This past weekend I had the pleasure of accompanying my mother in her quest to find a new car. We visited a couple of smaller dealerships and each one was singing the same tune: We don't negotiate.
In fact, as soon as we got into the car with the salesman from the second dealership, he made it a point to tell us (as if it was a great service to the customer) they set their car prices competitively and take negotiating out of the equation.
“It's kind of like Target. Most people don't want to walk into the store and have to haggle over the prices of everything. It is what it is. People don't like to negotiate prices.”
“I do,” I blurted out. I couldn't help myself.
Why many car dealers stopped negotiating
I think I understand the issue here. (But, if you are in the car business – please jump in! – I'd love to get your thoughts).
Since Kelley Blue Book went online – and now everybody and their grandma has access to the same pricing information – a vehicle's value is no longer a mystery. All one has to do is plug in the details of an automobile and you soon have its worth. This is a great tool for anyone looking to sell their used car to someone else OR looking to buy one.
Dealers have turned this into their advantage by taking negotiations out of the picture completely and just going by the Blue Book OR – (as my mother was told by one dealership) – “the bank sets the price for me and I can't go any less”.
For many people, negotiating anything is a bit of a chore. It's uncomfortable, can be awkward and – if we're honest – a little scary. Unlike other cultures, we generally accept what the price is and pay it. Oftentimes, negotiating can make you look “cheap”. No one wants that label.
Dealerships have used this fear of negotiating to their advantage too – by eliminating it all together.
“We want your car buying process to be pleasant – our prices are AS IS, no negotiating necessary!”
But here's my problem
Of all places – I thought small-town America would still be in to negotiating car prices! But, this philosophy has infiltrated our great country-side! (unfortunately)
While I think I understand the issue at hand and many dealers are turning to a policy of non-negotiation, I'm not entirely comfortable with it. Why?
Here's the thing. I don't know what Ace Dealership paid for that vehicle. Sure, the Kelley Blue Book prices it at $4,500 – but whose to say Ace didn't pay $2,000 for it? Many dealers buy their inventory at auctions – often times getting great deals on cars that us average car buyers don't have access to (or the time / know-how to access).
So, while the car may be worth a said amount – there is often “room to negotiate”. Now, I'm okay with capitalism and the dealer getting their fair share. But, we're not negotiating the price of a lamp stand here. A vehicle purchase is one of those big-ticket items we want to make sure we are getting the best possible price on.
What do you think?
I'd love to hear if you share this frustration with car buying OR perhaps you are happy with the new way of purchasing a vehicle.