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Hey @TreyGuy (or others from Markup.org) How do you account for dealers which sell for $0 above MSRP but then include a non-negotiable $700 "paint protection"

Hey @TreyGuy (or others from Markup.org) How do you account for dealers which sell for $0 above MSRP but then include a non-negotiable $700 "paint protection" service? As a crowdsourced site, you'll get a ton of reports that a particular dealership has no markup and few if any reports from people who have actually been far enough into the purchase process to discover these hidden markups.

WalterBright 4y ago
Nothing is "non-negotiable" in business. Just say "no".
- Gh0stRAT 4y ago
  That's exactly what I did. I had my checkbook and was there to put in a deposit when I found out. Here's an abridged version of how the conversation went: > Me: I don't want that and won't be paying for it. > Them: Well we do it for all new cars and you can't have us not do it. > Me: Well then you can either eat the cost of this unnecessary "service" or sell me the car for $700 under MSRP to make up for it. > Them: Sorry, we can't do that. I walked out and they haven't called me back to say they were bluffing. Meanwhile, I'm working with a different dealership now.
  - 1123581321 4y ago
    You didn’t win this either. The last time I bought a (used) car from a dealership, I walked out, and they caught me as I was walking out the lobby and dropped the add-on, and then another add-on after some arguing since they knew I’d leave. That was successful.
  - WalterBright 4y ago
    There you go. You couldn't reach agreement so no deal. Nobody was forced into anything.
    - lucideer 4y ago
      But the point stands - if everyone walks out, and the only people driving out are those who accepted the service, they can't reasonably be considered a $0 MSRP dealer.
      - lelanthran 4y ago
        > But the point stands - if everyone walks out, and the only people driving out are those who accepted the service, they can't reasonably be considered a $0 MSRP dealer. FTFA > “The problem with the majority of other new car search sites is that they are not using crowdsourced data — they are using the data dealerships provide,” Soucie-Howren said. “We have found that the majority of dealerships do not display the true markup data or mandated add-ons.” Sounds like your concerns are taken into account - the founders claim to take into account "mandated options" (such as it is).
    - AinderS 4y ago
      Don't pretend this is a victimless crime. He was tricked into wasting his time due to false advertising, and honest dealers who advertise the full price lose customers to fraudsters.
      - WalterBright 4y ago
        Crime? Come on.
    - rdtwo 4y ago
      Timeshare is victimless too right?
  - londons_explore 4y ago
    Notably, this would be illegal in Europe. The advertised price has to include everything a typical buyer will end up paying. Eg. it was found illegal to advertise a certain price which only applied if you paid with a certain quite rare credit card. (and there was a surcharge for other cards). You have to show that a good chunk of buyers end up paying the advertised price.
    - rdtwo 4y ago
      Europe has a lot of regulations but consumer protection are probably #1 in the world
  - philjohn 4y ago
    In the UK but have another data point - was looking to buy a demo car from a VW dealership - paid the deposit and it was a decent amount under MSRP as it had 1500 miles on it. Phoned up the next day to say another dealer in their network had already sold it earlier in the day but not uploaded the paperwork yet. Polite, but firm, email was sent back opining being disappointed in their customer service as the dealership was so close to work and would have loved to have a long-term relationship with them yielded - a 1250 GBP discount on ordering a new car, as specced, at MSRP. There are good dealerships out there, but it's liking finding a diamond in the rough.
  - rsync 4y ago
    We’re you aware at the time that you were acting out a scene from the movie Fargo ?
    - Gh0stRAT 4y ago
      No, I'll apparently have to bump it up my to-watch list!
  - TreyGuy 4y ago
    A tale as old as car sales
  - technothrasher 4y ago
    > Meanwhile, I'm working with a different dealership now. Hopefully that goes well for you. When I recently got a new car, I called around to all the local dealerships before I found one that would order me a car at MSRP. But I knew I wasn't done with the BS. It took seven months for the car to come in, and they didn't add any cash markups, but they did give me a money factor for the lease that was really high. I could have walked, but then I'd be waiting another seven months or so and would be paying above MSRP and probably still get a marked up money factor. I really had no leverage. More annoying than that, though, was that when I asked them about the high money factor, the finance guy just straight up lied right to my face that they didn't mark it up. What I'd heard on the internet was wrong. What the other dealers told me was wrong. The whole world was wrong. Why? Why would he lie to me like that? It served no purpose, because I couldn't really do anything about it anyway. It's like it was compulsive with him or something.
    - jrs235 4y ago
      "We don't mark it up... we just get a kickback..." (Mental gymnastics in his head are: a mark up on the rate is a percentage added... We just get a [possibly] "flat" commission kickback.)
- baisq 4y ago
  Someone should go to the EU parliament and tell those busybodies that.
- smeej 4y ago
  ...that isn't negotiating.
zachshefska 4y ago
Great point (I’m the Zach Shefska referenced in the article), and have been working in this space to advocate for consumers. Two things: 1) new FTC proposed rules (which are open for public comment!) would ban the practice of “surprise” add-ons at the dealership. 2) a lot of folks that contribute to markups (and other crowdsourced initiatives) go all the way to getting a buyers order and then report those add-ons when they show up then. If you’re interested in the FTC rules, read here: https://joinyaa.com/guides/ftc-dealer-rules/ https://joinyaa.com/guides/ftc-dealer-rules/
- TreyGuy 4y ago
  Thanks Zach!
- nataz 4y ago
  Hey, cool to see you post on HN. I started following you and your dad on YouTube during the pandemic. It's been fascinating how you've (very intentionally) built your online following. Between social media vectors, the website, forums, paid tier access, pricing tools, and now insurance, you have quite the operation. Other folks on HN should take notes on what you've accomplished so far.
  - zachshefska 4y ago
    Thank you for the kind words. We have so much more work to do! Trying to innovate in this industry is TOUGH. All of the incumbent business models are predicated on information asymmetry. We're having fun changing the way things work and sliding the scale in the consumers favor.
- thfuran 4y ago
  Why should the rules only apply to cars?
- jonahhorowitz 4y ago
  The FTC (or congress) should mandate this for everything. The price for something should be the final, out the door price. It's amazing to travel in the UK and buy something at the supermarket. If it says ￡1, then that's the cost at the register. Right now in the US, there's resort fees, booking fees, regulatory compliance fees, and on and on that all get added during checkout. It's so deceptive.
TreyGuy 4y ago
Thanks for commenting @gh0strat. Right now we are currently accounting for both markup and mandatory add-ons as a total in the same numerical value. If it's 0 markup but $2995 for N2 filled tires then the total markup is $2995. We are finding the opposite to be true. Most of our posters are folks that have actually spent at least a little time dealing with a dealership and are reporting the numbers back to us. Our hope is that as we get more postings the false or innacurate postings will be drowned out by the accurate quality ones.

WalterBright 4y ago

Nothing is "non-negotiable" in business. Just say "no".

Gh0stRAT 4y ago
That's exactly what I did. I had my checkbook and was there to put in a deposit when I found out. Here's an abridged version of how the conversation went: > Me: I don't want that and won't be paying for it. > Them: Well we do it for all new cars and you can't have us not do it. > Me: Well then you can either eat the cost of this unnecessary "service" or sell me the car for $700 under MSRP to make up for it. > Them: Sorry, we can't do that. I walked out and they haven't called me back to say they were bluffing. Meanwhile, I'm working with a different dealership now.
- 1123581321 4y ago
  You didn’t win this either. The last time I bought a (used) car from a dealership, I walked out, and they caught me as I was walking out the lobby and dropped the add-on, and then another add-on after some arguing since they knew I’d leave. That was successful.
- WalterBright 4y ago
  There you go. You couldn't reach agreement so no deal. Nobody was forced into anything.
  - lucideer 4y ago
    But the point stands - if everyone walks out, and the only people driving out are those who accepted the service, they can't reasonably be considered a $0 MSRP dealer.
    - lelanthran 4y ago
      > But the point stands - if everyone walks out, and the only people driving out are those who accepted the service, they can't reasonably be considered a $0 MSRP dealer. FTFA > “The problem with the majority of other new car search sites is that they are not using crowdsourced data — they are using the data dealerships provide,” Soucie-Howren said. “We have found that the majority of dealerships do not display the true markup data or mandated add-ons.” Sounds like your concerns are taken into account - the founders claim to take into account "mandated options" (such as it is).
  - AinderS 4y ago
    Don't pretend this is a victimless crime. He was tricked into wasting his time due to false advertising, and honest dealers who advertise the full price lose customers to fraudsters.
    - WalterBright 4y ago
      Crime? Come on.
  - rdtwo 4y ago
    Timeshare is victimless too right?
- londons_explore 4y ago
  Notably, this would be illegal in Europe. The advertised price has to include everything a typical buyer will end up paying. Eg. it was found illegal to advertise a certain price which only applied if you paid with a certain quite rare credit card. (and there was a surcharge for other cards). You have to show that a good chunk of buyers end up paying the advertised price.
  - rdtwo 4y ago
    Europe has a lot of regulations but consumer protection are probably #1 in the world
- philjohn 4y ago
  In the UK but have another data point - was looking to buy a demo car from a VW dealership - paid the deposit and it was a decent amount under MSRP as it had 1500 miles on it. Phoned up the next day to say another dealer in their network had already sold it earlier in the day but not uploaded the paperwork yet. Polite, but firm, email was sent back opining being disappointed in their customer service as the dealership was so close to work and would have loved to have a long-term relationship with them yielded - a 1250 GBP discount on ordering a new car, as specced, at MSRP. There are good dealerships out there, but it's liking finding a diamond in the rough.
- rsync 4y ago
  We’re you aware at the time that you were acting out a scene from the movie Fargo ?
  - Gh0stRAT 4y ago
    No, I'll apparently have to bump it up my to-watch list!
- TreyGuy 4y ago
  A tale as old as car sales
- technothrasher 4y ago
  > Meanwhile, I'm working with a different dealership now. Hopefully that goes well for you. When I recently got a new car, I called around to all the local dealerships before I found one that would order me a car at MSRP. But I knew I wasn't done with the BS. It took seven months for the car to come in, and they didn't add any cash markups, but they did give me a money factor for the lease that was really high. I could have walked, but then I'd be waiting another seven months or so and would be paying above MSRP and probably still get a marked up money factor. I really had no leverage. More annoying than that, though, was that when I asked them about the high money factor, the finance guy just straight up lied right to my face that they didn't mark it up. What I'd heard on the internet was wrong. What the other dealers told me was wrong. The whole world was wrong. Why? Why would he lie to me like that? It served no purpose, because I couldn't really do anything about it anyway. It's like it was compulsive with him or something.
  - jrs235 4y ago
    "We don't mark it up... we just get a kickback..." (Mental gymnastics in his head are: a mark up on the rate is a percentage added... We just get a [possibly] "flat" commission kickback.)
baisq 4y ago
Someone should go to the EU parliament and tell those busybodies that.
smeej 4y ago
...that isn't negotiating.

zachshefska 4y ago

Great point (I’m the Zach Shefska referenced in the article), and have been working in this space to advocate for consumers. Two things: 1) new FTC proposed rules (which are open for public comment!) would ban the practice of “surprise” add-ons at the dealership. 2) a lot of folks that contribute to markups (and other crowdsourced initiatives) go all the way to getting a buyers order and then report those add-ons when they show up then. If you’re interested in the FTC rules, read here: https://joinyaa.com/guides/ftc-dealer-rules/ https://joinyaa.com/guides/ftc-dealer-rules/

TreyGuy 4y ago
Thanks Zach!
nataz 4y ago
Hey, cool to see you post on HN. I started following you and your dad on YouTube during the pandemic. It's been fascinating how you've (very intentionally) built your online following. Between social media vectors, the website, forums, paid tier access, pricing tools, and now insurance, you have quite the operation. Other folks on HN should take notes on what you've accomplished so far.
- zachshefska 4y ago
  Thank you for the kind words. We have so much more work to do! Trying to innovate in this industry is TOUGH. All of the incumbent business models are predicated on information asymmetry. We're having fun changing the way things work and sliding the scale in the consumers favor.
thfuran 4y ago
Why should the rules only apply to cars?
jonahhorowitz 4y ago
The FTC (or congress) should mandate this for everything. The price for something should be the final, out the door price. It's amazing to travel in the UK and buy something at the supermarket. If it says ￡1, then that's the cost at the register. Right now in the US, there's resort fees, booking fees, regulatory compliance fees, and on and on that all get added during checkout. It's so deceptive.

TreyGuy 4y ago

Thanks for commenting @gh0strat. Right now we are currently accounting for both markup and mandatory add-ons as a total in the same numerical value. If it's 0 markup but $2995 for N2 filled tires then the total markup is $2995. We are finding the opposite to be true. Most of our posters are folks that have actually spent at least a little time dealing with a dealership and are reporting the numbers back to us. Our hope is that as we get more postings the false or innacurate postings will be drowned out by the accurate quality ones.