Confirmation of Tesla's Sales Strategy

[Arnold Panz]

For those who are Dilbert/Scott Adams fans, I just read his blog post about buying a new car, and it was a fantastic reminder that anytime someone criticizes the way Tesla is selling cars, they really don't know what they're talking about. People hate buying cars at dealerships and hate the whole experience. Is Tesla's system perfect yet? Perhaps not, but it's 99.9% better than what Adams describes:

Car Buying

Before we made our offer I did my research only to discover that there was no way to figure out a fair price for this particular vehicle. There are plenty of sites that seem to offer that sort of information, but not credibly, and usually not for this model. I assume the car-buying sites are in the pockets of the car dealers or have their own scams going. In the end, we were flying blind and probably got screwed on the price. But that leads me to my favorite part of the negotiating process. No, we weren't done yet. Once you have an agreed price, the dealer keeps negotiating, but more cleverly this time.

The next step in the negotiations - if you can call it that - involves a fill-in sales guy making a "mistake" that lists the price on our paperwork far higher than what we agreed. By the time you get to this stage of the process, you're worn out from looking at all of the numbers, and you're tempted to sign whatever they slide in front of you. But I've been through this process enough times to know that the first version is always the "mistake" paperwork.

....

As I assess our performance in this process, I want to believe we got a good price and that we cleverly declined offers for useless add-ons. The reality is that we are amateurs and we were dealing with professionals. The rational part of me knows that somewhere there are customers getting better prices on this same vehicle, which causes me to hate both the car and the dealership.

[rolosrevenge]

Agreed, that's why I will only ever buy a Tesla again.

[AnOutsider]

Before we made our offer I did my research only to discover that there was no way to figure out a fair price for this particular vehicle. There are plenty of sites that seem to offer that sort of information, but not credibly, and usually not for this model. I assume the car-buying sites are in the pockets of the car dealers or have their own scams going.

I think it more likely the sites are businesses themselves and usually just scrape data for cars from various sources. It'd be fairly hard to do a detailed price analysis on every single car out, and they likely only bother for popular models.

Also, him hating the car and dealership for someone getting a better deal? WTF. The car is worth what you agree to pay for it. Someone is ALWAYS going to get a better deal somewhere (in Tesla's case, their numbers are firm, but some people will get Roadster discounts, state and federal rebates etc). I agree the current sales process just sucks, but I'd be careful before using clever words from an obvious cynic prone to hyperbole in my argument against it.

[Krugerrand]

That's true enough AnOutsider, except that everyone is entitled to feel how they feel. That is their reality. When one has to try so hard NOT to get ripped off, it's difficult not to feel that they 'probably' did get ripped off, anyway, despite their best efforts. Nobody likes to feel they've been taken advantage of and cheated. Cynic, hyperbole or not.

[Arnold Panz]

AO, if you read the whole post, Adams is being a bit facetious and uses hyperbole to make a bigger point (as he is in Dilbert) about the process of buying a car. The point is that you feel like you're getting ripped off anytime you buy a car at a dealership, and that they are constantly trying to fool you into buying/paying more than you should or would if you knew better. People who buy Teslas don't need to worry about that, and that's huge. To Elon's point, this is why people rate buying cars so low in terms of enjoyment, and why Tesla can make the experience significantly less painful for the average Joe.

[smorgasbord]

What else beside cars can you easily buy below the list price and yet feel ripped off?

[slavi]

What else beside cars can you easily buy below the list price and yet feel ripped off?

It's not a list price though, it's a manufacturer suggested retail price. It's like going to Jos. A. Bank and buying a $2000 suit while the guy next to you buys the same one for $800 and also gets two other suits for free.

[smorgasbord]

You think everyone buying a TV at Best Buy pays the same price?

You don't think they then try to sell you extended warranties or oxygen-free copper cables you don't need?

[Zextraterrestrial]

What else beside cars can you easily buy below the list price and yet feel ripped off?

If you don't get invoice for a car you have been ripped off!

Starbucks below list price is a ripoff.
Apple products below list price...still ripoff

[XrstalLens]

I'm totally with Scott Adams on this one. My first car I went into knowing very little and paid quite a bit more than I could have had I been a bit more savvy. I feel like I was taken advantage of because I didn't know "the tricks". The second car (completely different model and dealer) I went in prepared (I thought). I stuck to my guns and man, the guy pulled absolutely every trick in the book. It was a nightmare. Easily 2 hours in negotiations, and they hit me with something I was completely unprepared for and sold me a "new" car with over 7,000 miles on it (it had never been licensed so it was legal)! I was so angry! I made them pay me money for it, but I hated them for it and the whole stinking process. I got a reasonable price for the car in the end, but still felt completely screwed over and ripped off. I was fine with the car itself, but the buying process soured the enjoyment of it until I finally got rid of it. Never again!!

The two cars I've bought since then were both limited production and therefore the dealer (yet another one - which I'm actually reasonably happy with) wouldn't negotiate. I was actually glad to hear that. They still tried to sell the add-ons, but those are easy to say 'no' to if you're prepared ahead of time.

I am so glad Tesla is taking on the dealership sales model, and I hope they prevail.