4 ms·

As someone who's been through this process recently, I've never understood why car buying has to be this way. The whole process has a sleazy feel of I'll try to

As someone who's been through this process recently, I've never understood why car buying has to be this way. The whole process has a sleazy feel of I'll try to rip you off by as much as I can get away with. Car prices go lower as you reach the end of slow months when the sales teams don't reach their targets, they go higher earlier in the month .. it doesn't make any sense at all. Why not just have an MSRP like the on the manufacturer's website and sell all cars at this price? The dealer can get a constant profit on the car price & servicing, buyers can feel less ripped off and everyone wins? It doesn't really have to be a race to the bottom..

sokoloff 15y ago
Because (some) people like to get a "deal". And if you move your car brand to "no dicker stickers" and I don't, I'm likely to capture a share of the "likes a bargain" shoppers, though I admit I'll lose some of the "likes a sense of apparent fairness shoppers" to you. Now, what happens when you have a "no dicker" policy and you need to move a car for whatever reason? Maybe the new models are coming out. Maybe the dealer needs to raise some cash to meet his loan payments. Maybe a model is intended for snow/foul weather usage, and you shipped too many of them into New England, expecting a normal winter. How do you entice customers who will eventually need a new car (according to them) into buying your car from your dealer now. Do you lower MSRP across the board for year-end models? That could work. Do you lower your MSRP only in New England? That could work, but smells worse from a globally consistent pricing point of view. Do you allow just the dealer who needs cash to lower his price? Well, you can't really do that and have any notion of consistent pricing. And that's just the problems in the new car market, where a given car could be identical to any other any equivalent car. In the used car market, it gets way, way worse (in terms of complexity and sleaziness).
- spitfire 15y ago
  This is a flaw in inventory control (too much of it), and it can be fixed. The toyota production system is about getting the car to the customer as quickly as possible. If you were smart you would organize your production/inventory into a Just In Time system. Every car is a bespoke order, each store has a demo of each type of vehicle available for test drives.
  - philwelch 15y ago
    There's already an order of magnitude more used cars going around that fundamentally can't fit this model. Savvy individual buyers don't buy new anyway; setting up your new car distribution system based on efficiently serving a savvy customer in a way that doesn't extend to the rest of your business doesn't make much sense.
- polyfractal 15y ago
  I mostly agree with your response, but it isn't entirely accurate. You can sale-price items that have a constant retail value. If you see a sale in a supermarket, you don't think the price is inconsistent or that you need to haggle over cereal prices. You just realize it is a temporary sale, a discount on the normal price.
  - sokoloff 15y ago
    Agreed, but once you do that, you get away from tejaswiy's idea of just "sell all cars at that price". I don't have an issue with negotiated prices or sales, but some do.
polyfractal 15y ago
To add to the "likes a bargain" response, there are people that don't know they should haggle over price. I have an extended family member that walked into a dealership, got a price quote and signed the dotted line - no haggling at all. They definitely got ripped off. To be fair, these people are entirely incompetent with money in general. But I imagine there are a good number of individuals that get totally screwed over without realizing it, effectively padding the bottom line of dealers.
- ams6110 15y ago
  The worst way naive buyers get screwed is by negotiating payment not price. The last few cars I've bought I found on Craigslist and bought from a private individual. Only way I'll do it from now on. I really see absolutely no value that a dealership brings to the transaction.
  - dedward 15y ago
    payment, not price? so were not talking about people buying cars, were talking about banks jbuying cars for people and expecting interest on top. now i see why this is. onfusing. why would you ever buy a car on anything but price? if you have to borrow for it swallow your ego and buy something you canafford..... simple.
    - sokoloff 15y ago
      That's just it. In many people's minds, if the bank or manufacturer-affiliated financing arm will loan them the money, then that fact tells them that they CAN afford it, and they get an ego stroke for having been such a wise consumer, manager of credit, and provider for their family. Same exact facts, opposite conclusion to your line of thinking. (I agree with you, in case it wasn't obvious.)
- dedward 15y ago
  in your view theygot ripped off. in eir view, they were happy with what they got forthwir money, hence not ripped off. a rich man can buy a persian rug for thousands of dollars and behappy he did. a poor student cabuy samerug for 50 bucks and be happy with his negotiating skills. the guy who sold the rugs is happybeause hesold teo rugs. for the record, i dislike how carsare sold as wel...... but in the end, it should beas simple as making your choices wisely.
jaylevitt 15y ago
GM tried this with Saturn, among many other innovations; Saturn failed, but it sounds like the failure was due to internal strife, not the no-haggle pricing. http://www.thedailybeast.com/newsweek/2009/04/03/saturn-was-supposed-to-save-gm.html http://www.thedailybeast.com/newsweek/2009/04/03/saturn-was-...

sokoloff 15y ago

Because (some) people like to get a "deal". And if you move your car brand to "no dicker stickers" and I don't, I'm likely to capture a share of the "likes a bargain" shoppers, though I admit I'll lose some of the "likes a sense of apparent fairness shoppers" to you. Now, what happens when you have a "no dicker" policy and you need to move a car for whatever reason? Maybe the new models are coming out. Maybe the dealer needs to raise some cash to meet his loan payments. Maybe a model is intended for snow/foul weather usage, and you shipped too many of them into New England, expecting a normal winter. How do you entice customers who will eventually need a new car (according to them) into buying your car from your dealer now. Do you lower MSRP across the board for year-end models? That could work. Do you lower your MSRP only in New England? That could work, but smells worse from a globally consistent pricing point of view. Do you allow just the dealer who needs cash to lower his price? Well, you can't really do that and have any notion of consistent pricing. And that's just the problems in the new car market, where a given car could be identical to any other any equivalent car. In the used car market, it gets way, way worse (in terms of complexity and sleaziness).

spitfire 15y ago
This is a flaw in inventory control (too much of it), and it can be fixed. The toyota production system is about getting the car to the customer as quickly as possible. If you were smart you would organize your production/inventory into a Just In Time system. Every car is a bespoke order, each store has a demo of each type of vehicle available for test drives.
- philwelch 15y ago
  There's already an order of magnitude more used cars going around that fundamentally can't fit this model. Savvy individual buyers don't buy new anyway; setting up your new car distribution system based on efficiently serving a savvy customer in a way that doesn't extend to the rest of your business doesn't make much sense.
polyfractal 15y ago
I mostly agree with your response, but it isn't entirely accurate. You can sale-price items that have a constant retail value. If you see a sale in a supermarket, you don't think the price is inconsistent or that you need to haggle over cereal prices. You just realize it is a temporary sale, a discount on the normal price.
- sokoloff 15y ago
  Agreed, but once you do that, you get away from tejaswiy's idea of just "sell all cars at that price". I don't have an issue with negotiated prices or sales, but some do.

polyfractal 15y ago

To add to the "likes a bargain" response, there are people that don't know they should haggle over price. I have an extended family member that walked into a dealership, got a price quote and signed the dotted line - no haggling at all. They definitely got ripped off. To be fair, these people are entirely incompetent with money in general. But I imagine there are a good number of individuals that get totally screwed over without realizing it, effectively padding the bottom line of dealers.

ams6110 15y ago
The worst way naive buyers get screwed is by negotiating payment not price. The last few cars I've bought I found on Craigslist and bought from a private individual. Only way I'll do it from now on. I really see absolutely no value that a dealership brings to the transaction.
- dedward 15y ago
  payment, not price? so were not talking about people buying cars, were talking about banks jbuying cars for people and expecting interest on top. now i see why this is. onfusing. why would you ever buy a car on anything but price? if you have to borrow for it swallow your ego and buy something you canafford..... simple.
  - sokoloff 15y ago
    That's just it. In many people's minds, if the bank or manufacturer-affiliated financing arm will loan them the money, then that fact tells them that they CAN afford it, and they get an ego stroke for having been such a wise consumer, manager of credit, and provider for their family. Same exact facts, opposite conclusion to your line of thinking. (I agree with you, in case it wasn't obvious.)
dedward 15y ago
in your view theygot ripped off. in eir view, they were happy with what they got forthwir money, hence not ripped off. a rich man can buy a persian rug for thousands of dollars and behappy he did. a poor student cabuy samerug for 50 bucks and be happy with his negotiating skills. the guy who sold the rugs is happybeause hesold teo rugs. for the record, i dislike how carsare sold as wel...... but in the end, it should beas simple as making your choices wisely.

jaylevitt 15y ago

GM tried this with Saturn, among many other innovations; Saturn failed, but it sounds like the failure was due to internal strife, not the no-haggle pricing. http://www.thedailybeast.com/newsweek/2009/04/03/saturn-was-supposed-to-save-gm.html http://www.thedailybeast.com/newsweek/2009/04/03/saturn-was-...