The Problem with Dealerships
Youd think, considering the news about struggling dealers and automakers, that sales managers at dealerships would be itching to make the best deals they can. Instead, theyre tending to hoard their inventory, only willing to let cars go for top dollar. Maybe their strategy is to sell fewer cars, but at a higher profit. Or maybe theyre just too dang arrogant to admit they need to make the best deal possible.
I posted over the weekend about my experience shopping for a replacement car for my wife. Then a CarGurus blog reader sent us an e-mail expressing his frustrations with dealerships, which confirmed to me that my experience probably isnt unique.
From what Im seeing so far, dealers are playing serious hardball. Heres one example from this weekend:
I found a car I was interested in and began negotiations. My first step was to negotiate the price of my trade-in, for which they offered me $6,500. My research showed a trade-in value of about $9,000. Also, and heres the kicker, the dealer had my exact car on their lot for $15,999.
So I knew theyd price my car similarly, and I asked for $10K on my trade-in. I told my salesman Id then negotiate a fair price on their car. I essentially got laughed at as I was walking out their door. They let me go when I was willing to make a deal and pay more than I probably should have for their car.
So now Im changing strategies and doing what I shouldve done in the first place. I sold my car privately for $11,000, Ive secured financing through my credit union, and now Ill shop with cash in hand and work the best deal I can.
Thats my advice to the guy who emailed us and to anyone else car shopping right now. Dealers are hurting, but theyre still looking to take advantage of buyers in any way they can. Go with cash and make your best offer if they still turn you down, well, maybe theyll be one of the thousands more dealers to fail in the coming years.
Would any dealers care to put in their two cents here? Have any other car shoppers had experiences like this?
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I sold out my Dealership Interest in 2001. Let’s just say I could see what is happing today from many miles away. People who know me now say that I am an Automotive Genius for seeing the handwriting-on-the wall.
We are now going through the painful experience of bringing automotive retailing into modern times. Multi-manufacture dealerships will be a think of the past as this so called, “RESTRUCTURING” take hold, or should I say, Takes its Toll!