AUTOMOBILE PURCHASES Do most people walk into a dealership and pay the sticker p

Question

AUTOMOBILE PURCHASES

Do most people walk into a dealership and pay the sticker price on the side of the car? Should they? Does everyone pay the same price for the same car? Why? Why not? Have you followed through with a purchase and if so, what was your experience like? How has the Internet changed the way people buy new cars? Since buyers negotiate their own deal for differentiated new cars (including financing and trade-in) they pay different prices. What determines how much the person pays? Make sure to include vocabulary from the readings, namely “willingness to pay” and “consumer surplus”

Explanation / Answer

Most people walk into a dealership and pay the sticker price on the side of the car.They should not behave in that way.If you pay the sticker price than actually you are going to give the dealer additional profit of thousands of dollars.When you are spending a huge amount for your car better you should negotiate.You should focus on your willingness to pay. No everyone doesnot pay same price for the same car because when a customer is well informed about the car price from various sources like internet,from others etc than definately the customer will negotiate and get it at lower price but the customer who will not negotiate will end up paying more for the same car. Although the MSRP is the suggested price, dealers have the freedom to ask more or less than the figure.Because of these also price varies. Yes I have followed through with a purchase. I had a good experience.The first thing that Icame across was the point from the dealer that dealers were very experienced.The best statement that I came across was that buying a car is investment.Another statement that is we will earn little profit by selling this car is also common.So its very much required to have a proper information regarding the price of the car. Internet has changed a lot the way people buy new cars.With a range of information about car options online, many customers have done much of their “shopping” online before heading out to a dealership.Customers are more informed.With the help of internet customers will get information regarding the meaning of Manufacturers Suggested Retail Price(MSRP).It’s now even possible to receive pre-approval for an auto loan after filling out a short application online. And this all happens before even stepping foot onto the dealership’s property. The money that the customer pays depends on many things His monthly income. Conversation between dealer and the customer Prior information regarding the car. Loan facility and EMI facility etc.

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