Somehow, about a year ago, I got on an auto dealer sales “how to” e-mail list. Normally, I just unsubscribe, but this look into the heart of the beast interested me.
Now, my subject above reads more into this article by Dennis Galbraith, and is clearly biased by my firm belief that car dealers (new and used) are among the most amoral evil rationalizing humans that exist in polite culture.
I’ve always been dismayed that the same car, even at the same dealer, would cost different based on the negotiating savvy of the buyer. I recognize their right to sell that way, but it always seemed wrong because it took advantage of people that really couldn’t afford to be taken advantage of. One of the leading causes of financial distress of my employees is stupid car deals. Well, let me re-phrase that… stupid employees doing stupid car deals. Sure I know they are dumb, but basing a business model on exploiting the dumb seems… wrong.
According to Mr. Galbraith ubiquitous information about pricing, both OEM and from other dealers, means that the negotiated price sales model will become slowly dead.
With transparency into market prices, negotiating does not make as much sense as it once did. Posting a higher starting price, rather than an aggressive offer price, results in fewer shoppers contacting the store.
This is very true. I just bought a van. I used online tools to find exactly what I wanted across a very wide geographic area. I ended up scoring an excellent deal in Texas, buying the van based on about 60 photos and excellent recommends from other customers of the dealer.
There was no negotiation. The sale was pleasant, easy, and quick. Hallellujah! It only took 100 years.
Negotiated pricing is still with us. The VW place I visited here in St. George used it when I briefly considered a Jetta TDI instead of a van. But they were never getting my business. I needed to see the car. But I had, in my pocket, a smart phone with prices and options for hundreds of TDIs from here, Las Vegas, Phoenix and Southern California.
Thank you Internet!
