I personally hate the car buying experience because of the haggling process and then not wanting to give you the actual price, only talking about the monthly payment, etc. This has caused me to repair rather than replace cars in the past. There are things I would rather have done than buy a car and those things include root canals and oral surgery!
Also, a friend was looking to sell a used car and has only gotten calls from complete nuts and people wanting to make “payments” to him and not pay in full at the time of sale. All this nonsense caused him to decide to repair the car and keep it.
I personally think Ford is on the right track but am sure dealers WILL NOT like it one bit. What do you think?
The car-buying experience definitely can differ from one dealership to another. You might recall my experiences when I was looking to buy a new car last autumn.
Two NJ dealerships bluntly informed me that they added a $5k mark-up to the price of all of their new cars, and one of those two added insult to injury by offering me only ~$1k for my flawless trade-in. A salesman at a third NJ dealership first stated a $5k markup, but when he heard the relatively rare model in which I was interested, he arrogantly informed me that the markup was $15k. Additionally, all 3 dealerships gave me a 6-9 month estimate for delivery of the model that I wanted.
So, I cast my net wider, and discovered a dealer ~70 miles away in PA, whose website stated that they do not add anything to the sticker price. So, I took a ride there, and confirmed that they do not add anything to the sticker price. And, the very low-key sales manager informed me that 3 of the model that I wanted were in transit to the dealership. One of them was the color combination that I wanted, so I came back a couple of days later and gave him a deposit payment.
The bottom line is that I drove away from that dealership ~3 weeks later with my desired car, and I didn’t have to pay any “ADP”. Additionally, they gave me $7,500 for my trade-in. The saleswoman was as low-key and non-pushy as her boss had been, and the tech expert with whom I dealt was very helpful in explaining the high-tech features.
That dealership’s slogan is, “Experience the luxury of peace”, and they definitely provided me with a peaceful experience. If I live long enough to buy another new car, I will definitely head for that dealership, due to their low-key nature.
Unfortunately, that has been my experience, also. Even though a trade-in almost always yields less than a private sale, I am no longer willing to deal with the weirdos that characterize many used car private sales.
Profits increase mostly for the dealer since they pay Ford a fixed price. Unless it has changed, the dealer pays invoice plus a carrying charge based on how long the car sits on the dealer’s lot. Popular models aren’t discounted for any brand. Tesla doesn’t discount any car they sell and doesn’t have to given that Model 3 and Model Y buyers are usually due a tax credit.
This was EXACTLY the model GM s Saturn division used. They had significant success with this model. I know people who bought Saturns because of this policy, me included (full disclosure; I did get an employee discount). Saturn’s ultimate failure was product related, not the sales model.
CarMax uses this model and I purchased 2 cars from them.
I don’t see this actually happening . I think it is just a Public Relations effort to the outrageous Additional Dealer Profit amounts that have been placed on some vehicles .
A local Ford dealer adds 10000.00 to each Ford Maverick pickup they have.
That is true, but I have noticed recently that the storage lot for the closest Tesla dealership now has what has to be well over 100 cars sitting there. That storage lot used to hold… maybe… 20 cars at a time, but for the past few months the number of cars sitting there has ballooned.
I have a theory that might just apply to this area, very close to Princeton:
Since Teslas are now so numerous in this area (sometimes it seems that 1 out of every 5 cars is a Tesla), it is possible that Tesla has reached the saturation point for customers in this area. Obviously, this might not be the case in other parts of the country.
Yup!
The last time that I sold a car (1986), I ran a newspaper ad, and I listed the make, model, model year, paint color, interior color, odometer mileage, number of cylinders, and the fact that it had stick shift. The more memorable time-wasting responses went like this:
Caller #1: What color is it?
Me: Silver, as noted in the ad.
Caller #1:Oh, I wanted a red car.
Caller #2: What type of engine does it have?
Me: It’s a 4-cylinder, just like it says in the ad.
Caller #2: I wanted a V-8.
Caller #3: Does it have automatic transmission?
Me: No, as the ad states, it has a manual 4-speed transmission
Caller # 3: (Irately) How do you expect me to drive it without an automatic transmission?
Caller #4: How many miles on the odometer?
Me: 82,000, just like the ad states
Caller #4: (Irately) I’d never buy a car with that many miles!
I could go on with more examples of ignorant/annoying/bizarre phone calls, but suffice it to say that I will never again try to sell a car.
Buyers might have been unwilling to buy Teslas until it was clear what the tax credit would be. I bought mine just before the end of February to make sure I am entitled to the maximum tax credit. As you may know, Tesla dropped the price another $2000+ on the Model 3 when the IRS disclosed that it would only bet a $3750 credit because the battery cells are manufactured overseas.
I think I agree that it does not work for cars or other high cost purchases. There are just too many variables involved such as trade in value, popularity of the car, etc. I suspect it is an effort to lock in the outrageously high pricing they have put into practice the last few years. In some areas of the world, they negotiate every small purchase. Buy a hamburger, try to knock the price down. Here though it is reserved for large purchases like cars and houses, etc. of course in the shortage frenzy, people bid up the asking price.
Local Ford dealer is part of a dealer group that’s no-haggle and no dealer fees, you pay the price on the windshield tag plus tax and title/registration. Hasn’t always been the lowest price in the market but the price is after dealer discounts and any rebates that would apply to any buyer.
I’ve bought (2) cars from Carvana. The fixed price model has been a big part of the appeal, in addition to the selection and them bringing the car to my house.
I’m all for the car industry trying something new, or bringing an old idea back.
Here is why the fixed price model falls apart. Dealer A, your new car will be $24000 ,plus tax and $125 for paperwork and I will give you $6000 for your trade in.
Dealer B - Your new car will be $24ooo plus tax and $125 paperwork fees and I will give you $6500 for your trade in.
Customer to dealer B, “I will think about it” while he goes back to dealer A and tells him about the trade in offer from dealer B.
Years ago, you could negotiate on the price of a vehicle. now, especially high demand vehicles or vehicles that you want a certain color or features, you have to order. then you have to wait for it to be built. from the time you order the vehicle and the time you get it the price can go up from the manufacturer. then you also might have dealer add Ons or mark ups over MSRP to deal with, unless you get it in writing before time (Like I did) that the price you agreed on will be the price of the vehicle. No mark-ups, No price adjustments, No Add Ons. So, maybe this is what he is talking about.
I don’t see the need for a dealership to switch to fixed pricing. If a buyer prefers fixed pricing, they can tell the dealership upfront they’ll only make one offer, what they consider to be a reasonable & fair offer, and if the seller declines, take their business elsewhere.