The greatest thing Tesla did for the American car market isn’t being the vanguard for the electric vehicles revolution. It is offering an alternative to the traditional dealership method of car buying. For once, you can simply tap on your phone to buy a car, no hassles, no begging some asshole across a desk to sell you a car. The price is the price, no add-ons, no hidden fees.
I’d buy a Tesla car on that procedural benefit alone.
But I’d have to want a Tesla car, which I don’t. So to buy almost any other brand, I have to set foot inside a dealership, and talk to a guy or gal. The incentives at play cannot be more juxtaposed. The customer is trying to pay as little as possible, and the salesperson is trying to sell for as much as possible - because their proverbial food-on-the-table depend on it. When two sides are so directly opposed, each inch given and taketh feels especially painfully emotionally.
By asking to pay a lower price for a car, you are directly hurting the paycheck of the salesperson. It’s kind of perverse when you think about it. That relationship is entirely adversarial, no matter how cordial the conversation may be.
What doubles that whammy is when a customer like me shows up: paying in cash, no vehicle to trade in, and declining all add-ons.
You see, it’s not just on the net profit of a car that a dealership can make money off a customer. When you have a vehicle to trade in, the dealer makes money when they sells that to another party. When you finance a car purchase, banks kick back money to the dealer. Call it a finder’s fee. And we all know about add-ons: extended warranties, wheel insurance, paint protection, et cetera.
So with me, I am robbing the dealership of two thirds of the potential profits. This creates a slightly awkward situation because the sales department knows they are not going to make as much money off me. Depending on the particular car and brand, selling me a car might even be a waste of time! Why make $300 from me when the next person - financing, with trade-in, and amicable to add-ons - is a walking $900 sign asking to be snatched. It would take selling three cars to three of me to equal that one transaction.
I am not surprised then when their attitude with me isn’t as favorable compared to a customer with higher profit potential. Again, the incentives are perverse. If my salary is entirely commission based, of course I am going to treat the higher potential customers with more enthusiasm, if not complete favorable bias.
Try it next time: nothing kills the mood faster than telling a car salesperson that you are paying in cash fully.
Big Bentleys are always cool.
