25%? 10%? 1%?)
The Acura dealer in Auburn, MA, is truly one of my favorite retailers in the world across any and all industries: clothing, furniture, electronics, automotive, etc. Real people selling and servicing really-well engineered cars, treating me like I’m a member of the family, and truly passionate about the technology and where the brand(s) is going over the next few years. To the point where I LOOK FORWARD to oil changes — because I walk outta there having learned something automotive every time! As much as I want a RWD BMW/M-B in the next few years, I can’t imagine buying a vehicle anywhere else but at Acura of Auburn (especially after reading all of the horror stories above).
The bit of irony that I want to include is how AWEFUL the Acura of Framingham dealer is. As noted several times in the above posts, we are talking about the sleeziest sales scum possible…in a slum of a dealership that also tries to sell Chevy’s and Hyundai’s.
SherbornSean — can you attest to this description, or have you not had the pleasure, or pain, of dealing with them? If Auburn was closer to 495, they’d put the Framingham dealer where he belongs…out of business.
MgoBLUE,
Five years ago we ordered an MDX from the Framingham guys. At the time, that model was in high demand. You could get it at MSRP, but you had to put down your deposit and wait on the waiting list.
They promised us a car in 3-6 months, which was OK by us — our old junkers were working fine, and we were only interested in the MDX because we were thinking about starting a family.
I would call them every couple of months, and they would tell me “a few more weeks” every time. Our son was 2 months old by the time they finally got us our car, a year later.
My guess is that whenever they got someone to pay over list, they bunped us down the list each time. I refuse to return to this dealer, despite frequent mailings urging me to get service at triple the rate the local Honda specialist charges.
If I ever buy another Acura, I’ll definitely drive to Auburn.
Does anyone have experience buying a car in another country? Do the auto companies have company owned stores? Are the prices negotiated?
I read once that in Japan the majority of cars are actually sold by sales people who come out to your home. Is this true?
I am posting this in both dealer editorials.