I rented a Jeep last week, and let me tell you, this thing was a Jeep. It defiantly looked like a Jeep. I could tell it was a Jeep because it said “Jeep” in many places, including right on the hood, which is just so Jeep. It wasn’t a Wrangler or a Grand Cherokee but […]
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Posts By: BarkM
There’s been a slow, yet steady change in the automotive marketplace over the last eight years, and you, the consumer, have been the lobster sitting in the pot as the change has occurred. The market has gotten significantly worse for car buyers. The number of franchise and independent dealers has been reduced by almost half. And yet, those surviving dealers have had an unprecedented run of year-over-year growth since 2008.
But as that growth has slowed in 2016, car buyers find themselves paying more money for used cars than ever before. We know that the typical American household can’t afford the typical new car sold in America, but we may soon be approaching a day when that same household can’t afford the typical used car, either. In fact, according to NADA Data, the average used car transaction price in 2016 will crest $20,000 for the first time in history, and will be 59.1 percent of the average new car transaction price of $33,903.
What does all of this mean to you? That buying used may not be the smartest financial choice you can make. In fact, it might not be very smart at all.
MrKiwi writes:
I’m currently driving a 2011 Ford Fusion with 80,000 miles. It’s good, reliable, and utterly boring. I’ll have it completely paid off in a couple of months. Here’s where I’m going to get myself into trouble.
The responsible thing to do would be to keep the Fusion and enjoy a paid-off car. But …
While driving a rental car recently, I remembered how much I enjoy a manual transmission. There are also a couple of times a year when I could use the extra capacity of a hatch. I’m starting to look at the listings for lightly used Ford Focuses and Mazda3s with manual transmissions, thinking, “Wouldn’t it be fun?”
I’m back like a rebel making trouble with another installment of Dealers Are The Worst Businessmen. Today, we’ll be talking about the information that most dealers use to make every decision in the dealership, and how it’s completely and utterly useless.
To those of you who’ve worked in the dealership world, you already know what I’m talking about, right? Yep. The CRM (Customer Relationship Management) tool. Doesn’t matter whether it’s VinSolutions, DealerSocket, or any of the other popular software solutions on the market. Nowhere will you find a more prominent example of “garbage in, garbage out” than in the customer data mining that occurs at every dealer group. It’s a wonderful example of how most dealers spend thousands of dollars on tools they believe they need and then neglect to learn how to properly use.
But first, a story.
Lichtronamo writes:
Hi Bark,
I’m starting the process of finding a used car for my daughter who turns 16 in September and will (hopefully) get her license afterwards.
She’s 5’3″ and about 90 pounds, so a B- or C-segment car would be right in terms of size. She’s also listened to me go on about how great it is to drive a manual transmission since she was born, and believes this to be a fundamental need of any car purchase. Our budget is upwards of $10,000 with driver safety the other primary criteria. Fuel economy and reliability aren’t negatives. While I should probably zero in on finding a nice Corolla, I’m looking for an out-of-the-box choice with some car-guy (and girl) cred. Golf? Mini? Mazda3?
Imagine that you owned a successful business. For many of you reading this today (including me), you don’t have to imagine, because you’ve done it. If you owned anything from a lemonade stand to a global airline, you’d have a pretty good idea of your costs and profits. You’d know which advertising sources worked best for your business. You’d strive to know where your customers came from. You’d have a system for hiring and training employees.
You’d do all of this and more, because you must have all of your ducks lined up in pretty little rows to be successful.
Well, that is unless you’re a car dealer. In that case, you may have no idea about any part of how your business works and still make money hand over fist.
Don’t believe me? Over the next several weeks, I’ll prove it to you. Today we’ll start with a simple concept that befuddles most dealers: online merchandising.
It was 8:18 p.m. on a Sunday night, and the situation was seeming grim. I had just returned a press car to the Parking Spot at the Philadelphia airport, and not a single rental car agency in Philly was willing to rent me a car.
A combination of poor communication and piss-poor planning on my part made it necessary for me to drive home nine hours through the darkness of Appalachia just so I could turn around and leave again in the morning. I had been awake since 6:00 a.m., and it seemed likely that the clock would make three full rotations before I’d shut my eyes again.
Through deceit and sheer willpower, I saw the bluegrass of central Kentucky at 5:07 a.m., but not before I discovered a few things about myself, not all of which I wanted to discover.
When we started doing Ask Bark earlier in the year, I had no idea that it would grow into a weekly column, nor did I know that it would become the most popular series on TTAC. It’s rare that an Ask Bark is not the most-read post of the day when one runs, and I know that has very little to do with me. Rather, it’s an effect caused by the great readership of this site. Without your questions and your responses, this column wouldn’t exist. I thank you for continuing to send your questions and for your continued participation.
As a result, I have over 200 unanswered questions sitting in my email inbox. Not all of them require a full thousand-word response, so I’m going to tackle a few of the shorter questions today. Oh, and the hero image is just a pic of my son with the vehicle he designed for Disney’s Test Track that I’ve wanted to use. Click the jump and let’s help our fellow readers together.
“Well, I mean, all this is basic and terrible,” said Mrs. Bark, pointing to the dash of our rental Hyundai Sonata. “But this could work for us.”
Mrs. Bark just turned 40. She’s an educated woman with four college degrees. She’s a college professor, almost the definition of a middle-class job. And yet she’s never owned the most middle class of vehicles — a mid-sized sedan.
When she became pregnant with our first child in 2007, she owned a 2005 Scion tC that we bought new from the dealership. After roughly a month of dealing with taking a baby seat in and out of the back seat of the little coupe, she decided that she needed something more suitable for motherhood. Since I owned an RX-8 then, I decided that we’d look at Mazda’s offerings, the Mazda5 and the CX-7.
Strangely enough, we never even considered a mid-sized sedan … but maybe we should have.
I always buy new. I know, I know.
There’s a financial wizard of the Internet around every corner, ready to pounce and scream “DEPRECIATING ASSET” at me. But the reality is that I — like most shoppers — like to get a good deal when I buy anything, and that includes five-figure investments. Also, like most car buyers, I feel that “good deal” really means “the dealer didn’t make a dime on me.” Yes, I know that car dealers need to make money on used car sales to stay in business (and to continue perpetuating the myth that they don’t make any money on new car sales), but that doesn’t mean I’m their mark. On a new car, I can know with 100-percent certainty if I got a good deal.
When one of my Twitter followers asked me why the dealer’s cost isn’t the starting point for negotiation on a car, I quickly replied (as I was walking to dinner) that “used cars have recon cost.” However, upon further reflection, I realized that’s just the tip of the iceberg and if a Twitter user didn’t know why used car costs are so nebulous, most of y’all probably don’t know either. Transparency on used cars simply doesn’t exist, and it never will. Here’s why.
An anonymous GM employee writes:
I have a field role with General Motors that affords me the luxury of driving (mostly) anything in The General’s portfolio. I can choose from any brand except Cadillac, and can’t drive a Corvette or pickup (because of retail demand and limited supply). I’m 22 with student debt down into the low four digits. GM pays for gas, insurance, and incidentals like oil changes and winter tires because I need a car to do my job. I live in a snow-heavy state where I’m expected to do around 30,000 miles a year for business travel alone. Finally, I switch out cars every four months because that means it remains eligible for new vehicle incentives and programs when it’s sold back to the dealer at a big discount.
Here’s the catch: the vehicle is considered a taxable benefit.
One of my favorite pieces that my dear older brother has ever written is his recount of his experience with Matt Farah’s Million Mile Lexus. His epic takedown of the very notion inspired a good amount of heartburn amongst the Best & Brightest, generating nearly half a thousand comments on the way to becoming one of the most viewed articles ever posted here.
I was reminded of it today when I was browsing through the new Facebook Marketplace for my zip code. There are dozens of cheap cars posted daily, ranging from $300 for a Suzuki Reno without a motor to $3,500 for a Jeep Grand Cherokee with a rear window that’s sadly fallen off its track, destined to lazily lay halfway down its frame for eternity. However, in each of the corresponding comments sections for the listed cars, at least one person asks the following question: “What’s wrong with it?”
And that’s when you begin to understand how buying a cheap car can become an incredibly harrowing, terrifying experience.
Kevin writes:
Here’s my struggle:
I’m a Saab fanatic. Fanboi. Devotee. Whatever you want to call it. It’s a total #saabobsession. I’m currently driving a 2001 9-5 sedan, a 2.3-liter car that my wife and I have owned since new. I also own a 2006 9-3 Aero convertible, and I’m the vice-president of our regional Saab owners club. I’m in deep. We do have a 2011 Ford Flex Ecoboost as the main family hauler.
My 9-5 has just 118,000 miles on it, and has been meticulously maintained. For the first ten years of its life, it was my wife’s daily driver. When we got the Flex, I inherited it from her, got an ECU tune and upgraded the suspension. It’s nothing extreme, but it’s fast enough, plenty of fun, reliable, and I don’t worry about where I leave it parked.
A couple of weeks ago, the 9-5 started leaking oil onto the driveway. I took it to my good friends at my local Saab repair shop, and they told me that a seal needs to be replaced behind the timing chain cover, maybe between the head and the block? Whatever, the important takeaway is the repair estimate: $2,400. It also needs new brakes ($600), and a new clutch is on the horizon ($1,700) as the car’s still on its original clutch and it chatters when cold. So, here I am looking at over $4,500 in repairs on my beloved 9-5. Those repairs exceed the cash value of the car, and as much as it pains me to admit it, I don’t think it’s worth sinking that kind of money into it.
Here at TTAC, it’s been a tradition of sorts to call out poor examples of car reviews. In fact, we’ve done it so often over the years that I wondered if doing it again would be overkill. There’s such a multitude of miserably bad car reviewers on the minor car blogs of the Internet that it hardly seemed worth pointing out yet another case.
Well, I did wonder that. Then I read some reviews by Tim Esterdahl of Car Revs Daily. I wondered no longer.
There’s much talk in the automotive world about luxury. Companies are seemingly always redefining it, according to their clever ad campaigns. Luxury is something to which we aspire, a vague idea that is difficult to define. But, much like pornography, we know it when we see it. I’ve seen the 2016 Infiniti QX60, and whatever […]
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