Car salesmen cower when Barney Bargainer strolls through the showroom door. At least Barney thinks so. The “deal” is everything, and he knows how to play the game. After all, he learned the tricks about keeping the salesman off guard from his Dad, in the era of Edsels and Studebakers.
All he has to do is wear them down through the force of his dickering style. In the end, they’ll be lucky to wind up with any commission, and the dealership will earn a mere sliver of profit.
Mary Modern isn’t so eager to begin car shopping. She doesn’t like to dicker. A fair profit and a reasonable commission are one thing, but paying a higher price than an aggressive buyer would be annoying.
In 2001, Mary can arm herself with useful information and look for a dealership that welcomes the informed shopper. And she has learned that when you’re not happy with the way a purchase is progressing, walk away and try another dealership.
Barney and Mary are shopping for a mid-size family sedan. Barney has a wife and three kids. Mary is single, but often goes on trips with friends. Both are interested in sedans with spacious interiors, abundant cargo space and satisfying performance. Being easy on gas wouldn’t hurt, either.
Barney relies on one person to decide what car to buy and where to buy it: Himself. Sure, he listens to suggestions from his wife, Betty. But they barely register. He knows what’s best.
“The better-informed consumer always winds up with the better deal,” said auto analyst John McElroy, editorial director of Blue Sky Productions. “But not necessarily the lowest price.” In the end, you’re better off when you drive home the vehicle you’re seeking, even if it costs a little more, “rather than getting sweet-talked into something” you don’t really want.
But don’t tell that to Barney has glanced through a couple of product reviews of family sedans in the newspaper. He even thumbed through a car magazine or two, while waiting for Betty at the drugstore. His son, Jeff, suggested he do some research on the Internet, but Barney nixed that. “I use a computer enough at work. Don’t need to mess around with it at home, too. Anyway, I know what I want already.”
Having bought his last car from Beneficial Motors, Barney decides to try them first. “Wonder if that salesman Curtis is still there,” he says to himself. “Man, I really took that guy the last time.”
Curtis still works at Beneficial. And when he sees Barney coming, he practically gets into an argument with another of the salesman over the chance to deal with Barney. Curtis remembers him so well, he starts spending that extra commission.
“Well, hello there,” Curtis says as Barney glides between a convertible and a sport-utility, avoiding the sedans. “Great to see you again. Barney, is it? What can I do for you, Barney? Ready for a new car? Which model did you have in mind?”
Because he hadn’t really thought much about that, his voice stumbled. “Uh, not quite sure yet. Long as the price is right, though, let’s look ‘er over.”
This style customer tends “to come in with animosity, kind of with trepidation. They come in and try to be `gamesmen,'” said Dennis Wolff, a 15-year sales veteran with Bill Jacobs Chevrolet in Joliet. Rather than knowing what they want when they walk in, these customers tend to need more guidance. When necessary with such customers, he will talk price at the outset rather than waiting until later in the transaction, to help ease their minds.
Some customers still expect the back-and-forth selling techniques, Wolff said, whereby the salesperson takes the customer’s offer to the sales manager, who rejects it and tosses out a counteroffer–repeating the process until a figure is agreed upon. “Maybe you’re not in the right store,” Wolff says he tells some customers who appear to prefer that type of environment.
Mary Modern didn’t need to be told about the Internet, buying services or dealer Web sites. She was eager to use of all the resources in sight. Not that Mary wanted to turn the buying experience into an endless ordeal. But she was willing to invest a few days to get the best vehicle for a reasonable price.
First, she’d done some research in the local paper’s auto section. She also bought a car buying guide, such as Edmund’s and the Kelley Blue Book and consulted Consumer Reports magazine.
After narrowing her choices down, Mary submitted a purchase request to Internet buying services such as Autobytel and CarsDirect. Armed with her quotes, she set about to test drive an import and a domestic model.
Her research told her that an extensive drive was needed to make a proper evaluation, not a quick spin around the block. Mary was pleased to see that her first choice, Contempra Motors, looked different than the usual car dealership. No garish signs, for one thing, making lavish promises for “No Money Down.” The signs simply described some of the vehicles in stock.
Mary was impressed by the salesman. “Hello,” he said, “may I help you with anything?”
Mary smiled: “Yes, you can. I’ve been looking into the new Nishonta sedan. I wonder if I could test-drive one today.”
“Absolutely,” he said. “I’m Richard Subtle. Just tell me which version you’d like to drive–the base model or the step-up sedan–and I’ll get it set up.”
Wolff prefers such a well-informed customer. “They know what they want; they go out and find it. When they come in, they’re fairly ready to buy.”
Trade-in values are a “sticky point” in striking a deal, Wolff said. But here too, research can at least give a consumer an idea of what his or her old vehicle is worth.
When the negotiations begin, each of them will be given an “asking” price, somewhat lower than the car’s sticker indicates unless the model is popular.
During her research, Mary looked up the “dealer invoice” price for the car she likes on Web sites ranging from Microsoft Carpoint.com to Autobytel.com to Cars.com. But she also learned that this figure doesn’t necessarily reflect what the dealer paid for the car from the manufacturer, which includes advertising fees and holdback.
But because she has some idea of the car’s wholesale price, she’s better equipped to know when the negotiated sum is approaching a suitable point. And she’s willing to stop there, rather than dickering down to the last possible dollar.
Barney, oblivious to the fact that a dealership selling cars for less than they paid for them would soon be out of business, still heads for the ads promising cars for “$1 over sticker,” or even “below dealer invoice.”
“The best deal that you get is to shop at a dealership with all the information” you can obtain beforehand, said Art Spinella of CNW Marketing Research. “But haggle when you get there.” In other words, it pays to use elements of both methods.
In Spinella’s view, most dealerships have no preference as to approach. Good auto salespeople are ready to work with either type of shopper, though “they prefer to deal with somebody who comes in” on their own, rather than one who is sent by an Internet buying service, he said.
WHERE TO GO FOR INFO
Here is a sampling of Internet sites with information on new cars:
Manufacturers
Acura at www.acura.com
Audi at www.audi.com
BMW at www.bmw.com
Buick at www.buick.com
Cadillac at www.cadillac.com
Chevrolet at www.chevrolet.com
Chrysler at www.chrysler.com
Daewoo at www.dm.co.kr
Dodge at www.4adodge.com
Ferrari at www.ferrari.com
Ford at www.ford.com
General Motors at www.gm.com/
GMC at www.gmc.com
Honda at www.honda.com
Hummer at www.hummer.com
Hyundai at www.hmc.co.kr
Infiniti at infiniti.com
Jaguar at www.jaguarcars.com
Jeep at jeepunpaved.com
Kia at www.kia.com
Land Rover at www.LandRover.com
Lexus at www.lexususa.com
Lincoln at www.lincolnvehicles.com
Lotus at www.lotus-cars.co.uk
Mazda at www.mazda.com
Mercedes-Benz at www.mercedes.com
Mercury at www.mercuryvehicles.com
Mitsubishi at www.mitsubishi-motors.co.jp
Nissan at www.nissanmotors.com
Oldsmobile at www.oldsmobile.com
Pontiac at www.pontiac.com
Porsche at www.porsche.com
Rolls-Royce at www.rolls-royceandbentley.com
Saab at www.saabusa.com
Saturn at www.saturn.com
Suburu at www.subaru.com
Suzuki at www.suzuki.com
Toyota at www.toyota.com
Volkswagen at www.vw.com
Volvo at www.volvocars.com
Local dealers
Chicago Automobile Trade Association at www.dealerlocator.com
Buying/pricing sites
Autobytel at www.autobytel.com
AutoVantage at www.autovantage.com
Autoweb at www.autoweb.com
Cars.com at www.cars.com
CarsDirect at www.carsdirect.com
CarSmart at www.carsmart.com
GM BuyPower at www.gmbuypower.com
InvoiceDealers at www.invoicedealers.com
Microsoft CarPoint at www.carpoint.msn.com
Others
Edmunds at www.edmunds.com
Consumer Reports at www.consumerreports.org
Kelley Blue Book at www.kbb.com
