New Car Buying Hasn't Changed

[MichealKnight]

For now, yes

I drive by a Toyota and a GM dealership everyday on my way to w*rk. The Toyota dealership has an expansive empty lot in front of the showroom. The only vehicles they have on the lot are trade-ins. There might be one or two new ones inside but out in front of the building there are only used vehicles for sale.
The GM dealership might have 2 or 3 trucks at most on their lot, with 10 or 12 used (trade-in - non GM) vehicles out by the road to make it look like they have stuff for sale.
It looks like the days of test driving the vehicle you want are gone for now.

Sometimes, OEMs come out with models, get 100% behind it - then it withers away. For instance, right now - GM rolled out a program where they aren't just grading dealers on sales volume - BUT, rather. inventory turn. Their daily sales reports that show all GM dealer sales that owners of dealerships get each morning has been ranked by volume, FOREVER ....now, inventory turn determines rank. And sure there's sense to it...since you won't have "200 to choose from" ...you better sell the 30 you have quickly - and then you get a bigger share of the production. They want dealers to order "pop cons" - popular configurations that supposedly sell quicker. This eliminates customers being able to say "I waaaant this option but not that option" and makes it easier for an OEM to know what to order from suppliers. BUT many times these things wither away and in the past, OEMs, especially domestics - return to overproducing.

I am 100% certain about the trends I spoke of in this thread....but this one...I feel is temporary.

 

[Dawg52]

I drive by a Toyota and a GM dealership everyday on my way to w*rk. The Toyota dealership has an expansive empty lot in front of the showroom. The only vehicles they have on the lot are trade-ins. There might be one or two new ones inside but out in front of the building there are only used vehicles for sale.
The GM dealership might have 2 or 3 trucks at most on their lot, with 10 or 12 used (trade-in - non GM) vehicles out by the road to make it look like they have stuff for sale.
It looks like the days of test driving the vehicle you want are gone for now.

Around here the dealers have almost no used cars. Not a lot of new one's either but a few.

I bought a new Cadillac xt5 in the Summer and yes.... I knew it was not a good time to buy one but with manufactures discounts and a favorable trade in allowance I don't think I did too bad. I emailed several dealers in a 250 mile radius and they were all pretty close. No caddy dealers in my town so got it 90 miles from me. I've really enjoyed it so far.

 

[JoeWras]

There's a real shortage. No doubt about it. But let's also not forget that advertising the shortage is a real benefit to manufacturers and dealers. It is to their advantage to have influencers and writers speak of the urgency of the shortage. This creates a mindset of "I gotta buy now."

Am I saying that perhaps the industry is stoking fear about the shortage in order to drive sales? Darn right I am.

The longer they can keep this mindset, the longer they can hold prices up.

 

[Out of Steam]

There are some models in decent supply. I noticed that a Ford dealer in our area has a good supply of Escapes and Edges. 20 or more of each listed, most in stock.

Probably where I would start if I needed to replace a vehicle, though probably not my first choice on normal times.

 

[Out of Steam]

Am I saying that perhaps the industry is stoking fear about the shortage in order to drive sales? Darn right I am.

The longer they can keep this mindset, the longer they can hold prices up.

Business has found that keeping supply below demand can be incredibly profitable. I suspect it will be a long-term feature of the economy.

 

[teetee]

Business has found that keeping supply below demand can be incredibly profitable. I suspect it will be a long-term feature of the economy.

It is either making more profit or less profit. There is no evilness behind it, just survival instinct. I am sure dealerships have better survival instinct than their customers.

If this shortage is becoming a long term trend, my prediction is the car repair cost in general will go up with time since more car owners will choose (or be financially forced to) to have their cars repaired than to go through the car buying process.

 

[Another Reader]

Anyone remember the quotas on Japanese cars back in 1983-84? Dealers in the Bay Area were asking $1,000 over a $10,000 sticker and getting it. I found a dealer with the Accord I wanted 300 miles away in a small town. I got a good price, but when I sent my neighbor there, they increased the price to sticker plus $500.

 

[Midpack]

On all my contracts: "Should dealer desire to apply advertising to my vehicle, he agrees to pay $300 base charge and $49.95 per month thereafter as long as advertising remains on my vehicle." Has worked so far - no stickers on my last 4 new cars. MANY years ago dealers had chromed dealership logos DRILLED in truck lids and affixed permanently. apparently customers liked chrome!

I’ve stipulated no dealer markings on every car I’ve bought and that’s all I needed to do. Resorting to the above is unnecessary drama…

 

[Midpack]

Business has found that keeping supply below demand can be incredibly profitable. I suspect it will be a long-term feature of the economy.

Have found? That’s not a revelation to any successful business in the last 100 years. A basic fact everyone already knew, matching supply and demand and corresponding prices are fundamental.

Dealers have overhead. At the moment, they are selling way fewer cars overall due to real supply shortages, so they have to increase prices to cover fixed costs. Not all costs are variable.

It is either making more profit or less profit. There is no evilness behind it, just survival instinct. I am sure dealerships have better survival instinct than their customers.

 

[Out of Steam]

Have found? That’s not a revelation to any successful business in the last 100 years. A basic fact everyone already knew, matching supply and demand and corresponding prices are fundamental.

Certainly wasn't the case in the car business before the pandemic, where I could have driven down five miles of my local shopping strip and found several thousand brand new cars awaiting owners in an area serving only 200K people.

 

[Midpack]

Certainly wasn't the case in the car business before the pandemic, where I could have driven down five miles of my local shopping strip and found several thousand brand new cars awaiting owners in an area serving only 200K people.

It’s a fundamental for all businesses, not unique to cars.

It was definitely the case before the pandemic, it just wasn’t as widespread. There have almost always been some makes/models that have garnered market adjustments, the concept didn’t begin with the pandemic.

Pre pandemic examples include the Dodge Demon and the Ford F-150 Raptor. At the peak of their popularity, these vehicles had "market adjustments" on their window stickers ranging from $10,000 to upwards of $30,000 over the manufacturer's suggested retail price.

This issue doesn't just affect flashy performance vehicles. Pre-pandemic in-demand vehicles such as the Kia Telluride and the Toyota RAV4 Hybrid sold for a few thousand above MSRP. It's a textbook case of supply and demand in which there are more customers than cars.

When the Audi TT first came out, you could not buy one as MSRP.

There are countless examples…

 

[medved]

I have used a car buying service for the past few car purchases. I pay the service around $250. They save me more than that, and they also save me the hassle of dealing with dealers. Well worth it in my opinion.

 

[Global Wizzo]

Car Buying

My last three buys. Two of the three were great along with the dealers. One was a VW Routan Van the other was a MB E350 CPO.

Bought both over the phone after finding the one I wanted searching dealer stock. Flew in, wrote a check, drove out 30 min later

Had to replace the van with 24 hours notice. Tried to buy a Volvo, the car couldn’t tow what I needed and had to come from stock. Great dealer experience.

Chrysler Pacifica was next choice. Frustrating long dealer experience, misrepresentations, just low quality dealership. Two subsequent dealers used for maintenance aren’t any better. They actually said I was due an oil change at 1K miles and that was the 10K change.

Guess the MB, Volvo and BW dealers spoiled me.

I’ll try very hard to never buy another Chrysler vehicle.

 

[Car-Guy]

I’ll try very hard to never buy another Chrysler vehicle.

I started buying from Chrysler (a.k.a. Stellantis North America now) about 7 or 8 years ago becasue they made what I wanted... I've bought 6 new vehicles from them in that time frame and all from different dealerships. On a scale of 1 to 10 the best dealership was maybe 5... Most were 2's or 3's. Or pretty poor... However, I wasn't buying the dealership, I was buying the vehicles so I put up with their BS for an hour or so each year...(And most of the "dealing" was done on line.) IMO (and experaince) the sales experaince is all about the same regardless of the make of most vehicles... YMMV

 

[albundyz]

We bought a used car at a major dealership here in LA. About 14 months ago. The car was exactly what we wanted and had extremely low mileage. We felt the advertised price was good, so we were very happy and agreed to pay the advertised price. So, we get the purchase agreement and I see there's an extra $800 tacked on the advertised priced. I say "WTF is this?" To my surprise the man said that the dealership recommends that you get car interior insurance. Huh?, apparently, it protects you if you get a rip or a tear in your seats. So I asked him if it also protected us from being hit by a helicopter. Anyways, I could not believe that they still do stuff like this. I was tempted to ask the man if he was related to Jerry Lundagaard. (Fargo). They eventually DID remove the extra $800.

 

[FLJim]

We bought a used car at a major dealership here in LA. About 14 months ago. The car was exactly what we wanted and had extremely low mileage. We felt the advertised price was good, so we were very happy and agreed to pay the advertised price. So, we get the purchase agreement and I see there's an extra $800 tacked on the advertised priced. I say "WTF is this?" To my surprise the man said that the dealership recommends that you get car interior insurance. Huh?, apparently, it protects you if you get a rip or a tear in your seats. So I asked him if it also protected us from being hit by a helicopter. Anyways, I could not believe that they still do stuff like this. I was tempted to ask the man if he was related to Jerry Lundagaard. (Fargo). They eventually DID remove the extra $800.

And can you believe a $900 doc fee at a certain dealership in Florida? That's why we always talk the "out the door price".

 

[pb4uski]

On a number of my last purchases I objected to the doc fee... I told them that I wasn't going to pay for them to do their paperwork... one said that they couldn't do anything about it as it was required.. I called BS... then they said they couldn't waive it because it was preprinted on the form (which it was)... I told them in that case they could decrease the price I was paying by the amount of the doc fee and that would neutralize the doc fee... after a lot of hemming and hawing they agreed.

 

[FLJim]

On a number of my last purchases I objected to the doc fee... I told them that I wasn't going to pay for them to do their paperwork... one said that they couldn't do anything about it as it was required.. I called BS... then they said they couldn't waive it because it was preprinted on the form (which it was)... I told them in that case they could decrease the price I was paying by the amount of the doc fee and that would neutralize the doc fee... after a lot of hemming and hawing they agreed.

Never fall in love with a vehicle until after you own it! The doc fee is especially annoying for me. Be ready to walk out the door and they usually won't let you! Today with such a short supply, dealers might let you get away, figuring there is another (easier) mark right behind you.

 

[Midpack]

There sure are a lot of posts in this thread about successfully negotiating with car dealers, that are simply not applicable at present with most makes/models. If you don't believe it, go try to buy a car at MSPR or below right now. Other than a few really unpopular models, it's not happening. I'm sure buyers will have more leverage again one day, but not right now...

And most used cars are marked up even more than new right now. If you want to sell a used car and you don't need a replacement, there has never been a better time!

 

[Davidhelp]

"Bought my first new car almost 50 years ago"


That was a great deal driving your Chrysler Imperial LeBaron Two-Door Hardtop car for 50 years.... : )

 

[travelover]

And can you believe a $900 doc fee at a certain dealership in Florida? That's why we always talk the "out the door price".

Me, too, at least in normal times. They can call it anything they want, all I care about is the bottom line.

 

[JoeWras]

Documents is hard.

 

[Car-Guy]

They can call it anything they want, all I care about is the bottom line.

Interesting, I agree with that.

Documents is hard.

Especially when they are all standardize and used over and over again and they just plug in the names and numbers... Getting those formats/fonts/margins set is rough. (Well it is the first time)

 

[GTFan]

One more thing I forgot, re monopoly.

If the manufacturer - be it Toyota, Lexus, Ford...etc sets a "Minimum Retail Price" - the dealers 100% are in compliance to follow it. And guess who sits on Dealer Boards that represent dealers to the OEM? Yep, dealers do.

Has any manufacturer with a dealer network actually done this? Ever? Because it's the only way I've seen manufacturers get away with forced MSRP sales on any product. The car biz has never worked this way AFAIK, and I wonder if it's because there are laws in many states that don't allow it.

 

[Time2]

What is a new car?
At 66yrs old I have never bought a new car, but have had some very nice used cars. We have only bought one car at a dealer and that was a 1997 Toyota T-100. We paid $11,000 in 2000, whether it was a good deal, probably not, compared to a private sale, but we have got our moneys worth.
It is still a daily driver 21 years later.
This is a few years old, it is a little worse for wear, it went thru a hurricane and got a few small dents. Insurance company totaled it, said dent repair and painting would cost more than the truck was worth. They paid me about $3000 and I bought it back for $736. That was 3 yrs ago, such a deal!