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Internet vs. Traditional Car Buying

philip17philip17 Southern CaliforniaPosts: 11
Hello:

I'm an editor at Edmunds.com and I've written many of the advice pieces. Now I need your help.

I'm doing research for a story that tests the way cars are priced. Specifically: if you walk on the lot and ask for a price on a car they will probably quote you sticker price and try to stick to that. But if you go through the Internet department, the same car will immediately be discounted.

Has anyone had this experience? Can any of you post your stories and the prices of the cars involved. I need this information for my article.

Thanks for your help.

Philip Reed
Consumer Advice Editor
Edmunds.com

Philip Reed, Edmunds.com Senior Consumer Advice Editor

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Comments

  • raybearraybear Posts: 1,776
    How many stories do you need?

    Truthfully, I've seen it go both ways. Somtimes the customer gets the right salesman and sometimes they get the wrong internet guy. Usually the internet or fleet managers come in low right away; where the salesman's job is to protect the dealer's profit margin the internet manager's is to move product.
  • one shot at the internet customer, so we cut to the chase immediately. The lot guys try to start out higher, but will eventually get into our range.

    How many stories do you want? We could write a book.

    Ed
  • Gimme a call if ya want...

    I'm moving a ton of used cars on eBay and autotrader.com and I do put my "bottom-line" pricing there as a rule..

    Bill

    PA.. ya missed the fun this week!
  • I used the fax/email method described by brentwood in the Acura shopping thread to get what I feel is a phenomenal price on a new 2003 Acura TL-S with Navi. I proposed what I thought was a fair price for the vehicle and emailed a ton of dealerships within about a 90 minute drive of my location. Some of the dealers didn't respond, some were down right rude, and some gave decent quotes. I also emailed a dealership that I had dealt with previously that was two hours away to see what they could do. They responded quickly, courteously and with a price significantly lower than the others. Guess who earned my business :-).

    On the whole, it was a pleasant buying experience. There was none of the dickering over price or stress of negotiating. Instead, I got to do things at my own pace in an environment that I was comfortable in. The only anxiety I experienced in the whole process was in waiting for those emails responses to role back in. I would recommend it to anyone buying a new car.

    On the flip side, I do have some recommendations for dealers. I know I may be speaking to a lot of converts already, but there are a lot of things that a dealer can do to increase the likelihood that I, as an internet buyer, will buy from you. I found that the most useful responses were from dealers that used some sort of form. These responses included some details about the car, price, destination fees, dealer prep fees, and any fees associated with titling or registering the car. By being upfront with all the not so obvious costs of a car, those dealers earned a long hard second look from me. Also, and perhaps most importantly, be courteous in your response even if the price the customer is asking is totally out of whack with what you think you can sell the car at. I sent my emails out to dealers with an offer based upon Edmund's TMV, so I did not think my offer was way out of line for my area. I received several offers that were close (but it turned out they couldn't get the color I wanted on a 2002, so I got the great deal on a 2003). However, a couple of dealers were pretty rude in their responses. One responded that they would not "devalue our product in such a way. This offer is unacceptable." While I may not have the capacity to understand the economics that drive automobile pricing beyond simple supply and demand, I am capable of figuring out that if dealer X , Y, and Z can sell that car for $200 more than my offer than it is not really "devaluing" the product that much. However, if it is unacceptable to you, suggest something that would be more reasonable. I was amazed that I could contact dealers with a stated intent to buy a car for a certain amount of money TODAY and be told "Sorry, can't do that" and not receive some sort of counter offer. To me, it would make sense to at least give me your best price. You might be a little higher, but it does no harm to ante up and get in the game. You might be a couple of hundred bucks higher, but I might be willing to pay that. Maybe your dealership is on the way home from my office or my child's daycare. I might be willing to part with a little more of my hard earned dollars for that little bit of convenience. You will never have the chance to find out and take some of my hard earned money from me if you don't at least suggest what would be a fair price for you.

    I'm sure most car salespeople see their share of buyers who want to nickel and dime you so that they can save a buck of two. As a buyer, I want to get a price that I think is fair, to me and to you. After using the email method to purchase my new car, I'm most likely to recommend to my family, friends and co-workers the dealerships that did all the things I described above.
    I personally don't think I'll buy another car by walking into a showroom to sit down and negotiate again. It's not a perfect method, but it really puts the power in the hands of the buyer. If I bought the old way and you treated me like cr@p, I had to get up and leave, wasting a lot of my time. If you do that to me now, one simple keystroke and PLONK! you're filed in the trash with all of the other spam that I get.

    I do want to thank all of the great contributors to these forums. They provide a lot of information that makes the car buying experience much more palatable. If more sales people were like the ones that frequent these forums, I think most people would not have such a negative opinion of the process.
  • I bought a Forester last August the old-fashioned way - face-to-face.

    I also looked at the Ford/Mazda Tribscape, Xterra, Pathfinder and one or two others.

    In the process of using the Internet to research them, I wound up on manufacturers' sites that said design your car and e-mail local dealers FOR A PRICE. I believed them. HA!

    Okay, I tried two or three. All I got back was invites to come on down and talk.

    If I had wanted to come on down and talk I wouldn't have been sitting there typing my info into the pc, e-mailing it and waiting for an answer.

    They lied on the sites, or they don't know what their representatives are really doing.

    Thanks for listening.

    John
  • I recently tried to obtain quotes through the Internet on an Acura TL, a Toyota Tacoma, and a Ford F-150. Each time I was given some b.s. reason that I needed to either call or "come on down to the dealership and let's talk".

    I did not want to go down to the dealership and talk. That's why I used the internet. I wanted a damned quote, no more, no less. Why is that so frigging difficult in this business?
  • Last year, I got a great deal on a new Outback Sedan for the wife. Emailed the "internet rep." at the Subaru dealership, and an hour later I was offered a GREAT deal. No other dealer was willing to come within $2K of the price they gave me up front.

    Last month I was looking for a new ML320, so I emailed the dealers & also all the internet sites like Stoneage, Autobytel, etc.
    Of the 3 dealers in the area, one never replied, one quoted me FULL MSRP as their "best price" (and I was already one of their customers) after about a week, and the third dealer sent me a letter two weeks after my inquiry asking me to go to their dealership and talk to them.

    Pissed me off so bad I went and bought a new Envoy. (With a GM Employee Discount, so internet shopping wouldn't have made any difference anyway)
  • aftyafty Posts: 499
    I totally agree with the getting a quote business. I'm not emailing dealers so that I can come down and talk. That's exactly what I'm trying to avoid!

    When I was buying my Altima, I emailed 6 dealers for a quote. 3 of them called me and wanted me to come down and talk. 1 never replied. 2 gave me a price quote, and I bought from the cheaper one of those two.
  • isellhondasisellhondas Issaquah WashingtonPosts: 17,695
    No smart dealer will give you a "quote" to go shop! Sure, some business will be lost that way, but a smart dealer will simply tell the shopper to bring in an offer after getting quotes from everyone else!

    It is truly amazing to se what some people will put themselves through in their quest to get the "best" price on a car!

    And beware of the lowball! I recently had a customer drive over 100 miles to "save" five hundred dollars on a new Civic.

    When she got there, the car she wanted turned out to be a five speed and not the automatic she wanted!

    " Oh...I could've sworn you wanted a stick...sorry, but the automatics are 800.00 more"

    She stormed out, drove another 100 miles and bought the car from me.

    Sadly, a lot of shoppers wold have simply caved in and bought the car from the store that lied to them.
  • aftyafty Posts: 499
    I've had this argument before, but I think it's worth the possible lost sale (and shopping of your price) to give the consumer a quote. It doesn't take that much of your time, and many consumers appreciate the no-nonsense approach to sales. I know I did, and that is a big part of the reason I bought my Altima where I did.
  • In my example, I'm refering to manufacturers' sites. Not some local dealer's site.

    The sites say "Choose Model, Color, Options and Click Here To Get A Quote From A Local Dealer."

    What part of this am I misreading? :)

    Appears deceptive to me. It should read click here to get bravo sierra.

    John
  • I definately see your point about emailed quote requests as being a method to gain quotes that are then going to be used to shop. However, I think salespeople should be viewing those requests as people looking to buy, not just people looking to shop. Sure, some will be shopping, but I would think giving out that price quote by email would be worth it if only some were actually people looking to buy and not shop. We are all looking for the "best" price. Do you like it when you pay too much for an item? In a lot of ways I think a few bad apples, both buyers and sellers, have dictated how the rest of us go about the process. Unfortunately this has left buyers with the impression that all car dealers are sleazy salesman who are trying to cheat them out of the all their hard earned money. You don't have to look much further than the Inconsiderate buyer thread to see some of the cr@p that buyers pull.

    When I emailed, I emailed out an offer for a new car. I named what was included in my offer and what costs the offer did not include (tax and tags). I indicated I was buying that day from the first dealer that met my offer. While I was willing to pay a little bit more than I offered, many dealers did not even make a counter offer. If you give me a fair price quote you are more likely to earn my business than if you say "come on down and we'll talk".
  • raybearraybear Posts: 1,776
    What you did is a far cry from what many salespeople see. You named your own price, something a certain internet company does, and it is more effective than challenging the dealers to a bidding war.
  • I followed the advice of brentwood in the Acura shopping thread. Again, what really amazed me were the number of rude responses I got and the number of no reponses I got. A dealership less than 5 minutes away didn't even respond to me.

    As I said, I was looking to buy, not shop. It would make sense to me to give a quote even if only 1 out of 10 inquiries is looking to buy.

    I think the internet is an incredible resource for the consumer in the car buying process. It helps level the playing field and allows me to make best use of my time. I would recommend it to everyone.
  • isellhondasisellhondas Issaquah WashingtonPosts: 17,695
    And not a bad way to shop...

    " I'm willing to pay 18,250 for a XXXXX and will buy it today...can you do that?"

    That will get a response.

    "Give me your "best price"? These requests are generally ignored since the vast majority of them amount to nothing.

    It's not 1 out of 10....not even close!
  • raybearraybear Posts: 1,776
    The hazard of naming your own price includes rejection. The salesmen live with it all the time. I get it every day.

    No biggie; you got what you wanted, those who didn't respond are out a sale.
  • Out of curiousity, what percentage of internet leads turn in to sales for you?

    Are you more likely to agree to an offer that is slightly low if it is coming from within your normal sales area or outside of it?

    Although I think I may be still smarting from being turned down by that cute redhead when I was a gawky teenager, being rejected by a salesman just seems puzzling to me. If you really don't want my money, fine with me. I don't understand it, but there are a lot of things in life I don't understand. =)
  • raybearraybear Posts: 1,776
    I don't sell the cars, I shop online for my customers.

    Close-rate-wise, I have a little better than 13% of "raw" offers accepted this month. That includes the people who are trying to save 50% off on a new car and crazy stuff like that (those mostly get ignored). I have a little over 30% of "reasonable" offers, those that dealers are likely to respond to, closed. Some of these are cars that have been configured incorrectly, usually the wrong options or color combinations are a sticking point.

    My response rate from dealers is running 76% month-to-date, a little above average. This means that a lot of my offers were still either too low, too small a search area or configured badly enough that the dealers didn't reply to the request.

    I collect a deposit from my customer, tell the dealer about it and they still don't always respond. Go figure. You can't throw money at some people!
  • I too was rejected by a redhead. I waited a year turned less gawky and got an even cuter redhead! That is kind of like being a salesman!
  • If you really and truly are giving "your best price" over the Internet (or even at the store, for that matter), why do you care if someone shops it around? If it's really "your best price", then nobody else should be able to beat it unless they really and truly are operating a more efficient operation than you. And if they are, well, you gave "your best price" so you did everything you could do to get the sale and you should congratulate the other guy and see what you can do to make your operation more efficient so you can beat him next time.
  • you've been around here long enough to know that there's no such thing as a single "best price." Just about anyone will knock $100-200 off a deal to steal it from the competition, but when does the insanity end?

    Had a guy on a Highlander last week. Hard enough to find, but he wanted something that will have to be special ordered. No problem. The dealer down the street was offering to sell it to him for invoice and had a buy-down rate to 0% for 36 mos.

    I saved him a lot of time and effort. I told him to go buy it from my competitor. If they're dumb enough to throw away that much money, they have my blessing.

    I explain it like this. "Yes, Mr. customer, you can always save $100-200 shopping my number somewhere else, but you'll have to go through the typical "dealership experience" that you were trying to avoid in the first place by shopping on the internet. Now, I can deliver your new car to you and you can sign the papers on your kitchen table with no BS and you can have that day of your life back to do something worthwhile with your family. How much is your time worth to you?"

    I'm looking through a few of my last surveys here... "we paid more with Ed than our local dealer, but loved the process"..."wasn't the least expensive, but provided the best service"...It goes on and on.

    Ed
  • I have a question for you. What happens when you tell a customer to buy it from the competition, goodbye and goodluck but they still stick around? Whenever I tell a customer the above they still want to know what my best price is. I will answer it is higher than what you say you can buy it for down the street. I was in the practice of warning them about certain tactics used by competition. I no longer do this because if I cannot turn the customer around by that point I figure I will look bad by badmouthing competition.
  • that point is give them my standard pricing on something. I tell them that my numbers are always "real" and that I won't play any games with them. Many times, when people are shopping numbers, the sales people are pricing vehicles that aren't in stock anyway, and if I can come up with a competitive price on the vehicle, especially if I have it in stock, I'll get the deal, just to save the people the hassle of waiting.

    What cracks me up is when the customer is trying to buy one of my vehicles from another dealership. I had that happen with an Avalon a couple of months ago...the guy calls and tells me that his local dealer will sell him MY car cheaper than I will (again, not by much). I informed him that I didn't have to trade the car with that dealer, then I told him how easy I could make the whole process on him, and we delivered it that afternoon. One of the surveys I mentioned in the above post was from that guy.

    Ed
  • landru2landru2 Posts: 638
    Yes, I've had that happen too - the guy wanting to buy my "one of a kind" threatens to go and buy it from another store because he knows we can transfer between stores. LOL!
  • The "insanity ends" when either you or the competitor who's undercutting your true "best price" goes out of business. You'll go out of business because you can't provide the same service as efficiently as somebody else - which is how a free market is supposed to work - or he'll go out of business because he's a moron who sells cars below his cost, and a free market doesn't tolerate morons gladly.

    You dealer guys are always telling us thick skulled customers that we should focus on the "out the door" price and if that's the price we're willing to pay, we should shut up and be happy with that and not worry about saving $100 for the dealer across town. So, I similarly advise your side that if you truly quoted your "best price", YOU should be happy because that's the lowest price at which you are willing to sell the vehicle, and not worry what the dealer across town is doing.

    Quote your best price - no more, no less. Problem solved. Please, tell me what am I missing. I want to hear this.
  • that nothing is cut and dry in the car business. As someone explained in the "buying cars for cost" discussion, the actual cost of the car can change daily because of many factors.

    There is no single "best price." In my emails and telephone conversations, I quote someone a very competitive price, which varies by the type of vehicle, market conditions, etc, but I also mention to them that if they have a lower price from another dealer, I'd certainly do everything I can to beat it. My compensation relies on me making the dealership money, so I don't always quote the lowest price (in the first conversation). Nobody does.

    There are also intangibles that add value to a transaction (my service) that I should be compensated for. I'm going to say this again, at the risk of seeming repetitive, THE LOWEST PRICE ISN'T ALWAYS THE BEST VALUE.

    I'm sorry that you don't like the color of the sky in reality.

    You haven't heard of anyone here posting a thread called "I got my car for free because two dealers have a promotion where they will beat anyone else's deal by $500!!" have you?

    Believe it or not, dealerships are in business to make money. If another dealership is going to beat my quote significantly, they can have the deal, because usually the "haggle to the last $50" customer is a perpetual problem on the surveys also.

    I'm not trying to be condescending, but what part of this aren't you understanding?

    Ed
  • There is a frequent radio ad in these parts for a dealer that "will beat any price", but in the mumbled 'fine print' at the end, they note that the competitor's vehicle must be an exact match - color, options, trimline, etc...and the kicker clause: They reserve the right to buy the competitor's vehicle.

    So the insanity has its' limits with those guys.
  • landru2landru2 Posts: 638
    This is open to anyone that doesn't understand why there is no such thing as a "best price." Imagine your employer came up to you today and asked "What's the lowest salary you'll work for?"

    What number do you give?
  • dustidusti Posts: 36
    Can't expect the dealer to cut to the bone on the first shake ...

    just because a customer walks in the door demanding his "best" price.

    If the customer can convince the dealer he is a serious buyer, has the cash, and is willing to take his business elsewhere ..

    ... can generally get the dealer's "best" price without too much effort.

    The act of doing this is called negotiating.

    To expect to get it without negotiating is sort of entrapping the dealer into a lie.
  • I'm not trying to be condescending either, but one of your fellow salesmen in that same "buying for cost" thread insisted that "cost is cost" and that if we didn't understand that, well, we must be thick.

    Now you're telling me that "the actual cost of the car can change daily because of many factors".

    I'm just confused - is cost really cost, or isn't it? I'm guess I'm just too thick to understand.
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