I will tell you that Alot of little used lots are crooked. I know I worked for one as a manager, i was told to do things that were illegal ( i refused) but they did it all the same. ( thats why i quit) I was to tell the mech. to not fix trans. motors, etc. I would really get that car looked at buy a mech. If they tell you no, DO NOT BUY THE CAR. if its used you can requset a mech. ( not there) inspect. the car. and then go in there with the inspection report. and talk to them about any problems you have with it. Also the BBB is crap, Studebaker Auto is in great standings with them and there the biggest cons in grand junction. ( i now have a bad rep. for working there, but didnt know they were that whay intill 6 months into the job) and all i did was try to bring the best car i could to the person that needed it. I worked very hard to get people the car that they wanted and was in the best condition. But alot of used car dealer look at you and see 1900 500 2000 2300 bucks that they can get out of you. I assume that there is an as is on the car, a used car dealer will use that as a sheld to you if any thing goes wrong. If you get this car and they say it has a 30 day or whatever it has warrenty, tell them you want it in writing( even if it has a as is on it and they say it has a 30 day tell them to write it on the as is and make them sign it below it )
Im not saying that there like that but BE CAREFUL
Former or Current Car Sales People
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arctic_blue83
<div class='quotetop'>QUOTE (Stealth01 @ Mar 29 2008, 10:39 PM) [url=index.php?act=findpost&pid=36546]<{POST_SNAPBACK}>[/url]</div>
Not really, I knew a couple honest guys in the business, myself being one of them... however, you don't make much money in that business if you're honest.... we had a couple very crooked managers during the time I worked there though, who would constantly lie to their salesmen, and feed them a line of shit to give to the customer.
I got into the business because I love cars... worked at a Mazda dealership because at the time, I had a Speed6 that I loved... as it turns out, not many (hardly any) people in the car business love cars, and although I'm a tech junkie when it comes to cars, I'm not much of a salesman lol, hence why my employ there was so brief, until I got back into the telcom/IT field (working for Avaya), which is basically what I did in the Army for 4 1/2 years, something I'm good at- troubleshooting & correcting technical problems lol.
I learned a lot working there.... and the sad thing is, EVERYONE is paid on commission... and I mean everyone. The salesmen, the managers, the GM, the finance guy ect ect, everyone except the receptionist lol. This is how they look at it, let's say the salesman is getting paid around 25% of the gross profit they make off of the car, we'll take this scenario:
Someone trades in a Honda Civic let's say, and the manager gives them $10,000 for their trade in. Now, the value of their car was most likely not given based upon what KBB says, it's based on what the same car is going for at local auctions. Most larger dealerships (new car dealerships) have access to a database of cars being sold at auctions all over the country, so they car see what a same model car with similar miles is going for at auctions, this is what is referred to as the ACV (actual cash value) of your car, has NOTHING to do with KBB... although, usually where I worked at, we never referenced KBB, if anything we would reference NADA, but that's another story.
So, let's say the dealership has now "bought" this Civic for $10k... the reason they don't want to go over auction value is because 1) They don't want to give you anymore than they could have bought it for themselves, and 2) If the car doesn't sell on their lot it's likely going to auction and they don't want to lose money. So they're into this Civic for $10k... and lets say someone notices the tires are bald, and they have to spend $500 on new tires... they're now into this car for $10.5k... and then they have to send it through their shop... and guess what? The service department charges the sales department out the ass (or at least ours did), typically, our "shop fee" was $700, for that money, the service department would change fluids, sometimes filters, sometimes brake pads, other minor replaceable parts, run a thorough inspection of the vehicle, and have it cleaned and detailed. So now, with the "shop fee", the sales department is now into this car for $11.2k... then comes the PAC fee, and in case you're wondering what that is, it's pure profit for the owner, yep that's right, the owner takes it right out of the salesman's cut, ours was around $300.... so now you're into this car for $11.5k... see how this is adding up?
So now, it comes time to put the car onto the lot, but instead of being into it for $10k like you bought it for, you're into it for $11.5k.... so you mark it at lets say $14,500, so you have $3000 worth of profit to play with/negotiate. Now a customer comes along to buy the car... and negotiations begin... he sees the $400 dealer handling fee, and says he won't pay it... the manager agrees.... but guess what? It's the owners policy that EVERY car will have dealer handling charges no matter what, you can't waive them in the end, so as a salesman, guess where that $400 is deducted from? That's right, your gross profit... now you have $2600 in profit, not $3000, but that's alright, you're still doing good, and little does the customer know, they're still paying DH, but the price of the car is technically now $14,100.... then the customer starts going on and on, about how they have seen the exact same car with similar mileage on Autotrader a dozen times in private party sales, only going for $12,000.... so you go back and forth, trying to convince the customer that the car is worth more than that, finally, you come to an agreement, and settle for $12,500... but as a salesman, DH came out of your gross, so you're only making a total of $600 gross profit that you're getting paid on.
So, $600... what's 25% of $600? $150. That's what you just made before taxes on that deal. Now, national average for car sales, your average salesman sells about 8 cars a month... yep, some sell more, some less, but average is 8. You don't need to be a rocket scientist to figure out that making small gross profits like $600, as if they do that 8 times in a month, they will only have made a whopping $1200 for the month BEFORE taxes.... I know with my bills/lifestyle, I can't live off of $1200 before taxes a month.... most people can't. So, if that's your profession, how do you make a good living? Well, most salesmen, if they stay in the business long enough, learn to be good liars. If they would have lied their ass off, and told the customer they "didn't have any room to budge on the price of that Honda", and were convincing about it, they might have made a $3000 gross, which means they would have had an extra $750 in their pocket.
When I working in the business, I preferred dealing with new car customers that were reasonable, that I could he honest with, and make a fair deal. I don't know how many times I went to my managers desk, got the invoice book, showed them what we were into the car for (only on new cars, not used, no invoice per se for used cars), and made a fair deal. If between invoice and MSRP, we had $2000 profit, some people would understand that the dealer bought these cars from the Manufacturer at invoice, and to stay in business they need to make a profit... I had several customers who were willing to split the profit in half and call it a deal, that way they saved $1000, we made $1000 and I didn't go hungry lol. Granted you won't get rich this way, but it's a fair way to do business.... although, people are so leery of dealers, sometimes people would call me a liar, and say we just printed the invoice book out lol, even though they could find the same effin numbers on Edmunds if they weren't so lazy... and then we had other people that thought that we didn't deserve any profit and that I didn't deserve to get paid for spending hours with a customer, and would negotiate until we made no money... which is why it's hard to be honest in a business like that, because most people don't give a shit, and if you tell them how much you're into a car for, they won't want you to make a penny.
It sucks. I fucking despise lying.... I wasn't a good salesman, and didn't make much money lol. Hence why I left that business. Now this only goes for larger new car lots, as smaller used car lots, a lot of them just pick up cars from auctions, and they go straight to the lot, without more than a vacuum touching them. In the car business, if you have a used car manager who's crafty, who talks people into taking low trade in amounts, and only buys smoking good deals from the auctions, then you can make a lot more money on used cars... you can also afford to mark your cars lower, allowing people to buy cars cheaper than they should be paying, in essence, getting a good deal on both sides, the customer getting a lot of car for their money, and you still making a nice profit... but that doesn't happen often, mostly it's just a grind.
So in essence, yes, most people in the business are shady... in order to make a good living they have to be... it's sad, I personally can't do it, not in my nature... or at least I can't make a decent living doing it... but sometimes they didn't start out as being shady, they got on the job training after not making any money for a couple weeks in a row lol. It's messed up, and it shouldn't be that way, but unfortunately, that's how the business works.
I hope I've answered your question
Are they ALL this crooked? They tried to tell us their original asking price was $6995, but I found an ad in the paper today for the SAME car for $3995. THey mentioned NOTHING about the 6-year 100K limited warranty that the paper mentions, or that she gets the $500 gas card just for test driving.
So my wife is concerned about their integrity, but I suspect ALL of them, especially used sales, are this way.[/b]
Not really, I knew a couple honest guys in the business, myself being one of them... however, you don't make much money in that business if you're honest.... we had a couple very crooked managers during the time I worked there though, who would constantly lie to their salesmen, and feed them a line of shit to give to the customer.
I got into the business because I love cars... worked at a Mazda dealership because at the time, I had a Speed6 that I loved... as it turns out, not many (hardly any) people in the car business love cars, and although I'm a tech junkie when it comes to cars, I'm not much of a salesman lol, hence why my employ there was so brief, until I got back into the telcom/IT field (working for Avaya), which is basically what I did in the Army for 4 1/2 years, something I'm good at- troubleshooting & correcting technical problems lol.
I learned a lot working there.... and the sad thing is, EVERYONE is paid on commission... and I mean everyone. The salesmen, the managers, the GM, the finance guy ect ect, everyone except the receptionist lol. This is how they look at it, let's say the salesman is getting paid around 25% of the gross profit they make off of the car, we'll take this scenario:
Someone trades in a Honda Civic let's say, and the manager gives them $10,000 for their trade in. Now, the value of their car was most likely not given based upon what KBB says, it's based on what the same car is going for at local auctions. Most larger dealerships (new car dealerships) have access to a database of cars being sold at auctions all over the country, so they car see what a same model car with similar miles is going for at auctions, this is what is referred to as the ACV (actual cash value) of your car, has NOTHING to do with KBB... although, usually where I worked at, we never referenced KBB, if anything we would reference NADA, but that's another story.
So, let's say the dealership has now "bought" this Civic for $10k... the reason they don't want to go over auction value is because 1) They don't want to give you anymore than they could have bought it for themselves, and 2) If the car doesn't sell on their lot it's likely going to auction and they don't want to lose money. So they're into this Civic for $10k... and lets say someone notices the tires are bald, and they have to spend $500 on new tires... they're now into this car for $10.5k... and then they have to send it through their shop... and guess what? The service department charges the sales department out the ass (or at least ours did), typically, our "shop fee" was $700, for that money, the service department would change fluids, sometimes filters, sometimes brake pads, other minor replaceable parts, run a thorough inspection of the vehicle, and have it cleaned and detailed. So now, with the "shop fee", the sales department is now into this car for $11.2k... then comes the PAC fee, and in case you're wondering what that is, it's pure profit for the owner, yep that's right, the owner takes it right out of the salesman's cut, ours was around $300.... so now you're into this car for $11.5k... see how this is adding up?
So now, it comes time to put the car onto the lot, but instead of being into it for $10k like you bought it for, you're into it for $11.5k.... so you mark it at lets say $14,500, so you have $3000 worth of profit to play with/negotiate. Now a customer comes along to buy the car... and negotiations begin... he sees the $400 dealer handling fee, and says he won't pay it... the manager agrees.... but guess what? It's the owners policy that EVERY car will have dealer handling charges no matter what, you can't waive them in the end, so as a salesman, guess where that $400 is deducted from? That's right, your gross profit... now you have $2600 in profit, not $3000, but that's alright, you're still doing good, and little does the customer know, they're still paying DH, but the price of the car is technically now $14,100.... then the customer starts going on and on, about how they have seen the exact same car with similar mileage on Autotrader a dozen times in private party sales, only going for $12,000.... so you go back and forth, trying to convince the customer that the car is worth more than that, finally, you come to an agreement, and settle for $12,500... but as a salesman, DH came out of your gross, so you're only making a total of $600 gross profit that you're getting paid on.
So, $600... what's 25% of $600? $150. That's what you just made before taxes on that deal. Now, national average for car sales, your average salesman sells about 8 cars a month... yep, some sell more, some less, but average is 8. You don't need to be a rocket scientist to figure out that making small gross profits like $600, as if they do that 8 times in a month, they will only have made a whopping $1200 for the month BEFORE taxes.... I know with my bills/lifestyle, I can't live off of $1200 before taxes a month.... most people can't. So, if that's your profession, how do you make a good living? Well, most salesmen, if they stay in the business long enough, learn to be good liars. If they would have lied their ass off, and told the customer they "didn't have any room to budge on the price of that Honda", and were convincing about it, they might have made a $3000 gross, which means they would have had an extra $750 in their pocket.
When I working in the business, I preferred dealing with new car customers that were reasonable, that I could he honest with, and make a fair deal. I don't know how many times I went to my managers desk, got the invoice book, showed them what we were into the car for (only on new cars, not used, no invoice per se for used cars), and made a fair deal. If between invoice and MSRP, we had $2000 profit, some people would understand that the dealer bought these cars from the Manufacturer at invoice, and to stay in business they need to make a profit... I had several customers who were willing to split the profit in half and call it a deal, that way they saved $1000, we made $1000 and I didn't go hungry lol. Granted you won't get rich this way, but it's a fair way to do business.... although, people are so leery of dealers, sometimes people would call me a liar, and say we just printed the invoice book out lol, even though they could find the same effin numbers on Edmunds if they weren't so lazy... and then we had other people that thought that we didn't deserve any profit and that I didn't deserve to get paid for spending hours with a customer, and would negotiate until we made no money... which is why it's hard to be honest in a business like that, because most people don't give a shit, and if you tell them how much you're into a car for, they won't want you to make a penny.
It sucks. I fucking despise lying.... I wasn't a good salesman, and didn't make much money lol. Hence why I left that business. Now this only goes for larger new car lots, as smaller used car lots, a lot of them just pick up cars from auctions, and they go straight to the lot, without more than a vacuum touching them. In the car business, if you have a used car manager who's crafty, who talks people into taking low trade in amounts, and only buys smoking good deals from the auctions, then you can make a lot more money on used cars... you can also afford to mark your cars lower, allowing people to buy cars cheaper than they should be paying, in essence, getting a good deal on both sides, the customer getting a lot of car for their money, and you still making a nice profit... but that doesn't happen often, mostly it's just a grind.
So in essence, yes, most people in the business are shady... in order to make a good living they have to be... it's sad, I personally can't do it, not in my nature... or at least I can't make a decent living doing it... but sometimes they didn't start out as being shady, they got on the job training after not making any money for a couple weeks in a row lol. It's messed up, and it shouldn't be that way, but unfortunately, that's how the business works.
I hope I've answered your question
Yeah, that pretty much answers it. Kind of depressing, really. But it explains why buying a car is such a conflict. The customer is interested in getting the car for what it's worth, the salesman/dealer is trying to inflate that price, and both sides know it. Automatic conflict.
Stealth01
2006 Mazdaspeed 6 GT
SURE Full3 Aeros ID300 SRI, SURE Torq R6 RMM, SURE Shortcut/Countershift, SURE Anchors, Dunlop Winterspot M3s (Winter Shoes), "O" Series Stubby Antenna, Red LED Dome & Door Lights, Whistler Pro-78 RD Hardwired, SURE Dreadnaught, Juggernaught, SURE Flow M6 TP, SURE Charge Tubes, Hawk HPS F/R Pads, Technafit SSBLs, StopTech Rotors, Cobb AP, SURE Ventus in 50-50 Hybrid Mode, [color="Lime"] PERM Tune[/color] (Stratified Auto) Coming soon: Autotech FP Internals, S6 Mounts
2006 Mazdaspeed 6 GT
SURE Full3 Aeros ID300 SRI, SURE Torq R6 RMM, SURE Shortcut/Countershift, SURE Anchors, Dunlop Winterspot M3s (Winter Shoes), "O" Series Stubby Antenna, Red LED Dome & Door Lights, Whistler Pro-78 RD Hardwired, SURE Dreadnaught, Juggernaught, SURE Flow M6 TP, SURE Charge Tubes, Hawk HPS F/R Pads, Technafit SSBLs, StopTech Rotors, Cobb AP, SURE Ventus in 50-50 Hybrid Mode, [color="Lime"] PERM Tune[/color] (Stratified Auto) Coming soon: Autotech FP Internals, S6 Mounts
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arctic_blue83
<div class='quotetop'>QUOTE (Stealth01 @ Mar 30 2008, 06:35 AM) [url=index.php?act=findpost&pid=36574]<{POST_SNAPBACK}>[/url]</div>
Yeah... although, a car's "worth" is debatable in many cases... as it comes down to anything else- "what is the car worth to you?" There are so many variables when trying to calculate a car's worth it's not even funny, there's KBB, NADA, auction values, private party sales/values, sites like Edmunds ect ect. This becomes very debatable in the realm of used cars.... but people still haggle to the death on new cars.
Like for instance, a car like the Mazdaspeed 3, I think everyone would agree, that car has a LOT of bang for buck. Starting about $23k, no other car I know of has 263hp combined with a smooth 6-speed, LSD, awesome suspension, great brakes, very upscale interior (I know $30+k cars that don't have interiors as nice as the Speed3's), 18" wheels, ect. No matter how you slice it, you get a TON of car for your money with the Speed3, which is something no one debates... yet, people still try and negotiate on them?!? As if, brand new, they're not worth their MSRP around $23k?!? I think that car is worth every penny of it's MSRP... does that mean I would pay it? Probably not lol, I'm "one of those assholes" lol, I'm just cheap. Although would I say that anyone who paid MSRP got ripped off? Absolutely not. Even at MSRP, you're still getting a lot of car for your money, and I would say the car is "worth" MSRP, if not more.
Ever wonder why in today's world, your resale value drops so fast? I can tell you why, a couple reasons, the first being negotiating. That's right, if brand new, someone negotiates $2500 off a car, shortly after, someone else tries to sell their "used" car they paid MSRP for, for $2500 under what they bought it for (MSRP), but guess what? The person who's buying it, they might have heard their buddy who negotiated $2500 below sticker (happens all the time on the internet these days lol), and tell the guy trying to sell his car "I could get one brand new for that, you need to lower the price". In order to make it a "fair deal" he comes off the price of his car another $1500, and all of the sudden in a very short amount of time, the "resale value" of this car had already plummeted $4000 from MSRP, almost overnight.... why? Because of people negotiating with a dealer on a new car, because at that point, the only person who is going to be able to get out from under a car, is the person that paid the least amount of money for the car.
As customers are just like the dealers in the end... they don't want to pay anymore than what they can buy it for elsewhere... just like a dealer when he gives them auction value as the trade in value of their car, same concept, just roles reversed.
Take a situation like my own with my Mazdaspeed 6.... I bought one after they had been out for a while, when they had huge rebates. I bought a base Sport Mazdaspeed 6, with the only option being $50 wheel locks, so MSRP was $28,595 (still have the sticker lol), they had $3500 in rebates because Mazda was having a hard time selling them, that and I got mine for S-plan (invoice), so it came out to be about $23k... that's right, $5500 below MSRP. I had the car a whopping 1 year, was in great shape, only had 12k miles on it... guess how I had to haggle my ass off to get trade in after only 1 year? $18.5k, which was up from the $18k they were offering initially... hell, I even had the Subie dealership call about 5 MAZDA dealers, with me overhearing them, to try and get buy bids on the car, as sometimes a "home" dealership will give more for their own product, as it's easier to sell on a "home" dealership... I was lucky the guys at Subaru even honored the $18.5k I got them up to, as every Mazda dealer they called only offered between $16.5-17.5k for it. Had I not negotiated with the Subie dealership prior to them doing buy bids, or I would have got significantly less.
Now, for someone like me, I only paid $23k for it, so losing $4500 over the course of a year (I think the model year had been out for about 1.5 years at that point), that wasn't "that bad" lol. I've seen WAAAYYYY worse. Considering I had been paying on it for a year, I had paid off around $3500 or so (and also put down money when I bought it) of what I paid for the car, so it wasn't that bad, I was able to get out from under it easily, but what about people that bought the car before the rebates? I personally, know someone on this board, who bought their Grand Touring Speed6 when they first came out, for MSRP, IIRC, they had most of the options, leather, moon roof, ect ect, and paid around $31k. Now, was the car worth $31k? In my opinion, absolutely. A mid-size car with plenty of power (rated at 274hp for '06), a smooth 6-speed, AWD, leather seats, moon roof, 18" wheels, ect ect. If you go to BMW (You would be lucky to pick up a base 328i with a couple options), for $31-32k you're NOT going to get nearly as much car for the same price, same with Audi (overpriced A4 Quattro, need I say more? Price one out...), Lexus (ever priced a LOWER horsepower IS 250 AWD?), Acura (same options on a TL with similar power, but no AWD), and the list goes on. IMO, the ONLY car that had similar features/horsepower ect, for around that price, is the Subaru Legacy GT, and that car was not available with rebates.
Which brings me to the 2nd reason why cars lose so much value- REBATES. When a manufacturer can't sell a car worth a piss, sometimes they throw out rebates to help get them off the lot, this absolutely TANKS your resale value, which is why it's typically a good idea to buy popular cars, or at least don't buy the car before the rebates are given out lol. People always want their own definition of a "good deal", myself included lol, so when manufacturers throw out $3500 on cars like the Speed6, you get a TON of car for your money, but really, you're not paying for the "worth" of the car anymore, as it's easily worth more than that IMO, you're just cheap and recognize a great deal when you see one.... like me. I bought a $23k Speed6 because I could afford it at the time, and I couldn't afford a $32k STI, or else that's what I would have bought, so I settled because I recognized a GREAT deal at the time, allowing me to get a LOT more car for my money than I should have.
So I got a great deal on my Speed6... but what about people who paid $31k for a Speed6? Is it worth the money? IMO, yes. Although because Mazda didn't do a good job advertising, most people never knew about these cars, and then you have assholes like me, who got stupid great deals on them... even though at the time the car was launched, it was certainly worth it's $31k MSRP, I would GUARANTEE in Colorado, they would be LUCKY to even get $19.5k, and I mean lucky. So in the course of a little over a year, their resale has dropped at least $11.5k... no way they've paid off that much of the car just making basic monthly payments, unless they financed for a very short amount of time (24-36 months). So even though, at $31k they were still getting a lot of car for their money, due to people negotiating (like me) and rebates, they has piss poor resale value, and are probably stuck in that car for a very long time. Which sucks.
You have to also realize, new car sales VASTLY affects the world of used cars, as you can see above with trade in values, but also realize, it's not just the dealers fault.... I would also blame the manufacturers. Are cars priced WAY too high? Not necessarily. I think EVERY company should be like SCION, as there is NO NEGOTIATING ALLOWED. Dealers cannot change the price of a Scion, they are not supposed to mark it up, and they are not supposed to negotiate on them. Doing so would lead to Scion revoking their license to sell Scions. The MSRP is what the car sells for. No more, no less. They have very small profit margins on those cars, but who cares, it's a fair deal for everyone, and from what I hear, Scion directly has added flat rate commissions for their salesmen for selling one, so no matter what, every walks away with a fair deal. This makes car buying easy, AND more importantly, it keeps your resale value in tact. It's almost like buying directly from the manufacturer, like it should be...
You can't go to Walmart and negotiate on the price of milk... or to GAP to negotiate on clothes, what's the difference? I think with new cars it should be "this is the car, this is the price, no negotiating, if you like it buy it, if not, find something else". I think the auto industry has become too much like the Housing industry, when it comes to haggling, resale ect ect, except, there's one VERY huge flaw in that concept... the reason you can negotiate in the housing market, is the market it subject to change, and houses, have the ability to appreciate. Granted, right now, the economy is hurting, so right now houses are low, but eventually, they'll come back up (we all hope lol). Now that model is different than cars, which depreciate almost immediately. The same is not always true with houses... yet, why do we negotiate on them in the same manner? Cars are more like food or clothes, they don't gain value with the market like houses, you can't resell them for more than you paid for them (typically lol). Therein lies the problem.
Now, I've never been to Japan, but have a few friends who have... and from what I understand, over there, you DO pay MSRP for cars, apparently, attempting to negotiate on them is almost considered "dishonorable" as you're doing the product an injustice. If you want the car, buy the car for it's being sold for, which is based on what the manufacturer has implied it's "worth". There will always be cheaper cars, and used cars, if you don't think it's "worth" a certain amount, that's fine, don't buy it. Which is why I don't buy BMW's, Audi's, Mercedes ect ect, I don't think they're worth the money, I don't think I get enough car for my dollar... so I don't buy them.
So, in the end, I think "worth" is subjective. There is no one set "worth", too many sources, "worth" is a matter of personal opinion, everyone has their own idea of what something is worth. That's often times where the conflict begins... but if it were up to me, there would be no negotiating, at least not on new cars, as in my opinion, I think that's where the main problem lies. No negotiating would mean things would be more competitive, and probably cause manufacturers to keep their MSRP's low in order to compete/beat other manufacturers prices, but would not kill resale, and make the car buying experience easier overall. That's just my $.02 though. Take it as you will.
Yeah, that pretty much answers it. Kind of depressing, really. But it explains why buying a car is such a conflict. The customer is interested in getting the car for what it's worth, the salesman/dealer is trying to inflate that price, and both sides know it. Automatic conflict.[/b]
Yeah... although, a car's "worth" is debatable in many cases... as it comes down to anything else- "what is the car worth to you?" There are so many variables when trying to calculate a car's worth it's not even funny, there's KBB, NADA, auction values, private party sales/values, sites like Edmunds ect ect. This becomes very debatable in the realm of used cars.... but people still haggle to the death on new cars.
Like for instance, a car like the Mazdaspeed 3, I think everyone would agree, that car has a LOT of bang for buck. Starting about $23k, no other car I know of has 263hp combined with a smooth 6-speed, LSD, awesome suspension, great brakes, very upscale interior (I know $30+k cars that don't have interiors as nice as the Speed3's), 18" wheels, ect. No matter how you slice it, you get a TON of car for your money with the Speed3, which is something no one debates... yet, people still try and negotiate on them?!? As if, brand new, they're not worth their MSRP around $23k?!? I think that car is worth every penny of it's MSRP... does that mean I would pay it? Probably not lol, I'm "one of those assholes" lol, I'm just cheap. Although would I say that anyone who paid MSRP got ripped off? Absolutely not. Even at MSRP, you're still getting a lot of car for your money, and I would say the car is "worth" MSRP, if not more.
Ever wonder why in today's world, your resale value drops so fast? I can tell you why, a couple reasons, the first being negotiating. That's right, if brand new, someone negotiates $2500 off a car, shortly after, someone else tries to sell their "used" car they paid MSRP for, for $2500 under what they bought it for (MSRP), but guess what? The person who's buying it, they might have heard their buddy who negotiated $2500 below sticker (happens all the time on the internet these days lol), and tell the guy trying to sell his car "I could get one brand new for that, you need to lower the price". In order to make it a "fair deal" he comes off the price of his car another $1500, and all of the sudden in a very short amount of time, the "resale value" of this car had already plummeted $4000 from MSRP, almost overnight.... why? Because of people negotiating with a dealer on a new car, because at that point, the only person who is going to be able to get out from under a car, is the person that paid the least amount of money for the car.
As customers are just like the dealers in the end... they don't want to pay anymore than what they can buy it for elsewhere... just like a dealer when he gives them auction value as the trade in value of their car, same concept, just roles reversed.
Take a situation like my own with my Mazdaspeed 6.... I bought one after they had been out for a while, when they had huge rebates. I bought a base Sport Mazdaspeed 6, with the only option being $50 wheel locks, so MSRP was $28,595 (still have the sticker lol), they had $3500 in rebates because Mazda was having a hard time selling them, that and I got mine for S-plan (invoice), so it came out to be about $23k... that's right, $5500 below MSRP. I had the car a whopping 1 year, was in great shape, only had 12k miles on it... guess how I had to haggle my ass off to get trade in after only 1 year? $18.5k, which was up from the $18k they were offering initially... hell, I even had the Subie dealership call about 5 MAZDA dealers, with me overhearing them, to try and get buy bids on the car, as sometimes a "home" dealership will give more for their own product, as it's easier to sell on a "home" dealership... I was lucky the guys at Subaru even honored the $18.5k I got them up to, as every Mazda dealer they called only offered between $16.5-17.5k for it. Had I not negotiated with the Subie dealership prior to them doing buy bids, or I would have got significantly less.
Now, for someone like me, I only paid $23k for it, so losing $4500 over the course of a year (I think the model year had been out for about 1.5 years at that point), that wasn't "that bad" lol. I've seen WAAAYYYY worse. Considering I had been paying on it for a year, I had paid off around $3500 or so (and also put down money when I bought it) of what I paid for the car, so it wasn't that bad, I was able to get out from under it easily, but what about people that bought the car before the rebates? I personally, know someone on this board, who bought their Grand Touring Speed6 when they first came out, for MSRP, IIRC, they had most of the options, leather, moon roof, ect ect, and paid around $31k. Now, was the car worth $31k? In my opinion, absolutely. A mid-size car with plenty of power (rated at 274hp for '06), a smooth 6-speed, AWD, leather seats, moon roof, 18" wheels, ect ect. If you go to BMW (You would be lucky to pick up a base 328i with a couple options), for $31-32k you're NOT going to get nearly as much car for the same price, same with Audi (overpriced A4 Quattro, need I say more? Price one out...), Lexus (ever priced a LOWER horsepower IS 250 AWD?), Acura (same options on a TL with similar power, but no AWD), and the list goes on. IMO, the ONLY car that had similar features/horsepower ect, for around that price, is the Subaru Legacy GT, and that car was not available with rebates.
Which brings me to the 2nd reason why cars lose so much value- REBATES. When a manufacturer can't sell a car worth a piss, sometimes they throw out rebates to help get them off the lot, this absolutely TANKS your resale value, which is why it's typically a good idea to buy popular cars, or at least don't buy the car before the rebates are given out lol. People always want their own definition of a "good deal", myself included lol, so when manufacturers throw out $3500 on cars like the Speed6, you get a TON of car for your money, but really, you're not paying for the "worth" of the car anymore, as it's easily worth more than that IMO, you're just cheap and recognize a great deal when you see one.... like me. I bought a $23k Speed6 because I could afford it at the time, and I couldn't afford a $32k STI, or else that's what I would have bought, so I settled because I recognized a GREAT deal at the time, allowing me to get a LOT more car for my money than I should have.
So I got a great deal on my Speed6... but what about people who paid $31k for a Speed6? Is it worth the money? IMO, yes. Although because Mazda didn't do a good job advertising, most people never knew about these cars, and then you have assholes like me, who got stupid great deals on them... even though at the time the car was launched, it was certainly worth it's $31k MSRP, I would GUARANTEE in Colorado, they would be LUCKY to even get $19.5k, and I mean lucky. So in the course of a little over a year, their resale has dropped at least $11.5k... no way they've paid off that much of the car just making basic monthly payments, unless they financed for a very short amount of time (24-36 months). So even though, at $31k they were still getting a lot of car for their money, due to people negotiating (like me) and rebates, they has piss poor resale value, and are probably stuck in that car for a very long time. Which sucks.
You have to also realize, new car sales VASTLY affects the world of used cars, as you can see above with trade in values, but also realize, it's not just the dealers fault.... I would also blame the manufacturers. Are cars priced WAY too high? Not necessarily. I think EVERY company should be like SCION, as there is NO NEGOTIATING ALLOWED. Dealers cannot change the price of a Scion, they are not supposed to mark it up, and they are not supposed to negotiate on them. Doing so would lead to Scion revoking their license to sell Scions. The MSRP is what the car sells for. No more, no less. They have very small profit margins on those cars, but who cares, it's a fair deal for everyone, and from what I hear, Scion directly has added flat rate commissions for their salesmen for selling one, so no matter what, every walks away with a fair deal. This makes car buying easy, AND more importantly, it keeps your resale value in tact. It's almost like buying directly from the manufacturer, like it should be...
You can't go to Walmart and negotiate on the price of milk... or to GAP to negotiate on clothes, what's the difference? I think with new cars it should be "this is the car, this is the price, no negotiating, if you like it buy it, if not, find something else". I think the auto industry has become too much like the Housing industry, when it comes to haggling, resale ect ect, except, there's one VERY huge flaw in that concept... the reason you can negotiate in the housing market, is the market it subject to change, and houses, have the ability to appreciate. Granted, right now, the economy is hurting, so right now houses are low, but eventually, they'll come back up (we all hope lol). Now that model is different than cars, which depreciate almost immediately. The same is not always true with houses... yet, why do we negotiate on them in the same manner? Cars are more like food or clothes, they don't gain value with the market like houses, you can't resell them for more than you paid for them (typically lol). Therein lies the problem.
Now, I've never been to Japan, but have a few friends who have... and from what I understand, over there, you DO pay MSRP for cars, apparently, attempting to negotiate on them is almost considered "dishonorable" as you're doing the product an injustice. If you want the car, buy the car for it's being sold for, which is based on what the manufacturer has implied it's "worth". There will always be cheaper cars, and used cars, if you don't think it's "worth" a certain amount, that's fine, don't buy it. Which is why I don't buy BMW's, Audi's, Mercedes ect ect, I don't think they're worth the money, I don't think I get enough car for my dollar... so I don't buy them.
So, in the end, I think "worth" is subjective. There is no one set "worth", too many sources, "worth" is a matter of personal opinion, everyone has their own idea of what something is worth. That's often times where the conflict begins... but if it were up to me, there would be no negotiating, at least not on new cars, as in my opinion, I think that's where the main problem lies. No negotiating would mean things would be more competitive, and probably cause manufacturers to keep their MSRP's low in order to compete/beat other manufacturers prices, but would not kill resale, and make the car buying experience easier overall. That's just my $.02 though. Take it as you will.
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Co626
All true, but I think the haggling over cars came about as a direct result of people not being TRULY able to afford new ones any more without hellaciously long financing. So we try to eek out every cent possible from the dealer.
That's why I like the older used cars. I think their value is much less subjective than that of new cars or newer used ones. There isn't really any "new" competition on them, so their value isn't as radically affected by the market fluctuations.
That's why I like the older used cars. I think their value is much less subjective than that of new cars or newer used ones. There isn't really any "new" competition on them, so their value isn't as radically affected by the market fluctuations.
Stealth01
2006 Mazdaspeed 6 GT
SURE Full3 Aeros ID300 SRI, SURE Torq R6 RMM, SURE Shortcut/Countershift, SURE Anchors, Dunlop Winterspot M3s (Winter Shoes), "O" Series Stubby Antenna, Red LED Dome & Door Lights, Whistler Pro-78 RD Hardwired, SURE Dreadnaught, Juggernaught, SURE Flow M6 TP, SURE Charge Tubes, Hawk HPS F/R Pads, Technafit SSBLs, StopTech Rotors, Cobb AP, SURE Ventus in 50-50 Hybrid Mode, [color="Lime"] PERM Tune[/color] (Stratified Auto) Coming soon: Autotech FP Internals, S6 Mounts
2006 Mazdaspeed 6 GT
SURE Full3 Aeros ID300 SRI, SURE Torq R6 RMM, SURE Shortcut/Countershift, SURE Anchors, Dunlop Winterspot M3s (Winter Shoes), "O" Series Stubby Antenna, Red LED Dome & Door Lights, Whistler Pro-78 RD Hardwired, SURE Dreadnaught, Juggernaught, SURE Flow M6 TP, SURE Charge Tubes, Hawk HPS F/R Pads, Technafit SSBLs, StopTech Rotors, Cobb AP, SURE Ventus in 50-50 Hybrid Mode, [color="Lime"] PERM Tune[/color] (Stratified Auto) Coming soon: Autotech FP Internals, S6 Mounts
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RX-7 Chris
- Posts: 7800
- Joined: Tue Oct 02, 2007 9:14
- Location: Colorado Springs
- Contact:
We bought my wife's Saturn L200 at Phil Long Saturn at chapel hills and had luck there. The people were really good and have had no problems with them.
1984 RX-7 GSL-SE [size=84]My restomod project[/SIZE]
1964 Ford Galaxie 500XL flat black w/ white interior, 2 dr fastback, 390 thunderbird, C6 auto, 2500 rpm high stall converter, shift kit, AC, Holley 750 cfm
[size=100]RIP 1983 RX-7[/SIZE]
My Car Blog
And in the end, this sale worked out well. THey worked with us on the financing, and threw in an extra $500 gas card for me to boot. So I certainly can't complain. Sarah LOVES her new car, and I can sleep a LOT easier knowing it isn't going to break down in a bad part of town, and that it's hella safe.
And I can secretly chuckle at the SPLIT BENCH SEAT in the front. BENCH!!!!!
And I can secretly chuckle at the SPLIT BENCH SEAT in the front. BENCH!!!!!
Stealth01
2006 Mazdaspeed 6 GT
SURE Full3 Aeros ID300 SRI, SURE Torq R6 RMM, SURE Shortcut/Countershift, SURE Anchors, Dunlop Winterspot M3s (Winter Shoes), "O" Series Stubby Antenna, Red LED Dome & Door Lights, Whistler Pro-78 RD Hardwired, SURE Dreadnaught, Juggernaught, SURE Flow M6 TP, SURE Charge Tubes, Hawk HPS F/R Pads, Technafit SSBLs, StopTech Rotors, Cobb AP, SURE Ventus in 50-50 Hybrid Mode, [color="Lime"] PERM Tune[/color] (Stratified Auto) Coming soon: Autotech FP Internals, S6 Mounts
2006 Mazdaspeed 6 GT
SURE Full3 Aeros ID300 SRI, SURE Torq R6 RMM, SURE Shortcut/Countershift, SURE Anchors, Dunlop Winterspot M3s (Winter Shoes), "O" Series Stubby Antenna, Red LED Dome & Door Lights, Whistler Pro-78 RD Hardwired, SURE Dreadnaught, Juggernaught, SURE Flow M6 TP, SURE Charge Tubes, Hawk HPS F/R Pads, Technafit SSBLs, StopTech Rotors, Cobb AP, SURE Ventus in 50-50 Hybrid Mode, [color="Lime"] PERM Tune[/color] (Stratified Auto) Coming soon: Autotech FP Internals, S6 Mounts
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SpeedRacer
- Posts: 5030
- Joined: Wed Sep 19, 2007 9:14
- Location: Aurora
- Contact:
<div class='quotetop'>QUOTE (SpeedRacer @ Mar 31 2008, 08:54 PM) [url=index.php?act=findpost&pid=36932]<{POST_SNAPBACK}>[/url]</div>
Yeah, I was thinking of that. But at least it'd be MUCH cleaner hokey pokey. LOL.
hokey pokey in the fron t seat now[/b]
Yeah, I was thinking of that. But at least it'd be MUCH cleaner hokey pokey. LOL.
Stealth01
2006 Mazdaspeed 6 GT
SURE Full3 Aeros ID300 SRI, SURE Torq R6 RMM, SURE Shortcut/Countershift, SURE Anchors, Dunlop Winterspot M3s (Winter Shoes), "O" Series Stubby Antenna, Red LED Dome & Door Lights, Whistler Pro-78 RD Hardwired, SURE Dreadnaught, Juggernaught, SURE Flow M6 TP, SURE Charge Tubes, Hawk HPS F/R Pads, Technafit SSBLs, StopTech Rotors, Cobb AP, SURE Ventus in 50-50 Hybrid Mode, [color="Lime"] PERM Tune[/color] (Stratified Auto) Coming soon: Autotech FP Internals, S6 Mounts
2006 Mazdaspeed 6 GT
SURE Full3 Aeros ID300 SRI, SURE Torq R6 RMM, SURE Shortcut/Countershift, SURE Anchors, Dunlop Winterspot M3s (Winter Shoes), "O" Series Stubby Antenna, Red LED Dome & Door Lights, Whistler Pro-78 RD Hardwired, SURE Dreadnaught, Juggernaught, SURE Flow M6 TP, SURE Charge Tubes, Hawk HPS F/R Pads, Technafit SSBLs, StopTech Rotors, Cobb AP, SURE Ventus in 50-50 Hybrid Mode, [color="Lime"] PERM Tune[/color] (Stratified Auto) Coming soon: Autotech FP Internals, S6 Mounts
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