New Car Deals

[PepsiFree]

The problem is selling pre-orders with any pricing information at all that far in advance. Dealerships have no problem holding your money, whether it be $500, $1000, or whatever, for a year or more, knowing they have no obligation to deliver what you actually ordered.

While dealerships may not be able to control everything, there seems to be very few willing to offer a solution or something that at least recognizes that the delay has absolutely ####ed the customer. Instead, it’s take it or leave it because some other sucker is going to take it if you don’t.

Pretty stupid way to operate, but when things swing back on the other direction it’s going to bite some of those dealerships and those salespeople in the ass.

[you&me]

Originally Posted by PepsiFree

The problem is selling pre-orders with any pricing information at all that far in advance. Dealerships have no problem holding your money, whether it be $500, $1000, or whatever, for a year or more, knowing they have no obligation to deliver what you actually ordered.

While dealerships may not be able to control everything, there seems to be very few willing to offer a solution or something that at least recognizes that the delay has absolutely ####ed the customer. Instead, it’s take it or leave it because some other sucker is going to take it if you don’t.

Pretty stupid way to operate, but when things swing back on the other direction it’s going to bite some of those dealerships and those salespeople in the ass.

Definitely.

It can be hard to keep in mind that we're still in pretty unprecedented times... Under normal circumstances, the vehicle ordering process is pretty straightforward, with options, prices and lead times are all accurately available from the manufacturers to the dealers, and therefore the consumers.

It's also important to understand that the dealers don't always have a lot of control these days when it comes to how the vehicles they receive are built... Some manufacturers just keep the assembly lines moving along and if the supply of this component or that widgit isn't available on a particular day, it's either substituted or left out completely. When we got my wife's new car last year, the guy at the dealership remarked how lucky we were... Sure, it was a couple months later than expected, and a heck of a lot more expensive, but at least it showed up the way we ordered it... He was dreading his next delivery, because that one (a luxury SUV) showed up missing things like heated seats.

[justing]

Originally Posted by you&me

And this is consistent with something else a lot of people don't realize about the car dealership business - it is very siloed and each department typically operates as its own business under the umbrella of the dealership; new car sales, parts, service, used cars, finance, etc all have their owner P&L and (usually) are each in it to maximize their own P, with little to no care for another department's L. For example:
- The new car department wants to maximize their profit on a new car, even if a discount would help a buyer qualify for financing;
- The finance department wants to maximize their profit, which means maximizing fees and add-ons (and somewhat ironically, maximizing the sale price);
- The used car department wants to buy your trade in for as little as possible (so they can make more money on it), even if giving you a higher offer would help the new car department sell you a new car (and the finance department get another finance deal done);
- When the used car department needs to service your trade-in before it goes on the lot, they have to pay the service department full retail for that service (or occasionally a token discount);
- The service department doing the service on the trade in, has to pay the parts department full retail for the parts needed during the service (or occasionally a token discount).
Etc, etc

Knowing this can help some people understand why the entire dealership experience is so unpleasant and terrible... Not only are you there "competing" to get a good deal, but then every touch point you encounter along the "sales journey" (ewwww) is competing against the others... This model is what makes change and disruption so difficult and the only people that win are the ones that would be in charge of implementing change - the dealers.

Why is this? I've heard this before but never understood the reason.
I mean we're just a small store but I can't imagine having my goldsmith that sits beside me operate as her own business under my business... seems like it's way worse for the customer.

[Derek Sutton]

Originally Posted by justing

Why is this? I've heard this before but never understood the reason.
I mean we're just a small store but I can't imagine having my goldsmith that sits beside me operate as her own business under my business... seems like it's way worse for the customer.

That was a great post by you&me and 100% on the money. The biggest reason being is aside from the receptionist, everyone you see in a dealership works on some form of commission or has gross oriented targets to earn any sort of bonus. The sales person may be on some sort of volume based pay structure in the larger stores which is the “new way” of “non commission” marketing but beyond that we are all on some form of commission. It really is a terrible model, but maximizes every penny possible out of a customer while minimizing costs to the dealer.

The battles between the used car department and service department are often petty, numerous and terribly frustrating. The games played by the finance department are often childish, petty and unethical, these are the biggest snakes in the dealership. And so many financially illiterate/ desperate customers will just sign anything. From purchasing useless extended warranties agreeing to 18% finance rates to 6 year terms on vehicles with 175,000 km in them.

And everyday is a gong show, for one reason or another which is what makes it fun.

[chedder]

I'm just trying to get over the fact that Ford knows about my sex life and medical history?!

[I_H8_Crawford]

I was just offered over $40K (20+%) off on a car I am looking at... guess the high-end market isn't moving so well?

[BagoPucks]

I dont think it is. it feels like the utility end of the market has gone crazy but the luxury end might have deals to be found on the lot.

[you&me]

Originally Posted by I_H8_Crawford

I was just offered over $40K (20+%) off on a car I am looking at... guess the high-end market isn't moving so well?

Depends on what it is... A lot of demand up until now was driven by the inflated market itself; when cars are selling for well over MSRP, buyers will line up to speculate on cars they wouldn't otherwise buy... once that secondary market starts coming down, demand for new cars can dry up pretty quickly when the prospect of actual depreciation enters the picture.

The fact that you're being offered that kind of discount tells you the price trajectory of that model...

[Weitz]

I’m probably jumping into the new car market soon (SUV with some tow capability. 5-7k lbs).

Not looking forward to the shortages and what not I’ll have to deal with. Last couple new vehicles I bought it was real easy.

[TorqueDog]

Originally Posted by Derek Sutton

And so many financially illiterate/ desperate customers will just sign anything. From purchasing useless extended warranties agreeing to 18% finance rates to 6 year terms on vehicles with 175,000 km in them.

Good ol' sub-prime auto financing (I use the term 'good' loosely). Long terms with higher-than-a-credit-card interest rates on a god damned automobile. It was madness. Usually reserve delivery deals, too, so they avoided taxes.

I saw credit reports with enough R9s on them to make you ask how anyone would lend them $5, nevermind $26k for a Dodge Ram 1500.

[Bill Bumface]

Originally Posted by I_H8_Crawford

I was just offered over $40K (20+%) off on a car I am looking at... guess the high-end market isn't moving so well?

There are lots of variables for individual cars. Is it the end of a model line, and the new version coming this year? Cars always sell like crap at the end of their runs.