Academic

Car Shopping During a Financial Crisis

By Gordon Smith, Christine, Hurt, Vic Fleischer, Fred Tung, Lisa Fairfax, David Zaring

We are in the market for a new car, and we spent most of Saturday at local automobile dealerships, test driving various mid-size sedans. I wondered if the Saturday following April 15 would be a big shopping day, especially in a valley where car dealers are closed on Sunday, but the showrooms and lots were almost deserted and the sales personnel had all of the time in the world for us. Whenever we found a car that might fit our needs, they started chopping the price without our even asking.

One salesman went straight to employee pricing (invoice + $300) as his starting price. If we wanted to get someone really excited, we would ask about a 2008 model that was still on the lot. Negotiations for those were starting with $6000-$7000 discounts off the sticker.

I have no idea how low they are willing to go, since we haven't gotten serious about any of the vehicles, yet, but I am feeling pretty popular. On my way home at the end of the day, one of my sons called from home to tell me that a dealership we had just visited "just found a really cool car for you!"

Most of the sales personnel shied away from negative selling, though one guy at a foreign dealership warned me to stay away from the American manufacturers. The resale on those American cars is dropping through the floor. This within minutes of offering to unload a brand new 2008 at a very steep discount.

All of this reminded me vaguely of visiting the tourist markets in India and China. If you have done that, you may recall that mix of guilt over the fact that you were bargaining at all combined with apprehension that you were about to be taken to the cleaners. Here's hoping that we end up with something better than an imitation Pashmina scarf.

Full post as published by Conglomerate on April 20, 2009 (boomark / email).