Off Topic: Dealerships need to end

[Ninja_Matt]

My issue with typical car dealers is not with their financing rates. That's probably the most transparent part of the process. If they aren't offering a special rate, like 0%, you can usually do better with a bank or credit union. You should already be preapproved before stepping in. If they can beat it, make them put it in writing.

My issue/s begin when they advertise a vehicle at a set price, but once you walk in, they say that's the price only if you qualify for all current incentives, which is impossible. It also doesn't include their required "special package" like VIN etching, undercoating, LoJack, etc... There's also the issue with them not taking the time to know the vehicle they're selling.

When we bought our Tesla last year, I was trying my best to buy something else. I used email to communicate with a sales manager at my local Hyundai dealer for an Ionic 5. After a few back-and-forths, I had agreed to a price and made an appointment. When we got to the dealer, we took the car for a drive and were ready to sign. That's when the sales guy said the email price I was given was incorrect. It was actually $5k higher, plus they needed to add their $2k package that wasn't disclosed in the email. I told them they were nuts and walked out.

I went home and logged onto Tesla's site, picked the options I wanted, paid a $250 deposit and was given a window of when it would be available. I got a VIN emailed to me a couple weeks later with a tighter window. A couple days later I was given the date it would arrive and I needed to pick when I would be there to inspect and take it, if all looked good. All paperwork is done online. You can finance through them with a clear rate, which includes your payments, or you can go in with a bank check. This is how buying a vehicle should be in this day and age.

In fairness, these dealerships are job security for companies like us. Our company essentially models a more direct to consumer approach like Tesla but with a partnered dealer network. While we do charge a service fee (discounted for Mazdas247 members of course ), the discounts we negotiate (and the time we save you from doing the dealer dance) should vastly make up for our cost.

We are a small company and do all our tech in house, so development is admittedly on the slower side, but were hoping to release our Client portal by end of year to really make it an seamless process to buy a car well below market value, transparently and autonomously online, while vetting the dealer and keeping them on guard rails.

Pick your car, see your price, submit your info/docs, dealer approves and confirms details, you agree to final terms and schedule pickup/delivery, boom new car, great price, no hassle - all done online on a portal.

 

[Powerslider]

Tesla wanted to completely do away with the utterly useless dealership model, but because car dealers bribe, I mean, donate to the campaigns of so many politicians, that ancient model is baked into almost every state's code of laws. Without actually changing the laws on a state by state basis, we're stuck.

Crooked for sure.

Dealerships aren’t “utterly useless.” A great example is their parts and service departments. Ever try and order parts from Tesla? The process is horrible. At least at a dealership the person at the parts counter is almost always someone with technical knowledge. Tesla has people with zero knowledge of the parts; it’s just some random SKU to them.

Then there’s all the jobs dealerships provide to the local economies…

 

[Ninja_Matt]

Dealerships aren’t “utterly useless.” A great example is their parts and service departments. Ever try and order parts from Tesla? The process is horrible. At least at a dealership the person at the parts counter is almost always someone with technical knowledge. Tesla has people with zero knowledge of the parts; it’s just some random SKU to them.

Then there’s all the jobs dealerships provide to the local economies…

I would agree with this, as someone who actually comes from dealership management background, there are some great dealers out there who do honest work and can be of value, the problem is weeding them out from the bad actors and even long term consistency (once a dealership is sold under new management, its back to square one). Parts and Service relationships can be invaluable, the best techs and advisors are honest about what you need and what you don't and will treat their best customers like family - it's not easy to find the good ones, but they are out there. The market will weed out the dealers that don't keep up with modern customer experience standards eventually.

 

[theblooms]

It is called the free market. Free Market. America. Home of the Free...market.

But it's not a free market at all. As I said before, dealership are codified by state law. In a truly free market, this wouldn't be the case.

 

[theblooms]

Also, why are negotiations even a thing? You don't go into Publix and negotiate on the price of your Corn Flakes. The price is right there. And of you don't like it, you simply go next door to Food Lion.

That's the free market working.

 

[ColoradoDriver]

Also, why are negotiations even a thing? You don't go into Publix and negotiate on the price of your Corn Flakes. The price is right there. And of you don't like it, you simply go next door to Food Lion.

That's the free market working.

Seinfeld - Market Negotiation

08x08 The Chicken Roaster

youtu.be

 

[Powerslider]

Also, why are negotiations even a thing? You don't go into Publix and negotiate on the price of your Corn Flakes. The price is right there. And of you don't like it, you simply go next door to Food Lion.

That's the free market working.

The great thing here is negotiating is fully optional. Feel free to pay MSRP like you would with an online vendor.

 

[Ninja_Matt]

Also, why are negotiations even a thing? You don't go into Publix and negotiate on the price of your Corn Flakes. The price is right there. And of you don't like it, you simply go next door to Food Lion.

That's the free market working.

Negotiations are a thing because customers make them a thing, sellers rarely negotiate, customers/buyers negotiate when they disagree on price.

 

[Sig cx-5]

Negotiations are a thing because customers make them a thing, sellers rarely negotiate, customers/buyers negotiate when they disagree on price.

Are you implying that the customer is the aggressor? That's laughable. The educated customer knows the value of the product they're purchasing. The seller hopes they don't and tries hard to maximize profit by using all sorts of shady tactics. It wasn't always this bad. They need to go the way of the dinosaur.

 

[Powerslider]

Negotiations are a thing because customers make them a thing, sellers rarely negotiate, customers/buyers negotiate when they disagree on price.

Are you implying that the customer is the aggressor?

Clearly it’s always the buyer that prompts negotiations for a lower price. Not sure that makes them an “aggressor” though.

 

[Ninja_Matt]

Are you implying that the customer is the aggressor? That's laughable. The educated customer knows the value of the product they're purchasing. The seller hopes they don't and tries hard to maximize profit by using all sorts of shady tactics. It wasn't always this bad. They need to go the way of the dinosaur.

I don't believe I ever used the term aggressor, but the customer is the initiator in a negotiation mainly because they hold the leverage to close a sale and because they don't like the price of *insert any item* and want a better deal. That can be true while it also being true that many dealers are scumbags and try to overcharge people on the first rip - but this goes back to the free market argument, you aren't required to buy from a dealer that is adding tons of fees and trying to take advantage. If you hate your money and only care about the experience at any cost, there is nothing forcing you to negotiate on an overpriced good of any kind, but if you do, justified or not, you as the consumer are the initiator.

Also, I would argue it was a lot worse decades ago when the internet wasn't around to inform consumers, regulations hadn't caught up yet and dealers could do way more to avoid disclosure of information.

And a final thought, during my dealership tenure as someone I like to consider being one of the more honest dealers out there, consumers are conditioned to negotiate always even when being presented with phenomenal deals. For a common example - "Give me your best price, I don't want to negotiate" - *gives discount below invoice with all incentives applied at buy rate and giving the house away on first go* - "Okay, let's get this down another $2,000 and we'll talk". Consumers don't JUST want a fair deal, they want to win and winning involves getting the other party (dealer) to accept terms you set - aka negotiate.

 

[Sig cx-5]

I don't believe I ever used the term aggressor, but the customer is the initiator in a negotiation mainly because they hold the leverage to close a sale and because they don't like the price of *insert any item* and want a better deal. That can be true while it also being true that many dealers are scumbags and try to overcharge people on the first rip - but this goes back to the free market argument, you aren't required to buy from a dealer that is adding tons of fees and trying to take advantage. If you hate your money and only care about the experience at any cost, there is nothing forcing you to negotiate on an overpriced good of any kind, but if you do, justified or not, you as the consumer are the initiator.

Also, I would argue it was a lot worse decades ago when the internet wasn't around to inform consumers, regulations hadn't caught up yet and dealers could do way more to avoid disclosure of information.

And a final thought, during my dealership tenure as someone I like to consider being one of the more honest dealers out there, consumers are conditioned to negotiate always even when being presented with phenomenal deals. For a common example - "Give me your best price, I don't want to negotiate" - *gives discount below invoice with all incentives applied at buy rate and giving the house away on first go* - "Okay, let's get this down another $2,000 and we'll talk". Consumers don't JUST want a fair deal, they want to win and winning involves getting the other party (dealer) to accept terms you set - aka negotiate.

Thanks for confirming your bias.

I do agree that there are buyers out there that expect dealers to lose money. They are in a very small minority, though. I also agree that not all dealers are shady, but they too seem to be dwindling as of late. I don't know how old you are, but I've been buying new vehicles since the mid 80's. I can assure you that their tactics are getting worse, not better. I base this on Chicago area dealers, so maybe other locations have more honest management/owners.

One of the biggest swindler dealers around here is Napleton, which has a presence in a few states. They took over the local Mazda dealer after I purchased and you could see things going downhill fast. They immediately enacted their mandatory package inclusion, even if you were buying a yet to be delivered vehicle. You could "negotiate" that down after several hours, but in the end, you were still paying more than just walking in and saying I'll pay MSRP on the original Monroney sticker. They must be making a ton of money doing this, since they currently own 5 of my local dealers.

When I bought my '21 Ranger a couple years ago, the closest dealer, not Napleton owned, was using the same tactic. They even said their advertised deals were a misprint. I did find a small Ford dealer a few towns away that sold me the same vehicle for thousands less with no add-ons and no pushing for warranties, service plans, etc. So, yes, there are still a few decent dealers out there, like the local Mazda dealer used to be before they sold out. That seems to be at the root of my distrust/hatred of the current dealership model. The little guys are selling out and the dealerships are turning into these corporate cesspools.

 

[Sig cx-5]

Clearly it’s always the buyer that prompts negotiations for a lower price. Not sure that makes them an “aggressor” though.

LOL Yeah, because they don't want to pay thousands over the original sticker price. Not every buyer is stupid. If you're an educated buyer, you go in knowing what you should be paying. You can either chose to negotiate, or just walk out. The problem being, it's not easy to find another local dealer that won't do the same thing. Again, it's the reason we now have a Tesla in the garage, vs. a Hyundai.

 

[Conrad 16.5]

Thanks for confirming your bias.

I do agree that there are buyers out there that expect dealers to lose money. They are in a very small minority, though. I also agree that not all dealers are shady, but they too seem to be dwindling as of late. I don't know how old you are, but I've been buying new vehicles since the mid 80's. I can assure you that their tactics are getting worse, not better. I base this on Chicago area dealers, so maybe other locations have more honest management/owners.

One of the biggest swindler dealers around here is Napleton, which has a presence in a few states. They took over the local Mazda dealer after I purchased and you could see things going downhill fast. They immediately enacted their mandatory package inclusion, even if you were buying a yet to be delivered vehicle. You could "negotiate" that down after several hours, but in the end, you were still paying more than just walking in and saying I'll pay MSRP on the original Monroney sticker. They must be making a ton of money doing this, since they currently own 5 of my local dealers.

When I bought my '21 Ranger a couple years ago, the closest dealer, not Napleton owned, was using the same tactic. They even said their advertised deals were a misprint. I did find a small Ford dealer a few towns away that sold me the same vehicle for thousands less with no add-ons and no pushing for warranties, service plans, etc. So, yes, there are still a few decent dealers out there, like the local Mazda dealer used to be before they sold out. That seems to be at the root of my distrust/hatred of the current dealership model. The little guys are selling out and the dealerships are turning into these corporate cesspools.

Napleton = Crooks

Back when I was looking to buy our CX-5, Napleton was one of the dealerships that I contacted early on for a quote. It didn't take long to eliminate them from contention, not long at all. They kept trying to feed me BS that I wasn't hungry for...

 

[Ninja_Matt]

Thanks for confirming your bias.

I do agree that there are buyers out there that expect dealers to lose money. They are in a very small minority, though. I also agree that not all dealers are shady, but they too seem to be dwindling as of late. I don't know how old you are, but I've been buying new vehicles since the mid 80's. I can assure you that their tactics are getting worse, not better. I base this on Chicago area dealers, so maybe other locations have more honest management/owners.

One of the biggest swindler dealers around here is Napleton, which has a presence in a few states. They took over the local Mazda dealer after I purchased and you could see things going downhill fast. They immediately enacted their mandatory package inclusion, even if you were buying a yet to be delivered vehicle. You could "negotiate" that down after several hours, but in the end, you were still paying more than just walking in and saying I'll pay MSRP on the original Monroney sticker. They must be making a ton of money doing this, since they currently own 5 of my local dealers.

When I bought my '21 Ranger a couple years ago, the closest dealer, not Napleton owned, was using the same tactic. They even said their advertised deals were a misprint. I did find a small Ford dealer a few towns away that sold me the same vehicle for thousands less with no add-ons and no pushing for warranties, service plans, etc. So, yes, there are still a few decent dealers out there, like the local Mazda dealer used to be before they sold out. That seems to be at the root of my distrust/hatred of the current dealership model. The little guys are selling out and the dealerships are turning into these corporate cesspools.

I can absolutely agree with you, if anyone can really relate it would be myself, I spent 5 years of my life managing the sales desk of two different Mazda dealers, my last one was a family owned dealer in FL, I consider myself very progressive from a business standpoint in context to traditional dealer models and tripled their new car volume mainly by using an aggressive loyalty strategy. December 15th, 2020 comes around and ownership took the opportunity to leverage our massive growth and sold to Morgan Auto Group - day one they said no more transparent quoting, $3,000 addendums ("Advantage Package"), back to four squares, etc. December 30th I walked out the doors and never worked at a dealership again. Complete joke of a company and they are sadly buying up family owned dealers all over the South and ruining them. So don't misunderstand my neutrality on the dealer vs consumer debate as being a dealer apologist. Quite the contrary, I joined and now co-own a platform that is entirely about defeating greedy dealers, making relationships with trustworthy dealers offering the best deals and giving a transparent buying experience to consumers.

 

[theblooms]

back to four squares

If anyone busts out the 4 square, don't say a word, simply get up and walk out.

 

[Ninja_Matt]

If anyone busts out the 4 square, don't say a word, simply get up and walk out.

The moment I knew it was over actually -

Some young guy wearing a (no joke) Gucci face mask (same guy bragging to the female staff about being best friends with the owner's son and doing blow on his yacht) was introduced to me as the new "Finance Director" and he came to "teach us how to make money", which was a four square. I called my GM and said "this guy is kidding right? can you believe this? this is a joke." and my GM said "Just give him a chance and try to learn from him". I knew the Kool-aid had been drank and I was looking for the exit, this place is going to burn.

Also, later confirmed that guy was a pure nepotism hire who had months of experience and was being paid a $1.5M salary in his mid-twenties as a friend of the owner's son. The guy who he replaced was with the dealership for 16 years and they fired him over text.

 

[Powerslider]

LOL Yeah, because they don't want to pay thousands over the original sticker price. Not every buyer is stupid. If you're an educated buyer, you go in knowing what you should be paying. You can either chose to negotiate, or just walk out. The problem being, it's not easy to find another local dealer that won't do the same thing. Again, it's the reason we now have a Tesla in the garage, vs. a Hyundai.

Personally, I value the ability to negotiate, but I understand theres a lot of people who value the simplicity of just paying full price with companies like Tesla who don’t provide a negotiating mechanism. Likely they don’t feel skilled in negotiating and understandably find comfort in the level playing field.

 

[Buzzman12]

They immediately enacted their mandatory package inclusion, even if you were buying a yet to be delivered vehicle. You could "negotiate" that down after several hours, but in the end, you were still paying more than just walking in and saying I'll pay MSRP on the original sticker. They must be making a ton of money doing this.

This just drives me nuts. Going in to buy a car, and then get told that it has nitrogen in the tires, and has been vin etched, and paint protected, etc etc, so you'll have to pay for that as it's already done.

When I bought my Kia Stinger last year I actually got the car earlier than I thought, as this particular one became available when the guy that originally ordered it didn't pass his finance/credit check. They offered it to me, so I went in and started talking to them about it. I got told that the guy that ordered it also ordered the extended warranty, rustproofing, paint protection, and pretty much every other add on they could muster, so of course, I was told I had to pay for all of that.
My reaction was pretty simple: I said the other guy may have ordered all that crap, but I didn't, so....take it all off. But but but, that's part of the package for this car. Ah, maybe for the other guy it was, but not for me. Didn't take them long to realize I wasn't going to bite.
I paid MSRP for the car, as there were zero Stingers selling for under sticker price last year. I was OK with that, as they were in demand and hard to find. I did manage to get full window tint thrown in, but I bought zero add ons from the dealer.
I went third party for clear wrap (Xpel) on the front bumper and hood, as well as oil spraying the car. I've done a few cosmetic changes since I bought it, and will be installing a ram air snorkel kit in the near future. I have not been back to the dealer....lol.

 

[Sig cx-5]

Personally, I value the ability to negotiate, but I understand theres a lot of people who value the simplicity of just paying full price with companies like Tesla who don’t provide a negotiating mechanism. Likely they don’t feel skilled in negotiating and understandably find comfort in the level playing field.

Please share the recent results of your "skilled" negotiations. Can you post the details of your last new vehicle purchase, including all the pertinent details? What do you even drive?

There's a reason mainstream dealers don't like selling EV's. It's because they can't compete with the likes of Tesla, Rivian, Polestar, etc without discounting them to a point where the dealer doesn't make much money. I actually had a Volvo salesperson tell me not to buy their BEV's, because I would be limited to only around town driving. Our daughter bought an XC40 Recharge out in TX a year ago and loves it. It was the reason we wanted to check it out. In all my years of looking at vehicles, I never felt so alienated. I guess, at least they didn't try to rip me off with some crazy required extras and waste my time.