This very interesting video shows what happened when 100 Ford dealers were asked to quote a best and final price for an identical model of pickup. The first year, relatively few responded. The second year (after Ford had taken notice and presumably talked to its dealers) a lot more responded - but the price variance in both years, from lowest to highest offer, was astonishingly high, well into five figures. Take a look.
I knew dealer margins varied, but I had no idea their pricing structures were so very different, nor did I realize how much the price goes up when dealer add-ons are included. The section on fees and regulatory charges was also eye-opening; I'd assumed that dealers would not dare meddle with statutory costs like that, but it looks like I was wrong.
I'm sure the facts and figures disclosed in the video will be encountered at any manufacturer's dealers, not just Ford's. Nevertheless, I hope Ford notices this video and does something about what it reveals - because business practices like these do it no favors at all in the eyes of the public.
I'm certainly going to follow the video's advice if I ever buy another vehicle from a dealer. Obviously, it applies more to new vehicles, but I'm willing to bet some of it carries over to the used market as well.
Peter
13 comments:
Every Dealer I know wanted a used car lot. No one knew how much you had in a car on that lot. Cars have become need to haves and the need to keep a dealership running and selling a need at a profit is a never ending battle.
Back in '95, I saw that in action when 'Dealer Prep' fee was added to the invoice, but in a slightly different font. Another dealer gave me a lowball price and sent me to see someone who turned out to be the fleet dealer and couldn't honor the price--the vehicle did not have the options I was supposedly purchasing. And the list goes on and on...
A point of view from a car salesman, now retired, who sold vehicles for thirty years. If you are not in the store, you are wasting my time. A phone call is treated with respect. An internet inquiry is a fishing tactic. As to the manufacturers, I met perhaps three or four manufacturer employees I would hire for my crew. Let the dealer principals deal with them.
You might note the folks in the video also offer their service (for a fee) and pander to most of the myths about car sales.
Sales people deal with customer with poor credit, insufficient down payment, and near worthless trade ins.
Glad I'm out of the business in this internet era. The heavy hitters are selling used cars and/or fleet sales.
One last point. When you work on commission, your most valuable asset is your time. How you spend your time determines how much you make. I didn't spend my time on those I perceived to be time wasters, like internet trolls.
I certainly know that when I get a new car, it's always been a matter of negotiation as to what I pay. The initial offer varies from dealer to dealer, and how much I finally pay is then based on the starting point, and how much they want to sell me the car. And never try to buy a car when you really want one -- it gives them an edge in the negotiation.
Sometimes I forget that for most of my life, used car dealers have been the scum of the earth, the lowest of the low.
Today I put MSM & politicians in the 'scum" category too but when I have to think about car dealers (or actually deal with them) I remember!
WSF and Ben are both right... sigh...
Could not agree MORE, friend. Sold Chevys for several years; most of what these two characters in the video tell you is shaded, semi-, or not even half-true. As you said: if they're not in the store, they're wasting your time. Finally: yes, the 'net is NOT your friend.
Why do we have to deal like a bunch of rug merchants at the bazaar when buying a car? Even CarMax has a no haggle price, but they charge you an additional fee just to buy the car. Carvana is similar as far as I know.
Imagine if all transactions were like this at all the stores.
When we paid off our two leased vehicles three years ago, the dealer tried to add thousands in 'dealer prep' - for vehicles that had been in our sole possession for two years. The actual sales rep we were dealing with had no clue and was astonished as we went through the paperwork line by line and crossed things off. Needless to say, we paid no extra fees. I had called Toyota ahead of time and although they said we had to go to a dealer to pay off our leases (couldn't do so online/by phone), I knew what to expect money wise.
I would like to add one piece of advice that will make life easier for everyone. Please, go to your credit union or bank first and find out what you qualify for in a loan.
Even leasing has its negotiations. The only time I leased a car was through a broker who handled the dealer. The salesman said there was no movement on the price, but when I got home 20 minutes later, the same salesman called and said I could have the car at the price the broker had offered.
Again, why does it have to be this way?
BINGO!!
On the flip side, I recently went with my 84 year old mother-in-law to buy a new car. She had settled on a Buick Envision (she will ONLY buy American - even if it's made in China...)
GM had a $5K incentive on the remaining 2025's; they have not imported any 2026's yet as they're hoping for tariff relief.
Local Buick-GMC dealer gave her right on the value of her trade, as I had researched that. The had NO junk fees other than a Dealer Prep fee of $700. The final number was right where I had expected it to be, and we did the deal in an hour. I was pleasantly surprised at how clean the buyer's order was; the whole thing was stress-free.
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