Monday, April 16, 2007

Car Buying Notes

We just picked out a Honda Civic. Here are some things I noticed about the process:

  • We dealt with three different sales shmucks. Only the last sales shmuck was helpful. At the Honda dealership in Valdosta, I had bad experiences with the sales folks being unhelpful. Of course, I've found unhelpful Toyota sales folks too.

  • I talked to two dealerships; one of them wanted me to drive to his dealership before they'd take my offer. We had already visited the other. Even when you don't need dealer financing, it's hard to get taken very seriously over the phone.

  • The dealers wanted me to make an offer...they didn't want to make me a quote. I thought this was odd.

  • Consumer Reports shows that Honda dealerships get 3% holdback on the invoice price of the car; i.e., after they sell the car, Honda credits the dealer 3% of the sales price. That's how they can sell it at or near their invoice price. But the Honda dealership here said that Honda had recently changed the holdback to 2%. I wasn't sure whether to believe him.

  • I accidentally looked at the wrong price on Consumer Reports' site -- I offered based on the price of a manual transmission. Yes, that was somewhat too low to be reasonable. When they told me it was too low, I looked at my data again and found my error, then made another offer -- this one stuck. Perhaps the first one sounded so crazy that they were more ready to bite on a reasonable one? (Could this be related to the the "Dominated Alternative" phenomenon that Behavioral Psychologist Dan Arieli of MIT has spoken about? i.e., given options A, B, and Z, where A and B are similar prices, B is clearly the worst, and A and Z are similar value, people will often choose A, even if A is somewhat costlier than Z).
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