Automotive

Why Buying A Car Is So Awful

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[OP]
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Why Buying A Car Is So Awful

Why Buying A Car Is So Awful

Listened to this podcast from NPR's Planet Money series and was wondering if the same laws are true here in Canada? Too much work to research it myself.
To put it simply, car buying sucks because of outdated franchise laws in the states that protect franchisees. Do we have similar laws in Canada?

I wonder if one of the fast growing Chinese manufacturers would ever enter North America. If so, they could perhaps enter with a different sales/distribution model that would put pressure on the current method (assuming there is a demand for their product).

My recent car buying experience wasn't terrible, but I still dislike that I can't go to any dealership and pay the same price for the same vehicle and not be stuck in some high pressure tactics.
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Deal Guru
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Jan 10, 2008
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Cant wait for the day we can buy cars online .This "dealership" thing and practices makes me sick
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Buying a car in Canada sucks due to the adversarial relationship between the dealership and the customer.
1. The customer wants $2000 off a $17000 base model Kia Rio. This isn't going to happen because the dealer only has a $800 markup. Customers seem to think that dealers are making thousands on low-cost, high volume models. They don't. Most of the margin are in high value or "fully equipped" vehicles.
2. Dealers build $50,000,000 dealerships with marble floors, free coffee for everyone, PS3, etc, ec. Someone has to pay for this. The "acquisition fee" or equivalent can be up to $1000. That's YOUR share of their mortgage.
3. Profit chasing. Dealers add frivolous items like window/glass etching, security fee, advertising fees, etc, etc. Up to $1000 to cover the dealer's general operating costs.
4. Lack of understanding of standard and optional features from the customer. Ever notice that tiny writing 2 pixels high on the bottom of the commercials? Chances are that whatever is on the commercial is an option or the top-end model. Consumers just assume that it's included. And consumers don't understand the cost of these options.
5. High shop rate. See #2. Marble, coffee, PS3, and netflix isn't free.

I've been to many dealerships and there's very little high pressure sales. They get you at the signing with extended warranties, undercoatings, etchings, etc.

Last thing is that many dealerships are now part of a consortium. Don't like Dealer A? Well, Dealer B is probably part of the same consortium. Over here, Go Auto group, the Yachimec Group, the Pattison group, and the Weber group seem to own most of the dealerships covering all brands.
↑, ↑, ↓, ↓, ←, →, ←, →, B, A, START

There are no apostrophes in plurals! "I have 1000 posts" = correct. "I have 1000 post's" = incorrect!
Could've, would've, should've. It's simple English, people!
Voila: French, meaning "There it is!" or "Look!" Viola: A medium-sized stringed instrument Wala: An island of Vanuatu.
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stephroll wrote:
Feb 14th, 2013 12:22 pm
Cant wait for the day we can buy cars online .This "dealership" thing and practices makes me sick
It's called www.costcoauto.com. USA only and fixed pricing, just like anything else at costco. Their staff has already done the work for you.
↑, ↑, ↓, ↓, ←, →, ←, →, B, A, START

There are no apostrophes in plurals! "I have 1000 posts" = correct. "I have 1000 post's" = incorrect!
Could've, would've, should've. It's simple English, people!
Voila: French, meaning "There it is!" or "Look!" Viola: A medium-sized stringed instrument Wala: An island of Vanuatu.
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Feb 11, 2007
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rf134a wrote:
Feb 14th, 2013 12:27 pm
It's called www.costcoauto.com. USA only and fixed pricing, just like anything else at costco. Their staff has already done the work for you.
Useless. Selecting a car there reveals:
"This isn’t the price you’ll pay. Every eligible vehicle has Costco pricing exclusively for you. Locate and contact a participating Costco dealer to see your savings."

The price does not appear to be truly fixed or as printed. You still have to contact and speak to a dealer. The dream is to click a car, build and price, "add to cart" put down a deposit by credit card and select a nearby pickup location.

At least that site is a step towards that.
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Langley
Fortunately, my uncle works at a dealership, so I can walk in and get a car with minimum markup and no bs. He also has a lot of friends at other brands, theres a lot of movement, amongst former coworkers.
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Tesla Motors doesn't have dealers and uses the direct sale model, which has lead to them getting sued by dealer associations because bypassing them is apparently illegal in the US. Visit their store in Yorkdale and check them out.
Could HAVE, not could OF. What does 'could of' even mean?
[OP]
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rf134a wrote:
Feb 14th, 2013 12:26 pm
Buying a car in Canada sucks due to the adversarial relationship between the dealership and the customer.
1. The customer wants $2000 off a $17000 base model Kia Rio. This isn't going to happen because the dealer only has a $800 markup. Customers seem to think that dealers are making thousands on low-cost, high volume models. They don't. Most of the margin are in high value or "fully equipped" vehicles.
2. Dealers build $50,000,000 dealerships with marble floors, free coffee for everyone, PS3, etc, ec. Someone has to pay for this. The "acquisition fee" or equivalent can be up to $1000. That's YOUR share of their mortgage.
3. Profit chasing. Dealers add frivolous items like window/glass etching, security fee, advertising fees, etc, etc. Up to $1000 to cover the dealer's general operating costs.
4. Lack of understanding of standard and optional features from the customer. Ever notice that tiny writing 2 pixels high on the bottom of the commercials? Chances are that whatever is on the commercial is an option or the top-end model. Consumers just assume that it's included. And consumers don't understand the cost of these options.
5. High shop rate. See #2. Marble, coffee, PS3, and netflix isn't free.

I've been to many dealerships and there's very little high pressure sales. They get you at the signing with extended warranties, undercoatings, etchings, etc.

Last thing is that many dealerships are now part of a consortium. Don't like Dealer A? Well, Dealer B is probably part of the same consortium. Over here, Go Auto group, the Yachimec Group, the Pattison group, and the Weber group seem to own most of the dealerships covering all brands.
Yeah, not a fan of the consortiums, but understand the economics behind it.
I don't think you can blame the adversarial relationship on customer expectations or maximizing dealership profits. Every major retail chain/business wants to do the same. But for some reason, people have greater disdain for the car buying experience than any other purchasing decision.
Perhaps it is simply because of the high cost in car ownership, or maybe an unfair perptuation of a stereotype.

But I still don't like the fact that I can't got to Dealer A and buy the exact same car for the exact same price as I can get from Dealer B. I'm not buying a car so I can walk on marble floors, drink coffee, or play video games.
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Piro21 wrote:
Feb 14th, 2013 1:01 pm
Tesla Motors doesn't have dealers and uses the direct sale model, which has lead to them getting sued by dealer associations because bypassing them is apparently illegal in the US. Visit their store in Yorkdale and check them out.
Tesla's Yorkdale store is pretty nice. But unfortunately, they'll never sell in high enough volumes for the industry to change.
BTW, a judge dismissed the suit, but it is being appealed.
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Dec 8, 2012
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GRIMSBY
Dealers are here to make money fellas. They're not here to make zero dollars selling you a brand new car. NOBODY deserves to be ripped off, and at the same token, i dont think there is any harm in them making a little bit of cash. As a dealer for Toyota, I often tell stubborn customers how much money we wanna make on a certain deal and take it from there. I feel even worse for the new car salesman that get absolutely nickle'd and dime'd to death by cheap cheap customers that take the price down the road so the other dealer can beat it by 50-100 dollars---sad.

Sometimes, excellent customer service and white glove treatment have a certain value too. As for the dealership itself having "marble floors and a PS3" you need to keep in mind a couple of things. 1. the way the dealership looks is governed and monitored by the manufacturers head office. 2. Do you wanna walk into a ***** hole when buying or servicing your car? Most likely not :) High pressure sales tactics are a thing of the 70's and 80's- we have every right to ask you for the business, but no one should HAMMER you into a deal :)
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mjl_toronto wrote:
Feb 14th, 2013 1:21 pm
Tesla's Yorkdale store is pretty nice. But unfortunately, they'll never sell in high enough volumes for the industry to change.
BTW, a judge dismissed the suit, but it is being appealed.
Maybe not their current models, but if they ever sell something that competes in the Nissan Leaf/Honda Civic range I'll be on it in a second, even if the cost of everything but the actual car stays the same. $600 a year for servicing doesn't sound too bad.
Could HAVE, not could OF. What does 'could of' even mean?
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Mar 23, 2004
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Piro21 wrote:
Feb 14th, 2013 1:01 pm
Tesla Motors doesn't have dealers and uses the direct sale model, which has lead to them getting sued by dealer associations because bypassing them is apparently illegal in the US. Visit their store in Yorkdale and check them out.
And with models starting at "just" $52k, I'm sure RFDers are starting to lineup already, lol.
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Tesla Can suck my nuts. I hope Nikolas heirs are getting royalties.
[OP]
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Striker01 wrote:
Feb 14th, 2013 1:25 pm
Dealers are here to make money fellas. They're not here to make zero dollars selling you a brand new car. NOBODY deserves to be ripped off, and at the same token, i dont think there is any harm in them making a little bit of cash. As a dealer for Toyota, I often tell stubborn customers how much money we wanna make on a certain deal and take it from there. I feel even worse for the new car salesman that get absolutely nickle'd and dime'd to death by cheap cheap customers that take the price down the road so the other dealer can beat it by 50-100 dollars---sad.

Sometimes, excellent customer service and white glove treatment have a certain value too. As for the dealership itself having "marble floors and a PS3" you need to keep in mind a couple of things. 1. the way the dealership looks is governed and monitored by the manufacturers head office. 2. Do you wanna walk into a ***** hole when buying or servicing your car? Most likely not :) High pressure sales tactics are a thing of the 70's and 80's- we have every right to ask you for the business, but no one should HAMMER you into a deal :)
I'm not against dealers/salespeople making money. But I am against different prices for the same vehicle.

Since you are a dealer, would happen to know if there are laws are in place in Canada that protect franchise owners?
Piro21 wrote:
Feb 14th, 2013 1:28 pm
Maybe not their current models, but if they ever sell something that competes in the Nissan Leaf/Honda Civic range I'll be on it in a second, even if the cost of everything but the actual car stays the same. $600 a year for servicing doesn't sound too bad.
Supercooled wrote:
Feb 14th, 2013 3:07 pm
Tesla Can suck my nuts. I hope Nikolas heirs are getting royalties.
ES_Revenge wrote:
Feb 14th, 2013 2:54 pm
And with models starting at "just" $52k, I'm sure RFDers are starting to lineup already, lol.
Why all this talk about Tesla cars? I'm interested in their method of selling, not the car.

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