More than almost anything else, I hate buying a car. I can't imagine I'm alone in this. I don't mean offense to people out there in the industry. But let's face it, dealing for a car from a dealership, new or used, is not something you wake up anticipating with glee.
The first time I bought car was when I was about 25. The car I was driving had been given to me four years earlier when my grandparents replaced it. A 1982 Buick LeSabre. It was a great car. But alas, by 1997 it had given everything it could give. After researching for about 3 months, I decided to buy a new car, a Honda Civic. And that's what I ended up buying from the only Honda dealership in the tiny Texas town I lived in. I was paranoid about the whole process, knowing that I would pay as much as the dealer could take me for. In the end I paid $500 over cost for it.
That car was a good little car. Oh, I can sense you have a question. You're thinking to yourself, she bought a car in 1997 and she's talking about it in the past tense? That car was a good little car? What happened to it? I'm sad to say, the first car I ever bought was totaled about 18 months into the payment plan. It's a great story, one that cannot be topped. But it will detract from the main purpose of this post. But I promise, someday I tell the story. Anyways, 18 months after I bought my first car, I found myself suddenly needing to buy a second car. Since I'd already done the research, and I really liked that little car, I decided to buy exactly the same car, only a 2000 model. I walked into the dealership on a cold snowy day in December and told them I was ready to buy a car. After much convoluted discussion with a less than savory dealer-type, we agreed on $350 over cost. I guess my being the only customer in the joint on top of the picture of four inches of snow on all the vehicles made the dealer believe he probably wouldn't get another sale that day. Better $350 from me than nothing from anyone.
Which leads me to the point of this little post. I live in Michigan and I dearly hope that the car industry pulls through this economic downturn, as it is called. There are good people who are suffering after giving their all to these companies. Forget tradition and pride and all the rest; that's not why I want this industry to pull through. I don't want this industry to die because many, many people will suffer if it does. Not the least of those suffering are the car dealers themselves. But...
The car dealers also have seen rosier days. Unlike the workers on the lines who have cut their losses in union negotiations, the dealers do quite fine when the economy's doing well. And for the last few years when loans were easy to come by, some of them did much better than the rest of us.
Does it seem fair?
Here's my suggestion for the car industry, both as someone who sincerely hopes you pull through and as someone who is a frugal girl when buying a car. Stop selling new cars exclusively through the dealerships. It profits only the dealer, and it discourages people like me from going into the showroom.
What is the point of sticker prices? They represent nothing but an average $5,000 mark-up that is pure profit for the dealership. Now I know it costs something to keep a storefront, but that much? Are you serious?
I'm never going to pay more than $300 over cost for a new vehicle. My dad, way more frugal than I am, has walked out of negotiations because the dealer wouldn't come down $50 to his standard of $250 over cost. And don't even get me started on my husband. The point is, if cars don't sell, the dealers aren't the only ones who lose. Every single person who manufactures vehicles for a living loses. If I knew I could buy a car for a reasonable price above cost, like $300, I wouldn't dread going through the process of buying a car as much as I do.
Same goes for the dealership service department. Everyone knows you're a sucker if you pay as much as the dealership is asking for a repair. How does it build customer loyalty to jack up the prices so high only a fool would pay it?
Just a suggestion. Now back to our regularly scheduled programming.
***A brief disclaimer: I am aware of the fact that both of the cars I have bought were Hondas, and therefore never brought business to the big 3 auto makers. My 2000 Honda is going on 10 years old now and it has gotten considerable use. It still gets 33 mpg in town, up to 40 on the highway. In addition to eliminating the middleman dealers, the big 3 auto makers would do well to improve the quality of their cars. Then I'll happily buy American. 'Cause I'm not that into donating my money to the oil companies just because the auto makers can't produce a quality product.***
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2 comments:
Heather, put yourself in my husband's shoes. If you pay $300 over sticker for the car, he gets $100 and the rest goes to the dealership.
He prays that he can sell at least 20 cars a month....if he's lucky. With the economy the way it's been, it's more like 13 or 14.
He makes more on used cars. He doesn't get a salary or hourly wage.
The dealership has a LOT of expenses...electricity, salary for office employees, water, internet,cleaning services, sometimes they are leasing their land, advertising. Every car that leaves their dealership has a full tank of gas.
He says most cusotmers don't even want to pay ANYTHING over invoice. They want to offer the dealer $500 UNDER invoice. That means he could have spent 5 hours with a customer and not even made minimum wage.
No one would think of offering the furniture store or the appliance salesman or the grocery store less than invoice.
He has been selling more cars on their internet site. The customer doesn't spend 5 hours traipsing all over the lot and he doesn't spend 5 hours with a customer who walks out because he won't come down in price so far that he will owe the dealership money at the end of the month (that happens sometimes)
Many nights, he is supposed to get our of work at 6PM, but someone calls and says they would like to come and see a car at 7:30. He makes sure the car will be available and that it's clean. Then the customer either shows up at 8:30 or not at all. So he stayed at work for an extra 3 to 4 hours and didn't get paid for it.
We've never been more than "comfortable". "Comfortable" was the years he was in management and worked over 70 hours a week. Car salesmen don't work 40 hour weeks. It's more like 50-60. Most years we can't afford a vacation and we are both driving 10 year old cars.
It would be easy to say to him "go work in some other business", but it's all he knows and all he's ever done.
We're not offended at all by your post, but most people have no understanding of how the dealership works.
Sunshine State - Thank you for adding this information. It definitely helps to have more information from someone who knows the story from the inside.
It reminds me to say (especially in this economy) something important. Whereas being frugal is always wise, and you don't want to pay more for anything than you have to, there is a certain morality that must be included in frugality. To ask someone to sell you something at a loss is (for me) a conflict of my ethics. It's like stiffing a waitress. When you buy a shirt in the store, you know that the cost of that item partially includes the electricity in the store and the wage of the salesperson who rings you up. If it doesn't, the store will quickly go out of business. That's part of what you pay for when you buy something -- the cost to actually make the sale.
Sure, we can all be excited about getting a good deal at a liquidation sale or snatching up the last awesome deal on a discontinued item or a slightly damaged piece of merchandise. But for a healthy economy, we have to accept that this is the exception rather than the rule. To ask a car dealer to sell a car under invoice price or at a loss to themselves isn't responsible consumerism in my opinion. You shouldn't put someone else in the red just because you want something beyond what it is worth. Again, the waitress example. You don't to tip her at all. But if you can't afford the meal and the tip, you shouldn't be dining at the establishment.
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