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.
By that line of reasoning, if a car is good, a dealer should charge whatever they want for it, and we should buy it. We should not bother to shop around, we should be willing to pay any price the dealer throws out because it's a good car. Maybe we should extend that to all products? Um, no. The merits of a car do not set it's price. Supply and demand do. You want to get rid of huge discounts? Don't start with a ridiculously high price. MSRP is a joke for the majority of cars out there. Their are volume dealers who sell at slightly above invoice a do very, very well. It can be done. Easy way? just deal off the dealer invoice, and get rid of the MSRP sticker altogether. But no one wants that type of transparency. So much goes into this--quotas, time of year, time of month, incentives, there will never be a set price for a vehicle, it fluctuates. And that's ok in a free market society.
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.
Nope, the market would determine sales just as it does now....if the perceived value doesn't measure up to the sticker, the sales results will be obvious and an adjustment will be made, just as it is currently doing with the $10K discounts on GMC trucks. Why the hell would any dealer want to do business off the invoice? In no other business in the world does a customer expect to purchase something for cost plus. Why would it be that way with cars? The free market handles real estate prices just fine, it can do the same for cars. You go into Sears and expect to see the invoice for that $10K box full of tools? How about with your Snap On dealer? Dealing off invoice is why you have $150/hr shop labor rates and sky high parts prices. Dealing off invoice is a stupid way for any dealer to do business, and the ones that do don't last long, or they make it up on the back end. You guys all want to buy straight from the manufacturer, you think Ford is going to show you what it really costs to build that F-150? You think Tesla is?Who's going to pay for warranty work at $100 over invoice? That new Belchfire 5000 is not worth buying at sticker, but if you can get it for invoice plus $100 it's a great buy? Why? Either it's worth what its priced at or it isn't, that $1000 discount doesn't all of a sudden make it a better car, or even a better buy. How many cars a month would a dealer have to sell at $100 over invoice to pay the rent on a $10 million building? Plus all the employees? Support staff? Taxes? Utilites? Inventory? Parts stock? and on and on? You guys are completely unrealistic when it comes to buying new cars.
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.
Same thing for the dealer tho, right? The problem with your argument is who and how is it decided what the fair price is? Fair to whom? What could the dealer do that would be more logical? Remember the manufacturer sets the sticker price, not the dealer - unless they do an add-on sticker. So the most they can make is already determined by the mfr, you want to determine the least they can make - how would you do that? It's unworkable.....all around. Put up the sticker price and have everyone pay it - resale values will rise and the market will be much more orderly. If a car's perceived value via the sticker is too high, people won't buy the car. Simple. True Car will go out of business cause no one will feel like the other guy got a better deal.
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.
There is more money to be made in the maintenance end of the car deal rather then the selling price. Sure not everybody goes back to the dealer BUT the more cars you sell the more people that buy that will keep going to the dealer.. Sell the car at close to cost once you factor in getting it to the dealer, make it as fun a transaction as you can and they may keep coming back for service and another car down the road.. Granted you can't be like my local MINI dealer and need my car for half a day just to change the oil..
It's strange to me how the quality of MINI dealers varies so much.....or maybe it's just the perception? My dealer (Baron MINI in KC) has always been top notch, yet I read so many stories on here of dealers who seem just terrible.
Mine was great for as long as I used them. They went above and beyond, including giving me a loaner when they had the car for a week, and drove it back down--about an hour's drive--to exchange the cars when it was done.
Ours would do that on the loaners, even for oil changes if they had one around.. but no lie when I was getting a free oil changes I had to either leave the car or be there by lunch time to get the oil changed and would be there for 2-3 hours.. On other stuff they go above and beyond just not oil changes atleast.. Maybe they have changed now been a long time since I have had them do any service work. Do need to take it in for a recall though..