So why the uptick in clunkers being traded? as opposed to normal wear and tear, or even "just need a lower payment".
Just walked out when buying a truck, because of $995 for 'ceramic paint coating'.
- Thread starter mrsilv04
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Uptick in scrap because they can only drive them so much more and it's time to get out of them and into something new to them.
There are more options to dispose of a trade in than there has ever been . And if you get taken on a trade, with all the information available, it's your own fault.
AZjeff
$50 Site Donor 2023
Maybe depends on where you live. I was seeing the Carvana delivery trucks regularly and can't remember the last time I saw one now. Have never seen a Vroom truck. Just saying Carvana isn't doing business here like it was. The nearest Carmax to me is 2 hours away in Phoenix. We have 1 dealer per brand here with the next car dealers 50 miles away so it's harder to play hardball and walk out and move on. It's certainly easier to be better informed what your car should be worth in your area. What you can do with that depends on you. I've never tried to sell a car to a dealer.
The FTC has just announced a crackdown on these crazy dealer add-on fees. Let's see if it really sticks or will the dealers find a way around it
GON
$100 Site Donor 2024
The question to ask is what the dealer associations are paying the lobbyists to do. Almost every FTC ruling of the past few decades has been about paying "juice" from one organization to another organization to receive a favorable ruling. Over the past few decades, the only significant ruling I am tracking that was "shot down" was the ATT merge with T mobile.
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Bait and switch marketing: Advertising cars the dealer never had in stock or prices or financing terms the dealer will not honor
Junk fees: Fees for products or services that do not benefit the consumer. The FTC gives examples, including nitrogen in tires or additional warranties that duplicate a manufacturer’s warranty
Misleading buyers about optional fees: Telling buyers that extended warranties or other services are mandatory
Surprise fees: In a guide explaining the new rules to dealerships, the FTC says, “Under the CARS Rule, dealers must get consumers’ express, informed consent before charging them for anything. Period.”
Dealers must “provide the offering price — the actual price any consumer can pay for the vehicle; tell consumers that optional add-ons (like extended warranties) are not required; and give information about the total payment when discussing monthly payments.”
The teeth I guess here is transparency rather then a harsh ban. The onus is now on the customer to use this new found knowledge when reviewing deals and make a fair decision to do business with dealers. The salesfolks who earn their keep of course can bend the law however they please of course, nature of the game.
ie extended service is plan is optional, but heres our service costs that will occur once toyota prepaid care is gone. etc etc
Junk fees: Fees for products or services that do not benefit the consumer. The FTC gives examples, including nitrogen in tires or additional warranties that duplicate a manufacturer’s warranty
Misleading buyers about optional fees: Telling buyers that extended warranties or other services are mandatory
Surprise fees: In a guide explaining the new rules to dealerships, the FTC says, “Under the CARS Rule, dealers must get consumers’ express, informed consent before charging them for anything. Period.”
Dealers must “provide the offering price — the actual price any consumer can pay for the vehicle; tell consumers that optional add-ons (like extended warranties) are not required; and give information about the total payment when discussing monthly payments.”
The teeth I guess here is transparency rather then a harsh ban. The onus is now on the customer to use this new found knowledge when reviewing deals and make a fair decision to do business with dealers. The salesfolks who earn their keep of course can bend the law however they please of course, nature of the game.
ie extended service is plan is optional, but heres our service costs that will occur once toyota prepaid care is gone. etc etc
A lot of consumers focus on the monthly payment rather than the total cost. Both need to be part of the evaluation.
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Marketing departments spend alot of training minds to think that way. Look at the national mfgs adds. $99 to sign and drive, whose fine print has a huge down payment.
Folks need to use a proper auto calculator before they step into the buying, while at the finance office need to read the truth in lending disclose printed on the first page of an auto contract with all the numbers
I'm sure they will find a way around it. The house always wins...
If nothing else, if the used car market starts to go soft, they could lowball trade-ins. Then if the market ever goes up, just increase their selling price. If "everyone else" raises their prices at the same time (and collusion cannot be shown), then that's how the game works.
That all said, some blame belongs with consumers, if they weren't paying, dealers would have moved on long ago.
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If the dealer had any common sense and good manners, he would have dropped the silly "$995 ceramic upcharge" and immediately apologized for the "confusion", playing it down as a "mistake". The OP did the right thing by walking away. Talking to some dealerships I do business with occasionally, things aren't looking up, as people just aren't borrowing buying, like they used to. When money is tight, customers are more careful how they spend it.
In DE I think you can sell your vehicle privately and buy in new one shortly and deduct the private sale amount from the new car price to come up with the amount for the 4% title tax. It's the only sales kind of tax DE has. In NY only a trade-in on the sales agreement for the new car would drop the amount you paid sales tax on.
I wasn't even thinking about taxes, 'cuz I don't have them. Was thinking along the lines of, the dealer at most places is going to live in the ground between what they pay for a trade-in and what they sell the new(er) car for. Plus whatever they can add on the backend.
During the pandemic we went to a Subaru dealer we had bought a 2016 Crosstrek from and said we are looking to buy a 2021. They would only sell it over MSRP with some stupid marketing fee. They lost a customer. We ended up buying a new one at a DE dealer for less than MSRP. Not a huge discount but less.
And the price my wife got for her 2016 Crosstrek was about half of what it was worth. But when you sell/give to your daughter you never get full price. Got to love your kids.
And the price my wife got for her 2016 Crosstrek was about half of what it was worth. But when you sell/give to your daughter you never get full price. Got to love your kids.
Is there really any doubt in your mind that the dealers will find some other add on?
Its the markup that annoys me.
They hire someone cheap to do the labour, pay them maybe $22 / hour, it takes 1.5 hours, so $33 labor cost, plus $10 of product cost, for a total $43. Then charge $995 for it. Why not be more reasonable, and charge $99, still a good markup.
I work in the logging industry, and would like it if we could make $99 for every $43 spent, but don't even come close to that.
They hire someone cheap to do the labour, pay them maybe $22 / hour, it takes 1.5 hours, so $33 labor cost, plus $10 of product cost, for a total $43. Then charge $995 for it. Why not be more reasonable, and charge $99, still a good markup.
I work in the logging industry, and would like it if we could make $99 for every $43 spent, but don't even come close to that.
There's reasons why only a select few work in auto sales. Not saying you have to sell your soul... but I'm guessing it doesn't hurt.
But in your example, you left out what I think is called "burden" cost. That employee making $22 costs more like $30/hr, maybe more. Benefits add up. Plus it costs money to have a roof over them while working. So the cost of that labor total might be more like $50/hr.
Plus... in the end... most people just pay the cost and move on. Dealerships have learned that. They can bend a bit more on the upfront cost, knowing that they can make up for it on the backend. Sometimes (often?) they win on both accounts, and then they do really well.
It's easy to throw stones at them (and I think they deserve all of 'em) but in sales, there are times when sales goes to nothing. One economic downturn and nothing is to be had. Their fault if they don't stockpile during good times, but its the nature of their business, they have busy times and slow times.
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