Bob wrote:
>No one is forcing the dealer to give the car away. They have the choice;
>either make the "deal" or not. Do you really think >they wouldn't sell it
>for MSRP if they could get away with it? Undoubtably the car dealers favor
>the negotiating process of >purchasing a car. If not they would set price
>and stick to it.

Bob,
I don't really disagree with you. My point is, how low can a person in a
business be expected to lower their prices and still remain in business.
There's a reason for the MSRP. I don't know what the overhead for a dealer
is to sell a car, but it always sounds like someone is trying to steal
something when they buy a car. When you go to a high end audio store where
your purchases might be in the thousands, do you lowball the purchase, do
you go online and find the dealers cost, do you search for any incentives by
the manufacturer, do you bargain for the delivery or the install?
I think it's degrading to both the consumer as well as the dealer the way
auto sales are conducted. The price should be on the sticker, and that's
what you pay. If you think the percentages are high, check what the markups
(percantage) are on some other products. The problem with autos is the
percentage is on a reasonably high figure. Why should it be different for
autos?
Say the dealer paid $24,000 for that car. Sticker is $26,800. He sells for
even $100. over invoice and he gets a holdback of 3% (I heard it was 2%)
$720. He's got $820. What about transportation charges, cleanup charges, and
technicians PDI labor(Pre Delivery Inspection - required), floor planning,
advertising, rent, electricity, personnel, etc. OK, so cut the $820 in half
(very conservative) and he doesn't have even 2% profit. How many businesses
do you know that thrive on 2% profit? I know, they make more on financing,
so now let's raise that up to even 10%. Still, a very modest return in a
retail business. Let's exclude parts and service, because with a pre-set
attitude about the dealer ripping you off you know you're not going to go
back there, besides that's a separate purchase.
I know most dealers are not hurting unless they're selling Oldsmobiles these
days, but they are still entitled to make a living and a decent profit. We
live in a land of free enterprise and free competition. If you don't like
price, go somewhere else.
Besides, Caveat Emptor!
Howard