Is there any more annoying and pointless process than buying a car? Unless you have balls of steel, have done hours of research and are willing and able to debate and haggle with a pro at the system designed to defeat you, you’re going to spend more than you should. Just what the car companies need right now; a process designed to keep people from wanting to buy a new car.
Why You Can’t Buy a New Car Online
Wouldn’t it be nice if you could cut out the middleman and just order your Prius straight from Toyota?
But you can’t. And there’s one reason why: the car-dealer lobby, which has worked hard to ensure that this will never happen. Since the late 1990s, car dealers have used their considerable political clout to pass or better enforce state franchise laws that in many cases make it a criminal offense for an auto manufacturer to sell a new car to anyone but a state-licensed car dealer. The laws governing who can sell new cars are among the most anti-competitive of any domestic industry. By creating local monopolies for dealerships and prohibiting online sales for new cars, they constitute a major restraint on interstate commerce; in 2001, the Consumer Federation of America estimated [pdf] that the laws added at least $1,500 to the price of every new car.
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Online sales would help companies like GM and Chrysler align production to sales better by allowing more people to buy their cars built-to-order from the factory, rather than having Detroit send out truckloads of vehicles to sit around on dealer lots for months in the hopes that a rebate offer will finally entice someone to buy them.Now that the federal government is bailing out GM and Chrysler to the tune of $13.4 billion, and Congress is demanding major changes in the way they’re run[. …] You’d think they would find a sympathetic ear among deregulatory Republicans who take great umbrage over any state interference with the free market, but you’d be wrong. Most free-market Republicans have no interest in taking on the car dealers, who are among their strongest local supporters. Since 1990, American car dealers have given more than $66 million to federal candidates, with more than three-quarters going to Republicans.
Long live CarMax.
Dear Editors,
Please post several more stories as soon as possible so that picture of the octuplet mom goes off the front page.
I purchased a car from a Toyota dealer in Austin Texas. They crammed an extended warranty down my throat in the end. With a poor service department and poor customer relations, about the only benefit was to have the chance to test drive the car. Of course, I could have rented one for test, and then buy it online if the option was available.
Oh yeah. Everyone who sells stuff online is a saint. The internet filters out all the bad people. In fact, all the economic stimulus money should go to the internet — then everyone could twitter all day long and American productivity, creativity and greatness would skyrocket to the infinity plus 12 super-greatness-and-goodness level.
Good article, thanks. They should do just in time manufacturing.
Why are cars the only product in the US that doesn’t have a price? I want to know how much the car is before I decide if I want to buy it. I don’t want to waste an hour talking to some guy in a polyester suit before I learn how much the vehicle costs. Straight talk is better than haggling.
I want to built my own car like I build a computer on Dell’s website, then I want the price. I would then have the price to arrange financing ahead of time.
The whole car buying process is made just to make sane men crazy. You never go to a store and haggle over the cost of a loaf of bread or a case of Mountain Dew. You never haggle over the cost of a meal at Olive Garden.
Could you imagine the drive-in line at McDonalds? “How much is a Big Mac?” you ask.
“It’s $10.00, but let me talk to my manager. I want to give you a good deal on this sandwich, but my manager is mean. I will try to get a lower price.”
Later he comes back to the window. “My manager will lower the price to $2.00, but you have to also buy fries and a drink.”
“And how much are fries and a drink,” you ask.
“Let me talk to my manager.”
This happens two or three times until you get to the $4.00 price of a value meal and then they start over with the next customer.
Anyone using more than that 10% of their brain would be already using Firefox with AdBlock Plus to block such annoying pictures of people who do things that Hitler would simply not allow under any circumstances. Using that plug-in hybrid for their Firefox web browser also gives one the energy saving option of blocking salmonella tainted photos of the new president which incessantly appear on their favorite websites. Now regarding less important issues, we all know that it’s Bush’s fault that there are car dealers and their labor groups that have forced themselves on communities that beg them to come in to their towns, for their tax revenues. Of course this is the republican’s fault, and Bush’s fault that a community like Carlsbad, California made many millions they reinvested LOCALLY because they got all the car dealerships to open there, thus receiving so much tax revenue, their downtown became like Beverly Hills on the beach, thus generating more revenue from more tourism, and local shopping and dining, which also provided many many jobs. Don’t try to tell any democrat about such successes though, but between you and me, yes, my dear, it’s the republican’s fault these things happen. Change that to something we can believe in by banning local dealerships and that money goes overseas to those call centers in India. Now regarding Toyota, their service departments and cars are horrible. I will NEVER buy a Toyota again. They are too expensive, and required more service than an old Ford, GM, or Chrysler which is now #1 on my list for anything, used, new, or abused, anything by the big 3, NOTHING foreign. Now to all you green idiots who think buying your foreign car online will also save the planet, there is NO CAR that is ecologically friendly, they all are bad, and don’t even try to talk to me about running power cords to recharge my car parked on the street or driveway, that is the stupidest thing I have heard from all of the sleazy green salesmen. How is your newly elected “free from foreign oil” dictator going to deal with liability issues regarding power cords laying all over every driveway and out to streets to make this “a better planet full of change and charge we can believe in”.
When websites can wear a ring on every finger, a gold chain, a shoulder pad suit and really bad tassled loafers, plus take a 3 hour lunch, we’ll get that online deal. Until then, tough.
Seriously, the auto lobby is one monster lobby and they seem to have plenty of money even in this economic downturn. How many bailout dollars are headed for the lobby-meisters? That’s one piece of information I’d like to see.
Back in 2000 I ordered my wife’s Mazda 626 over the internet through CarsDirect.com. We did have to talk to someone due to some options mix-up, but that was all. We also had the option of having it delivered or picking it up at a local dealership. We choose the dealership just in case there was a problem and we had to reject the car. There weren’t any issues and the guy we paid said the price was better than any the dealership could have given us. So my question is, have the rules changed since then or was our purchase somehow under the radar?
I bought a used Saab convertible some years ago from the Saab website. It had been owned by a car rental company for six months. Got a $40K car for $28K with 11K miles on it, reconditioned. I think it had a full warranty minus six months, too. It was delivered to a Saab dealer near where I lived. Wrote a check at the dealer and drove it off.
After doing about ten minutes of internet research and coming up with a reasonable amount for a car, how the hell tough is it to say to a salesman “I am willing to pay $X for that car”, and if they balk or start feeding you a line of BS, JUST WALK OUT? I’ve done it with a Buick LeSabre, a Dodge Caravan, and my present Taurus. Works like a charm, and zero haggling.
Car dealers are pretty desperate right about now, last I heard.
ARRRRRRGGGHH! I get tired of laws designed to specifically SCREW the public! Laws like the ones the Republicans passed to specifically OUTLAW letting the government (Medicaid) bargin for drug prices as a single ‘entity’ like Boeing or a big private company. Why? Because as such a big entity Medicaid would be able to bargin for cheaper prices, so they made a specific law to f**k the public to prevent this…as a reward to the drug companies.
In this case, there are specific laws that don’t ALLOW a car company to sell directly to the public? I can go to Dell, Sony or IBM and DIRECTLY buy a computer. Sure I can also go to a reseller like Best Buy or Wal-Mart…but imagine if there was a state/federal law that made it illegal for Dell to sell computers directly to the public, they could ONLY sell to resellers like Best Buy. What the F**K!!!
Gotta love those small government, free market Republicans! And people think I’m weird for being a Libertarian. Last I checked, if the Republican party actually practiced what it preached, they’d be Libertarians, not Republicans.
Read the full article. It goes on to describe how Ronald Reagan, a Statist if ever there was one, played a major role in this economic fascism.
Because it is not right that a manufacturer gets to compete with a franchised retailer. Why on earth would a Ford dealer want to compete with Ford for a car sale?
Mercedes-Benz used to have factory owned dealerships (at least in California… don’t know about the rest of the country). The had to close them in the early 90’s for this reason. The private Mercedes-Benz dealerships didn’t like to have to compete with the factory for a sale.
Now, I would like to see the laws changed so that a car maker choose a distribution model… (a) Sell from the factory and/or factory owned dealers, or (B) franchise private dealerships. Not both.
#14 If you buy from the manufacturer where would you take it for warranty service? A dealer could refuse.
There’s more to the story. Most car manufacturers don’t want to sell their cars directly because they don’t want to deal with the neurotic car buying public. Plus, if they sell them, they have to service them. Yet another reason why they won’t sell them directly.
And to #6 who wrote: “Why are cars the only product in the US that doesn’t have a price? ”
Are you that stupid? Ever heard of the Mulroney sticker that is put onto EVERY NEW CAR that is sold in the USA? It has the exact PRICE of the car on it. Now, a dealer might add extras to the car but by law that “addendum” has to be put right next to the sticker/MSRP price.
And for anyone that has never worked for a car dealer. I suggest you do so you’d understand that car dealers are the way they are because of you fickle/lying/jimmy jack/mooch car buyers that come in to get that “best price” and then leave to go to another dealer. Sure, it’s your right to do so but don’t think that the dealer isn’t going to play games too. I am not condoning any arrogant lying POS car salesman that plays games but it’s a two way street. It’s why many dealers will “low ball” a customer that wants to negotiate without the intention of buying. The sales manager will give you some ridiculously low price so you walk out and go to another dealer to be kicked in the ass when you try to negotiate a better deal off of that ridiculous price you got from the last dealer. And when you go back to the dealer who low balled you, he’ll then laugh at you and say, “that deal was good when you were originally here but you decided to pass on it.”
How do I know this? Cuz I use to sell cars via the internet and saw the other side of the equation after being a car buyer previously. And I can tell you that much of the car buying public are as bad as the slick and arrogant car salesmen.
CarMax isn’t the “be all” aither. They price what they pay by Blue Book’s wholesale and then give you a “discount” on Blue Book’s highest retail price. Believe me, CarMax is making out like a bandit. As far as repair, What if the manufacturers had spent all the setup time spent on creating a nationwide sales support network with a nationwide repair network? We’d be paying $600 for a sensor chip everywhere! The only way we seem to have corrected this issue is the indepentant car buying service, hiring a mouthpiece to work on your behalf against a larger foe.
I’m with OvenMaster…
I wanted a 4 door Tacoma w/a manual transmission. I went to Toyota’s website http://shopatgst.com/BuildYourToyota.asp?zip_code=12345 and clicked all the boxes for the options I wanted. It provided me with all the available vehicles that (more or less) met my criteria. I copied the VIN and emailed the 3 closest dealerships for a price.
I asked the local dealer if they’d beat the lowest price so I could buy locally and they did. I paid dealer invoice (they kept the holdback). When it was time to pick it up, the truck had been up optioned by the original dealer, they still held to the agreed upon price.
6 days from emails to pick-up. $6k+ below MSRP, and the big bonus, the service department has been great.
Great internet buying experience!
#16, the Warden, if you’ve ever had to deal with an unscrupulous dealer in the course of making a major purchase, you can answer your own question. “Let me go talk to the manager.” Har! What a load of BS.
Well, screw that, let me go talk to another dealer. One that won’t rip me off juggling trade-ins, finance points, “undercoating”, mfg. incentives, etc.
I wouldn’t buy a new car anyway, too much to lose driving it off the lot. I’ll take that 2 year old program car at half price, here’s my cash, haggle if you like, but take the deal or leave it. I won’t waste your time if you won’t waste mine.
Go look at Consumerist.com for all the funky tricks dealers play on the public. You’ll get an eye opening of major proportions.
Oh, and don’t screw me around with that “4-square crap”, either. If you don’t read any other link in this thread, please read this one.
“Most free-market Republicans have no interest in taking on the car dealers, who are among their strongest local supporters.”
Once again proving all politicians – Repug or Dem – are evil.
Interesting test in Tulsa a few years back. FoMoCo bought all the local dealers and ran the operations completely. Even had a stand alone repair shop in a retail center (of course being F.O.R.D. it was always very busy). New cars had a “no haggle” price.
But they threw in the towel a while ago. Guess people still got screwed (financing, trade in, etc) and being a typical US car company, they just didn’t know how to do anything better.
You simply have to be able say ‘no, thanks at that price’ at least once to the dealer. This gives them a strong message that you are serious about your research.
You should also bring a piece of paper to the dealership and make sure you do all the math of the finance calculations yourself. The point is not that they will do the math wrong. The point is you will see exactly how the deal is structured. Do not be afraid to take the time to do this or look like a fool for mapping out your car deal in the dealership.
My dad swears by this process, http://tinyurl.com/nxutm2