tesla's real impact - breaking the car dealer monopoly
#241
Lexus Fanatic
iTrader: (1)
think dealers can get away with shady shell game numbers games like this if there was another buying alternative? Selling directly is unfair to the dealers all right because they cant play stupid games with you on the numbers.
Bark's Bites: Those Dealers Who Add $3,000 to Window Stickers (While Selling at Invoice)
By Mark "Bark M." Baruth on July 26, 2017
In the last five years, I’ve visited over 2,500 dealers in 44 different states. Sometimes I think I’ve seen everything. And just when I think that, I’m invariably proven wrong.
This week, I walked through the doors of a massive dealership — easily one of the largest dealers I’ve ever set foot in (the name and make of this dealer shall remain anonymous, since the conversation was “off the record”). This dealer sells upwards of 500 new cars a month and about 200 used per month, and they’re planning to add even more floor space so they can increase their volume.
As I waited to talk to the GM, I browsed the cars on the showroom floor. Considering the overwhelming success of this store, you can imagine my surprise when I saw that every car on the floor, without exception, had an extra sticker on the window.
The sticker said:
I damn near sprinted around the showroom to check, and yes, I was right — this sticker was on Every. Single. Car. The dealer did have a couple of new models that, in theory, could possibly be considered “limited availability,” but most of them were “limited to how many the factory can produce in a year.”
Of course, everybody knows (because the internet says it’s true) that dealers absolutely, positively, do not make money on new cars (insert eye-roll emoji), so I had to find out what was going on here.
Turns out it’s some pretty sinister **** that you, the consumer, definitely need to know about.
There are a fair number of manufacturers that absolutely, positively, will not allow their dealers to advertise below invoice (Toyota, Honda, etc.), so they have to get fairly creative in order to advertise “specials” to entice customers to come in the door. Let me explain.
Have you ever shopped at a liquidation sale, like when Circuit City went out of business? The liquidators buy up all the inventory and subsequently throw up big “50% OFF” signs all over the store.
Well, of course that’s not really true — the inventory of washers, dryers, and HDTVs is, in most cases, actually no cheaper than it was before, but they can advertise it as 50 percent off by marking it up before “slashing prices.” In order for your local Japanese import dealer to do those “$5,000 OFF ALL NEW CAMCORDIMA” sales, they actually have to mark the cars up first.
You may be saying to yourself, “But, Bark, isn’t that illegal?” In some states, yes, it is. In many states in the union, you can’t put any dealer markup on the sticker. In others, you have to put something of value on the sticker in order to mark it up — you can claim that window tint is worth $2,000 if you want to, but there has to be something there. However, in many states, you can put whatever the hell you want to on the sticker, and you can make it look nearly identical to the actual Monroney sticker.
But is anybody actually stupid enough to fall for this? Does anybody ever walk in and pay full pop plus an additional $3,149? “Sometimes, yes,” said the GM of this particular store. “It’s almost always immigrants who don’t know any better.” While punching people labelled as ***** may be up for debate, I think we can all agree that it’s okay to punch GMs who take advantage of immigrants.
“But,” he continued, “we actually only sell about 10 percent of our cars at MSRP or above. It’s psychological warfare — the customer feels like he’s getting a really great deal, but we know that we’re glad to sell the car at invoice, so anything above that is a win.”
I did a quick check of his third-party listings on the usual suspects, and noticed that he didn’t have any of the ADM added to his cars on the classified sites. “No, of course not. Nobody would click on them if we did that. We advertise at invoice, which is the minimum price that we’re allowed to advertise at.
“However, if you click through to our website, you’ll see that all of the cars have a little button that says ‘Click to unlock our Internet Specials.’ If they click that button, they have to fill out a contact form, including name, phone number, and e-mail. If they provide a valid e-mail, we’ll show them the real price — invoice minus holdback and all dealer fees. Every internet deal is a loser for us, but it helps us hit our sales targets.”
In case you’re not playing along at home, I’ll sum it up for you: the dealer marks up all of his cars on the sales floor, hoping that uneducated customers will fall for it, so that he can, in turn, sell the majority of his cars at a loss to smart shoppers, but only if they’re willing to give up a “lead.” It also allows him to advertise “sales” to pull in more traffic in the slower times, even though the sale price is, in most cases, essentially MSRP.
And dealers wonder why customers don’t trust them. So how can you avoid this sort of nonsense?
It sounds simple, but do your homework. Over 80 percent of customers now “research” online before they visit a dealership, but the vast majority of that research consists of reading new car reviews and dealer reviews on Google and DealerRater. At the very least, if you’re shopping new, you need to come to the dealer armed with invoice numbers.
Third-party searches are a great place to start your search, but it’s not where you should end it. Many dealers are doing exactly what my new GM friend is doing — saving the best deals for their own websites. Doesn’t really matter if it’s due to OEM regulations or if it’s because the dealer thinks that he closes at a higher percentage on leads from his site, it’s just true. After you find the car you want via Cars.com or AutoTrader.com, head over to the dealer’s site to make sure that better pricing isn’t available there.
This tactic of forcing a customer to give up an email address in order to “unlock” the best deals is, unfortunately, becoming rather commonplace. While I don’t really care if a dealer spams my personal email (60,000 unread and counting), you might. So it doesn’t hurt to throw together an extra email address for yourself like “barkcarshopping2017@gmail.com.” As long as you actually create the address, their CRM tools will recognize it as valid and email you the pertinent information.
Also, never, ever pay ADM. Not never. I don’t care if it’s the latest and greatest car on the market. MSRP, sure. ADM, nope. I bought two of the hottest, most marked up cars on the market (2013 Boss 302, 2016 Focus RS) and refused to pay ADM. There certainly is no reason to do it on a 2018 Camry.
Lastly, don’t write off a dealer that has a car you want just because you hate their tactics. While it can be somewhat emotionally satisfying to say “screw you” to a dealer who marks up everything on his lot, there’s no reason to inconvenience yourself by driving across town or, God forbid, flying across the country. Chances are the dealer isn’t as stupid as he’s appearing to be and that he understands that he’ll eventually have to sell the car at invoice or below. Just make it clear in your communications that you’re willing to pay invoice minus holdback, and stick to your guns. No negotiation, no haggling. Invoice minus holdback and go.
Now you know how to avoid this particular dealer trick, but as long as there are franchise dealers, there will be more tricks. If you come across any new ones, email me at barkm302@gmail.com and I’ll let you know how to beat them. It’s kinda my thing.
Bark's Bites: Those Dealers Who Add $3,000 to Window Stickers (While Selling at Invoice)
Bark’s Bites: The Dealers Who Add $3,000 to Window Stickers While Secretly Selling at Invoice
By Mark "Bark M." Baruth on July 26, 2017
In the last five years, I’ve visited over 2,500 dealers in 44 different states. Sometimes I think I’ve seen everything. And just when I think that, I’m invariably proven wrong.
This week, I walked through the doors of a massive dealership — easily one of the largest dealers I’ve ever set foot in (the name and make of this dealer shall remain anonymous, since the conversation was “off the record”). This dealer sells upwards of 500 new cars a month and about 200 used per month, and they’re planning to add even more floor space so they can increase their volume.
As I waited to talk to the GM, I browsed the cars on the showroom floor. Considering the overwhelming success of this store, you can imagine my surprise when I saw that every car on the floor, without exception, had an extra sticker on the window.
The sticker said:
DEALER-ADDED EQUIPMENT AND SERVICES
ADJUSTED MARKET VALUE $1949.00
LIMITED MARKET AVAILABILITY $1000
TINT $200.00
TOTAL $3149.00
ADJUSTED MARKET VALUE $1949.00
LIMITED MARKET AVAILABILITY $1000
TINT $200.00
TOTAL $3149.00
Of course, everybody knows (because the internet says it’s true) that dealers absolutely, positively, do not make money on new cars (insert eye-roll emoji), so I had to find out what was going on here.
Turns out it’s some pretty sinister **** that you, the consumer, definitely need to know about.
There are a fair number of manufacturers that absolutely, positively, will not allow their dealers to advertise below invoice (Toyota, Honda, etc.), so they have to get fairly creative in order to advertise “specials” to entice customers to come in the door. Let me explain.
Have you ever shopped at a liquidation sale, like when Circuit City went out of business? The liquidators buy up all the inventory and subsequently throw up big “50% OFF” signs all over the store.
Well, of course that’s not really true — the inventory of washers, dryers, and HDTVs is, in most cases, actually no cheaper than it was before, but they can advertise it as 50 percent off by marking it up before “slashing prices.” In order for your local Japanese import dealer to do those “$5,000 OFF ALL NEW CAMCORDIMA” sales, they actually have to mark the cars up first.
You may be saying to yourself, “But, Bark, isn’t that illegal?” In some states, yes, it is. In many states in the union, you can’t put any dealer markup on the sticker. In others, you have to put something of value on the sticker in order to mark it up — you can claim that window tint is worth $2,000 if you want to, but there has to be something there. However, in many states, you can put whatever the hell you want to on the sticker, and you can make it look nearly identical to the actual Monroney sticker.
But is anybody actually stupid enough to fall for this? Does anybody ever walk in and pay full pop plus an additional $3,149? “Sometimes, yes,” said the GM of this particular store. “It’s almost always immigrants who don’t know any better.” While punching people labelled as ***** may be up for debate, I think we can all agree that it’s okay to punch GMs who take advantage of immigrants.
“But,” he continued, “we actually only sell about 10 percent of our cars at MSRP or above. It’s psychological warfare — the customer feels like he’s getting a really great deal, but we know that we’re glad to sell the car at invoice, so anything above that is a win.”
I did a quick check of his third-party listings on the usual suspects, and noticed that he didn’t have any of the ADM added to his cars on the classified sites. “No, of course not. Nobody would click on them if we did that. We advertise at invoice, which is the minimum price that we’re allowed to advertise at.
“However, if you click through to our website, you’ll see that all of the cars have a little button that says ‘Click to unlock our Internet Specials.’ If they click that button, they have to fill out a contact form, including name, phone number, and e-mail. If they provide a valid e-mail, we’ll show them the real price — invoice minus holdback and all dealer fees. Every internet deal is a loser for us, but it helps us hit our sales targets.”
In case you’re not playing along at home, I’ll sum it up for you: the dealer marks up all of his cars on the sales floor, hoping that uneducated customers will fall for it, so that he can, in turn, sell the majority of his cars at a loss to smart shoppers, but only if they’re willing to give up a “lead.” It also allows him to advertise “sales” to pull in more traffic in the slower times, even though the sale price is, in most cases, essentially MSRP.
And dealers wonder why customers don’t trust them. So how can you avoid this sort of nonsense?
It sounds simple, but do your homework. Over 80 percent of customers now “research” online before they visit a dealership, but the vast majority of that research consists of reading new car reviews and dealer reviews on Google and DealerRater. At the very least, if you’re shopping new, you need to come to the dealer armed with invoice numbers.
Third-party searches are a great place to start your search, but it’s not where you should end it. Many dealers are doing exactly what my new GM friend is doing — saving the best deals for their own websites. Doesn’t really matter if it’s due to OEM regulations or if it’s because the dealer thinks that he closes at a higher percentage on leads from his site, it’s just true. After you find the car you want via Cars.com or AutoTrader.com, head over to the dealer’s site to make sure that better pricing isn’t available there.
This tactic of forcing a customer to give up an email address in order to “unlock” the best deals is, unfortunately, becoming rather commonplace. While I don’t really care if a dealer spams my personal email (60,000 unread and counting), you might. So it doesn’t hurt to throw together an extra email address for yourself like “barkcarshopping2017@gmail.com.” As long as you actually create the address, their CRM tools will recognize it as valid and email you the pertinent information.
Also, never, ever pay ADM. Not never. I don’t care if it’s the latest and greatest car on the market. MSRP, sure. ADM, nope. I bought two of the hottest, most marked up cars on the market (2013 Boss 302, 2016 Focus RS) and refused to pay ADM. There certainly is no reason to do it on a 2018 Camry.
Lastly, don’t write off a dealer that has a car you want just because you hate their tactics. While it can be somewhat emotionally satisfying to say “screw you” to a dealer who marks up everything on his lot, there’s no reason to inconvenience yourself by driving across town or, God forbid, flying across the country. Chances are the dealer isn’t as stupid as he’s appearing to be and that he understands that he’ll eventually have to sell the car at invoice or below. Just make it clear in your communications that you’re willing to pay invoice minus holdback, and stick to your guns. No negotiation, no haggling. Invoice minus holdback and go.
Now you know how to avoid this particular dealer trick, but as long as there are franchise dealers, there will be more tricks. If you come across any new ones, email me at barkm302@gmail.com and I’ll let you know how to beat them. It’s kinda my thing.
#242
Lexus Fanatic
None of those shenanigans bother me because they're not going to be able to pull them over on me.
I don't have much sympathy for people who refuse to become educated consumers when buying big items.
I don't have much sympathy for people who refuse to become educated consumers when buying big items.
#243
Lexus Fanatic
You may be saying to yourself, “But, Bark, isn’t that illegal?” In some states, yes, it is. In many states in the union, you can’t put any dealer markup on the sticker.
#244
Lead Lap
think dealers can get away with shady shell game numbers games like this if there was another buying alternative? Selling directly is unfair to the dealers all right because they cant play stupid games with you on the numbers.
Bark's Bites: Those Dealers Who Add $3,000 to Window Stickers (While Selling at Invoice)
Bark's Bites: Those Dealers Who Add $3,000 to Window Stickers (While Selling at Invoice)
#245
Lexus Fanatic
I have seen this firsthand when I was shopping for an Accord for my father. The closest Honda dealer by me had a $2,000 markup on every window sticker for a market adjustment. I asked the sales guy about that and he said don't worry about that its negotiable. Just because of that BS markup on an appliance car I just couldn't give them my business out of principal and left and bought at another dealer. Another Honda dealer close to me has a Civic Type R and they have a $15k markup. The sales guy said they won't get $15k but they will get $10k.
#246
Lexus Fanatic
Supply and demand...
#247
Lead Lap
Everyman Tesla Surprise:The Tesla Model 3 Is Launching At $44,000 Not $35,000.
https://jalopnik.com/surprise-the-te...not-1797357913
https://jalopnik.com/surprise-the-te...not-1797357913
#248
Lexus Fanatic
No surprise lol
#249
Racer
Everyman Tesla Surprise:The Tesla Model 3 Is Launching At $44,000 Not $35,000.
https://jalopnik.com/surprise-the-te...not-1797357913
https://jalopnik.com/surprise-the-te...not-1797357913
http://fortune.com/2017/07/29/teslas...range-barrier/
#250
Lexus Fanatic
We stopped at the new Tesla "store" in the GTA on the way home today. Confirmed a few things, I asked if they were a dealer and the response from the rep was that they were a "store". The rep confirmed that cars that were on the lots both Model S and X are available to purchase, you could purchase right on the spot. They will take in your trade as well. If a special order car was to be ordered direct from the factory, it is a 3-4 month wait.
#251
Lexus Fanatic
I read another article about it this morning. It will still be available for $35K in the Fall. The $44K has an additional $5K package and additional range and performance over the base 3. This isn't bad news. The $44K actually seems a better value than the $35K. Interesting that there won't be any badges nor exterior indicators to set the two trim levels apart. The battery capacity isn't even disclosed either so I wonder if the additional range is just software unlocked like it was for the Model S 60/75. Can't believe it has already been a year since pre-orders. The reality of electric cars on the road en mass is starting to become a reality much sooner than I thought it would be. Our next car may have to be a Model 3 or SUV equivalent of the 3.
http://fortune.com/2017/07/29/teslas...range-barrier/
http://fortune.com/2017/07/29/teslas...range-barrier/
Everyman Tesla Surprise:The Tesla Model 3 Is Launching At $44,000 Not $35,000.
https://jalopnik.com/surprise-the-te...not-1797357913
https://jalopnik.com/surprise-the-te...not-1797357913
At the price $41K, you get an different color than black, and you get a bunch of interior features such as 12 way power seats, phone charger and a few other things. At $46K you will get all the other driving aids. 58K for the long range model.
I think people are dreaming on the success of this car that is no bigger than a BMW 3-series.
#252
Lexus Fanatic
Thread Starter
iTrader: (20)
perhaps you even feel good that many are ripped off by dealers, 'allowing' the dealer to even take a loss on your deal because it balances out.
abuses of power bother me, and i hate seeing nice people i know (typically older) going into a dealer and getting financially stiffed because it never occurred to them that a dealer could be so unethical.
#253
Lexus Fanatic
Dealers, today, are also very sensitive to their standings with the manufacturers, as the manufacturers give out zone-awardsand citations to the dealerships/franchises that get the most favorable ratings, in surveys, filled out by satisfied customers.
#254
Lexus Fanatic
Thread Starter
iTrader: (20)
holy sweeping statement. while obviously true, it's also an ambiguous statement. you could be saying all people aren't entirely naive. or you're saying only some people are completely naive, etc.
regardless, i would say that while i expect almost everyone is aware (and leery) that dealers will take as much money as possible from customers, most also won't know when it's happening because many dealer salespeople are very good at appearing straightforward and honest, when in reality there's all kinds of things they're not disclosing, and numbers that change during the process, and completely confusing 'sheets' showing how a price is calculated. and don't you love it when you find something 'wrong' and they act surprised, that it was a mistake, yeah right...
regardless, i would say that while i expect almost everyone is aware (and leery) that dealers will take as much money as possible from customers, most also won't know when it's happening because many dealer salespeople are very good at appearing straightforward and honest, when in reality there's all kinds of things they're not disclosing, and numbers that change during the process, and completely confusing 'sheets' showing how a price is calculated. and don't you love it when you find something 'wrong' and they act surprised, that it was a mistake, yeah right...
#255
Lexus Fanatic
Originally Posted by bitkahuna
just because it doesn't affect you, and sure, people should become educated about corrupt and unscrupulous practices doesn't make what dealers are doing right.
perhaps you even feel good that many are ripped off by dealers, 'allowing' the dealer to even take a loss on your deal because it balances out.
abuses of power bother me, and i hate seeing nice people i know (typically older) going into a dealer and getting financially stiffed because it never occurred to them that a dealer could be so unethical.
perhaps you even feel good that many are ripped off by dealers, 'allowing' the dealer to even take a loss on your deal because it balances out.
abuses of power bother me, and i hate seeing nice people i know (typically older) going into a dealer and getting financially stiffed because it never occurred to them that a dealer could be so unethical.
I don't like to support the idea that regulations should somehow take away people's responsibilities to look out for themselves.