I’m sitting inside one of the largest auto retailers in the world. Khakis. Shorts. Blue shirts are wandering. Aimlessly. Finally a family of ‘fish’ enter this pond of corporate hookery. They look at the displays. And then a nice middle-aged female lady comes to make her greeting. And the fun begins…
Is this the way car buying should be? It’s not that bad folks but boy is it expensive. And for what? Shareholders, upper level managers, lower level managers, salespersons, buyers, detailers, recon crews, and the list goes on and on. It’s a lot of overhead for a borderline commodity and I’m still not convinced that any of it adds any real value. But that’s okay. If the car sales continue to dry up, this behemoth will be able to make up for it by lowballing their trade-in’s. Which they then resell to dealers who have their own fishes and ponds. Will you take the bait? Will I?
It will remain like this as long as there are state franchise laws protecting dealers (Or until the next round of Bankruptcies…).
I purchased my last three vehicles entirely through the internet, only venturing into Dealership Hell with check in hand.
Even then, I had to endure “tours” of the service facility, and the relentless browbeating of the F&I Guy (“Ummm, no thanks to that extended warranty. GAP? Uh, I’m putting 50% down. Financing? Uh, I WORK at the Credit Union, so NO to that. Can you take my check now and hand me the keys?”).
I’d rather venture into an Arab rug bazaar.
The last time we bought a new car, my wife told the salesman in no uncertain terms that we wouldn’t need to visit the friendly F&I guy. (We had put down a substantial down payment and were financing the rest through our credit union). He complied.
The time before that we endured the spiel, which included plugs for an extended warranty and a maintenance plan. I told him the car was Toyota, so I didn’t expect it to break down (it hasn’t after 5 years), and that I LIKED to change my own oil.
Since 1983, and with the only exception of a 1991 mew car for my parents, I have not bought any new or expecially used car from any dealer.
New cars actually have much lower profit margins than some ripoff used cars, when you can sell it to the dealer one day for $4,000 and the next, with MINIMAL if any improvements and no warranty, the dealer sells it to you for $8,000 (actual case)
WOW..nicely worded so as to avoid any potential ramifications from that retailer. I bought a car from that particular source and yes, it was expensive, all the niceness that was presented did not justify the paint that faded on 1/2 the car in 6 months from their “reconditioning team”. Beware when corporations boast ethics…..
I don’t know about you guys, but I’ve had no beatdown by Finance guys at either of my new purchases (1 motorcycle, 1 car).
Both were quick & relatively painless. Maybe I’m lucky ?
Robstar, my last car buying experience was the same. No hard sell from the Finance guy (gal, actually) and the whole process was very pleasant.
Prices should be fixed and no haggling like some fourth-world middle eastern bazaar when you go buy a NEW vehicle. The whole theater was mercilessly ridiculed in a SEINFELD episode at a Saab Dealer. It is such a sharp contrast to the high-tech product we are buying!
I prefer purchasing used cars from private individuals. More effort is required to assess the vehicle and complete the transaction, sales are almost always as is, but sale prices are significantly lower.
Canada lacks a CarMax. Good used car dealers are as uncommon as honest politicians. New car dealer Certified Pre-Owned (CPO) cars are more hype than substance. The much ballyhooed warranties are filled with booby traps, exclusions, deductibles and are valid only if the dealer and manufacturer remain in business. The GM Optimum Warranty, for example, is a 90-day limited warranty with a $100 deductible, and the balance of the original manufacturer’s warranty. In spite of advertised rigorous CPO selection and reconditioning standards cheating and skimping are rampant. Some dealers are selling collision and flood damaged cars and U.S. lemon law buybacks, and lying through their teeth about their quality.
Ontario has no lemon laws. Statutory consumer protections are minimal and poorly enforced by self-serving industry insiders. In all likelihood it will be up to the purchaser to sue the dealer in court. The case will not be heard for months. He will undoubtedly be defended by a lawyer. Unless you are made of money you will be representing yourself before an imperious civil service appointee, often a former party functionary or spear carrier, in a cryptic proceeding, all the while beating yourself up for not being more careful in the first place.
My last dealership transaction was 10 years ago. Relatively painless until they slapped the $250 advertising fee onto the price. Threatened to walk and they adjusted the price to cover.
All other cars since then have been used cars bought through the internet. No BS every time.
“Gardiner Westbound :
October 6th, 2009 at 2:07 pm
I prefer purchasing used cars from private individuals. More effort is required to assess the vehicle and complete the transaction, sales are almost always as is, but sale prices are significantly lower.”
It makes far more economic sense to always, regardless of your budget, to buy used, and always from a private owner.
One inconvenience is that, if you are looking for a low-volume high-end luxury import, you may have to drive 100 miles or so round trip, or more, to see a private vehicle. Sometimes the owner can bring it to your home, or some midpoint agreed upon. But it is still very much worth it.
Besides the obscene profits dealers make from USED (not new) cars, they usually tell you little about their history.
When I bought my last car, I knew that the owner used it to commute 60 miles each way to work for more than 3 years. Obviously, he would have kept it in top shape, he would not risk a high paying job by showing up late or not at all all the time!
And so it was, the dealer gave me a printout, many pages long, of the car’s service and repair history from when it was almost brand new to its 112k miles.
I took a calculated risk and bought the car without even a mechanic look in detail at it. I test drove it twice and then decided to buy it, even tho I was looking for the mid size with a manual 6 or 5 speed, and not the largest size and auto. I am still a very happy owner of the car, which cost me 10% (one tenth!) of what its “grandchild” goes for new today.
It can be hard to find a late model car for sale by a private owner. Most of them are either off lease, off rental lots or dealer trade ins. If, however, you are looking for a five or more year old used car then yes, the private sellers can be found.
Be warned, however, that there are plenty of shady private sellers out there as well. Many are small time wheeler dealers who will lie through their teeth to get ‘er done.
“Be warned, however, that there are plenty of shady private sellers out there as well. Many are small time wheeler dealers who will lie through their teeth to get ‘er done.”
These are isolated cases in most areas. It does depend where you live, but the vast majority of private sellers are far more trustworthy than your average used car dealer, who, in most polls, do worse than the most corrupt politicians!
Also, it does not take a lot of homework to figure out that the private seller is a legit seller and not a dealer or a crook, usually you visit his home for the test drive etc.
I work at the unmentioned company (MAXCAR).
I worked at “traditional” New/Used dealers for many years as a Service Advisor, Sales Rep (New Used), New Car Manager, Used Car Manager, Finance Manager, Gen Sales Manager, and General Manager.
I Represented Ford, Mazda, Jaguar, Dodge, Chrysler, Jeep, and Toyota.
Knew the dealer/operators and factory guys very well.
I would not purchase from a traditional dealer unless it was my only option.
Almost all of my transactions are stress-free.
There is no visit to the F&I guy ever. There is no T.O. to a manger. There is no arguing or dickering, and all of the people love it.
From my personal experience 70% of the customers walking in the door are previous purchasers of (MAXCAR) or they have been referred to (MAXCAR) by family or friend. We are not talking about a casual referral. The feedback I get is that the referrals are strongly worded as in “you need to purchase from Carmax”, or “don’t buy any place but Carmax”.
This is the “holy grail” of retail.
70% and growing. I am astounded every day.
This is the easiest and frinedliest car purchase experience I have ever seen.
It’s not perfect, and we do have dissatisfied clients, but this place is a world apart from the traditional model.
The ONLY fly in the ointment of my otherwise very pleasant Saab purchasing experience was the Financing guy.
I also had the loan pre-arranged from my CU, and was making a substantial down-payment. One little wrinkle was that MA does not do temp plates, so I had to get them myself in ME and take them with me to do the deal. No big, $13. I did the whole deal over the phone with the Internet Sales guy, other than the Finance guy wanted to talk to me. OK, Fine. He wants a chance to see if he can beat my CU on the loan. OK, fine, why not? Well, that was 11am. Still had not heard back from him by 4pm – I need to get the final figure to give to the CU so they can write me a check to take down to pick up the car that night. Call the dealership – turns out the best Finance guy can do is MATCH the CU. Well, he tried. But then the BS starts. “Well, if you don’t finance it here you will need to make two trips (250 mile roundtrip), one to sign the papers one to pick up the car.” And some other creative BS. Uh, negative pal, my CU is standing by to write a check, you either give me the figure right damned NOW, or the deal not happenning. At that point he gave me back to my sales rep, who gave me the figure, and that was that. Irritating non-the-less.
I agree, the whole mess needs to go away. Why shouldn’t manufacturer’s sell direct? I don’t have to go to a Dell dealership to buy or get a Dell serviced? Though I do have the choice of going to an independent reseller if I choose to. That is how cars should be sold too.
I have purchased several used cars from the local Dodge boys, always dealing with the same sales guy. He has treated me well. After the first time I told him I did not need a warranty, special service or financing, he said OK and moved on. He has never mentioned it again in any of my other sales. Further, I went in looking for a car for my son and he talked me out of one the boy had his eye on, saying, “The guy who traded it in abused it.” Most of the rest of my cars were purchased from a local private guy who (cue the snickers) rebuild mildly damaged late models purchased at auction. When he died, nearly 500 people came to his funeral, most proudly driving or riding in cars he had sold them over the years.
It is always buyer beware. I also recently bought a car through Car Soup. Great deal, great car (Nissan Sentra, 75K, $3,100, perfect for son #2).
Odd that this piece is titled “Retail Hell” because that unnamed business (which we’re sure is CarMax) provides a customer experience that is nothing like hell. It’s a nice place to shop.
My impression is that CarMax’s non-negotiable used car prices are at the high end of “dealer retail”. A brief comparison of a CarMax 2008 Impala’s price with that model price (via Edmunds and AutoTrader) at other stores suggests CarMax is pretty near the typical asking price; one’s ability to bargain seems to be the primary reason other stores can be cheaper. CarMax would surely say their prices are fair because its cars are in nice condition and it provides things like 5 day buyback and 30 day warranty.
I like that at CarMax, customers also clearly see that trading-in is actually another transaction (with reversed roles) and there’s no hidden effect on the newer car’s price. I don’t know if they tend to lowball “trade-in” values, but my son got paid more than I ever thought his old car was worth at wholesale.
Seems to me all that’s worth something. Whether it’s worth the CarMax premium over another dealer’s haggled-down final price is up to each customer.
Man I have sold several of my cars to Carmax over the years and it is a very simple process. As long as you are willing to take near trade-in value its a fairly painless process. Havent ever bought a new car from them though just couldnt find one I wanted. Several dealers told me if I had an acceptable quote from Carmax to just take it as they couldnt beat them. Thats without even looking at my vehicle.
I traded in my old truck at CarMax because the local Dodge dealer low-balled me (of course). When I went back to him with CarMax’s price he told me to take it and run as there was no way he could match it. Now I was paying cash for the new truck so no F&I funny business, thus the deal was fairly painless.
Given my experience at CarMax my next “new” vehicle will be purchased from them because I like the no haggle aspect: this is the price take it or leave it. I’d rather pay a little more as long as I know (for sure) the person behind me in line is paying the same price.
Be warned, however, that there are plenty of shady private sellers out there as well. Many are small time wheeler dealers who will lie through their teeth to get ‘er done. – John Horner
In Ontario all motor vehicle dealers and salesmen must be licenced. Studies suggest as many as 25-percent of classified and Internet car advertisements are placed by curbsiders, unlicenced dealers fraudulently posing as private sellers.
Vehicles sold by curbsiders are often stolen, odometer-tampered, salvage vehicles, or have liens against them. When you call, say “I’m calling about the car.” If the person asks, “Which car?” you know there is more than one car for sale, which means he is a dealer. Another clue you are dealing with a curbsider is a private seller who suggests you meet somewhere impersonal like an underground parking garage or at a McDonald’s to see the car. If you meet at a house and notice several cars parked around that may also be for sale, ask about them. If the house looks scruffy and ill-maintained, you can deduce the car will have been poorly looked after too.
A curbsider always has a credible story. He is selling the car cheap because he needs quick money to resolve a family crisis, he is moving out of the country, he is getting a company car, he is selling it on behalf of an ill or deceased relative, or for a friend who is away, or whatever. Run away, run away, run away.
I find Lang’s articles fascinating, even though I have no clue what he’s talking about. Ever.
Verbal, you may want to try reading the words.
But for a few points of reference. This article may give you a clue as to what I’m writing about.
https://www.thetruthaboutcars.com/hammer-time-honor-duty-love/
I’m not anti-dealership, anti-Carmax or even anti-buy here pay here dealer. In fact I’m the former, sometimes the later, and as to the one in the middle, I had the chance to join them several years ago as a buyer.
What I AM anti is ignorance, and it appears to me that most folks do the entire car buying process upside down. The one most critical factor you need to consider when buying a car is not the ‘brand’ or the price. Or even the used car place. It’s the owner.
The owner determines how well the car has been driven, how well it’s been maintained, and the quality of it’s overall journey from the factory floor to your garage.
Unfortunately people buy with their eyes, and they take assurances from complete strangers that the car has not been abused. Often times these strangers know absolutely nothing about the cars or their history. Not one iota. This is the model we have at most dealerships. Regardless of the name that’s in front of it.
I do give credit to the new car dealers for offering CPO’s that eliminate worry. I also give credit to Carmax for taking many of the ideas that helped Saturn become popular, and applying them to used cars. They even improved on the idea greatly and have become a very successful company due to the quality of their employees.
But I still believe that in the decades to come, business historians are going to look at the way people buy cars and say, “Why did they ever do that?”.
That’s my opinion. Take it the way you see it.
Mr Lang, I too am a huge fan of your articles and love to read and reread them. The comment section afterwards from the B&B is particularly interesting. However, like Verbal, I have the darndest time understanding what you are talking about sometimes.
But I still believe that in the decades to come, business historians are going to look at the way people buy cars and say, “Why did they ever do that?”.
+1. And I’m actually a fan of a local dealer for selective used purchases. But the system as a whole is whacked.
Well I do work as an auctioneer. Sometimes my words (and thoughts) do run together.
Carmax’s gross profit margins have to be huge (I’m sure the net is much smaller). Sometimes, but not always, their “last chance” vehicles are priced decently. Mostly, their prices are on the high retail side, and when you consider that at a traditional dealership, you could get an easy $1000 off the asking price, it’s a hard pill to swallow.
CarMax does seem to offer very little for high mileage cars. Earlier this year I sold a 98 ES300 private party for 50% over the CarMax quote.
On the other hand I did go back to buy a van after being unable to find one with the model/year/mileage I wanted private party. I maybe could have done a little better on price haggling at a dealership but the time/hassle wasn’t worth a few hundred potential dollars.
Mr. Lang, are you suggesting that ideally, one should try to buy a used car directly from an owner who can provide facts about the vehicle’s history? And second best, from a small dealer like you who discloses what you’ve learned about the vehicle’s history?
1 & 2 are interchangeable.
You should buy from someone who tells the truth, offers a great product, and sells it at a fair price.
Knowing the history of the vehicle and finding out it’s weaknesses (and maintenance needs) are the primary part of that equation.