Mild Rant about car dealers

[Dave Schwartz]

I have a story about our 2005 Chrysler Pacifica. We purchased this vehicle new in Nov. 2004 and have simply loved the car. With Chrysler being somewhat overstocked the car simply did not hold it's value.

It was originally stickered at $33k. The following year, because of over-stocked inventories, the 2006 version was around $28k. In 2007 it was $25k and 2008 was around $23k. These prices were for the fully loaded model (i.e. DVD player, high-end sound system, power tailgate, all leather, etc.).

So, as the new price rolled back, obviously are car dropped in value much like a rock. Today, Kelly has that car retailing at $15k but the local dealers offered us $8k. We have decided to drive it until the wheels fall off.


To the story. We have two problems with the car. The sensor system is constantly telling us that we must "service tire system" even though the tires are fine. (This has been fully verified.) The second problem is that the electronic keys intermittently refuse to work.

I took the car to the dealer I purchased it from, Lithia Chrysler in Reno. Here is what I was told:

1. First, these are two separate problems. They want $240 to diagnose.
2. The tire sensors are probably the issue. There are 5 sensors, $40 each plus $60 to install. ($500)
3. It might only be one sensor but it will cost almost as much to verify which sensors are bad as it does to install them, therefore, I might as well just replace them.
4. The keys - They want to replace both keys ($160 each). This problem, which occurs "intermittently," happens with both keys simultaneously. Logically, at least to me, this says that the problem is not the keys themselves but rather the input device. They insist on replacing the keys first, before the unit is considered for replacement. The unit is $900.

5. They have warned me that they are going to charge me $100+ per hour to have a guy stand there and click the keys until they fail and that there is a good chance that they will never fail this way.

6. My total exposure on this deal is $1,800 or more!

7. I have an after-market warranty. They want $120 to file the warranty claim.

8. Before they file the claim I must have proof of every oil change and service I have ever performed or they will not file.

9. If the claim is approved, they will hold the car until payment is received from the warranty company.


This is "punishment" for not having my car serviced with these guys regularly. Instead, I work with a local garage who (for example) does not charge when they do not find anything wrong.

LOL - In this day and age of tight economy, what is wrong with new car dealers? Why don't they just announce, "We don't want your business?"

[highnote]

Great story! Have you considered writing a letter to the editor of the local newspaper? You'd think they'd bend over backwards for your business -- especially if they want to sell you a car in the future!

[pandy]

I have said this for a long time, car dealers in this country consistently damage their industry through their utter contempt for their own customers. This is the only business I know where they look for ways to cheat their customers, are rude to their customers, and in the service area, over charge their customers which drives business away to the local service stations (which is where we get our cars serviced).

As for the extended warranty, when I used mine they did not ask for any proof of oil changes so I was very satisfied.

The Pacifica is one of the vehicles my wife and I have considered purchasing used since it has such a poor resale value and I really like the vehicle. My wife has gotten amazing deals on used American cars. When she purchased her current car, a fully loaded Mercury Sable, it was 2 years old and looked brand new, the original sticker was in the glove compartment, $24,700. She paid $10,000 for it from a dealer. She once bought a beautiful Lincoln Continental, which has terrible resale value around here, for $3,500 and it was 6 years old and had $100,000 miles on it, a $35,000 car! She drove it for 5 years trouble free and sold it for $1,500 when the struts started to go.

Personally, I've pissed away a small fortune on interest and lost value purchasing new cars, from now on I'm keeping my cars longer and then buying used.

[redshift1]

When the car market started tanking I went to leasing as It was impossible to predict a cars future value. Some of the current lease rates especially on the Prius are very nice.

[HUSKER55]

Dave, why don't you take the car to a high performance shop. Like the ones you see on sundays on tv

They know their way around cars and systems and their prices may not be nearly as high. Certainly worth a shot.

I had a car years back that always started "coughing" at 45mph. Dealer said I needed a new tranny.

I left and went to a local shop and he laughed and said no it is in the fuel sysetem.

A $9 gasket and $35 for labor and 30 minutes and I never had a problem afterwards. (something about a secondry pump for something or something)

Maybe it is your turn to get lucky.

What the hell, heh?

[Dave Schwartz]

Dave, why don't you take the car to a high performance shop. Like the ones you see on sundays on tv

I went to our really trusted guys first. They said that the parts are only available to Chrysler dealers.

BTW, I left out the part about how they actually started with a bill for $899 for the 30,000 mile service. This service was performed elsewhere long ago for around $150. They said that I'd need to complete the service to show "proof of continued service" to the warranty company. :lol:

[bigmack]

Today, Kelly has that car retailing at $15k but the local dealers offered us $8k. We have decided to drive it until the wheels fall off.
$15K looks awfully high. Even it being a limited with low miles I believe tops out around $12ish.

[judd]

I have said this for a long time, car dealers in this country consistently damage their industry through their utter contempt for their own customers. This is the only business I know where they look for ways to cheat their customers, are rude to their customers, and in the service area, over charge their customers which drives business away to the local service stations (which is where we get our cars serviced).

As for the extended warranty, when I used mine they did not ask for any proof of oil changes so I was very satisfied.

The Pacifica is one of the vehicles my wife and I have considered purchasing used since it has such a poor resale value and I really like the vehicle. My wife has gotten amazing deals on used American cars. When she purchased her current car, a fully loaded Mercury Sable, it was 2 years old and looked brand new, the original sticker was in the glove compartment, $24,700. She paid $10,000 for it from a dealer. She once bought a beautiful Lincoln Continental, which has terrible resale value around here, for $3,500 and it was 6 years old and had $100,000 miles on it, a $35,000 car! She drove it for 5 years trouble free and sold it for $1,500 when the struts started to go.

Personally, I've pissed away a small fortune on interest and lost value purchasing new cars, from now on I'm keeping my cars longer and then buying used.
not true about dealers, but anyone that buys a chrysler product what do you expect :bang: :D

[Native Texan III]

Look, in comparison, how well KIA are treating their European customers with 7 year warranties.

http://www.inautonews.com/kia-will-offer-seven-years-warranty-to-the-entire-range

[Dave Schwartz]

Make, I got that figure from Kelly this morning. Seems High to me as well.

Lexus offered me $6k on a trade. LOL

[judd]

go to kelly blue book .com will give you trade-in price

[bigmack]

Make, I got that figure from Kelly this morning. Seems High to me as well.

Lexus offered me $6 on a trade. LOL
There are 25+ Pacifica's in Reno Craigslist. You should be able to get all of $11K for it. http://reno.craigslist.org/search/cta?query=pacifica&srchType=T&minAsk=&maxAsk=

I know an old timer in town bought one on Ebay and loves his.

[wisconsin]

Dave,

Feel the need to respond on a couple of your points. Being an employee of a 5 dealer group, maybe I can shed some insight. First and foremost, electrical components are the toughest and most expensive to diagnose. Mechanics are not paid by the hour as we know it. They are only paid on book time for any work they do. Unfortunately, that means they can't just diagnose the problem like the local guy down the street can. The money has to come from somewhere. That's a problem, but from a dealer's point of view, it is the only way it can be done, otherwise you would have tech's investigating everyone's problems willy nilly, real or imagined.

Your warrany has a deductible and a clause that you document your service work. Not uncommon, but the responsibility falls on the customer for obvious reasons. Hopefully, you did read that. I'm not making excuses for a dealer, but again, it's your responsibilty to know what you have to do, and not the dealer's.

Regarding your trade value, that's the toughest part of cars, and believe me, I am right out there on the front line. KBB retail may very well be $15,000, but nobody is paying KBB retail that I am aware of. Everyone wants discounts. Your trade value may be $8,000. There are dealer fees that automatically get charged to that car (the owner gets paid first, no matter what), and then there is reconditioning. Your car is a prime example of reconditioning. ALL of the costs get charged to that car. It's entirely feasible that the dealer would be into that car for close to $11,000 when it's done, and that's if it does not need new brakes, etc. Buy one from a private party and see what you get. After that, we have expenses such as Internet. Our dealership sells about 60 cars per month, and our Internet alone costs over $25,000 plus another $25,000 in newsprint and radio ads. Thats nearly $1000 per car. And we also have a mortgage, office staff, utilities (you should see our water bill, and tax bill, too.)

Just wanting to provide a different perspective about dealers that customers never think of.

[judd]

each department has expenses, body shop, parts dept etc some over $40,000 per month (each department)

[Dave Schwartz]

Wisconsin,

Yes, this is precisely the response I knew I would get if I complained to the dealership.

I cannot fault them for charging to diagnose. My problem is that when I take my car to be fixed at my favorite garage, they bill much more "reasonably."

I used to take my car to the dealership for everything. Then one day, while I was there, I said, "Why don't you give me an oil change while you've got the car?" When I picked up the car they had billed $124 for an oil change. That is insane! Same oil change I was getting down the street for $32 (and there are certainly cheaper ones!).

Whatever you get fixed at the dealer is much, much higher. Why is that? They should be getting parts for less money than the local garage does, yet they want to bill at 40% higher hourly rate and get pure retail for each part.

When my Pacifica's value crashed because the brand new model was 25% cheaper than I paid for it three years before imagine what it did to the value of my car. I cannot hold the dealer responsible for that. Some would say that I chose poorly. My responsibility.

But if America's dealers want to get us back, they don't do it by raping us on repairs.

The message I got from the devaluation of the Pacifica was to purchase a new car for $75k or more because they seem to hold their value. Now I have learned a second message: buy used and service it away from the dealer as soon as the warranty is up.


Fortunately, for me, I really like the Pacifica.
http://www.allpar.com/model/cs.html

When I considered trading it for a $50k+ Lexus a three years ago it was hard to find anything the Lexus had that mine didn't. In fact, when the guy started thumping the heated seats, I asked if that included the rear. "No, but do you really them there?" Gee, the Pacifica has them. And he offered me $8k on a trade-in.


So, as long as it runs great I'll continue to drive it. Hopefully that will last another couple of years and then... I guess I'll bite the bullet and buy another car. Probably higher end. Probably used.

I am just tired of being taken advantage of.

Oh, and I will NEVER buy from a Lithia dealer again.


Dave

[highnote]

Anyone ever hear of Stew Leonard's super market? There are two in the world -- both in Connecticut and in one of the most competitive supermarket markets in the country. Stew Leonard's has been successful because of the value he places on the customer.

When you walk up to the front of his store there are two rules literally carved into a giant stone.

Rule 1 -- The customer is always right.
Rule 2 -- If the customer is ever wrong, reread Rule 1.

[WinterTriangle]

Personally, I've pissed away a small fortune on interest and lost value purchasing new cars, from now on I'm keeping my cars longer and then buying used.

Used to buy new. No more.

The best bang for the buck is 2 year old (off-lease) certified vehicle from dealership.

The moment you drive your new one off the lot, the value is pretty much closer to the above than what you just paid for new. :)


I prefer Toyotas myself.

[judd]

oil changes are not that high, read your bill car must have needed something additional

[wisconsin]

C'mon Dave,

My response was not the typical response you would get from anyone. I was letting you know what is involved, from this side. Our hourly rate is $92. If you can get an hourly rate down the street for $55, run there. Our techs are not only ASE cerified, but they must go through extensive Ford training on a regular basis. It's not the parts, it's the labor that runs the bill up. A water pump might only cost $200, but it takes a long time to get at it, and to put the other stuff back together afterwards.

It's funny that we are the bad guys. Nobody says dick about the plumber who comes to your house, or the appliance repair man. But the big, bad car dealer is out to get everyone, and since were in business, we are supposed to give everything away forever after the sale. I can't think of any business that thrives on making $1000 on a $40,000 truck, and then there is the expectation 5 years later to perform work for cost. And believe me, I am not exaggerating.

[pandy]

My wife bought her fullly-loaded Mercury Sable off a two year lease, amazing deal, $10,000 for a $24,700 vehicle and it was in perfect condition.

[BlueShoe]

New car dealerships do not make money selling you a new car; they make money servicing and repairing the car they sold you. Generally speaking, the dealer will charge 1 1/2 to sometimes 3 times what a perfectly competent independent garage will ask for doing the same work. The only time I patronize a dealer service department is when they send me a coupon for a special deal. A $19.95 oil change and new filter plus light detailing and inspection is certainly worth the trip. Then when the sales service rep tries to talk me up into doing additional work by telling me that my vehicle needs this or that, I merely smile politely and decline the added service. If it is something that is actually needed, can have it done at far less cost elsewhere. In the 6 years since purchasing my present car new, this system has worked just fine.

[johnhannibalsmith]

Just used. Pre-1988 if possible. Toyota, Datsun, Mazda, if possible. 5-speed, if possible. Under $2,500, for certain.

Dispose of readily at my discretion.

[Dave Schwartz]

My response was not the typical response you would get from anyone. I was letting you know what is involved, from this side. Our hourly rate is $92. If you can get an hourly rate down the street for $55, run there. Our techs are not only ASE cerified, but they must go through extensive Ford training on a regular basis. It's not the parts, it's the labor that runs the bill up. A water pump might only cost $200, but it takes a long time to get at it, and to put the other stuff back together afterwards.

Sorry if it sounded like I was lumping you with them. That was not my intention. Perhaps you work for a really great dealership. I know they exist. Somewhere.

The issue is not the hourly rate. The issue is that you purchase a car from a local dealer but choose to service it elsewhere. When you get to the point of an item that must be dealer-installed they make it perfectly clear that you are being screwed because you did not service with them.

Is it different with your dealership?

A story...
A friend of mine purchased a Dodge truck via Costco. The local dealer refused to prep the truck and my friend was forced to drive almost 90 miles to pick it up. The local dealer also refused to do any warranty work on the vehicle.

In my mind's eye this is just plain wrong. If you purchased a Dodge then any Dodge dealer should service it, especially under warranty. The truck broke down once and he had to have it towed to the original dealer to have it worked on.

At the time my next-door neighbor was the F&I manager at Reno Dodge. Over barbecued ribs we discussed it and she stood firmly that Reno Dodge should not "have to" perform warranty service on any car they did not sell. She told me that "punishing" the Costco purchaser was just a way of teaching them that they better buy from a local dealer in the future.

Please explain how this is correct.

This is why SOME car dealers are bad guys.

BTW, Reno Dodge has had the reputation of showing the greatest-profit-per-sale of any dealership in the U.S.


Another story. Back in the early '90s I had a Dodge Stealth. I was doing a seminar in Las Vegas (480 miles away) and the alternator went out. The service manager asked where I serviced my car and verified that I took it to Reno Dodge. The manager told me that the price to fix my car would have gone up about 30% if I had not been servicing my car at Reno Dodge.

That alternator cost me $800.


Regards,
Dave Schwartz

[wisconsin]

Is there any wonder why Dodge dealers are crying the blues?

D=Drive
O=Over
D=Dealer
G=Get
E=Even

Around us, there are a dozen Ford dealers within a 30 minute drive. Our service department is always servicing one of those cars not bought here. To shun away a service customer is like throwing money away, and I can't believe dealers still pull that crap. On the other hand, if there is a log jam of customers, I know who's will get fixed first.

As far as buying from Costco, I would not be in any hurry to prep that car either. The car is drop-shipped at a dealership and the dealer becomes the paper-shuffler, for a measly "courtesy" delivery fee, like $100.

The moral of the story, Dave, is to dis-associate yourself from Dodge all together. Have you driven a Ford lately?

[Dave Schwartz]

LOL - Ford lately. Seriously, I am going to look for a high-ticket used car next time I look.

About the time I looked at the Lexus I also considered the Mercedes SUV. They have one that is much like the Pacifica - lot of common parts I understand. Problem is that it is butt-ugly. IMHO, Mercedes is just another over-priced American-like car.

What I will probably do (eventually) is look at some higher-priced cars and build a spreadsheet of the typical year and two-year depreciation percentages. I am simply tired of making bad investments in cars.

[pandy]

I recall reading an article in Playboy a few years back when the Chrysler 300 first came out, the one that cuts off a few of the cylinders to save gas at cruising speeds. Anyway, this auto-journalist, who also writes for Car and Driver, said that even though like most writers for Car And Driver he was always biased against US because it was just cooler to prefer the Euro-cars, he admitted that the Chrysler 300 was almost identical to a Mercedes sedan that sold for twice as much, or over $70k. He said that if you were blindfolded and drove both cars you could not tell the difference, they had the same suspensions, and the same engines.

[wisconsin]

LOL - Ford lately. Seriously, I am going to look for a high-ticket used car next time I look.

About the time I looked at the Lexus I also considered the Mercedes SUV. They have one that is much like the Pacifica - lot of common parts I understand. Problem is that it is butt-ugly. IMHO, Mercedes is just another over-priced American-like car.

What I will probably do (eventually) is look at some higher-priced cars and build a spreadsheet of the typical year and two-year depreciation percentages. I am simply tired of making bad investments in cars.

Fair enough, I'm not going to try and convince you, but you best look at JD Powers and Consumer Reports before you laugh at Ford. Lexus is an overpriced Toyota, so you will overpay, and Mercedes are genrally selling for invoice, and if you thought that your Chrysler was expensive to maintain and fix, whoo boy........

[judd]

LOL - Ford lately. Seriously, I am going to look for a high-ticket used car next time I look.

About the time I looked at the Lexus I also considered the Mercedes SUV. They have one that is much like the Pacifica - lot of common parts I understand. Problem is that it is butt-ugly. IMHO, Mercedes is just another over-priced American-like car.

What I will probably do (eventually) is look at some higher-priced cars and build a spreadsheet of the typical year and two-year depreciation percentages. I am simply tired of making bad investments in cars.
how can you laugh at ford when you been driving chrysler products ?? :D

[Dave Schwartz]

No, no. You misunderstood. I was chuckling at your response. Have you driven a Ford lately.

Of the American car companies, Ford is definitely out in front. No arguement from me there.

[bigmack]

I've always been more of European fan. Always bought used, never had anything serious go wrong with the exception of a 6 Series BMW that had some drive tran problems. Sold it for a $1K less than I put into it. Fav was a 7 Series that I picked-up from an equine vet in Del Mar. It was a few years old and he wanted to move into a Range Rover.

Euro's will easily go 200,000+. I've had a few Jag's. One the AC went out when I had a place in Rancho Mirage for the summer. Never had any problems with the Lucas electronics. I've had many Saabs.

Went to look at a Saab rag-top from a private party in a Jag I had. I liked it and offered to pay what he was axing. He says 'wait a sec'. Goes in the house and calls some guy that was there a couple days earlier and offered him less. He tells the guy that I'm there offering what he wanted for it and if he wanted it he'd have to pay full price. Guy agrees over the phone. Seller comes back out to me and says 'I've decided to sell it to the guy that was here 2 days ago' - I says 'What are you nuts?' He says 'What do you need it for, you have a Jag?' I restate 'What are you nuts?'

Anywho, buying a used Euro and getting it checked out in advance is my avenue. I've rarely sold them for much less than I've paid for 'em. No depreciation. Free cars.

[pandy]

Foreign cars in general and especially the Japanese cars are overrated. I debated friends for years that Toyota was not a superior product and now it has been proven since more Toyotas have been recalled than sold in the last 5 or 6 years.

If you look at the actual engineering involved, all of the major car makers have very similar products. The direct overhead cam is the popular engine and has been for years and with proper maintenance will last for 200k to 300k miles.

I buy American because it is better for the economy. The only advantage to buying foreign is the low lease rates on Japanese cars, because of their excellent trade in values. People actually think that they are better quality than American cars and perception is important with resale value.

A lot of stats that appear in Consumer reports are bogus. For instance, they showed percentages but not totals. Toyota is a great example of this. When they had lower sales, the reliability rating was sky high. But, there were a lot more Fords on the road, so of course there more of a chance for a Ford to have a problem. Once Toyota passed Ford and become the number 1 car maker, oh boy, the shit hit the fan and their reliability rating collapsed.

I read Consumer Reports once in a while but I realize that basically it is an inaccurate, poorly managed and overrated magazine. It's entertaining to read but you can't take it seriously. It's good for bragging rights though, my Boston Acoustics speakers were ranked number 1 in Consumer Reports and I never hesitate to tell my friends that I have the top ranked speakers. :)

[judd]

nothing like a vette

[Dave Schwartz]

Pandy,

I must disagree.

When I had my Stealth, Consumer Reports highlighted problems in electronics and interior integrity. That was precisely where I had the problems.

In the mid-90s we had a GMC Safari. It was a great van and consumer reports said so. When we traded it in, we got the Chevy equivalent, the Astro Van. CR had it on their do-not-buy list. It was pure crap. (I should have read CR before I purchased.)

Although my experience is over 10 years old, it was extremely positive.


Dave

[pandy]

I agree Dave that quite often Consumer Reports is correct, but they also have a lot of bad information based on insufficient data.

[Dave Schwartz]

Pandy, that could very well be true.

[judd]

just got wifes infinity oil change at dealer less than $40 :)

[Robert Goren]

Consumer Reports lost all credibility with me about 25 years ago when they ranked OLD MILWAUKEE as the number 1 beer. I haven't look a copy since.

[JustRalph]

Consumer Reports lost all credibility with me about 25 years ago when they ranked OLD MILWAUKEE as the number 1 beer. I haven't look a copy since.

Well!! That'll Learn Em!!

[HUSKER55]

old milwaukee beer is one of the reasons straight bourbon was invented;)

[Dave Schwartz]

Update: The problem with my tire sensors, which Lithia wanted $240 to diagnose and at least another $500 to fix was repaired elsewhere today for a grand total of $189, including tax.

Lithia will never get any more of my business and new car dealers do not get to demand I service with them after warranty!