Last weekend I was asked by my daughter to check out a vehicle that one of her friends was buying. It was a used car at a “no haggle” dealer.
I couldn’t find any obvious faults, all monitors complete, no stored faults, oil cap clean, etc.
But I thought the price was too high. I would have haggled or walked, but I don’t believe the dealer would let me walk without a counter offer. Heres the deal, they were asking top dollar, a good place to haggle from. They disguised it by listing what they claimed was the average price for that model in this market, and then discounting it by around $850. Then when it came to the sale, they added an $899 processing fee.
But her friend fell in love with the car so what could I do. I told her I thought it was too high and that was all I said.
Our Ford dealer is like that, but you don’t have any processing fees, just the price on the windshield tag plus tax, title, and tags. From what a co-worker who’s bought several used cars there has said they’re very reasonable compared to some other places.
Why would you say it’s a scam. It’s just like the grocery store. Each item has a price, do you haggle over your Cheerios? And it’s not “new” CarMax has been around since 1993.
Saturn cars did this for new cars starting in 1991. A dealer in Ohio offered new cars at 99 over invoice… about 3.5% below MSRP. Their used cars were “no dicker sticker”. Not a new thing at all.
+1
The profit margin for supermarkets is actually very thin–except on items like prepared foods, for which customers pay a huge premium.
Many years ago, my brother worked for a grocery wholesaler, and my parents’ first thought was that we would take advantage of the wholesaler’s policy of selling goods to their employees at the same price they charged to supermarkets.
When they realized that the saving would be–literally–just pennies, my parents decided that it wasn’t worthwhile to buy canned goods and other items by the case, due to the storage problem.
Offering your informed advice is the best you could possibly do. The buyer is free to take your advice or ignore it, make an offer, or not make an offer, that’s not your decision. I don’t see this as a dealership-perpetuated “scam” myself. At least not anymore than the other common scams run into all the time, unsolicited telemarketer calls, advertised store items that cause you to go to the store, only to find the items of interest are not in stock, etc.
When I purchased my Corolla 30+ years ago, one the invoice items was “ADP”, $1500. I asked what that was for, the sales-staff said “add’l dealer profit”. I said I want the dealer to make a profit on the sale, but $500 seems enough. The sales-staff of course complained but eventually agreed. I didn’t consider the ADP item a scam, just the way business operates in the USA and presumably most countries.
We’ve had no haggle car dealers for decades. Some people don’t like to negotiate prices. My sister and her wife are that way. They walk in knowing what the want and accept whatever price the salesman offers. It’s not my money so I don’t say anything. The way many of them work is that the car or truck is priced when it arrives on the lot. Every week or two the price is dropped until it sells. There’s a market for that and the car dealers make good money catering to that crowd. We bought our 2003 Olds Silhouette at one of those dealers. I tried to negotiate but the salesman refused. It was already reduce a lot since Oldsmobile had announced they were shutting down and I had other incentives. The deal was still great and I went for it anyway.
ADP has nothing to do with normal dealer profit. It’s only added to high demand cars. I got asked for $1600 on a new XJ Cherokee. I walked out, they called a day later, got it without the ADP.
That is a slang term used by the consumers. The “pack” labels placed next to the Monroney labels list the Added Dealer Packages, for example that cheap security kit that was installed. Other examples at that time were air conditioning, pin striping, custom wheels etc. Toyota didn’t offer factory remote keyless entry during the mid 1990’s, that would be another ADP.
What you refer to as added dealer profit is called a market value adjustment.
