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I think it's more than that... (archive)

[ Follow Ups ] [ 3-series (E46) Message Board ] [ Msg. Board FAQ ]

Posted by Hmmmm, again on April 18, 1999 at 21:38:58:

In Reply to: I don't think so... posted by yba on April 18, 1999 at 20:38:59:

To a lot of people, the most important thing about their deal was the amount of dealer profit. That's what they brag about - the great deal they made as far as supposedly taking advantage of the dealer, or coming out best. The bottom line price is secondary.

Some people are perfectly happy when they talk a dealer down to, say, 1,500 over invoice, but then the dealer talks them into a warranty where the dealer makes an additional 750, they use the dealers financing where a bank kicks back 500, etc. But they still think they got this great deal.

People who think they paid too much will actually be unhappy, forever, with their car, because in the back of their mind they know that they could have gotten a deal that was $1000 better, or whatever. Never mind that their neighbor with a Civic had a bottom line of half of what they paid.

Another way of looking at it: Look at how people obsess over 1,500 profit instead of 2,000. But then look at how easily they decide to buy an expensive option like the premium package. If a car comes in with fold-down rear seats, that they don't want, most people will pay the additional $500 to get the car. But some people won't buy the same car if the dealer profit is even $100 higher than they think is "fair."

Maybe my 18,000 example for a 328i wasn't exactly what I wanted to say. As evidence of my point though, I think most of us have seen posts somewhere of people that absolutely REFUSE to buy a Saturn because the dealers won't deal. Never mind that they like the car and they have no objection to the bottom-line price, which is in line with the competition. If the dealer won't cut that profit, it wrecks the deal. That's my point. People obsess about the profit level more than the bottom line price, and that's my point.

(But, hey, my deal is 1,500 over, so it must matter to me, too!)

There is another thing that is going on now that plays right into this mindset. Blue book prices on used cars are now very inflated, typically by several thousand dollars. (If you don't believe it, look at blue book on a one year old 3-series. Now compare that to a realistic price on a brand new one. Unless things have changed recently, the used one will have a higher retail price than you could buy a new one for.) That way, dealers can have permanent sales, everyone thinks they got a below blue book deal, the dealer gets a reputation for selling cheap, and everyone ends up happy! (Even the dealer, because they make more on used car sales than new). At least they are happy until they want to trade in that same car, but there are other games that can be played there. But this message is getting too long.

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