Haggling making a comeback?
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This was inevitable, Retail competition forcing other retailers to lower their prices, wait till someone starts accepting trade-ins...
The fun will really begin when consumers start demanding Government enforced sticker prices (it could happen, we live in a liberal society) on all merchandise when they discover the mark up on the goods and services that they have been paying exhorbenant prices for over the years. I almost forgot about the banking, finance and credit card industries and the hidden fees and mark ups on there services, a bank will make you feel good when you deposit the money... and I always loved the practice of charging you to access your money, let's get this straight, I gave you my money to hold in a non-interest bearing account and you charge me for retrieving in the form of a fee, what a great industry.
The retail automobile industry has operated under intense pressure from consumers and consumer advocates, let's see them tackle these other industries when there pricing matrix is opened up for scrutiny and review. Is it any wonder that a furniture retailer can discount a sofa 50% and still make a profit, or a clothing retailer or an electronics company, we can all do the math. Now we will witness the opening of a Pandora's box of good salacious, old fashioned price gouging and the retail auto industry won't be the topic of conversation.
In no way do I defend any retail auto dealers unethical practices, I believe the more informed a consumer is the better off the industry will be, the problem is there are not enough informed consumers, so what may lead one to believe that they may have been deceived by a auto retailer, may in fact have been above board, however the customer did not fully understand what was happening financially to sell them a vehicle (i.e finance companies discounting a finance contract to the auto dealer). This is a practice that is virtually unknown to a consumer and not well reported on.
For example, a customer who has substandard (non-prime) credit wants to purchase a vehicle, however there credit is less than perfect, for a number of reasons, the finance contract is financed by a lending company that will purchase the contract for a discount fee (sometimes a flat fee or a percentage of the financed amount, which could be as high as 30%). This fee is not negotiable between the dealer and the finance customer (plus the lender gets all of the interest) it is the cost of doing business with the lender. This fee may end up being passed along to the customer in the form of a higher priced vehicle or other items added to the vehicle, so that there is enough profit in the deal to make a sale to the customer. A customer would possibly not fully understand this discount and therefore believes that the car dealer just marked up the price because the customer could not arrange financing on there own. I will talk more about these practices in other articles to completely explain why certain things happen at car dealerships.
But back to the topic, this is going to be real good for consumers or will result in more mandating by our government, I hope that the government stays out of it and let the free enterprise system work...
My thoughts...
Enjoy Today!
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