Why is the "buying a new car experience".....so unpleasant?

Mike wrote: They're evolving for the internet, at least with this story. Every salesman I've talked to now tells me that the internet now forces them to compete on price in a way they didn't before. Today, the price they post online has to be their rock bottom price, because that is the only way for them to get customers in the door. No, they can't go lower it. Of course, we know that trade-in value books are published, so it's a giant "surprise" for me to learn that every dealer around here claims to pay about a hundred under dealer retail to buy their inventory when negotiations start.

Again, it's not hard getting a decent price to start with. I have done that many times. I have worked with the internet sites too including Truecar which supposedly gives you an agreed upon price with a certificate. It's when you actually get to the dealership and they tack on all their idiocy that the price explodes. Back in the mid 2000s I was interested in a Toyota MR2. Went and checked it out, did the dance with the salesman, basically came to agreed on price. Went back, there was a sticker on the window for an additional $3500 with a description of (I am completely serious here) "Availability re-adjustment fee" which basically meant that because only a certain amount were being made the dealer was marking up the price by $3500. I walked. Oh ya...........how are those MR2s selling now? 'Nuff said.

NOHOME wrote: It is a conflict of interest situation. They could care less what you want, need or can afford. The job description is "to make your money their money". It was funn when I bought the FRS because I explained and managed to get it through her head that I wanted a number that was going to go on the check and that I only had one check. She finally got it, gave me the number, and yet she made me sit through the interview with the idiot who's job it is to sell you every gimmick they have. I TOLD him the check was already wrote and that there was no hope for him, but he still read through the script and wasted over half an hour of my time. So yeah, I hate the experience also.

If they don't do this, they can be charged with "discrimination" and fined. There was a lawsuit in the land of lawyers (California) where a customer claimed he would have bought a product that would have covered a repair, but wasn't offered it, so was "discrimintated" against. He won. Now there are companies that sell video equipment to record the process, so a dealer can defend himself against this.

Flight Service wrote: carmax was designed to combat this

Carmax was designed to sell financing and aftermarket products, not cars.

If they don't make you happy (and they won't the first time around) get up and walk out.

They will chase you down and drag you back in and try to compromise.

Keep walking out until you are happy, or move on to another dealer.

It's also good if you have filled out a credit app or can show you have cash on deposit, that way they know you are a real buyer not just yanking their chain.

Note - They will want to finance you because they get a kickback from the finance company, don't buy an extended warranty, don't take in a trade in, don't be afraid to ask for extras (wheel swaps, accys)

I've never bought a new car, but I'm guessing some of the friction that occurs when GRM'ers go to the new car dealer might stem from the simple fact that we are not their target market.

Have you ever had a job where you do a lot of things the same way, day in and day out, for years? Then, something out of left field comes up and it takes a while to figure it out just because it doesn't fit into one of your mental templates?

I bet the overwhelming majority of people walking into a new car showroom have a number in mind for price/monthly payment and a list of maybe 2-5 things they want in a car (fuel economy, safety, AWD, room for the dog, tow a travel trailer, 3rd row seat, bluetooth, etc.) and a list of unsaid things they want (their sisters to be jealous, to impress the neighbor, dick joke) and it is up to the sales guy to sort that out and talk them into what he has on the lot. A big part of this is getting the buyer to trust/like him enough to respect his opinions. It's more about the sales guy than the car.

As simple as it ought to be, it's way outside the norm when a GRM'er comes in looking for X model with Y motor, Z transmission, A option package, and the rear spoiler delete. I imagine lots of sales guys struggle with that.

Flight Service wrote: I am happy to answer any question anyone has about the system.

Actually, I do have a question. How can I predict how much I would get for a car I wanted to sell to Carmax before I actually go in? Is there a way to get an idea of what I'd be offered?

It's just that my "local" Carmax isn't incredibly local or convenient, and they are always really busy so it always takes a while to get an actual number...

Lugnut wrote:

Flight Service wrote: I am happy to answer any question anyone has about the system.

Actually, I do have a question. How can I predict how much I would get for a car I wanted to sell to Carmax before I actually go in? Is there a way to get an idea of what I'd be offered? It's just that my "local" Carmax isn't incredibly local or convenient, and they are always really busy so it always takes a while to get an actual number...

I can get you in the ballpark. They look at 3 data point. If it isn't going to qualify to be resold it is Manheim, Carmax Auctions, and Black book. If it does qualify to be resold it Manheim, Black Book, and what they have been buying them for.

Black Book Link

They will use KBB to beat you down. What ever your cars grade is subtract one in most cases.

Carmax will buy your car but in my 3 and half years there, I rarely saw the customer come where they should on the trade. It is easy and convenient but that comes at a price. In Greenville at my store we actually had a dealship up the street try to match us. They said if we would buy it for X they would beat it. So most people got us to quote it. Took it up the street and sold it and then came back and bought from us.

bentwrench wrote: If they don't make you happy (and they won't the first time around) get up and walk out. They will chase you down and drag you back in and try to compromise. Keep walking out until you are happy, or move on to another dealer.

That is a stupid way to do business. I would not deal with that at all. If your argument is that is the way the system is set up my response is they wont get my business. We didn't have to deal with any of that when we bought the Elantra.

That is a stupid way to do business.

Truer words were never spoken.

I read a couple pages of these posts but not all of them. You guys who monkey around with this test drive nonsense are just setting yourself up for a miserable day. If you know you want a specific car, why do you need a test drive? If you don't know if you like a car and you need a test drive to convince yourself that you do, you're as bad and as indecisive as 99% of the buying public. But if you insist...

Step 1: Call local dealer, ask for the sales manager. Step 2: Tell him you are willing to come in but you're not going to buy that day. Ask him if he understands and agrees. Tell him you want to take a test drive of a car and if he says no, then just hang up and move on to the next dealer. Just separate the test drive from the buying experience.

When you are ready to buy, again, call the sales manager. Ask him, which salesman he wants to handle the deal. Make an appointment for a specific time and go in at that time. This eliminates people hounding you the minute you get in the door.

As someone that's worked in dealerships for a while now, I can hopefully shed some light on some of the recurring themes in this thread from the other side of the desk.

First, car enthusiasts make terrible car salespeople, as do people with lots of technical knowledge. The people who are the best at selling cars would also do well selling mattresses or jewelry or any other commissioned good. Getting this vibe isn't unusual. 99.5% of cars I sold went to people that wanted bluetooth, a certain color, and a payment around $x per month. The vast majority of people could care less about anything other than the car having a bunch of neat stuff and looking a certain way. Also, big volume dealers spend tons of money on sales training/methods. This is why it seems like you're talking to a brick wall when you try and take control. The first dealer I sold in was all about staying on the script and keeping control of the customer. It's annoying for both parties but I made vastly more money there than I have anywhere else. They do this stuff because it works really well on about 80% of people and the ones that aren't susceptible wouldn't have been profitable anyway.

Second, there isn't a whole lot of profit in the car itself. The other products are hugely profitable. Warranties, service contracts, financing, etc. This is why the best sales guy is the one in the finance office. He'll be the toughest sell and you'll spend a ton of time in there saying no to stuff. He probably only gets paid on those products so he's gonna work really hard to get you to buy something. A lot of stores will pay finance guys based on averages so that one crappy deal can end up hitting them pretty hard, sometimes to the point they'd rather blow the deal and have you walk vs taking maybe a $500 hit on their commission check because you wanted to pay cash.

Third, the salesperson has absolutely no influence on the sale price of the car. When he has to go talk to the sales manager he's telling the truth. You're sales person doesn't know the bottom line on the car, period. He shouldn't even want to know, it really doesn't have any influence on what he's doing. His job is purely to close you at the highest payment he can so the finance guy can jam a bunch of other products in there without lowering the price of the car or changing your payment. To get the best deal you need to negotiate on sale price, period. A good sales person will try to steer you back to monthly payment at every turn. The "four square" method is specifically designed to make it look like negotiation is taking place without ever changing the price on anything.

Every part of this process has been studied and scripted to the point where any idiot can sell cars. That's sort of what's happening now and why everyone has such consistently unpleasant experiences.

skruffy wrote: A lot of stores will pay finance guys based on averages so that one crappy deal can end up hitting them pretty hard, sometimes to the point they'd rather blow the deal and have you walk vs taking maybe a $500 hit on their commission check because you wanted to pay cash.

So the finance guy, based upon what sale X will do to his own, personal profit, can kill a deal that's an otherwise good deal for the dealership?

I believe you, but at the same time, it makes absolutely no sense on the part of the dealership.

so … is there any advantage to using a broker of some sort, so you don't have to wade through all this BS … spend the entire day saying NO ?

and in answer to plance1 …. I'm not sure how you know if a car is right for you, ergonomically, if you don't take a test drive … I'd rather have a loaner of the car I'm interested in for a weekend so I can actually decide if I can live with it for several yrs

Datsun1500 wrote: It's not that difficult to buy a new car, I can't be the only one that's never had an issue with it.

Although I'm nowhere near your league - no, you're not the only one.

I had a friend who only bought Saturns because he hated the new car dealership experience. When he wanted a truck, I gave him my little pep talk above. The day after he bought it, he said that as they were driving away, he wanted to go back and buy another car, just because he finally felt like he wasn't a victim.

It's just not that hard if you have an ounce of willpower and some preplanning ability. And it's not that I've been lucky with particular dealers - I've only been a repeat customer once (due to the cars bought, not dissatisfaction).

plance1 wrote: This eliminates people hounding you the minute you get in the door.

I must appear poorer than dirt (which is kinda funny...) since whenever I walk into a dealer around here I practically have to beg somebody if I have a question.

I've only bought one new car by myself - my 2003 Jetta TDI wagon. It was a car I knew I would have to order and I had a specific set of options I wanted. Although it didn't occur to me until afterwards, the saleswoman I had was a rookie (I did know this) and I'm pretty sure my car was her first sale. I really believe that in the interest of making her first sale quick and easy, the sales manager offered an initial price that was a surprising amount under MSRP ($20.9K vs. $23K). Since I was expecting a need to haggle to get anything off an ordered car, I was taken aback and just agreed since that amount was less than I thought I'd pay.

When I picked up the car 10 weeks later, there was a noticeable difference in how the saleswoman spoke and carried herself around the dealership. She was no longer rookie.

The other car I bought with my ex-g/f was a '07 MINI convertible. Now MINI salespeople can be funny. Here you'll actually get enthusiasts selling the cars. And at least back then, if they didn't become an enthusiast at some level, they didn't seem to last very long. Mostly because the sales guys really had to keep up with the various options and features since they could be assured that a good number of customers coming in to buy cars had researched the car to the Nth degree and knew what they wanted (order-to-spec MINI's were over 50% of sales back then). It had to be a odd gig for a career car salesman. I'm sure it sounded great - the cars were selling at MSRP back then (with floor models loaded with dealer-installed options), so I'm sure commissions were fantastic. Any attempt to haggle by the customer was quickly rebuffed since they knew the car would sell to somebody else.

Anyway, when we ordered our car, we got a new guy that was an experienced car salesman, but an idiot about MINIs and knew next to nothing about the cars. This really pissed of the ex- (not that this is hard to do...) and soured the experience somewhat. But that said, the general "no-haggle" policy at MINI dealers back then made the whole experience fairly painless. There was no heavy-handed attempt to pile on additional B.S. since there was already a reasonable amount of profit in the sale.

I know I have different needs than the "get the best price and drive out" buyer. I have a couple of divorces under my belt, an ex-wife who thought that not paying bills just made them go away, another ex-wife who decided that my business's account that held estimated tax payments would be a great way to fund clothes-shopping. My mistakes there will stick with me for a long time, so my credit is... poor.

Honestly, I care much less about a few hundred dollars, maybe even a thousand dollars, over the course of owning a relatively expensive car. (Not that the car is expensive relative to other new cars, that the car is expensive relative to the cars I normally play with, which usually end up between that few hundred to a thousand dollars.) Yes, that $1,000 might end up costing me $519 over the course of five years (although I never keep a car that long anyway), but that has become not the most important thing. I certainly waste a hundred bucks a year on stupider things than a nice car.

I guess for me, it's all about that finance guy. When I bought my MINI two and a half years ago, I almost thought the guy was messing with me because he got my financing all set up over the phone before I came in to the dealership. I get denied a lot, since my credit score is eleven and a half, to the point where I don't even car shop anymore, in spite there being of lots of cars I would love to have and could more than afford. The bottom line price is just not the most important thing. I am happy to spend an extra couple hundred bucks to have my car buying experience go smoothly and easily and, with any luck, not a lot of waiting around.

Who knows? In another three to four years when most of that nonsense has fallen off my credit report, maybe I will agree and stress out about getting the best deal and be willing to walk out on dealerships over $125 or even $1,000. Too often, though, the cars that I want are not the dime-a-dozen type where the next dealer down the street will have exact same one. I think most of us aren't shopping for those. When I was younger and stupider, I let a $500 difference walk me out of a dealership and not buy the SEVERELY discounted RS America that I wanted, and now that car is worth more than I would have paid for it twenty years ago. And twenty years on, I still desperately want to have one.

The business needs to make some money. If they make my being a customer easy for me, I have no problem rewarding them for it.

Back in a former life I sold cars for about a year......at a Saturn dealer--- yes I was warm and fuzzy!

Skruffy's take is spot-on. The real money is made in the "box" where the financing / warranty deals take place. It was common for "already-done" car deals to unravel in the box, so as a sales guy, you were always on pins and needles until all the paperwork was completed. I'm a pretty mellow guy, but I almost got into fistfights a couple of times when the finance manager screwed the deal trying to squeeze more $$ out of the buyer. Car sales is a very high-stress racket.

The thing that surprised me the most was that it was legal for the dealership to skim a couple of points from the car loan. For instance, the car dealer tells you he can get your payment down to $250 a month on a 5.5% loan. You agree, thinking this is the best you can do.......after all, the dealership has many financing options, so they can find you the best deal right? What has actually happened is the dealer has found a loan at 5.3% interest, and they are now allowed to keep the .2% difference. It blew my mind when I found this out. It is written in the fine print, but hardly anyone notices. After all--the buyer is getting a "great" deal. In Colorado it was legal for dealers to keep 2 points from the financing, but no more IIRC.

When buying a new car, always come to the dealership with your financing already figured out--- through your bank or credit union. Who knows, maybe the dealer can beat the 5.5% that your bank offered-- even if they are really getting 5.2% or less. Just be very careful you know what you are signing.

I'm glad I played the game for a while, as it's now fun to help friends buy new cars.

I guess it depends on what you're offered. I could've gotten financing from anywhere, but when the Lexus dealer offered me 1.9% for the purchase of my wife's car, I took it and was happy with it. I could really care less if I could've gotten 1.7% at that point...

We must just be lucky, or maybe mid TN dealers are just better, but out of three new cars, one new motorcycle, and one new atv since 2007 we've yet to have a negative experience. Now two of the cars were limited production and/or had a waiting list, so I was just happy to get MSRP and not get gouged with other crap, but the others we negotiated pretty painlessly and left feeling good about it.

it's funny. Yesterday I was at the local wawa (convenience store for those not on the east coast) and across the street was a Honda Dealership and next door was a VW Audi.. you could spot the salesmen as they walked in. the VWAudi guys looks particularly obnoxious with the short spikey hair, dark glasses, suit jacket over a loud open shirt.. they just screamed "car salesman!" as they tried to look trendy and hip.

At least the Honda guys were in Khakis and issued Polo shirts

TeamEvil wrote: "How this ever became a business model, I'll never know." I always figured that it grew directly out of horse trading. Both deal with basic transportation needs, both have a reputation for shady deals, both require a good hard look at the item before starting negotiations, and both have the potential for you getting screwed by an unscrupulous dealer. Maybe? I can't think of another reason why this sort of business model would be the norm.

Datsun1500 wrote: In reply to TeamEvil: That's pretty much spot on how it happened. It evolved from horse trading

Which has since been codified into law thanks to the car dealership lobby. Hence the hoops Tesla is jumping through to revolutionize the car sales industry for the modern age and why Carmax does not sell new cars.

Datsun1500 wrote: Brokers get paid, that comes from your wallet. Guess what a broker does? Gets email quotes from a few dealers and gets the local guy to match it. Sound familiar? It's not that difficult to buy a new car, I can't be the only one that's never had an issue with it.

I have brokered for a few people and that's it. I get to do the arguing and actually get a buyers order via email/fax before we ever walk in the door. If time is permitting I am there for signing, if not, I will go over the numbers they see before they go in there.

In reply to Xceler8x:

Carmax doesn't sell new cars because the profit margin is too low.

If you notice the few new lots they have are usually selling below everyone else in the area.

They want your used car.

EvanR wrote:

skruffy wrote: A lot of stores will pay finance guys based on averages so that one crappy deal can end up hitting them pretty hard, sometimes to the point they'd rather blow the deal and have you walk vs taking maybe a $500 hit on their commission check because you wanted to pay cash.

So the finance guy, based upon what sale X will do to his own, personal profit, can kill a deal that's an otherwise good deal for the dealership? I believe you, but at the same time, it makes absolutely no sense on the part of the dealership.

This isn't something the sales manager would be very happy about. If you look at it from the finance guys prospective, he's either gonna blow a deal that was gonna cost him money anyway or he's going to get you to buy something so he can get paid. He doesn't have a loosing outcome in this situation.

Ever wonder what the finance guy does for the hour or so it takes him to get ready? He's in there running your deal six ways from sunday till he finds all the ways to maximize his commission. Different products will pay different bonuses, certain banks are easier marks when it comes to loading other crap aside from the car into the deal, different banks will allow different amounts of rate bump (the number of percentage points you pay the dealer over the rate they got you from the bank), etc... He had you approved for a loan and all that stuff set up in the first ten minutes or so.

how badly does it berkeley with his head, if after spending all that time, you mention, for the first time, that you're paying cash ?