# No-haggle car dealerships? Good or bad? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [October 9, 2021, 12:34pm UTC](https://boards.straightdope.com/t/no-haggle-car-dealerships-good-or-bad/952206 "2021-10-09T12:34:13Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![doreen](https://avatars.discourse-cdn.com/v4/letter/d/858c86/32.png) [@doreen](https://boards.straightdope.com/u/doreen)\ **Post date:** [October 10, 2021, 2:58pm UTC](https://boards.straightdope.com/t/no-haggle-car-dealerships-good-or-bad/952206/41 "2021-10-10T14:58:03Z")
> [@I\_Love\_Me\_Vol.I](#): > > Wouldn’t this thread be of interest to people who already understand that you never use dealer financing? Why would you never use dealer financing? - I just looked up rates for my vehicle. The manufacturer financing is 0% for a 24-48 month loan, and .9% for a longer loan, my credit union is 3.29% ( with .5% off if I use their car buying service and .5% off if I set up auto pay) and a bank I have accounts with charges 2.29%. ---
**Author:** ![thorny\_locust](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/thorny_locust/32/431_2.png) [@thorny\_locust](https://boards.straightdope.com/u/thorny_locust)\ **Post date:** [October 10, 2021, 3:00pm UTC](https://boards.straightdope.com/t/no-haggle-car-dealerships-good-or-bad/952206/42 "2021-10-10T15:00:09Z")
The places offering haggle pricing need more sales people, or more hours for sales people, in order to have time for the haggling. That would indeed make their expenses higher; so the no-haggle places should be able to price theirs cheaper on average. A few people probably do come out ahead by the haggle technique. But that only works if a number of others come out behind. And that number coming out behind almost certainly includes some of those who think they came out ahead. ---
**Author:** ![Roger\_That](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/roger_that/32/8505_2.png) [@Roger\_That](https://boards.straightdope.com/u/Roger_That)\ **Post date:** [October 10, 2021, 3:01pm UTC](https://boards.straightdope.com/t/no-haggle-car-dealerships-good-or-bad/952206/43 "2021-10-10T15:01:00Z")
> [@k9bfriender](#): > > hey have less overhead in not having a bunch of sales people around to haggle prices with That’s what I’m thinking. I’m not looking to buy a car for another 10 years, so I’m not interested personally as much as I am wondering how the no-haggle business model works out. I’d imagine that the cost of paying salesmen huge salaries to screw naive customers might seem onerous to a few dealers. “Hmmm if I can save 3K per car on a much smaller staff, and it costs me only 3K per car making less profit, maybe I can manage that?” ---
**Author:** ![Hampshire](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hampshire/32/4887_2.png) [@Hampshire](https://boards.straightdope.com/u/Hampshire)\ **Post date:** [October 10, 2021, 3:21pm UTC](https://boards.straightdope.com/t/no-haggle-car-dealerships-good-or-bad/952206/44 "2021-10-10T15:21:31Z")
Don’t know why people are disparaging dealer financing. If you know what rate/term you can get with your own bank then it’s a pretty simple yes/no decision to make AFTER the final price on the vehicle has been figured out. I’ve done it multiple times and the dealers always seem to beat the rates my banks are giving. As far as trade-ins go while it’s true you can usually get more by selling it on your own it gets tricky if the vehicle you are selling has a high value since most people don’t have $17k sitting around in cash for a used car. I’ve successfully used CarMax in these cases. Not to sell the car to them but to get a hard copy offer in hand. That then goes with me to the dealer where I’m buying a new car. Again, AFTER the new vehicle price is settled on you can offer the trade-in and ask them if they will meet your CarMax offer. The last two I’ve done this with took me up on the offer and saved me a ton of sales tax on the new vehicle price. ---
**Author:** ![Czarcasm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/czarcasm/32/4050_2.png) [@Czarcasm](https://boards.straightdope.com/u/Czarcasm)\ **Post date:** [October 10, 2021, 3:29pm UTC](https://boards.straightdope.com/t/no-haggle-car-dealerships-good-or-bad/952206/45 "2021-10-10T15:29:43Z")
Here is a recent _Motley Fool_ article detailing some of the possible problems with dealer financing: [5 Reasons to Avoid Car Dealership Financing (fool.com)](https://www.fool.com/the-ascent/personal-loans/articles/5-reasons-avoid-car-dealership-financing/) ---
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [October 10, 2021, 3:45pm UTC](https://boards.straightdope.com/t/no-haggle-car-dealerships-good-or-bad/952206/46 "2021-10-10T15:45:07Z")
There’s something called “price discrimination”, and in general, it’s a good thing for everyone involved. All sellers try to do it; it just works differently for cars and for groceries. The idea is that there’s some bare minimum price at which you can sell a product and make any profit at all. Any sale at that price or higher is better than not selling the item. But, of course, you’d prefer to sell the item for a much higher price, if you can. And customers differ in what they’re willing to pay for an item. Some customers aren’t willing to pay even the minimum price: OK, there’s not much to be done about that; you’re just not going to do business with them. Some are willing to pay the minimum price, but not much more. Some are willing to pay much more than the minimum price. Now, ideally, you’d charge every customer what they’re willing to pay: Make a little profit on the ones willing to pay only a little more than the minimum, and a lot of profit on the ones willing to pay a lot. But you can’t tell, a priori, what any given customer is genuinely willing to pay. So you play a variety of games with the customer. Haggling, of course, is the most straightforward version of this, but it’s usually not worth the seller’s time, for a bill of $50 or whatever you’d see in a typical grocery purchase. So for cheaper things like groceries, they have coupons: Some people bother to get the coupons and bring them in, and some people don’t. When you’re talking thousands or tens of thousands of dollars, though, like for a car, it’s worth an hour or two of negotiating if that can make a difference of hundreds of dollars. ---
**Author:** ![Hampshire](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hampshire/32/4887_2.png) [@Hampshire](https://boards.straightdope.com/u/Hampshire)\ **Post date:** [October 10, 2021, 3:54pm UTC](https://boards.straightdope.com/t/no-haggle-car-dealerships-good-or-bad/952206/47 "2021-10-10T15:54:09Z")
Those are some pretty flimsy reasons to avoid dealer financing. If you know the bottom line rate/term you can get shopping on your own and the dealer can beat that rate with the same term it’s a pretty cut and dry decision. ---
**Author:** ![Capn\_Carl](https://avatars.discourse-cdn.com/v4/letter/c/838e76/32.png) [@Capn\_Carl](https://boards.straightdope.com/u/Capn_Carl)\ **Post date:** [October 10, 2021, 3:56pm UTC](https://boards.straightdope.com/t/no-haggle-car-dealerships-good-or-bad/952206/48 "2021-10-10T15:56:31Z")
There’s an auto manufacturer that uses no-haggle sales, and always has, and they’re doing very well: Tesla. There’s no negotiation, prices are fixed. The sales staff exists only to help you select options and guide you through the purchasing site. If you don’t need a test drive, you can do all the ordering and financing right from home. ---
**Author:** ![Mighty\_Mouse](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mighty_mouse/32/7776_2.png) [@Mighty\_Mouse](https://boards.straightdope.com/u/Mighty_Mouse)\ **Post date:** [October 10, 2021, 3:59pm UTC](https://boards.straightdope.com/t/no-haggle-car-dealerships-good-or-bad/952206/49 "2021-10-10T15:59:50Z")
> [@Chronos](#): > > There’s something called “price discrimination”, and in general, it’s a good thing for everyone involved. Wait what? Has Economics 101 been revolutionized since the 1980s? ---
**Author:** ![Briny\_Deep](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/briny_deep/32/17188_2.png) [@Briny\_Deep](https://boards.straightdope.com/u/Briny_Deep)\ **Post date:** [October 10, 2021, 4:11pm UTC](https://boards.straightdope.com/t/no-haggle-car-dealerships-good-or-bad/952206/50 "2021-10-10T16:11:20Z")
> [@markn\_1](#): > > Yes, there’s a possibility she didn’t really get me the best price I could have gotten by negotiating myself, but I doubt it I know someone who buys cars this way, and I understand the broker’s commission is based on the size of the discount they achieved – thus they are self-motivated. ---
**Author:** ![dalej42](https://avatars.discourse-cdn.com/v4/letter/d/67e7ee/32.png) [@dalej42](https://boards.straightdope.com/u/dalej42)\ **Post date:** [October 10, 2021, 4:15pm UTC](https://boards.straightdope.com/t/no-haggle-car-dealerships-good-or-bad/952206/51 "2021-10-10T16:15:32Z")
> [@Mighty\_Mouse](#): > > Wait what? Has Economics 101 been revolutionized since the 1980s? Price discrimination is usually a good thing. Airline tickets are a classic example. The leisure traveler gets to travel for less with advance planning. The grocery example, someone who has more time than money can clip coupons and research sales, others with more money than time end up paying the sticker price ---
**Author:** ![doreen](https://avatars.discourse-cdn.com/v4/letter/d/858c86/32.png) [@doreen](https://boards.straightdope.com/u/doreen)\ **Post date:** [October 10, 2021, 4:21pm UTC](https://boards.straightdope.com/t/no-haggle-car-dealerships-good-or-bad/952206/52 "2021-10-10T16:21:07Z")
Yes - but that means it doesn’t benefit everyone. Specifically it doesn’t benefit the people who don’t clip coupons, who can’t plan travel in advance with a Saturday night stay, or who don’t haggle effectively. Those people likely pay a higher price with price discrimination that they would if there was a single set price. ---
**Author:** ![Mighty\_Mouse](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mighty_mouse/32/7776_2.png) [@Mighty\_Mouse](https://boards.straightdope.com/u/Mighty_Mouse)\ **Post date:** [October 10, 2021, 4:23pm UTC](https://boards.straightdope.com/t/no-haggle-car-dealerships-good-or-bad/952206/53 "2021-10-10T16:23:45Z")
It is not a good thing for standardized products. If you were buying a car with a whole lot of conditions and restriction compared with someone else, then price discrimination make sense. It’s literally Econ 101. With a standardized product a market price means the buyers fat the consumers surplus and the sellers get the producers surplus. With price discrimination the seller gets both. ---
**Author:** ![dalej42](https://avatars.discourse-cdn.com/v4/letter/d/67e7ee/32.png) [@dalej42](https://boards.straightdope.com/u/dalej42)\ **Post date:** [October 10, 2021, 4:24pm UTC](https://boards.straightdope.com/t/no-haggle-car-dealerships-good-or-bad/952206/54 "2021-10-10T16:24:03Z")
> [@doreen](#): > > Yes - but that means it doesn’t benefit everyone. Specifically it doesn’t benefit the people who don’t clip coupons, who can’t plan travel in advance with a Saturday night stay, or who don’t haggle effectively. Those people likely pay a higher price with price discrimination that they would if there was a single set price. That’s the point, for people who are more price sensitive, they benefit. They make sacrifices in order to obtain a lower price. ---
**Author:** ![doreen](https://avatars.discourse-cdn.com/v4/letter/d/858c86/32.png) [@doreen](https://boards.straightdope.com/u/doreen)\ **Post date:** [October 10, 2021, 4:30pm UTC](https://boards.straightdope.com/t/no-haggle-car-dealerships-good-or-bad/952206/55 "2021-10-10T16:30:49Z")
But the original comment regarding price discrimination was > There’s something called “price discrimination”, and in general, it’s a good thing for everyone involved. It’s not a good thing for everyone involved- it’s a good thing for the seller and possibly for some of the buyers\* but definitely not _everyone_. \*or maybe not - there’s no guarantee, after all, that the price with the coupon is lower than the fixed price would be in an environment without price discrimination. ---
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [October 10, 2021, 4:40pm UTC](https://boards.straightdope.com/t/no-haggle-car-dealerships-good-or-bad/952206/56 "2021-10-10T16:40:29Z")
But the people who are hurt by it aren’t hurt very much. And these aren’t neccessarily fixed sets of people, either: Someone might haggle for some products but not others, or might haggle when they’re young and struggling but not when they’re older and established, or the like. ---
**Author:** ![dalej42](https://avatars.discourse-cdn.com/v4/letter/d/67e7ee/32.png) [@dalej42](https://boards.straightdope.com/u/dalej42)\ **Post date:** [October 10, 2021, 4:40pm UTC](https://boards.straightdope.com/t/no-haggle-car-dealerships-good-or-bad/952206/57 "2021-10-10T16:40:58Z")
> [@doreen](#): > > It’s not a good thing for everyone involved- it’s a good thing for the seller and possibly for some of the buyers\* but definitely not _everyone_ . It’s good for the sticker price payer because they simple get the good or service they want without having to make whatever sacrifices the lower price payer is willing to make. Getting back to car dealerships, let’s take person A who doesn’t bother with haggling or research and ends up paying $3000 more for the equivalent car than person B paid. Person B did more research (spending time) and spent time haggling. Person A was able to use his/her time in other ways. They have the value of the time which wasn’t used in research or haggling. ---
**Author:** ![CookingWithGas](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cookingwithgas/32/485_2.png) [@CookingWithGas](https://boards.straightdope.com/u/CookingWithGas)\ **Post date:** [October 10, 2021, 4:47pm UTC](https://boards.straightdope.com/t/no-haggle-car-dealerships-good-or-bad/952206/58 "2021-10-10T16:47:56Z")
> [@thorny\_locust](#): > > The places offering haggle pricing need more sales people, or more hours for sales people, in order to have time for the haggling. That would indeed make their expenses higher; I’m not sure that’s true–salespeople are paid on commission. ---
**Author:** ![CookingWithGas](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cookingwithgas/32/485_2.png) [@CookingWithGas](https://boards.straightdope.com/u/CookingWithGas)\ **Post date:** [October 10, 2021, 4:50pm UTC](https://boards.straightdope.com/t/no-haggle-car-dealerships-good-or-bad/952206/59 "2021-10-10T16:50:28Z")
> [@thorny\_locust](#): > > Dealers that offer haggle pricing are not doing it out of altruism to give you the best price. It’s good for their bottom line or they wouldn’t do it. Absolutely. Just like anybody who sells anything using any method. I was responding to the claim that with no-haggle pricing you automatically get the best possible price. ---
**Author:** ![k9bfriender](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/k9bfriender/32/3283_2.png) [@k9bfriender](https://boards.straightdope.com/u/k9bfriender)\ **Post date:** [October 10, 2021, 4:57pm UTC](https://boards.straightdope.com/t/no-haggle-car-dealerships-good-or-bad/952206/60 "2021-10-10T16:57:15Z")
> [@CookingWithGas](#): > > I’m not sure that’s true–salespeople are paid on commission. Which comes out of the cost of the car sold. A quick glance around the interwebs indicates that it varies quite a bit, but is usually 20%-30%. So, eliminate salesmen, and you can charge 20-30% less. > [@CookingWithGas](#): > > I was responding to the claim that with no-haggle pricing you automatically get the best possible price. I don’t think that anyone made that claim. [Previous page](https://boards.straightdope.com/t/no-haggle-car-dealerships-good-or-bad/952206.md?page=2) [Next page](https://boards.straightdope.com/t/no-haggle-car-dealerships-good-or-bad/952206.md?page=4)