Inside the rise of ‘stealerships’ and the shady economics of car buying : Planet Money : NPR

Inside the rise of ‘stealerships’ and the shady economics of car buying : Planet Money : NPR

https://reddit.com/r/electricvehicles/comments/x3aaf2/inside_the_rise_of_stealerships_and_the_shady/
seat51c
https://www.npr.org/sections/money/2022/08/30/1119715886/inside-the-rise-of-stealerships-and-the-shady-economics-of-car-buying


Inside the rise of ‘stealerships’ and the shady economics of car buying : Planet Money : NPR



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27 thoughts on “Inside the rise of ‘stealerships’ and the shady economics of car buying : Planet Money : NPR

  1. > For example, a number of studies find that dealerships tend to charge people of color more than white folks. Another study finds that older people tend to be charged higher prices than younger people, and that older women tend to be charged the highest price of all.

    I think this is the ugliest part of the legacy automaker dealer model. Race, age and gender should not factor into how much you pay for a vehicle.

  2. I almost bought a car last week, but the dealership quoted me 3 different prices and kept adding bullshit fees that upped the price of the car by 10%. Also it was 6 hours away but they kept telling me to “come on down” to discuss it.

  3. because car dealerships, before this story, historically had a reputation for being a feel-good place to visit and be treated well, lol.

    I can’t stand elon musk as a person, but what big T has done to revolutionize the “car buying experience” is impressive.

  4. I bought a Polestar recently. It’s a great car, but the dealership experience had me seriously second-guessing if I shouldn’t just buy another Tesla. Constantly having to worry about getting screwed over is soul-draining.

  5. “The FTC’s proposed rules would cause great harm to consumers by significantly extending transaction times, making the customer experience much more complex and inefficient, and increasing prices, and NADA again urges the FTC…”

    Um…Fuck NADA.

    Again, hate Musk, but buying a Tesla is pretty much like buying an iPhone.

    Check it out in the “store”. Go home, tippity-tap, clickity click on your computer or phone. Pick the options *you* want.

    “Buy now”

    and go pick it up when it’s ready.

  6. Re franchises: …”Some of these claims — like the fact that local dealerships create jobs — are undeniable. Others are highly debatable. First of all, there are more than a dozen automakers in the United States, so no single carmaker comes close to being a monopoly. And it’s not clear how adding a middleman to the process reduces prices for consumers, especially when you consider that this middleman often resorts to a slew of tactics that tends to raise prices. Many of these dealerships, by the way, are not mom-and-pop shops; the industry is seeing growing consolidation, with multibillion-dollar corporations now owning hundreds of dealerships across the nation…”

  7. I wound up getting my car through Carvana, because fuck stealerships. My deal with them went smoothly, despite all the horror stories you hear. They offered me $5k more in trade in value than any local dealer besides Carmax, and it was still $2k more than them.

  8. The FTC is considering regulation to curb shady dealership behavior that would:

    – require accurate pricing in advertisements
    – require dealers to obtain express consent for charges
    – prohibit the sale of any add-on product that confers no benefit to the consumer (nitrogen tire BS contains no more nitrogen than air already does)
    – require dealers to maintain records of advertisements and transactions to increase accountability.
    – prohibit dealers from making certain misrepresentations during the sales process

    They are seeking public comments on the matter until Sep 12. Right now, **car dealers and salespeople are brigading the comments claiming they’re all transparent already** so they don’t need these rules, and that it would only cost consumers more time in the transaction.

    1. If these dealers were already transparent, why wouldn’t they want rules in place to make their competition just as transparent as they claim to be?
    2. If pricing were fair, accurate, and transparent, there wouldn’t be a cottage industry around educating consumers about specific dealers and their tactics. For example, [www.markups.org](https://www.markups.org) has 4,700 user submissions about the markups being charged to consumers by specific dealerships that would be entirely pointless if these dealerships were transparent.
    3. I don’t believe there is a consumer in the country that wouldn’t gladly spend 5 extra minutes in the F&I office if it meant knowing they weren’t being screwed out of thousands of dollars while in there.

    Please consider submitting your thoughts at: https://www.regulations.gov/document/FTC-2022-0046-0001

  9. This is why we just ordered a Rivian R1S, even with the inflation bending me over a rock right now I’d rather do that then take it from shithead middleman dealer who has NEVER provided me any value after a sale.

  10. I have a model 3 that we purchased a few years ago and in the near future, we will need a second vehicle. I’d like to get an EV with CarPlay but every single car buying experience I’ve had in the last 30 years tells me to just stick with Tesla.

  11. I think our experience (and I hope we can agree to band together) should be like this:

    say you want to pick up an ID-4 that’s available. Or a Bolt. Or wahtever, just pick an EV you like.

    Place a preorder for a Tesla model 3.

    Walk into the VW dealer like “respectfully, be a straight shooter, no bs, no hassle, and keep it quick. I’ll cancel my tesla order and go with you, today.”

    Then make sure they credit your sales price for the amount of the lost tesla deposit.

    If they can’t agree to those simple terms…

    simply.

    walk.

    out.

  12. It all really depends on the dealership. Sewell dealerships in Dallas are awesome. They treat you right and there is no BS. On the other hand, the dealership across the street from their Sewell Lexus dealership AutoNation owned BMW of Dallas is filled w/a bunch of assholes and treat you like you’d expect to be treated by one of the fly by night cash only used lots.

  13. I’ve had some bizarre experiences with dealerships when seeking to get a car repaired. At one, I explained that the car wouldn’t start. All they did was (1) turn the ignition key to try to start the car, (2) fail to start it with that method, and (3) guess that there might be a problem with the car’s distributor. The bill was an incredible $98!! I had done exactly the same thing at least 50 times before I brought the car to them! YUK! I should have refused to pay any more than, say, $5. At another dealership, the problem I had at that time was a rattling noise coming from somewhere around the middle floor of the car. They said they did many checks, and found SIX things that needed fixing. I was skeptical, and brought the car to a repair shop that doesn’t sell cars — only repairs cars. They checked for all six of the problems and told me emphatically that NONE of the six problems existed! (The other place suggested it was a loose exhaust pipe. I checked under the car for that and found that, yes, a “U” bolt was loose and needed a little tightening.) At another dealership (one selling used cars), I expressed interest in buying a “Jeep”. When I said I wanted to bring the car to a repair shop to have a “buyer’s check”, the two salesmen looked at each other, showing obvious worry. They asked me to visit them again the next day. One of the salesmen rode along with me and the mechanic during the buyer’s check. The mechanic said the car needed around $2,000 in repairs! When we were leaving the repair place I thanked the mechanic and handed him a $10 tip. The salesman saw this and accused me of paying the mechanic to make up stuff! But I had made it clear I did not want that car! His accusation might have made sense if I had used it to get a discount…but to use it to decide against buying the car? Crazy!

  14. It’s probably hard to find a ‘good dealership’, but I personally would prefer one of those over something like Tesla’s direct sale.

    When I bought my BMW, I visited two dealerships. One of them was god awful in that they didn’t seem like they cared much about my business at all. They were standoffish and were pretty much going to inflate the price over MSRP.

    The other dealer I went to however was superb. We finalized the price (below MSRP) via e-mail, got my order in and they kept me up to date throughout the process without me prodding. When the car finally arrived, I was dreading the finance portion of the deal since that’s when dealers tend to spring surprises on you. However, there was 0 upsell (warranties and maintenance plans). I was told they were offered but was in no way pressured or guilted into considering anything. Was in and out in under 2 hours (including a walkthrough of the car).

    The things I liked about buying a Tesla was being able to do all the paperwork online without having to interact with people. But when you actually need to get to people for updates, changes or questions, it was **hell**.

    When I was supposed to take delivery of my Model 3, no one showed up. And it took me way too much effort to reach a human being to figure out what went wrong.

    So I would always choose my BMW dealer over the Tesla direct sale model. But I also understand that most people may not be able to benefit from being near these ‘good dealers’. In those cases I would pick a direct sale model over dealers any day of the week.

    When you get to higher end manufacturers, there is something to be said about cultivating a relationship with the dealer that would generally entitle you to even better service, discounts, waivers and access to exclusive models.

  15. Funny story I posted this article on askcarales and no need to guess the response….

    It was taken down ASAP and I was banned from the sub lol…..

    They did not want to hear ANY of this AT ALL..

    It’s a dying model, the manufacturers know it, the consumers don’t want anything to do with them…

    Anyone in the business is there as an opportunist, they add ZERO value to the buying process…

    ![gif](giphy|5GoVLqeAOo6PK)

  16. I was pleased with my Audi dealer in North Scottsdale, AZ. He delivered at the quoted MSRP, gave me no surprises, and helped me figure the cost of shipping versus local pick-up (the latter being cheaper for me). He kept in the loop in terms of the car’s manufacture (I ordered it exactly the way I wanted it) and most of of delivery (though for some reason, not even Audi USA can track a car between San Diego and Phoenix).

    Further, he was a complete human being when my father-in-law unexpectedly died and threw a wrench into my placing the order.

    But, he’s been one of the few notable exceptions in my 44 years of buying cars from dealers. I’ve had everything happen from a dealer selling me a car that wouldn’t start or shift out of first (oh, the innocence of youth) to my having to create a scene on a busy showroom floor after a salesman refused to return my keys for my potential trade when I turned down his “deal.”

    Will be glad to see the dealer model die.

    Edit: fixed a typo.

  17. As a former business owner I understand the economics from the dealership side. Less cars means less profit so they are having to increase markup to make up fir kess numbers. Mcdonalds is cheaper due to volume as an example. I am buying a genesis tomorrow over sticker albeit not the 10k over they were asking for bit almost all new cars here have a markup. Silver lining they gave me 4k for my 17 elantra with 185k on it. I was flabbergasted

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