Most liked posts in thread: TrueCar, not good deal in the long run

When you see GM advertising $10 grand plus off of sticker, I don't know how much better of deal you need to get.....

People don't recognize what these giant discounts do to resale value......

 

I guess that matters if you buy a car for resale value. If you get a huge discount up front, and lose it on the back end, you've actually done better than if you do it the other way around, from a financial standpoint. That money you save up front is money you can use immediately--invest, use if you need it, whatever. The only way it kills you is if it affects resale value disproportionately to your discount.

 

The value isn't going to drop 10k because someone got a deal 10k lower than yours, the car depreciates the second you sign the paperwork. It will cause the car to depreciate more, but not the full total of whatever discount someone got, it doesn't work that way.

Saturn tried your strategy. How are they doing now? If you let the dealer set the price, that's a one way bargain, and you have no leverage. In utopia, maybe a dealer would set a fair price, but we live in a capitalist society, and that's not going to happen, nor should it IMHO.

 

Nah, it was all the pricing strategy, the rest of that stuff, labor costs, part sharing, etc were just a mumbo jumbo of minor nuisances....

 

Actually, the market will take note of the price drop and adjust accordingly, cause it's not just one guy that got the deal, it's a nationally advertised campaign, thousands and maybe tens of thousands will get the deal nationwide, and Black Book and the auctions will adjust accordingly as these cars hit the market used in a short while.

I was in the car bidness for 30 years......BTDT.

As to the pricing, you completely missed the point, perhaps because you are one of those who buys the deal first, then the car.

It's more understandable today than before, because there is so little to differentiate one car from another today.

 

^^^ One of my main reasons for choosing to park a Jaguar, over a Beemer, in my garage at this point in time. I chose the bigger bang for the buck...

 

Truecar is awful.

I say this as someone who has used it and someone who deals with customers who use it.

 

You couldn't be farther from the truth.

TrueCar customers are the same customers that would've beat your balls around in the negotiating process anyway. It's just another tool for them to use.

Additionally, for a dealership to be a 'TrueCar dealer,' they need to pay TrueCar money. So, you're losing money there, losing money on the front end of the deal by discounting the car, and you're losing again when TrueCar doesn't significantly increase your sales volume. Been there, done that when we tried to implement a TrueCar pricing strategy at a dealership I worked for. It's just another weapon for the customer to utilize, and in the end it's costing you more money than just being aggressive on pricing anyway.

That all being said, the negotiation process used in the car-buying industry is outmoded and needs to be eliminated. Like all other purchased goods, cars should be sold on their merits, and not how much of a discount is given.

Otherwise it all just ends up being a race to the bottom where nobody wins. Because of bigger discounts, both by dealers and by manufacturers, purchased vehicles lose value quicker, the car industry suffers from diminishing profits, and because of the lack of profit that can go into improving the product, technology then stagnates, and we all lose.

 

Like all other purchased goods, cars should be sold on their merits, and not how much of a discount is given.


Eggggggggzactly!

What I've been saying all along......buy the car, not the deal.

 

The thing is for the masses cars are now a commodity.

 

Ideally, I'd like to see franchised dealers go away as well.

Straight-to-consumer purchasing. Get rid of the middle man, control dealership experiences, and build a better brand.

Shitty dealers ruin the experience for everyone, regardless of brand. Unfortunately, it's against the law to have a non-franchised car dealership.

 

Yes, it's kind of crazy, I know about the law because of the Tesla thing, but I don't know how/why it came into existence. Something I'll have to read up on.

 

I get it, you want uninformed consumers shopping vehicles with a take it or leave it price set by the dealer. Unfortunately, we live in the real world and it'll never happen.

If dealers held to your line of thinking, cars would be sitting on the lots for months (or longer), until the price adjusted. A silly way of doing business. It's not a grocery store, these are high ticket items that eat up a substantial portion of income. People shop a bit more diligently because of it.

Why would a dealer want to operate off invoice? Because some of the most successful dealers in the country do, and have been for years. GMC in Tennessee, Dodge in Minnesota, to name a few. They deal off invoice, have a reasonable markup they're more than happy to show you, and sell a ton of cars. How do they make money? Volume, and quick deals. On the other hand, I am willing to pay more to stay local, especially if it's a good dealer, but I'm not willing to be gouged. As for "they don't last long", the GMC dealer is one of, if not the, healthiest in the country. And they've been doing it for years. As a side note, I purchased a Dodge Caravan new many years ago below dealer invoice from the dealer in Minnesota, although I have to credit our Credit Union for that one, they hooked me up. How is that possible? Because of manufacturer holdbacks. The dealer STILL made money, even selling below his original invoice.

Actually, wholesale stores do exist, or stores that discount heavily by selling on volume do exist, are doing quite well, and are expanding.

Real estate is probably the single worst example you could have chosen. How many people pay the "sticker" price on a house? By your line of reasoning, that's what they should do. Oh, wait, we did do that a few years ago, people overextended, the economy crashed, and we're still bailing ourselves out.

As for shops charging 150 an hour, go to a private shop owned by a solid local businessman, problem solved.

I don't care what it costs Ford to build and F-150. I do care what they're charging wholesale. So do many other educated consumers.

In the end, I've managed to get deals that I was comfortable with, and the dealer made a profit. I managed to buy the exact car I was looking for each time (The MINI is the only car I came close to paying MSRP on.). Dealer's aren't charities, they should and expect to make money. If they weren't making money of what I offered, they would have turned me down. They didn't.

Could a single price work? Sure, if the dealers picked a reasonable price and shared it with everyone. But that's not how it works. They gouge who they can, and deal with those unwilling to be gouged.

You say we're completely unrealistic when it comes to buying new cars. I'd rejoin that you're completely unrealistic when it comes to selling cars.

 

I don't care what it costs Ford to build and F-150. I do care what they're charging wholesale. So do many other educated consumers

(BTW, the profit Ford gets on each truck is close to $15K per vehicle)

So, you're OK with Ford making this kind of coin off you but you sure wouldn't stand for the dealer doing it - why?


Could a single price work? Sure, if the dealers picked a reasonable price and shared it with everyone

And how exactly would you determine this?

The whole thing is completely arbitrary.....

 

Exactly why we haggle. If the dealer can't come up with something more logical, arbitrary is what we're left with. It's the system they designed, and it worked great for them, until the process became more transparent. It doesn't have to be arbitrary, MSRP pricing has made it that way, because for the most part it's unrealistic.

How many salesman does it take to sell a truck? How many workers does it take to build a truck? Of course Ford is going to make more than the dealer, they're doing the R&D, the manufacturing, constantly retooling and needing more capital, so dealers have something to sell. They have all the liability of recalls and lawsuits; they assume the majority of the risk. You can take in to other factors as well--labor agreements, etc, and the cost of those, and you could argue that it's too much, and I wouldn't necessarily disagree with that, but those bills have to be paid.

 

Right. And no one will buy it, the cars will sit on the lots until the manufacturer drop MSRP. Like that's practical for the dealer...The system we have now is better than that. The dealer decides in the end if the deal is fair or not. They don't have to accept a low offer, anymore than the consumer has to accept a high price.

If you're so worried about resale value, just buy used, avoid the up front depreciation, problem solved, or at least significantly alleviated. Not saying resale isn't important, but it's not the primary reason most people buy a car.

 

bought my last car with true-car...the deal that was offered was BELOW the bottom of the chart true-car has....it was a DUAL-dealer that was once HALF SABB...so they were trying to push VOLUME with VW cars.....about a 45 minute drive away...was a few hundred $$ lower than the other 2 true-car offers...
When I called my closest competing dealer, non-true-car, with the offer too see if they would match they said "we doubt any dealer can offer a car for sale at that price,'we know what we paid, it is a bait-and-switch, come on down and we will fill up you tank with gas just for visiting and we can talk'"...
I drove to the other dealer....and picked up the car, deal was done. complete with trade in and out the door in a couple hours. ZERO junk fees. I did have to bicker back and forth hard on the trade-in, as that is the ONLY real opportunity for the dealer to make $$, but the sale was fast, easy, and pain-free.
True-car is a tool....knowledge is power, and just like ANY car buying service, it is a lead generating product that the dealer pays $200 or so for each sale...USAA once did the car buying on the phone for you...now they offer true-car...
I used it, and in all honesty, I would do it again. It was much less stressful than when we bought my wife her Honda CRV...that was 4 HOURS of talk, 2 hrs to get the $$ down, bunch of the sales folks "talking" about baseball in the backroom, making us wait till we started walking out TWO TIMES....THEN we had to talk trade in...:arf:

 

P.S.
TWO of my 3 area MINI dealers use true-car (yes they advertise here).....I looked...and the deals WERE tempting for the 5 door...even when they were in the first month or two sales...
Aggressive dealers find ways to sells cars and parts...the consumer wins. When dealers act in collusion as a cartel, we get raped.

 

Dealers being successful and doing invoice deals is only a situation that exists because it's the norm. They've found other ways to make up the money lost.

That being said, franchised dealer operations need to go away - I want to see direct sales to the consumer, with fixed pricing (if you question what I'm saying, remember, I am a salesperson saying this, and I'd lose my job if the industry switched to such a process).

As Minidave said, you would see higher resale prices, an easier sales process, happier customers, and an increase in innovation in both the vehicles and the selling process.

Everyone buys Apple products - do you see anyone haggling there? No. Same thing with Tesla.

Make a product worth buying, price it fairly, and the people will come.

 

Saturn try it and it failed. Great buying experience from what I've heard.

I negotiate on everything I can. Because there is always wiggle room.