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c) - haha, that is probably true. I have a relative that just bought a new car. After a little negotiation, got a couple thousand (?) knocked off the price of l

c) - haha, that is probably true. I have a relative that just bought a new car. After a little negotiation, got a couple thousand (?) knocked off the price of like a $35k car. "Great deal" - but I'm pretty sure the dealer is prepared to offer a price that is only as low as a great deal for the dealer as well.

johnnylambada 5y ago
This is price discovery in action. From the dealer’s point of view it’s worth jacking up the price that they are willing to take because some consumers will just pay it. Other consumers will try to bargain and they’ll find a (slightly) lower price. When someone just pays the first price the dealer says, the dealer makes a few thousand more than they otherwise works have. This is the same reason there are food coupons. Very price sensitive people will go out of their way to use them but others will pay full price.
smiley1437 5y ago
Exactly - that dealer could be negotiating dozens of car deals a day, has a ton of experience, PLUS he knows much more about his side of the deal (actual costs and back end rebates, etc) A typical buyer negotiates for a car only a few times in their life. Who do you think is likely to come out on top?
- david422 5y ago
  I had to fix my car once - the defroster wasn't working - and the bill came out wayyy higher than I had expected - like $1100 on a car that was probably only worth 3 or 4k by my estimates. I was pretty unhappy and I was trying to figure out where the breakdown had occurred. The dealer had talked to me about some complications they had run into and some options they could pursue to fix the heater, and I had given my approval. But I hadn't put together the labor rate and time spent. Was it my fault for not asking? If I had known up front I would have thought twice about sinking 1k into a 3k car. Ultimately I think the dealer held the power in that situation and while it was my fault, the dealer certainly didn't help make it clear. Anyways, that's how you lose trust and business.

johnnylambada 5y ago

This is price discovery in action. From the dealer’s point of view it’s worth jacking up the price that they are willing to take because some consumers will just pay it. Other consumers will try to bargain and they’ll find a (slightly) lower price. When someone just pays the first price the dealer says, the dealer makes a few thousand more than they otherwise works have. This is the same reason there are food coupons. Very price sensitive people will go out of their way to use them but others will pay full price.

smiley1437 5y ago

Exactly - that dealer could be negotiating dozens of car deals a day, has a ton of experience, PLUS he knows much more about his side of the deal (actual costs and back end rebates, etc) A typical buyer negotiates for a car only a few times in their life. Who do you think is likely to come out on top?

david422 5y ago
I had to fix my car once - the defroster wasn't working - and the bill came out wayyy higher than I had expected - like $1100 on a car that was probably only worth 3 or 4k by my estimates. I was pretty unhappy and I was trying to figure out where the breakdown had occurred. The dealer had talked to me about some complications they had run into and some options they could pursue to fix the heater, and I had given my approval. But I hadn't put together the labor rate and time spent. Was it my fault for not asking? If I had known up front I would have thought twice about sinking 1k into a 3k car. Ultimately I think the dealer held the power in that situation and while it was my fault, the dealer certainly didn't help make it clear. Anyways, that's how you lose trust and business.