This weekend provided a milestone for me: purchasing my first brand new car. It's a 2009 Honda Fit Sport (in silver and without the navigation system.) The Honda website for the Fit is great... you can check it out here.
I love this car. It has everything I need (and almost everything I want) in a vehicle: good torque, fast brakes, comfortable interior, sharp exterior, an iPod/MP3 player hookup in the dashboard compartment, awesome seat configurations so that you can fit almost anything under 8 ft. long and 4 ft. high in the car while still being a sub-compact size, and it meets the ultra-low emissions standards (even hybrids are only marginally more emissions efficient than this vehicle.) It also gets 33 mpg (highway) with an automatic transmission which I view to be essential driving in Atlanta traffic (it does have paddle shifters though - so if you really want to take advantage of the sport capabilities it is easy to do so.) And for those of you who want a great little car that is still kid-friendly, the back seats and seat belts are specifically designed to comfortably accomodate child car seats. (This is certainly not our focus for many years, but since it's a Honda we figure it might last 7 years at which point it might be a consideration.)
So, what's the problem... other than old people who keep trying to run into me because they can't see my small car in their giant boat's mirrors? Well, let's just say that the purchasing process was perhaps one of the most horrible experiences of my life. I'll begin by disclosing that this dealership only sold 5 cars on Saturday (before the whole credit crisis, auto-industry turmoil they would average at least 5 times that many) and that they almost didn't sell this one either. You see, car salesmen don't appreciate young, business savvy, well-researched, thrifty buyers. When we walked in with our spreadsheet that outlined the invoice cost of the vehicle, MSRP (which we had no problem paying), the cheapest HondaCare extended warranty out there that was offered by a dealership in Connecticut, and the BlueBook value of my trade in in addition to having arranged our own financing which was a point lower than market interest rates they were "shocked." The primary salesmen said that we stumped him... which he assures us never happens. They were even more "stumped" that we weren't willing to budge on our values. There were several times at different intervals when we stood up, began walking out, and were stopped by someone higher- up (the Sales Manager and the Finance Manager) who was willing to negotiate with us further. This process went on for 4 1/2 hours. And, the last time we almost walked out, we had been there over 3 hours and were back in the Financing Department. At that point, I was willing to never buy a car and just pray that mine held out long enough until we move closer to better public transit. In the end, we conceded some of the value of my trade in while they cut the add-ons a few hundred dollars and found us an interest rate lower than the one we brought in. Our monthly payment is $2 more than we went in willing to pay (due to a better deal on GAP insurance through our loan issuer.) Therefore, this was a successful deal in our minds and the dealership still made plenty of money although not as much as they had originally hoped.
What I gained from this experience was my own shock at how absolutely appalling all the salespeople were - and we had "nice" ones. Please. If I walked into a restaurant and was treated that way I would demand that my meal be comped. So, why do car salesmen continue to treat their clients so poorly and why is the car buying experience so terrible? Because the salespeople drastically increase their own commissions by throwing more crap you don't need into the vehicle you want or by devaluing your trade-in. This process is well explained in this expose' on Edmunds.com. If you are ever in the market for a new or used car from a dealership I strongly recommend reading this article because is outlines the exact behavior of the car salesman... from the rudeness to them forcing you to wait around in uncomfortable chairs just so that they have the "power" in the transaction to them actually putting you on an intercom so that the sales and finance managers can listen to your private conversations while they are making you wait (I strongly recommend bringing a tablet of paper so that you can write-down your real thoughts while re-directing the listeners through your conversation.)
The whole process is absolutely despicable in my opinion and I don't understand why there isn't a better way of doing this. Instead of making your clients squirm, why not make them feel comfortable and at ease with the situation? Never in my life have I been more on my toes in a negotation or been more of an arrogant jerk myself just to survive the process with any kind of personally desirable outcome. And, it's not like this negotation was a battle of wits in the traditional sense. I don't think there was a person in that whole dealership who was more intelligent than us, yet they emitted an air of superiority merely by the fact that they held the item we wanted hostage and without their "cooperation" we were going home sad and empty-handed. I've heard that when you start buying luxury vehicles this does not happen because the salespeople know that if the buyers aren't catered to they will just leave. I've vowed to never buy a new car again until I can comfortably afford at least an entry-level luxury vehicle.
Our research, stubborness, and understanding of game theory resulted in our vehicle victory, yet when transaction was complete we were forced to sit there an additional 30 minutes or so by the managers reminding us to "spread the word" about our experience (which they assured us was a pleasant one) because "word of mouth" is the best sales driver. Seriously? Buying that car made me feel so awful that despite having a brand new car I still feel a little dirty about the whole thing.
Other than playing hardball and researching the tricks of the car selling trade, I have not further advice for future car purchasers. However, to car salesmen: I learned a lesson once several years ago that I will take with me the rest of my life. I was flying out to Seattle for a conference after which I was flying to Oklahoma for a graduate school interview. I was running a little late and got stuck in Atlanta traffic on the way to the airport (big surprise, huh?). I managed to get to the ticket counter 40 minutes, not the required 45 before my flight departed and they wouldn't let me go through. I was beside myself because I couldn't afford to re-book either ticket and they had no obligation to put me on a later flight because I failed to check-in on time. Well, the guy in front of me was being a complete a**hole, so I decided to plead for help. The airport attendant took pity on me and allowed me to pay a $50 re-booking fee and said I could try to fly stand-by on the next available flight (which left 8 hours later.) She did not have to do this for me, but she said that I was so nice that she was willing to help me out even though she technically was not supposed to. I waited around until that flight and made it on. So, while I don't have a problem playing hardball to get what I want, I prefer to be nice. And, the most successful people I've met share the same opinion. In my experience, the higher title (or more experience) a business person has, they nicer they are. The love their jobs, are good at them, and like working with people. Most along the way learned that playing nice in the sandbox actually gets you farther than causing a mass exodus by starting a sand-throwing fight.
Car salesmen would greatly benefit from the same wisdom.
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