The Internet Pricing Bait and Switch

Posted on May 25, 2020 in Editorials | 1 comment

The Internet brings transparency to the car buying process and allows us to search the whole country for our favorite car. While shopping for a WRX a few months ago, I got quotes from dealers as far as 1,500 miles away. I ended up skipping the local dealers and travelling to a dealer 80 miles away in order to get the best price.

Leaving your immediate geographical area can be beneficial in many instances, especially if you can find a more competitive market that’s reasonably close. Unscrupulous dealers have caught on to geographical buyers who are only looking for the lowest price. These dealers combine geography and psychology in order to dupe buyers to come in and often get rewarded for their shameless behavior by making the sale.

Shopping for the WRX involved getting quotes from local dealers as well as dealers in a 100 mile radius around my home. I also requested a quote from a Colorado dealer as they are well known for having the lowest prices in the nation and shipping car all across the country. I took the quote from the Colorado dealer and asked all of the local dealers to match it. The ones near my home refused to come close but a dealer that was 80 miles decided to match it and I ended up purchasing the car there. My transaction went smoothly and the price was honored — but that is not always the case.

Many potential buyers will search and quote a new car way outside their immediate area and talk to dealers that might be located three or four hours away. Let’s say Bob is shopping for a new car and he sends quote requests out to many dealers. He receives a quote from a dealer that is three hours away that is $700 less than any of the local dealers can offer. He takes the quote into his local dealers but they state that they cannot match it as Bob does not qualify for all of the incentives. He decides that the local dealer is out to get extra profit and that a $700 savings is worth a six hour round trip. He picks up a one-way rental car for $70 and heads out to the far away dealer.

Once he arrives, he is happy to find the car he was quoted sitting out front and goes in to finish up the transaction. The salesman collects all of his information and informs him that the price will be $1,000 higher than they initially quoted him in the email since he does not qualify for all of the incentives. Bob gets angry and wants to storm out but he has already dropped off his one-way rental and told his buddies that they are going out for a cruise that night. He is now $370 over the price that his local dealer offered him but does not want to slink back after calling them a bunch of crooks.

Bob decides his best bet is to swallow what’s left of his pride and plead with the dealer to negotiate with him. The dealer is prepared for this moment and offers the same price as Bob’s local dealer. Since Bob is unwilling to swallow his pride twice and pay for another rental car, he signs on the dotted line and heads out for his three hour drive home. In the end, Bob ended up spending more for his new car and wasting six hours of time driving to a dealer that played on his desire to get the lowest possible price. The unscrupulous dealer gets rewarded and makes another sale while the transparent dealer loses time giving you a quote and test drive.

The far-away dealer relied on Bob not asking too many questions or checking the fine print and they will continue to thrive as there are many others shoppers just like Bob. The transparent local dealer lost a sale and if there are others like it that start hurting the bottom line, they might just resort to the tactics of the far-away dealer.

Internet pricing can be a powerful tool but you should always be sure to get the full price and read all of the fine print so you can get the best price and reward dealers that actually deserve it.