Car Dealerships would rather haggle than make an honest deal

 

I'm coming close to inking a deal on a car.  Some dealerships have given me prices, and others keep steering me towards haggling with their sales people.  Of course, I will not play their game the way they want it played.  Instead, I may go with the salesman I liked most, only because I felt that he was giving me an honest, but high price.

Lately, I've been watching videos from the people who started caredge.com, Ray and Zach Shefska.  I'm hoping that these guys are able to develop their business in a way that forces car dealerships to get real, and to stop depending on haggling.  I may even use their service soon.  Who knows?  

At the very beginning of the pandemic shutdown, dealerships were making good offers to get rid of inventory, as many wanted to stem the loss from floor plan financing.  During the rest of the pandemic and through the recovery, car prices shot through the roof due to supply chain issues.  Now, we're seeing signs that dealerships are choking on both new car and used car inventories, especially at Stellantis (Dodge, Chrysler, Ram and Jeep brands) dealerships. 

If my car were 2-3 years younger, I'd hold out for another 2 years before buying a car.  The last thing I want to have happen to me is to have my car die while I'm presenting as Marian.  There are many risks for me that I want to eliminate, and predictable mechanical failures of a car's old age are those I can eliminate by buying a new car.  By buying a car with modern safety features, I also reduce the risks of me getting into an accident.  It's worth the money to eliminate risk from my life.

But back to deals....

Out of the 10 dealerships I've visited, only 1 or 2 have given me the information I wanted.  I figure that a single car buyer may not be enough to affect major change.  But if enough of us start using my tactics, we can force big changes, a little bit at a time.  

Car Shopping - Weekend #3

 

The above picture is an ad produced for a New York City area bank (which I ended up working for a few years after this ad campaign).  They wanted to show the public that they would lend money on any major car brand, then: Ford, Chevy, AMC, Chrysler, and Volkswagen.  Although more brands have appeared in the American market in the past 50 years, the process of buying a car is just as frustrating now as it was when I bought my first car.

This weekend, I wanted to take test rides in 3 cars: The Subaru Crosstrek, the Honda HR-V, and the Mazda CX-30.  Although all 3 would be good choices, I am leaning towards choosing either the Crosstrek or the HR-V.  Both are excellent cars, and both have all the options I want for a similar price.  RQS leans towards the Crosstrek because of its display.  I'm still torn between the two due to my prior experience with the Honda brand.  What I see as an advantage with the Subaru is equaled by my experience with my Honda Civic.

On Friday, I picked up RQS at the station, and we test drove a Subaru.  I was pleasantly surprised how good this car felt.  It was a car which I wouldn't be bumping my head into the door frame upon entering the car - and I like that.  Although a 15 minute drive is way too short to evaluate a car, it was enough for me to make it my number 2 (or even my number 1) pick. At the end of this test drive, I knew I needed to drive this car again before making a final decision.

Saturday came, and we didn't get out of the house until mid afternoon.  Our first stop was at a Honda dealership to drive the HR-V.  And RQS was equally impressed with this car.  It seems like this is an extremely popular model, as this model seems to be sold as quickly as it is delivered to the dealership. Once done with this dealership, we ended up at another Honda dealership.  This time, they had no HR-Vs in stock for me to drive.  In fact, half of the cars in this dealer's showroom were used cars.  How this dealership makes money I'll never know.

- - - - - -

I made an offer to DCD that he could buy my current car for book value.  Given that the car has over 200k miles on it, but has been well maintained, DCD figures the value to be about $2,500.  Since I am not going to be holding a note on this car, I wanted a check for this amount if I were to sell him the car.  Today, I found out that he is not able to get this amount of money from his bank, "The bank of Mom".  So, I guess I'll end up letting the dealer take my old car off my hands.

In the end, I expect to be $33k poorer than I am now, but with a car that's safer to drive.  The only questions are: (1) Which car will I choose, and (2) When will I drop the hammer on the deal?

Car shopping - Weekend #2

 

I'm certainly not in the market for this old truck.  But I am in the market for a new car, and it will most likely be an SUV, given the options available to me.  Gone are the days of nice sedans and coupes.  We are now in the age of the do anything vehicle.  And this is not a bad thing, considering that we all seem to need to carry large things in the back of the car now and then.

This weekend, I was forced to stay in Mario mode, so that I could visit several car dealerships and have ID that matches my gender presentation.  What bothers me is that I won't be able to get my nails done for a few weeks, so that Mario looks like he's expected to look - like a boring, heavy set, old guy.  And we had a frustrated laugh at the first dealership we visited.

Most of us have gone through the frustrating experience that is new car shopping in the Unites States. First you enter the showroom and meet a salesperson.  Then, they ask for your license, so that they can check your credit report and start the process of structuring a deal designed to get you to buy their car with maximum profit. When the salesperson comes back with your license, he starts asking you about your budget for the car, whether you will be financing the car and what kind of monthly payments you can afford, whether you have a car you'd like to trade, as well as other information he will need for his finance guy to structure a deal.  Only then, do you get to the process of taking a test drive.

Now, I have been around this block before, and I have had many dealers try to screw me - even when I was willing to buy a car at MSRP (both before, during, and after Covid-19).  So, I've taken the time to learn how to NOT provide much negotiating information to the "enemy". And RQS has been a great help to me while we have visited the dealerships.

Before RQS came up this weekend, I had a pleasant test drive of a Honda at a local dealership.  The salesman knew that I've been to this dance before, and didn't try to hard sell me on the car I tested.  Instead, we had a long, leisurely test drive on both local roads and the highway, and I found this to be the best car I had tested so far.  Although there is one thing I don't like about the car (the CVT transmission), I'd buy this car at the right price.  This would become the car I measure things against in test drives planned when RQS arrived.

On Saturday, we visited the first of these dealerships, a Mazda dealership, where we were greeted by a salesperson who offered us coffee and proceeded to ask for my license, so that he could make a copy.  After an excessive amount of time, RQS and I were starting to get frustrated.  But then, I think the salesperson couldn't pull a credit on me, as I had frozen it when my wallet was lifted in Chicago.  And only when he gave up, did he return to the desk to try and extract more information from me - which he didn't get.  After the test drive, we chatted and I got his opening price for the car - something in a fair range for the vehicle we tested.  Unfortunately, it was getting dark, so we suspended our shopping for the day.

Sunday came, and we ended up visiting 3 dealerships.  The first one we entered, a Subaru franchise in Yonkers, got me to write a "Nastygram" (as I call it).  We entered the dealership, and the receptionist was doing her business on the phone and didn't bother to acknowledge us.  After 10 minutes of walking around, no one bothered to ask us anything, so we left.  (Given the large inventory on their lot, I don't think they are too successful a dealership.)  And then it was onto the next dealership - a Yonkers Honda dealership.  Although we were acknowledged promptly, we still had to wait a while due to short staffing. When we finally met with a salesperson, we were told that they don't do test drives on Sundays, and that she couldn't give me an out the door price - she was required to haggle.  Since there's no way we'd even consider doing this without even a test drive, we moved onto a third dealership in White Plains. This time, we were greeted promptly, "interrogated" for sales information, and given our test drive. Although we did get an out the door price, it would not be as good as the price I got before the weekend started.

Monday came, and I wrote the "Nastygram" I mentioned above.  Even though I received an apologetic response later in the day, I won't return to that dealership.  I figure that I can get a better deal from other dealerships that carry its brands, assuming that I don't go with the Honda....

I've decided to hold off on buying a car for now.

 

As much as I want a new car, I don't want to over pay for it.  Even though there is a shortage of cars, there is no excuse to charge $3000 over MSRP on an entry level car.  Dealers may get the sale now, but will not get the next sale after the supply chain returns to a new normal.

Over the past few weeks, I've visited dealerships and have been told that they will not make deals without charging extra for the car.  If a dealership indicates that it has wiggle room in making a deal, it's not enough room to get me to bite.  If a dealership claims to be willing to sell a car at MSRP, I've found that the dealership will throw on a BS line item to get that extra profit.  Finally, due to a lack of inventory, dealerships will sell used cars for the price of a new car.

Things will return to normal.  How soon, no one knows.  But if one can afford to wait for a new car, it pays to do so.  There are mixed opinions on whether a healthy normal will return, due to a long term shortage of computer chips.  But I feel that the industry will figure out a way to build new supply chains to maximize potential sales.  And if I'm right, things should start to ease up in the next few months.  This is worth waiting for....

Car Shopping - A Used Car is Suggested.

This weekend, RQS and I went car shopping.  And I'm still not sure if I want to drop the hammer on this car, a 2020 Hyundai Sonata.  The car is nicer than the Elantra I wanted to buy, but it has 2 years of mileage on it.  As I started to write this, it's a flip of the coin that I will buy this car of not.  And if I don't, I'll likely spend the money to put new tires and brakes on my old car, and keep it on the road for at least another year.

- - - - - -

Both of us felt a positive vibe when we entered the salesroom.  Our salesman was eager to see us, and noted that the car we wanted wasn't in stock.  However, this conflicts with the ad I saw online, but I digress...  He asked if I was willing to look at a gently used car, and I said yes.  Within 5 minutes, RQS and I were out on local roads taking a test drive.

Of course, the salesman knew he had a good product and a potential customer.  In some ways, the car could sell itself.  But, given that I am going to reduce my income for the short term when I leave my job, I am a little leery on taking on debt for a used car I am not fully sold on. So I think I will pass on the deal and see if other dealerships for other brands have something I'd like.

Headaches in buying a new car - dealership issues....

 

There are precious few people who enjoy buying a new car.  I'm not one of them.  I hate the tactics used to extract money from my picket and out it in their till.  But then, we are a capitalist society, and the automobile market is not a transparent one.  Without having access to as much information as the car dealer, the consumer is bound to make a less than optimal deal.

In my case, I did some research, and was willing to settle on one of the two cars I wanted, but not in the color I wanted.  I can learn to live with a sub optimal color, but not a sub optimal deal.  And I had to send the following message to the dealer to get its attention:


I went to your dealership last Saturday, and asked for internet sales as you directed. However, the man who came to assist us had no idea that I was coming, nor did he initially want to sell the car at the price you and I talked about before some spirited haggling. (This should not have happened - they should have been aware I would be there at mid afternoon, and ready to sell the car at the price you and I discussed. This almost made me walk away to make a deal elsewhere - at another dealership I found who could/would sell the Elantra at MSRP.)

After the haggling and discussion over dinner, I thought we had the basics of a deal laid out. However, after a short email exchange with John J on Monday, I haven't heard anything back from him, and it is information I need to proceed any further with any deal.

1. When do they expect the car to be delivered to the dealership?
2. What interest rate is to be used for your financing? Is there a 36 month option available?
3. What paperwork will I need to pick up the car? (e.g: insurance cards, certified/bank check, etc.)
4. For my trade, I have the original title and the release of lien. Is that enough for you to work with?
5. Specifically what are the doc fees and non tax fees? (I'm pretty sure of what the doc fees should be, but what are the non tax fees?)

Most important, the line item called "<dealer-name> Complete" seems to be padding to add to your firm's bottom line, as there are no details on what this is. I need more information, as I wanted a car at MSRP, and not $977 more than the price should be. (Asking for almost $1000 extra without a good and acceptable explanation of what this covers would be a deal breaker for me.)

Can you help get me the information I need?

Now, I am not in love with this car, and it's a good thing  I don't have to have this car, and can easily do without it.  Additionally, there is another dealer closer to me that says it's willing to do a deal at MSRP.  Part of me wants for my current deal to fall through.  But I am willing to go through with it if my concerns are adequately addressed.

Keep your fingers crossed.

Thinking about my weekend....

I don't miss scenes like that above.  Part of me feels sorry for the person in the picture, and part of me feels revulsion at the same time.  And this is what I've encountered lately when I've taken the subway - at least one derelict has made each of my excursions underground less pleasant since I've met RQS.  So, I don't mind driving her home at the end of each weekend, as I want for her day to start off in a pleasant way.

But enough of the subway for now....

RQS came up this past weekend and we went car shopping.  Specifically, we drove to Goshen to talk with a salesman at a dealership which had a couple of cars I was interested in.  This drive had its share of problems, as we encountered a traffic jam at a traffic circle in Bear Mountain state park.  So we decided to bail, and take the long scenic way to Route 17 instead of risking a problem on the other side of the mountain.  This was a fortuitous decision, as we got to see a side of the park I've never seen before.  When we reached the road that I expected to use to reach Route 17, it was closed.  So, we continued on the road towards Sloatsburg and reached Route 17 just short of the Red Apple Rest. 

Before I go on, I want to mention something about the Red Apple Rest.  In its heyday, it was an important "pit stop" along the "old" route to the Catskills.  However, with more people taking the Thruway, this establishment was left for locals to patronize.  Sadly, there was not enough business for this place to survive, and the ruins of this place stand along the road where a once thriving business once stood.

Once we passed the Red Apple Rest, it was off to the dealership.  And then, the "fun" began.  I was interested in both the Hyundai Kona and the Elantra, and was willing to take either model at the price the internet sales person said they'd accept.  However, the Kona I wanted was gone, and all that was coming in was a more expensive trim package that I didn't want to pay for.  So I mentioned the Elantra. The sales person mentioned that it was a different type of car, and I understood that. He presented me with a couple of offers, and the last one was acceptable.  But I needed a little time to think on it, as the car's color was not what I wanted.  I said that I'd get back to him by Monday, and I hope that we can work things out - as the cash price is not an issue anymore.

- - - - - -

On the way home, we decided to finish off some leftovers from the day before.  As we passed through Ossining, I spotted the Lobster Truck on its way back home.  Luckily, Shoprite is having a lobster sale next week, and we'll be feasting on crustaceans when she's here next.

Some more car shopping

 

So far, I have test driven 3 cars.  If the dealerships weren't so understandably greedy these days, I might have dropped the hammer and bought one of these cars.  No, I am not knocking the dealerships.  They are doing exactly what they should be doing when a product is in short supply - raising prices to reach a stable point on a supply/demand curve.

RQS and I stayed in most of the day, as the weather was dreary.  It was raining hard throughout the morning and early afternoon, and it was not good for taking test drives.  By 3:00 pm, the weather started getting better, and we went to Central Avenue to start our car shopping expedition.  The first of the cars I drove was a Hyundai.  As much as I liked the Kona, I felt that there was something missing.  (It is still on my list of possible purchases.)  Next was the Elantra (shown above).  I liked the car, but had my usual problem of bumping my head upon entry.  This dealer was willing to haggle a bit, but didn't seem too greedy.

The next dealer was a Honda dealer, where we tried out their HR-V.  This car said "Buy Me at the right price!"  But the salesman said that the dealership was asking $3k above MSRP.  There is no way I will pay that much as the manufacturers are ramping up production and that supply chains will soon get back to normal.  The salesman had his obligatory meeting with the salesman, and said that they had some wiggle room.  (I figure that if I offer $1k over MSRP, I could get the car for $1.5 if I hold firm.)

As you can guess, I hate paying MSRP for anything.  So I'm not in too much of a hurry for now.  But I want to get a new car purchase done by the time I leave my job.  Keep your fingers crossed....