Who Really Likes Shopping for a Car?

dreamstime_xl_67457514car salesman

Good Sense News – Volume 3, Issue 1

We all know someone who can brag endlessly about their car-buying prowess…you know, the guy that beats the salesman up so mercilessly that he enjoys getting the deal he wants, or the gal who can gleefully wrap the sales person around her little finger to steal the deal. I think we all know also that very little—maybe none—of that swaggering, pretentious bragging is actually true. In fact, surveys have verified that overwhelmingly, people really hate the car-buying experience.

So, why do you suppose that is? After all, the smell of a new car, or the vision of an upgraded chariot in your future, or the envy of your friends and neighbors should be viewed as an all-around good things…shouldn’t they? Yes, they really are good things, but many people tend to feel the stress of walking onto the showroom floor just isn’t worth it. And a natural reaction among us emotional creatures is to steer away from stressful situation.

Buying a Car is a Unique Process

Car shopping is different from, say, shopping for a set of luggage. When your suitcase wears out, you typically go to the internet and start browsing or, if there’s a store that sells luggage somewhere close by, you take a trip and look at what’s available. In this type of shopping, the price is the price, and the range of features is fairly restricted. So you pick one out and, if you’re on line, you just order it. If you’re in a store, you just take it to the checkout and off you go. Simple…and you probably didn’t need to engage with any pushy personalities bent on up-selling you to buy more of a suitcase than you really want or need.

Buying a car, on the other hand, involves an entirely different dynamic, at least for the present. Online car buying is beginning to obtain more of a presence in the economy, and we’ll get to that in dreamstime_m_27877485sleazy car salesman deala moment, but for now the car lot/showroom experience is still how most folks shop for a car. The dynamic, then, is to first do some research so you can narrow the selection field down, and then head for the car lot. Like most people, you’ll start by walking the rows of cars, knowing full well that it will only be a matter of minutes before a salesperson will track you down and offer to help you. And right about there is the point where so many people begin to get turned off by the car shopping experience.

So what’s the problem? Historically, car salesmen (consider the use of this term to be gender-neutral, by the way) have been found to be pushy and intimidating, and most people abhor being pushed around, fast talked, and brow beat. That’s the way things once were, but fortunately things have changed over the years to the point that the auto dealer salesforce is more pleasant to deal with. Still, surveys report that a large percentage (a substantial majority, by the way) hate the car-buying process. Car shopping site Edmunds.com (1) puts this in perspective, noting that a survey of more than 1,000 U.S. adults claim purchasing a car or truck is more stressful than getting married, going on a first date or watching their team in a close championship game. Wait, what? Why is that so?

Not surprisingly, the root of the problem appears to be the strong preference to avoid haggling over price.  In fact, Edmunds’ survey observes that “nine out of 10 car shoppers would be more excited to purchase a vehicle if it had a set price they felt good about, rather than having to haggle.” And yet, the importance of negotiating a price continues to be a key factor in the car-buying process, even though it produces the stress that so many hate. Perhaps it’s the potential for buyer remorse, but more likely it’s the nagging fear of leaving money on the table. Back in the days when only the dealership knew the numbers, it was difficult to know where the bottom line was and how far downward a walk-in buyer could negotiate the final price. But that’s beginning to change.

Knowing the “Fair Price”

Automobile dealerships are embracing the fact that their customer base is shifting to a world where the internet enables prospective buyers to become highly-informed before stepping onto the premises. It’s a whole new process that levels the playing field so much that most large dealerships have created an “internet sales department” expressly to interact with potential buyers who are smarter, better prepared, and more comfortable in dealing with the dealership’s sales force (after all, they’re often negotiating from their couch, maybe in their pajamas). Bankrate.com several years ago published an insightful article titled “A 9-step guide to buying a car online” that sets the arena within which the 21st century car-buying public operates, and it’s a pretty good read.

But getting back to the “haggling” issue, being able to get a handle on the invoice price the dealer pays to the manufacturer has given car buyers a piece of ammunition, and it’s a fairly easy to piece to find out. Websites like truecar.com and carsdirect.com can show you what the dealer actually pays, and if you couple this with current market prices for the car you want to buy (defined as what other buyers are actually paying for that car), you’ll have a pretty good bargaining position going in. And once the salespeople know you’ve done your homework, you’ll be surprised at how much of the unpleasantness dissipates.

The price is the price, but there’s more to it.

To be fair, the price the dealer paid to the manufacturer is only part of the equation. There are destination costs (the fee paid for transport of the vehicle from the point of manufacture to the dealer’s facility) and the various overhead items required for the dealership to operate (advertising, facility costs, their own capital costs, and so on), You need to have a sense of what these costs are also, because they’ll be factored into the bargaining process when the dealer combats your offer.

Of course, it’s always about more than the price. You’ll want to be sure the dealership will be a responsible service provider, you’ll want to be sure the car you’re buying is right for you. and you’ll want to trust the dealership staff to be honest with you. All of that goes without saying, really, but doing your own research and gaining the footing you need before you sit down at the table gives you an edge that can take the nastiness out of the car-buying process.

What does the future hold for car buyers?

It’s not really the future anymore, since online car buying is beginning to show up in the marketplace. New services like beepi.com and vroom.com are beginning to take hold in the used car marketplace, and these are the types of facilitate the entire process of buying a car, financing it, and having it delivered to you home…complete with a return guarantee. for new car purchases, companies like Tesla, Scion, and Lexus are beginning to experiment with “no-haggle,” online price negotiation processes that enable a buyer to settle the unpleasant part of the car-buying experience in a detached setting. And fixed pricing is not really a new concept anyway, since GM’s Saturn brand pioneered it decades ago with questionable success.

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