77 replies to this topic

[Stains_not_here_man]

Because something that costs half a years pay is worth negotiating over.

Thinking about this more I just don't like this answer. It's a value calculation which is somewhat subjective. Maybe I think any item over $100 is "worth" negotiating over but that doesn't mean I should expect it.

[Mando]

It seems like there should be a place for a car dealer with only internet sales and maybe a few cars available to test drive. Don't have sales people, just offer the best possible price and that's it. It should be able to beat a normal dealership on average.

[porter]

Isn't that the premise of carmax? Granted, that is just used cars. Costco and I'm sure other memberships offer a pre negotiated price on new cars that is pretty good.

[Mando]

Isn't that the premise of carmax? Granted, that is just used cars. Costco and I'm sure other memberships offer a pre negotiated price on new cars that is pretty good.

Isn't the Costco thing usually very limited models and options?

[porter]

I'm not sure. We picked the exact car we wanted when we got our Outback that way (wow, that was 7 years ago). It was probably a very common configuration, though.

[BrewerGeorge]

Thinking about this more I just don't like this answer. It's a value calculation which is somewhat subjective. Maybe I think any item over $100 is "worth" negotiating over but that doesn't mean I should expect it.

It's more of an effect of percentages. If you negotiate 5% off your hundred dollar item, it's five bucks.  If you negotiate 5% off a $20k car, though it's a Grand.

 

I'm willing to spend a few hours researching, shopping around and negotiating for a Grand.  Not so much for $5.

[Dave McG]

Thinking about this more I just don't like this answer. It's a value calculation which is somewhat subjective. Maybe I think any item over $100 is "worth" negotiating over but that doesn't mean I should expect it.

That's why I mentioned commissioned salesmen as my deciding factor. If they are on commission, their own income is directly impacted by how much they charge you. On the flip side, if you walk out the door, they get nothing. That means that the first priority is to make a sale. The price or other factors are secondary.

[Stains_not_here_man]

I'm willing to spend a few hours researching, shopping around and negotiating for a Grand. Not so much for $5.

Oh sure. My question is really about why it's set up this way. I'm trying to think of other large retail purchases that don't involve a service component but coming up short.

[porter]

Oh sure. My question is really about why it's set up this way. I'm trying to think of other large retail purchases that don't involve a service component but coming up short.

Because there's extra profit to be had in dealing with people who don't negotiate or are unskilled at it?

[Trub L]

That's not quite the same. The car dealer situation is like calling 5 different Sears stores in nearby towns and trying to get different quotes on the exact same model of dishwasher. They'll all tell you the same price. Maybe you can find it 10 bucks cheaper at Lowe's or something but even in those cases a lot of places will price match.

I'm not sure why cars should be an exception to this.

I'll reiterate. The very fact that X car with Y options just doesn't always have Z price is a little ridiculous in the first place.

Cool story, bro. But this isn't what we were talking about. Sharing another dealer's pricing is the issue, not shopping around for competitive price.

Anyhoo, it's an ethical thing rather than as legal one, so it just comes down to personal boundaries. Sharing pricing to try to squeeze the best bargain is probably something you'd find in The Art of the Deal. I certainly don't want to be *that* guy. YMMV.

[dagomike]

Oh sure. My question is really about why it's set up this way. I'm trying to think of other large retail purchases that don't involve a service component but coming up short.

 

Dealer franchise laws. You could probably call it car version of the alcohol three-tier system. Good intentions gone screwy and now both car makers and dealers lobby to protect their sales channels. 

[Stains_not_here_man]

Because there's extra profit to be had in dealing with people who don't negotiate or are unskilled at it?

 

That seems like the only reason I can think of.  Can't say I like it.  Joe Bob Jones shouldn't be able to get a better price on a mass-produced good by being meaner/more stubborn/smoother/whatever than Jim Bob Smith...

 

Thinking about this more I started thinking about buying a house.  With pre-built, regular neighborhood homes, negotiating a price for a house makes sense - it's essentially a unique, hand-made product and there are a whole bunch of factors involved like location, construction quality, materials, age, etc etc. that make that house different than every other house on the market.  There are emotional factors, market influences, etc.

 

In some developments, though, when we were shopping for houses we looked at a couple of those where essentially there's a huge development built by a single builder and they have maybe 4-5 house "styles" to choose from and they build them on demand. In those cases it seemed like the real deciding factor in price differences was location/lot size; otherwise, the house itself cost $X for this base model, and $Y more if you wanted upgraded floors/counters/etc, and $Z more for an extra laundry area, or whatever.  It was pretty much "pick your house and here's a chart showing you what it will cost."  There seems to be much less variance in price and less wiggle room to negotiate, which makes sense because they're essentially building to suit your specs instead of trying to convince you to buy something already built.

 

To me, buying a new car seems somewhat more like the latter type of house-buying than the former, and even more "cookie cutter" in that there's no "location" factor to consider. It's a mass-produced appliance.  But for some reason it seems like we treat it more like the former, and act like every car is unique and every person should pay a unique price.  I find it odd, and kind of... anti-consumer.

 

Cool story, bro. But this isn't what we were talking about. Sharing another dealer's pricing is the issue, not shopping around for competitive price.
 

 

Yes, that's what we were talking about.  The conversation evolved from the ethics of sharing one dealer's pricing with another, to wondering why on earth two dealers who are selling an identical product produced in the same factory would even have two different prices to begin with.

[Car ChuckRam]

Dealer franchise laws. You could probably call it car version of the alcohol three-tier system. Good intentions gone screwy and now both car makers and dealers lobby to protect their sales channels.

I think it was New Jersey that got Tesla booted because they didn’t fit the exact dealer franchise laws. So many square feet of showroom, so many available models etc.

[dagomike]

I got an offer for a fair trade-in for my car and got them to go an extra $250. Ended up with that and about $2000 off the sticker on the new car plus three oil changes. Last $400 on the new car was squeezing blood from a stone. So, basically $1400 by working the Internet and $650 and oil changes by pressing harder.

 

According to misc websites, it's a good deal. I might have got more if I dragged it out until the end of the month or worked other dealers more, but it's done and moving on to other things.

[porter]

You didn't even get free tires for life?

[BrewerGeorge]

Being done with a chore has a value all its own.

[Stains_not_here_man]

This thread makes me so angry

[dagomike]

Being done with a chore has a value all its own.

 

 

Well, it's diminishing returns. I think there's a line where everything above that is pure gravy for them and they'll give that up without much resistance. Then once you start drinking their milkshake, it's on. It depends how much time and effort you want to put into something. It's their job, so they have nothing better to do with that time. 

 

I had in total of three trips to the dealership and a bunch of calls and email. Each $100 was harder than the last. At  that point, I had to ask myself if another $100 was worth a bunch more hours next week replowing the same row with other dealers to see where the bottom really is. So, I called it and eeked a couple extra oil changes two hours before they close for the week. I feel I got a modest win, the wife is happy, and it's done hopefully for another 5-7 years.