The Problem with Dealerships

Out to get you?

Why don’t dealers want to sell cars?

You’d think, considering the news about struggling dealers and automakers, that sales managers at dealerships would be itching to make the best deals they can.

Instead, they’re tending to hoard their inventory, only willing to let cars go for top dollar. Maybe their strategy is to sell fewer cars, but at a higher profit. Or maybe they’re just too dang arrogant to admit they need to make the best deal possible.

I posted over the weekend about my experience shopping for a replacement car for my wife. Then a CarGurus blog reader sent us an e-mail expressing his frustrations with dealerships, which confirmed to me that my experience probably isn’t unique. 

From what I’m seeing so far, dealers are playing serious hardball. Here’s one example from this weekend:

I found a car I was interested in and began negotiations. My first step was to negotiate the price of my trade-in, for which they offered me $6,500. My research showed a trade-in value of about $9,000. Also, and here’s the kicker, the dealer had my exact car on their lot for $15,999. 

So I knew they’d price my car similarly, and I asked for $10K on my trade-in. I told my salesman I’d then negotiate a fair price on their car. I essentially got laughed at as I was walking out their door. They let me go when I was willing to make a deal and pay more than I probably should have for their car.

So now I’m changing strategies and doing what I should’ve done in the first place. I sold my car privately for $11,000, I’ve secured financing through my credit union, and now I’ll shop with cash in hand and work the best deal I can.

That’s my advice to the guy who emailed us and to anyone else car shopping right now. Dealers are hurting, but they’re still looking to take advantage of buyers in any way they can. Go with cash and make your best offer… if they still turn you down, well, maybe they’ll be one of the thousands more dealers to fail in the coming years.

Would any dealers care to put in their two cents here? Have any other car shoppers had experiences like this?

-tgriffith

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