What does the future hold for Stealerships?

babyzilla

I'm really curious to know everyone's thoughts/opinions on this topic - dealerships price gouging during the pandemic.

I understand the basic economics of low supply, high demand, supply chain, chip shortage, logistics, staffing, etc.

I believe the majority of people who are buying cars right now NEED to for one reason or another. Then you get some people who just have the money and don't really care and want what they want when they want. On the other hand, you have people who refuse to pay over MSRP (considering the fact they were probably paying below MSRP at one point), those who refuse to give business to the stealerships, and those who can simply wait because buying the car they want isn't a necessity.

I'm sure we can all agree that dealerships don't necessarily have the best reputation for providing great experiences. However, during these times, it's like they don't even give AF. Getting a car for MSRP is considered fair at best. $5k mark up is just minimum. The sales people, sales managers, and finance managers are outright nasty. They have become so greedy, and it's so easy for them right now to get away with their behavior and tactics. It's just unethical business. Are the mark ups necessary? Are they not worried about treating customers like **** for the time being because they know people will always need to buy cars and that they can just excuse their nasty behavior on the pandemic once everything goes back to normal?

So what's their end goal here? They will continue raking in the profits while screwing over customers for the short game, and then what? I just see it as them building more of a bad reputation. Once the whole vehicle economy balances back out again, who wants to deal with them? If anything, it makes CarMax (specifically referring to the ones that sell new cars and I know that it's limited to Toyota and some other manufacturers) and other dealerships that ran their business by no-haggle pricing much more enticing.

It reminds me of history regarding old dynasties and kingdoms. The most powerful ones end up peaking at some point and then crumble. What do you all think?

SeeThruHead

It's kind of a cartel. Like real estate (at least in canada). They have so much government protection. The laws are very anti-consumer. I'd like to see that removed and then see what happens to them/their approach to dealing with customers.

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babyzilla

I've always wondered if they had their own forum or organization where they team up to "beat" the customer. For example, they all agree to set a minimum mark up - this could be a locality thing or specific vehicle, or whatever. Another example would be a customer states they have a better deal at dealership x. So, dealership y calls x and they do some internal business to make sure the price doesn't get any lower and offer a potential kickback.

Maybe I'm crazy.

danegrey

i have no idea any more, have not bought a new car in about 5 years. The experience was ok, back and forth and I felt good about it. Nothing like it is now.

I still take the Z to the dealership for an oil change and only because it seems cheaper and they can still figure out how to get it done. (car is a bit low)

My Miata has been serviced at the dealership too, partly because of the relationship I have with one of the service reps.

I bought my Miata at the start of pandemic, I did my research and had a number and in the end it was met 1/2 way. Did not care about the internet price, actually worked my way under that.

Maybe at times it is simply how you work with the person. And have the ability to walk away from the deal if it is not right for you.

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babyzilla

Working with a reasonable person goes a long way, I agree with that. However, like I mentioned earlier, it doesn't even matter anymore - the sales manager calls the shots. The sales people are just the middle men and they're useless quite frankly. They are filters IF anything. The whole walking out scenario is a bit dramatic for me and cringe worthy lol. The issue is it doesn't matter what kind of relationship you have established with the dealer anymore, because "business is business." Want to walk away as a haggling tactic? Great, good riddance. On to the next person who will buy whatever the dealer is demanding no questions asked. I really look forward to buying direct from the manufacturer one day. I don't think it'll ever happen even though Tesla is doing it. I would honestly feel very bad for all the people who would lose their jobs, but it's almost as if their industry asked for it on a silver platter.

SeeThruHead

yeah i was looking online for a new (used) car last week. They wouldn't budge at all. So much "let me check with my manager" day goes by and they say nope. no movement on anything.

And autotrader shows the car as 4000$ above market lol. They have since dropped the price 500$. Going to see if they go down another 500 and start negotiating again.

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babyzilla

When I was looking for a car a couple a weeks ago (I since then gave up), a local dealer called me saying they have the exact car I want. I told them no thank you as I already have an order with another dealership (this story is in another thread). He convinced me to come in saying we could make a deal. I should have known better, but I figured why not. I get in there and the car has a $5k mark up and some BS paint protection coating on it for another $2k. I look at the dude and was like are you $hitting me? He told me not to worry and that his manager will talk to me. Manager talks to me and basically says it is what it is. I just looked at the sales person in complete confusion. I told him thanks for wasting my time as I walked out. I had the checkbook in my hand.

SeeThruHead

I was looking at a 2019 Nismo

Already overpriced IMO (more than the canadian MSRP new) The guy said, we can't lower the price. It has $9000 worth of ceramic coating and PPF on it.

Basically told him to shove it as I would definitely be taking those off and redoing them if I did buy it.

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babyzilla

Among other things, like existing , dealers need to stop with their BS "protective packages. They always use some off brand stuff that I've never heard of and that's IF they actually even do it or do it properly. PPF is one thing because, well, you can actually touch and feel it. The ceramic coating...you could fool anyone.

SeeThruHead

Yeah the ppf is never properly wrapped and tucked. Always cut so it's visible and peels easily.

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SteveVQ

Stealerships have been struggling to meet quotas for the last 2 years. Use that to your advantage, you have them by the short and curlies, not the other way around. At least if you have good credit and a flush account.

If you have a 700+ credit score and flush account, you can tell them to suck it and walk off if they try some stupid "dealer mark up" BS. 8 times out of 10 I've gotten the deal I wanted because I stick to my guns and walk away (DGAF if its cringe). They always come running out chasing me before I get back into my car to make the deal I want. The fact is they need me but I don't need them.

I'm the worst and best kind of customer. Excellent credit, flush account BUT I don't want to be your friend and I could give 2 ***** less about you losing money on a deal. When I walk into a stealership my thoughts are all about what's best for me. IDC your house is falling apart and you're going through a divorce. Get me the best deal or I'll walk.... then you can go deal with Joe Shmoe and his 500 credit score with $2k in the bank who can barely afford a 15yr old Corolla.

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Zingston

I've walked away so many times I can't remember... and most of the time they chase me or call me the next day.

babyzilla

@SteveVQ @Zingston, I understand what you're saying. Have either of you bought a car since the pandemic? Sincere question BTW. Like I said earlier in my post. From my experience and others I have talked to, they don't care if you walk out. No one is chasing anyone. So I'm curious if that's still going on for you guys. I'm not new to buying cars.

Zingston

I hear ya... last car was 2017. Thankfully I'm not in the position where I HAVE to buy a car right now.

SteveVQ

Yes, actually, I bought this Z I currently have Feb 12th, 2021. They wanted $26K and I walked out. They chased me and I got it for $18k .
I knew the car had been sitting on their lot for a while and I took full advantage of that.

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