Originally planned to be a couple of separate posts on similar but different subjects, I’ve decided to just re-write the thing and take it in a different direction. Naturally it ended up being two posts, I’m weird like that. This all happened after reading a post by a commenter on JD Roth’s Get Rich Slowly blog.
Let’s start with a really long essay I began reading a few weeks ago. Its called “Confessions of a Car Salesman“. The title is a bit misleading because its not a seasoned car salesman writing his memoirs. Instead, Edmunds.com hired a journalist to go undercover. They paid the writer to get a job as a car salesman at two dealerships, one a high pressure sales environment and the other more relaxed. It took me more than two hours off and on to read the entire essay, but its well worth the read. This is especially true if you’re in the market for a new car. It takes the undercover reporter a few tries to finally land a job, but even in the interview process he learns the strategies the sales team uses with a customer are also in effect with interviews. I’ll let you read to learn more about them. You’ll find the essay to be very thorough, well written, and entertaining.
Edmunds has created a follow-up that is the perfect complement to “Confessions of a Car Salesman”. ”Confessions of an Auto Finance Manager” is not an undercover story. Instead it was written by an actual insider that has left the game. He walks you through the tricks of his trade, most notably taking advantage of customer exhaustion once they reach the finance office. Don’t be fooled, these people are not bank representatives, their commissioned sales guys just like the fellows on the front lines. More often than not it seems, their merely promoted from car sales.
As I said before, JD’s blog post from a commenter on the car sales business prompted me to compile everything into one post. The commenter is also an insider, and you can read the post to get the idea of what he’s saying. What I learned from reading all these posts and my personal experience in car buying is: THE SYSTEM SUCKS. ”Confessions of a Car Salesman” includes a brief history on how we got to this crappy situation with commissions on car sales. Its simply a dying business model. I refuse to be a player in that game which is why I did all my negotiating online.
Despite what Roth’s commenter states and the follow-up comments to the post say, I don’t care that the salesmen are trying to make a buck. The system of any commissioned sales job does not ever have the best interests of the customer at heart. Whether you’re selling cars at a dealership or long term care insurance in someone’s house, the commissioned officer has a direct incentive to jack up the price to pad their paycheck. That is a broken system. Go ahead a try to defend the system telling me there are good people out there in a bad business. But when rent and child support are due it doesn’t matter if you’re the nicest person in the world, you’re going to push those useless add ons to pad your pockets. A good product will sell itself and I don’t need someone with a fake Rolex and silk tie to tell me how awesome my Accord is. I already knew more about it then he did, and I knew he was saying it because he thought I would actually pay the price on the window sticker for it.
Forget it. It’s broken. The people that sell cars for a living want easy money with little effort or training. We call that greedy, and not the good greed that funds capitalism. This is the bad greed that leaves someone making $10 an hour with $500 payments. Bad greed like the mortgage groups that put those same people in a $250,000 house.
You should know by now that I am no consumer advocate. Any fool dumb enough to pay sticker for a new car deserves whatever jacked up cost they end up with. All I’m saying is it doesn’t have to be this way.
Now, lets fix the system. Starting tomorrow…
 By The Weakonomist |
The Weakonomist is the founder of Weakonomics. Clicking the picture of the puppy will tell you more about him. If you like what you're reading consider subscribing to the blog, following him on Twitter, and checking out the related posts below. Please consider a donation if you really enjoy Weakonomics. Also keep in mind that nothing I say can be construed as financial advice. |
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