Saturday, August 26, 2006

Automotive Hell

Today Claire and I traded in my car for a new one. My old car, which I bought from my Grandfather, was basically a huge Grandpa car- a Crown Victoria. I only drive three days a week, but it was costing me sixty bucks a week to do so! I traded it for a car that gets over twice the gas mileage. But, I also had to deal with a car salesman, an experience that is about as pleasant as pissing blood. Luckily, we had two secret weapons with us- Claire's father, who is the CFO of one of the world's largest accounting firms, so he knows about money and dealmaking. Also, we brought his best friend, who is a Toyota dealer- we were buying a Toyota. In other words, we were basically a car salesman's worst nightmare.

In the car business, they call customers like us 'grinders'- we're basically ready to argue all day to get the deal we want, and then walk out if we don't. This is exactly what we did, argued for a few hours. To be honest, I hate doing it, but the guy was wasting our time in a serious way. He even tried to change the price on the sales slip from the one he had quoted five minutes earlier! And then he pretended this was a mistake. Claire's father was great though. He very calmly said: "I just don't see how you could have made this mistake. Either give us the price we agreed to, or we'll go somewhere else." We were very close to leaving at this point anyway because the haggling was... well, as stupid as trying to add $100 to a sales slip and hoping we wouldn't notice.

I learned today that the Canadian dealers (at least the Toyota dealers) quit pulling this routine about five years ago. What they realized is that you have two extremes buying cars- the grinders, and the sweet old ladies. When a car dealer takes a bath on a sale to a grinder, they have to make it up by gouging the sweet old lady, and they can get away with it. So, they do. But, if you pay people the blue book value right out and don't haggle over it, you lose the grinders and keep the sweet old ladies. Not only is the experience of buying a car much less painful, but they end up with more sales. Buying a car is, thus, more pleasant in Canada. And their sales have boomed because they've eliminated the scam from the business.

So, it is possible to make a very nice living without basing your business on how much you can scam from people. I know, it's crazy, but true. I would like to see them apply this attitude here. It's healthy to have an honest society, and it's actually more profitable.


The Pagan Temple said...

A lot of it is competition based. Not competition between car dealers, but between employees. Business owners and managers encourage this competition, many times openly so, and this is the result of it.

Rufus said...

I think our friend was saying that he pays the workers a much better salary without commissions. Also, they think of them as information providers and not salesmen. He says that it makes the job a lot more enjoyable to do as well.