Auto Depression
There are myriad reasons why the American automobile market has suffered so badly during the recession: dependence on high-profit gas guzzling SUVs, health care and pension costs for workers, unions vs. management, and quite frankly, selling cars that were inferior to foreign competitors. All the above can and has been debated at length in the press and on the web, but one area of failure that has not been explored is the way autos are sold in this country, and how it may relate to poor car sales.
When the Great Recession hit, the banks were 'too big to fail' and had to be bailed out by the Feds. While most hated the idea, Americans swallowed this bitter bill as an unfortunate reality. But, when GM and Chrysler needed to be bailed out, Americans' attitude was 'let 'em fail!' I was astounded by the sentiment. I am not an economist, but I believe that America needs to produce to survive. The auto industry is one of the last big producers, so how could we let it fail while we propped up banks that just push around paper all day? I know it is much more complicated than that, but on an emotional level, that is how I felt.
Between the time of the bailouts and today, I have purchased one car for myself, and I just helped my mom and dad lease another. This brings my lifetime total of car buying/leasing (for myself or helping a friend or family member during negotiations) to seven. Now I understand why people hate the automobile industry. Americans LOVE their cars, but HATE the process of buying them. In 2010, the process of buying a car is akin to purchasing textiles in a turn-of-the-century Persian street market. If you are planning on buying a car, you better do your homework or you will get 'taken' by the dealer. Buy the Consumer Reports New Car Buyers Kit to get the actual price the dealer paid for the car (not the same as the invoice price). Also, the Kit will help you with the cost of accessories and advice on how to buy, lease, and haggle with the dealer. Buying a used car? Use Consumer Reports as well, but don't forget to check out the Carfax, a service of Carfax.com that lists all the repair records of the car in question...just to make sure you're not getting ripped off.
Just writing the above paragraph made my blood boil. No other product that I have purchased was this much work. If I want to buy a big-screen TV, I will read the reviews on various blogs, find the one I want, and then I will search the web and stores for the best price. Done. When you buy a car, doing your homework will help, but no matter how many times I have purchase a car, I always get flustered at some point during the process. When it is all said and done, you're so mentally exhausted and drained that the thrill of having a new car to drive home is muted by the vile, filthy process you just hand to go through.
If you are in the market for a new or used car, I cannot recommend highly enough buying the Consumer Reports New/Used Car Buyers Kit. It could save you hundreds, if not thousands of dollars. Second, try to avoid HAVING to buy a car. Don't get to the point where your current ride is about to die, and you're hoping it won't conk out in the dealer's lot (that happened this past weekend to my mom's car -- long story short, got a great lease deal on a new Accord and they still took the old car in trade). Also, be prepared to WALK AWAY! If you are confused for some reason, any reason, just tell the dealer to print everything out so you can bring it home and read it over. Be firm! Don't let them push you around. Make your deal over the web via the dealer's site. Make sure to get the 'out the door price'. Use that quote and shop around to other dealers on the web.
There are hundreds of tips like the above on buying a new car, and that's one of the reasons why people hate the industry and why the car market continues to suffer -- the fact that there has to be so may tips and tricks to buying a car! It is the 21st century, and it is time to start selling cars in such a way that doesn't make customers feel like taking a shower after leaving the dealership.
