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Comment by izacus | Hacker News Reader

Can someone lift my european ignorance and tell me what's wrong with the dealers? How are they different from BestBuy, Target, etc - just essentially bringing the car to a showroom and selling it to you?

Why are dealers such a huge problem and who would buy such an expensive thing as a car without trying it first?

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The showroom isn't so much a problem as the high-pressure sales tactics and negotiations that comes with it. The laws in most US states protect this model. Ford can't typically setup a retail store where you just test drive a car and the pricing is transparent and obvious, they have to sell through dealerships (franchise). Obviously franchise owners have different motivations than the manufacturer, they make a commission and need to get as much as possible with each sale.

Other commenters have pointed out a lot of the issues, but one that always bugs me is how they often times refuse to talk about the actual price. They are always trying to sell you on the 'price per month' you are able to afford. This is so they can hide the true cost of ownership behind a low monthly payment.

It is because a lot of dealers in US are dishonnest. For example they never honor the quote they themselves have given in email. They never tell the interest rate or car price they are offering. They always ask you what is your affordable monthly payment! After buying they push to extended warranty so much. You need to spend couple of hours just saying no. It is just a frustrating experience overall.

I just wrote a comment where I detailed my recent experience. They honored their email quote, but tried to add on a $1500 BS package which I negotiated down to $150. So I supose they were off by $150 in my case.

With new cars it's pretty easy to get past most all of the problem. Don't negotiate in person. Do everything over email, and have them send over the bill of sale and other paperwork in advance. Take it with you and pick up the car.

With used cars it's a lot more hassle because you're not going to want to commit to that without more extensive, time consuming research and inspection.

In Belgium, any price on email is valid in court.

Also, I have never seen issues like this here. The entire price has to be shown upfront and it's pretty boring actually.

Compared to the US, it seems great though

Historically there have been a lot of sketchy dealers who are very pushy and dishonest.

If you go in with your own financing or cash, and say 'no' to all the upselling, it isn't much different than Best Buy.

Most new car dealers make more money from their service center than sales.

> Most new car dealers make more money from their service center than sales.

And from the "finance reserve." If Toyota Financial Services approves you for an autoloan at 3% the dealer will tell you're eligible for 5% - and they keep the difference.[1] That can really add up over the life of the loan. And why it's important to read your TILA disclosures.

[1] http://www.realcartips.com/carloans/220-how-much-dealers-mak...

If you go in with your own financing or cash, you are going to get a worse deal. I would use their financing then just pay it off after a month or two.

If you don't do your homework ahead of time, a dealership is a tough place to navigate. When I bought a Toyota, the sales guy only wanted to talk about payment - what payment did I want because he could get me that payment. I wanted to talk about absolute numbers for trade-in and purchase and then talk about financing for the balance. They really resisted that.

The last car I bought was a Subaru and that dealership felt even slimier. They handed me off from person-to-person-to-person and only the last guy could tell me the final numbers.

> I would use their financing then just pay it off after a month or two.

Make sure there isn't an early-payoff penalty.

I've heard two approaches on Reddit. One is to negotiate the final out-the-door cost (NOT monthly payments) with their financing, etc., and then tell them you have your own financing (or cash) and take it or leave it, being totally ready to walk.

The other is to negotiate with their financing, ensure there are no prepayment penalties to pay it off early, and then as soon as you leave just pay the thing in full or pay it with a loan you secured at a better rate.

Car dealerships made a lot sense in the pre-youtube/doug demuro age, they can explain the tech, the new cruise control options or passenger side airbags. These days cars are generally pretty reliable, have heavy feature parity at their price points, and car rental is accessible if you would like to try before you buy. Certainly, there are edge cases, but it's probably good enough for most people weighing something like a chevy bolt over a ford focus.

If I buy something at BestBuy or Target I feel well assured that everyone else that bought the thing from Bestbuy or Target, barring promoted discounts, paid the same amount for the item that I did.

People that buy cars usually do not pay the same price for the same car. This feels unfair to the average American consumer. There is a lot of anxiety around haggling, financing, and trade-ins.

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