#2. Car Buying Isn't Nearly as Bad as It Used to Be
I mentioned earlier that payment packing had been made illegal in parts of the USA, and in general there is a trend of going away from the shady shit I described. The biggest reason for that is the Internet -- the information available to consumers has leveled the playing field, like this amazing expose written for Edmunds by a reporter working undercover as a car salesman. Customers are too well-informed these days to be screwed over like they used to, so salespeople who are unable to adapt don't survive. Also, in the wake of the economic collapse of 2007 (and the near-collapse of several automakers), cash-strapped customers were less willing than ever to put up with a salesperson's shit.
"OK, he isn't happy, but my manager says that he's willing to take your firstborn off the price if you sign right now."
So these days, a lot of dealers have moved away from the traditional profit-based commission structure and replaced it with a flat commission. Salespeople are paid a fixed amount for every car sold, regardless of how much profit the dealership makes, so they have no incentive to screw you on the price.
And, over time, the fast-talking, shady salesman types are being pushed off the sales floor. When I started working in 2002, the dealership was full of those people. Not long after, a new manager took over and fired every salesperson except me, because they saw which way the wind was blowing.
"Always. Be. Closing. Doors. Everybody's. Fired. Goodbye."
Now that I run a dealership, I control what kind of salespeople work there. I always make interviewees read that Edmunds expose and tell me what they thought of it. If I get any hint of them condoning the sales methods, I show them the door. Many dealership managers (myself included) are very hesitant to hire salespeople who have worked at other dealers simply because we don't want them infecting the staff with shady tactics and bad habits (you'll notice how young most of the salespeople are now -- this is why).
So, what happened to all of those sleazy salespeople? If you've bought a house or a bed recently, you already know -- a lot of the old school salespeople moved on to real estate, and after the housing bubble, most now (curiously) work in flooring and mattress sales. Hey, have you heard that you need to replace your mattress every eight years because it fills with dead skin? Yes, there's always a market for bullshit.
"Of course! Manure sales!"
"So," you're probably asking, "if that's true, why can't I just buy a car for a set price off the Internet, the way I buy every fucking other thing in my life?" Well ...
#1. A Shocking Amount of Customers Prefer the Haggling
Barry Austin Photography/Photodisc/Getty
A survey found that 90 percent of consumers would be more excited about buying a car if it was a haggle-free experience. This dovetails nicely with the desperately emerging trend of "no-haggle" car sales, which is exactly what it sounds like: the price of the car is set, there's no negotiation, take it or leave it. So if customers hate haggling, and dealers know they hate it, why does it continue?
Well, it's kind of a self-perpetuating thing -- remember, the customers have been taught over the course of decades to assume that they're getting screwed if they take the advertised price. So if the dealer says, "Let's not haggle!" a large percentage of customers nod and say, "Ah, yes, it's the infamous 'no haggle' haggling technique! Well played, sir!"
"He tasks me ... he tasks me, and I shall have him!"
This isn't a hypothetical for me -- I ran a no-haggle dealership for a while, and while the survey claims that 90 percent of customers want haggle-free buying, approximately 100 percent of customers insisted on freaking haggling. It wasn't like the prices were so inflated that they felt forced into it -- I marked all the cars below the Edmunds TMV and below what people were frequently paying at other dealerships. It didn't matter -- the dealership ultimately closed simply because customers could not accept at face value that I was offering them a good deal.
And some people just seem to like playing the game. Not long ago, I had a gentleman on the lot, and after several hours with him, we had negotiated a good price on a car. Just as were getting ready to close, he informed me that a competing dealership had quoted him the same car for less money. When I looked at the quote, I pointed out the aforementioned fine print that said "all incentives applied," but he insisted that the other dealer had promised he could use both the cash-back bonus and the 0 percent interest. Even after I showed him that all dealerships were strictly forbidden from doing that, he decided to check out, but promised that if it turned out to be a scam, he would come back.
"Fine, but you do so with your head hanging in shame!"
I checked a few days later and saw that this guy wound up buying the car from the other dealer for $200 more than we had been offering, just so he wouldn't have to come back and admit he was wrong. Why? Did he think I was going to mock him for it, or that I wouldn't honor our original agreement as punishment? Fuck no, I don't care about that, I wanted to sell the damn car! On top of that, he just reinforced a shitty sales technique while disincentivizing someone for being up front and honest.
That's kind of the way these things go -- it's hard to get people to stop playing games, as long as there's still someone out there who's sure they can "win."
You keep on keepin' on.
Know anyone who plans on buying a car soon? Click the Facebook 'share' button below and pass this along to your friends.