Fremont delivery - car refused

[Osteolog]

I have never spent that much time buying a car at a dealership (not even before online sales became available).

That's great for you but doesn't change the unpleasant experiences that many of us have had when buying cars from a dealership. Even when you get a 'good deal' at a dealer, you're just lowering their margin and it still requires me to spend time figuring out what the actual best price I can expect before I even deal with a person. It's annoying and unpleasant. Obviously I'm not forced to, but when thousands of dollars are on the line I'll deal with it no matter how much I'd rather not.
That I was able to order my Model 3 with zero hassle from the comfort of my couch was amazing and I don't plan to go back to haggling for my car like I'm buying it at a garage sale.

 

[cella]

That's great for you but doesn't change the unpleasant experiences that many of us have had when buying cars from a dealership. Even when you get a 'good deal' at a dealer, you're just lowering their margin and it still requires me to spend time figuring out what the actual best price I can expect before I even deal with a person. It's annoying and unpleasant. Obviously I'm not forced to, but when thousands of dollars are on the line I'll deal with it no matter how much I'd rather not.

Well, in the case of Tesla you always pay MSRP. You don't have the option of trying to get a better deal even if you are willing to negotiate. I don't really see an advantage here.

That I was able to order my Model 3 with zero hassle from the comfort of my couch was amazing and I don't plan to go back to haggling for my car like I'm buying it at a garage sale.

As pointed out earlier, you can have pretty much the same experience with any car these days using various online services. It's not the 1990s anymore.

 

[devilmountain]

You can't negotiate at Tesla at all, and nobody forces you to haggle at other dealerships. I usually settle the price in advance, e.g. by getting a bunch of offers through sites like Truecar, and then perhaps trying to reduce the price a little further by email (e.g. ask the dealership with the second best price to beat the best one). When you finally go to the dealership with your quote, you talk to the guy responsible for Internet sales and there is no more haggling at all. I don't really understand either what people find so horrible about buying a car at a dealership.

I was going to say exactly what you are saying. Tesla is making you pay full sticker for the car, you can't haggle with them. You can go into any car dealership and pay full sticker and go immediately into finance. You don't have to spend hours haggling. Matter of fact my Model 3 is the first car I have ever paid full sticker for.

I bought a Fusion 2 years ago. I called up the fleet department and told the guy what I was looking for. I scheduled an appointment and he showed me 3 cars in the range I wanted to spend. I test drove, got a price of 100 over dealer price (nobody gets holdback), and was out in 2 1/2 hours. It was a very pleasant experience. If the finance department wasn't busy I would have been out sooner.

 

[DR61]

With Tesla all customers are buying from the manufacturer, therefore everyone pays invoice price (which equals sticker price in this case).

 

[cella]

With Tesla all customers are buying from the manufacturer, therefore everyone pays invoice price (which equals sticker price in this case).

Sure, but that still doesn't tell you if their profit margins are smaller or bigger than those of cars of another brand sold through dealerships.

 

[Future4me]

Doesn't matter. At least I know I didn't pay more for my car than the guy that pulls up next to me ( with the same options ).

 

[mattjs33]

Yes but all the folks saying they hate negotiating with traditional dealers are then being disingenuous by saying they like Tesla's no-haggle pricing.

You can do that at a traditional dealership also; just pay sticker list. That will spare you all that nonsensical negotiating time. Trust me, they will rush you right through the sales process. It's called a "lay down". Boy do they like those.

 

[bro1999]

For those that despise the typical car dealership buying experience, just employ the Tesla negotiation strategy. Walk in, announce to the sales floor "I will pay MSRP for ____ car!", and watch you get treated like a king. Problem solved.

 

[Osteolog]

Well, in the case of Tesla you always pay MSRP. You don't have the option of trying to get a better deal even if you are willing to negotiate. I don't really see an advantage here.

There are several advantages. As a quick example, if I buy some iPhones from Apple for 'X$' and then mark them up and resell them for X+Y, you're not getting a great deal if you manage to reduce the markup ('Y') that I applied to the product, you're just decreasing extra costs that I added in the first place -- you could have just bought one for X$ and bypassed me entirely. It's also not a great experience if you get a car for a certain price only to discover that you could have got it for thousands cheaper if only you'd just haggled a bit longer or better. The whole process really starts the purchase experience off on the wrong foot. Knowing that everyone gets the car/phone/whatever for a certain price results in a nicer and more consistent experience. Feel free to apply the dealership model to anything else and see if you'd like it more. Buying groceries, going out to dinner, seeing a movie, buying a phone, etc. If you had to stop, research prices, and haggle for all of those it'd be downright miserable...at least for those of us who don't enjoy the process of haggling.

Ultimately we'll see what the market decides, but given that many places in the US either refuse to allow Tesla to sell directly and/or protect the dealership model by antiquated laws, I really doubt it's kicking around because it's the best way to sell a product.

 

[Osteolog]

For those that despise the typical car dealership buying experience, just employ the Tesla negotiation strategy. Walk in, announce to the sales floor "I will pay MSRP for ____ car!", and watch you get treated like a king. Problem solved.

You're entirely missing the point. When you know that you can save thousands off of an unnecessarily added markup by dealing with a bunch of nonsense most people will do it even if they'd rather not. 'Hey, we'll take $4,000 off the listed price of the car if you let me throw my drink in your face and punch you in the arm'. I'd also deal with that, but I'd prefer to avoid it if possible.

 

[WileyTheMan]

You're entirely missing the point. When you know that you can save thousands off of an unnecessarily added markup by dealing with a bunch of nonsense most people will do it even if they'd rather not. 'Hey, we'll take $4,000 off the listed price of the car if you let me throw my drink in your face and punch you in the arm'. I'd also deal with that, but I'd prefer to avoid it if possible.

Agreed. For me, it's the asinine negotiation tactics that both the buyer and seller go through in order to get what they want ("let me go talk to my manager", getting up and sitting back down in your chair, sob stories about losing money, etc.). Maybe others thrive on that, but it causes undue stress on me and my family who have now been hanging out in a car dealership for half a day. I recall when Saturn tried to do away with all that, and it was refreshing. But that got the kebash real quick when GM absorbed them.

 

[devilmountain]

Agreed. For me, it's the asinine negotiation tactics that both the buyer and seller go through in order to get what they want ("let me go talk to my manager", getting up and sitting back down in your chair, sob stories about losing money, etc.). Maybe others thrive on that, but it causes undue stress on me and my family who have now been hanging out in a car dealership for half a day. I recall when Saturn tried to do away with all that, and it was refreshing. But that got the kebash real quick when GM absorbed them.

Saturn was always a GM product. Dealers in an area where owned by one owner versus most dealerships in a given area owned by different owners. This gave control of that area to the one owner. I owned a Saturn, loved it. Sure it was no haggle but you paid MSRP.

Correction it was founded by former GM employees than bought out in 1990.

 

[Lloyd]

For those that despise the typical car dealership buying experience, just employ the Tesla negotiation strategy. Walk in, announce to the sales floor "I will pay MSRP for ____ car!", and watch you get treated like a king. Problem solved.

I tried to do that years ago when the Nissan 300ZX twin turbos were hot. Nobody would take that offer in California! I called every one. I finally found a dealer in Salt Lake City willing to sell a red one. I flew there, picked it up and yes, that dealer was happy, and so was I !!!

 

[bro1999]

You're entirely missing the point. When you know that you can save thousands off of an unnecessarily added markup by dealing with a bunch of nonsense most people will do it even if they'd rather not. 'Hey, we'll take $4,000 off the listed price of the car if you let me throw my drink in your face and punch you in the arm'. I'd also deal with that, but I'd prefer to avoid it if possible.

So are you saying Tesla vehicles are not marked up in any way?

 

[drawfour]

Agreed. For me, it's the asinine negotiation tactics that both the buyer and seller go through in order to get what they want ("let me go talk to my manager", getting up and sitting back down in your chair, sob stories about losing money, etc.).

Yeah, that whole "let me go talk to my manager" thing is soooo annoying. I got really pissed off when a dealership did that with me. I told them my offer was firm, and every time they came back with something closer, but never there. I finally just walked out after yelling at them (got other customers to stop what they were doing and look at me) for wasting my time and not being serious about selling cars, and went to another dealership. I gave that dealership an offer below their asking price, and the guy literally said "here, let me just take some more off of that and we'll call it a deal". Sure, they may have significantly marked it up before that, but that was very refreshing. We got the car we wanted with no hassle and paid what we thought was a reasonable price. The only thing that upsets me is that the crappy dealership is the closest one to our house, so when we need service/diagnostics, they end up getting our business. Granted, the service department and sales departments are run by different people, but it leaves a bit of a bad taste in my mouth.

I'm half tempted (if I ever buy a non-Tesla) to tell them I'd like to play a game. One time offer, they accept it or I walk away. The rules are simple. I put down the highest price I'm willing to pay on a piece of paper that they cannot see. They put down the lowest price they're willing to sell to me, also on a paper I can't see. Then we swap papers. If their price is lower than my price, we split the difference in the middle. Both should be happy -- I paid less than I was willing, and they got more than they were willing to let it go for. If there is no overlap, then I walk away. No games. No second chances.

If they beg and plead to try it again, and if I still want the car, I'll tell them "fine, but my max price just went down significantly to penalize you for your games".

I have no idea if they'd be willing to play such a game, but it sure would beat the hassle of the back-and-forth with "manager", or doing the other trick of going to lots of dealers and getting price quotes, then take the lowest two and pit them back and forth to get the lowest offer. I'd really like to just walk in, look at a few cars, decide on which one I want, and settle on a price within a couple minutes.

 

[Trips]

Lexus has a dozen or so dealerships that are no-haggle and in my experience they great to deal with. The issue they have is people getting a quote from them and taking it 250 miles away and telling a different dealership to beat it. While buying the car is a good experience, dealing with the service department is an expensive pain.

 

[Osteolog]

So are you saying Tesla vehicles are not marked up in any way?

You seem to be missing the point again. Teslas are 'marked up' inasmuch as my movie tickets or cell phone are. Obviously these things generally include a profit margin so that the business can remain in business. What Tesla doesn't have is a middleman adding a bunch of extra unnecessary costs (see also: holdbacks) that you can then waste valuable time trying to reduce via haggling. See my iPhone example above. Adding to that, Ford (for example) is presumably selling their cars for an invoice price (ignoring holdbacks for the moment) that makes Ford enough money to remain a sustainable business. All the other nonsense added by the dealer afterwards is just that and does little to contribute to the company that actually makes the cars.

 

[brkaus]

You seem to be missing the point again. Teslas are 'marked up' inasmuch as my movie tickets or cell phone are. Obviously these things generally include a profit margin so that the business can remain in business. What Tesla doesn't have is a middleman adding a bunch of extra unnecessary costs (see also: holdbacks) that you can then waste valuable time trying to reduce via haggling. See my iPhone example above. Adding to that, Ford (for example) is presumably selling their cars for an invoice price (ignoring holdbacks for the moment) that makes Ford enough money to remain a sustainable business. All the other nonsense added by the dealer afterwards is just that and does little to contribute to the company that actually makes the cars.

Exactly. If one person gets a super deal, the next person gets hosed to keep average selling price at a point the dealer likes.

 

[cella]

You seem to be missing the point again. Teslas are 'marked up' inasmuch as my movie tickets or cell phone are. Obviously these things generally include a profit margin so that the business can remain in business. What Tesla doesn't have is a middleman adding a bunch of extra unnecessary costs (see also: holdbacks) that you can then waste valuable time trying to reduce via haggling.

But how do you know Tesla's retail arm doesn't add the same (or higher) markup and "extra unnecessary cost"? As Tesla is trying to enter the mass market, they will incur the same costs that dealerships shoulder today (cost of inventory, showrooms, sales assistants etc.). It seems Tesla is to some extent trying to emulate what Apple does with their own retail stores, which not only are profit centers that generate billions of additional revenue for the company, but also help keep the margins up by reducing the competition among retail outlets. With Tesla you have to pay whatever they say, and you cannot play one delivery center against another as you can with car dealerships. I am not convinced that the direct sales model is advantageous from the customer perspective, or, in other words, that the benefits of "cutting out the middleman" will be passed on to the customer as opposed to generating additional profit for the company.

 

[Osteolog]

But how do you know Tesla's retail arm doesn't add the same (or higher) markup and "extra unnecessary cost"? As Tesla is trying to enter the mass market, they will incur the same costs that dealerships shoulder today (cost of inventory, showrooms, sales assistants etc.). It seems Tesla is to some extent trying to emulate what Apple does with their own retail stores, which not only are profit centers that generate billions of additional revenue for the company, but also help keep the margins up by reducing the competition among retail outlets. With Tesla you have to pay whatever they say, and you cannot play one delivery center against another as you can with car dealerships. I am not convinced that the direct sales model is advantageous from the customer perspective, or, in other words, that the benefits of "cutting out the middleman" will be passed on to the customer as opposed to generating additional profit for the company.

Whether any savings are passed on to the customer is almost entirely orthogonal to the point of this discussion. Again, apply your reasoning to something like the iPhone. 'I sure wish there was a middleman in there adding markup to my iPhone so that I can play the stores off each other and waste hours reducing that markup to get closer to the actual invoice price' and 'we're stuck paying Apple whatever they say for an iPhone'. If it actually did make for a situation that was advantageous to the customer, why haven't other business picked it up? But no, I'm sure you're correct that the dealership model which is protected from competition by law is the best option for customers while all the rest of the free market businesses are just opting for something that is worse for customers.

Having to haggle with people who do that as their job every day and are given knowledge we aren't isn't generally a good way to do things from the point of view of a customer. Clearly, Tesla will incur similar costs to maintain showrooms and maintenance staff, but those costs should be included in the price of the car (same as my tech gadgets). Why do you think it makes sense to require us to haggle for that one portion of the process? We may as well also haggle with their various suppliers so that we can get the best deal on sheet metal, paint, seats, and wheels for our particular car while we're at it.

I am not convinced that the direct sales model is advantageous from the customer perspective, or, in other words, that the benefits of "cutting out the middleman" will be passed on to the customer as opposed to generating additional profit for the company.

Uhh, if there's any extra profit to be had, I damn well want it to go to the company that actually makes the products I like (Focus ST, Audi S5, STI, Model 3, etc) rather than to some random sales staff pushing undercoating and floor matts on me in between trips to 'talk to their manager'.