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Dealerships don’t want to sell EVs (lemmy.world)

submitted 1 month ago by manualoverride@lemmy.world to c/evs@lemmy.world

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This is just a rant… maybe a discussion starter

Margins on 2nd hand and new electric cars are thin, gone are the days where you could get 25% off a new car, and thin margins mean lower commission.

Servicing costs are minimal so no kickbacks for selling the servicing plans.

People are wise to paint protection and alloy wheel cover that cost more than a refurb.

EV buyers tend to make better decisions and are more likely to be cash buyers or finance elsewhere, so no kickback for selling a finance plan.

Manufacturers still selling higher margin hybrid and ICE vehicles mean they are the real target for salespeople.

Manufacturers also want to shift their ICE inventories and new products so they are still pushing the FUD on electric, and myths like “EVs will be obsolete once Hydrogen cars come out, you may as well get an ICE car in the meantime.”

I’ve had a really bad customer experiences at Toyota, Honda and now Kia dealerships.

I know people will suggest the Tesla online sales model, but Musk is just ruining the brand to the point where I can’t buy or recommend one.

So now I’m going to do all my own research, find the exact car I want, and contact the dealer/seller directly while avoiding as much interaction as possible.

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[–] drdabbles@lemmy.world 27 points 1 month ago* (last edited 1 month ago) (1 children)

I think you need to look into how dealer pricing works, because you're making a lot of common incorrect assumptions. The dealer's margin on a new vehicle is, like 2%. They make a third of their revenue from accessories, a third or more from repair work, and the rest from financing finders fees.

You got 25% off a car because either it was used, or the manufacturer kicked in incentives. Not because a dealer could afford to give you 25% off.

Also, LMAO on hydrogen.

[–] manualoverride@lemmy.world 6 points 1 month ago (2 children)

However the dealer achieved it, as a customer when I bought my car 8 years ago I ordered the spec I wanted and a price came up, I said I wanted it at a price the was 25% lower (I had found 24% discounts online) and as I was walking out the building they stopped me and agreed.

For new model cars discounts from car brokers are only around 3% on the cars I’ve looked at.

[–] IcyToes@sh.itjust.works 3 points 1 month ago (1 children)

Probably because their list price was too high. Doesn't mean they're all that inflated.

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[–] drdabbles@lemmy.world 2 points 1 month ago

You're talking 25% off MSRP, or worse a locally adjusted market price which isn't the price people should pay. It's a suggested price. You should be paying invoice price plus a margin for dealer profit. It would really help for people to know how products sell and what the various prices are, because not knowing these things leads to mistakes like thinking you got an amazing deal by discounting MSRP or even a local market price rather than moving upward from invoice price.

[–] lemming741@lemmy.world 18 points 1 month ago (3 children)

One trick when buying any car is to arrange financing ahead of time.

Find the car. Negotiate a price. Get a Buyers Order. It will have all the fees and BS on it because of what happens next. Take the Buyers Order to the credit union. CU writes them a check, and they don't have an opportunity to add more fluff, or sell you financing.

[–] Nougat@fedia.io 12 points 1 month ago* (last edited 1 month ago) (2 children)

You can often get pre-approved for a car loan up to a certain amount, and the bank will provide you a check that you can fill out up to that specified amount and make payable to the dealer. Basically, you can show up to the dealer pre-financed by a third party, do the deal, drive away, no need to make an extra trip out and back.

Or is it that the bank will deposit the money in your account, then you write the check from there, and return the vehicle purchase details to the bank within a certain time frame? I know we've done this a couple of times, but I forget exactly how the process plays out.

[–] manualoverride@lemmy.world 7 points 1 month ago (1 children)

I’m the ‘car and tech guy’ for my family/friends, two most recent trips were cash buys… you can see the look on the salespeople’s faces drop when they find out they won’t get any finance commission.

[–] mosiacmango@lemm.ee 4 points 1 month ago* (last edited 1 month ago) (1 children)

You can also finance and pay off the loan early as well.

I've taken dealer financing on a car to lock in their lower offer and then paid it off in full the next month. No interest, no bullshitting around.

Just make sure there is no penalty for paying the loan off early. Check the actual contract.

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[–] lemming741@lemmy.world 7 points 1 month ago (1 children)

The 'trick' I'm getting at is to force them to give you an out-the-door price. If you walk in with a blank check, they're going to try and max it.

[–] Nougat@fedia.io 7 points 1 month ago (1 children)

You don't tell them that you have financing already until you have a promised price on the vehicle you want.

[–] manualoverride@lemmy.world 2 points 1 month ago (1 children)

This is actually a really good tip.

[–] Nougat@fedia.io 4 points 1 month ago

Car dealers try to present the transaction as "one thing" - purchase price, trade in, financing, warranty. They figure out which one of those things you are most sensitive to, and then give you a good deal on that part, making up the difference by not giving you a good deal on the other parts.

Even if you want to buy a car, with a trade in, and finance it, and you want an extended warranty (sometimes those can be okay, that's a whole other story that I am happy to talk about if anyone is interested) -- you should still go in and only talk about one thing at a time.

Zeroth step: If anything gives you pause anywhere along this process, walk. There's other cars, other dealers, other salespeople. Always be ready to stand up and leave, and don't just make empty threats.

First is to find a vehicle that suits your needs - something you would buy. Then get an "out the door" price on that vehicle. That price is going to include all the fees and taxes and registration, not just the purchase price of the vehicle.

Only after you have that in hand do you move to the next thing, and that would be trade-in. If you want any offer on a trade in vehicle, that vehicle will need to be at the dealer with you for them to inspect it. They're already eye-fucking the car you drove in, from the moment you came on the lot. In order to get that trade in offer, you will need to hand over your keys. Yes, your car is now a hostage to keep you in the dealership. "While they're checking your trade, why don't we talk about financing, warranty, accessories, pre-paid maintenance?" No. One thing at a time. You will refuse to talk about any other aspect of this transaction until your trade has been evaluated and a trade in price settled on. You may need to demand your own car back so that you can leave.

That's done, you have agreed on a trade in price (or you do not have a trade in), now you can talk about financing. If you intend to self finance, skip this step. Even if you do not intend to self finance, you should have done some research on what kind of rates you could get from a bank or credit union, otherwise you have no way of knowing whether what the finance office has to offer is competitive.

The finance office will also be the place where extended warranty is offered. In short, if the warranty offered is an exclusive warranty (covers everything except what's on a particular list), it might be worth it to you to get. An inclusive warranty "only covers what's on this list," and those are universally bad. Adding the warranty to the financing might affect your interest rate, but it shouldn't be by very much, if at all.

Make sure that you're satisfied with the condition of the car. Something doesn't work? Unsightly door dings? Ask if the dealer can take care of those. Maybe they will, maybe they won't, but you don't know until you ask. Paintless dent repair probably costs the dealer $25 per ding for their vendor to come do it, maybe they'll pass that along to you at cost to get the deal done. Anything the dealer promises to fix, they will write you a "We Owe" for. If it's not on paper, it's not going to happen.

All done, right? Nope. Now they will draw up the official paperwork for the transaction. Check every single line item on that sales contract to make sure they all match what you were promised. What's this extra fee for? Why is the price of the extended warranty $400 more than what you said? How come I'm being charged for dealer-added pinstripes when I never agreed to that? Remember the Zeroth Step? Be ready to walk. You've been in the dealer for hours now, and they're banking on you just being tired of going through this and wanting it to be over. Even if everything is correct, you can still walk at this point. Don't let your emotions get in the way.

Now you can sign the contract and drive off in your car.

[–] TheDannysaur@lemmy.world 7 points 1 month ago

Depends on the dealership. I went in and asked if I could get additional money off the car for using their financing. They say yes they gave a $1,000 credit.

I then asked how many payments did I need to make for them to get their full incentive for the loan. They said 6 months. I asked if I could pay it off after that, and they said sure, they'd have their kickback from the bank.

And that's what we did. It was a pretty frank conversation with the dealer, they were cool, we were cool.

[–] Anticorp@lemmy.world 3 points 1 month ago (1 children)

You're more likely to get a better deal if you use their financing since they make money on that too, and they usually have competitive rates if you have good credit.

[–] lemming741@lemmy.world 7 points 1 month ago (1 children)

They shuffle numbers around to make it look good. They'll pad the price so they can show you a good rate. Why do you think they ask about financing so early in the process?

They're crooks, the lot of them. Never trust someone that can write numbers upside down.

[–] Anticorp@lemmy.world 2 points 1 month ago

They ask for financing early on so they don't waste time talking to someone who can't even buy a car. There are a lot of people who go look at cars that can't actually buy one.

You're right that they shuffle things around, but if you remove an entire revenue stream from the equation, you're going to get a worse price on the car than if you could get by financing through them. They can often offer the same rate that the credit union is offering, but they make a couple grand in kick-backs from the bank. They will sometimes use that kickback to offset the price of the car.

[–] DmMacniel 12 points 1 month ago (4 children)

EVs will be obsolete once Hydrogen cars come out

follow up question, and when would those come out?

[–] ShinkanTrain@lemmy.ml 10 points 1 month ago* (last edited 1 month ago) (3 children)

Follow up comment: Even if they do come out and we're somehow green, dealerships won't sell them either. Oil money speaks pretty loud

[–] ObsidianZed@lemmy.world 6 points 1 month ago

Back when I was considering a Ford Lightning, I went to a local Ford dealership and the salesman came out like they do. He asked what I was looking for and I said I just wanted to see the Lightnings.

He literally said "you know we're an oil and gas country, right?"

Even if I was fully planning on buying that day, there's no way I would have bought from that guy.

At one point, he also said something along the lines of "they don't give us any incentive to push these."

[–] DmMacniel 3 points 1 month ago (1 children)

thats not really a question, even though its probably right :D

[–] ShinkanTrain@lemmy.ml 3 points 1 month ago* (last edited 1 month ago)

I started writing a question, got sidetracked and forgot about it lmao

[–] manualoverride@lemmy.world 3 points 1 month ago

Ah well that is one of the reasons why big oil has invested so much in hydrogen, the way hydrogen is made right now is by refining it from natural gas using massive amounts of electricity which oil companies can generate for themselves. This hydrogen is then sold along with the same 0.1% of hydrogen which is electrolysed from water using solar and wind power and greenwashes the remaining 99.9% masking the fact you would have been better off just refining crude oil into diesel, or burning puppies and kittens in a steam engine.

[–] manualoverride@lemmy.world 8 points 1 month ago (3 children)

I did ask… apparently “Toyota have had some big breakthroughs and they should be out in a couple of years, with instant refuelling!”

I believe my reply was “that’s absolute bullshit”

[–] DmMacniel 5 points 1 month ago* (last edited 1 month ago) (2 children)

Instant refuelling

I do not think the word means what you (the dealer) think it means.

[–] IphtashuFitz@lemmy.world 5 points 1 month ago

I tell folks it takes me about 20 seconds to charge it up. I get home, get out of the car, and plug it in. It charges overnight and I have a full “tank” when I wake up in the morning.

[–] manualoverride@lemmy.world 4 points 1 month ago (1 children)

You sold my father a Honda Jazz, prepare to die!

[–] DmMacniel 4 points 1 month ago (1 children)

You forgot the introduction, tse.. and thats why the dealer didn´t took you seriously :P

[–] threelonmusketeers@sh.itjust.works 4 points 1 month ago* (last edited 1 month ago) (1 children)

My name is Manua Loverride. You sold my father a Honda Jazz. Prepare to die.

Better?

@manualoverride@lemmy.world

[–] manualoverride@lemmy.world 2 points 1 month ago

Perfection!

[–] Chocrates@lemmy.world 3 points 1 month ago

Toyota has had no plan to move on from ICE engines from what I have read. I don't know why they spend the little money they do, on research. Maybe so they can make claims like the above

[–] IphtashuFitz@lemmy.world 3 points 1 month ago* (last edited 1 month ago) (2 children)

I see Tesla Superchargers and a growing number of other charging stations popping up all over the place.

Where do I go to fuel up a hydrogen car? I don’t see hydrogen fueling stations anywhere… How long will it take to build all that out?

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[–] NaibofTabr@infosec.pub 5 points 1 month ago (1 children)

More importantly, when will the hydrogen infrastructure be coming out?

[–] manualoverride@lemmy.world 4 points 1 month ago

Oh my friend, it’s already here! There are 3 hydrogen filling stations in a 1000 mile radius of which at least one is operational on average.

[–] DrunkenPirate 3 points 1 month ago

Toyota Mirai

[–] helenslunch@feddit.nl 10 points 1 month ago (2 children)

Servicing costs are minimal so no kickbacks for selling the servicing plans.

I mean that sounds to me like all the more reason to sell service plans.

EV buyers tend to make better decisions and are more likely to be cash buyers or finance elsewhere, so no kickback for selling a finance plan.

Source for that?

they are still pushing the FUD on electric, and myths like “EVs will be obsolete

Gonna call Hanlon's Razor on this one. These salespeople are generally just idiots who don't even know the names of the cars on their lots.

and contact the dealer/seller directly while avoiding as much interaction as possible.

Good luck. I have a family member that got bait-and-switched just a few days ago. They will tell you whatever lies they have to to get you on the lot.

[–] jqubed@lemmy.world 9 points 1 month ago (1 children)

Gonna call Hanlon's Razor on this one. These salespeople are generally just idiots who don't even know the names of the cars on their lots.

I bought a new car a couple years ago and was really disappointed in my search to discover that I seemed to know more than the sales people at basically every dealership. The only person I talked to who seemed really knowledgeable was actually not a salesman but a manager at a Ford dealership.

[–] helenslunch@feddit.nl 8 points 1 month ago* (last edited 1 month ago)

Right? You would think a salesperson might, at the very least, spend a few hours learning about the products they're selling.

[–] manualoverride@lemmy.world 2 points 1 month ago (1 children)

Service plans are too cheap for EVs so really low commission, plus people know they don’t need any real servicing, it’s a major selling point.

If people didn’t make good decisions they’d let the salesperson talk them into a nice commission rich hybrid.

The guy who told me about Hydrogen cars taking over soon sold my dad his car 25 years earlier, so a career salesman.

I’m calling ahead and telling them the car I’m coming to see and the price I want to pay, if it’s not there or the price changes I’m never coming back.

[–] helenslunch@feddit.nl 4 points 1 month ago* (last edited 1 month ago) (3 children)

Service plans are too cheap for EVs so really low commission

I don't believe that for a second. Service providers are not going to lower the price of their service plans to the extent that salespeople can't be bothered to sell them or they're no longer profitable. That would be foolish. But please feel free to prove me wrong.

The guy who told me about Hydrogen cars taking over soon sold my dad his car 25 years earlier, so a career salesman.

What's that supposed to mean? I find that, at best, veterans are no better than their fresher colleagues, and often are worse. At least that's the way it is in every industry I've worked in.

I’m calling ahead and telling them the car I’m coming to see and the price I want to pay, if it’s not there or the price changes I’m never coming back.

You'll run out of dealerships before you find a car to buy.

Like I said, good luck.

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[–] cron 5 points 1 month ago (2 children)

I heard that from a salesman perspective that EVs are harder to sell, because the customers tend to know less and have more questions. And there is not really an incentive for salespeople to sell more EVs.

[–] thesohoriots@lemmy.world 8 points 1 month ago (1 children)

A friend of mine who works in a Mercedes service department has a fleet of electric vehicles to loan out during repairs. Problem is, this being the US, nobody wants them. So he sits on a bunch of luxury EVs because people would rather wait for ICE cars to become available. You seriously can’t live with an electric Mercedes for a week? Maybe learn a little about it? Nope.

[–] cron 6 points 1 month ago

It appears that it is very hard to change peoples habits.

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[–] Bronzie@sh.itjust.works 5 points 1 month ago

At least in Europe, both Volvo and Polestar sell online at «fixed» prices.

Polestar 2 is in between Model 3 and Y, size wise and releasing 3 and 4 these days. Volvo has options from the EX30 to EX90.

[–] randompasta@lemmy.today 4 points 1 month ago (2 children)

I used to be a huge Toyota fan. I've been driving a 3rd hand 2011 Nissan Leaf to work as our secondary car for a number of years and an old Prius for longer trips. We really need a new car to replace the Leaf so that I can drive more than 35 miles. Toyota's bullshit statements on electric cars turned me off to ever buy one again. I've been in a search for months and have noticed that traditional manufacturer dealerships just don't care about electric cars for the reasons you state. I've decided to go with companies that have at least 2 released electric cars. That shows a level of choice and commitment.

[–] Hello_there@fedia.io 4 points 1 month ago (1 children)

I'd look at in terms of compliance car, or all in.

VW, Hyundai/Kia, GM, Ford and Volvo are all doing good work with EVs. They're selling a lot of vehicles, have multiple well received models with medium to great reviews, and they're building vehicles from the ground up to take advantage of EV perks.

Compare that to Toyota, who created one pure EV, the bz4x, that has a crappy charging speed and range and a high price, and for the first several years, received no promotion or ads. For some reason, they're advertising it a lot now, but it's still a shit car compared to what else you can get for the same price. I would throw fiat, Audi, BMW, Honda all in that boat too. You're much better off going with someone that created a vehicle they actually want to sell lots of.

[–] randompasta@lemmy.today 2 points 1 month ago (3 children)

Seriously looking at the Polestar 4. They are sort of Volvo but now 100% electric at this point.

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[–] Elextra@literature.cafe 3 points 1 month ago

I did the same and got a Ford Mach E. Upgrading from my 2013 Corolla that still drives like its never going to die. The lobbying from Toyota is terrible and now they are far too behind in EVs to take them seriously

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