I just drove by a Tractor Supply Store. The owner festooned the store with a huge banner: “NEVER UNDERSOLD.” In certain states, the price claim must include the word “knowingly.” Which is another way of saying “We say we’ve got the lowest price but it’s your job to find out. If YOU can show us a lower price for an item, we’ll reduce our price to match it. Oh, do you have a written price quote? And you do realize that you’re not comparing apples to apples here. Our price includes our personal guarantee and . . . ” When it comes to this kind of malodorous marketing, car dealers rule. Here are some other examples.
TODAY ONLY! When it comes to factory rebates, there is such a thing as an expiry date. Never mind that. Ninety-nine-point-nine times out of a hundred, the claim that a deal is only good for 24 hours is as meaningless as a politician’s promise to balance the budget. That deal the car dealer just offered you? It’ll be there in the morning. In fact, car deals only get better over time. Just like your car, the store’s vehicle is a depreciating asset. The longer you wait, the less it’s worth, the less you should have to pay. Of course, there is a bottom line, under which they can’t/won’t sell. Your job: find it! If the dealer ends-up selling the car or truck to someone else, well, you’re out of luck. Unless the dealer can somehow find another one just like it. What are the odds?
WE’RE NUMBER ONE! Ricky Bobby’s Daddy was right; second place is the first loser. And no one wants to be a loser. Or buy from a loser, now that car dealers are cratering. When a car dealer says it’s number one, it’s implying that it offers the best possible deal. Bigger is better is cheaper is better. So car dealers create their own awards. “Number one Chrysler-Dodge-Jeep-Ram-Fiat-Alfa-Mahindra dealer in the tri-state area.” It’s nearly as confusing as the Championship game in the BCS series. Actually, lose the C. It’s pure BS that doesn’t mean a thing. Chances are the store in question simply have the most aggressive and deceitful salesman in your area.
FREE! Free anything is a lie. Love is not free, so why in the hell would an oil change or tires be any different?
WE’LL PAY YOUR CAR OFF NO MATTER WHAT YOU OWE! At best, the plain truth is that the total cost of the deal is the total cost of the deal. In other words, a car dealer may pay off your car even though it’s so far underwater its bumping along the bottom of the Mariana Trench, but he’ll just roll the cost into the price of the new car. At worst, it’s a flat-out lie.
WE GUARANTEE YOU A LOAN! For the financially challenged, a car “loan” equals a monthly payment. Period. The lower your credit, the lower of the morals of your car salesman, the higher the payment OR the longer you have to pay it. Why wouldn’t a car dealer offer a deadbeat buyer a “loan” on a shitbox? Chances are he’ll recoup his “investment” in less than a year. After that, it’s all gravy. He might get the car back to sell to the next sucker AND continue collecting money from the defaulted customer.
ZERO PERCENT INTEREST FREE LOANS! Would zero percent financing would pack the same punch if it was pitched something like this? ”This model sells for $35,000, but if you pay $5,000 more, we’ll set your interest payments up at zero percent?” Could it be that the $5,000 rebate is actually prepaid interest in sheep’s clothing? You got THAT right.
OUR COSTS ARE LESS, SO WE CHARGE YOU LESS! Car dealers know that a claim is more believable if it’s justified. So they tell you why they charge less for the same car you can buy somewhere else. [see: We’re Number One!”] Common sense tells you that all car dealers run the exact same sort of business; their basic costs are roughly identical. Besides, the price of a car is determined entirely by what people are willing to pay for it. Common sense tells us that a car dealer will charge a customer as much as they can for any given car. End of story.
[courtesy wolferadio11.wordpress.com]
Subprime financing like the example shown here is merely advertising that the dealer has and/or specializes in it. Not all dealerships deal in subprime financing.
How about when they give you a price, and the paperwork says something different when you come in with your wife who is all excited to drive off the lot in her new car.
Oh wait, that would constitute fraud. Unprovable fraud unless you taped the telephone conversation, but fraud nonetheless.
I’ve said it for years: The first OEM to turn the retail experience into something akin to the Apple store where product-knowledgeable staff are there to help you find a product that’s fits your needs at a standard price without negotiations, commissions, or shady tactics will be the first OEM to reach 85% market share.
The dealer experience is hell.
I just found this thread. Sorry for the late reply, but I’ve been selling for almost 16 years and maybe I can shed some light on the dealership experience.
First, There’s no excuse for changing prices/paperwork etc.
I started my career at a dealership that was trying to recover from being a one-price/no-haggle dealership. It doesn’t work. Oldsmobile tried the approach shortly before being shut down, and we know what happened to Saturn. Remove trade-ins from the equation and the concept would be great, but as long as the new car buyer can shop his vehicle from dealer-to-dealer, there will always be some sort of negotiation.
Knowledgeable staff? I believe it’s very important, but with the high turnover in the sales departments of most dealerships, it’s almost impossible to develop a staff of people who know product inside and out.
As far as the advertising goes, it would be nice to be able to break out of the “price leader” pack, but if you were looking at an Apple, and you thought you could buy it for a few hundred bucks less, chances are you’d at least investigate.
TODAY ONLY! If it is “today only” it is probably some meaningless gimmick promotion you don’t want anyway. It is possible to wait too long and miss out on a particular model at the end of the model year.
FREE! Anything “free” you are paying for one way or another.
WE’LL PAY YOUR CAR OFF NO MATTER WHAT YOU OWE! This is happening less and less now that banks are clamping down on how much you can finance. The days of rolling $5k of negative equity onto a new car are over, and forget about it if you are trying to buy a used car.
WE GUARANTEE YOU A LOAN! Only a buy here pay here place can do that. Otherwise, the dealer is doing something shady to lie to the bank.
ZERO PERCENT INTEREST FREE LOANS! You are always giving up a rebate to take this. Are you really going to keep the car for the whole term of the loan? If not, take the cash.
OUR COSTS ARE LESS, SO WE CHARGE YOU LESS! I guess if the dealer pays cash for the cars and has no interest expense, this could be true. All dealers pay the same for new cars, and your local dealers all buy their used cars at the same local auction. If one dealer is selling for substantially less than the others, beware.
The final one (OUR COSTS ARE LESS, SO WE CHARGE YOU LESS!) can actually be a true, at certain times, and between certain markets.
Granted, it may only be a few percent of the deal, but here are at least two situations where I knew this to be true.
1) Volume based factory to dealer incentives often effectively warp pricing on the final few units a dealer is willing to push out the door in a given time period. Example – Back when I worked at a Mitsubishi store we had a chance to get an extra chunk of change back from the factory per every Eclipse we sold that month. We didn’t rely on it during the month, but then we got close to the milestone. On New Years eve we sold a unit for many thousands of dollars below actual cost in order to qualify for five times that amount back in the form of the increased incentive on the other 19 we’d sold that month. (Granted, this was back in 1995 when Eclipses were actually easy to sell.)
These sorts of volume based incentives are never listed by Edmunds or other data providers, and front line salesmen rarely even know of their existence. Certainly they are never used to compute commissions.
2) Cross market advertising charges can often vary by quite a bit. Dealers in nearby markets may have very different co-op fees for their advertising buys. This may represent a hundred dollars or more, thereby satisfying the one-cent-less is a lower price crowd.
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And the loan one can be downright sinister in its application.
I did a bunch of work for a sub-prime auto lender in the late 90’s when I was with a debt collection software provider.
The lender wrote high interest loans and so called Rule of 78 loans in states that still allowed them.
The rule of thumb with these places was that the down payment required to get the “loan” typically covered the wholesale cost of the car being sold.
The gravy train started not after one year, it started virtually with the first payment.
If it was made.
The first payment default rate was shockingly high.
So, you could get a loan, but only if you had a down payment, and the car you were buying was only worth the down payment.
I cheered a little bit when that client went out of business.
An article about those shady finance companies that finance anyone would be very interesting.
I know of a case where a marginally employed lady paid 10,000 bucks for a 2500 Kia Sportage (NADA value too…, yikes). They had a gps unit in her car to track it.
The part I can’t figure out is the finance companies angle on this. They can’t possibly make money loaning stupendous amounts of money on cars that are worth 1/5th of the loan @ 20%— they must be getting kickbacks from the dealer to do such a dirty deal. I mean, I wouldn’t loan this lady lunch money, much less 10 grand. No honest lender would either.
actually, dealerships usually trot out the “if you make (x) per week, you MAY be approved,” or “we’ll take any credit application.” Neither statement ever says they’ll guarantee the loan will be approved.
I like the Kia guy here locally who is advertising that a new “overshipment” of Rios is in and can be had for only $7995…but wait…stop the commercial and read the little itty-bitty print and that’s with 25% down payment on a vehicle starting out at $12,995. The sad part is with the automotive industry the way it is, you’d think that maybe dealerships would start operating a tad bit more ethically to, oh…I don’t know, maybe be in a better position to sell cars? But the same tired sales pitches are being thrown out there to hopefully sucker some poor schlock into running down to the dealership for that steal of a deal…
guaranteed financing does not have to be buy here pay here, the dealer can sign recourse on a conventional loan. Also, some subprime lenders have dealer programs that keep a reserve on all the contracts as a pool for defaults and they guarantee financing to anyone.
Question:
Would zero percent financing would pack the same punch if it was pitched something like this? ”This model sells for $35,000, but if you pay $5,000 more, we’ll set your interest payments up at zero percent?”
Isn’t that how they finance cars under Sharia law?
Haggle-free pricing would help a lot. I agree with the retail model greenb1ood describes above.
You’ll never fix the financing shenanigans because it happens in every industry: credit cards, mortgages, retail, etc.
Part of the US mortgage ‘crisis’ was caused by foolish homebuyers believing they could afford double the house they truly could, and paying for it with an Adjustable Rate Mortgage. Meanwhile, many banks were forced by the US government to offer such deals in order to increase home ownership in certain communities. Now people who can’t read a mortgage loan contract are ‘victims’ of predatory lenders.
The same thing happens in the car industry, and that’s why we have TV shows called “Operation Repo”.
I will probably stick with used cars from now on – no mfr kickbacks, no model-year time pressure, and someone else paid for the depreciation.
My favorite :
A lease payment, say for a A4. $299 per month !
Fine print says “7500 miles per year” (that’s helpful) “Tax not included” (How can I get that deal ?) “Dealer participation required” (cough, cough)
Reality says that car is not on the dealer’s lot, would have to be a special order. Your cars will all have luxury packages and options on them.
I’ve said it for years: The first OEM to turn the retail experience into something akin to the Apple store where product-knowledgeable staff are there to help you find a product that’s fits your needs at a standard price without negotiations, commissions, or shady tactics will be the first OEM to reach 85% market share.
This cracks me up! Everyone who even thinks about buying a car bemoans the dealer that “screwed” them on the deal and wish the prices were fixed. Don’t you realize that this would result in higher prices?
To prove the point, look at the Apple model ( I own an Apple computer, BTW). You can pretty much only buy them from Apple and the price is fixed – at about twice the price of the equivalent Windows machine, where a number of competing retailers vie for your business! Is this what you really want when buying a car?
Zero percent is offered in lieu of rebates. The sensible thing to do is sit down and actually figure out what best suits the buyer. Example; Car A sells for $35,000 with buyer choice of 0 percent loan for 60 months or $3,000 rebate. With $5,000 down payment 0 percent is $500. per mo. At bank rate(5%)and $3000 rebate car is $509 per month. I’d go with 0% in this case. Pretty simple really.
I got a Mac from Amazon and got 14% off what I’d have paid buying from Apple (not even including the sales tax Apple would have collected and which Amazon does not).
But I also don’t think the Apple Store model should be used for selling cars.
Cars should be sold directly from the manufacturer, with the dealerships making money with service and parts sales alone.
Deceptive advertising is something that I’ve come to expect, it’s just part of the pain of the car buying process, but it doesn’t have to be that way. Combined with cars being more reliable, I’d guess that it explains a large part of the automotive depression. I don’t want fixed pricing, I want up front pricing, as clearly marked as it is for a front load washing machine or a plasma TV. I don’t just want this on advertised items, I want to see it displayed on items that aren’t advertised as well. Having prices for these items fluctuate from time to time is something I expect. If the price is low enough, I purchase the item, otherwise I live without it. Because advertising is generally straightforward outside of the automotive world, I sometimes decide to make purchases that I wouldn’t otherwise make, because an item is on sale, or because prices have decreased with changing technology.
I know dealers hate the free market, and fear the race to the bottom the clearly advertised up front pricing could bring, but I’d also like to see customer satisfaction scores without dealer influence. With this information in hand, I likely wouldn’t buy from the lowest price dealer, even though I know I could get service and warranty work done elsewhere. Service oriented dealers could use this information in their advertising, and replace their push-pull-drag sale full page ads.
There is nothing wrong with a dealer making a fair profit. In fact, I expect them to in order to stay in business. Fees for things like handling paperwork are fine too, as long as these fees are clear up front, not at the last minute when I am signing that paperwork. I know, I’m dreaming, but it just seems unreasonable that each car sale to be handled as though it is the first car sale they ever made, and that determining the price is more difficult than building a space elevator.
greenb1ood: Saturn has “everybody pays the same” pricing since it started. That has been one of the big reasons to consider Saturn. Some of the other deals like 0% vs $ rebate, etc. are at Saturn because of parent co. GM and GMAC.
I’ve found the car deal goes much better if I don’t have a trade in. Dealer doesn’t have to sell another car that may sit on the lot for months or has to auction.
The whole car buying process still mentally drains me vs buying anything else. There’s always some bs I have to knock down or be prepared to walk away. Having my wisdom teeth removed was way better than buying a car.
I bought two cars from Carmax – even after the first one turned out to be crap – because of the no-haggle pricing system.
I’m sure I paid a little more for them. But I’d rather know I paid a little more (they do have to keep the lights on, after all) than worry I’d paid a LOT more.
Next I bought a Scion. Noticing a theme here?
I have never bought from a “conventional” dealer, and I never intend to. I like to think they’re slowly going extinct – it’s really a miracle this relic of the barter system has made it this far.
Auto dealership ads are, without exception/bar none, the most sleazy, misleading and fraudulent ads of all.
Some of these ads would be absolutely great fodder for comedic sketches.
“***Only one available. Stock Number AO6396. Must qualify for owner loyalty, conquest, college graduate, military service, AARP, NRA, ACLU, Mensa, Lance Armstrong Foundation. Must have black hair, green eyes and be blood type A only. Must be a smoker and non-drinker. All rebates to dealer. Promotion ended two weeks ago, but dealership still kept the ad alive.***