Dealers Can Fight It, But The Way We Buy Cars Is Changing

"Blake Noble" (no-bull) 03/25/2014 at 09:45 • Filed to: rants

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I can walk into any electronics store and buy a new freakishly large super hi-def and razor-thin LED television set with super hi-def surround sound audio just as quick and painless as if I were buying new underwear. I can just grab what I want, throw down the paper or plastic and maybe sign a thing or two, and I'm out the door in less than fifteen minutes.

However, the difference is that, unlike a new pair of bloomers, a new massive TV set isn't exactly a minor purchase. While you aren't likely to finance it on 84 months, if you want a good one you're still going to spend a few hundred of your hard-earned dollars. And I could substitute the TV for a cell phone, an iPod, a laptop, a living room sofa, expensive jewelery, a high end American guitar, and nothing would change in comparison to that pack of skivvies — most of those things still cost more than your typical bi-weekly paycheck and yet you can drag one home way quicker than what it took to earn the money you needed to buy it.

I wish I could say purchasing a car from a dealership is as easy. But the simple truth is it isn't. And I can think of a million other things I'd rather do instead of going through the motions to take a new car home from one. For example, I'd rather have my next-door neighbor give me an impromptu castration with a pair of old garden shears. I'd rather slow dance in a salmon costume with a grizzly bear. I'd even rather have dinner with Fred Phelps.

Visiting a dealer is about as pleasant as riding a rusty roller coaster that collapses in on itself right near the end as the person seated behind you stabs you in the head with a hunting knife. And despite countless promises to the contrary by dealerships across the Union, the experience doesn't waffle much.

You show up to the lot greeted by a salesman who's an overdressed watery-eyed optimist that always jerks you around on the price because the sales manager he keeps running to is an undiagnosed sociopath, and then when they're done raking you over the coals, they turn you over to the finance guy who's a closet rapist. It's really no wonder that Congressmen and car salesmen have roughly equal public approval ratings.

Now I'm sure some of you out there are probably already saying to yourself, "That's all crap, buddy. Every time I buy a car, I go in there armed to the teeth with numbers and math, and I know how to stack the deck in my favor on a deal. There's a little extra work, but it's not the nightmare you're making it out to be. It's pretty easy and I've found the salesman is always willing to work for me." Ha, yeah. Alright.

If there is one thing a dealership is good at, it's taking buyers from all walks of life to the cleaners hand over fist. You can be strong, confident and mature or a total meathead in his early twenties who doesn't know the difference between a LSD and LSD. It doesn't matter. They're going to "talk numbers"with you just the same. If you do play hardball, they'll just put on a big show to make you feel better by letting someone scribble a load of chickenshit on a piece of paper, all the while telling you they moved the moons of Neptune to make this deal happen "just for you."

They're not making a deal happen for you. They'll just pick up whatever money they were shaving out of the asking price by charging you a few hundred bucks for doc fees, prep services, and so on when they send you to the finance guy. And before you say that's where you should skirt the middle man, both you and I know that almost everyone is going to wind up financing through the dealer anyway and will be eager to get everything over with at that point, so why waste air?

I've also left trading in your old car out of the equation there, too. If you're trading in or trading up, my best advice to you is to show up on the dealer's tarmac bent over the hood with your pants already around your ankles. Sitting up a huge neon sign with an arrow that reads "COME ON IN" wouldn't hurt, either.

The whole process plainly sucks and it's in need of permanent reform. Something has to come along and uproot the established order once and for all. But the real question is will the winds of change finally blow into town?

It isn't like reform hasn't tried to happen. During the '90s, both Circuit City and General Motors experimented with way we buy cars with CarMax and Saturn dealerships respectively. They both kept prices flat, which was supposed to keep haggling pretty much out of the equation. GM also decided to put Saturn's salespeople on a salary instead of paying them commission, which theoretically kept pressure on the buyer low. Even better, Saturn dealers also had a full 30 day or 1,500 mile return policy that gave unhappy buyers a full refund.

It was a step in the right direction, but neither CarMax nor Saturn dealers managed to really shake things up when the smoke cleared. When Saturn folded, GM's other brands didn't implement the buying process nor refund policy at their dealerships. CarMax, I think, has turned out to be mostly a bunch of hot air. Buying a car from them doesn't seem like it's much better than going to Hometown Stealership, and the fact they corral their cars in like unruly livestock on an Iowa dirt farm is annoying.

It's worth mentioning that Toyota's Scion division sort of adopted Saturn's no-haggle pricing strategy, and Toyota's iFi financing plan is certainly better than going the buy-here-pay-here route if you have the budget but a credit score worse than Greece. But, again, I don't see Toyota and Scion's approach being widely accepted.

So they all ultimately fell short. But fear not, real change is finally on the horizon. Texas and New Jersey's money-grubbing backwater politicians may have succeeded in delaying the inevitable (with no thanks to a bunch of sissies who own dealerships), but Tesla's method of manufacturer-direct sales will certainly put an end to all of the bickering about pricing, which means more sociopaths will be out of work. You can finally just pay one price for a new car the same as you would an iPhone or a Macbook from the Apple Store.

Speaking of iPhones, thanks to Citroen — out of all the manufacturers out there — it's likely you'll be able to buy your car like you would a smartphone from an AT&T retailer in the near future too. When the adorably batshit C4 Cactus cute-ute hits showrooms, our friends in Europe will be able to buy one either on a pay-as-you-go setup or for one flat monthly rate on a three year contract that includes the cost of the car, insurance, and maintenance. How painless is that? If it's successful overseas, don't be surprised if an automaker Stateside ( cough, probably Tesla, cough ) gives it a try. Say farewell to that rapist in financing and say so long to leasing.

It's going to be nice. I'll always love cars more than I do my boxers, but soon I'll be able to say I like buying a new car just as much as I like buying new underwear. Besides, I never really wanted to wear a salmon suit or have dinner with Fred anyway.

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Tom McParland > Blake Noble 03/25/2014 at 09:47

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I have been working with dealers everyday for the past several years. Things are changing. When I first started consulting I would say it was about 70% slimeballs and 30% decent people. Now I would say it is about 50/ 50, especially at the luxury level. While I have my issues with Hyundai/Kia still using the same old tricks and thinking that they are ripping off sub-prime buyers. I have a Mercedes dealer who I will contact, tell him what I want. He gives me 3-4 options with big discounts (better than any other Benz dealer in the area) up-front, and will gladly deliver a car even if it means an hour drive. Some dealers are starting to understand you have to be competitive on price because there is this thing called the internet...and the more games you play the more people will be turned off and go somewhere else. There are still too many dealers who "don't get it," that is why I still get customers. Just last night I was talking to a salesperson. I asked them what their best price on a car was. He said "I'm only authorized to tell you the sticker price." I wanted to say "That why the hell am I talking to you, you don't need authorization to tell me the sticker price. IT'S THE GODDAMN STICKER PRICE!" What I did say was, "I have X offer on a '14 tell your manager if he wants to move that '13 he needs to beat the '14 price by at least a grand."

scotschris > Tom McParland 03/25/2014 at 09:51

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How do you leave an idiot in suspense? See above...Pah

Tom McParland > scotschris 03/25/2014 at 09:55

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Sorry, Kinja published before I got a chance to finish

scotschris > Tom McParland 03/25/2014 at 09:58

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Sounds like my sex life

KusabiSensei - Captain of the Toronto Maple Leafs > Blake Noble 03/25/2014 at 09:58

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I'd even rather have dinner with Fred Phelps.

Surprisingly appropriate here.

spanfucker retire bitch > Blake Noble 03/25/2014 at 10:01

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While I'm all for allowing open competition and see no need to prevent Tesla from doing direct selling to customers - no, my experience was not even 1/100th as bad you claim it was.

I had a sales manager who was a bit too pushy for me at one Mazda dealership so I went to the other one and it was wholly stress free. And yes, I did finance with the dealership because it would have been stupid not to - 60 months at 0% interest - only an idiot would think a Bank or a Credit Union could do better.

KusabiSensei - Captain of the Toronto Maple Leafs > Tom McParland 03/25/2014 at 10:01

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He said "I'm only authorized to tell you the sticker price."

Translation: I'm not authorized to sell you a car.

Tom McParland > KusabiSensei - Captain of the Toronto Maple Leafs 03/25/2014 at 10:06

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I get that managers don't trust the new people...put don't put them in charge of internet sales.

EL_ULY > Blake Noble 03/25/2014 at 10:06

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Yup, sales department is just a hack job. Also, kids (12-35 yo) are so weak, soft, and dumb to deal with a simple salesman and get screwed. Plus, I want certain features in a car, no more "only available in this package" BS!

Still, we can bash dealers "sales" all we want, they are hacks I agree, but I'll still see you kiddos in our service department when you and your dad/mechanic cannot perform a linear down pressure calibration and software update on your ABS accumulator :] I'll do that for you for a nominal fee

-long time dealer service department employee :]

jariten1781 > Blake Noble 03/25/2014 at 10:06

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Only in the West is it easy to buy stuff like TVs by just plopping down a set price. Buying semi-expensive stuff like electronics in places like Thailand is very analogous to the US car buying experience. Exercises in haggling and frustration.

crown victor victoria > Tom McParland 03/25/2014 at 10:30

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What part of this do you attribute to the repeat business you bring to the Benz guy, though? He's giving you better treatment/pricing because he knows you'll keep coming back in a much shorter timeframe than an average customer, and is willing to discount because he'll more than make up for it in volume.

Not to say that the "1 car purchase every 5 years" buyer wouldn't get the same kind of representation from the guy, he sounds like a standup salesperson, but it would be harder to see the results if you don't have a group of purchases to compare.

It seems like the real way to go here is to work with a broker, we'll call him Automatch Consulting, who can build relationships and get mutually beneficial deals with salespeople that a lone individual never could.

Tom McParland > crown victor victoria 03/25/2014 at 11:07

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I don't know if this answers your question but I have sent people to him that didn't hire me. All got similar deals than my clients would have.

crown victor victoria > Tom McParland 03/25/2014 at 11:15

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It does, but it is not the answer I was expecting. I wish more salespeople were like that guy.

Still, you can leverage a good business relationship with the dealers, which is something most car buyers can't do.

ihbase > Tom McParland 03/25/2014 at 13:47

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"I have X offer on a '14 tell your manager if he wants to move that '13 he needs to beat the '14 price by at least a grand."

Why would your customer be willing to save $1000 on a model year holdover when that unit has already depreciated a lot more than $1000 sitting on the lot? Unless I am missing something, your customer would lose something like $3-5k in depreciation while you offer to save them $1000. What am I missing? -Michael

Tom McParland > ihbase 03/25/2014 at 14:01

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I'm trying to see how deep they would go. If they come back a grand off, I tell them they need to do better when the '14 isn't that much more. But if I say they have to be 4-5 grand off initially they usually get pissed and don't even bother calling.

Blake Noble > KusabiSensei - Captain of the Toronto Maple Leafs 03/25/2014 at 15:09

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Well I guess it's obvious I didn't hear the news.

Ding, dong, the witch is dead, the witch is dead ...

Blake Noble > EL_ULY 03/25/2014 at 15:29

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Hey, for the most part, service departments really aren't the problem when it comes to visiting the dealer. Especially when it's staffed with trustworthy technicians and a straight forward service manager/writer.

That's not to say that I haven't visited one or two piss poor service departments in my day, but for the most part it's been rare that I've had someone try to pull one over on me when I had any sort of basic maintenance done.

Blake Noble > spanfucker retire bitch 03/25/2014 at 15:31

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Mind if I ask you about the 0 percent interest for 60 months deal? Because if you had the option of that or $3,000 cash back, you actually were better off taking the rebate and financing through a local credit union at, say, 2.7 percent interest.

EL_ULY > Blake Noble 03/25/2014 at 15:39

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Yup, that goes with every industry though. As for cars, buy used and buy tools :]

Blake Noble > Tom McParland 03/25/2014 at 16:02

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Tom, I'll try to have a response to this post up later tonight when I get home from work. :-)

spanfucker retire bitch > Blake Noble 03/25/2014 at 16:03

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There was no cash back offer - not for my anyways. They had some small ones running that month like 500 off for college grads and Vets and stuff like that. I got them to reduce the price by nearly 1,500 (pretty good for Mazda - they don't load their cars with incentives like other car companies) on the car and add another 2,000 to my trade in, for a total 3,000 on the trade in for a 10 year old Matrix with 125,000 miles on it, two minor accidents and two spots of rust.

Battery Tender Unnecessary > Tom McParland 03/25/2014 at 17:48

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I think the bottom line is that competition whether through direct sales or traditional methods is good for business. If a customer has the ability to go straight to the factory and order a car, the dealerships will need to step up with service and customer relations, maybe things like special delivery events, etc. I find it ironic that dealerships are using laws that were established to prevent a monopoly on manufacturer vs. private dealers to protect their relative monopoly on modern sales practices.

McLarry > Blake Noble 03/25/2014 at 18:48

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You'd rather have your balls cut off with rusty shears than buy a new car? Your priorities sound a bit...skewed... :P

J "oppo" Zeke > EL_ULY 03/25/2014 at 18:54

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I may hate service departments more than sales honestly. For all the ups and downs I've had buying/trading/selling cars, I've yet to experience something pleasant in service for anything more than an oil change. I schedule ahead of time, make sure to point out the specific items I need done, agree on whatever price is fair - and still things are left undone, done poorly, or lead to new problems.

Latest was getting a Mini-authorized front brake job. I asked for a tire rotation as well. What did I get? No tire rotation, and the front wheel studs were so overtorqued I needed a bigger breaker bar than the decent-sized one I had in my garage just to loosen them (to complete the work they neglected.) In my experience, this has been the apotheosis of a pleasant experience.

I've been buying and taking cars into service departments since I was 18, but more often than not I'm wondering who's taking me for a longer ride: service or sales. At least offer to buy me dinner first and cuddle after if you're gonna treat me like this.

At 36 I just go to specialists. Never a problem, always amazing service, and a knack for intuitively solving more complex issues quickly.

J "oppo" Zeke > Blake Noble 03/25/2014 at 19:05

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I've bought a couple cars via the internet, and it really makes for a great experience. The dealer can't judge you based on personal prejudice, you don't have to sit around waiting at a formica table with marginal coffee for hours on end, and there's never a stupid 4-square sheet or a "lemme check with my manager" moment to sully your day.

With the amount of available competitive lending out there, I now always have a check on hand even if they end up offering a better deal on financing what little is left to finance. There's no reason not to have all the figures done ahead of time too. Of course people still walk in to stores not knowing their own credit, how much they can afford, what the real cost of a car is once you figure fees/taxes and APR and to those people #sorryimnotsorry.

But for the informed public, why even try to make the deal difficult?

If you have money in your pocket and walk into a dealership, it really is as simple as buying an iPhone or TV. This applies for first timers getting a Sentra, or old hacks buying their latest toy. Just square up your credit months in advance, save up your cash, get that financing at the market competitive rate for the max you can actually afford and have fun.

EL_ULY > J "oppo" Zeke 03/25/2014 at 19:12

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True, same could be said of all industries. Still, we get pleeeeenty of work from "specialist shops" at our service department of cars they could not fix or installed aftermarket parts that did not do the job. Cars torn apart get towed in all the time. As for these specialty shops, most offer genuine parts and yes they do.... at dealer list prices. Here at my Volvo, Aston, Lotus, Mercedes dealer, we sale parts to these places from 20-25% off list price while they charge full price and just a slightly lower labor rate. For example, module for a 2007 V8 Vantage Volante. We sold one just half hour ago to an "English auto Specialist" down the street. $794.54 is the list price and what their customer will pay. The shop pays $589.39. Yay profit. As techs, we can figure out problems on any cars. They are all just nuts, bolts, parts, and fluids. Those issues are car issues not specific brand hub bub. What does separate us is some newer cars that need software updates and special tools. Dealers have them and independent shops can purchase all these things including diag tools. They are not cheap so they gotta get their money out of you as well.

solution, buy used, buy tools :]

J "oppo" Zeke > EL_ULY 03/25/2014 at 19:49

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There was a good Saab service department in the Chicago burbs I used to take cars to years back. Great service, really talented professionals working there. Always a pleasure going to them. Too bad that wasn't/isn't the norm.

My BMW goes to a place in the city where OEM parts price is competitive with the lowest prices on the net. Yet they also stock the superior aftermarket alternatives. I'd much rather have a metal impeller water pump than the OEM plastic one. A dealer's service department would rarely be allowed to carry that alternative, even if all the techs wouldn't put the inferior bits into their own cars. It's that sort of knowledge that makes the difference for me: knowing what's best for the car without brand bias, and with a wealth of experience.

As for costs? Well if I had the time to wrench on my cars I wouldn't have a job designing them lol.

awe46m3zcp > Blake Noble 03/26/2014 at 09:12

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A friend of mine just purchased a car from a Carvana vending machine. Really cool method for buying a car.

willkinton247 > Blake Noble 03/26/2014 at 10:48

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What about TrueCar? I haven't used it, but it seems legit.

Blake Noble > Tom McParland 03/26/2014 at 12:52

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I'm a little late here — okay, really, really late — but here goes.

There are still too many dealers who "don't get it," that is why I still get customers. Just last night I was talking to a salesperson. I asked them what their best price on a car was. He said "I'm only authorized to tell you the sticker price." I wanted to say "That why the hell am I talking to you, you don't need authorization to tell me the sticker price. IT'S THE GODDAMN STICKER PRICE!" What I did say was, "I have X offer on a '14 tell your manager if he wants to move that '13 he needs to beat the '14 price by at least a grand."

This entire paragraph, I feel, is reason enough for the buying process to change. You shouldn't have to walk on eggshells to know what you have to pay for a car. There should be one price everywhere you go, and there should be true "sales" where the price is discounted for buyers who are wanting a better price.

You shouldn't have to have a master's degree in mathematics to figure out exactly what it's going to cost you either. That's why I hope Citroen's approach is successful and encourages other automakers here to give it a try. It would certainly appeal to younger, poorer buyers who wouldn't have the means to get into a decent car.

But, with all that said, I think it's great there are people out there like you who are willing to fight for buyers who would've otherwise been eaten alive by dealerships.

Tom McParland > Blake Noble 03/26/2014 at 13:24

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I totally agree....the process needs to change. That is why I am rooting for Tesla even though if their model were to catch on everywhere, I would no longer get business.

Blake Noble > Tom McParland 03/26/2014 at 14:59

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I think there's still a place for consultants when traditional dealerships are placed on the endangered species list. That's not to say your profession might change somewhat, but then again, what profession hasn't seen some form of change with the dawn of the 21st century? Talk to a pharmacist who started work back in the '90s, for example. That profession has changed quite a lot and is still changing.

LTK > Blake Noble 03/30/2014 at 11:23

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Mr. Noble, what is this?! It's inflammatory over-generalization.  I am a sales consultant and I hate the slimeball approach to car sales, but your article is a vast overreach. I, too, like Tesla's model and want to see the competition it brings to the market. Still, when you buy that TV for 500-1000, you don't see the invoice or go into Best Buy and demand to see the "best number" on that TV. You shop websites or circulars and pick out a TV with the best performance for the best value. You have every single one of those resources available to you for automobiles: Edmunds, Jalopnik, US News Car Rankings, Consumer Reports, Truecar.com, etc...

If I ask for a certain price, you are more than welcome to make a counteroffer. If I get "slimey" on you, you are more than welcome to go to my competitor down the street. If you don't like the color or features of the one I have, I can find you one nearby and sell you that one. Still, on a 20, 30, or even 40k dollar purchase, you better be smart enough to know the basics of how interest rates work. Don't expect 200/month on a $30,000 car. And if you don't like the trade-in value, ask for more or keep it and sell it on craigslist. I don't care, it's just more hassle I have to deal with after you leave.

Also, the average total profit on a new car is $1200 and on a used, it's $2300. Service departments rake in FAR higher margins for dealerships.

Some of my least happy customers are ones that got phenomenal deals in which I bent over backwards to provide them service. And because of the very harsh survey penalties, they ended up costing me money to sell them that vehicle. I do my very best to provide every customer with a straight-forward, easy, and pleasurable buying experience. I have a 92% satisfaction rating in an industry where "mostly satisfied" is weighted against me at 50% and costs me $250. I know my vehicles inside and out. I have a handout on my desk laying out exactly what to expect in the car buying process. When I read hit-pieces like this, I find them extremely offensive.