Nobody Likes Paying More Than Sticker Price, For Some Reason
GfK is a market research firm that recently released new data showing that some 31 percent of new car buyers who paid more than sticker said they would tell others not to use their dealership, and that some 29 percent of buyers who bought over sticker said that they wouldn’t use the same dealer for service, while 27 percent of such buyers said they were done buying that particular brand, period, according to Automotive News.
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These numbers are surprising only if you’re the kind of person for whom money is no object; or the kind of person who is convinced you’re getting a deal even if you are paying more than sticker to your dealer, who I’m sure adores you as a customer; or you are the kind of person who associates paying a lot of money for something as a status symbol in itself, the kind of person who loves to mention at the bar how much you dropped on your new C8.
What the GfK research attempts to show, at any rate, is that charging more than sticker is bad for business, which might be more convincing if the practice hasn’t persisted for all of these years, despite lots of handwringing about it from automakers, who like to portray themselves as above the fray, and dealers, who often shrug and say they simply have no choice.
In the Auto News story, as usual, the most insightful comments are from the latter group, who would like to be good guys in this whole process, or so they insist.
Selling above sticker price at a time inventory was just returning is “a bad look,” said Keith Powell, owner of Yes Chevrolet and Yes Ford near Charleston, W.Va. His group does not exceed sticker price on any model except for the Corvette.
“It’s not good for CSI, it’s not good for customer retention,” Powell said. In a small market like West Virginia, he added, “we gotta take care of the people that do business with us.”
Rob Shabe, fixed-operations director of Murphy Ford in Chester, Pa., thinks it’s possible dealers who charge above sticker might undercut their service department.
“I could see how a customer would feel that way … ‘If they’re overcharging me because [of] supply and demand, they would do the same in service,’ ” said Shabe, whose store doesn’t exceed sticker.
Other dealers simply don’t seem to give a shit.
Mercedes-Benz of Edison in New Jersey doesn’t charge above sticker price. But general manager Doug Wells doubts that retailers who price above sticker would need to worry about their service department losing business.
The negative sentiment found by GfK reflects consumers shopping outside their market, rendering the issue moot, Wells said. A customer who searched the country for a pickup truck during an inventory shortage found one in New York City and traveled there to buy it at a $5,000 premium.
“They weren’t gonna service the car in New York anyhow,” he said.
Powell said he doubts customers would forego a particular automaker’s brand because of a dealer’s pricing. He likened it to a customer who quits patronizing one McDonald’s perpetually lacking milkshakes in favor of another location in the chain.
“They’re not gonna stop going to McDonald’s,” he said.
There’s an interesting dynamic here going on, in which Auto News asks dealer reps to comment on presumably well-gathered data that shows one thing, and their response is to insist that it doesn’t matter, which may be true, captive as such people are with taking their car to the local dealership, out of convenience or necessity. And while the quality of automakers’ dealers varies pretty widely — Lexus and Porsche buyers seem to like their dealers just fine, among others, while Kia, Hyundai, and Alfa Romeo fare much worse — this seems to be a good reminder of who a lot of dealers are at the end of the day: Those motherfuckers you’ll never go back to again. Until you do.
