51
votes
Escape from the box: new technology and old tactics have made buying a car a death march of deception
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- Title
- Escape From the Box
- Authors
- David Dayen
- Published
- Jul 8 2024
- Word count
- 6176 words
Buying my car, my house, even all the different appointments for my wife's pregnancy, I constantly feel like I'm being railroaded through processes I know nothing about that are designed to take advantage of me.
I'm glad there are guys like Jase helping folks out with shit like this simply because its the right thing to do. I'm constantly checking my cynical side because it can be so exhausting at times, but stories like this remind me that trust is earned.
I wish I could take more things at face value. Sometimes I feel I've become too jaded, but the fact of the matter is its just plain safer to be skeptical of everything put in front of you, and walk away if something feels off.
We have real estate agents to help buyers walk through the process. There should seriously be something equivalent for car buyers. I’d gladly pay a Jase to sit with me and play hardball with the dealership on my behalf. It would be worth it for the peace of mind, let alone the savings.
We should just make it impossible (through regulation) to make predatory businesses like dealers unviable (i.e., unprofitable). I bought a new car last year direct from the company that makes them (Rivian). The buying experience was so much better than when I bought my first car from a local Toyota dealer (with financing through Toyota). Going through Toyota wasn’t even that bad, but this was also early 2010s. Now, dealers have more perverse incentives as car prices have sky-rocketed and the industry has become “financialized”. I really hope auto-makers can wrest control of the market from dealers and just sell directly to customers. I’m somewhat pessimistic, though because Ford is struggling with this even though they’ve been doing some good things. Dealers have outsize influence at the state and local government level, though, so it’s an uphill battle. The fact that it’s illegal in large parts of the US for car manufacturers to directly sell you a car they made is just bonkers when you think about it. It’s regulatory capture by profiteers that needs to be unwound.
My wife and I bought a new car for the first time last year and it was a mostly okay process, except for this one salesman who was extremely pushy about a car we had no intention of buying.
First, when my wife called he told her the model we were interested in was available but when we got there, it had just walked off the lot (or, more likely, was not there in the first place), but the version one model up (and way more expensive) was available. We took it for a test drive because why not, and then when we told him it was too expensive for us, he got actually mad and was demanding to know why we were wasting his time, and tried to guilt us into buying it. At one point he asked what he'd need to do to get us to buy it and I told him that he could take 15,000 off the sticker price, and he said I was being unreasonable.
Why didn't we just get up and leave? Because we were trading in our other vehicle and he took our keys to have it appraised. So we were stuck there while this guy tried to twist our arm and get us to spend money we just didn't have. It was terrible
Awful. He wasted his own time and he's angry at you for it.
We bought a new car last year. It was a pretty painless process, even though we didn't go through the loan pre-approval process with our credit union like I did for the last car I bought. When I checked the rates before going to test drive one of two cars I had on my list and decided that this was the car we wanted based on just the test drive. We went into the office to set everything up, and the salesman wasn't pushy, he didn't even seem worried if we bought that day or not, but we were ready and everyone was incredibly kind and walked us through the entire process and even explained everything in all the TOS we signed as we went through each clause. Then we went to the closer's office to sign the paperwork and walked out with our brand-new car.
The entire process from test drive to driving off the lot with the exact car with the exact features and specs we wanted was about 3 hours. It was awesome.
Yep, bought a Tesla from them 5 years ago and the process was great. No haggling, no upselling, nothing. 99% of it all was done via text or email. Everyone involved was great and I had no issue using my bank for financing. Every car buying experience should be like that.
I felt lucky to get my Ford Maverick for MSRP at a local dealership. Not all dealerships are the same, not even the ones with the same name. The biggest Ford dealer in my state franchises its name, and two of their lots that I went to tried to tack on a $3,500 dealer fee, that's a whole 10% of the MSRP for the trim/options I got! You really have to shop around to try and cut through the bullshit, which is the biggest problem with dealerships. And when the model you want flies off lots faster than they can be manufactured, dealers will take advantage of that.
The real estate industry needs better sales people. But yes at least there's a pretense of them being on your side. They're not. Only your real estate lawyers are.
The last time I purchased a car, I ended up having to stay for two hours after they closed putting up with their bullshit. The new car I had come to look at did not exist. So I settled for a used model. But of course the price that was listed on the car was not the actual price. There were a bunch of added stuff - the exact same things the article mentioned, no less - that were already installed and raised up the price by several thousands of dollars. It wasn’t until I picked up my phone and showed them another dealer was offering a newer version of the same model car for significantly less did they relent and actually offered me a discount on the price.
Then after all of that I had to negotiate financing and service packages. Financing was a real pain because they wanted to push me towards their financing company with super long terms that would raise the cost of the car by thousands, but after some effort I managed to get them to run it through the bank I preferred and a much shorter term. I told them I didn’t want a service package or extended warranty, but they wouldn’t let me skip their spiel.
And then there was the actual signing. There was so much paperwork, and it was rather obvious that the person I was dealing with did not appreciate that I was actually reading through them before I signed them. And of course, one of those were an arbitration agreement. If I refused to sign it, they would refuse to sell me the car - as would literally every dealership in the United States. It is a practice that should be illegal in all industries. It’s one thing to willingly waive your rights to the legal system, and it’s another thing to have no other option.
And after all of that I think there were another hour for them to finish registering the car to me and activating things like Sirius XM and OnStar trials.
If car dealerships disappeared off the face of the earth overnight, we’d all be waking up to a better world.
I've purchased two cars in the last five years, plus helped my dad and another friend purchase their cars as well. All four of these cars were different makes. So I've been to, called, and emailed a lot of dealerships and salespeople. And this article is spot on. The shit that dealerships say and do to try and get your money is ridiculous.
A couple of random thoughts about the subject that came to mind when reading that article, in no particular order:
At least half of the dealerships I talked to said they had a dealer fee. Usually $1000, $1500, or $2000. Every single one of them said this dealership fee was non-negotiable and they couldn't take it off. Then when I showed them a better offer from a nearby dealership with no dealer fee, about half of them were willing to take off the dealership fee.
While helping my friend buy his car, a Subaru, he was presented with one MSRP when speaking with the salesman. When it came time to actually sign the documents an hour later, I noticed that the monthly payments were based on an MSRP that was about $4,000 higher. Pointed out the 'mistake' to them which prompted a manager to get involved and say they would have never offered that first price because it was below their profit line. So either it was an honest mistake on the salesman's part to offer such a low price, or we were lying about the lower price. Well when we got up to leave, suddenly that price wasn't so bad for them and maybe they could figure out a way to make it work (i.e. give us the price they had originally offered).
Every fucking car salesperson I have talked to in the last few years has opened with the same "how much do you want your monthly payment to be?" bullshit line. The article mentions it too, but I find it such a duplicitous practice for salespeople to open up with that. The monthly payment is based on a ton of factors, like length of contract, downpayment, and oh yeah the actual fucking price of the car. Every time I hear that line I reply with "I don't care about the monthly payment, I want to know the total price of the car". You can figure out the financial details after you know how much the car you're paying for actually costs.
I am a STRONG believer in shopping around for most things, but especially for a large purchase like a new car. I literally called 20 Toyota dealerships before buying my Tacoma (all were within 1.5 hours driving radius). Around five of them didn't have the exact model I wanted in stock. Another ten or so weren't willing to come down on price or additional fees. And then the last five or so kept matching and lowering each other's offers until I settled on one that offered the best deal and financing. Had to drive to a town 1 hour away to get it, but saved me a few thousand dollars which was more than worth it. I didn't walk into a single one of these dealerships other than the one closest to me to test drive the car. Just cold called them with a scripted "Hi my name is ___ and I'm looking to purchase a _____ with _____ options. I'm going to be purchasing the car in the next few days and am calling around to find the cheapest price and best incentives." (Side note: At the very last minute, right before making the purchase, I called the dealership closest to me and explained that I was about to drive 1 hour away to purchase this car and was wondering if they could match that deal so that I didn't have to drive all that way. The manager essentially told me to pound sand, so I said thanks, hung up, and saved myself a few grand just by driving an hour there and another hour back.)
As a former salesperson (not cars though), any salesperson that makes you feel pressured is not worth listening to. I've told many salespeople to please back off and give me space to breathe and think things through at my own pace. If your gut tells you something is off, then either something is indeed wrong or you just don't know enough about the deal you are making and are thus nervous. In both cases you should stop what you're doing and either walk away entirely or probe further to investigate what is causing you hesitation.
One more I just thought of: never take the first trade-in offer you get. Price your car out on Carmax.com first, ask other dealerships, look up used models very similar in year/mileage/condition as yours on places like Cargurus.com or Carfax.com to get a good understanding on how much your car is actually worth before even contemplating a dealership's trade-in offer. I've been lowballed by nearly every dealership I asked.
This was a great read.
I, like most people who've bought a car, experienced my own version of it. I was also kind of lucky, because I ended up in an unusually "good" situation that let me dodge most of the bullshit.
I had put in a pre-order for a 2023 Chevy Bolt and put a deposit down on it. I also signed a document offering me the car at MSRP.
Eight months later I get the call that my car is available, so I go in, document in hand, ready to have to argue about the price (I didn't think they were going to honor the MSRP).
They did, which was nice, but they outright tried to cheat me on extras. When I preordered the car, I had sat with the salesperson and chosen each of my options, "yes" and "no"-ing to the specific build of the car and all the different options. During this process, I watched the salesperson enter all of these into the order myself, so I was fully aware of what was and wasn't available with my car.
So, when I went to sit with the finance guy, he led with the monthly payment. I confirmed the MSRP and interest rate. So far so good. Then he tells me that for a small additional amount (I think it was $10 or $20) I could add an extended warranty.
This was very fishy, because he had prices on the screen regarding the extended warranty, and they didn't match a small additional monthly fee. It would have been more like $100 a month instead of $10.
He gave me his pitch about everything the extended warranty covered, and here's where I was "lucky" again. I was buying an electric vehicle, but the pitch wasn't really updated for those, so his screen was showing things like having the cost of the fuel pump replaced. He also wasn't great at selling it. He literally said "well, if your car had _____, that would be covered" multiple times as he was running through the different coverages. It's clear he was used to the script for ICEs, but not EVs.
I asked if my car's battery would be covered. He told me no.
I declined the warranty. He asked why. I told him "because the battery isn't covered and that's the main part of my car."
He then pulled up a big scary list of different car failures and how much each of those would cost without an extended warranty. Again, this was tailored mostly to ICEs, and I was also mad at this point at his blatant fearmongering. I again declined the warranty.
Once he accepted that he wasn't going to get me with the extended warranty, he started to finalize things. Here's where it was clear I was attempting to be "boxed in" as the article calls it.
After declining the warranty, he told me that, surprise surpise, the salesperson had added some options to my car that I actually didn't ask for, and in removing those, my new monthly payment would actually be lower! By about $90! What a win, right?
He was clearly lying. Again, I'd sat with the salesperson and chosen each option myself and also watched them get entered into the system. What I suspect was that the monthly price for the warranty was something like $100 extra, and they rolled $90 into my payment automatically to make it look more appealing -- "only $10 more!" When I declined the warranty, they "discovered" those extra unwanted options as an excuse to give me the actual monthly payment instead of the inflated one.
It sucks that my experience, which was pretty bullshit, is actually sort of an ideal one. I consider myself "lucky" because I was able to dodge most of the bullshit. Reading the experiences shared in the article reminds me that it could be so much worse.
It also sucks that, unfortunately, the bullshit didn't stop after the dealership. I assumed I was through it all once I had the car myself, only to later learn that Chevy was tracking me without my consent. Just like the dealership, Chevy tried to bullshit their way out of it by saying we consented, but evidence mounted that they too were lying.
What's sad is that I really love my car. It's awesome. The vehicle itself is amazing. Everything else surrounding it though? Awful. I'm hoping that, by the time I need to buy another car, more direct-sale options (like Tesla) are available.
I agree with this 100%, but it isn't new - it's basically modern capitalism 101. Every modern supermarket has thrown decades to centuries of man-hours analyzing exactly how to maximize the chances of you impulse-buying after you walk into the store.
FWIW I don't think dealers are fundamentally the issue here, just practically - car OEM direct-dealers don't do anything shady because they have a lot to gain by destroying the dealership industry. Once the dealership industry is already gone, that will no longer be true, and car OEMs may well start pulling the same scams that current dealerships are pulling.
Dealerships are basically dinosaurs, they existed because car OEMs couldn't practically handle the repair side back in the 1920s and needed a local repair shop (also some financial hedging stuff), but nowadays car OEMs increasingly don't even want to make things repairable, and AFAICT would prefer to get rid of dealerships entirely.
I expect not wanting to handle dealership nonsense is a significant part of the reason people might buy a Tesla.
It's the reason my last two purchases have been a Tesla. Hate Musk, but love their complete lack of bullshit when it comes to buying a car.
The best car purchase experience I’ve ever had was a new Scion FRS (aka Toyota 86) from a Scion dealership before the brand was completely folded into Toyota.
Scion had a policy called “Pure Price”
Only one trim level offered, no negotiation, no surprises.
Great car, by the way. A blast to drive and held its resale value well. Back seat was a joke though.
It's been a few years since I've bought a vehicle, but I've purchased quite a few over the years.
My experience has been.... don't deal with the sales floor, ever. Do all of your negotiation with the internet sales manager.
My process has been:
...every time I've been able to get through the process with only 2 or 3 rounds of emails and then showed up signed the papers and drove away paying exactly the price that I expected to pay with only an hour, maybe two to get through the whole process.
Maybe things have changed in the last few years, but it has worked for me many times.
Sounds like a great strategy, thank you for sharing and I’m happy it has worked for you multiple times over the years!
The issue is that you’ve lost the average consumer’s interest and motivation at “spreadsheet” – willing- or ableness to prepare well must be a big factor in preventing getting things you didn’t actually want (such as higher monthly payments).
I used to drive a LOT of miles, but now I rarely need to drive so it's been a while since I've done this, but I remember once, when buying my 2015 Subaru Forester (which I still "daily" drive -- except for the daily part :) ) that when I committed to the final deal I drove to the dealership and while they had me sitting and waiting another dealer called me and offered me a better price. The dealership where I was at overheard me talking to the other dealer so I ended up live negotiating dealer vs. dealer and ended up getting another $500 off of the negotiated price, plus some free all-weather floormats and trunk mat thrown in. I think the other dealer was willing to go a bit lower, but at that point I didn't feel like driving 40 minutes to the other one for a small discount.
I've purchased two others since that experience, but one of them I sold after it no longer met my needs (and I preferred the Forester) and the other is a van that I build my DIY campervan with.