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Are Car Dealers a Business Worth Keeping? (vox.com)
schwit1 writes: An opinion piece at Vox argues that "car dealers are awful," and the efforts to protect them against direct sales from Tesla and other manufacturers are misguided. "Buying a car involves going from dealer to dealer, each of whom has his own inventory. One guy only has blue paint. The other guy doesn't have the blue paint, and also only has dark gray seats. And each has his own fake sticker prices and complicated cash-back offers. It's no wonder 83 percent consumers say they would rather skip the haggling, and a third of people say doing taxes is less annoying than working with a car dealer.
But it's not just the hassle. State bans on direct sales turn out to cost consumers an enormous amount of cash. It's an enormous problem, and it warrants a federal solution. Cars are the most expensive consumer product that the typical consumer buys. And while it may seem obvious that cars are expensive due to the material and labor required to build them, the logistics of distributing cars is actually a very expensive part of the process. Research by Eric Marti, Garth Saloner, and Michael Spence has concluded that as much as 30 percent of the cost of a car is the cost of distribution.
But it's not just the hassle. State bans on direct sales turn out to cost consumers an enormous amount of cash. It's an enormous problem, and it warrants a federal solution. Cars are the most expensive consumer product that the typical consumer buys. And while it may seem obvious that cars are expensive due to the material and labor required to build them, the logistics of distributing cars is actually a very expensive part of the process. Research by Eric Marti, Garth Saloner, and Michael Spence has concluded that as much as 30 percent of the cost of a car is the cost of distribution.
My folks would do that, but they'd take it one step further.
They'd play good cop/bad cop, my dad would really really want the car, my mom would not like it. So they'd argue in front of the salesperson, and my mom would just keep digging in her heels until the price came down a *LOT*.
Then they'd switch roles. Without warning or obvious signal, they'd reverse on the salesperson. Suddenly she's on board, but my dad wouldn't be sure anymore, and not happy about this, or that, or something else, and you know, she made him think about it a bit, and...
The poor salesdroids had no idea what to do, so they just kept going lower. They walked out one time with the sales manager almost in tears trying to satisfy them. When they 'reluctantly' agreed to the deal, he was falling all over himself in gratitude... even though he'd just gotten soaked, badly. Like five figures below sticker, four figures below cost badly.
My dad had been a very successful car salesman way back in the day, and knew every stupid little trick his colleagues would play on the unsuspecting. He quit because he couldn't handle the deceit and dishonesty any more. Flipping it around was highly satisfying to him.
Mom was just kind of evil.