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Selling cars in the U.S. - the inside scoop

By el_guapo in Culture
Mon Aug 04, 2003 at 09:15:17 PM EST
Tags: Culture (all tags)
Culture

OK, a quick foreword. I am a dyed in the wool tech weenie. Hardcore Cisco jockey. I got whacked from a classic tech company back in January, and I was faced with the very real prospect of being unemployed for a Very Long Time(c). So I thought: "what the hey, I'll sell cars until I can be a professional propeller head again". Boy oh boy, was THAT an experience. Details below.... (Note, I'm detailing 2 very different markets, Arizona and Texas - abbreviated T, A, or T&A :)


I'm going to answer the most obvious question first: Are car salesmen as slimy as their reputation suggests? Yes. And no. In my short 4-month exposure, I learned that car salesmen represent a very real cross section of humanity. Are there complete dirtbags that will lie and cheat and do whatever they can to get every last penny out of you? Yup. Are there some really decent folks who just want to help you pick out the car that is best for you, and hope they can come out of the transaction earning a little money? Yup. There's probably 10 of the former for every single of the latter.

Part One: Dealership Organization (aka: just how much can these guys make?) From 1.a(top) to 9.z(bottom)

Top down: General Sales Manager - 1(T&A) - HMFIC. Theoretically in charge of everything, however, like any super-senior manager, this guy can take a VERY hands off approach, or not. Depends on the individual. Also, note that he's in charge of the dealership operations, NOT the business. There is usually an owner, owner's kids, a comptroller, and the usual U.S. corporate B.S. above this guy. GSM's can make from $15,000 to $50,000 per month, and they get a cut from each and every deal the dealership does.

Sales Manager - 2.a(T&A) - aka: "Desk Manager", these are the guys your salesman goes to when he says "Let me ask my manager". And, contrary to popular belief, they do NOT walk up there and shoot the breeze pretending to wait for an answer. I have no clue how this rumor started, but think about it: how does wasting your time help anybody? It is in that dealership's best interest (including the salesman) to get your transaction concluded as quickly as possible, so they can get back to the business of selling the next guy a car as quickly as possible. Desk Managers can earn from $10,000 to $20,000 per month, and get a cut from each deal they themselves write.

Finance and Insurance - 2.b(T&A) - The guys in the back that actually sign all the real forms (all of the ones you've signed up until now were complete bullshit). These guys have the best job of all, IMHO. Every one of their "customers" has already been completely dealt with, the bad credit folks have already been filtered out (dealerships spend TONS of effort selling cars to people that ultimately turn out to not be able to buy a car), etc. If a customer sits down with an F&I guy, statistically, there's about a 99% chance that they're leaving his office with a new car. F&I guys can make $10,000 to $20,000 per month, and get a cut from each deal they themselves write. Wanna piss off an F&I guy? Pay cash for the car (or finance with your own bank or credit union, the same thing to him) - he will literally get $0 for that deal, effectively working for free.

Assistant Sales Managers - 3.a(A) - aka: Team Lead. Dealerships break their salesmen up into "Teams", which is actually a joke as there is NO teamwork involved. "Teams" are actually a concept created by the dealership for the sole purpose of making scheduling time easier. Turnover is so high that keeping the work schedule up to date with who actually works there would be a monumental task. So they just schedule the teams, and let HR keep the teams staffed. ASM's can earn from $4,000 to $10,000 per month, and get a cut from all of the deals that their team writes. In Arizona, ASM is one of a couple of "first steps" that the dealership can use to promote high producing salesmen after they've "done their time".

Fleet Sales - 3.b(T&A) - Another carrot, after a person has proved themselves "on the floor" (i.e. regular salesmen), they can be moved to fleet sales. The nice thing about fleet sales is that the sales here are almost always done deals. You don't have to work the customer, fact find, select a vehicle, or any of the other onerous things that a salesman taking a cold call has to do. In all probability, it's a repeat customer, they know what they paid for the last vehicle so you don't have to haggle with them, etc etc etc. You're a glorified "form filler-outer". Fleet Sales, like ASM's, can make between $4,000 to $10,000 per month, and get a cut from each deal they write. Fleet guys survive from volume, volume, volume. A really good floor salesman might sell 15 cars a month, a really good fleet guy will move 30.

Internet Sales - 3.c(T&A) - Positionally identical to Fleet Sales and ASM, another "first step" for promoting a good salesman. Another cushy job, too. Again, you have to expend exactly zero effort to find your customers, your website snagged them all. Also, internet customers are usually cut and dried. They know what they want, they know what you paid for it, and they know what they'll pay for it. These deals start out being finished, as it were. Internet Sales can make from $4,000 to $10,000 per month, and get a cut from each deal they write. Like fleet, volume is everything.

Floor Salesman - 4(T&A) - This one is hard to typify. If he's been there a while (say >5 years), this job is cushy in the extreme, as all of your business is repeat. If not (and most aren't), you're as low as low can be at that dealership. A typical new hire new car salesman is going to work from 50 to 90 hours per week, earning 25% of commissionable gross, with a guaranteed minimum of $100.00 per vehicle sold. The vast majority are going to sell between 5 and 15 cars a month, earning between $2,000 and $7,000 per month.

OK, realize those number are averages, I know of a salesman in Texas that sells >20 cars each and every month, and makes something like $180,000.00 per year. Of course, he's at a huge dealership, and he's been there like 12 years. Basically, 20% of the people in a dealership make 80% of the money.

Part Two: Anatomy of a Car Deal(T&A) - Car deals are broken down into two basic parts: The Front End The front end is basically what you paid for the car minus what the dealer paid for the car plus "pack". You can go to www.edmunds.com or www.kbb.com and usually find out exactly what the dealership paid for his new cars. That cost is basically invoice price minus holdback. Invoice is the theoretical dealer cost, and holdback was supposed to be a secret amount that let them sell it at invoice and still make money. Supposedly in the old days, holdback was how that dealership paid it's fair share of national advertising campaigns and whatnot. This isn't the old days anymore, and now that folks have learned about holdback, it's simply a "secret" mark-up now. OK, so WTF is that "Pack"? Pack is a theoretical number that represents what it costs that dealership to sell you a car. If it's a snazzy new dealership, on really expensive land, with a huge advertising budget, it's going to have a large pack. Say $750 per car. Small dealerships may have a Pack more like $250 per car. So, let's analyze that thing that doesn't exist, the typical car deal:

MSRP: $21,000.00 - FYI only, not relevant in this calculation

Price you paid: 20,000.00 minus

Invoice: 18,500.00 minus

Hold Back: $500.00 plus

Pack: $500.00 equals

Front End Commissionable Gross: $1,500.00 times

Commission rate 25% equals

Salesman Commission $375.00

Some quick math reveals that if a salesman moves 15 of these deals a month he makes $5,625.00 per month. Noting that most don't sell 15 per month, and that the above referenced deal would be a wet dream to most car salesmen. IE: almost none make that kind of money. Perhaps you can now see that despite the fact that the car salesman is easily the hardest working guy on the lot, he is also generally the least well paid. What would the salesman make if you weren't a pushover and only paid him $18,500? Well, he earns what is known in the business as a "mini": the smallest commission that dealership will pay. This is usually $100.00, but can vary somewhat. Why would a dealership sell you a car for what that dealership paid for said car? Now we get to one of the last nasty little secrets of the business:

Part Three: The Back End

The Back End is money the dealership makes that most people don't know about; and IMHO is literally theft on their part. Huh? How so? First, think about this, if you and I can go into any bank and get a loan with an interest rate of, say, 5.9% for a new car - and we generate a total of maybe 1 loan every 2-3 years; think about what kind of rate a dealership that generates 300 loans a month can get. If you can get 5.95, then that dealership can realistically get 1.9%, and then sell that loan to you for 5.9%, and they keep every penny of the difference. How is this theft, you say? Well, you are literally the one getting approved at that 1.9% rate. They are literally lying to your face when they tell you that you were approved at 5.9%. Ever wonder why you have to wait 2 entire forevers from the time you agree to buy the car to the time you're actually sitting down in back signing the real papers? I mean, it can't take that long to enter all the information into the computer, right? It's because he's literally pouring over your credit and financials to see what kind of rate he thinks he can stick you with. God help you if your credit was just high enough to get approved. Your "buy" rate (as it's called) will likely be something like 12%-15%, and they're going to tell you that your loan was approved for 22%. No shit.

Oh, and for you smarty-pants that go to your credit union/bank and get preapproved, then go in brandishing the approval form saying "I'll only finance with you if you can match this rate". Hoo boy, they love you!! They only look perturbed (they want you to think you're the shit, after all), but inside they're dancing with joy. They now know the exact amount they can fuck you over on the interest rate. For the people who don't bring in an interest rate, well, the F&I guy just kind of has to feel you out. This is actually kind of dangerous, because if he quotes you a rate that you know is too high, what excuse can he pull out of his ass to justify lowering that rate? "Uhhh, the computer printed the wrong rate"? He certainly can't tell you the truth! "Ha Ha, you got me, I was actually trying to defraud you out of some extra money! Silly me!". The sad thing about this fraud, and I do consider it fraud, is that the banks are part and parcel to it. Screwing you over on the interest rate is one of many ways the F&I guy makes tons of money off of you. He also gets a huge cut of: Credit Life, GAP Insurance, Extended Warranties and those completely bullshit "security stickers" and window etching.

Part Four: Various Sundry Other Ways They Rip You Off

Paint Sealant, fabric protection and under body coating: These are usually bundled together in a "Value Package" (HA!), and the only one that gains value is the dealer. This little gimmick is fucked up no matter how you look at it. If they're (pseudo)honest, and it's actually all there you've got a glorified wax job, a $6.00 can of Wal-Mart brand fabric sealer applied by an illegal immigrant making $5.00 and hour, and an under body coating that actually increases the odds that your car will rust. Total value: $25.00, your price? Usually something like $995.00. Never pay for this stuff, not even the $25.00 dealer cost. A)It's not worth it, and B)it's almost NEVER actually there. <Gasp> Yes, they will lie to your face and tell you that stuff is on there when it isn't.

Window etching: this is sometimes rolled into the package above. Never pay for this either. Their cost: $8.00, your cost: usually like $149.00. Why not pay for it, if it's actually on the car? A)It's as worthless as the above package - how many thieves do you know that are going to give the slightest shit that a partial VIN is on the windows? B)You can get a kit yourself for a whopping $19.95. There's probably lower prices than that out there, I'm lazy :P

Accessories: Man oh man oh man. Accessories are easy to figure out. Want to know the dealer cost on an accessory? Divide the price in half. That $499.00 Honda cassette deck you want installed cost that dealer $249.00. If you just have to have a factory cassette (or whatever), negotiate the price. They're going to show you an official looking MSRP sheet, and innocently act like the factory set that price. Bullshit. Offer them a reasonable price, and they'll take it. You're not going to get accessories for less than cost though. From his standpoint, why would he pay you to take an accessory?

FYI: a typical car deal might be: Front End = $500.00 profit, Back End = $3,000.00 profit. See why it sucks to be that floor salesman??

Now, for the part that can actually save you some real dinero - "How do I get the best deal on my new car"? Very simple. Find the web sites of the 2 closest dealerships selling the car you want. Get an online quote (include the interest rate in your request!!) from one of them, then take the email offer he sent you, and forward it to the other. Lather rinse repeat until they've obviously cut every last dime out of the deal. Do this towards the end of the month, but not the last day, since if you have to walk on the deal to make a point you'll have to wait another 30 days for them to be that price aggressive again. Give yourself 2-3 days, that should be close enough that they're hungry to make their 30 day numbers, and leave you enough time to walk and be able to come back the next day.

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Selling cars in the U.S. - the inside scoop | 215 comments (189 topical, 26 editorial, 0 hidden)
VIN etching (4.66 / 3) (#12)
by Work on Mon Aug 04, 2003 at 05:43:27 PM EST

VIN etching is the biggest rip off. My first job was making the noxious crap they do it with. Total cost per bottle/stencil to make and ship: $1.00. And you can do about 3 cars off a single bottle.

And IMHO, its pretty pointless anyway. Its pretty easy to etch the etchings right off.

The sad thing is, we shipped hundreds, if not thousands, of bottles and stencils to dealers every week.

Why don't they just put a little radio tag ... (4.50 / 2) (#38)
by pyramid termite on Mon Aug 04, 2003 at 08:58:33 PM EST

... someplace inaccessable, like in the engine block, that would broadcast the VIN number? That would be a lot harder for theives to overcome. They do it for clothes, why not cars?

On the Internet, anyone can accuse you of being a dog.
[ Parent ]
That's called "Lojack" (4.50 / 2) (#40)
by ad hoc on Mon Aug 04, 2003 at 09:33:46 PM EST

http://www.lojack.com/


--

[ Parent ]
There is a nice show (5.00 / 5) (#77)
by Dievs on Tue Aug 05, 2003 at 04:54:40 AM EST

There is(at least was) a pretty fun TV show in Russia about that.

The idea was that you give the contestants a car with that LoJack, they get a 15 min headstart, and then the cops go after them. (It was organised together with a police training excercise).
If they aren't caught within 1 hour, they get the car.
The police cars and the 'getaway' car have cameras, and quite a good show with real live chase scenes is made from that.

Most of the guys are caught. I have seen one that escaped, and it was driven by a pro rally driver, and they escaped through wilderness and using a train car they rented for that.

[ Parent ]

lojack is a scam (5.00 / 2) (#85)
by moonpolysoft on Tue Aug 05, 2003 at 08:26:56 AM EST

Lojack requires that at least two police cars be in the area and be equipped with the proprietary lojack equipment that the police have to pay for. So if its a busy police day and that cop is needed elsewhere, you are SOL.

Onstar is just as bad. Onstar is controlled by a cellular system. So the easiest way to disable Onstar antitheft is locate a cell antenna on the vehicle then remove it. No more Onstar.

The only vehicle tracking system that I know of that is worth a damn is a GPS tracking unit by viper. That one has a direct satellite uplink to a call-center.



[ Parent ]
That's as may be (4.00 / 1) (#90)
by ad hoc on Tue Aug 05, 2003 at 09:30:16 AM EST

I don't know if it's a scam or not. My guess is you're right. To locate the car, it would have to be triangulated. Still, it is the system he's talking about.


--

[ Parent ]
Not necessarily (none / 0) (#146)
by ttfkam on Tue Aug 05, 2003 at 07:44:15 PM EST

You may be speaking to the theoretical as was the case with cable vs. DSL where cable users supposedly would get screwed with too many people in the neighborhood clogging the pipe.  As a general rule, this hasn't been the case.

My folks have had their car/truck stolen a few times (I hate LA sometimes), and the only two times where the truck was recovered quickly and relatively undamaged was when it had Lojack.  The biggest expense was the towing service (a rant for another day).

Apparently some car thieves have learned to steal the car and then dump it somewhere for a day or two before heading to the chop shop just to make sure that the police don't get led to their base of operations by the Lojack signal.

Seemed worth the money to me.  Hardly a scam.  Then again, LA is a large city with at least two spare cars at any given time.  Your mileage may vary in smaller communities.

If I'm made in God's image then God needs to lay off the corn chips and onion dip. Get some exercise, God! - Tatarigami
[ Parent ]

You mean like an RFID chip? (5.00 / 2) (#45)
by groove10 on Mon Aug 04, 2003 at 10:29:05 PM EST

As descibed in this Register article here. Automobiles and bicycles would seem like the perfect application for these chips. There are a lot of privacy implications in tehe use of these chips but I think that vehicles would be one of the few things that people would want to be personally identifiable. The VIN number could go by the way-side.

Do you like D&D? How bout text-based MMORPGs? You need to try Everwars. It's better than shooting smack!
[ Parent ]
demo cars? (5.00 / 2) (#14)
by urdine on Mon Aug 04, 2003 at 06:00:38 PM EST

A question about demo cars (the cars salesmen get to drive around for a few thousand miles usually before being sold at a slight discount): do you think buying these cars is worth the discount? I've heard that salesmen abuse the cars, or alternatively it's not a bad trade-off if you're cheap (since you get the new car warranty, etc.), or it's completely up to luck - you might get a car that's beat up or you might get a great deal.

What I've heard is that beating up on the car is often not intentional, but salesmen put on a lot of highway miles and tend to "break in" the car too quickly, which can cause long-term engine problems or some such. Is there any truth to this, or is this a question I should redirect to Car Talk? ;)

Excellent article, by the way!

and an answer :) (4.50 / 2) (#19)
by el_guapo on Mon Aug 04, 2003 at 06:27:25 PM EST

thanks for the compliment, BTW :D RE: demo's - they're not never beat up, and they don't let most salesmen drive them. demo's are meted out to senior salesmen (that one i mentioned that had been there 12 years making $180,000.00 per year had one, for instance) and to the managers. here's how they work. first, the need for one arrives, either someone got promoted, turned in their last one, whatever. the lucky person picks out a car, always a loaded top of the line one, and they "ground" it. ie: put a real tag on it. seen those cars with metal tags that say "dealer" on them with no expiration date? that's a grounded demo. now the person is required to drive said car to work, so that it can be potentially sold, of course salesmen NEVER volunteer to show these, as he'd be selling the car out from under a manager - although that was the deal that manager theoretically struck to get the demo, that it might get sold out from under him. so what always happens, the car gets a few miles on it, and in an effort to be able to get SOMETHING out of it, they yank the tag, put it on the lot, and give him another and sell that one as a demo. with internet haggling, ie: using my above listed system, you will darn near get the same deal you'll get on a demo. so while there's usually nothing wrong with them, i wouldn't do it...
mas cerveza, por favor mirrors, manifestos, etc.
[ Parent ]
Another perspective (4.75 / 4) (#28)
by falloutboy on Mon Aug 04, 2003 at 07:09:24 PM EST

I used to work as a service advisor at a BMW dealership in New York. Demo cars at that store were a fantastic deal for a couple of reasons.

Demo cars were always impeccably serviced.

BMW added an extra 5000 miles to the new car warranty.

A few thousand miles on the clock doesn't hurt you any, but can make for a great bargaining point to shave some cash off the price.

If, during the first few months of ownership, you do discover something horribly wrong with the car, you might be able to get the dealer to put you in a brand new car at no cost. Remember that car dealerships are actually small businesses and they depend on a customer coming back both for service and their next vehicle.

I have a quick story thats only peripherally on topic, but worth a chuckle, so here goes. A guy had bought a convertible M3 with the 6 speed manual gearbox and found a really awful shaking in the rear end at speed after only about two months on the road. The technician pulled some data from the engine computer, and found that he'd modified it to remove the rev limiter. The computer had recorded that the highest the engine had revved was about 1000 over redline, and that the driver held the car at that level for -- no kidding -- nearly 8 minutes. Although this was not likely the direct cause of the shaking, BMW declined to buy back the car.

[ Parent ]

Demos rock (4.00 / 1) (#44)
by tjb on Mon Aug 04, 2003 at 10:19:10 PM EST

Maybe its just BMW that are so magnanimous with their demos - three years ago I picked up my 323i loaded up with a perfect hybrid of the sport and luxury packages (given what I wanted) and a bit over 5000 miles for around $8500 less than what would be its sticker if it was brand new.  After haggling a bit about the fees and interest rates and such, I picked up a $38000 car for about the same monthly as a $28000 car.  

And if it was beaten up, I can't tell.  I do have a relatively minor complaint about the engine light always going on when there's nothing wrong (about once every six months or so), but at least the dealership doesn't charge me for determining that nothing is wrong and resetting the computer.  But its still a pain in the ass to have to drop the car off for a day given that I'm still too young (for another month or so) to be allowed to take a loaner.

Tim

[ Parent ]

One factual bone to pick (4.75 / 4) (#15)
by nadreck on Mon Aug 04, 2003 at 06:04:11 PM EST

I will accept most of what you wrote as fitting my view of the industry, however the loan rates you quote at the low end do not seem credible. Since no one, not even banks, can get 1.9% on fully backed securities for a term of more than a year, a car dealer putting a deal together between a finance company and an ordinary retail customer with excelent credit will not get better than 5.9% for a 3 to 5 year loan with 75% of the value of a car as colateral.

Now the exception to that is the sponsored loans that come not from a financial institution but through the graces of the car manufacturer. These can be looked up as loans at regular rates of interest but the interest charges broken out and offered as a rebate by the car manufacturer. If there is a 0% loan available today for a $20,000 Ford if you put $5,000 down, it is the equivalent of a 5.9% loan with a $2,000 rebate.

I just can't accept your figures about the finance side. The larceny I believe, just the numbers don't add up.


Nadreck of Palain VII (ok, ok, really Jim Grant of Yellowknife)

saw it every day (4.00 / 2) (#17)
by el_guapo on Mon Aug 04, 2003 at 06:19:51 PM EST

literally. with an isaac/beacon over 700, i saw buy rates of 1.9 every single day. and the beuty of the %0 deal is that most people take the rebate, and so the dealership gets to screw them over on interest as well. dunno how to convince you of those rates, but they were surprisingly common, and for decent lengths of time. now, not 72 months, but certainly 48...
mas cerveza, por favor mirrors, manifestos, etc.
[ Parent ]
Someone has to pay (4.66 / 3) (#22)
by nadreck on Mon Aug 04, 2003 at 06:41:38 PM EST

There is no money available for consumer credit at that low a rate. So if it is there it comes out of someones pocket most probably the car manufacturer. If you have the choice of lending the money to the US government for 5 years at >3% or Joe Sixpack for 1.9% what will you do?


Nadreck of Palain VII (ok, ok, really Jim Grant of Yellowknife)
[ Parent ]

Someone does pay (5.00 / 1) (#26)
by pyramid termite on Mon Aug 04, 2003 at 06:59:17 PM EST

If you have the choice of lending the money to the US government for 5 years at >3% or Joe Sixpack for 1.9% what will you do?

That would depend on whether you're in the business of lending money or manufacturing cars, right? Remember at some point the government's going to tax you on the inventory you still have - also, there may be some kind of "kickback" arrangement that el guapo wasn't privy to. Also remember that although el guapo knows what price the dealer's paying for the car and selling it for, he doesn't know how much it actually costs the manufacturer to make the car. I bet you there's at least a few thousand dollars right there.

So, the question really is - if you have 20,000 dollars, do you lend it to the government at >3% or make a car, sell it for 23,000+ to the dealer, who then sells it to Joe Sixpack for 27,000+ that you collect 1.9 interest on? (I know, my figures are probably off, but the basic idea is right.)

On the Internet, anyone can accuse you of being a dog.
[ Parent ]
FYI (none / 0) (#29)
by el_guapo on Mon Aug 04, 2003 at 07:10:54 PM EST

of the pricing i *did* see, the standard markup was literally %100. i have no clue if that holds true for the car itself. but i *do* know that mazda challenged the dealership i was at to sell >60 cars, and if they DID, they'd get a $1,000.00 per car bonus. (my point being the mfr must have WAY more than $1,000.00 profit selling to the dealer for that to make sense) see this comment on how insane they got on the last day of the month when they thought they weren't gonna make 60 cars http://www.kuro5hin.org/comments/2003/7/30/153635/504/7#7
mas cerveza, por favor mirrors, manifestos, etc.
[ Parent ]
search me (none / 0) (#27)
by el_guapo on Mon Aug 04, 2003 at 07:04:31 PM EST

it was both the manufacturer's finance outfits AND private banks. the 1st time i saw it i thought it had to be promotional. it wasn't. after seeing it hundreds of times from everyone under the sun, all i could figure was the institutions are getting it at that %.75 rate (or whatever that funds rate is now) and turning it around and selling it at %1.9. and remember that i got to see it for 2 months in houston and then 2 months in phoenix, so it's not a regional thing, either. maybe the manufacturers have some leverage with the banks? like, ok, grant these loans to credit worthy folks, or we'll pull our 1.8 billion in deposits out?
mas cerveza, por favor mirrors, manifestos, etc.
[ Parent ]
The institutions only get it for .75% short term (4.66 / 3) (#33)
by nadreck on Mon Aug 04, 2003 at 07:34:59 PM EST

Longer term rates are much higher. A car loan to a consumer is a contract for years at a fixed rate. I still can't accept this one part of your article. All the rest rings true, and if you had talked about the dealers accessing 4 or 5% funds and turning around and telling their customers with good credit ratings that they qualified for 7% or 9% I would believe it.

I will accept the idea that someone else was subsidizing it, but not that they could actually get rates like that.

I won't refute this anymore, but frankly can't believe your assertion that this was available in a non-subsidized form.


Nadreck of Palain VII (ok, ok, really Jim Grant of Yellowknife)
[ Parent ]

You're not seeing it. (3.00 / 2) (#74)
by debacle on Tue Aug 05, 2003 at 03:34:13 AM EST

This is just a triple jump of funds instead of a double jump.

Banks do this all the time.

They take out 10000 to give to Jim Blowcock at .75, and within a year they've got the money back from Jim Blowcock, as well as the savings of the other members of the bank, and then they have another 2-4 years to get the rest of the money back from Jim at 3.7 percent.

Auto dealers do the same thing. That's part of the reason why there are downpayments. They get that 1.9 percent rate, but they can't keep the money out for 3-6 years, so they pay it all back ASAP, and reap the benefits for another 4 years.

I know this because I work in accounting with a friend of the family, and he can do some things with numbers that all you to make more money taking out a loan without investing a penny of it, than putting the same amount of money in the bank and letting it collect interest.

That's why they call it a loophole.

It tastes sweet.
[ Parent ]

just found out how they're dooing it (none / 0) (#210)
by el_guapo on Mon Aug 11, 2003 at 08:13:39 PM EST

http://www.hondacars.com/tools/frameset.asp?Function=offers&=undefined you were correct. it was manufacturer sponsored, they just weren't telling the customer, and so fucked them over on the rate. that explains why i saw 1.9 and 2.9 all the time....
mas cerveza, por favor mirrors, manifestos, etc.
[ Parent ]
Yup. (4.00 / 1) (#91)
by Rocky on Tue Aug 05, 2003 at 09:32:02 AM EST

Someone does pay - the lender.

You see, this is how it works:  If the customer does not have an immediate lender in mind when he/she makes a purchase, it's up to the dealer to make the decision as to who gets the lending deal.  The dealer will go to the lender that provides the highest terms that the customer will find acceptable.  In addition the dealer can make a small cut from the lender for passing on the deal.

The different lending institutions are basically bidding for that dealer's business at that point, and the institutions try to cut it as close as possible to get as much paper as they can.  I used to work for a car finance company, and I remember that there were some regions of the US where it was tough for the finance company to compete because a local bank was undercutting our rates.  Sure, the bank would take a bath in the long term by not making enough interest to justify the deal, but sometimes volume more was important to them, especially if those contracts were ABS'ed (Asset Backed Securities - selling the financing to a third party to raise cash).

Anyway, that's why you can get those low rates - capitalism!

If we knew what it was we were doing, it would not be called research, would it?
- Albert Einstein (1879 - 1955)
[ Parent ]

Participation Points (5.00 / 2) (#96)
by rigorist on Tue Aug 05, 2003 at 09:57:40 AM EST

I've seen the contracts between dealers and lenders in discovery.  What I have seen works like this:  The dealer delivers the car to the customer.  The lender pays the dealer for the car.  The lender collects payments from the customer.  Then, the lender pays the dealer a portion of each payment (usually on a quarterly basis).  This additional payment is referred to (in my area) as "participation" and varies widely.

Keep in mind these are secured loans.  If the customer does not pay, the lender can repossess and sell the vehicle.  This, in theory, should allow the lender to lend at even lower rates than prime.  Do they?  Yes.  Does the customer see the benefit?  No.

[ Parent ]

Waiting around in back (5.00 / 4) (#30)
by FlipFlop on Mon Aug 04, 2003 at 07:18:07 PM EST

And, contrary to popular belief, they do NOT walk up there and shoot the breeze pretending to wait for an answer. I have no clue how this rumor started, but think about it: how does wasting your time help anybody?

Some years back, there was a popular scam amongst car dealers. The salesman would offer to sell you the car at a great price. He'd let you drive it home, show it off to your neighbors, tell your neighbors what a great deal you were getting, etc..

When you finally sat down to sign the papers, the salesman would go in back to do something else. A few minutes later, he would come back out and tell you the manager wouldn't let him sell the car at the agreed-upon price. He argued with the manager and tried to get him to bring the price down, but he just wouldn't budge. If you still want the car, it will cost an extra $500.

Naturally, the manager isn't available to speak with the customer personally. The salesman conveniently hands the blame off to some imaginary entity that no one has any power over. The scam apparently worked well enough to become popular.

In some states, this scam is illegal. If a dealer offers to sell you a car at a certain price, they are requied to honor that offer.

AdTI - The think tank that didn't

Bait and switch (3.50 / 2) (#67)
by grouse on Tue Aug 05, 2003 at 02:47:44 AM EST

In what states is this legal?

You sad bastard!

"Grouse please don't take this the wrong way... To be quite frank, you are throwing my inner Chi out of its harmonious balance with nature." -- Tex Bigballs
[ Parent ]

"Puppy Love" (4.25 / 4) (#99)
by rigorist on Tue Aug 05, 2003 at 10:05:08 AM EST

This is still done every day.  However, instead of the manager causing problems, the dealership blames the finance company.

See, in the "paperwork" dealers will put a form called a "conditional delivery agreement."  This form says the whole deal can be cancelled if the financing pans out.  

After a few days, the dealer calls the customer and says financing was not approved.  Financing _can_ be approved only if the customer comes up with a bigger down payment and pays a higher interest rate.

Here's a link to a description of the practice:
http://www.lawlibrary.state.mn.us/archive/supct/0006/c499161.htm

[ Parent ]

And the smart customer... (4.00 / 2) (#102)
by ckaminski on Tue Aug 05, 2003 at 11:00:46 AM EST

...picks his ass up, tells them he's going across town to their competitor and will buy from them.


[ Parent ]
Wouldn't... (2.00 / 1) (#104)
by SPYvSPY on Tue Aug 05, 2003 at 11:14:41 AM EST

...any intelligent person tell the dealer to fuck off and die at that point?
------------------------------------------------

By replying to this or any other comment in this thread, you assign an equal share of all worldwide copyright in such reply to each of the other readers of this site.
[ Parent ]

The result (none / 0) (#147)
by rigorist on Tue Aug 05, 2003 at 07:54:09 PM EST

Then the dealership repos the car.  Believe it.  

I sued out one of these about six years ago.  My clients purchased a car and signed financing paperwork.  They took the car home.  The next day, husband goes to his credit union and gets a loan for the car.  The credit union issued a bank check for the price.

My client and his elderly father went to the dealership to pay off the car.  The dealership REFUSED to take the check and roughed up my client and his father.  My client left the check.

Four weeks later, the dealer repossessed the car from a parking lot.

We sued, they paid.  You bet they paid.

As for the parent, its easy to talk tough on k5.  Try being tough when its your car they're taking.  Come and see me then.  Bet you won't.  Bet you just cave in like most people.

[ Parent ]

Or (none / 0) (#157)
by TheOnlyCoolTim on Tue Aug 05, 2003 at 11:39:20 PM EST

tell them to fuck off and die when you see the "Conditional Delivery Agreement"?

Tim
"We are trapped in the belly of this horrible machine, and the machine is bleeding to death."
[ Parent ]

so what you're saying is... (3.00 / 1) (#31)
by reklaw on Mon Aug 04, 2003 at 07:32:16 PM EST

... don't get your car finance from the dealership.

Not that I'm an expert or anything, but I'd have thought that'd be common sense -- the same way you expect to get screwed over on store cards, for example.
-

Credit cards (3.00 / 1) (#71)
by grouse on Tue Aug 05, 2003 at 02:55:07 AM EST

Actually, running a balance on any credit card is usually a rip-off, let alone a store card.

You sad bastard!

"Grouse please don't take this the wrong way... To be quite frank, you are throwing my inner Chi out of its harmonious balance with nature." -- Tex Bigballs
[ Parent ]

Even better... (none / 0) (#194)
by rodgerd on Thu Aug 07, 2003 at 10:48:50 PM EST

...just don't buy on finance.  For an asset that depreiates as quickly as a car, it's just plain dumb.

[ Parent ]
well, yeah (none / 0) (#195)
by reklaw on Thu Aug 07, 2003 at 11:07:33 PM EST

That's pretty much my opinion on the matter too. People always seem to take strong offence to that, though, for some reason, and say something about me getting at people who can't afford to pay for a car in one go (ie. can't be arsed to save up).

If that fails, then I get attacked for encouraging people not to "build credit", which is a mysterious process whereby you give some finance company your money for no reason other than getting yourself a credit history.
-
[ Parent ]

well. (none / 0) (#199)
by /dev/trash on Fri Aug 08, 2003 at 11:54:22 AM EST

If you ever wanna buy a house, you need that credit history.  Unless you also think people whould just save until they can buy a house with cash.

---
Updated 07/20/2003!!
Summer Tour!
[ Parent ]
well, no. (none / 0) (#200)
by reklaw on Fri Aug 08, 2003 at 12:57:09 PM EST

I'm sure there are other ways of building a credit history -- how about getting a credit card, spending on it and paying off the balance every month (before you get charged interest)?

It just doesn't seem right to me that people would buy a car on finance just because of some silly fear over their credit rating.
-
[ Parent ]

annnnnd? (none / 0) (#203)
by /dev/trash on Fri Aug 08, 2003 at 05:43:18 PM EST

What should you finance with a  credit card?  Food clothes, etc?

Sure you can get a credit history with a credit card but if the limit is like a $1000, that proves that you can handle a $1000 credit, the next big step before a house would be.....a car.

---
Updated 07/20/2003!!
Summer Tour!
[ Parent ]

well, hey. (none / 0) (#204)
by reklaw on Fri Aug 08, 2003 at 08:17:42 PM EST

There's always more than one way to skin a cat.

If you're determined to bend over and take it in the ass from your financial overlords... be my guest.
-
[ Parent ]

ahhhh (none / 0) (#205)
by /dev/trash on Fri Aug 08, 2003 at 09:01:47 PM EST

Who said I'd ever finance a car???

Until I win the lottery I won't even buy a new car.

---
Updated 07/20/2003!!
Summer Tour!
[ Parent ]

Perhaps it's different over there... (none / 0) (#215)
by rodgerd on Wed Oct 22, 2003 at 04:43:09 PM EST

...but my bank didn't want me to pay off a car before they would give me a mortgage.

[ Parent ]
Excellent piece (4.00 / 4) (#34)
by A Proud American on Mon Aug 04, 2003 at 07:42:19 PM EST

But no one here has two cents to their name.

The purchasing power of the kombined K5 kollective is probably about seventy-five dollars.

____________________________
The weak are killed and eaten...


Aw (5.00 / 1) (#41)
by KnightStalker on Mon Aug 04, 2003 at 09:51:27 PM EST

You're just mad because we gave all your money to Rusty.

[ Parent ]
Hamster yacht polish (none / 0) (#135)
by CFK on Tue Aug 05, 2003 at 06:00:57 PM EST

CMF wins, yet again!

[ Parent ]
The right way to finance the car. (4.66 / 3) (#36)
by stodd on Mon Aug 04, 2003 at 07:53:03 PM EST

Get yourself approved for the lowest rate through your credit union. When it's time to sign the papers, you walk in with a cashiers check for the full value of the car. You sign, you walk, and you make all payments directly to the CU. Car dealers hate it when you do this, because they don't even get an origination fee on the loan. You will probably pay just as much, but at least you know it's going to an organization you're a member of, and you can derive some benefits through your own savings account.

Better- Let them slice assuming big back end. (4.50 / 2) (#42)
by snowlion on Mon Aug 04, 2003 at 10:04:07 PM EST

Act as if you are financing through the car dealership.

Let them rack up a huge back end.

Say it costs too much.

They'll slice the price a bunch, because they think you're financing through them.

Then pay with your cash.
--
Map Your Thoughts
[ Parent ]

Better - Free money! (4.50 / 2) (#57)
by ZorbaTHut on Tue Aug 05, 2003 at 12:12:15 AM EST

Find a car dealership with a "first X months interest free" deal. Often they have ludicrous rates after X months, but that's okay, we don't care. Do the above. Don't pay with cash. Get a loan. Stuff your cash in a savings account or a bond or (if you're feeling relatively risky) the stock market. A week before the interest kicks in, pull the cash out and pay for the entire amount. Pocket the money *you* made off the loan.

Borrowing money is only a bad idea when you have to pay interest. :)

[ Parent ]

not worth it (3.00 / 1) (#81)
by jjayson on Tue Aug 05, 2003 at 06:51:06 AM EST

A 6mo T-bill will net yield you ~$105, while moving the cash into a money market might pull in ~$140 if the rate doesn't go down.
--
"Fuck off, preferably with a bullet, if you can find one that's willing to defile itself by being in your head for a split second." - Parent ]
Are you kidding? (3.50 / 2) (#103)
by ckaminski on Tue Aug 05, 2003 at 11:06:31 AM EST

You telling me that a free $105 isn't worth a little bookkeeping?  ;-) And if you get a 2% APR on your money market accounts like I do at <shamelessplug>www.netbank.com</shamelessplug> it's even better.

[ Parent ]
Good article.. analogous to most sales enviroments (4.00 / 1) (#43)
by cavalier on Mon Aug 04, 2003 at 10:05:05 PM EST

Where there is inventory and a team necessary to sell them..   furniture sales for example,  and I have direct experience in radio sales just like this.  The big kahunas get all the repeat business,  the little fishies struggle alot and often starve due to no hook ups.  Usually if a guy is walking into a store,  or calling up a radio station,  they already want to make the deal.  You've just got to dance with them...

In radio I've seen it usually go..

AE (Account Exceutive) -->  LSM (Local Sales Manager) -->  GSM (General Sales Manager) -->  DOS (Director of Sales)

Thank you el guapo.  You're so big.


carsdirect.com? (5.00 / 3) (#46)
by snowlion on Mon Aug 04, 2003 at 10:31:42 PM EST

Are those good prices? Legit?

I read on the web another story by a guy who did car sales,and he talked about people buying via carsdirect.com.

Pretty bitter about it, actually.
You notice that kind of thing?
--
Map Your Thoughts

Middle Men (none / 0) (#148)
by curunir on Tue Aug 05, 2003 at 08:34:12 PM EST

I imagine that carsdirect.com isn't too much better. They've just figured out the minimum they need to allow the dealer to keep and are keeping the rest. So the dealer makes barely anything on the deal, but the carsdirect.com people are probably doing alright.

It seems to be pretty consistant that whenever there is a business where consumers are gouged at every turn, a middle man will spring up and reduce the cost a little bit while taking their own cut. For instance, I work for (indirectly, we were bought) what's known as a PBM (perscription benefits management). The only reason such a company exists is to counter the greediness of pharmaceutical companies. The simple version of what a PBM does is to negotiate decreased drug prices based on representing millions of consumers at a time and then take their cut.

[ Parent ]
See, capitalism works! [n/t] (none / 0) (#179)
by skim123 on Wed Aug 06, 2003 at 11:41:39 PM EST


Money is in some respects like fire; it is a very excellent servant but a terrible master.
PT Barnum


[ Parent ]
Why is buying a car sooo painful? (3.66 / 3) (#48)
by groove10 on Mon Aug 04, 2003 at 10:43:17 PM EST

I went shopping with my girlfriend for a new car about 10 months ago. It was probably one of the worst expereinces of my life. I really hate the lying, sleazy ways the dealers have of getting every dime you have. I understand it's part of the business, but why does it have to exist?

Why not adopt a model like every other comodity sold (except for maybe houses)? Why do we need to haggle over the price? I hate haggling with salespeople. It's seriously no fun.

I know there are places like CarsDirect.com, but you can't test drive cars through the internet yet, so you still feel the pressure when in the dealership.

There has to be a better way. Any suggestions?

Do you like D&D? How bout text-based MMORPGs? You need to try Everwars. It's better than shooting smack!
You probably answered your own question (4.50 / 2) (#51)
by roystgnr on Mon Aug 04, 2003 at 10:55:13 PM EST

Why not adopt a model like every other comodity sold (except for maybe houses)?

Cars aren't as bad as houses, but both of them are at least an order of magnitude more expensive than any other purchases.  The kind of haggling hassle that car dealerships put you through lets them price discriminate (make more profit from customers that can afford to pay more), and the more expensive a product is the more it pays to squeeze an extra percent or two profit out of the sale.

[ Parent ]

Opportunity cost, not PD (4.66 / 3) (#60)
by DrSbaitso on Tue Aug 05, 2003 at 12:53:53 AM EST

Haggling is more a measure of the opportunity cost of different people's time rather than an attempt to price discriminate. If you look poor, a car salesman isn't more likely to offer you a better deal straight up; probably the reverse, actually, as you'll be offered terrible financing. People who are willing to shop around, haggle, and walk away - people with lower time opportunity costs - get lower prices on cars. I'm sure car dealerships price discriminate, this just isn't necessarily the way they do so.

Aeroflot Airlines: You Have Made the Right Choice!
---Advertising slogan for the only airline in the USSR
[ Parent ]
Couldn't you just Pretend? (4.00 / 1) (#53)
by snowlion on Mon Aug 04, 2003 at 11:29:13 PM EST

Go to a car dealership with the car you want.

Drive it around a bunch with them.

Then go and buy it on CarsDirect.com..?
--
Map Your Thoughts
[ Parent ]

You can, but... (4.00 / 1) (#86)
by falloutboy on Tue Aug 05, 2003 at 08:49:13 AM EST

You could go to a dealership and drive the cars, then go buy it on the net, but its pretty dishonest and a complete waste of a salesman's time.

However, if you used carsdirect.com as a bargaining point.... tell the salesman "If you can match or beat the deal I can find on the web, I'll buy from you" then you're just a sharp customer.

[ Parent ]

Uh... (4.33 / 3) (#88)
by Rocky on Tue Aug 05, 2003 at 09:21:50 AM EST

>  but its pretty dishonest and a complete waste of a salesman's time.

Is this the pot calling the kettle black?

As far as I am concerned, if I'm going to buy a car over the internet like that, I'm going to test drive it first.  If I have to disappoint a car salesman to do it, oh well...  It's not like dealerships are being honest with me.

Next thing you know, you'll be telling me I have to tip them!

If we knew what it was we were doing, it would not be called research, would it?
- Albert Einstein (1879 - 1955)
[ Parent ]

Haggling is the biggest rip-off (3.00 / 1) (#54)
by smallstepforman on Mon Aug 04, 2003 at 11:38:30 PM EST

One thing that I cannot stomach is haggling - knowing that I'm getting a different price compared to a person who entered the shop 5 minutes ago makes my head hurt and makes me mad. Its not only cars and houses - almost everything in a capitalistic society can be renegotiated price wise. Go buy a pair of trousers, or a shirt, or a Hi-Fi system, mobile phone deals, cable internet packages, heck, even go to a restaurant and you can pay less (or more) than other customers. This is unjust, unfair, and just plain wrong. Make everyone pay the marked price (which is lower than the Recommended Retail Price), everyone pay the same price, and I'll be happy.

After haggling, I always feel as if I've been ripped off - I don't feel happy that I got a decent deal from the salesperson.

[ Parent ]

yeah...we should al pay the price it costs (none / 0) (#59)
by modmans2ndcoming on Tue Aug 05, 2003 at 12:25:35 AM EST

the OEM to build it. then no one makes money on any deals and the economy stagnates...good idea.

and your buying houses crap....what is that...do you know nothing of appreciation and location value?

christ...you should have lived in soviet russia for 10 years then come and tell me how good a pure socialistic state is.

[ Parent ]

Capitalism? (2.50 / 2) (#76)
by m0rph3us0 on Tue Aug 05, 2003 at 04:00:57 AM EST

Better than a purely capitalist state. Like public infrastructure like interstates?

[ Parent ]
I never said that a pure capitalist state was good (4.66 / 3) (#108)
by modmans2ndcoming on Tue Aug 05, 2003 at 11:35:05 AM EST

so stop putting words in my mouth.

and just for the record, NO it is not better than a pure capitalist state. both forms suck because they fail miserably is areas that are very important.

in a pure socialist state, people starve and do not get the things in life that they want to have, every one gets the same crap and the system ends up falling apart under its own weight.

in a pure capitalist system, you end up with all monopolies running the economy and the government ends up being eclipsed by these monopolies, eventually ending up with one big monopoly running everything, including the government and then the system is no different than a pure socialistic state and the system falls apart under its own weight.

both systems suck ass. so what is the answer? what we have no in most of Europe and in the US. a hybrid system, though the US relies on private companies much more than europe does, most of europe is transitioning to more private companies to run things like telephone service and electricity.

[ Parent ]

Soviet Russia (5.00 / 1) (#151)
by smallstepforman on Tue Aug 05, 2003 at 09:55:27 PM EST

Well, I lived in socialist Yugoslavia (run by Communist party, for more than 10 years). Does that count? These days I live in capitalistic Australia, and let me assure you that I pay different telephone, cable tv and electricity rates compared to my neighbour. How? Just call up and ask to disconnect since you're going to a competitor. They'll offer a much better deal for services than what other customers pay. These days I'm a nomad, moving from one company to another every year (once special deals expire). I'm tired of playing this game, and its unfair for people unfamiliar with the scheme. And you know what - someone else in my street is probably paying less than me, and that pisses me off.

[ Parent ]
wtf? (4.50 / 2) (#61)
by kitten on Tue Aug 05, 2003 at 01:16:32 AM EST

almost everything in a capitalistic society can be renegotiated price wise. Go buy a pair of trousers, or a shirt, or a Hi-Fi system, mobile phone deals, cable internet packages, heck, even go to a restaurant and you can pay less (or more) than other customers.

Since when, exactly? Try walking into Gap, taking some pants up to the counter, and when the casheir says "seventy dollars", offer to pay forty instead. See how far you get.

Or walk into Best Buy and tell the salesguy you don't want to pay the listed price of $199.95 for that car stereo, but you'll gladly pay $130. See what happens.

Make everyone pay the marked price (which is lower than the Recommended Retail Price), everyone pay the same price, and I'll be happy.

Yeah, well, last time I checked, that's how it happens for just about anything other than vehicles and houses. The item has a price tag and you know how much it costs, then you either pay it or you don't.

Really, I have absolutely no idea where you're getting this stuff. Especially this one:

heck, even go to a restaurant and you can pay less (or more) than other customers.

Riiiight.
mirrorshades radio - darkwave, synthpop, industrial, futurepop.
[ Parent ]
It happens sometimes, (none / 0) (#64)
by la princesa on Tue Aug 05, 2003 at 01:50:26 AM EST

particularly when one is willing to pay cash immediately, though that is mostly for items and services costing more than a hundred dollars.  With clothes, haggling is more likely to be doable at designer shops and discount places if one is so determined.  And there are a variety of factors that can reduce the price of a meal in a restaurant aside from just bitching about it til one is comped the meal.  Pretty much anything for sale is negotiable in terms of price.  I personally like that kind of flexibility and am glad I'm not one of those stuck paying full price for anything.    

___
<qpt> Disprove people? <qpt> What happens when you disprove them? Do they disappear in a flash of logic?
[ Parent ]
not everything (5.00 / 2) (#79)
by needless on Tue Aug 05, 2003 at 05:43:47 AM EST

If a business is corporately owned (restaurants are the exception), you won't be able to pull it off.  Most corporate retail outlets have policies that absolutely prohibit adjusted prices except for very specific circumstances, like the labelled price being incorrect.  If something is damaged or out of the original packaging it will sometimes be given a fixed discount, but that's it - no negotiating.  More often than not, damaged and opened items are just sent back to the corporate headquarters for them to resell to a private business.

[ Parent ]
Car Stereo? (none / 0) (#75)
by m0rph3us0 on Tue Aug 05, 2003 at 03:59:22 AM EST

Car Stereo List Price: $330
Price I paid with $50 dollars in accesories: $270
Time spent haggling 5 minutes.
Joy of watching idiots pay retail: Priceless.

[ Parent ]
Goody for you. (5.00 / 1) (#80)
by kitten on Tue Aug 05, 2003 at 06:32:09 AM EST

Anecdotal evidence is certainly convincing.

Regardless of the merit of your little story, prices at corporate stores and retail outlets are not negotiable. Period. If the price tag says two hundred dollars, you either pay two hundred or you don't get the item.

The salesguy doesn't set the prices. The manager doesn't set the prices.

And the salesguy in most stores isn't really a "salesperson". He's just some guy who wanders around and says "Do you need help with anything?" and then goes "Ah yes, car stereos are over here."

Sorry, I just don't buy it. You walk into Wal Mart and try the following:

ASSOCIATE: Hi, can I help you with something?

YOU: Yeah, well, I was just looking at these televisions here.

A: Okay, if you need any help at all, let me know.

Y: Actually, maybe you can help.

A: Yes?

Y: How much for that one over there?

A: (checks the price tag) Ahh.. two hundred fifty, sir.

Y: Two hundred fifty, eh? Tell you what - I'll give you one fifty and we'll call it a deal.

A: Uh, sir..

Y: C'mon. One fifty, all up front. Cash.

A: Look, sir, I don't set the prices, okay?

Y: Ah, you wanna play hardball? One seventy, how's that?

A: Sir, it's two fifty, there's nothing I can do about it.

Y: Two fifty is too much --

A: Sorry, man. I told you, I just work here.

Y: -- so how about, two hundred. Okay? An even two hundred. Deal?

A: Sir, if you want a two hundred dollar TV, how about one of these instead?

Y: I want this one, and I only want to pay two hundred for it.

A: Well, *I* don't set the price - it's two fifty, and that's it. I'm sorry I can't help you.

Y: Oh, just look at this thing. Sure it's nice, but the image quality just isn't *that* great. I can't believe you're charging two fifty for it.

A: Sir, *I* am not charging *anything* for it. *I* have absolutely nothing to do with the pricing of these items, okay? I just work here. Corporate office tells us the price, we put it on the item. That's it.

Y: Fuckin' rip off!

Right..

The original poster I responded to was lamenting that "everything is negotiable" and how infuriating it was (to him) that he would get one price while someone else got another.

He made it sound as though this were a common occurance - people wandering into Best Buy and haggling over the price of a television or stereo.

My commentary was simply pointing out that this is not the usual course of events. If the price tag says $199.95, that's how much money you're going to pay if you want it.

In some very specific situations, when the planets are aligned properly, you *might* be able to talk down a price in a store such as this - but not often. The salespeople do not set the prices, for one thing - they are set by either the store manager, or the corporate headquarters. Bickering with a salesperson isn't going to help you.

In some places, such as a jeweler's, you might get away with it. I imagine it would be possible to haggle over the price of a diamond ring, for example - but in places such as this, the salesperson is *actually* a salesperson - his pay is, in part, based on commission, and he has a certain bit of leeway in the pricing of items, so as to encourage sales.

But in retail stores, forget it. There's no way you're going to walk into a Wal Mart and insist that you're only paying $100 for a television which is clearly marked $200.

The capitalist system operates under supply and demand - if enough people think the price of an item is too high, they won't buy it, and the price will have to go down due to an overabundance of supply. It has very little to do with haggling, especially in the modern world of chain stores and retail outlets.
mirrorshades radio - darkwave, synthpop, industrial, futurepop.
[ Parent ]
Learn to haggle (4.00 / 2) (#83)
by squigly on Tue Aug 05, 2003 at 07:50:44 AM EST

YOU: "Hi, the shop down the road is selling this for $150.  Will you price match?"
ASSOCIATE: ["Yeah, we can do that" | "No, sorry.  We can't match that price"].  I know shops that will always price match other shops.  

[ Parent ]
Middle of the road: 'Show me their ad' (3.00 / 1) (#115)
by pin0cchio on Tue Aug 05, 2003 at 01:37:03 PM EST

Some shops will take a middle-of-the-road approach to keep customers from fraudulently disguising their haggling as price matching.

ASSOCIATE: "Yeah, we can do that. Just show me their ad."


lj65
[ Parent ]
They don't all do that (3.00 / 1) (#130)
by squigly on Tue Aug 05, 2003 at 04:09:58 PM EST

Usually if you just want a small discount they'll take your word for it.  Even if they won't, a store nearby probably will.

[ Parent ]
Electronics (5.00 / 1) (#87)
by CaptainSuperBoy on Tue Aug 05, 2003 at 08:53:48 AM EST

I have to disagree, at least for corporate electronics stores. It's true that Best Buy and Circuit City don't haggle but they are the exception, not the rule. In New York you have a ton of sleazy electronics stores where you're expected to haggle, including three largish ones, The Wiz, J&R, and PC Richards. Even here in Western Mass we have those kinds of stores, such as Bernie's.

--
jimmysquid.com - I take pictures.
[ Parent ]
Always, but only on some products. (5.00 / 3) (#124)
by shumacher on Tue Aug 05, 2003 at 03:25:45 PM EST

I am writing this while on vacation, and at the sunset of my tenure with one of the national electronics superstores mentioned by the parent. At many electronics stores you can and should haggle for price, but know when it will benefit you. If you're in doubt, haggle.
Items that almost always will get you a discount:

Big screen tv sets (35 percentile price or above as determined by tags on floor).
Flat panel plasma and LCD TV sets.
Home theater components (excluding Bose and Home-Theater-In-A-Box systems).
Car video (excluding In-A-Bag products).
Camcorders (In top 60 percentile prices).
Open Box products

Items that will often net a discount:

Television sets 27" or above (excluding "off-brand"/ADV/loss-leader items)
Premium digital still cameras
Mid-range/inexpensive big screen projection tv sets.
Premium MP3 players.
Home-Theater-In-A-Box systems

Items that almost never net a discount, but are worth a little pressure on:

Laptop and premium desktop computers.
Mid-range digital cameras.
Premium DVD players.
Furniture
PDAs in the 40 percentile or above price range.
Small upper-range television sets (esp. flat-screen brand-name TVs)
Bose bookshelf, outdoor and tower speakers

Stuff that never gets discounted:
Any type of ADV/Loss-leadership item.
low-end DVD players
Accessories
Service plans
Home installations
DirecTV
Video Games (hardware and software)
Music
Movies
Printers
Desktop Computers
CRT monitors (exc Sony)
Clock Radios
Boom Boxes
Phones (cell and home)
FRS radios
Home Networking
Computer Software
Bose Lifestyle systems

Of course, if you have a good argument that makes you a victim or a good customer, or if you have an offer from another store, or if you have an advertisment, you should talk to someone there. If there is a possibility for future sales, tell them. Many people buy a large TV with plans for a home theater system down the road. It makes pleasing you now a better idea. Don't lie about being a good customer, where I worked, we often would check before offering a deal. Also, try to get a whole deal together first. If you're buying a set of component video cables, an optical digital cable and a four year service plan, many sales managers will give you a greater discount. It also avoids lots of checking and trips back and forth. If a salesperson goes to a sales manager three times on a deal, the discounts stop coming. I would suggest going to your salesperson first, and only if you feel that your offers are being dismissed out of hand, go to the sales manager. Avoid operations management because they have less interest in the deal happening today. The example of a $200 head unit up the thread is probably accurate, you usually won't get anything off the head unit, but you will get a discount on a $400 head unit - there's more room for the discount to work. Also, look at the sales. At most stores, high margin items stay on sale. This week it may be 0% financing, next week, it might be $50 cheaper, next week, free delivery, next week $70 gift card. For the store, most of these offers are worth about the same. If you want one of the other offers from one of the other weeks, just ask for it. Also, many stores work with a "0% is free" mindset. It's starting to change, but if you ever find yourself making a major purchase, ask for 0% and you'll most likely get it.


When you can balance a tack hammer on your head, you can head off your foes with a balanced attack.
[ Parent ]

haggling at Best Buy (5.00 / 3) (#120)
by mdecerbo on Tue Aug 05, 2003 at 02:32:23 PM EST

He made it sound as though this were a common occurance - people wandering into Best Buy and haggling over the price of a television or stereo.

Hate to argue with your elaborately constructed strawman dialogue, but haggling is a lot more common than you are assuming, if you talk to the manager.

To answer your specific example, I have haggled at Best Buy before-- if not outright on price, on what accessories or coupons they might throw in for free.

A quick google pulls up a Globe and Mail story on just how surprisingly prevalent haggling in retail stores is. And one of the examples is the 10% discount on a new home theatre obtained by haggling with a Best Buy manager. (Not too surprising, since I seem to get a Best Buy 10%-off coupon in the mail every couple of weeks.) The article also outlines the trend that "freebies" are more common than outright price breaks.

My best-ever haggle was at a Sears near the end of the Christmas shopping season, as I examined a customer-returned camcorder with a teensy scratch and no box. I can still hear the words of the salesman as I started to walk away. "How much this camera worth to you?" I scored a free extra battery pack too.

So try it (though perhaps not at Wal-Mart). You might be surprised how your dialogue plays out in real life.



[ Parent ]

So not true (none / 0) (#125)
by coryking on Tue Aug 05, 2003 at 03:42:40 PM EST

I've haggled over the price of a laptop and the accesories thrown in at Circuit City. If they want your money, AND your repeat business they will bite. If not, fuck em and leave.

You can haggle for everything - it's the beauty of capitalism.

[ Parent ]

Whatever. (5.00 / 1) (#153)
by kitten on Tue Aug 05, 2003 at 10:40:59 PM EST

I've haggled over the price of a laptop and the accesories thrown in at Circuit City. If they want your money, AND your repeat business they will bite. If not, fuck em and leave.

Hm. If I were the manager at Circuit City, my thinking would be this:

"If you want the laptop, you pay the price that's marked. If not, fuck you - there will be some other slob in here within five minutes who will gladly pay the marked price."

As I said before, the original poster was lamenting that this was a common occurance, and it isn't. Maybe, if all these anecdotes are to be believed, there is a tiny fraction of a percentage of people that a) bother trying and b) are successful.

But 999 out of 1000 customers will take the marked price as the price they will pay if they want that item.

You can haggle for everything - it's the beauty of capitalism.

The beauty of capitalism has nothing to do with direct, one-on-one dickering over a price. That's idiotic and would get people nowhere, especially if the original comment is to be believed (where only a tiny fraction of people get away with it).

The beauty of capitalism is that people won't pay for shit that's overpriced, and that forces the price down. It's a negative feedback control system, and it tends to work. Your lone-marauder vigilante-style "Gotta get my nickel's worth" chest-thumping bravado has nothing to do with the price of goods overall - since if everyone thought the price was too high, they wouldn't be paying it. But obviously they don't, and therefore the store doesn't need to be concerned with one fuckwit trying to "assert" himself.

At some point a customer is more trouble than they're worth. Were I the manager, I'd take you gently by the shoulders, point out the throngs of busy shoppers in my store, and say "Son, I appreciate that you don't want to pay the marked price for this stereo. But y'see all those people out there? They DO want to pay the marked price - so take your let's-make-a-deal nonsense out of my store."
mirrorshades radio - darkwave, synthpop, industrial, futurepop.
[ Parent ]
Re: (none / 0) (#169)
by smallstepforman on Wed Aug 06, 2003 at 07:32:34 PM EST

"If you want the laptop, you pay the price that's marked. If not, fuck you - there will be some other slob in here within five minutes who will gladly pay the marked price."

Buddy, you do realise that each store has a 20-33% markup on goods. If one store is unwilling to reduce this markup, then you can bet your sweet ass that the other one will, since 15% markup and a sale is better than 30% markup and no sale. Remember that everytime you go shopping - a sale with reduced profit is better than no sale and no profit.

<IBut y'see all those people out there? They DO want to pay the marked price - so take your let's-make-a-deal nonsense out of my store."</I>

Well then, your competitor across the road will have more sales and a higher profit than you will, since he's willing to budge on price.

[ Parent ]

No. (none / 0) (#176)
by Bridge Troll on Wed Aug 06, 2003 at 11:00:21 PM EST

I actually work at a Circuit City, and let me tell you, I know how the managers there think. For the most part it's, "Hey, check out that hot girl over there!" but when it comes down to it, they're about getting customers.

Customer loyalty is the thing they're looking for first (well, second after hot girls), because a loyal customer is someone who will consistently bring in money to the store. Even at a fairly deep discount, like a couple hundred bucks on the aforementioned laptop plus accessories, (I know the margins because the employee discount is store cost), they're making a few dollars, and that's good enough if it means a customer will come back and be a little more pliable next time. Plus, the customer might throw the money they saved plus a little extra into a Cityadvantage plan, which makes the store a nice bit of money considering few people really use them.




And besides, pounding your meat with a club is a very satisfying thing to do :) -- Sleepy
[ Parent ]
not $100 (none / 0) (#145)
by Battle Troll on Tue Aug 05, 2003 at 07:34:28 PM EST

But $170? Easily. Esp. on electronics items.
--
Skarphedinn was carrying the axe with which he had killed Thrainn Sigfusson and which he called 'Battle Troll.'
Njal's Saga, ca 1280 AD
[ Parent ]
you've obviously never worked retail.. (none / 0) (#155)
by Suppafly on Tue Aug 05, 2003 at 11:11:52 PM EST

The salesguy doesn't set the prices. The manager doesn't set the prices.

True, but the salesguy can get the manager and the manager being a representative of the company can give you a better deal than the price marked. Generally the managers are privvy to information such as how much the item cost the store, and has the authority to negotiate for the company.

If you'd ever worked in retail, you'd know this because managers sell things cheaper or give bulk discounts based on their own judgement on a daily basis is all major stores.
---
Playstation Sucks.
[ Parent ]
Actually I have. (none / 0) (#156)
by kitten on Tue Aug 05, 2003 at 11:31:29 PM EST

And half the time the general manager wasn't even in the store, which is as it should be - the mark of a good manager is that he doesn't have to be there all the time to make sure things run smoothly.

As for "bulk discounts", fat lot of good that does your average consumer. When's the last time you bought fifty car stereos?

Besides, the authority given to a manager depends entirely on what store we're talking about. At some chains, the manager is just a schedule-making, hiring-and-firing flunky. At others, he is lord of the domain.

Frankly I don't understand why everyone is up in arms over this. It's amazing to me that "haggling isn't a common thing" is such a hot-button issue with you people.

And I still say that there's no fucking way you'd get away with trying to play "let's make a deal" at a restaurant. If the menu says 4.99 for a burger, you're paying 4.99.

But hey, if you all want to sit here and spew meaningless anecdotes about what a great deal you probably didn't ever make, to prove your sense of entitlement, go right ahead.
mirrorshades radio - darkwave, synthpop, industrial, futurepop.
[ Parent ]
At a restaurant? (none / 0) (#166)
by nanobug on Wed Aug 06, 2003 at 08:15:32 AM EST

I work at Papa Johns for some extra cash on the weekends. People regularly come in wanting to buy more than 10 pizzas and try to negotiate the price, and it usually works. A large papa johns pizza with 2 toppings costs less than a dollar to make, yet they charge more than $13 for it. I bet if you went into McDonalds with a busload of people and asked to get cut a deal, you could do it. It just depends on the situation.

[ Parent ]
haha. (none / 0) (#173)
by kitten on Wed Aug 06, 2003 at 08:22:26 PM EST

I have worked in plenty of restaurants. Waiting tables seems to be the one thing I'm good at, unfortunately. Comb through my diaries for tales of misery and woe from the forefront of the industry.

And believe me, you don't get a "deal" for coming in with a shitload of people. On the contrary, it's standard industry practice to increase the bill in such cases, adding a mandatory gratuity as part of the bill, because of all the extra hassle involved and the fact that you're now taking up a server's entire section (or more).

The price is whatever the menu says it is - the manager is not going to cut you a break even if he had the authority to, which he usually doesn't. He'd not only be screwing the company and himself, but the poor waiter who stands to make less of a tip now, so there's no way in hell he's going to do it.

No, when the bill arrives, that's how much you're going to pay. Period. There is absolutely no reason to "cut them a deal" - they're not buying anything in bulk (everyone's ordering something different), they're not providing you with additional business (those tables would have filled just as quickly anyway), and so on.
mirrorshades radio - darkwave, synthpop, industrial, futurepop.
[ Parent ]
Re: (none / 0) (#175)
by smallstepforman on Wed Aug 06, 2003 at 10:50:02 PM EST

Have you ever tried to book a restaurant for a large birthday party or similar - just watch the manager offer enormous discounts for large group bookings. Been there, done that, got up to 30% off. Second of all, gratuity is a USA thing, in other parts of the world we dont practice such nonsense. When I went to the States on holiday, I was shocked to see Gratuity included on the bill - that is ridiculous.

[ Parent ]
gratuity (none / 0) (#180)
by Suppafly on Wed Aug 06, 2003 at 11:43:11 PM EST

the gratuity is usually only already included in the bill if more than 8 people are on the same ticket, unfortunately this means the server gets stuck with a 15% tip instead of the usually larger tip that would have been left instead.
---
Playstation Sucks.
[ Parent ]
So in other words.. (none / 0) (#181)
by kitten on Thu Aug 07, 2003 at 12:20:13 AM EST

In whatever ass-backwards Eurotwink country you're from, you can bargain with the manager like an asshole to get a discount when every other person pays the marked price. Congratulations.

In civilized countries, you either pay the price or you don't - you don't get a "deal" because, guess what? You are not special.
mirrorshades radio - darkwave, synthpop, industrial, futurepop.
[ Parent ]
Re: (none / 0) (#186)
by smallstepforman on Thu Aug 07, 2003 at 04:49:48 AM EST

You're really keen to defend your civilised attitude by never haggling, hence assuming that everyone else who haggles is a barbarian. Fine, retailers love you. I get the same goods you do, at lower prices.

BTW, I'm from Australia.

[ Parent ]

Like I said (none / 0) (#183)
by nanobug on Thu Aug 07, 2003 at 12:49:31 AM EST

It depends on the situation.  Some places are more open to large groups coming in and getting a discount than others.  Obviously you have worked at places that are not like that, or you haven't witnessed it.  Others have witnessed it.  There is no wrong or right, its just differences in location, economic factors, etc.

[ Parent ]
papa johns is great for deals.. (none / 0) (#178)
by Suppafly on Wed Aug 06, 2003 at 11:41:12 PM EST

When I used to buy pizza for our local student acm group, I regularly got $13 pizza's for $5.. sometimes all you have to do is buy 4 or 5 of them to get a deal. Just ask for a manager, they know how much they cost to make and will usually sell them for next to nothing is the quantity is more than a few.
---
Playstation Sucks.
[ Parent ]
I accidentally haggled at McDonalds! (none / 0) (#213)
by rehan on Wed Aug 13, 2003 at 04:49:03 AM EST

Now I'm not a haggler - I don't like it.

But once, I went into McDonalds, got to the front of the line, ordered something and then realized that I had about 50 cents on me.

I apologized to the cashier and said I'd have to go and get some cash. He diddled around with his cash register and dropped the price by like 50 cents. I told him that I had 50 cents on me and he diddled around with his cash register for about a minute and got the price down to about 40c. The original price was probably $3 or $4.

Apparently they have discounts and promotions that they can take off the price. I don't know how willing they are to do that stuff though, since I never asked again (told you I don't like haggling :) )


Stay Frosty and Alert


[ Parent ]
More evidence that you're wrong (none / 0) (#159)
by Hizonner on Wed Aug 06, 2003 at 02:27:45 AM EST

Ignoring the many, many times that I, like others here, have negotiated over the prices of electronics and suchlike, there's this little anecdote.

I walked into a mall jeweler (not a manufacturing jeweler, not a specialty jeweler, not a place where the owner is running the counter, a chain jeweler in a mall) late last Christmas season. I saw a piece I liked for my wife. It was marked at something like $1600 (I forget the exact numbers). Retail at a gem show it might have been $1200. Wholesale, of course, a lot less; I'm not sure I really want to know what these guys' markups are.

I talked to the evening sales lady, or shift manager, who was probably 20 years old, sure as hell didn't own the place, and almost as certainly wasn't the general manager, either.

The exchange went like this (close to verbatim):

Me: This is a nice piece, but it's not a $1600 piece. I'll give you $1150 for it.

Her: [Pulls out a calculator, punches some numbers]. I can give it to you for $1280.

Me: OK.

The point here is that, not only were these people ready to negotiate, but they had organized the process to the point where you could get a significant discount without even talking to anybody with real authority. They were prepared to offer a 20 percent discount to anybody who asked.

Of course, I still overpaid for the piece, but I saved $320 just by asking.

[ Parent ]

Hoo-rah. (none / 0) (#160)
by kitten on Wed Aug 06, 2003 at 03:15:51 AM EST

I already mentioned jewelers as being an exception. Obviously there are exceptions - cars, houses, boats, jewels.

But once again, my point was that the original commenter made it seem as though walking into your average store and watching another customer get a better price by "haggling" was a commonplace thing, and it simply isn't. For ninety nine out of a hundred transactions you complete, the price is what the price tag says - no ifs, ands, or buts. No wheeling-and-dealing.

You aren't going to get away with that shit at Wal Mart, the supermarket, the movie theatre, Best Buy, or whatever else.

If you want to maintain that you're a pretentious twit who "only shops at independently owned and operated shops" where you can speak directly to the owner, then fine. Or, if you want to tout the "one time" anecdote where you managed to "get a deal", fine.

Only don't act like it's a common occurance or that you do it "all the time", because that's pure bullshit.

I'm really getting tired of this thread. I make one little comment and suddenly every pretentious wank comes crawling out of the woodwork to assert how they are so special that they never pay "full price" for anything and always manage to "bargain" for everything.

Fuckin' whatever.
mirrorshades radio - darkwave, synthpop, industrial, futurepop.
[ Parent ]
How noble in reason (none / 0) (#164)
by Hizonner on Wed Aug 06, 2003 at 04:44:00 AM EST

I'm sorry. I honestly missed your paragraph about jewelers.

Furthermore, you are, of course, right that one isn't going to be able to negotiate price (very much, very often) on a very low-value transaction (where the cost of negotiating is more than the amount you'd save), or on a highly standardized item (where there's already what amounts to an efficient auction market), especially at a discount retailer (those outlets have less margin, and less room for price discrimination, and tend to exercise price discrimination differently, than "full price" retailers) operated by a large corporation (which has management constraints that keep it from being fully flexible).

None of that means, of course, that negotiation doesn't happen all the time on higher-value or non-standardized items. In fact, most of the anecdotes about negotiating with corporate retailers appear to have involved open-box merchandise, which is in some sense non-standardized, and jewelry is really a similar case. Nor does it mean that I believe any retailer is confident enough about moving merchandise to be so happy as you seem to suggest about losing sales at any profitable price. Still, you do have a point. There are lots of situations where trying to deal on the price is fruitless and/or not worth the effort... and that probably does include 99 percent of transactions by count, although I don't know that it's even 90 percent of transactions by value.

In fact, I seldom negotiate price myself, even when I'm well aware it can be done. If I did, I'd have anecdotes more recent than last December. I do it for consumer electronics because it's traditional there, and I did it for that necklace basically because I really wanted the thing and it was so obscenely overpriced.

Of course, even though I missed a paragraph, and perhaps overreacted to some things you said, I also didn't read in, and then stridently proclaim, insulting delusions about your "pretentiousness", nor did I refer to you as a "wank", nor did I create from whole cloth any false positions for you. I did not, for example, insinuate that you said you "only shop[ped] at independently owned and operated shops" when in fact you said no such thing. Nor, for that matter, have I taken anybody else in the discussion to task for any apparently imaginary sins, such as being in the grip of some sort of "sense of entitlement", nor denigrate their presumably polite counter-offers to marked prices as "games of Let's Make a Deal", somehow worthy of patronizing and/or truculent responses from retailers.

I think that puts us better than even.

[ Parent ]

Yeah well (none / 0) (#172)
by kitten on Wed Aug 06, 2003 at 08:14:08 PM EST

I also didn't read in, and then stridently proclaim, insulting delusions about your "pretentiousness", nor did I refer to you as a "wank", nor did I create from whole cloth any false positions for you. I did not, for example, insinuate that you said you "only shop[ped] at independently owned and operated shops" when in fact you said no such thing...

I wasn't referring to you specifically. I've gotten email and instant messeges from people about this, in addition to the minor flamewar here.

I mean, all I said was that except in very specific circumstances, the price tag is non-negotiable. For your day-to-day transactions, the price is what the vendor says it is, and you cannot "haggle" over it.

I said this in response to a poster who made it seem as though bargaining over prices was something he witnessed on a frequent basis.

What I said was not only true, but a perfectly reasonable thing to point out.

And next thing you know a flurry of indignant people come flying out of nowhere to proclaim how very very special they are because they "always" wheel and deal, and how I'm just plain wrong, because "one time" they managed to weasel out of paying twenty bucks on an item they rarely purchase and thus "everything" is negotiable.

The amount of pretentiousness in this thread is sickening, and I honestly can't understand why it's such an issue with you people.

So don't take it personally - I was simply fed up and amazed that people get this worked up over it.
mirrorshades radio - darkwave, synthpop, industrial, futurepop.
[ Parent ]
Re: (none / 0) (#170)
by smallstepforman on Wed Aug 06, 2003 at 07:41:57 PM EST

Well, my friend, you're obviously missing out on a world of discounts. Yes, I agree that there are some places where you cannot haggle (multinational stores which employ teenagers and pay $6/hour), but almost everywhere else, you can. When dealing with a salesperson, always ask for a discount, especially when buying more than one item from a store. I'm talking about stores where you dont take an article to a checkout or cashier, instead the salesperson does this for you. In these places you can 100% haggle and get up to 20% off, everytime.

Call your telecommunications company and ask to disconnect - you'll be suprised what sort of sweet deal you'd get to stay with them. At the end of the day, a sale, no matter how much cheaper than average, is better than no sale. If you're aware of this, you can get a better deal with everything. Just try it next time - when buying socks, ask the salesperson what price they'd give you if you purchased 2 extra pairs - you'd be pleasantly suprised.

[ Parent ]

Uh huh.. (3.00 / 1) (#182)
by kitten on Thu Aug 07, 2003 at 12:27:26 AM EST

I'm talking about stores where you dont take an article to a checkout or cashier, instead the salesperson does this for you.

Yeah, god knows I do that often.

Jesus. When I want some groceries, I fucking go to the supermarket, get what I want, pay for it, and leave.

When I want a fan, a quart of motor oil, and a box of crayons, I go to Wal Mart, get it, pay for it, and leave.

When I want a shirt and some pants, I go to a store, pick out what I want, pay for it, and leave.

In fact, offhand, I cannot think of the last time I was at a store where an actual salesperson was present, and where I didn't just lug my stuff up to the cashier, pay for it, and leave.

I don't know where the fuck you're shopping, or what the hell you're buying. I'm not sure I want to know.

Just try it next time - when buying socks, ask the salesperson

Christ almighty, where the hell are you buying socks that you have a fucking salesperson breathing down your neck? Normal people go to the store, grab some socks, and pay for it and leave.
mirrorshades radio - darkwave, synthpop, industrial, futurepop.
[ Parent ]
Re: (none / 0) (#187)
by smallstepforman on Thu Aug 07, 2003 at 05:11:57 AM EST

In fact, offhand, I cannot think of the last time I was at a store where an actual salesperson was present, and where I didn't just lug my stuff up to the cashier, pay for it, and leave.

Dont go to massive department stores, go to little boutiques and shops, where the owner/manager runs the store. Every shopping mall has these stores, as well as shopping street districts. Thats where you go for quality goods, not KMart, Target and Walmart.

I don't know where the fuck you're shopping, or what the hell you're buying. I'm not sure I want to know.

Well there's your problem right there. Dont shop in Walmart, and you'll discover a whole world of quality goods. One thing I dont understand is that you're extremelly vocal about haggling - just because your experiences are limited, dont assume that others are trading in some market in Cairo. I'm posting from Cosmopolitan Melbourne, Australia, not exactly a backhole of the world.

[ Parent ]

Spare me. (none / 0) (#188)
by kitten on Thu Aug 07, 2003 at 06:28:21 AM EST

Dont shop in Walmart, and you'll discover a whole world of quality goods.

Cotton socks are cotton socks. They're like four dollars for a pack of three pairs. At that price I don't care if they're "quality" or if they fall apart in a month, and I'm sure as hell not going to sit there and argue with someone so I can save a fifty cents on it.

The apples at a supermarket are just as good as the apples at the little corner fruit stand, contrary to what certain pretentious types will tell you.

go to little boutiques and shops, where the owner/manager runs the store.

In Atlanta, and many other major US cities I've been to with the possible exception of New York, this is nearly impossible. The bottom line is, I don't care enough to go out of my way to drive further to a place that probably has a smaller selection, just so I might be able to bicker with someone about the price of a pair of pants. There comes a point when it isn't worth it.

Every shopping mall has these stores

The only stores like that which you can find in a typical American mall are little carts that are parked in the middle of the "hallway" area, and generally they sell things you aren't buying very often, if at all. Sunglasses, cheap little rings, embroidered hats. The people that run those stands, you might be able to bicker with, but why bother?

The rest of the stores in a mall are franchise operations or corporate-owned stores. Real estate is expensive, especially for shopping malls.

just because your experiences are limited, dont assume that others are trading in some market in Cairo.

Sorry to tell you, but that's definitely the impression I get when I hear someone boasting about how often they "haggle" over the price of something, and frankly, it isn't that far off. The only places you'll get away with that are single-owner "mom and pop" type stores, which are becoming more and more scarce, and even when you can find them, the selection is limited and they're selling the same crap you can find anywhere else anyway. Why would I go through the trouble of hunting these people down, in an out-of-the-way location? So I can stand tall and Stick It To The Man by not buying at a corporate store? So I can save three bucks by making an ass of myself and arguing over the marked price? Give me a break.
mirrorshades radio - darkwave, synthpop, industrial, futurepop.
[ Parent ]
Re: (none / 0) (#190)
by smallstepforman on Thu Aug 07, 2003 at 07:36:57 PM EST

Well, judging from your posts, your shopping experience is limited to big shopping malls, with exuberent rents, way to expensive for boutique shop owners. Here in Melbourne, we have massive shopping streets that go on for kilometers, which is where most boutique shops live (along with major malls in big suburbs). When I go to the malls, I get bigname shopping outlets (KMart, Target etc) but they generally have cheap crap (and no haggling), as well as yuppie outlets (Myer, Country Road, Rivers, David Jones) with limited haggling. For quality clothing, quality electronics etc I go to smaller shops, since I'm picky about the stuff I buy. Ie. I'd buy Italian $150 shoes instead of Chinese $30 shoes, I buy Marantz audio components instead of Sanyo, I dine in restaurants with tablecloths and candles, where everyone drinks red wine (instead of pizza and beer), but thats a lifestyle choice. I'm not a wealthy SOB, and I cut corners elsewhere to enjoy other aspects in life.

I refuse to buy $4 socks in packs of three from KMart, since the material is crap, the elastic wears out and develop holes faster. Instead, I buy $12 socks which last longer, feel softer and even look better. And these socks I usually get free with a shirt or trousers that I buy in the same store.

[ Parent ]

Well, hello, Mister fancypants. (none / 0) (#196)
by kitten on Fri Aug 08, 2003 at 01:13:20 AM EST

For quality clothing, quality electronics etc I go to smaller shops, since I'm picky about the stuff I buy. Ie. I'd buy Italian $150 shoes instead of Chinese $30 shoes,

That doesn't make you any more or less "picky" than me. It just means I don't give a damn about things like socks. I bought a hundred dollar pair of combat boots that have lasted me over two years and running, and go with anything (polish them up and I wore them to my friend's wedding, with a tux, and nobody knew the difference), and they'll last a lot longer than your Italian shoes.

Nor does it follow that a "smaller shop" will have "higher quality" items than a large retail outlet. You're just making stuff up - I've heard this kind of pretentious crap before, although usually it's from people who refuse to shop at big-name outlets on principle rather than some imagined sense of entitlement.

I dine in restaurants with tablecloths and candles, where everyone drinks red wine (instead of pizza and beer), but thats a lifestyle choice.

Good for you - this is me caring. And, having been a waiter at restaurants like this, I can say with authority that those are the last places you'll ever get a deal. To even ask is unimaginably rude - fine dining comes with a price, and harrassing the waiter because you think you're entitled to pay less than everyone else is ridiculous. You'll get absolutely nothing but a snide look.

"May I take sir's order?"
"Hm.. well, I see the crab bisque is five dollars. I'd like that, but how about.. three dollars?"
"Perhaps sir is unclear regarding the prices..."

This is how I, and everyone else, handled twits like you. Makes you look like a real winner in front of your date, too, let me tell you.

(And for the record, no, going over my head and trying to sweet talk the manager won't get you anywhere either. Depending on the restaurant and manager, if he thinks you're going to continue to behave that way, he can kick you out. I've seen my former manager do it twice, on the basis that it was clear the customer was trying to beat the system.)

I refuse to buy $4 socks in packs of three from KMart, since the material is crap, the elastic wears out and develop holes faster. Instead, I buy $12 socks which last longer, feel softer and even look better.

Give me a break. I myself don't give two shits about socks - mine hardly ever even match. Of course, given my choice of footwear, it doesn't matter since nobody can see them. However, for four dollars, I don't care if they don't last long - so in two months I have to spend another four dollars. Oh, the horror.

And these socks I usually get free with a shirt or trousers that I buy in the same store.

Well, aren't you special. You spent money on item A so you think you're entitled to item B for free. Spare me.

All you've done is spew meaningless anecdotes which prove nothing, and fall back to the "smaller shops = better quality and better pricing" routine which holds absolutely no merit. If being a jackass lets you save a few dollars in Melbourne, congratulations - but don't act like that's a universal feature of capitalism. Capitalism governs the price of items by what the overall population is willing to pay for it - not how much one punk can wheel and deal. That does absolutely nothing for the marked price of the item in question.
mirrorshades radio - darkwave, synthpop, industrial, futurepop.
[ Parent ]
Actually (none / 0) (#89)
by onyxruby on Tue Aug 05, 2003 at 09:28:39 AM EST

Actually, I've done exactly that. I've been able to haggle a price for things at Best Buy before. If it's an open stock / return I can usually get it at 70% of list price (their standard is 80% or 90%).

I've also done this with new merchandise. Offer something in the range of 85%, look like your serious about buying, and you'd be surprised how often they'll bite. The trick is not to lowball your offer, because if you do they'll just dismiss it out of hand. In a pawn shop you should easily be able to get 60% of the list price.

It's actually easier to haggle for big ticket items than small. Avoid the newest items, find a model that's been out a while, and chances are you can get something knocked off.

Your example of $130 for a $200 item is off base, but it is quite conceivable to do somewhere around $170 - $180 at a Best Buy.

The moon is covered with the results of astronomical odds.
[ Parent ]

You're Wrong (none / 0) (#123)
by harryh on Tue Aug 05, 2003 at 03:20:54 PM EST

If it costs over $100 you can haggle *anywhere*.

I've once got a discount on a grill from Walmart.
I've got discounts on movie tickets (when I was buying 50 of 'em).
I've got discounts on furniture from Ikea.

Stuff from Circuit City/Best Buy type places is super easy.  People haggle over stereo equipment and major applicances all the time.

Only suckers pay retail.


[ Parent ]

Haggling (none / 0) (#65)
by Melba Toast on Tue Aug 05, 2003 at 01:51:37 AM EST

I have come to love haggling.

I buy almost nothing except at auctions anymore. Last week I bought a pallet with boxes of printer ribbons and old educational Macintosh software. I paid $5 for the pallet.

There was a newish Powerbook sealed into one of the boxes. There were new toner cartridges in one of the other boxes.

That's an aside, though. But I love haggling these days, and the thought of actually buying something new and paying an actual full price for it... well, it's a disturbing thought.

[ Parent ]

What we need now (none / 0) (#152)
by Tatarigami on Tue Aug 05, 2003 at 10:24:52 PM EST

...is an 'intro to haggling' article. I'd like to see some of the tricks experienced hagglers use, and see if they work for me as well.

Particularly on electronics.

[ Parent ]

Intro to haggling (none / 0) (#171)
by smallstepforman on Wed Aug 06, 2003 at 07:58:15 PM EST

1. You cannot haggle where you take an item to a checkout person. Forget supermarkets and massive retailers

2. When buying a shirt, ask what price you'd get if you were to purchase another item of clothing. Its easier to haggle when you buy multiple items from store.

3. Ring up your telecommunications provider and ask to terminate your connection - they'll ask why, and say you can get a better deal elsewhere. They'll offer you a sweeter deal than what you're currently on.

4. When buying anything, ask for a price when paying with cash (vs. paying with credit card). Most retailers are slugged 3% surcharge when using credit cards, so they'll drop the price when paying cash (or direct debit).

5. Always remember that a sale (at reduced commission) is better than no sale at all. Sales people will gladly reduce a price (when working on commission) than watch you leave the store and walk into a competitors store across the road.

6. When possible, purchase from smaller privately owned stores (where the owner/manager runs the store) than from big multinational retailors. Big retailors employ sales people who dont care about the business, and would rather do nothing (be lazy) than go out of their way to lookup a reduced price. Smaller stores look after their customers, and would gladly offer discounts just to get a sale.

7. Never agree to purchase an item the second you find something you like. Hesitate, think, ask yourself should you or shouldn't you, call someone, etc, eventually the salesperson will get tired and offer a discount just to get you out of their way :-)

8. Finally, if you cannot directly haggle on one item, ask them to throw something else in for free (like a free CD when buying a car CD-player).

Millions of people haggle - only fools pay retail.

[ Parent ]

addition (none / 0) (#202)
by roju on Fri Aug 08, 2003 at 05:35:11 PM EST

Regarding number 6, it's so very very true. Especially in consumer electronics. As soon as you're a regular, and if you've always haggled a little, the discounts are immense. My friend funnels a lot of his friends' hardware purchases through this one store, so they know he's worth tons of volume and he gets a huge discount. I was with him buying a harddrive the other day, and mentioned, "oh, I need a keyboard too, a cheap one" and next thing I know the salesman says "$8 [CAD]". The cheapest I've seen keyboards for elsewhere is approx $15, so I was pretty thrilled.

[ Parent ]
I bet you love airlines [nt] (none / 0) (#70)
by grouse on Tue Aug 05, 2003 at 02:52:03 AM EST


You sad bastard!

"Grouse please don't take this the wrong way... To be quite frank, you are throwing my inner Chi out of its harmonious balance with nature." -- Tex Bigballs
[ Parent ]

Don't leave the US then (5.00 / 4) (#72)
by scheme on Tue Aug 05, 2003 at 02:58:30 AM EST

One thing that I cannot stomach is haggling - knowing that I'm getting a different price compared to a person who entered the shop 5 minutes ago makes my head hurt and makes me mad. Its not only cars and houses - almost everything in a capitalistic society can be renegotiated price wise. Go buy a pair of trousers, or a shirt, or a Hi-Fi system, mobile phone deals, cable internet packages, heck, even go to a restaurant and you can pay less (or more) than other customers. This is unjust, unfair, and just plain wrong. Make everyone pay the marked price (which is lower than the Recommended Retail Price), everyone pay the same price, and I'll be happy. After haggling, I always feel as if I've been ripped off - I don't feel happy that I got a decent deal from the salesperson.

Wow, that's a pretty strong opinion and ultimately unrealistic. Aside from the US and possibly a few other western countries, most countries have a tradition of haggling over prices.

Regardless of what you think haggling is basically the same thing as comparison shopping. If you look at the same item at a couple different places then you are in effect negotiating a price for the item by reviewing multiple offers and then accepting the best one. With haggling, you cut out some of the time and effort and try to negotiate a mutually agreeable price with a single vendor.

Seriously, do you feel ripped off if someone purchases the same thing as you for less at another place? You seem to be advocating that everyone pay the same price for a given item regardless of the situation, that's not going to happen so you probably should accept the fact that others may pay less for a given thing then you do. Even with a fixed price say at store xyz, it's possible that someone could get the same thing for less (think employee discounts, coupons, knowing the owner/manager, mail in rebates, cash bonus plans, etc).


"Put your hand on a hot stove for a minute, and it seems like an hour. Sit with a pretty girl for an hour, and it seems like a minute. THAT'S relativity." --Albert Einstein


[ Parent ]
ob MP quote (none / 0) (#95)
by kableh on Tue Aug 05, 2003 at 09:44:52 AM EST

Four? For this gourd? Four? Look at it! It's worth ten if its worth a shekel!

[ Parent ]
What is taught (none / 0) (#114)
by pin0cchio on Tue Aug 05, 2003 at 01:30:57 PM EST

Regardless of what you think haggling is basically the same thing as comparison shopping. If you look at the same item at a couple different places then you are in effect negotiating a price for the item by reviewing multiple offers and then accepting the best one.

The difference here is that most Americans are better at comparison shopping than at haggling. This may in part be because American schools teach students how to comparison shop, but American schools generally do not teach students how to haggle with one seller.


lj65
[ Parent ]
I hate having to get pre-packaged deals (none / 0) (#106)
by gte910h on Tue Aug 05, 2003 at 11:22:49 AM EST

A car is expensive enough, and the way you pay for it is varied enough, that I LIKE having to negotiate. That way you cut off chaff that is of no interest to you.

This is also why I like negoitating for housing. That way you have room to get what you want as terms to be included in the contract.

Then again, I'm not bothered by the other guy not liking me. That's something that DOES bother many of my co-workers, who have similar feelings to you.

Gotta love capitalism.

[ Parent ]

Saturn (none / 0) (#116)
by leviramsey on Tue Aug 05, 2003 at 01:58:30 PM EST

Saturn's policy is that the sticker price is non-negotiable (though Saturn Corporation (a subsidiary of General Motors, of course) does adjust the sticker prices from time to time by corporate fiat [hahahahahaha... GM is mulling a purchase of FIAT!]). This doesn't necessarily mean that they don't screw you on the trade and the financing...



[ Parent ]
never in Japan (3.00 / 1) (#93)
by muyuubyou on Tue Aug 05, 2003 at 09:36:45 AM EST

The only place I've been where they never tried this to me.

Worst places? arab countries. Seems like they have to do it.

----------


----------
It is when I struggle to be brief that I become obscure - Horace, Epistles
[ Parent ]
i was on holiday in turkey last year (5.00 / 1) (#121)
by werner on Tue Aug 05, 2003 at 03:14:27 PM EST

and shopping (hell, just walking past a shop) there was one of the most stressful experiences of my life.

salesmen shouting randomly down the street after you, accosting you, even if you never even glanced in their direction.

there are sometimes price tags, but you know they are stiffing you and that you HAVE to haggle. horrible. horrible.

i hope i never go to turkey again.

[ Parent ]

An alternative (4.00 / 1) (#105)
by Eccles on Tue Aug 05, 2003 at 11:16:01 AM EST

I know there are places like CarsDirect.com, but you can't test drive cars through the internet yet, so you still feel the pressure when in the dealership.

CarMax now has a few new car dealerships associated with it, including a Toyota dealer in the D.C. area. My wife and I bought our last new car there, and were able to look at the price on the internet before we bought. It was a reasonably low-stress experience, so if you hate haggling, you might see if they're in your area.

[ Parent ]
Re: Carsdirect (4.00 / 1) (#117)
by Yanks Rule on Tue Aug 05, 2003 at 02:00:57 PM EST

Also, carsdirect goes through local dealers to get your car. For instance, I live in Pasadena, California, and when I was ordering my and the guy said he'd have to check around to see if they had my color. WHen he found it I asked where, and he replied "I can't tell you the name, but it's within 20 miles of you." Well, there's only one Lexus dealership that close (Longo Lexus), so I knew which one. Then you can just go test drive that model.

However, I didn't even test drive my car before I bought it. My dad had driven it before, and said it was a great car....

"I do think we live in dangerous times, and anybody who looks at the world and says this is the time to be a wuss--I can't buy that anymore. " -- Dennis Miller
[ Parent ]

CARS AREN'T COMMODITIES (5.00 / 1) (#133)
by cbraga on Tue Aug 05, 2003 at 05:41:15 PM EST

Not by a long shot. There are hundreds of models, and, for the same model, each one is diffent: different mileage, colour, condition, etc. Used cars will never be like that, and neither will houses for the same reason.

New cars, though, are a different matter. Buy one the next time, but you'll either have to pay much more, or take home much less.

ESC[78;89;13p ESC[110;121;13p
[ Parent ]

Haggling is only painful... (none / 0) (#136)
by splitpeasoup on Tue Aug 05, 2003 at 06:01:56 PM EST

...if you're no good at it.

Haggling over cars, from the point of view of the buyer, is quite pleasurable, if you are mildly sadistic, like I am, and if you do your homework right. You can rip the salespeople to shreds and laugh in the remains of their faces. I really do that to the VIN-etching quoting bunch. At the very worst, you walk out with no car and try your luck at another dealership. Again, it's a matter of doing your homework.

From the point of view of the salespeople, it is probably a lot more unpleasant than you as a customer can possibly imagine. They have to deal with people like me. I do feel genuinely sorry for them sometimes.

However I did meet my match at Herzog-Meier Beaverton. They are too ruthless even for me. You could walk out of the dealership without buying a car, and they wouldn't give a shit.

-SPS

"Be the change you wish to see in the world." - Gandhi
[ Parent ]

You have to say NO. (none / 0) (#174)
by McLae on Wed Aug 06, 2003 at 10:42:35 PM EST

The most important skill in buying a car is the ability to say No, and have it stick. If you lack this simple skill, take a friend with you who has it. I have gone to a dealer, only to find that the model/price they advertised was for a completely unsuitable piece of junk. When they tried the bait-and-switch thing, we sent the salesman off to try for a "better deal", and we stood up and walked out. So much fun to have three people in suits running after us saying "How can we make a deal?". If you are not willing to stand up and walk out, don't walk in. On the features thing, when we went to a different dealership, they were up front with us; "we do not have that color combination, but we might be able to find it. Would you be willing to wait while we look?" Three days later, I had the model, price and features I wanted.
Sig
[ Parent ]
or (3.60 / 5) (#49)
by turmeric on Mon Aug 04, 2003 at 10:47:20 PM EST

get a nice bicycle for $1,000

sorry I live in texas (none / 0) (#62)
by auraslip on Tue Aug 05, 2003 at 01:20:05 AM EST


___-___
[ Parent ]
which part (none / 0) (#63)
by turmeric on Tue Aug 05, 2003 at 01:49:52 AM EST

austin has a big bike scene.

[ Parent ]
dallas (none / 0) (#163)
by auraslip on Wed Aug 06, 2003 at 04:39:29 AM EST

just joshin anyways

___-___
[ Parent ]
So? I put 30 miles a day on my litespeed (none / 0) (#128)
by Bwah on Tue Aug 05, 2003 at 04:02:42 PM EST

and I live in DFW.

--
To redesign an infinite ensemble of universes: what terrible responsibility, what arrogance ... It sounds just like the type of thing your average Homo sap would do for a dare. -- Stephen Baxter
[ Parent ]

this girls dad I know (none / 0) (#162)
by auraslip on Wed Aug 06, 2003 at 04:39:08 AM EST

is in to biking.
wouldn't it be errie if it was you?
___-___
[ Parent ]
Heh .... that would be freaky ... (none / 0) (#214)
by Bwah on Mon Aug 25, 2003 at 02:04:40 PM EST

since I'm single and 26 ... :-)

--
To redesign an infinite ensemble of universes: what terrible responsibility, what arrogance ... It sounds just like the type of thing your average Homo sap would do for a dare. -- Stephen Baxter
[ Parent ]

sorry I live in Scotland (none / 0) (#78)
by gordonjcp on Tue Aug 05, 2003 at 05:30:18 AM EST

Hills, y'see... bloody great big ones. And crosswinds. And torrential rain. And baking heat, when it's not raining.

Give a man a fish, and he'll eat for a day. Teach a man to fish, and he'll bore you rigid with fishing stories for the rest of your life.


[ Parent ]
How do you bike (5.00 / 1) (#84)
by MSBob on Tue Aug 05, 2003 at 07:51:50 AM EST

on 20" of snow?
I don't mind paying taxes, they buy me civilization.

[ Parent ]
How do you drive (5.00 / 1) (#101)
by skyknight on Tue Aug 05, 2003 at 10:55:59 AM EST

on 20" of snow?

It's not much fun at the top. I envy the common people, their hearty meals and Bruce Springsteen and voting. --SIGNOR SPAGHETTI
[ Parent ]
Simple (none / 0) (#118)
by MSBob on Tue Aug 05, 2003 at 02:01:34 PM EST

Studded tyres.
I don't mind paying taxes, they buy me civilization.

[ Parent ]
Dude... (5.00 / 1) (#127)
by skyknight on Tue Aug 05, 2003 at 03:59:21 PM EST

is your bumper even 20" off of the ground? It doesn't matter how awesome your tires are if you get so much snow wedged under your car that your tires never get to do their magic.



It's not much fun at the top. I envy the common people, their hearty meals and Bruce Springsteen and voting. --SIGNOR SPAGHETTI
[ Parent ]
You probably don't drive in 20" ... (none / 0) (#150)
by pyramid termite on Tue Aug 05, 2003 at 09:51:43 PM EST

... but I've managed 12"-15" in my 91 Mercury Grand Marquis. You REALLY have to know what you're doing to drive in that without snow tires and no 4 wheel drive. (Even with.) One mistake and that's it. Fortunately there were no steep hills, as I doubt I'd have made it.

Ride a bike in that? Hell, no.

On the Internet, anyone can accuse you of being a dog.
[ Parent ]
typical rhetorical question (none / 0) (#209)
by ShrimpX on Sun Aug 10, 2003 at 07:17:12 PM EST

... from joe suv.

[ Parent ]
Loan rates and "theft" (4.25 / 4) (#50)
by EminenceGrise on Mon Aug 04, 2003 at 10:52:41 PM EST

I like most of this article, but I disagree that simply because a dealership can get a loan at your "1.9%" and then sell it to you for "5.9%", that it's theft per say.

Consider it this way: banks can (and do) borrow money at the prime rate, which would essentially be like your 1.9% dealer loan.  The bank is then free to offer you a loan at whatever rate they think is appropriate, say 5.9%, depending on your credit rating, etc.  They keep the extra 4.0% (this is how banks make money and pay out interest).  Credit unions can operate slightly differently (in that the amount they keep will be generally less on average than a commercial bank), but there will still be a markup to cover their costs, and pay the interest on the accounts they borrow the money from.  In the case of the car dealership, they are merely acting as the bank in the above equation - the car dealership is the one approved for the 1.9% rate, not you.  An individual will never get the prime rate (it's possible they could get close though).

Consider the following scenario: a bank offers you an interest rate of 5.9%, but the car dealership offers you 5.0%.  Are you going tell the car dealership to piss off?  If you end up saving money you otherwise wouldn't have, are you somehow less off even if the car dealership is making money hand over fist?  Are they taking advantage of you?  Sure, but so is the bank.  The point is the car dealership isn't screwing you any more than a bank (for the same loan rate), and you might do better.  If it's theft, then the bank is just as guilty - you could say it's institutionalized theft (and if you want to argue that, that's fine with me), but that's an issue with finance (see also "usury"), not a car dealership specifically (you do touch on this though).  Unfortunately it's also the major basis for the western economic system.


Almost, but not quite (4.66 / 3) (#58)
by Pac on Tue Aug 05, 2003 at 12:21:21 AM EST

Car dealerships do not default, you do. When they oversell for 5.9% the money the bank has sold them for 1.9%, they are certain to make sure the upsell is rolled back to the bank (either by design or by reselling your debt) and the sole responsible for payment is indeed you.

But you are right that this is probably one the ultimate pillars of Western capitalism. Arbitrating money prices is something so metaphysical that after one or two interactions one can almost forget there are real, tangible people and real, tangible products somewhere far behind it. It is also one of the basic activities entertaining the lives and times of the evil entity called "The Market" and its many servants... :)

Evolution doesn't take prisoners


[ Parent ]
Because (5.00 / 2) (#110)
by lonemarauder on Tue Aug 05, 2003 at 11:58:15 AM EST

I like most of this article, but I disagree that simply because a dealership can get a loan at your "1.9%" and then sell it to you for "5.9%", that it's theft per say.

Interest is the monetary expression of the risk of loaning money. By upcharging your interest rate without bearing responsibility for the loan, the dealership is taking payment for a risk that they do not realize.



[ Parent ]
Actually the way Banks make money... (5.00 / 1) (#134)
by Alhazred on Tue Aug 05, 2003 at 05:41:15 PM EST

Is that they borrow small(er) amounts of cash from the Federal Reserve. They don't pay anything like the Prime Rate either, they pay a MUCH lower rate than that!

Then said bank turns around and calls that money a 'reserve'. They can and do also use their deposits as reserves. Now they don't ever loan out their reserves, what they do is they CREATE money, called 'checkbook money' and loan THAT money out. Each bank is allowed to leverage its reserves in this way up to the Fed's reserve limit, which is basically around 90%.

That means the bank has say $1 Million in reserves made up of a combination of money borrowed from the Fed, money deposited, EXISTING OUTSTANDING LOANS, and stockholder equity. Notice that, the bank can count its outstanding loans as 'assets'. This means the bank CAN LEVERAGE ITS OWN LOANS!!! Basically the upshot of all this is that banks essentially "print" money and loan it to you, then collect interest. Even if a bank gets ZERO interest on the loan it looses NOTHING except G&A expenses.

Not to say anyone MAKES money on zero percent, but the fact is it costs a LOT less than you might think to loan out money.

Really someone should do a piece on how badly BANKS rip us all off, but you can just read "The Creature from Jekyll Island" for yourself...
That is not dead which may eternal lie And with strange aeons death itself may die.
[ Parent ]

bullshit..... (2.50 / 2) (#143)
by Run4YourLives on Tue Aug 05, 2003 at 07:10:57 PM EST

in the US, "reserve" monies only need to be 20% of the actual worth of the bank... in Canada, it's even better: 0.

It's slightly Japanese, but without all of that fanatical devotion to the workplace. - CheeseburgerBrown
[ Parent ]
lower (5.00 / 1) (#154)
by jjayson on Tue Aug 05, 2003 at 11:05:12 PM EST

The reserve requirement for transaction deposits is 10% (time deposits have no requirement). That means a bank has the potential of lending out 10x their receipts.
--
"Fuck off, preferably with a bullet, if you can find one that's willing to defile itself by being in your head for a split second." - Parent ]
Per se! (none / 0) (#193)
by rodgerd on Thu Aug 07, 2003 at 10:42:37 PM EST

It's per se, dammit, not per say.

Sorry, but this bugs shit out of me...

[ Parent ]

Sorry.... (none / 0) (#206)
by Neologic on Sat Aug 09, 2003 at 01:40:14 AM EST

It is 'bugs the shit out of me' dammit, not 'this bugs shit out of me'.
To be intelligble is to be found out...
[ Parent ]
You didn't mention... (4.50 / 4) (#52)
by Shimmer on Mon Aug 04, 2003 at 10:55:32 PM EST

The part where you "trade in" your old car.  The importance of this variable would seem to dwarf some of the others you mention.

-- Brian

Wizard needs food badly.

Cool article. (3.66 / 3) (#55)
by Fantastic Lad on Mon Aug 04, 2003 at 11:55:40 PM EST

I didn't know any of that stuff. I love learning the inside dope of any given industry!

Of course, I'm not sure how much direct good it'll do me. --The next vehicle I buy will most likely be parked on a used car lot when I first see her, I'll be trying to ignore the rust spots and paying in cash.

-FL

Bait and switch? (4.00 / 1) (#66)
by d2ksla on Tue Aug 05, 2003 at 02:12:11 AM EST

If I understand it correctly, the dealer makes money not only on selling the car, but on financing and the trade-in. Is it possible to negotiate a really good price for the new car, while acting as if you're willing to take nothing for the trade-in and pay high interest rates, and at the last moment switch the offer to paying cash only for the new car? Or can the dealer always back out of it? You'd think it would be hard for them to suddenly renege on the price for the car...

That's why (3.00 / 1) (#68)
by grouse on Tue Aug 05, 2003 at 02:51:02 AM EST

they usually ask how you'll be paying for the car pretty early on.

You sad bastard!

"Grouse please don't take this the wrong way... To be quite frank, you are throwing my inner Chi out of its harmonious balance with nature." -- Tex Bigballs
[ Parent ]

Ah... (4.00 / 2) (#109)
by lonemarauder on Tue Aug 05, 2003 at 11:53:29 AM EST

they usually ask how you'll be paying for the car pretty early on.

So that's the moment when I should apply the bullshit. Cool.



[ Parent ]
No.... (none / 0) (#201)
by ninjastu on Fri Aug 08, 2003 at 04:18:13 PM EST

That's when you tell the salesman that you'll worry about it later. You don't necessarily need to be rude with salesmen, but if they're pushy, you just walk. That changes their tune. If it doesn't, you don't want to buy from them anyway.

Michael Jordan owns a dealership here in Durham, NC. The story is that a salesman there was rude to his father (when he was still alive), so Air Jordan got pissed, bought the place, and replaced the management. I bought a new truck from there last year and was very pleased with the courteous service. (Of course, they're going to be extra nice when I now see how I got screwed over on my interest rate!!)

[ Parent ]

Buying directly from manufacturer (4.00 / 1) (#69)
by annenk38 on Tue Aug 05, 2003 at 02:51:24 AM EST

I remember in the early 90's, while I was deployed with the 26th MEU in the Mediterranean, we've had car manufacturer reps come aboard. They offered cars at prices far below those you'd pay at the dealership. All those extras the dealer wants $2000 for? -- you get 'em free! All you do is pay a $500 deposit up front, and then pick up your car upon your return to the U.S. Anyone know if that's still going on?

And if my left hand causes me to stumble as well -- what do I cut it off with? -- Harry, Prince of Wales (The Blackadder)
Never trade in your old car (4.75 / 4) (#73)
by Sciamachy on Tue Aug 05, 2003 at 02:59:29 AM EST

...unless it's an insurance write-off or you simply cannot shift it. You'll get shafted. Same goes for bikes - I had a 6 month old DT125R which I traded in against my CB500, and lost possibly a grand over selling it privately. So, sell your old car privately, and don't use the dealers' finance.
--
Fides Non Timet
Or donate it (4.66 / 3) (#92)
by greyrat on Tue Aug 05, 2003 at 09:35:21 AM EST

and take the Blue Book value as a tax write-off.
~ ~ ~
Did I actually read the article? No. No I didn't.
"Watch out for me nobbystyles, Gromit!"

[ Parent ]
Just make sure (5.00 / 4) (#107)
by sasquatchan on Tue Aug 05, 2003 at 11:25:41 AM EST

that the receipient charity wants the car and actually will take it. (ie do your research before hand about whether or not they will take it, make sure they tow it, and only then sign the title over to the charity).

There's been a handful of articles in the washpost over the past year about folks who donate a car to some such charity, and sign the title over, only to have the car sit for 6 months and not ever get picked up. Getting the title back and what not to actually do something with the car can be a real PITA (you already signed away the title).

Even worse is when the charity takes the car, but they convince you NOT to sign the title to them. Then the car gets taken at auction or towed somewhere or stolen, and it sits somewhere, racks up $5k in parking tickets, and you are still stuck with the bill b/c no one ever got the title cleared. Charities will ask you not to sign the title over so they won't have to go through the DMV (or state equivalent) and pay the fees for it, but then you are still responsible for the car.

So, yeah, do your homework first. A search on washpost for donated cars to charity will give you some background on this. Make sure you know what the charity will use the car for, get a receipt, etc etc.
-- The internet is not here for your personal therapy.
[ Parent ]

Provided that you itemize deductions (nt) (none / 0) (#126)
by gniv on Tue Aug 05, 2003 at 03:44:19 PM EST



[ Parent ]
Unless you really hate haggling ... (none / 0) (#129)
by Bwah on Tue Aug 05, 2003 at 04:06:33 PM EST

I would rather haggle with a dealer any day than try to sell another used car. I'll take the $1000 hit just to not have to deal with the type of people that want to come by and look at it/test drive it. Ugh.

--
To redesign an infinite ensemble of universes: what terrible responsibility, what arrogance ... It sounds just like the type of thing your average Homo sap would do for a dare. -- Stephen Baxter
[ Parent ]

How does 0.0 APR work? (4.50 / 2) (#82)
by porkchop_d_clown on Tue Aug 05, 2003 at 07:34:11 AM EST

So, towards the end of 2000, I picked up a new van for my wife that they were trying to unload so, they gave us 0.0 APR on a 5 year finance deal. Since then, I've noticed this deal has become more common when the car company needs to unload inventory. How does the dealer make his profit in that case?

--
His men will follow him anywhere, but only out of morbid curiousity.


Profit in the Mix (4.66 / 3) (#100)
by virg on Tue Aug 05, 2003 at 10:21:55 AM EST

The incentive to offer zero percent financing comes from two things. First, they lose money on the financing, but can often get you to buy a bigger car than you would otherwise buy, so they get more for the vehicle and less on the financing. Second, sometimes, it's not done to make a profit. That may be counterintuitive, but if the dealer needs to clear inventory, they will sometimes take a loss to get the car gone, because it loses value as it sits on the lot, it costs money to maintain it in inventory, and they can often get a first-time buyer into it, who is then a good candidate for repeat buying a few years down the road. So they offer a sweet deal to move the car, and sometimes they eat a loss to do it. That's why shopping near the end of the month can get you such great deals.

Virg
"Imagine (it won't be hard) that most people would prefer seeing Carrot Top beaten to death with a bag of walnuts." - Jmzero
[ Parent ]
You don't even mention... (4.00 / 1) (#94)
by Rocky on Tue Aug 05, 2003 at 09:38:27 AM EST

...the thing that really pisses me off about buying cars in the U.S. - being forced to buy from dealer inventory.

I found out at some point that for many companies in  Europe, you can pick and choose every element of your car from the engine up, and they will custom make it for you.  It's a double standard: even if the cars are made at the same plant, cars for the American market are made as pre-generated inventory, while many of the European-sold ones are custom.

That kind of ruined things for me, especially when I hear some cheeky dealer telling me I can't get my Geo Metro in Gan Green because he doesn't have it in stock and neither does his cousin who runs a dealership in Bay Ridge...

If we knew what it was we were doing, it would not be called research, would it?
- Albert Einstein (1879 - 1955)

Not totally the case... (4.00 / 1) (#111)
by squigly on Tue Aug 05, 2003 at 11:59:38 AM EST

When I was looking at a new car, I did go into a couple of dealerships, and specify exactly the options that I wanted.  I had a quote for a car with various options, that could be delivered in a few weeks.  I was called a couple of days later and offered a very similar car that I could get prety much immediately, but it was a differnt colour and the spec was slightly different.

Okay, that was just an option that I was freee to take or refuse, and they would have sold me the exact car that I wanted, but I get the feeling this isn't their preferred way of working.  I think it also depends on the car.  The Mini is so popular that all they need ot do is put one on the forecourt, and someone will buy it.

[ Parent ]

There's a price to that (none / 0) (#137)
by CtrlBR on Tue Aug 05, 2003 at 06:17:24 PM EST

I had to wait for nearly 2 months for my car and with some options it can even be longer.

But in Europe you can buy from the dealer inventory too.

If no-one thinks you're a freedom fighter than you're probably not a terrorist.
-- Gully Foyle

[ Parent ]
.. with another benefit (none / 0) (#140)
by Chep on Tue Aug 05, 2003 at 07:06:42 PM EST

is that as buying from inventory is not exactly the 'normal' way of doing (except fire sales and all that crap), you can usually use the "yeah, it's nice, but it sat in your inventory, didn't it?" excuse as a bargaining chip.

--

Our Constitution ... is called a democracy because power is in the hands not of a minority but of the greatest number.
Thucydide II, 37


[ Parent ]

Nope. (5.00 / 3) (#138)
by sonovel on Tue Aug 05, 2003 at 06:46:00 PM EST

You can order cars in the US. Dealers may not like it because they want to move stock on hand.

But you absolutely can order a vehicle with the options you want.

Some dealers may not want to do the work for this. But other dealers will. If a dealer tells you that no dealer will do this, they are lying.

Another strange belief that some have is that they are required to get their vehicle serviced where they bought it. New vehicle warentees are with the manufacturer so you can go to any dealership to get the servicing done.

[ Parent ]

even better... (5.00 / 1) (#142)
by Run4YourLives on Tue Aug 05, 2003 at 07:08:41 PM EST

you can take it to any mechanic and it'll still be valid... hell, you can not bother to change the oil at all and it'll still be valid most times...

It's slightly Japanese, but without all of that fanatical devotion to the workplace. - CheeseburgerBrown
[ Parent ]
Guess I scored.. (4.00 / 1) (#97)
by cvou on Tue Aug 05, 2003 at 09:59:43 AM EST

Bought an '02 Civic up here in Canada.  Paid $16k for it, pre tax.
  1. I didn't buy any of the shite you warned against, thank god.
  2. I financed the damn thing through my local credit union.  The dealer said they couldn't beat the rate the union offered me.  I bet what they really meant is that they couldn't take the profit cut.
  3. One thing you really haven't mentioned: warranties.  The vehicle came with 2yr and some km's left on it.  The Honda dealership I went to offered $800-1000 CDN for an additional 7yr/150,000km.  I'm thinking of going back and getting it, dispite Honda's rep in these parts, simply because i'm paranoid and that price seems WAY better than various other dealership warranties I investigated before buying.
Apparently the car I got a repo from someone who couldn't make lease payments.  I wonder how that factors into their profit margin..


extended warrenties are a waste... (5.00 / 1) (#132)
by Run4YourLives on Tue Aug 05, 2003 at 04:58:46 PM EST

of time and money.

Think about this... What are the odds that a "Manufacturer Defect" that turns up in year 5 is going to cost $1000?

Yeah, I thought so. PLay the odds... you'll probably win, and if not, you won't lose much.

It's slightly Japanese, but without all of that fanatical devotion to the workplace. - CheeseburgerBrown
[ Parent ]

don't bother with extended warranties (none / 0) (#184)
by DaChesserCat on Thu Aug 07, 2003 at 12:57:46 AM EST

I bought a '98 Dodge Dakota in December '00. I got a decent deal on it (I think; the selling price was about $100 below Edmunds retail price). Talking to the F&I guy, he suggested I get the extended warranty. My most recent vehicle had died on me (in the middle of evening rush hour, in December in the Midwest). I had frozen my tail off that night, and I had missed three days of work. Consequently, I was seriously concerned about reliability (yeah, I know; if I'm concerned about reliability why did I buy a Dakota?).

The extended warranty covered me completely. I mean, a $100 deductible, and everything else (parts, labor, etc.) was covered. If it was going to take more than one business day to get it fixed, I was entitled to a rental, and they had to pay UP FRONT for it (none of this "put it on your card, and we'll reimburse you" B.S). Considering what I'd been through in the last few days, I bought it (hook, line and sinker).

I was pleased as hell. The warranty was $1,800, and it was rolled into the financing. I pay more per month, but I couldn't afford a down payment at the time, so that was preferable. Then, I got the rest of the info on it. Turns out, if you can't show that it's had some kind of maintenance on it in the last 500 miles, the warranty is useless. Consequently, if I want the warranty to cover anything, I have to take it to a shop for regular maintenance, and the receipt needs to show the mileage at the time (and it needs to be relatively recent).

I do my own maintenance. I spent four years fixing jets in the US Air Farce. I've rebuilt engines in cars. Hell, I recently redid the head gaskets in my wife's V6; my daughter was able to count the pistons, and I was able to show her how a camshaft works. I don't go to Jiffy Lube for an oil change, and the truck doesn't get its first tune-up until about 100,000 miles. In short, I wasted $1,800.

Bought it; signed the contract; gotta pay it. If I had known then what I know now, I wouldn't have done so.

As it is, the extended warranty will run out at 98,800 miles. That's 1,200 miles BEFORE the first scheduled tune-up. BOHICA.

Of course, if you're completely inept with a socket wrench, or can't tell a combo wrench from a monkey wrench, your mileage may vary. In my case, it wasn't worth it.

Trains stop at train stations Busses stop at bus stations A windows workstation . . .
[ Parent ]
You got screwed in plenty of ways (none / 0) (#208)
by barzok on Sun Aug 10, 2003 at 09:44:08 AM EST

First, if that's a Dodge extended warranty (or service contract), the price is negotiable.  You could have gotten it down to close to $1000.

Second, read the really fine print.  Is it a warranty, or service contract?  If the latter, it'll state that any change in the vehicle from original spec makes the contract null & void.  Use a different brand of air/oil filter?  So long.  Decide you want BFG tires instead of Goodyears, on different rims?  That's it.  Yes, people have really been denied for stupid things like this.

Third, it is a contract.  You can negotiate terms.

Fourth, if it's not a Dodge deal, but through a 3rd party, that 3rd party may go under, leaving you high and dry.  Warranty Gold is having this problem right now.  The company that originally underwrote their contracts has gone south.  Leaving people who had a deal with them wondering if they still have coverage.

I bought a new Dakota 6 months ago, my second (first was a'99, this is an '03).  They tried to sell me the extended warranty but I passed - the Dodge 7/70 powertrain covers the parts I'm most concerned about, assming  I keep meticulous service records (forget to save an oil change receipt and I could be in trouble).

I know the history on these trucks.  Get your balljoints checked out before the warranty runs out.  They're a common failure point - to the point where the NHSTA is investigating.  The battery is on borrowed time, if it's still the original.  And the intake manifold  gasket (also called the "belly pan gasket") should be checked out if it's a 5.2L V8 (or even the V6).  The shocks, if they've never been replaced, have to go too.  And make sure you torque your front wheel lugs properly to 95-100 ft-lbs else you'll have a very good chance of warping the rotors.

[ Parent ]

My F&I guy straight up lied about the etching (4.00 / 2) (#98)
by Fon2d2 on Tue Aug 05, 2003 at 10:01:30 AM EST

Yes... I got it. It was pretty much straight up fraud. He knew I wasn't going to buy any type of "extended warranty" bullshit which I considered it to be. So he lied and said it would pay for itself by lowering insurance premiums. Of course there's no way I would know, never having bought insurance for myself before and not knowing anything about it. The dealership also ripped me out of my "auto-dimming mirror with compass". I did sign one of those "bullshit" sheets saying I would get it a few days before I actually signed for the car. When they got the car on the lot, they had me come in and look at it and then sign the papers. Of course I failed to notice there was only a regular rear-view mirror inside. When it came time to sign the papers, the F&I had me sign a sheet that said everything had been delivered as expected, not one that specifically listed the options I requested. I thought this seemed weird, so I referred back to the earlier document. He once again committed fraud and either directly said or implied it was part of the contract as well. A couple days after I got the car home, I noticed there was no temperature gauge or compass.

Good Article (4.00 / 3) (#112)
by Lenny on Tue Aug 05, 2003 at 12:48:32 PM EST

But you forgot to highlight the biggest liars/cheats of them all: customers. You mention 10 to one bad to good salesmen. I would say 20 to 1 for bad to good customers. They lie to you about their credit and you spend a few hours with them instead of spending the time with someone qualified to buy. Then they fail to mention to you that the head is cracked on their trade-in, which you find out after the deal. Then they tell you at the last minute that they can't come up with the down payment, so you have to go back and start F&I all over again. Car salesmen have to lie, cheat, and steal just to keep up with the customers.


"Hate the USA? Boycott everything American. Particularly its websites..."
-Me
true dat (3.00 / 2) (#119)
by el_guapo on Tue Aug 05, 2003 at 02:04:58 PM EST

a true irony - natures purest form of catch 22. people think car salesmen are liars, so they lie to car salesmen, forcing the car salesmen to lie. the car business is exactly what most customers deserve, sadly enough :/
mas cerveza, por favor mirrors, manifestos, etc.
[ Parent ]
What they desever (none / 0) (#149)
by jjayson on Tue Aug 05, 2003 at 09:48:30 PM EST

Things are almost always exactly what society deserves, from car markets to labor markets. The part that doesn't work is that people often think they deserve more than what they really do.
--
"Fuck off, preferably with a bullet, if you can find one that's willing to defile itself by being in your head for a split second." - Parent ]
Solution (none / 0) (#207)
by Bios_Hakr on Sat Aug 09, 2003 at 01:52:03 AM EST

The solution seems easy.  Just tell us the frickin price up front.

Every car on the lot should have a sticker with the price.  I come in and hand you $20k and walk away with my brand new Mini.  Easy.

No, you guys have to hide prices from us and then charge me $1000 to fill my tank and wash the car.

You shouldn't have to deal with financing.  Either I have the money when I walk on the lot, or I don't get the car.  Same with trade-ins.  Don't take them and you won't get ripped off.

I don't think any other buisness could operate the way you guys do.  Imagine being charged a "register fee" to buy a soda, or having a resturant charge you to wash the dishes your food was served on.  It's a crock of shit.

Spammers, telemarketers, and car crooks^H^H^H^H salsemen should all be stood agianst wall...


[ Parent ]

they TRIED this (none / 0) (#212)
by el_guapo on Tue Aug 12, 2003 at 06:51:48 PM EST

back in the mid-90's. "no haggle" pricing was all the rage. well, the customers had to blow it. they'd take a "no-haggle" price down the road and shop it, and OF COURSE that other dealer is going to beat the no haggle price to get the deal. so it's a catch 22. for no haggle pricing to work sort of requires the customers not to haggle, and while YOU might "do the honorable thing" and pay the posted price, the VAST majority of people AREN'T. the only reason saturn can get away with it is because of the franchise contract - if word got out that a saturn dealership was haggling, GM would come down hard on them. so, we're left with a system that A)screws over the unitiated, B)rewards liars and cheats and C)ensures good decent people won't stay in the industry long. take me, 4 months was all i could stomache. i literally chose NO paycheck over a car salesman paycheck. thank god i finally got another tech job. (as further evidence of my extreme distaste: i paid for quitting that industry with my house, i knowingly let my house go back to the bank instead of earning a living in that vile industry)
mas cerveza, por favor mirrors, manifestos, etc.
[ Parent ]
Bah (none / 0) (#122)
by Stick on Tue Aug 05, 2003 at 03:15:05 PM EST

Try buying something off a pakistani clothes market stall if you want really evil sales people.


---
Stick, thine posts bring light to mine eyes, tingles to my loins. Yea, each moment I sit, my monitor before me, waiting, yearning, needing your prose to make the moment complete. - Joh3n
Consumer Reports, Carsdirect.com (5.00 / 1) (#131)
by ehintz on Tue Aug 05, 2003 at 04:17:04 PM EST

Are your friends. Consumer Reports will give you a good idea about the actual dealer cost of the car (yes, it costs $15ish but it's well worth the information, and they're a non-profit). In my experience, we found the actual cost of the car minus holdbacks and all that crap, then shopped about. We found that Carsdirect was selling for $400 above cost, which Consumer Reports considered a reasonable dealer profit. Then we went back to the local dealer, and basically said 'hey, carsdirect will give it to us for this, but you deserve the business because you did the showroom work, so if you match them we'll do it'. Advantage: we get to pick the actual car rather than the dealer picking the most beat one on the lot. Turned out they had one with several extras we wanted but didn't feel worth the cost; rather than shipping the exact car in that we wanted from 2-300 miles out, they sold us their existing one. The original deal was about 3% over cost (IIRC CR said 2-6% is a reasonable dealer profit, if you get the report it will tell you so don't trust my 2 year old memory on this), but we got it for 1% with the extras calculated in. Several were free, and one was about half price. With the 1.9% financing, we ended up paying about $600 extra over the course of 3 years for the interest.

Anyway, the big lesson here is, negotiate. But start at the bottom and work up. Make the dealer work for it. And realize that the dealer does deserve to get paid for their work, just ensure that you pay bottom dollar.

Another comment; the 0% interest deals often seem to have a disclaimer along the lines of "$39.95 per thousand financed"; that's actually about a 4% markup. And I think they get it from you up front as part of the down, rather than paying out 1-2% over the life of the loan. TANSTAAFL.

Regards,
Ed Hintz
Biggest scam... (none / 0) (#139)
by Blarney on Tue Aug 05, 2003 at 06:46:03 PM EST

oops, the financing fell through! gosh, guess you'd better come back and refinance at a higher rate.

I hear that this is a common scam, and it actually happened to a friend of mine. I was there when he signed the contract, and the monthly payment/whatnot was actually written into it - to be made to the dealer or the dealer's bank, not some third party. Still, the scum claimed the right to revoke financing which they'd signed to.

Scummy bastards made threats that, if my friend didn't refinance at a higher rate, he would have to return the car and pay extra money to cover his use, that he'd have to pay for the car in a lump sum, that they'd send the repo men for it if he failed to cooperate. Finally they tricked him into coming down there for "scheduled maintenance" and pathetically tried to get him to sign an addendum to the sale contract stating "I purchased this car in error, and agree that this sale is void".

He's still got the car, and is still making the agreed-upon payments at the agreed-upon interest rate. I suspect that some salesmen gave him a rate that was too good, got chewed out by his boss, and decided to try to extort some more out of him. What a bunch of bastards.

now that's supidity... (5.00 / 1) (#141)
by Run4YourLives on Tue Aug 05, 2003 at 07:06:48 PM EST

Your friend is an idiot.

He signed the contract, it's not negotiable unless both parties agree (sometimes, not even then).

I would have let them take me to court... and if my car had gone missing, I would have called the police...

Of course, I would have actually read the contract first to make sure they weren't able to pull this fast one.

It's slightly Japanese, but without all of that fanatical devotion to the workplace. - CheeseburgerBrown
[ Parent ]

He didn't fall for it (none / 0) (#158)
by FlipFlop on Tue Aug 05, 2003 at 11:48:29 PM EST

Of course, I would have actually read the contract first to make sure they weren't able to pull this fast one.

Speaking of reading things first, did you read the whole post? His friend didn't fall for the scam. The only thing he did wrong was show up for scheduled maintenance, where they tried to scam him again (how could he trust those people to work on his car?).

AdTI - The think tank that didn't
[ Parent ]

My credit union... (4.00 / 1) (#144)
by blisspix on Tue Aug 05, 2003 at 07:24:48 PM EST

Has a service for car buyers where you tell them what model you want, and how much you want to pay (new or used). You test drive at the credit union, without a sales person, and the union arranges for all the safety checks and payment. Fabulous.

If I ever bought I car I'd do this. I will probably need to buy a used one within the next year so I need to do some research.

Used cars (none / 0) (#161)
by the77x42 on Wed Aug 06, 2003 at 03:47:25 AM EST

Don't buy them. It took me 8-10 months of research to find the best (and first) car for me. I looked EVERYWHERE, private sale, public sale, US (I'm in Canada), internet. I decided I wanted an early 90's Honda Accord/Prelude. I went to dozens of people, checked out the cars and did damage reports from the insurance company. 90% of the cars I looked at had been written off and the sellers were blatantly lying about it.

I finally found a car through a friend and got a good deal, but it's still used and not in the condition I would want it in.

If you have the money, buy new and take care of your car. If you don't have the money, research, research, research, and look into not even buying a car in the first place because they are the worst investment possible.

I have to go through this all over again because my gf wants to buy a new car and her mom is a car dealer, and even her mom is going to rip her off!

The bottom line is that you are going to get ripped off, try and not overlook the option of not even owning a car.


"We're not here to educate. We're here to point and laugh." - creature
"You have some pretty stupid ideas." - indubitable ‮

Still... (none / 0) (#167)
by Rocky on Wed Aug 06, 2003 at 09:29:57 AM EST

...new cars suck in terms of depreciation.  Maybe not as much as computers, but there's still a large amount of suckage.

Once you drive that new baby off the lot, that car's value has plummeted by $2000 already.

Maybe a compromise suggestion:  Cars that have come off of leases?  Cars that used to be part of a fleet (corporate or rental car) can be even less expensive, with less of the trauma of dealing with conventional used cars...

If we knew what it was we were doing, it would not be called research, would it?
- Albert Einstein (1879 - 1955)
[ Parent ]

Indeed (none / 0) (#177)
by skim123 on Wed Aug 06, 2003 at 11:38:53 PM EST

Maybe a compromise suggestion: Cars that have come off of leases? Cars that used to be part of a fleet (corporate or rental car) can be even less expensive, with less of the trauma of dealing with conventional used cars...

My dad got a used car that was a company car for a Chrystler executive back in its former life. It was like three years old and only had 25k miles or so.

I bought my first car new (well, in high school I bought an old clunker), but plan on buying my next car as a used one a year or two old from a corporate/fleet setting.

Money is in some respects like fire; it is a very excellent servant but a terrible master.
PT Barnum


[ Parent ]
Used cars are still a better deal (none / 0) (#168)
by dorquemada on Wed Aug 06, 2003 at 10:54:36 AM EST

Thing is, you can get a 2-year old used car for thousands of dollars less than a new car. If you sock half the money you save away, you can afford both a new engine and a new transmission and *still* have money left over. If you learn to do the basics like change fluids, fuses and brake pads you're even farther ahead on the deal.

People are far too scared of their own vehicles and they're willing to pay far too much of a premium for 'reliability', which is often as not a figment of their own imagination.

[ Parent ]

still though (none / 0) (#185)
by the77x42 on Thu Aug 07, 2003 at 02:34:55 AM EST

nothing beats having a nice new car and not having to worry about the way it was treated prior to your purchasing it. having to replace major engine components is a BIG pain (believe me, I know) and I would never like to go through that again. it just takes a lot of research both ways, but it's hard to rely on a used car unless you know its past.


"We're not here to educate. We're here to point and laugh." - creature
"You have some pretty stupid ideas." - indubitable ‮

[ Parent ]
This may surprise you. (none / 0) (#189)
by dorquemada on Thu Aug 07, 2003 at 06:49:35 AM EST

When you're talking about major engine component failure (and I'll include the transmission, as well, since it represents about the same level of pain in the ass) you're more likely to see one in the first 10,000 miles of use than in the next 20,000 miles of use. Despite modern manufacturing techniques, factory tolerances can be pretty broad, and if you match a main bearing on the big side of the tolerance with a journal on the big side, you're probably going to get it spun. Factory break-in can be pretty inconsistent, too, and popping out a freeze plug is a pain.

There's just not that much you can do to a motor or an auto transmission that will kill or even damage it in the first 30,000 miles of use, unless you never change the oil. Transmission service intervals are usually at 25K, but going 5K over won't hurt.

[ Parent ]

No Way (none / 0) (#191)
by snatmandu on Thu Aug 07, 2003 at 09:19:17 PM EST

Never, ever, buy a new car unless you're fabulously wealthy and/or vain.

New cars fail more often than you think.  In fact, I'd rather drive X-country in a car with 45k miles on it than I would in one with 45.

Cars go a long, long time.  Find an old-person car, even with high milage.  Don't buy used car from some crazy 20-something who floors it every time he gets on the freeway.

I bought a Cadillac Cimmeron (an 85) two years ago with 200k+ miles (the digital dash reads "Full").  I drive it up into the mountains to ski all the time.  Not so quick up the hills, but runs like a dream.  Probably has 250k miles on it now.

Needs a little bit of front-end work (probably about $500).  I bought the car for $1700.  I think I've replaced a headlight in the time I've owned it ($10).

Finally, consider that when you buy a new car, you're probably going to finance it, which is money down the drain.  Then you're going to have pay a bunch for insurance, where I pay very little - just the legal requirement.

[ Parent ]

Preach it, brother! (none / 0) (#192)
by rodgerd on Thu Aug 07, 2003 at 10:34:48 PM EST

You may as well buy a one year old car, heap up the one third of the price of a new car that you lose driving it away, and burn the cash to keep you warm.

New cars are a luxury; buy second hand.  A newish second hand will have the balance of the warranty on it if you care about it.

And your advice on finance is spot on.  Finance on cars and computers is the stupidest thing you can - they're the fastest depreciating assests you own, and you want to pay more, over time, for them at the same time you're losing money?  Insane.

Buy second hand, buy what you can afford.

[ Parent ]

slight change to your advice (none / 0) (#197)
by the77x42 on Fri Aug 08, 2003 at 03:43:30 AM EST

the common advice is to buy a car from the eldery or a woman due to some weird assumption that they are better drivers than...?

the key to a used car though is maintenance, so you want to buy a used car from someone who maintains their car. a quick test is simply to ask them how often they changed the oil or the last time they had their tires rotated. just simple little questions like that and you know if you are going to buy something well maintained.

the funniest thing that i've heard recently is from my girlfriend's mom (the car dealer): "oh, you don't need tune-ups anymore. cars nowadays just need their oil changed every 10,000km (6214 miles)". these are not the people you want to be buying a car from.


"We're not here to educate. We're here to point and laugh." - creature
"You have some pretty stupid ideas." - indubitable ‮

[ Parent ]

Point taken (5.00 / 1) (#198)
by snatmandu on Fri Aug 08, 2003 at 04:00:56 AM EST

I could have phrased that better.  Just looking for an old person is terrible advice.

Another good clue is to see if they offer you service records.  I bought a car once from a guy who kept meticulous records in his glovebox of all the service, and it was clear he was concerned about keeping his vehicle running well.

[ Parent ]

Great article... MSO vs. title (none / 0) (#165)
by ip4noman on Wed Aug 06, 2003 at 05:51:22 AM EST

Another interesting angle is the "Who really owns your car?" story. It concerns the "Manufacturer's Statement of Origin" which many radical libertarian groups describe as the actual title. When you buy a car, one of the many papers you sign is a power of attorney ("It's just a standard form, ma'am. Just sign it. Everyone does.") which allows the car dealership to transfer actual ownership to the State.

It seems to be supported by facts, and is rather interesting theory, IMHO:

http://www.google.com/search?q=mso+origin+title++power+attorney+%22who+owns%22+O R+%22who+really+owns%22

--
Breaking Blue / Cognitive Liberty Airwaves

Titles (none / 0) (#211)
by prong on Tue Aug 12, 2003 at 04:41:38 PM EST

Absolutely fascinating link. I keep forgetting how far out on the fringe some libertarians are.

A couple of points:

1. A certificate of title is just what it says it is. A document certifying that someone holds title to some piece of real property.

2. The reason states have the requirements that they do for certifying titles is that motor vehicles are high value and mobile, which makes them more attractive vehicles (pardon the pun) for fraud. The statutes exist to reduce the amount of that fraud.

The idea that the state "owns" your car by virtue of your surrendering an MSO or another state's certificate of title is silly at best, and probably suggests a trip to the shrink's office to adjust your medication is in order.

[ Parent ]
Selling cars in the U.S. - the inside scoop | 215 comments (189 topical, 26 editorial, 0 hidden)
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