Cars are expensive, especially now that the supply chain problems and semiconductor issues have created shortages in the automotive industry. But it’s more than that. Shopping for cars is not like shopping for most other products. Unlike, say, computers or appliances, cars are typically not sold for one standard price. A dozen people could go into a dealership and each pay a wildly different amount to buy the same exact vehicle.
The price of a car can vary depending on various factors, such as the negotiating skills of the buyer, the demand for the car, the financing terms, credit rating, and the dealership’s pricing strategy.
Additionally, the dealership may have a different pricing strategy for different customers, offering discounts or incentives to some customers and not to others. This can also result in different prices for the same exact vehicle.
Many experts and automotive industry analysts call this sort of pricing strategy “price discrimination.”
That’s when, instead of charging everyone the same price, sellers charge people different prices based on their willingness to pay, or could be “convinced” to pay.
In simpler terms, it means that the seller milks as much money as they can out of a car buyer, depending on the circumstances of the individual and the pricing has nothing to do with the actual car itself.
Of course not all dealerships engage in this pricing strategy, but many do it aggressively, often with snake oil-style salesmanship, deceptive marketing tactics, hidden fees, and overpriced add-ons, like floor mats, alarm systems, or anti-rust undercoating.
Industry watchers and even some consumers call these shady business practices as tactics “stealerships.”
The tricky pricing strategy used by dealerships can be maddening for consumers, and they are finding it atrocious that they have to haggle over the price of a new car, SUV, or a truck with slick, commission-seeking salespeople.
One reason why car shoppers are turning to the Internet to buy online is because they find the experience to be exhausting.
Reputable dealerships need to reverse this trend by focusing on customer service and integrity based sales process before it is too late.
