I often hear people say that the dealership is out to screw everyone, and I am not sure that is entirely fair. Sure, there are some that are really crooks, but for the most part I think that they cannot all be put into that category.
Most dealerships make very little on a new car sale....more is made on used cars. The dealerships make there money on service, parts and warranties. The salesmen generally do not make a lot on each car deal....it's tough to sell someone a $40,000+ vehicle, knowing that if the customer walks out of the store, there are hundreds of other salesmen that are going to try to make the same deal.
My son used to sell cars and typically made $100-$200 on each new car, and only made a living by selling a large volume of vehicles. Certain times of the year, the whole industry craps out and sales are almost non-existent. He worked a a few different dealerships and if one was a shyster, he would not remain there.
I'm not a salesman, but I taught Business and Marketing for 35+ years.
As I see it, the bottom line looks like this: A person goes into the dealership because they need/want a new vehicle. The dealership offers a certain amount of money for a trade, and charges a specific amount for the new vehicle. Generally, there is some negotiation, and, of course, the all out effort to sell warranties.
However, it is the buyer that actually makes the final decision. No one forces the buyer to take the deal....hell, there are literally hundreds of other dealerships that sell vehicles. So, if the buyer is happy with the deal, then I don't see where anyone is getting screwed.
I think the biggest issue is that buyers get all emotional and "want" the vehicle, hence overlooking or not caring about finance charges, warranty costs, etc. until a few days after the sale. If the buyer had a more rational attitude, sat back and clearly reviewed the deal, there would be less cognitive dissonance (remorse after the purchase).
Not to say that some dealerships don't clearly take advantage of the unknowing little old lady, but when I hear a 20-50 year old guy yell that he got screwed on a truck purchase, I wonder how much he was really involved in the deal rather that being over excited about that shiny new truck??????
The best example was when I was purchasing my current Ram truck. There was another guy buying a Chrysler 200, and was negotiating with the salesman...he insisted that his payment be at or under $300 per month. They worked the deal and he negotiated a $290 payment. I was getting ready to go into the finance office when he came out. He was smiling all over and stated that he got an extended warranty, tire warranty, windshield warranty, paint sealant, etc., etc., and his payment was still under $500!!!! I contend that he screwed himself.....
