I doubt that many of you will shed a tear when you get this news:
Car salesmen may be going the way of the dodo.
That's the provocative thesis of a recent BusinessWeekarticle that notes what some industry insiders are calling an unprecedented exodus from the selling game.
Turns out consumers are now too smart and too demanding. (Rats.)
As a result, salesmen may make as little as $100 per car in commission on cars in the $20,000 range, especially those pushed by the big-but-shrinking three, Ford
Blame gas prices and the new switch to cheaper cars -- which carry smaller commissions. Blame "the Internets," those darn tubes so chock-full of information. We consumers not only have instant access to data regarding the price and availability of our preferred models, but we also know exactly how to gouge dealerships for maximum effect, thanks to myriad online buying guides. (Heck, we've got our own advice on that right here, and it begins with the Foolish, yet heretical, suggestion that you simply don't buy a new car.)
And finally, blame the automakers themselves. Many of my colleagues and I have been pointing out for years that the brutal price war undertaken by American manufacturers was going to come back and haunt them. Not only did those multi-thousand-dollar givebacks come (for too long) unaccompanied by cost-cutting, but the endless parade of deals also conditioned buyers to refuse to buy unless there's a sale on. Result? The sales just keep on coming.
But what's bad for those car salesmen will likely be better for you, Fool. We may see dealers move toward more transparent pricing and no-haggle models like those pioneered (oddly enough) by GM at Saturn and used today at CarMax
That's pretty much the default for many of us now, anyway. When I bought my minivan two years ago, I knew what every dealer in the area had in stock and was willing to charge. When I walked into the nearest dealer with the info, they had little choice but to undershoot the competition, and when we returned with another, cheaper counter-offer, they had to drop again. If automakers and dealers dealt with this reality now, and it could wring out a few hundred or thousand bucks' worth of needless markup, that will be a better thing for everyone involved -- manufacturers, dealers, and consumers.
Let's face it -- the old way of doing business was awful. And here's a crazy thought: Maybe, just maybe, over the long run, people will buy more cars if it doesn't take weeks of homework and if they feel confident they're not being cheated.
I should close by noting that I've known several good, honest, trustworthy car salesmen in my day, but they were always too few and far in-between. I don't worry for them. Those who provide service that consumers find worth their money -- they'll continue to thrive. Those whose role in life is little more than collecting a markup and asking us, for the 10th time, if we're sure we don't want that clear-coat, well, they will probably end up looking for work.
But hold your applause, car buyers. We're not there yet.
At the time of publication, Seth Jayson had no positions in any company mentioned here. View his stock holdings and Fool profile here. CarMax is a Motley Fool Inside Value recommendation. Fool rules are here.