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That model hasnt even been proven to work. Saturn is out of business and Scion is struggling. And neither one of them sold vehicles with very much margin except Saturn towards the very end. If Scion starts selling more then just cheap econoboxes in the 40k+ category and succeeds then it will indicate a market shift. Until very recently with the FR-S they have stuck to very cheap cars and have been on the verge of failure.
I know you dont care about it (gov and safety regs) and it is priced into the car. That's why you are trying to equate buying a car, the second largest purchase most people generally make with buying a pair of shoes.
You think you speak for the majority of buyers when you obviously dont understand what is going on withthe system that brings a vehicle from raw materials to sitting in your driveway vs a company like Nike belting out a pair of shoes.
I coukd ask a 100 people, I could ask 1000, 10,000 any number. In my experience the vast majority of people want to deal, haggle in one form or another.
I understand everything that goes on to make a car, and all the systems in place to take some metal and turn it into a car. I'm from Detroit, and have lived in the auto industry since I was born. Trust me, I know. But, if it takes x amount of material, and y amount of labor, (labor also includes all the testing, R&D, etc.) to make a car, the cost of the car should be some form of C=f(x)f(y). You take that cost, add in a 10, 20, 30, whatever percent margin needed to make profits and keep the dealerships (stores) and manufactures in business, and that's the price that the consumer pays. It's not rocket science.
The vast majority of people you ask would like to haggle, unless you asked it in the way that I phrased the question. Another poster brought up that the consumer wants to haggle so that they can feel like they paid a fair value for the car. But if the MSRP, or the price that is on the price tag is the fair value, that everyone else in the country is paying, then there would be no need to haggle, nor would you want to because it would be a waste of time.
I understand everything that goes on to make a car, and all the systems in place to take some metal and turn it into a car. I'm from Detroit, and have lived in the auto industry since I was born. Trust me, I know. But, if it takes x amount of material, and y amount of labor, (labor also includes all the testing, R&D, etc.) to make a car, the cost of the car should be some form of C=f(x)f(y). You take that cost, add in a 10, 20, 30, whatever percent margin needed to make profits and keep the dealerships (stores) and manufactures in business, and that's the price that the consumer pays. It's not rocket science.
The vast majority of people you ask would like to haggle, unless you asked it in the way that I phrased the question. Another poster brought up that the consumer wants to haggle so that they can feel like they paid a fair value for the car. But if the MSRP, or the price that is on the price tag is the fair value, that everyone else in the country is paying, then there would be no need to haggle, nor would you want to because it would be a waste of time.
Exactly. People haggle because in the past, the dealers have always had fat built into their prices and to get the best deal you had to. If the equation were shifted, and people felt they were getting a fair and transparent price, it would be different, assuming it was industry wide. On the other hand, there is a lot of past history to overcome.
I don't like to haggle, I just do it because I have no choice. the dealer is pricing "haggling" into the quote they first give you. I actually used truecar for my last car purchase and it made the experience much more pleasant.
I don't like to haggle, I just do it because I have no choice. the dealer is pricing "haggling" into the quote they first give you. I actually used truecar for my last car purchase and it made the experience much more pleasant.
How'd it work for you?
I've always been curious about whether the dealer would actually honor the TrueCar price. And by curious, I mean I hate $tealers and don't believe they would. That said, the Mazda dealer I bought my car from was actually pretty good. The last new car my mom bought (Honda) was awful. Wasted two hours and had to walk out and buy it from another dealer at a higher price than agreed upon with the first one.
There have been threads about alternate dealership models before. The quick of it is that the current arrangement is how the manufacturers need it to be. The dealership setup is what gives them flexibility and allows them to move inventory. Car production schedules are pretty tight and need to be well planned, so it's not like a Dell computer that can be customized on the line for each and every customer. Dealers also provide critical warranty and frontline customer services and the number of dealers allows for actual competition to exist.
Also, as others said, the current model is overwhelmingly preferred by customers. You can custom order your car with what you want. You can pay MSRP or some other fixed price and avoid negotiation. Of course, no one wants to wait 6-8 weeks for their custom order domestic built car or months for a foreign build and something like over 97% of car purchases are done from dealer inventory. People overwhelmingly prefer driving and seeing the exact car they are going to buy, not a 'representative model' but the exact car.
Finally, anyone who thinks dealers make a lot of money off of new car sales is sadly mistaken. It may be a large volume of their overall business, but it is a very small part of their profit flow. Dealers make profit primarily in one of three ways:
1. Finance Department: They make a lot of money off of selling you financing, warranties, add-ons like alarms, floormats, etc. and insurance products. Sometimes these items can be marked up as much as 200%.
2. Service Department: Well run service and parts departments are a major profit maker for dealers, especially people coming in for routine services.
3. Used Car Department: The average profit margin on a used car sale is significantly greater than that on a new car. It is not uncommon for a dealer to earn upwards of $4,000 of profit on a used car under an ideal scenario. Most used car sales average in the $1,500-$2,000 range for net profits. On the other hand, in 2012 the average net profit on a new car sale was $111 according to NADA.
So, negotiate away on that new car, but that's not where the dealer is "screwing" you. Want to avoid getting screwed: secure your own financing, don't buy upgrades, warranties, etc. from the finance department, only use the dealer service department for warranty work unless you have covered maintenance and really do your homework and negotiate hard on a used car purchase.
I've always been curious about whether the dealer would actually honor the TrueCar price. And by curious, I mean I hate $tealers and don't believe they would. That said, the Mazda dealer I bought my car from was actually pretty good. The last new car my mom bought (Honda) was awful. Wasted two hours and had to walk out and buy it from another dealer at a higher price than agreed upon with the first one.
I basically worked up a truecar quote based on the car that I saw was in the dealer's lot. so I went there with a price for an actual car they have so they couldn't try to screw me if I came with someone that wasn't exactly matching the car.
I test drove the car and I liked it. I told the guy that I had the truecar quote but im not going to do the deal now since I want to check out some other cars. so he came back and basically said if he could beat the truecar price, would I do the deal? I said sure, so he beat it by a few hundred bucks. they did try to steal some money from me, so I did have to come back for a check from them a couple of days later. but that happens every time, just annoyed at myself for not catching it immediately.
even if I could have gotten it a little cheaper, I was still happy to get it over with. im not a car lover and I find the whole process torturous and it takes away from things id much rather be doing. so this gave me a price I was fine with without me having to go back and forth and saved me trips to other dealers. I was also happy that the financing worked out to be 0% over 62 months rather than 60 months. im not sure why it worked out that way, but it was better so I didn't complain.
I understand everything that goes on to make a car, and all the systems in place to take some metal and turn it into a car. I'm from Detroit, and have lived in the auto industry since I was born. Trust me, I know. But, if it takes x amount of material, and y amount of labor, (labor also includes all the testing, R&D, etc.) to make a car, the cost of the car should be some form of C=f(x)f(y). You take that cost, add in a 10, 20, 30, whatever percent margin needed to make profits and keep the dealerships (stores) and manufactures in business, and that's the price that the consumer pays. It's not rocket science.
The vast majority of people you ask would like to haggle, unless you asked it in the way that I phrased the question. Another poster brought up that the consumer wants to haggle so that they can feel like they paid a fair value for the car. But if the MSRP, or the price that is on the price tag is the fair value, that everyone else in the country is paying, then there would be no need to haggle, nor would you want to because it would be a waste of time.
Then you would be dooming yourself to paying more for a new car then you do now.
You decide what is fair profit for all of us and then let me know if you can get this coalition of fed up buyers who want one price to agree with it. I do not think you can.
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That said, the Mazda dealer I bought my car from was actually pretty good. The last new car my mom bought (Honda) was awful. Wasted two hours and had to walk out and buy it from another dealer at a higher price than agreed upon with the first one.
