Saturday, March 14, 2009 

Is a No Haggle Dealership for You

In 1990, General Motors capitalized on consumer's intense dislike of the auto purchasing process and introduced the Saturn. Saturns were, and are still, sold at a flat price with no dickering, dealing or haggling. Today, almost 25% of car buyers purchase vehicles from flat price, or no-haggle, dealerships. But are they truly saving money?

At no-haggle dealerships, cars are priced at a flat rate that typically includes a standard options package and a built in profit for the dealer. Additional options may be sold in flat-rate packages or a la carte. At regular dealerships, cars are displayed with a Manufacturer's Suggested Retail Price but everything including options, warranty, financing and dealer profit is negotiable.

Research has shown that educated consumers pay much less for cars at regular dealerships than at no-haggle dealerships. This is because regular dealers set average profit goals over time. For example, if they sell five cars, the average profit per car should be a certain amount, say $1,000. That means of those five cars, three could sell for $1000 profit, but the dealer could make $2000 and $0 profit on the remaining two cars and still hit their goal. At a no-haggle dealership, the profit goal is fixed per car, meaning that while you will not pay $1000 more because you have poor negotiating skills, you will also not save $1000 if you have good ones.

There are certain people who historically do benefit from purchasing cars from no-haggle dealerships. Young adults, women and minorities in particular, have historically paid higher prices than other groups at regular auto dealerships and may benefit from no-haggle pricing. In fact, reacting to the trend of more and more young people turning to no-haggle dealerships for their automobile purchases, Toyota introduced the Scion in 2003. The Scion is a small car that comes with trendy options packages and is priced and marketed directly at young people who don't want to negotiate to purchase their car.

Therefore, if you are willing to do the research and confident in your negotiation skills, you will almost certainly save money at a regular dealership unless you want a Saturn or Scion. Then you'll have to pay the same price as everyone else. However, if you're timid, too busy to research or spend time making a deal, or in one of the groups that historically are offered worse deals, you may be better off at a no-haggle dealership.

Jonathon Hardcastle writes articles on many topics including Automotive, Outdoors, and Business

 

What is a Supercar?

When Henry Ford started producing automobiles, a car was, well, a car. And when Henry's cars had lived out their life and were hauled off to a wrecking yard for burial, they were still a car.
Of course, there were convertibles, sedans, sports cars, trucks and racing cars. But if one of these began its life as, say, a convertible, it was still a convertible when its life ended.

Fast-forward to the 1960's and the present day. Yes, we still have convertibles, sedans, sports cars, trucks and racing cars. But we also have cult cars, chick cars, guy cars, muscle cars, classic cars, and super cars. And while there was never any controversy over whether a convertible was a convertible or a sedan was a sedan, there is disagreement over whether a car is or isn't a cult car, chick car, guy car, muscle car, classic car, or super car.

Further, once a convertible always a convertible. But not so with a super car. A car can be a super car in one decade but not in the next. So what characteristics constitute it?

Historically, the term super car was originally used in 1917 in an article in Car and Track about an Alfa Romeo Monza. However, CAR Magazine takes credit for 'coining' the phrase when L. J. K. Setright, a well-known British motor journalist, applied it to the Lamborghini Miura in the 1960's. In the 1970's it was used regularly although there still wasn't total agreement on exactly what it meant. That is still the case today although there are some benchmarks.

A must is high speed. However, the ability to attain ultimate speed levels alone is not sufficient. The car must also have world class handling ability when driven at these speeds. As a result, they usually have rear engine placement and rear wheel drive. This feature places the bulk of the car's weight in the middle of the car and permits intricate maneuvering and precision handling at high speeds.

Another feature is high acceleration. The vehicle should be able to go from 0 to 100 mph in less than seven seconds and from 0 to 200 mph in less than thirty seconds. Added to high performance are the characteristics, which are more difficult to define, and may be the cause of some of the controversy in labeling a supercar.

It should be 'exotic' in appearance and be on the cutting edge of design. Although not a benchmark, one feature that all super autos share is high price which translates to anywhere from a few hundred thousand to around two million dollars.

They can either be factory models or modifications of factory models. An example of a modification is the 1986 Pontiac Trans AM. The Polly Motorsport Company, based in Norway, took this car and modified it so it was 'lightening fast.' The modified Trans AM set a speed record of 407.134 kmph on the Papenburg Test Track in Germany. It could also accelerate from 0-100 kmph in 2.3 seconds. Not only is it now a super car, it is also the fastest street legal car in Europe.

Another automobile that achieved both super and cult status is the Lamborghini Countach, popularized due to its extreme design.

One is not likely to encounter a super car on the way to work during the morning rush hour. In fact, this car is not a daily commuter; it is a toy, albeit a high priced one designed for fun for the elite.

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