• Sean Lanham

Dealerships Are Done (Part 1)

Updated: Jun 12, 2020

You can do just about anything online now. With COVID-19, we are leaning even more on our online services but why haven't dealerships caught up. We'll take you through a COVID buying process from a dealership. It's not all bad but we don't ever want to deal with a dealer again.

COVID started lightly impacting the retail car market during April and May 2020. I've had my eye on one of my dream cars for about a year and finally prices started to drop significantly. I found a 2005 BMW M3, yes the legendary E46 M3, at a dealer in Winston Salem, NC. Not overly far from my home but because of COVID restrictions I couldn't go visit. I decided to take advantage of the dealer's e-commerce virtual checkout process. This the first and only good point for the dealer.

Dealerships are recognizing that with COVID restrictions, they can't expect people to flood their showrooms to shake hands and close deals so they began developing their e-commerce platforms. They have also seen how people are starting to adopt near 100% online and touches services like Carvana, Vroom, and Carmax's touch-less service. Well this dealer hasn't mastered their new platform yet.

In the past few years, sales catch phrases and halo terms have become the standard like haggle-free pricing, express checkout, reconditioned cars(not used or preowned) and if you are in the luxury market, you have had home delivery for purchases and service for a few years. Lets start at the beginning. Pricing.

This M3 was very clean, the dealer has a stellar review history and the GM walked me through exactly what was covered in their "reconditioning" process. When their no haggle pricing dropped from $22,000 to $20,999, to $17,999 to $15,499 over 45 days at the height of COVID, it went from being a prospect to being a target. No haggle pricing though. What does that mean? Pretty much the remove the only reason you tolerate the salesmen at the dealership. You go in prepared to turndown their window price and probably their second offer. You are prepared to go from the guy on the lot, to a manager, to a a finance manager, to the GM. That hasn't changed in the e-commerce space.

I called to inquire about the car and what has been done and what the car lacks. The receptionist referred me back to the website to start the express checkout process. This is the digital version of "let me get your info" so they can get you in their sales lead software. Ironically, the form said delaerlead at the bottom of it. I completed the process because I was set on buying this specific M3. Even if it did have problems, I could deal with them for the year, price, specs, and condition. After giving up my life story, I was shocked to see that I could start the paperwork, sort of. I could upload my license and my proof of insurance.

The online process ended right there. For the next 2 days I played phone tag with a salesman and the GM trying to get the out the door price breakdown and wire transfer info. I didn't actually receive the price breakdown until I signed the bill of sale. I calculated the 3% NC sales tax, assumed the normal $500 dealer fee and added in the DMV fees for registration and that's what I decided to wire to them. The salesman gave me a figure $1700 more than the "no-haggle" price. I asked him for the breakdown and he caught a few fees he never mentioned including a $500 mystery fee. Don't be afraid to be a little aggressive, especially when you are paying cash. The dealers have no upward leverage other than add ons so they are either in or out and you should have that attitude as well. Don't cater to them if they won't do the same for you.

After verifying the dealers bank info to make sure everything was in order, I wired my calculated out the door price that I reviewed with my salesman, which he couldn't disagree. I did it before he had an "oh I forgot about this" moment. I was outside of their 30 mile delivery area so I set up a day to take delivery and actually fill out the paperwork since their online section for completing the paperwork never actually populated the deal. Actually non of their online process populated anything because I was asked to text a picture of my license and insurance card. In the end I faxed it because I don't like the feeling of my license being in a strangers cell phone. Not like faxing it makes it safer but just a mental safety.

A few days later I spent about an hour signing paper work and collecting the car. Most of that was waiting and sitting through the finance manager trying to add services to the deal even though I'd already paid for the car in full and mentioned several times I don't want any extras.

Overall the process wasn't any worse than I expected. At least I didn't have to go through the additional hand offs while trying to negotiate a price and payments and credit checks and trade value wars. Would I do it again? NOOOOOOO. I am completely done with dealerships unless I am looking for a one off like I was in this situation. I'd rather buy from a guy on Craigslist at this point. In part 2 I will discuss my most pleasant dealer experience and what my next purchase will look like.

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