Time for a New Model in Car Sales

There are very few things as exciting as getting a new vehicle. From the exhilarating feeling the first time you rev the engine, the shine of the brand new paint, down to the “new car smell”, it’s all intoxicating.

Acquiring the car is great. We even take pictures and post it on social media, tell our friends and offer to give rides just so we can get behind the wheel. So what makes it so fantastic? It’s what owning a vehicle represents. Freedom, as cliche as that sounds. A vehicle makes us mobile. It also symbolizes an accomplishment. Next to a home, buying a vehicle may be the most expensive purchase a person makes in their lifetime. When the salesperson puts those keys in your hands you’ve done it. You’re a driver.

However, as exciting as it is to get the vehicle there is almost an equal amount of dread and frustration that goes into the car buying process. It seems just about everyone has or has heard horror stories.

Recently, on Facebook I asked my friends to share some of their experiences while purchasing a vehicle. The responses I got were alarming to say the least. Of the twenty-three comments on the post, only two reported a positive experience. The stories range from high-pressure tactics to one salesperson allegedly trying to seem “cool” by talking about previous drug use while on a test drive with a female teenage customer. One of the more egregious stories was from Staci L., “I had a car salesman tell me to go home and come back with my husband”.

The internet has brought transparency to several industries including car sales. People can now look up invoice prices, retail values of their trade-ins and the latest sales techniques. All that being said there are still some big major misconceptions about auto sales. I asked a group of car salespeople what those would be. The two big ones were unrealistically high price margins and the idea that most car salespeople are bullies. Patrick B writes, “…you buy food in the grocery store has a 2,500% markup in it. The best market buy seeing our vehicles is 8 to 10%.” Kenny P. echoed this sentiment, “I’ve been selling for 12 years and I can honestly say I’ve never lied to a customer. Also people just assume because it’s car there are tons of mark up I mean people don’t negotiate for a gallon of milk they just pay the price and think of the how much markup that has.”

It seems to me both sides are frustrated by negotiating. The car sales industry has responded with a “one price” sales model. No negotiating. This might work for some, but it won’t work for all. Few things appease everyone. As Russell M. from Facebook said, “I have had salesman simply refuse to counter. Like “this is the price goodbye.” The thought behind the “one price” model was simple, remove the fears and pressure of negotiating by eliminating it from the equation altogether. In a 2013 story on wardsauto.com comments were mixed.

Bchernek wrote, “it’s about VALUE- offering 100% of your products to 100% of your customers 100% of the time! We discovered that you don’t have to negotiate reduce the price of your products give them away in order to “get the deal”. It’s all about mindset and perception. Actually you can significantly increase profits with-out strong-armed tactics-a box close mentality. When you make up your mind once and for all its one price and you stick to your gun’s- it works.” In the same posting Ruggles counters with, “The moment inventory starts to pile up, its over baby. Has the auto retailing world not learned from the Saturn experiment, the Ford Collection experiment, and others? Isn’t it clear that if we disclose our triple net costs, INCLUDING trunk money, the consumer will NOT pay our overhead, let alone any net profit? Why this continued flirtation with a concept that has failed time and time again.”

Over the past few years, inventory websites have sprouted up like crazy, promising to show a dealership’s latest offerings. However, it’s up to the dealerships to manage their postings. If a car is sold or a price is changed it might not update right away. On top of that a person has to share their personal information with a dealership and might be hounded with emails and calls. I know because it’s happened to me.

Also, websites promising to compare previously sold prices on cars to help give you negotiating leverage, but it seems to lead to more frustration for both the customer and the auto dealer. As Michael C. from a Facebook auto sales group says, “Show them the MSRP of what they configured and your MSRP. Tell them “As you can see, what you configured and what you’re looking at are very different.”

If the traditional model of negotiating has lead to so many horror stories, one price has mixed results, at best, and price comparison sites don’t clearly represent what’s at a dealership then what’s the answer? Well, wouldn’t it be much easier if there was one website where dealerships could give you offers and compete for your business? There is, it’s called HaggleChamp. In all fairness I’m the C.E.O. of HaggleChamp, so I’m a bit bias. Right now you’re thinking, “what’s HaggleChamp, I’ve never heard of it.” That’s because it’s brand new. HaggleChamp is a negotiation platform gets car dealerships to fight for your business.

Simply tell us what you are after either make and model or a general description, include any basic trade-in information or down payment you might have and we alert our network of dealerships. They will give you offers. Then based off those offers you can “declare a contender”, that’s the offer you like the best so far. This re-alerts the network letting them know if they are your “contender” or not, giving them a fighting chance to win you over with a new offer. In the end, the first time you step on the lot is to test drive the car they have confirmed they have at the price they have confirmed to give you. Oh and, by the way, HaggleChamp is free to use and we don’t give out your contact information until you are ready to buy.

This article by Daniel Reyes first appeared on HaggleChamp and was distributed by the Personal Finance Syndication Network.