The Purchase of a New Car is a Humbling Experience

There are a few things that I really hate. Generally, I am sort of willing to do what folks expect of me. I usually leave disposal of really ugly bugs to my lovely wife, Joan, but that is often caused by my not seeing them. That may be Freudian, but I won't go into that.

Buying a car is the ultimate horror.

Sooner or later in life, one must purchase a new car. I arm myself with the newest issue of Consumer Reports, the purchased report that gives the "true" cost of the vehicle to the dealer, after allowances, hold backs, bonuses, and other payments, have an appraisal of the probable worth of the car that will be traded, and walk semi-confidentially to the showroom door.

I am then accosted, no, pounced on, by salespeople who see in me a wimp, a person who will put food on the salesperson's tables for months! In other word, a person to be fleeced.

Why can't a dealer offer an automobile at a set price, without forcing me to enter into negotiations which, by their very nature I will complete knowing that the next person will obtain the identical vehicle for less money?

First, there is the Manufacturer's Suggested List Price (MSLP), which I understand was actually paid by a customer in Arizona in 1932. This "price" has no connection with reality and serves only to give the unsophisticated buyer the feeling that he or she may have received a "bargain".

Then there is the "invoice" price. The salesperson will display an alleged invoice that is designed to show the "actual" price the dealer paid for the car. The salesperson will explain the savings over the MSLP and, dramatically tell you that, wink-wink, you can have the vehicle at this "invoice" price. The impression is that the dealer will make no profit but the salesman really likes you and that, in any event, while the dealer loses money on each sale, it is made up in the volume.

The fact is that neither the MSLP nor the "invoice" price represents the true cost to the dealer, due to hold-backs and allowances and incentives. Moreover, the dealer is entitled to make a profit on a sale. The dealer works on the assumption that it needs an "average: per car sold; some sales will be made at considerably above the average, others will be made considerably less than the average. It will all balance out. No one says so, but my sale will allow the next folks to enter the showroom to receive a far more advantageous price.

There is an advertisement on local television running now for a dealer in the area. The ad states that the "final" prices are on the windshield, no bargaining, a set take-it-or-leave-it price. Then the ad continues, "Come on in and we can talk it over and make a deal that you can easily afford -- just for you." Sounds like the "final" price on the windshield is subject to modification.

So, the program is to negotiate. A true "negotiation" and the establishment of fair value is defined as being between two parties, each have full knowledge of the facts, the buyer wishing but not desperate to buy and the seller willing but not desperate to sell. Now let's see, who is likely to "win" that negotiation: the salesperson who does this several times a day, every day, or me, a guy who ventures into the dealership every three to five years?

When I go into the local supermarket to purchase a quart of milk or a pound of coffee or, for goodness sake, a grape, I can't bargain with the cashier. Nope, I am told that the price is $X and I pay it or leave it. Same thing if I go into buy anything, but a car. I am told that a few years ago, a number of dealers did offer cars at a no-bargain set price and, while customers liked it, the dealers almost always dropped the concept. (One exception, I understand, is a Saturn dealership; prices there are non-negotiable.)

I wonder why.

By the way, I also hate shopping for clothes or accompanying my wife to a shopping mall, but that will await a later article.