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The surprising answer, via Consumerist, is nothing. Well, sales-wise. Richard of tryingtostimulate.wordpress.com (the economy, you perv) built out a Jeep Wrangler online, and was quoted a price of $24k. Thinking that giving an American automaker some business would be as easy as showing up, writing a check and driving away, he visited not one, but two Jeep dealers. Both tried desperately to get him to finance (so much for shoring up cashflow) and neither would sell him the vehicle he “built” online. In short, the man wanted a Jeep and had cash, but Chrysler’s crack (smoking) dealers couldn’t make it happen. Maybe they need a few more bailouts before they’ll start accepting cash for their products.
99 Comments on “What Happens When You Walk On A Jeep Dealer’s Lot With $25k?...”
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jesus christ, how can someone in that kind of economical shape turn down cash? Maybe the dealers are as much a problem as the weirdos running the show after all.
Dinosaurian dealers remain mired in a business model that is calcifying in a geological layer that will be named “The Ripoffacene” by future paleontologists. Meanwhile the intelligent mammals are setting up shop online, where you can turn bits into cashflow with the flick of a mouse.
Sure, the thunder lizard makes a lot of noise, but his bite has no teeth anymore. Extinction is a process that can happen over eons, or the blink of an eye. In the case of car dealers, it is the latter, and they are not even aware of it happening. Or what part their own behaviors had in bringing it about, namely all of it.
Good riddance.
–chuck
The prospective buyer is an idiot. Sure this doesnt paint a great picture of Chrysler dealers, or car dealers in general. But this guy is a moron.
How hard is it to say $24K for this car or no deal. He let himself be mistreated, he let his own time go to waste.
I dont feel an ounce of sympathy for this guy.
Dealers are the weakest link.
That’s just incredible. Maybe Richard should have just clicked on one more button –Check Inventory– on the website before heading out. Might have helped him avoid at least those two dealers. Might not.
gamper:
whatchu talkin bout Willis?
I certainly feel a few ounces of sympathy for the guy, he walked in to a dealership with cash and got shown the door. That is an awful story for any type of retail store, especially one on the brink of extinction, and I would be firing people over that if I owned that dealership.
If the quote he received is like most other car companies, then it was sent by the dealer themself(ves), implying that they had a vehicle in stock and would sell it for that price.
“How hard is it to say $24K for this car or no deal.”
I couldn’t imagine wasting $24K on a POS Jeep. Why not buy one that’s a year old for half price?
He needed to do two things, which he did not do:
1. Find a dealer that actually had a car equipped like he wanted.
2. Finance through Chrysler Financial to get their $1,500 incentive.
His experience can be chalked up as much to his own behavior as the dealers.
I want to go to a test drive center; drive the car; specify my options; and pay a no-haggle price…
On one particular forum, people were financing the car to get the big incentive, then pay off the car in the next month or two.
I would have tried the fleet department or buy through Costco, etc. My most recent purchase was through the fleet department and it went smoothly, with the exception of the F&I guy, who turned snippy after I turned down the extended warranty five times AND I wouldn’t finance.
Domestic dealers need to be blacklisted and boycotted into extinction.
I wanted a jeep for the right price and had similar experiences, on average they want to steal about 5K above their profit.
Just bought a trashed Jeep for 1k and have a local offroad shop build it the way I want to from the ground up.
At least they are grateful for the business and will likely do a much better job with better parts.
I’ve had similar experiences with car dealers. I imagine most have. Having to weigh the financing vs. the rebates, never knowing if you paid too much, the lies, etc. It’s just not worth the hassle just to be able to say “look at my BRAND NEW CAR!” I buy late model low mile vehicles with proven reliability. I get the financing through my credit union. So far it’s worked well for me.
Fortunately for Richard, he brought his mom along, although she should have done a better job teaching him how to deal with money and credit in the first place!
The slimeballs could tell right away that this guy was a complete newbie when it came to buying cars, and in typical fashion took advantage of that fact. Unbelievable (actually it isn’t, sadly). I guess “customer service” really is just a sign over a counter.
chuckgoolsbie: as a BSc student majoring in geology, I’ve got to say your first sentence almost caused me to fall of my chair laughing!
In my experience, mainstream brand import dealers are at least as bad as domestic dealers. So I wouldn’t chalk this up to “domestic.”
On the incentive, do as Areitu says. I did this with my Mazda–paid the loan off after ten days.
I have to agree with gamper, this guy is an idiot. There are so many things wrong with that story that i started to write them down, but will just finish the statement by re-iterating my point that he’s an idiot.
That being said, this is typical car dealership BS that is seriously sad to hear about in light of how the manufacturers are faring. The theme of the TTAC post should’ve been “Even though this guy’s a a little slow, Jeep dealers should take a guaranteed sale instead of trying to exorbitantly profit from (rip off) him.”
“Why not buy one that’s a year old for half price?”
Where can you find that? Keep in mind I’m not looking for one 50% off MSRP, the big three haven’t sold a car for sticker in decades. I’m talking about 50% off the best price you could get new.
It always amazes me when people buy a 1 year old used car and say, “Look I saved 7k.” No, you didn’t. You need to compare the price you got used to the best price you could get new.
oh boo hoo….This guy is a wimp. He is not giving you the Paul Harvey. There is not a dealer in the country right now who would not make a deal happen if at all possible. TTAC(edward) don’t print anything else this guy send you because it is BS and makes me puke
I will add to the chorus: the kid is an idiot and was in way over his head the second he walked on the dealer lot. This of course does not excuse the dealer sales force, either. They deserve one another.
Sounds about right to me. This is why your average person is upside down on every car they own and why everyone HATES the whole dealership “experience”.
Just today I overheard a co-worker talking about trying to buy a new SUV… he remarked at how little “wiggle” room the local Chevy dealership seemed to offer him. In this economy?!? On a new SUV?!? Are they nuts?!? Oh wait, I know the answer already.
never had a problem with my Honda dealer. I’ve bought 3 vehicles from them with cash, all well below MSRP. They’ve been more than happy to do business with me, and I likewise. Maybe one day the domestics will learn…
Similar story…
A number of years ago I had leased a Chrysler T&C Van – liked it a lot. In January, about 4 months before the lease was due , the salesman who had originally done the deal with me called and said if I came back early, they (Chrysler, I assumed) would get me a new van and forgive the old lease.
I was not really looking to make the move so early but what the hey, ok. I liked the sales guy and it was only a couple of months. There was a locally listed ad that had said take one from inventory, well equipped , at a certain price, no problems. Based on this, I went down and looked at a new model – in inventory – and said fine, let’s do it.
The salesman ran the numbers – no real dickering on my part (I know, I know) – but the offer in the local paper had pre-negotiated the deal for me in effect, so I thought.
I signed the offer and go to the finance manager who proceeds to arbitrarily add all kinds of things (increase)to the already agreed price, and then tells me they’re doing ME a favor by taking back the old one early. I said, “you don’t understand, I am doing this at the salesman’s request.” He was oblivious to this point.
I stood up, tore up the agreement and my check said “watch this…” and as they stood in their window, walked across the street a bought a van from the “competition” then and there.
The dealer GM called me two days later to apologize and offer me a better deal. I said too late, already bought from the “other guys.” The next week the salesman quit and went to another dealer – and then retired – saying he’d had enough. I liked the guy, what can I say. The Finance guy was not there a few weeks later – not sure what happened to him.
I have never bought another Mopar – and never will.
Also, I buy my cars, no more leases for me. I have had 32 vehicles over the years, but only two leases. No more.
From the blog:
To reiterate, I began my search with $24,000, I knew the exact color and features that I wanted, I priced everything out online at the Jeep website and thought it would be nothing more than walking into the dealership and ordering up my car.
Ordering? From a Jeep dealer? Even if you wanted to pay full sticker on a loaded Grand Cherokee SRT8, I doubt they would have helped you. And you thought this would be easy and you could get exactly what you wanted? Man…
___
Was he looking at ’09s or ’08s? Did he remember sales tax? Why didn’t he do an inventory search, and go to a lot that had a Wrangler priced close to what he wanted?
I agree with some other commenters, the dealer is lame but this guy was an easy mark.
Meh, after reading his article he and the dealers were all tools.
He should have looked around a little more and the dealers…if he was able to produce the money they should have taken it, especially with the market the way it is but I digress.
Having read the guy’s blog, he was prepared to pay far more than he should (full sticker with factory discounts… silly college kids!), and the dealers saw a “mark” and went for it.
I guess if you can make a little money for sure or maybe, just maybe, hit the jackpot. Jeep dealers go for the jackpot. Of course, the amount of negative press will cost Chrysler a lot more (Consumerist is owned by the powerful Consumers Union a.k.a Consumer Reports), but they’ll be dead soon anyway.
Note to Jeep: Take dirt nap now… C7 anyone?
ARGHHHHH!!!! I had to stop here!!!!
“He sat me down with one of his sales associates, from this point on he will be known as Dr. Doom (for all you non-comic book fans, Dr. Doom is an arch nemesis to Captain America, me), and we began discussing what I was looking for.”
No he’s bloody well not, Red Skull is Captain America’s nemesis. Dr. Doom is the arch enemy of The Fantastic Four!
Agree. This dude is a newbie when it comes to buying cars. Cash buys are no problem. Never were… Matter of fact, any deal I’ve ever done we didn’t even talk about the type of payment until the deal was done. In other words, “OK sir. Here’s the price of the car out the door. Are you going to finance? (No.) Any trade? (Not for the $3,000 below wholesale you want to give me.) How about this terrific extended warranty? (No thanks. I’ll consider that 3 years from now if I still have the car.) How about that underbody protection (You’re kidding, right?)” LOL. Now here’s the cash, and please don’t put any dealership advertisements/stickers/logos or license plate frames on the car please….
Is this guy an idiot? Yes.
An idiot for thinking that he could actually get the manufacturer’s recommended price on a vehicle and pay cash for it.
Think about that for a minute. No wonder auto makers, and auto dealers, are in trouble.
I bought my GTI in a similar fashion. I printed out my configuration from VW.com, went to a dealer with the print out and my trade.
I told the sales guy $25,000 for the trade, and the balance in cash. Do the deal and I drive away today.
He didn’t have the car in stock, but he found one at another dealer – two days later I drove off in my new car.
The process shouldn’t be any harder than that.
-ted
Sure the guy’s writing style and car-buying acumen are both weak, but he did get accross the dirty feeling I got from the Chevy, Ford, Dodge, and Ki dealers I last visted.
“In my experience, mainstream brand import dealers are at least as bad as domestic dealers.”
Import dealers can often be worse.
Research is the key to car buying IMO. The amount of money that is involved is substantial to most consumers, inlcuding myself, so it is surprising that there are so many out there who do not do the leg work first. Here are my tips that I will share with my son someday:
1) Always, always go to multiple dealers and let them beat eachother up on the price.
2) Never pay more for options you dont want.
3) The only number that is relevant is the out the door price. Period.
You can kill yourself trying to find a “better” deal, since there is no way to know, just be satisfied that you did the work necessary to at least get a “good” deal.
Wait a minute guys, anyone who calls this guy an idiot is missing an important point: Car buying is UNNECESSARILY COMPLEX.
The idea that it is somehow the guy’s fault for not “knowing HOW to buy” is absurd. I know this is borderline “flaming” but collectively you guys have Stockholm Syndrome if you think it is anyone but the dealer’s fault. If I want to buy any other consumer product, I can look online for a price, and either ORDER it, or drive to a store and BUY it. I don’t have to know anything else. No secret handshakes, no insider info, no “buying tips”, etc. Just go buy it. Why then is is so damn complicated to buy a car?
This idea that it is somehow different, akin to a house purchase, is bogus and antiquated. It is basically an appliance. A mass-produced consumer good, with an antiquated, and thankfully in a death-spiral distribution channel. The whole reason car dealers are going the way of the dodo is because they make it so damn hard to actually buy a car. You know, the basic form of commerce: the exchange money for goods.
Look at Capt. Mike’s own experience last week! The only idiots here are the dealers, and their enablers, the manufacturers.
One of them has to die in oder to save the business. Car dealers can’t live without the car makers, so guess which one will die?
–chuck
Oh, and thanks petrolhead85, I try.
Yunno, what this kid tried to do, at least in terms of specing out a car online and going to a dealership to purchase it, *should* be the bidness model. Alas, it ain’t and as many have already noted, this isn’t just a domestic brand issue either.
The model is broken and while this kid did some dumb things, he’s more representative of most consumers and how most consumers want car buying to be vastly different than it is now.
Off topic, but this is hilarious and sad:
“I had heard good things about the quality of Jeep vehicles.”
Isn’t this how almost all under-informed car purchases are made? “But I heard …”
I digress. I’m on the fence. A car is a HUGE purchase. As a consumer, you should do much better research and preparation than throwing together a dubious 4-point checklist.
On the other hand, as I often say with the service industries, “How hard is it to give you my money?”
Can the main stream media please do a couple of days of 24-hour coverage on the fact that dealers absolutely, positively do not want cash?
I’m sure most of you know this, but for anyone who does not:
Dealers often, if not in the majority of the cases, make more money on financing kick-backs than they do on the markup on the car itself.
This person that I worked with was so damn proud of themselves for saving up $12K for a used car that they would always start off every negotiation saying they were paying cash, and then be shocked that the dealer wouldn’t budge on the price.
Jeez, this guy in the article is walking into dealerships saying that he got $24K in cash from his mom, and he wonders why they were trying to punk him.
Do you have to finance? No. Do you have to pretend that you are open to it to get a good deal? Yes.
Or if you are required to finance to get the incentives then just finance and pay it off, as a couple people above have said, just make sure there is not a pre-payment penalty.
Why everyone jumping on the dealership? They were just trying to save this guy money.
This guy is a moron if he didn’t finance. You get $1000 additional incentive for financing through Chrysler Financial (so he’d be giving that one up), PLUS you get 0% financing for up to 4 years. Uh, pretty sure when you can get 0% interest rate and pay for it down the road with less-valuable dollars (due to inflation), that is a NO-BRAINER. Put the money in a savings account, make 2% on it while paying 0% to chrysler, and get an additional grand back.
The dealer was HELPING this guy. If he was smart, he would have listened instead of gone off and posted about it. Of course its always the customer’s choice, but why pass up free money?
Chuck, I disagree with you about consumer goods. Durable goods, electronics and most other items are in the same boat. If you wait, you can get a rebate or find a sale, if you find the right seller, you can haggle or simply buy it for a lower listed price. It is more complex than good “A” sells for “X” amount of dollars. It just seems that way becuase with lower priced items, the less incentive you have to shop around. Any one item may be found to have a wide range of prices, just like cars.
Car buying is the poster child for dirty sales tactics I think because of the amounts involved and becuase there is a salesman involved in every transaction, but nobody cares when they lose 10% on a $100 item that sold to the next guy for $90. If you found out that the next guy bought his car a 10% discount, you would be mad as hell.
OK, so the guy is a bit of a ninny. Still, he should have been treated better than that.
I can understand the dealer really trying to sell something from stock ( got 43 of the damn things) instead of custom ordering. I can’t understand even a ninny not realizing that the haggling should have begun at 24K and gone down from there – having to accept color/equipment he didn’t want.
What would really be interesting is if he had somehow put an identifying mark on the Jeeps he test drove – then he goes back in 3 months, 9 months, a year, to see if they are still on the lot.
Even without Mommy’s input, he did seem to realize he wasn’t getting the price quoted him on the website. They should have just tacked on sales tax, title, plate and Dealer Incurred Cost -$300- (you guys still selling cars, are dealers still DIC’ing the customers?) and let it go at that.
As it turns out, they didn’t make a sale, and Chrysler has probably lost a customer for life.
I’m blown away by the people defending the dealerships and attacking this kid.
chuckgoolsbee and grog nail it. This guy may be young and naive, but he’s mostly just inexperienced at buying cars and dealing with car dealers, like most Americans. And for some reason, that makes him “wrong” in this situation!
Are you kidding me? If you have to be “good” at buying cars to avoid getting ripped off (or feeling ripped off), the system’s broken – from the Jeep website that didn’t clearly explain that the price didn’t include title, taxes, and license fees to the dealers who tried to jack him around.
Assuming the dealer has a lot full of cars I can understand why they would want to sell what they have in inventory not what they have to order. If I were the sales rep I would be pushing a close model for a price that will send this guy home with change.
It’ about reducing overhead at this time. The days of long bucks are gone for these dudes.
If you wander down a dark alley and get mugged, you lack common sense, but it is still the mugger who is at fault.
Man, haters on here.
The guy just wanted a Jeep. His only mistake was assuming that the Jeep dealer would operate like Amazon.com or Best Buy and be eager to sell him what he wanted.
It’s already been pointed out, but why should buying a car really be any harder than that? In today’s age with all the information we have available and all the competition in the marketplace, why should one have to be a car-buying expert? It shouldn’t be some cryptic game that we have to play.
From this guy’s blog entry:
“I began the search for my first new car in late 2008 and I became serious about making the purchase this past weekend. I, a responsible consumer, really did my homework and surveyed dozens of makes and models, choosing a car based on four key criteria: American, under thirty thousand dollars, four wheel drive and room for my hockey equipment. The Jeep Wrangler Unlimited satisfied my requirements and I had heard good things about the quality of Jeep vehicles. I was at peace with my decision and now onto the easy part; spending my money.”
Seriously, “I did my homework and found out that Chrysler makes quality cars?” This guy obviously is not very good at homework.
The car buying process is complex because the dealers write the state laws regulating it, but at a certain point someone is so far gone the he or she cannot be helped. And it’s not like manufacturer owned dealers would be cheaper, they would just be more consistently expensive.
Here are his criteria: “American, under thirty thousand dollars, four wheel drive and room for my hockey equipment.”
If he read any consumer guides on car quality and on buying a car he could have picked up an Impreza for under $20K (made in Indiana). But, despite smugly claiming to have done his homework, he didn’t.
And then this guy goes on some lecturing tangent “Let me take a moment to advise all of you college-aged readers; credit cards do not equal free money, but I digress.” Yeah, credit cards aren’t free money, apparently if you want free money you have to ask your mommy like this guy did.
When he said “American” I think he meant D-3.
Still, Ford SUVs > Jeep if that’s your criteria.
Two mistakes:
1. He’s buying a Chrysler product.
2. He’s in the NY metro area.
The salesmen could tell he didn’t know what he was doing and smelled blood.
BDB:
Another place where he failed at his homework; a 19.9% German owned, 80.1% who-the-hell-knows owned company that makes most of its cars in Canada and Mexico isn’t exactly apple pie.
An Escape or Mariner would have been a better choice in terms of needs and reliability, and I’m sure a typical Ford dealer is acting a lot less erratically than a checking-the-news-in-the-morning-to-see-if-the-company-declared-Chapter-7 Chrysler brand dealer.
I’m with no_slushbox this kid sounds like a douche.
Here was a case of a naive young man who was not parted from his money. Its all the car dealers fault. All of it. Guy comes in with cash and his first name is Sir, said deferentially. Educate him and find a way to sell him something close to his ideal. Naahh, lets jack the price up 30% from what our supplier says – right on the website – it should sell for.
Calling him a ninny or idiot is inappropriate. I used to sell engineering software that required a lot of applied math and applied mechanics to understand. All the cool kids contributed to it, starting with names like Cauchy, Riemann and Gauss. Basically, we use the calculus of variations on the energy functional, take the first variation of said functional and out of that falls integral forms of the relationships for stress/strain, electro-magnetics, computational fluid dynamics, heat transfer or coupled variants of all of the above. Don’t feel like a ninny yet? I could go on. Point is, if we treated our customers as badly as car dealers treat theirs, we’d have had far fewer customers. If we telegraphed to them that we thought they were ninnies because they didn’t know the intricacies of our business and software and how to use it, they would have found alternatives. Our job was to get them what they wanted and then stand behind it.
How is it that somebody making an easier sale can’t figure this out, even in desperate times? As Chuck Goolsbee indicated, it shouldn’t be that hard.
“An Escape or Mariner would have been a better choice in terms of needs and reliability,”
Just for fun, I built a leathered-up V6 Mariner Premier for 28k on the Mercury website. Better looking, more room for his equipment, and more reliable than what he was looking at.
I feel for this kid. I really do. Mainly because I went through a similar situation when I went out to buy my first nice car (read: financing required – not the $2 – 3K crapmobiles I’d bought with cash). And I agree most of the blame can be placed on scumbag dealers (lest I feel chuck goolsbee’s wrath), part of the bad experience can be chopped up to this guy’s inexperience.
Yes, dealerships are, generally, concrete cesspools of cut-throat sales tactics and automotive nightmares. I think most will agree with that. This guy was perhaps too idealistic or inexperienced to know any better.
Going in next time, he’ll be a little more on guard, as you rightfully should be when entering a car dealership.
This might be a good QOTD if it hasn’t been done – “What was your worst dealership experience?”
chuckR
I agree, it should have been much easier and more pleasant. Still, you can’t really deny he’s a ninny. When you’re ready to fork over 4K more than you planned on a vehicle you don’t really want and only are saved from this mistake by a phone call to Mommy, you’re a ninny. When you walk into a dealer ready to pay the amount the web site said, you’re a ninny.
To be fair, maybe I was a ninny at that age too. I’m old and worn-torn and been thumped hard several times by the school of hard knocks. Maybe I just forgot what it was like.
My point, poorly communicated it would seem, is that even a ninny ought to be treated better. The man had $24K in his pocket and was hot to buy a Jeep. A way should have been found to sell him one of the 43 Jeeps on the lot for right around $24K.
To be fair to the man, he did pull back at the last moment, realizing he wasn’t getting what he wanted at anywhere near the price he was “quoted” on the web-site.
Just so there is no confusion, I’m not taking the dealer’s side. The dealer did wrong, and he paid for it with loosing a sale. As a recent article on TTAC made plain – dealers suck.
So, his mother gave him the cash? That raises another question–who the hell gives $24k away in cash to their child? Why not just buy a vehicle for him if its a gift?
I don’t know exactly how the dealer system works in the US, but I used to work for a large automotive bank here in Germany, and know that the dealers hardly made any money from taking cash. Financing and leasing were the real money makers for them, especially when they sold additional insurances.
The story here is still incredible though, because it means that dealers don’t profit at all from selling a car in cash.
He’s very lucky they fucked him out of buying a Wrangler.
As an ’08 Wrangler 4-door owner, I can testify that he saved himself years of horrific mileage, a gutless engine that sounds like gravel in a blender, and an interior that looks like Fisher Price was contracted to build it.
Now go buy a last generation Wrangler 2-door and build it up!
The thread earlier on why dealers suck, mucho, has been vindicated by this guy’s story. (Though he could have said 24 thousand, or no deal, showing them his online build.)
I don’t get the people dumping on the kid. He’s a first time buyer, he knows nothing – but he’s got cash, and he has a dream (however misinformed) about what kind of car he wants to drive.
What should a smart dealer do? Give the kid the buying experience of his life, make it painless, make certain the car the kid gets is exactly as specified. If he’s forgotten about sales tax, he’ll accept that. But loading the dice, misstating the price, goading him into another car.
They just lost a customer for life.
And I agree with DeanMTL – get a previous generation Wrangler and build it up, it’s fun.
(The car makers are going to bean count the hell out of any future cars coming our way. You’ll get a lot more if you look at used cars, and upgrade them with the money you’ve saved.)
Who cares. Chrysler crap.
Well said, Chuck. Apparently, most of us have accepted that the buildings of slime known as car dealerships operate the way they do. That doesn’t mean there isn’t a better business model out there.
If he read any consumer guides on car quality and on buying a car he could have picked up an Impreza for under $20K (made in Indiana). But, despite smugly claiming to have done his homework, he didn’t.
As far as I’m aware, the Impreza has always been an imported model. The Legacy (and derivatives) and the Forrester are built in Indiana. (to the best of my knowledge, anyway) The only thing I’m 100% certain on is that the WRX/etc models of Impreza are imported, which leads me to believe the base models are as well.
Anyway, “american” to this guy is any car maker who’s name dosn’t end in an “oo”, “ah”, or “ay” sound.
His post is way too long. I can only stand to read about 800 words at a time. :) Also I clicked his blog link and it appears to have been deleted.
This might be a good QOTD if it hasn’t been done – “What was your worst dealership experience?”
Since everyone is hatin’ on kid for being so dumb and inexperienced, a better QOTD might be to let people describe their first dealership experience. I got ripped off big time, and I am still pissed about it.
2. He’s in the NY metro area.…
Not quite sure what you mean by that…dealers tend to suck no matter where they are…
Looks like our newbie has deleted his post…link indicated deleted by author
Its not about the kid or the vehicle he wanted.
I’m with chuck (as usual) and tom. Existing dealer distribution channel is fatal flaw in this business.
Any dealer who cant sell a car for list price out the door should be out of business yesterday and is direct evidence that dealers need to be re-imagined.
And any salesperson who can’t educate a buyer then the individual needs to be “fixed” – likely out of sales industry forever. Simple stuff.
Although there are other basic consumer buying experiences that are equally out of whack from perspective of the individual. US health care. Government in all its forms. Neither of these are mass produced machines though.
The blog is deleted….
No matter-I understand. I wanted to buy an SRX, figuring if GM could build a decent car, I should buy it.
Two dealers really mis-handled me. I have a professional look, drive up mid day in a late model BMW, and tell them “I’m buying Mama a truck”.
Won’t bore you with the details but they all thought I was unable to understand the numbers on a leasing form. (lease for business).
Good Car….bollixed up by a dealer. No wonder GM can’t win.
Once upon a time the consumer was a slave to a middle man called the travel agent.
They were the gatekeepers between you and those sunny beaches at Hawaii and you the consumer had no idea if you were getting a good deal or if it was truly necessary to add the “grand Hula dance experience tour” to what you though would be just a simple airfare.
Despite travel agents best efforts to convince us that the world would stop flying without their assistance most of us do just fine ordering our own travel online.
This is really what needs to happen with the car industry, all sales go online you just swing by the service center to pickup your car after doing the options online.
That way the kid would be happily driving his new Jeep into the sunset at 16 mpg.
I tried to use the same pay in cash tactic when I purchased my last vehicle. The salesman begged me to finance deal through the dealership otherwise I would have to pay more for the purchase. Then the salesman suggested after I finance the car simply make 2 payments then close out the sale by paying the balance in full. Such a game we play.
feh, I just bought a 2yo Accord 6cyl 4dr for 20k OTD, w/14k miles and pretty well-appointed. One of the few times I didnt drive away with a bad taste in my mouth. My last buy from the same dealer just went over 300k miles and was an AVIS rental for a year (’99 Bonneville) and also didn’t leave a bad taste.
The only other time I can claim a positive experience I ordered a maxed out ’85 Berlinetta overseas and picked it up in Jersey on my way home, handed them a check, they handed me the keys and asta la vista, baby.
Given that I’ve bought 6 other vehicles in my lifetime that’s a pi$$poor batting average.
Well, okay, the gold ’72 Malibu wagon with the Hurst 4 on the floor and the 454 jammed in the engine bay was fun but the dealer experience didn’t count. I paid cash on a used lot. (Never took it north of 80, the front end gave every indication of being ready for liftoff and I sorta valued my life…) But I smoked by school buddy’s Ranchero regularly. “Hey , y’know what I’m gonna do now?” i yelled out the window as we were smoking along side by side on a country road. “I’mna gonna shift to 3rd, c’ya…………….!”
A friend of mine had a lease ending. He liked the Rendevous, it worked for him and never gave him any trouble. Back to Buick. Nothing in the van dept of course but he didn’t like any of the SUV’s offered. Ok. How about a p/up? A 4×4 Sierra crewcab with a small V8… a no brainer.
Not only weren’t they able to dicker nickel one but even worse couldn’t get him something … anything to look at. Not at that stealership nor anywhere else and we’re major metro.
Of course, now that they’ve established p/up in his mind, he goes to Ford and last week sealed the deal on an F150 4×4 Supercab with the 5.4L for a little less than he was paying for the Buick.
They had him easy. He told me yesterday that he was 6th in line when he took the keys back on the Buick. They just don’t get it.
Just out of curiosity, can anyone from Europe tell us how the new car sales channel works over there? I was in southern Italy for a month on business a few years ago, and while I saw what appeared to be car dealers, they were much smaller buildings with less than half dozen cars out front. No 80 foot inflatable gorillas, no spotlights or carnival rides.
Granted, this was a small industrial town, not Rome or Naples. Were these places dealers in the American sense, or were they factory-owned showrooms? Do you buy a new car off the lot over there, or all they all ordered from the factory? Is this dealer mess a uniquely North American problem?
As others have stated, the blog has been taken down, so I can’t really comment too broadly on this guy’s experience.
But to the four posters who referred to this guy as an “idiot,” this idiot is still holding onto cash that he intended to give to a business that, in a free market economy, should be competing to receive his cash.
So who is really the idiot?
The dealer screwed up an easy sale. They should have taken the full sticker deal, located the car if necessary, taken the money and ran. I sold 4 cars at full sticker last month. Easiest sales of them all. Why hassle a buyer willing to pay full price??
But to the four posters who referred to this guy as an “idiot,” this idiot is still holding onto cash that he intended to give to a business that, in a free market economy, should be competing to receive his cash.
If you read my post as an indictment of the prospective buyer, rather than of the dysfunctional car dealership system, I obviously need to work on making my sarcasm more obvious.
Despite travel agents best efforts to convince us that the world would stop flying without their assistance most of us do just fine ordering our own travel online.
t-truck nails it. Whether or not it survives the present crisis, the American car dealership as we know it is not going to last too many years longer.
Every person born after 1990, and a hefty fraction of those born before, are now accustomed to being able to order virtually anything they want, configured however they want it, and have it delivered to their doorstep with assurance that the seller will take it back if it isn’t exactly what they wanted. The day is not far off when these people will constitute a majority of car buyers. And they simply will not stand for the current system. If none of the extant dealers want to accomodate them, some of them will start new dealerships on this model. And they will make a series of small fortunes.
Think it won’t work for cars? The music industry thought it wouldn’t work for music.
“The prospective buyer is an idiot. Sure this doesnt paint a great picture of Chrysler dealers, or car dealers in general. But this guy is a moron.
How hard is it to say $24K for this car or no deal. He let himself be mistreated, he let his own time go to waste.
I dont feel an ounce of sympathy for this guy.”
That’s funny; I don’t feel an ounce of sympathy for the dealer.
What a goat screw on both sides. Why the hell would the lad give them his social security number right of the bat like that? That is beyond stupid.
Made me think of when I finished college and had my first job lined up. I was bound and determined to buy a brand new car – my old man said that was dumb but hey I wanted that ride. I was so glad I had him with me – I’d have fallen for so much stuff. “Hey Dad – look at this ad in the paper. This price is unreal” – It’s called bait and switch Boy. Look at the fine print – 1 at this price and 19 others at ‘similar’ prices. “Oh”. “Hey Dad, they will put a substance on the upholstery to protect it – it’s only $299!” It’s a $3 can of aerosol boy – you can get it at the K-Mart. “Oh”. “Gee Dad, that salesman at that last dealership seemed nice.” We live in Metro Detroit Boy, there are more dealerships per square mile here than anyplace on Earth. We are looking for the best deal – not trying to fix up your sister. “Oh”. On and On – what a learning experience.
The buyer in the story does seem a bit confused, but I will agree that the Jeep dealers also had some issues.
You always get a better deal taking a unit out of dealer stock than doing a locate or ordering a unit. Dealers don’t like to deal with ordered/located units. The couple of days it takes for a dealer trade (locate) to arrive gives the customer time to cool off on the car and time to shop around, and the six to twelve weeks it takes an ordered unit to arrive allows for all number of things to happen. That isn’t to say a dealer won’t locate or order a unit for you, but you have a much stronger negotiating position if you are asking for something that is currently on the lot in front of you.
As far as cash vs. financing, my dealership is always happy to accept a cash deal, in fact we ran about 50/50 this month in cash deals vs. financed. Of course, our pay program doesn’t include any money for the salesperson on the ‘back end’ (money from financing, warranties, etc) so, perhaps dealers that pay the salespeople on a mix of front end and back end gross encourage a more aggressive financing pitch.
One thing that all customers need to realize however is that a poor economy doesn’t somehow make it good business sense to start losing money on car deals. If I have a total of $2000 markup on a vehicle, selling it for $2500 off of sticker in addition to all manufacturer incentives doesn’t make any sense unless it is just a really old unit taking up space and floorplan from something that we can make a real profit on. Also, manufacturer’s incentives come from the manufacturer. If a certain rebates applies only with financing, we can’t give it to you if you don’t finance because the economy is poor, dealers have no control over the rebates. Also, the quickest way to lose any good will with the dealer you are trying to buy a car from is to walk onto the lot and say something to the effect of ‘Well I figure you guys are hurting so badly that you’ll pretty much give the car away’. Don’t be an arrogant SOB to us and we will return the civility to you.
Also, for everyone saying that the current system needs to go, I am with you. I’d love it if the price on the car’s sticker was the price the customer would pay. Getting rid of the haggling and the begging for freebies like tint or trailer hitches and the headaches from customers who have it so figured out that they won’t tell you what they want so you have no clue what to offer would make my day a lot easier. Dealers would all be happy to sell their cars at MSRP, and occasionally have percentage off sales like retail outlets, but customers won’t let it happen. If I say my car is a certain price, the first thing the customer will do is drive down to the next dealer and ask them to beat it. No one does this at Best Buy or Macy’s, yet somehow everyone feels entitled to play car dealers off of each other. If you want flat rate no haggle car pricing, awesome, the dealers and salespeople would be happy to make more money with a lot less work.
I don’t understand the haters, either. The point is the sad irony that a dealer, who is in the business of selling cars, for Gawd’s sake, let a willing buyer with means and desire WALK OUT the door with $24 k in cash.
the rest of this post makes me wonder why Saturn failed. Didn’t they have the business model that all the B&B say should work?
the rest of this post makes me wonder why Saturn failed. Didn’t they have the business model that all the B&B say should work?
If the business model is never implemented, it never has a chance to work.
@Nullomodo:
No one does this at Best Buy or Macy’s,
Wrong. My wife does it at Best Buy and Macy’s all the time, and gets away with it. There’s always room to work.
I see your point, but there are far, far more jerk dealers than there are jerk customers. If you get mistreated by a customer, well, y’all made your bed over the years. I’m going to guess that you’re still making money on the deal (and you should; don’t think I’m not saying that.)
I have never in my life been made as angry during a business transaction as I have at a car dealer. Insulting my intelligence, insulting my wife, not giving back my keys when it becomes obvious that there’ll be no deal … all the BS is so unnecessary.
You paid x for the car. I should pay x + 10 percent, or maybe x + 15 percent if it’s a really cool car for which there is a lot of demand. I finance through you, yes, you should get a cut of that too, but I should still get a fair rate. Tax, title, tag, and I go home, and nobody gets angry. If only …
the rest of this post makes me wonder why Saturn failed. Didn’t they have the business model that all the B&B say should work?
Half-right. Saturn had the dealership model the B&B say should work, and it worked, frankly, like gangbusters. An absurd number of people I know — young, professional, college-educated men and women with steady jobs — bought Saturns in the early to mid ’90s. It was the most pleasant car-buying experience I’ve ever had, and everyone I know who bought one felt the same way.
Unfortunately, having a great dealership model only works if you have, you know, something worth buying. The original Saturn models weren’t anything special; they were decent cars at a decent price, nothing spectacular on either side. The cars that succeeded them were … not up to even that modest standard.
EDIT: If I say my car is a certain price, the first thing the customer will do is drive down to the next dealer and ask them to beat it.
Note that “fixed price, no haggle” does not necessarily translate to “every dealer has the same price”. People will still shop around for the best deal. They’ll just do it out of sight of the dealer , the same way people use Google Shopping today.
@NulloModo “One thing that all customers need to realize however is that a poor economy doesn’t somehow make it good business sense to start losing money on car deals. If I have a total of $2000 markup on a vehicle, selling it for $2500 off of sticker in addition to all manufacturer incentives doesn’t make any sense unless it is just a really old unit taking up space and floorplan from something that we can make a real profit on.”
So you’re suggesting A) That it doesn’t make sense to do, ever, unless it does, and B) That you can’t operate the dealership in a capitalistic/free-market way with those basic Econ 101 supply and demand principles.
It seems that, right now, supply is severely outstripping demand – which would indicate a drop in prices in a relatively free market.
NulloModo:
You know why you can’t play one Macy’s off another? Because Macy’s owns both. If it wasn’t for all of the dealers’ state lobbying independent dealers wouldn’t even exist.
The competition of independent dealers alows smart customers to get better prices, but no haggle pricing doesn’t mean you don’t have to haggle, it means you don’t exist.
no_slushbox –
I don’t follow the logic of dealers not existing without lobbying, after all, a dealer is pretty much a retail outlet for cars the same as any other store, the biggest difference being that the haggle mentality has been around for so long that its become the standard way of doing business. You do make a good point about certain customers getting better deals however. On average a car salesman will sell 8 – 9 cars a month, which we’ll be generous and round up to 10 for easy math. Most dealers have a ‘mini deal’ payment for a sale that doesn’t have enough gross to pay a decent amount on percentage, or which loses money. Assuming a mini deal at $100 (some are higher, some lower) that would only be $1000 a month for the average salesperson. So, for the ‘smart’ customers that manage to wrangle out deals that hardly make any money, the salesperson has to knock somebody’s head off in a deal every once in a while just to make a living wage. Let’s assume then a no haggle system with on average between $1000 and $1500 gross per vehicle, and a 25% commission on that gross for the salesperson. The average salesperson now makes $3125 per month, which while not great, is at least enough to get by on, and the ones who take care of their customers and get referalls and repeat business will do even better.
I don’t get the ‘you don’t exist’ comment as obviously someone has to be around to sell the cars. A central ‘go test drive a generic model, order one with the options you want, and wait for it to be built’ idea is impractical. For one, most people won’t want to wait for their car to be built, they’d rather be able to go somewhere and get one pretty much as they like rather than wait a month for one with an exact set of criteria, and also it would raise production costs substantially if cars were being built to order across a long period of time vs at full capacity for a shorter period.
rj –
Dealers would love to consistently get x + 10%, as currently full MSRP sticker is less than 10% over invoice for a lot of cars.
Marcus –
I see your point, but incentives due to oversupply vs demand are what manufacturer’s incentives are for. The invoice on the car remains the same regardless if they are flying off the lot or they are piling up on the back 40. Prices are down for slow moving vehicles, but those extra savings come from the automaker, not the dealer who has already bought the car for a certain price. Not that this is particularly good for the automaker either, as it doesn’t make a lot of sense when you are bleeding money to start selling your wares below cost, but the manufacturer does have a lot more room to play around with in terms of cost of production vs cost to dealer, than the dealer does with cost to dealer vs cost to customer.
I will love the day I don’t have to say “no” 25 times to the Tiffany Unit trying to sell me crappy third party mats (they seem to forget that most cars come with the OEM mats, natch), tinting, and under body protection.
I bought a car last month after coming back to Australia. Australia is a bit different to the US buying experience.
In the US, I e-mailed the VW dealership’s Internet sales guy with exactly what I wanted (the cheapest Rabbit with ESP and sunroof, color unimportant), with my only proviso that they had to have stock. He up front admitted the spiff I found out about on Edmunds, and the exact dollar figure. We agreed on invoice – a bit of the spiff on the basis we would be financing. We also negotiated down the dealer prep as the car had already been prepped and driven a few miles (about 10 miles) as a tester. I felt we did a good deal there. I made it particularly clear that I didn’t want to hear about tinting, protection, etc.
Coming back to Australia, we had cash to buy the car outright, but I wanted to finance it as a way of rebuilding our credit history as we’d been away for a couple of years.
I did the rounds of the local Honda dealers, ringing them to see if they have Jazz (Fit) VTi’s in stock in a range of colors we could live with – I’m never having black again as it’s impossible to keep clean. I found a few cars in stock with colors I liked, but my wife didn’t like the colors of the auto VTI’s in stock, so we went one up to the VTI-S. We got the color and options (“all of them”) we wanted, saving about $1400 off a $24k on the road deal.
In Australia, there’s no transparency (if you can call it that) regarding “invoice” (fake or otherwise) prices. It’s practically impossible to know if there’s spiffs or hidden incentives unless its manufacture dollars on the hood. So it’s important to compare deal against deal, and be happy with that deal.
Honestly, though, I would have preferred going to Honda’s web site, ordering what I want, and picking it up a day or two later from my nearest outlet. I don’t need the sales person. I know exactly what I want, and they’re just so much fat overhead I can do without.
The guy’s not an idiot – the dealers are. They’ve done Chrysler a disservice – that dude will NEVER buy a Chrysler / Jeep product ever again, losing up to 10 – 30 sales in his lifetime. Multiply through the number of folks that this might also be happening to, and you get the picture. Chrysler should try to make good to this guy, no matter how imperfect or crap we personally think Jeep’s are. For everyone who likes a M3, there’s 10 who want a Jeep, and see M3 owners a bunch of posing tossers.
If he wanted a Jeep, had the money, it shouldn’t have been that hard to drive out of there in this market in a brand spanking new Jeep. The dealers are the idiots.
Andrew
NulloModo:
The only way to get rid of cross shopping would be for one company, the OEM, to own all the dealerships. Otherwise there is always going to be cross shopping for a major purchase like a car.
In many states it is illegal for the OEMs to sell directly to customers (because of dealer lobbying). Some OEMs probably like using dealers as distributors, but many I’m sure would rather have control over the sales process and over closing locations.
A recent development in the retailing of vehicles:
http://thekneeslider.com/archives/2009/02/28/brammo-enertia-electric-motorcycle-to-sell-at-best-buy/
In all fairness Best Buy is worse than any car dealer I’ve worked with.
Brammo previously was the licensed manufacturer of the Ariel Atom for the US market.
@Joey8360 :
Just out of curiosity, can anyone from Europe tell us how the new car sales channel works over there?
I’m on my first new car, but a few things strike me as being different
a) Negotiations on price start at list price and go down from there. Nobody, ever, pays list price. European car MSRPs are inflated to give room for rebates. I inquiried a few dealers and compared prices, then picked the dealer who came up with the best numbers, negotiated some more and placed my order a few weeks later after negotiating some more. At no point they were trying to rush me or to harass me into a sale.
b) Most new cars are ordered to the customer’s spec. I understand Americans want it “now”, so the dealers stock the most popular models in the most boring spec and are not that willing to order you exactly what you want
c) 5 weeks after my order I picked up a nice shiny new car, equipped like I wanted it, for the money I wanted too pay.
@NulloModo “One thing that all customers need to realize however is that a poor economy doesn’t somehow make it good business sense to start losing money on car deals. If I have a total of $2000 markup on a vehicle, selling it for $2500 off of sticker in addition to all manufacturer incentives doesn’t make any sense unless it is just a really old unit taking up space and floorplan from something that we can make a real profit on.”
Well that depends, sometimes its better to take a loss because the loss is less if you take the loss now. About two years ago I was renting out a house with a 1400 dollar a month mortgage at the time I knew that the housing market was collapsing and would only get worse. The going rent was around 1100 to 1200 a month in the neighborhood and there were quite a few houses available for rent. I lowered my asking price to 1000 dollars a month and had my pick of tenants. I rented it out to a nice couple. At that time two house down a comparable house was asking for 1400 dollars. I am assuming that the owner was trying to cover his mortgage like myself.
Here it is two years later and that other house is still unrented. True I took a loss but my loss would have been greater if I had not bit the bullet earlier. Now that couple that I rented my house to loves the house and they think of it as home so they are not going anywhere and my mortgage has fallen thanks to lower property taxes and insurance so that I am turning a small profit. Meanwhile the house two houses down has foregone 24000 dollars in rent because the owner refused to take a smaller loss two years ago. The market is not coming back anytime soon (autos or housing)
@NulloModo – Right then, we’re agreed. Very poor example of a free market.
Thank you, Chuckgoolsbee. This is wrong to say it the kids fault. Disregard his choice of vehicle…hell people by Azteks! Disregard his inability to stand up to an authority figure. Would you want these salesmen vultures preying on your grandmother? The kid (man) walked into a place the sells a product. That product is advertised at about $x amount. He tried to buy it but the business that proportedly sells this product wouldn’t with oout a little extra for this or that.
Buying a car should be no more difficult than buying a clock radio. Pick one with the features you want, pay the amount requested. Take it home and set the alarm. Take a nice nap satisfied with your product.
Any other result is the fault of the dealer and the responsibility of the manufacturer.
A classic case of counter-intuitive economics. When sales are slow, salespeople need to maximize commission on every car sold. When sales are high, they sell more cars and can therefore reduce commission/profit on each unit.
I get the impression that the salesmen here don’t see themselves as car salesmen, they see themselves as finance scheme salesmen, with cars being just a kind of sweetener to get people to sign on the dotted line.
So basically the dealer haters want OEM owned, fixed price shops. How will that be cheaper for the consumer than the business model we have now? No competition leads to higher prices in a free market. You guys can’t have it both ways.
No competition leads to higher prices in a free market.
I’m not sure if this model would be a good idea, but there would still be plenty of competition among the different car companies.
Appears that the blog entry has disappeared down the memory hole. Here’s the google cache link if you still want to read it:
Link
Another example of why I like to buy slightly used vehicles from private parties. At least you get an honest price haggle from someone who wants to sell a car.
Shit like this is why Generation Y will simply put the new car dealer as we know it out of business. Anyone under the age of 30 probably does a significant amount of shopping online, (research at a minumum) especially for major purchases.
If a manufacturer’s website quotes a price, the dealer damn well sell that product at that price (or less) or the consumer will go elsewhere. Simple as that. I’ve been through some bad tasting dealer experiences prior to mainsteam internet, but these days the only thing I need a dealer for is a sample test drive. The complicated and confusing purchase process through a dealer simply will not be put up with by younger generations that walk onto a lot armed with much more research in their back pocket than my father’s generation ever did.
@dwford “So basically the dealer haters want OEM owned, fixed price shops.” – I’m not a fan of dealers and that’s not what I’m saying. I will say that for the guy who went looking for a Jeep with $25k in his pocket, there wasn’t much good that dealers added to the buying process. (Except for maybe keeping him out of a GM vehicle where his warranty may not be honored soon and the parts suppliers may not be around much longer to provide parts for maintenance/warranty work.)
golden2husky
Not quite sure what you mean by that…dealers tend to suck no matter where they are…
I agree. What I meant was that you’re more likely to get ripped off/taken advantage of in New York/New Jersey/Connecticut than in other parts of the country. Seriously, who goes to the Bronx of all places to buy a car?
Don’t be upset, I grew up there so I know of what I speak. I shouldn’t talk though, I bought my Infiniti from Atlantic Infiniti on LI in 2004 and it actually wasn’t that bad…got a good deal, actually..
This definitely had more to do with him wanting a car that wasn’t in stock vs cash/finance.