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As someone who was a car salesman for 8 years, this was surprisingly accurate. Normally these style articles are just hilariously wrong, but I was impressed by
by jhspaybar 12y ago
As someone who was a car salesman for 8 years, this was surprisingly accurate. Normally these style articles are just hilariously wrong, but I was impressed by the accuracy here. I will say though, the profit levels that Edmunds and other companies suggest just aren't levels a salesperson can survive at. Most dealerships have a minimum commission around $100, and if you're buying the car at the prices you see recommended online, that is all the salesman will make. Increased profit is often a question of survival. If you know you're only going to sell 10-12 cars a month on average, they can't all be for $100 commissions or you're going to starve. Even the "unfair" deals, where he made $300-$500 from a sales persons perspective is about as low as they want to go.
I think there really does need to be some kind of change to the process here, sales people just literally cannot survive on what Edmunds would consider a fair price. As a sales person though, I can't tell you how many times someone had a fair price worked out before coming in to the dealership and then expected to negotiate more. Most people just seem to expect it, so you're in a weird limbo land where it's difficult to A sell a car to most people without a big negotiation, and then at the end the same people complain they have to negotiate, but had you just given that price up front, they never would have bought. Lots of interesting psychology :)
- bradleyland 12y agoThe question I'd ask is, why do I need the salesperson at all? I know exactly what I want when I buy a car. For my last two cars, I sourced and specified the manufacturer option codes for my order. The role of a salesperson is to convince someone to buy a product. If I am already convinced, why should I have to involve this person in my transactions?
- brandonmenc 12y ago> I know exactly what I want when I buy a car. A lot of people don't know exactly what they want. They have a price range, and that's about it. Someone needs to show them their options. Particularly if they're looking at used cars.
- ryanmarsh 12y agoA dealer salesman on a single brand lot is a horrible solution to this problem.
- ryanmarsh 12y agoYou don't, the dealer does. I sold cars for a short while. The dealer makes money by introducing a spread between what he paid for it (minus bonuses) and what you'll pay (plus financing). They are middlemen pure and simple, something information technology is exceptional at deprecating. The reason the major brands don't have company stores like Tesla is manufacturers don't have to hold as much of a risk with inventory and dealers are well lobbied.
- Agustus 12y agoThe main issue here is the lobbying component of the dealerships. A lot of states have mandatory purchase the car from the car dealer mandates, thereby requiring a system in which the dealer makes enough money to continue their efforts.
- justincormack 12y agoThe rest of the world has car dealerships too, and as far as I know has no mandatory purchase rules. As far as I can make out car dealers make so little money in Europe that it is not worth disintermediating them, but I may be wrong.
- h1ckb 12y agoAgreed. There is a difference between sales and fulfillment.
- jcromartie 12y agoThe closest you can get to a simple middleman-free market is eBay, sadly.
- prostoalex 12y agoSeems like TrueCar (and their various incarnations as AmEx Cars, Overstock Cars, etc.), Costco Auto Program and Cartelligent are working this space from the perspective mentioned - land the customer, help him settle on the right model, then shop around with a dealer who will agree to accept the lowest bid.
- icantthinkofone 12y agoThe article is from 2001.
- iolothebard 12y agoInteresting since several of my local dealerships offer internet prices online that are consistently 1-2k lower than the Edmunds "best price".