I am writing about automobile dealers to warn you about automobile dealers. Working with the dealer is serious business. Not casual the way commercials imply it should be. It’s serious business because you are obligating yourself for years. You are committing to a lot of money and maybe locked in payments.
The product choice you make is profound and often life-changing. You can’t change your automobile like clothing yet you probably have to wear it every day. Often people buy the wrong car. There is no three day grace period to return car
Your clear thinking and follow through within your budget is probably best. Forget relationships designed to pick your pockets. You are at the dealer to buy a car not make friends. On the whole automobile dealers charge the most money for everything. On the whole automobile dealers do not sell the best of everything.
Automobile dealers can be fun and entertaining and a real good experience to learn about your car. On the whole, automobile salespeople knows little to nothing technologically or mechanically about the car they’re selling. They are taught to push what is on the lot today.
Franchised new automobile and truck dealers are a small and powerful group of owners. Independent automobile dealers are a larger, less wealthy, less influential group of owners. Most automobile sales in the United States go through retail car dealers. Traditionally used cars sales make more profit than new cars.
A franchised new automobile or truck dealer is actually five separate businesses under one roof; parts, service, finance and insurance, used-car sales and new car sales. Traditionally new car sales make the least profit.
There is pressure in the automobile sales business. Most automobile salespeople change jobs within a year. Most finance and insurance managers are gone around three years. Automakers pressure dealer owners. Owners pressure salespeople and you know the rest. With high salesperson turnover the people you worked with at the dealer will be gone before your warranty is up.
The Harvard Law Review in February 1991 had a groundbreaking article, titled “Fair Driving: Gender and Race Discrimination in Retail Car Negotiations”. The attorney, professor and author Ian Ayres concluded his research article with this last quote:
“Earlier this year, I asked a car dealer during an interview whether the bulk of his profits were concentrated in a few sales. He told me that his dealership made a substantial number of both “sucker” and “non-sucker” sales. He added: “my cousin, however, owns a dealership In a black neighborhood. He doesn’t sell nearly as many (cars), but he always hits an awful lot a home runs. You know, sometimes it seems like the people that can least afford it have to pay the most”
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