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      05-13-2022, 10:24 AM   #1
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Lease question..... am I stupid or is the dealer playing me?

Bear with me.

Wife drives a 2019 Stelvio, gorgeous car, full leather dash, like really nice spec. Was $67K, all in with taxes we pay $830 month. It only has 12,000KM, so 8,000 miles. Lease expires Nov 2023 with a residual of $30K, I expect the vehicle to be worth about $42K when it comes to end the lease. Retail right now would be about $45K minimum, maybe closer to $50K given the lack of new product for sale.

So I am in for service and get talking to the GM, I ask him, when my lease is up can you extend it two years at the residual of $30K? He says no, so I say ok I will likely buy it out right. He says wait, why not take the EXISTING equity now, put it against a new one and sign up for 4 more years? He wins as he moves a new one off the lot with 0 hassle and has a super high quality used vehicle he can make good margin on.

I am open to the idea so hit up the sales guy today and he says "we can roll in about $2K equity". New one is also $67K all in with taxes etc and they have two on the lot.

What am I missing here? Surely if we hand back and near new vehicle he has to at least give me the agreed residual of 30K for it to make sense for me????

Or am I being naive?

I am not grasping his concept of "hand me a new new car and drive away in a new one" .....over 4 years I am MILES behind, better off just buying the dang thing end of next yr and flipping or driving it another 3 years.

Wife LOVES the car.
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      05-13-2022, 10:34 AM   #2
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When you still have that much time left on the lease you get screwed. If you had less than six months maybe you'd do a little better. I'd wait to make a decision.
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      05-13-2022, 10:35 AM   #3
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You still have almost 15k of payments to hit that 30k so they're basically saying 45k owed, giving you 47 so you get 2 back.
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      05-13-2022, 10:44 AM   #4
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My motivation is cost, not getting into a new one so looks like best idea here is to just buy it end of next yr, drive it another 3 years or so. She does about 5k miles a yr so really, car should be fine even if it is Italian. Leasing is just easier as she writes some of it off so no question from the tax man, once you buy the whole depreciation thing is subjective to some degree so i gotta pull out the abacus.
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      05-13-2022, 03:01 PM   #5
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Read your lease document. It set the residual when you signed the lease. Your equity is any difference between a prospective private party resale price and the residual price stated in your lease. It's just a numbers game.
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      05-13-2022, 03:05 PM   #6
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They are trying to bone you:-) They never offer something that is in your best interest.
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      05-14-2022, 07:01 AM   #7
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Originally Posted by G MONEY View Post
They are trying to bone you:-) They never offer something that is in your best interest.
Exactly. Dealers never EVER try to help the customer. They're in this business to make as much money as possible.

Whether they make the bare min due to customer knowledge or whether they rape a customer due to customer being unaware, distracted by the likes of a new car, or just flat out can't play the game, is basically where the whole experience stands.

I can't wait until the future has no more dealers. If we like a car, we go on a website and order it and someone drops it off at our house, given a 20 minute test drive before we sign papers and that's it. No more fucking nonsense from dumbass car salesmen.
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      05-14-2022, 07:28 AM   #8
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Exactly. Dealers never EVER try to help the customer. They're in this business to make as much money as possible.

Whether they make the bare min due to customer knowledge or whether they rape a customer due to customer being unaware, distracted by the likes of a new car, or just flat out can't play the game, is basically where the whole experience stands.

I can't wait until the future has no more dealers. If we like a car, we go on a website and order it and someone drops it off at our house, given a 20 minute test drive before we sign papers and that's it. No more fucking nonsense from dumbass car salesmen.
Unpopular opinion here... but I prefer the dealer network over direct sales. I consider myself a savvy shopper and as a result am able to put in a little legwork to get a much better than average deal for myself (in normal times). And since I go in knowledgeable, no dealer BS gets to me because I'm able to smell it a mile away.

A direct sales approach removes that ability and im stuck paying what everyone else pays. There's NO room for negotiation and I'm at the mercy of manufacturer pricing. I prefer the competition between multiple dealers and my ability to shop around.
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      05-14-2022, 07:46 AM   #9
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Originally Posted by wtwo3 View Post
Unpopular opinion here... but I prefer the dealer network over direct sales. I consider myself a savvy shopper and as a result am able to put in a little legwork to get a much better than average deal for myself (in normal times). And since I go in knowledgeable, no dealer BS gets to me because I'm able to smell it a mile away.

A direct sales approach removes that ability and im stuck paying what everyone else pays. There's NO room for negotiation and I'm at the mercy of manufacturer pricing. I prefer the competition between multiple dealers and my ability to shop around.
Car salesmen do not work for free. So their battle of the negotiations are all dependent on how much commission they make. Why do we, as the customer, need to deal with that?

I would much rather pay, for example, 80k for an M3, and you will pay 80k for an M3, and everyone who wants an M3 will pay 80k, if it results in not having to deal with a 3rd party, which is what a dealer is. If i want an M3, i go on the BMW website and order it. Someone else, a small company who doesn't profit much from the work they put in, drives the car to your house and gives you a short test drive. You like the car, you sign papers for 80k. You don't, then that person leaves with the car. I assume there might be a small penalty if you decide you don't like the car but that cost will be no where near what you would pay, if you had to deal with all the haggling dealers do.

I can almost bet that if this became reality, you would see how much dealers make as a profit, if they car makers actually start selling directly to a customer.

Another example, we can probably get what we would pay 80k for an M3, perhaps 65k, because that gap in cost are all profits to the dealer and whomever else is involved in that 3rd party process.
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      05-14-2022, 08:42 AM   #10
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Originally Posted by BGM-M3COMP View Post
Car salesmen do not work for free. So their battle of the negotiations are all dependent on how much commission they make. Why do we, as the customer, need to deal with that?

I would much rather pay, for example, 80k for an M3, and you will pay 80k for an M3, and everyone who wants an M3 will pay 80k, if it results in not having to deal with a 3rd party, which is what a dealer is. If i want an M3, i go on the BMW website and order it. Someone else, a small company who doesn't profit much from the work they put in, drives the car to your house and gives you a short test drive. You like the car, you sign papers for 80k. You don't, then that person leaves with the car. I assume there might be a small penalty if you decide you don't like the car but that cost will be no where near what you would pay, if you had to deal with all the haggling dealers do.

I can almost bet that if this became reality, you would see how much dealers make as a profit, if they car makers actually start selling directly to a customer.

Another example, we can probably get what we would pay 80k for an M3, perhaps 65k, because that gap in cost are all profits to the dealer and whomever else is involved in that 3rd party process.
You're assuming as a result of direct sales you'd now be paying what the dealer pays for the car. In reality I highly doubt the mfg would simply hand that cost savings to the consumer. Take a look at Tesla and the seemingly random and arbitrary price increases they implement multiple times a year. You're at the mercy of what the mfg wants to charge you and there's absolutely ZERO room for negotiation.

The bulk of dealer profit isn't from car sales. It's from service. This is why many smaller market dealers refuse to cater to out of state customers.

I also don't waste my time haggling with car sales people. When I was shopping around for my current cars, I had a deal in place well before I ever stepped foot into a dealership. I drafted up a simple email detailing exactly what I was looking for and what sort of discount I was expecting (based on market research at the time), and sent that email to about 20 dealers in the midwest. It was a simple yes/no question - do you agree to these terms? If not, let's not waste each other's time. If yes, let's talk on the phone and get a deal in place, sign some papers and get it done. The only time I ever step foot inside a dealership is if I want a test drive, or when it's time for me to pick up my new car.

I get this isn't typically how people buy cars. Conventional car buying involves going into a dealer, test driving, and then spending hours of frustration dealing with sales person BS all the while potentially walking out with nothing. But like I said, the dealer network is excellent if you're a savvy shopper. It's stress free and you're able to work out a better deal than most people if you know what you're doing. I'll take that any day of the week over direct sales where we're ALL getting ripped off the same amount.

On top of all that, if you establish a good relationship with a dealer/sales person, you both know what to expect each time you're shopping for a new car and it becomes even more convenient. There's pros and cons to each method. I get the pros of the direct sales method as it relates to convenience, and I get the cons of a dealer network because some dealers are the scum of the earth. But if you know what you're doing and can sniff out the BS, working with dealers IMO is a much better option.
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      05-14-2022, 08:44 AM   #11
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      05-14-2022, 10:51 AM   #12
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Originally Posted by wtwo3 View Post
You're assuming as a result of direct sales you'd now be paying what the dealer pays for the car. In reality I highly doubt the mfg would simply hand that cost savings to the consumer. Take a look at Tesla and the seemingly random and arbitrary price increases they implement multiple times a year. You're at the mercy of what the mfg wants to charge you and there's absolutely ZERO room for negotiation.

The bulk of dealer profit isn't from car sales. It's from service. This is why many smaller market dealers refuse to cater to out of state customers.

I also don't waste my time haggling with car sales people. When I was shopping around for my current cars, I had a deal in place well before I ever stepped foot into a dealership. I drafted up a simple email detailing exactly what I was looking for and what sort of discount I was expecting (based on market research at the time), and sent that email to about 20 dealers in the midwest. It was a simple yes/no question - do you agree to these terms? If not, let's not waste each other's time. If yes, let's talk on the phone and get a deal in place, sign some papers and get it done. The only time I ever step foot inside a dealership is if I want a test drive, or when it's time for me to pick up my new car.

I get this isn't typically how people buy cars. Conventional car buying involves going into a dealer, test driving, and then spending hours of frustration dealing with sales person BS all the while potentially walking out with nothing. But like I said, the dealer network is excellent if you're a savvy shopper. It's stress free and you're able to work out a better deal than most people if you know what you're doing. I'll take that any day of the week over direct sales where we're ALL getting ripped off the same amount.

On top of all that, if you establish a good relationship with a dealer/sales person, you both know what to expect each time you're shopping for a new car and it becomes even more convenient. There's pros and cons to each method. I get the pros of the direct sales method as it relates to convenience, and I get the cons of a dealer network because some dealers are the scum of the earth. But if you know what you're doing and can sniff out the BS, working with dealers IMO is a much better option.
Like i said, salesman do not work for free. I have too many friends in this business and my dad, before he passed away, has been a car salesman for over 20 years working at many different car makers. His "hussle" was to sell cars. Obviously. That's why they're there.

If we can eliminate that, the car buying experience will be much easier and everyone can basically pay a "flat rate". Where did i say if this happens we'll be paying what the dealer pays for the car? You already said it yourself, profits are made from service. I would almost bet there are more service work done on warranty alone than those who are sending their used out of warranty car, to the "DEALER" for service. A lot of more people are smarter than that. Yet these dealers are still making gigantic profits. It's from sales.

I still hope the future will eliminate dealers. There's really no need for them. They are just there to technically show you the car and allow you to test drive. Contracts can technically be done online with e-signatures.
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      05-14-2022, 12:48 PM   #13
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Quote:
Originally Posted by BGM-M3COMP View Post
Like i said, salesman do not work for free. I have too many friends in this business and my dad, before he passed away, has been a car salesman for over 20 years working at many different car makers. His "hussle" was to sell cars. Obviously. That's why they're there.

If we can eliminate that, the car buying experience will be much easier and everyone can basically pay a "flat rate". Where did i say if this happens we'll be paying what the dealer pays for the car? You already said it yourself, profits are made from service. I would almost bet there are more service work done on warranty alone than those who are sending their used out of warranty car, to the "DEALER" for service. A lot of more people are smarter than that. Yet these dealers are still making gigantic profits. It's from sales.

I still hope the future will eliminate dealers. There's really no need for them. They are just there to technically show you the car and allow you to test drive. Contracts can technically be done online with e-signatures.
My apologies if I misunderstood - but your last sentence in the previous message mentioned we could perhaps pay $65k instead of $80k because of the elimination of dealer profit. The issue with that is that 1) if there are cost savings by eliminating the dealer network, manufacturers aren't simply going to hand those over to the customers. I used to work for a manufacturer which also acted as a distributor, and the consumer paid the same price for the product whether they bought from a 3rd party dealer or if they bought it direct from the manufacturer.

The issue is, while sales people don't work for free, there's other cost benefits to utilizing a dealer network over direct sales from the manufacturers point of view. Delivering direct to customer as an example - there's a significant added cost to that as opposed to consolidated shipping into dealerships. Then there's the issue of service centers. The current model of utilizing dealers as service centers works well. Eliminate the dealer network and all of a sudden you, as a manufacturer, will either have to foot the bill to establish your own service centers, or you outsource to a 3rd party. Either way that cost doesn't go away. If you look at Tesla's model, customers getting timely service has been a major issue. And finally, even the process of setting up a test drive at your place of residence, there's cost associated with that.

Like I said before, I get the convenience benefit of this all. But if you're a savvy shopper, you're getting screwed by paying what everyone else is paying whereas previously you would have come out ahead (in some cases significantly) through discounts, since there's zero negotiation/shopping around/relationship building in a direct sales method.

We're in a crappy market, so it's easy to point the finger at dealers who are taking advantage by charging markups on top of MSRP. But in a normal market, if you follow the process I outlined, working with dealers is convenient and satisfactory while getting a great deal on a car. I'll take that any day of the week.
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      05-14-2022, 01:13 PM   #14
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Originally Posted by wtwo3 View Post
My apologies if I misunderstood - but your last sentence in the previous message mentioned we could perhaps pay $65k instead of $80k because of the elimination of dealer profit. The issue with that is that 1) if there are cost savings by eliminating the dealer network, manufacturers aren't simply going to hand those over to the customers. I used to work for a manufacturer which also acted as a distributor, and the consumer paid the same price for the product whether they bought from a 3rd party dealer or if they bought it direct from the manufacturer.

The issue is, while sales people don't work for free, there's other cost benefits to utilizing a dealer network over direct sales from the manufacturers point of view. Delivering direct to customer as an example - there's a significant added cost to that as opposed to consolidated shipping into dealerships. Then there's the issue of service centers. The current model of utilizing dealers as service centers works well. Eliminate the dealer network and all of a sudden you, as a manufacturer, will either have to foot the bill to establish your own service centers, or you outsource to a 3rd party. Either way that cost doesn't go away. If you look at Tesla's model, customers getting timely service has been a major issue. And finally, even the process of setting up a test drive at your place of residence, there's cost associated with that.

Like I said before, I get the convenience benefit of this all. But if you're a savvy shopper, you're getting screwed by paying what everyone else is paying whereas previously you would have come out ahead (in some cases significantly) through discounts, since there's zero negotiation/shopping around/relationship building in a direct sales method.

We're in a crappy market, so it's easy to point the finger at dealers who are taking advantage by charging markups on top of MSRP. But in a normal market, if you follow the process I outlined, working with dealers is convenient and satisfactory while getting a great deal on a car. I'll take that any day of the week.
Not necessarily though. I received my model 3 about a month or so now and i ordered it through the website. It took a couple of months for it to get built and when it was done, i went right to the dealer and did NOTHING. The car was in a parking spot waiting for me and all i did was sign a couple of papers at the front desk, basically acknowledging that i came to pick up the car. Similar to someone just going to the dealer to pick up plates for your new car. You go to the front desk, sign a paper and you get your plates. That was my tesla experience. I did not need a test drive as i have a couple of friends with model 3 performances so i knew how it was.

You might or might not be right on tesla service. I do not know on that part but the buying experience for tesla has been easier than going to walmart to get a pair of socks.

This is why i am saying what i said. That tesla experience, is what future car buying should be. We do NOT need a dealership. They are just there to store the cars, and have a person give you a key to test drive and "talk" about it. Then you have to meet with the finance guy and of course he wants to sell you a bunch of shit for his own pocket.

We do not need that.

We should go on the site, pick the model we want, the color, the options, the other stuff protection plans, extended warranty etc, ALL ON THE WEBSITE. Then go pick up the car somewhere or have a 3rd party come to your house, pay a fee for them to go, whether you buy the car or not, and if you do, you sign the papers and the person leaves. Done deal. No hassling. No extra shit. No buy this and buy that.

It's 80k M3, maybe 250 bucks for the person to go to your house for a test drive, non refundable 250. You say no to the car, they keep the 250. You say yes, you still pay the 250 but you also got the car for exactly 80k, as marked on the website. No other fees or nonsense. Delivery person makes his money (250 for example), you get your car. Done.

That should be the future.
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      05-14-2022, 01:41 PM   #15
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Not necessarily though. I received my model 3 about a month or so now and i ordered it through the website. It took a couple of months for it to get built and when it was done, i went right to the dealer and did NOTHING. The car was in a parking spot waiting for me and all i did was sign a couple of papers at the front desk, basically acknowledging that i came to pick up the car. Similar to someone just going to the dealer to pick up plates for your new car. You go to the front desk, sign a paper and you get your plates. That was my tesla experience. I did not need a test drive as i have a couple of friends with model 3 performances so i knew how it was.

You might or might not be right on tesla service. I do not know on that part but the buying experience for tesla has been easier than going to walmart to get a pair of socks.

This is why i am saying what i said. That tesla experience, is what future car buying should be. We do NOT need a dealership. They are just there to store the cars, and have a person give you a key to test drive and "talk" about it. Then you have to meet with the finance guy and of course he wants to sell you a bunch of shit for his own pocket.

We do not need that.

We should go on the site, pick the model we want, the color, the options, the other stuff protection plans, extended warranty etc, ALL ON THE WEBSITE. Then go pick up the car somewhere or have a 3rd party come to your house, pay a fee for them to go, whether you buy the car or not, and if you do, you sign the papers and the person leaves. Done deal. No hassling. No extra shit. No buy this and buy that.

It's 80k M3, maybe 250 bucks for the person to go to your house for a test drive, non refundable 250. You say no to the car, they keep the 250. You say yes, you still pay the 250 but you also got the car for exactly 80k, as marked on the website. No other fees or nonsense. Delivery person makes his money (250 for example), you get your car. Done.

That should be the future.
Your Tesla experience was similar to my BMW experience. The only difference was I did a bit of research and then mass emailed dealers. So by that admission, yes it was slightly more work... but that slightly more work meant I paid over $10k less between the 2 cars I ordered. I don't know about you, but over $10k in savings is worth a bit of legwork.

The only time I stepped into the dealer was to take delivery of my car. They already knew I wasn't planning to buy any extras, so the process between signing the final paperwork and getting the keys was about 20 minutes.

I realize this may not be the typical buying experience, but like I said before, if you're savvy enough, the dealership experience can be about as convenient as direct sales, while enjoying thousands in savings.
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      05-14-2022, 01:52 PM   #16
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Quote:
Originally Posted by UPSROD View Post
If you are leasing a car you are stupid!

Ask me know I know you have no idea about how finance or tax laws work
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      05-14-2022, 01:59 PM   #17
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If you are using it for your or your wife's business then that's a different story. Most people are leasing because they can't afford the car.
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      05-14-2022, 02:20 PM   #18
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Your Tesla experience was similar to my BMW experience. The only difference was I did a bit of research and then mass emailed dealers. So by that admission, yes it was slightly more work... but that slightly more work meant I paid over $10k less between the 2 cars I ordered. I don't know about you, but over $10k in savings is worth a bit of legwork.

The only time I stepped into the dealer was to take delivery of my car. They already knew I wasn't planning to buy any extras, so the process between signing the final paperwork and getting the keys was about 20 minutes.

I realize this may not be the typical buying experience, but like I said before, if you're savvy enough, the dealership experience can be about as convenient as direct sales, while enjoying thousands in savings.

Not everyone is keen on the car buying experience. Maybe you know very well how it works. Maybe i know how it works. But the question really stands, do we REALLY need an actual dealership? If you think so, please explain. What is mandatory about a dealership, that we really need them there for? Taking service dept aside, and just talking about sales. Why do we need them?

TURO has opened an outlet of people who can rent a car they might want to buy, so there's no need to go to the dealership to test drive a car they're interested in.

Think about it. You and your spouse want an M3. But you never drove it. You go to the dealer, and he offers a test drive. What do you think will happen? You and your spouse are SO excited, happy, not only because you're out test driving the car and at the next step of attaining one, but now you're so emotionally involved in a thought process that is blinded by what you are feeling that moment. That's how salesmen get most buyers. They know people get all giddy and happy about a new car they want to buy, that COMMON SENSE gets thrown out the window. Now the salesman can work.

"soooo how much can you put down? Are you trading anything? When was the last time you ran your credit? Are you leasing or financing? You know we ran your credit (IE: credit is 820) but might need another 2500 for the down payment. We can make it work but i'll have to ask the finance guy. Oh you're only approved for 2.9% APR (meanwhile the finance guy got your loan for 0.5%). Meet with the finance guy so he can go over all the protection plan. Wheels and tires, windshield, lifetime oil changes. You definitely need all that sir!"



Everything i said above is all tactics they use to make money on the customer. That is why they're there. Like i said before, maybe it's easy for you, and maybe it's easy for me to buy a car. Maybe it's easier for many on this forum. But that doesn't mean everyone who is ever buying a car will have the tools needed to get the best deal because of dealer money making tactics.

If you eliminate the dealer, you now have a bold price. Whatever is the price on the car website, that is what you pay. If you agree, you place your order. If you don't, you close the browser tab and don't buy the car.
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      05-14-2022, 02:36 PM   #19
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Quote:
Originally Posted by BGM-M3COMP View Post
Not everyone is keen on the car buying experience. Maybe you know very well how it works. Maybe i know how it works. But the question really stands, do we REALLY need an actual dealership? If you think so, please explain. What is mandatory about a dealership, that we really need them there for? Taking service dept aside, and just talking about sales. Why do we need them?

TURO has opened an outlet of people who can rent a car they might want to buy, so there's no need to go to the dealership to test drive a car they're interested in.

Think about it. You and your spouse want an M3. But you never drove it. You go to the dealer, and he offers a test drive. What do you think will happen? You and your spouse are SO excited, happy, not only because you're out test driving the car and at the next step of attaining one, but now you're so emotionally involved in a thought process that is blinded by what you are feeling that moment. That's how salesmen get most buyers. They know people get all giddy and happy about a new car they want to buy, that COMMON SENSE gets thrown out the window. Now the salesman can work.

"soooo how much can you put down? Are you trading anything? When was the last time you ran your credit? Are you leasing or financing? You know we ran your credit (IE: credit is 820) but might need another 2500 for the down payment. We can make it work but i'll have to ask the finance guy. Oh you're only approved for 2.9% APR (meanwhile the finance guy got your loan for 0.5%). Meet with the finance guy so he can go over all the protection plan. Wheels and tires, windshield, lifetime oil changes. You definitely need all that sir!"



Everything i said above is all tactics they use to make money on the customer. That is why they're there. Like i said before, maybe it's easy for you, and maybe it's easy for me to buy a car. Maybe it's easier for many on this forum. But that doesn't mean everyone who is ever buying a car will have the tools needed to get the best deal because of dealer money making tactics.

If you eliminate the dealer, you now have a bold price. Whatever is the price on the car website, that is what you pay. If you agree, you place your order. If you don't, you close the browser tab and don't buy the car.
I understand what you're saying, however I'm not talking about most buyers. I'm talking about myself, a savvy shopper, and others who are knowledgeable about the process.

After a test drive of course a sales person will ask me those questions. My response? "I'll think about it", and I walk out of the dealer. What are they going to do? Tackle me and chain me to their desk until they get through their sales process?

You ask why do we NEED a dealership experience. I said multiple times that me, as a savvy shopper, can leverage the competitive dealership network to get a great deal. Like I said before, I saved over $10k between the 2 cars I was shopping for by simply email blasting 20 dealers and going with the one that offered the best deal.

I know EXACTLY what I want and I detail that in my email. I know the exact configuration I want, what my credit score is, if I want to lease, finance, or pay cash. If I'm leasing I know beforehand what the residual value and money factors are, I know what "good" deals in for the car in question in my local market are. If I'm financing I know what the base apr is. At that point the ball is in their court and they simply have to answer a yes/no question. It's literally that simple for me to save thousands of dollars. And THIS is what I'll lose out on by going with a direct sales method.

Like I said before, most consumers won't have this experience and that's because they're not willing to put in the legwork. For those I agree, the convenience and hassle-free experience of direct sales makes sense.

However for a savvy shopper, the process can be about as convenient as direct sales, while in the process savings thousands.
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      05-14-2022, 03:20 PM   #20
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Quote:
Originally Posted by wtwo3 View Post
I understand what you're saying, however I'm not talking about most buyers. I'm talking about myself, a savvy shopper, and others who are knowledgeable about the process.

After a test drive of course a sales person will ask me those questions. My response? "I'll think about it", and I walk out of the dealer. What are they going to do? Tackle me and chain me to their desk until they get through their sales process?

You ask why do we NEED a dealership experience. I said multiple times that me, as a savvy shopper, can leverage the competitive dealership network to get a great deal. Like I said before, I saved over $10k between the 2 cars I was shopping for by simply email blasting 20 dealers and going with the one that offered the best deal.

I know EXACTLY what I want and I detail that in my email. I know the exact configuration I want, what my credit score is, if I want to lease, finance, or pay cash. If I'm leasing I know beforehand what the residual value and money factors are, I know what "good" deals in for the car in question in my local market are. If I'm financing I know what the base apr is. At that point the ball is in their court and they simply have to answer a yes/no question. It's literally that simple for me to save thousands of dollars. And THIS is what I'll lose out on by going with a direct sales method.

Like I said before, most consumers won't have this experience and that's because they're not willing to put in the legwork. For those I agree, the convenience and hassle-free experience of direct sales makes sense.

However for a savvy shopper, the process can be about as convenient as direct sales, while in the process savings thousands.
But it's not about you or me, it's just a general thought about the subject as a whole.

There would be no need to be savvy or to have knowledge, or to have resistance or the ability to say no to a salesman if you don't want to be pressured into buying a car and want to think about it. Not everyone has the same thought process when walking into the dealer. They see the car they like, they like it even more after the test drive, and literally bend over backwards to the dealer just to bring the car home. There is always doubt when someone is driving the car home thinking, "damn did i really get a good deal on this?" I can almost bet every single person has thought that after signing papers. Myself included. And i'm pretty good at knowing what i want and don't want and if i feel like if the purchase is worth it.

My idea of everything i said eliminates all that and that is why i feel like cars would be cheaper, if there was no dealer. There's no middle man, so there's no one else to pay as i said these people do not work for free. A car that could cost 80, might only really be worth 65-68 because you're getting it directly from the manufacturer. How you wanna slice what the dealer could make on profits is all on you. I say cars can be cheaper if we don't have anymore dealers. You pick the car you like online and that's it.

There is no need for a dealer other than it's service dept.
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      05-14-2022, 03:23 PM   #21
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Quote:
Originally Posted by wtwo3 View Post
I understand what you're saying, however I'm not talking about most buyers. I'm talking about myself, a savvy shopper, and others who are knowledgeable about the process.

After a test drive of course a sales person will ask me those questions. My response? "I'll think about it", and I walk out of the dealer. What are they going to do? Tackle me and chain me to their desk until they get through their sales process?

You ask why do we NEED a dealership experience. I said multiple times that me, as a savvy shopper, can leverage the competitive dealership network to get a great deal. Like I said before, I saved over $10k between the 2 cars I was shopping for by simply email blasting 20 dealers and going with the one that offered the best deal.

I know EXACTLY what I want and I detail that in my email. I know the exact configuration I want, what my credit score is, if I want to lease, finance, or pay cash. If I'm leasing I know beforehand what the residual value and money factors are, I know what "good" deals in for the car in question in my local market are. If I'm financing I know what the base apr is. At that point the ball is in their court and they simply have to answer a yes/no question. It's literally that simple for me to save thousands of dollars. And THIS is what I'll lose out on by going with a direct sales method.

Like I said before, most consumers won't have this experience and that's because they're not willing to put in the legwork. For those I agree, the convenience and hassle-free experience of direct sales makes sense.

However for a savvy shopper, the process can be about as convenient as direct sales, while in the process savings thousands.
100% agree with you. Iím still getting 5-10% off MSRP at my BMW dealer. Would obviously be impossible to get with Tesla, Rivian etc.
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      05-14-2022, 03:50 PM   #22
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Quote:
Originally Posted by BGM-M3COMP View Post
But it's not about you or me, it's just a general thought about the subject as a whole.

There would be no need to be savvy or to have knowledge, or to have resistance or the ability to say no to a salesman if you don't want to be pressured into buying a car and want to think about it. Not everyone has the same thought process when walking into the dealer. They see the car they like, they like it even more after the test drive, and literally bend over backwards to the dealer just to bring the car home. There is always doubt when someone is driving the car home thinking, "damn did i really get a good deal on this?" I can almost bet every single person has thought that after signing papers. Myself included. And i'm pretty good at knowing what i want and don't want and if i feel like if the purchase is worth it.

My idea of everything i said eliminates all that and that is why i feel like cars would be cheaper, if there was no dealer. There's no middle man, so there's no one else to pay as i said these people do not work for free. A car that could cost 80, might only really be worth 65-68 because you're getting it directly from the manufacturer. How you wanna slice what the dealer could make on profits is all on you. I say cars can be cheaper if we don't have anymore dealers. You pick the car you like online and that's it.

There is no need for a dealer other than it's service dept.
We're not going to agree, and that's fine, just difference of opinion.
And you're right... it's not about me or you in the grand scheme of things. But I was explaining why I personally prefer the dealer network and why savvy shoppers are able to leverage it to our benefit. Unpopular opinion like I said, but I feel I have legitimate premise for it.

In terms of cost, I think you're underestimating the added costs associated with eliminating the middle man. It's not as simple as eliminating the middle man and now you've saved a ton of money. As I mentioned before, you have to somehow compensate for the services being eliminated (and i'm not talking about services to the consumer, but services to the manufacturer). There's a reason why distribution is such a large business and typically NOT handled by the manufacturer, regardless of industry. Simply put, the added distribution cost of direct, last mile shipments rather than consolidated shipments into dealerships would be a huge expense that either the manufacturer would directly have to take on, or outsource and indirectly pay for through a 3rd party distributor.

If a car is sold to the dealer for $65k and then sold to the consumer at $80k, removing the dealer doesn't mean the manufacturer is going to gift the customer $15k and sell the car to them for $65k. I don't even think the car will be $75k. It has to make up for the gap in services the dealer offers the manufacturer, and there's cost associated with that - and in some cases (i.e distribution) much greater cost because now you're talking last-mile delivery which wasn't a factor in the dealer network.
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