Intangelon
02-07-2006, 21:14
I, for one, HOPE the housing bubble bursts. There's no way in hell I'll ever be able to afford a house anywhere near where I want to live. It makes me wonder if housing isn't one of those things that shouldn't be subject to the variances of the free market. Deregulation of phone service I can see, but when where you live and what you drive are treated like haggling sessions with information asymmetry virtually assuring that nobody will pay what either commodity is truly worth (thus ensuring ridiculous profits for realtors and auto dealers)...it gets scary.
What if everything we bought was like houses and cars? Can you imagine haggling over a loaf of bread? There's a standard profit on virtually everything sold -- why not houses and cars? PROPERTY I understand, its value is tied to varying factors (some of them specious and highly twitchy, which adds to this overall misgiving I have), but the house itself or the car? Why can't we ever be shown, without having to be a consumer sleuth, what the person selling us either of those two things actually paid for them? Why does a car dealer look at you like you've just asked him to eat his own child when you ask him what he paid for the used car you're trying not to get fleeced on? Moreover, why do we tolerate such arrogance? Surely,$1000 profit on a used car is enough!
When I went in to buy my 2002 Honda Civic Si in Bismarck, the original price was $14,900. Doing some basic preliminary research, I discovered that the high private sale price (and why is there a difference THERE, by the way?) was $11,325. When I sat down to deal with the salesdude (which is what he was...a dude...highlighted hair, massive amounts of product, aviator sunglasses and enough Abercrombie clothing to be in an ad), I told him all I'd discovered and said that I would pay no more than $12,000 for the car. I figured that $775 profit -- as far as I knew -- was solid. I worked one summer for an auto wholesaler as a driver and records-keeper, and I know that there was no way in hell they paid $11k for this car. I also knew the car had a manual transmission and therefore unpopular in the Bismarck market (of the hundred cars or so on the lot, only four were stickshift -- the region is not stick-friendly for reasons I don't know...maybe they're burnt out on shifting from their tractors?), thus making it theoretically worth a bit less than if it were being sold in my real home city of Seattle.
The guy "goes and talks to his supervisor" (don't get me started on THAT), and comes back with a figure of $13,600. Confused as to whether I'd been heard, I repeated my statement simply. "I will buy this car for $12,000 or I will leave." We sometimes forget that we have the power of denying the sale. He retreated again and came back with some Sharpie-handwritten missive, apparently from the aforementioned supervisor that read "No BS, no trade, $12,900." Without signing anything, I agreed to consider the price and asked for them to evaluate my trade. Well, it was a 1991 Acura Integra manual transmission, so I knew I wasn't going to get anywhere near teh book value of $1750. I'd planned on $500, and I was exactly right. That set the price of the car at $12,400. I went in with a "demand" price of $12,000 and an "highest acceptable" of $12,500 so I agreed and the deal was signed and done.
Thing is, I still think they probably profited on that car to the tune of at least $1400 and probably more. And just think if I had paid their asking price. Why does it have to be a battle like this? Why are we so intimidated by car salesdudes? Why is $1000 or more profit on a used car not enough? I don't want to sound like a profit-is-murder complete anticapitalist here, but why are only big purchases so fraught with traps? A $1000 profit on, say a $10,000 car is 10%. What kind of profit margin do the makers of bread expect? What's reasonable considering overhead and other costs of business? What's reasonable about basing someone's salary on how many deals they can make when all the deals aren't deals for anyone but the seller?
And if a car was this much of a joust, I loathe to think of what buying a house will be like when I do. *shudder* I mean, I hate paying rent, but damn.
I know this sounds somewhat naive, but WTF?
What if everything we bought was like houses and cars? Can you imagine haggling over a loaf of bread? There's a standard profit on virtually everything sold -- why not houses and cars? PROPERTY I understand, its value is tied to varying factors (some of them specious and highly twitchy, which adds to this overall misgiving I have), but the house itself or the car? Why can't we ever be shown, without having to be a consumer sleuth, what the person selling us either of those two things actually paid for them? Why does a car dealer look at you like you've just asked him to eat his own child when you ask him what he paid for the used car you're trying not to get fleeced on? Moreover, why do we tolerate such arrogance? Surely,$1000 profit on a used car is enough!
When I went in to buy my 2002 Honda Civic Si in Bismarck, the original price was $14,900. Doing some basic preliminary research, I discovered that the high private sale price (and why is there a difference THERE, by the way?) was $11,325. When I sat down to deal with the salesdude (which is what he was...a dude...highlighted hair, massive amounts of product, aviator sunglasses and enough Abercrombie clothing to be in an ad), I told him all I'd discovered and said that I would pay no more than $12,000 for the car. I figured that $775 profit -- as far as I knew -- was solid. I worked one summer for an auto wholesaler as a driver and records-keeper, and I know that there was no way in hell they paid $11k for this car. I also knew the car had a manual transmission and therefore unpopular in the Bismarck market (of the hundred cars or so on the lot, only four were stickshift -- the region is not stick-friendly for reasons I don't know...maybe they're burnt out on shifting from their tractors?), thus making it theoretically worth a bit less than if it were being sold in my real home city of Seattle.
The guy "goes and talks to his supervisor" (don't get me started on THAT), and comes back with a figure of $13,600. Confused as to whether I'd been heard, I repeated my statement simply. "I will buy this car for $12,000 or I will leave." We sometimes forget that we have the power of denying the sale. He retreated again and came back with some Sharpie-handwritten missive, apparently from the aforementioned supervisor that read "No BS, no trade, $12,900." Without signing anything, I agreed to consider the price and asked for them to evaluate my trade. Well, it was a 1991 Acura Integra manual transmission, so I knew I wasn't going to get anywhere near teh book value of $1750. I'd planned on $500, and I was exactly right. That set the price of the car at $12,400. I went in with a "demand" price of $12,000 and an "highest acceptable" of $12,500 so I agreed and the deal was signed and done.
Thing is, I still think they probably profited on that car to the tune of at least $1400 and probably more. And just think if I had paid their asking price. Why does it have to be a battle like this? Why are we so intimidated by car salesdudes? Why is $1000 or more profit on a used car not enough? I don't want to sound like a profit-is-murder complete anticapitalist here, but why are only big purchases so fraught with traps? A $1000 profit on, say a $10,000 car is 10%. What kind of profit margin do the makers of bread expect? What's reasonable considering overhead and other costs of business? What's reasonable about basing someone's salary on how many deals they can make when all the deals aren't deals for anyone but the seller?
And if a car was this much of a joust, I loathe to think of what buying a house will be like when I do. *shudder* I mean, I hate paying rent, but damn.
I know this sounds somewhat naive, but WTF?