Demonstrators and dealer delivery fees

Demonstrators and dealer delivery fees. Don’t be a dealer’s victim any longer: Enough is enough…

---

Dealers are ambush predators. So naturally, I received this from Daniel.

I am buying a "demo" car with 9kms on the clock and is fully registered.

I have noted on the receipt it is being sold as a used car yet the dealer has charged me a dealer delivery fee. Can they legally charge this fee when bearing in mind that the vehicle is being sold as used.

- Daniel

The golden rule with all ambushes: don’t stand on the ‘X’. 

Sounds to me like Daniel here is standing right on the X and letting the dealer dictate all the terms. This is an excellent way to get cut down in the crossfire.

Let’s go back 150,000 years or so, to the jungle. You’ve got the predator and the prey. One of the principle problems with being the prey is: you’re always kinda playing catchup.

Dutch eventually gets off the Predator’s X and puts it on his…

The predator has picked the spot. He’s waiting for you. Weapons hot. All you have to do is turn up, and he’s ready to rock and roll.

This is bad for you, because you’re probably not ready. You’re probably thinking about boobies. We all are. During an ambush, you’ve got to drop the boobies, figure out what’s happening and then step up, with countermeasures. 

150,000 years later, it’s like being mugged in the street - the advantage is always with the mugger. Violence is interesting. It’s such a salient feature of life.

The tactical decision-making process is described as an OODA loop (OODA - observe, orient, decide, act.) That’s the process.

Generally when you get mugged, the mugger is at ‘act’ and you’re at ‘observe’. He’s at step four; you’re at step one - it’s a massive game of catch-up for you. Step one for you is always ‘get off the friggin X’.

If you’re being mugged - move. Move to the side, create an angle, counter-attack. Be better than the mugger: Adapt; do something they don’t expect - disrupt their equilibrium.

The bad guy (nee dealer salesperson) has a picture in his head about how this is going to go. Do not be in that picture. Disrupt their OODA loop and paint a different picture. Get them back onto ‘Orient’ (while you’re onto Act).

The sequence in Top Gun where Maverick and Goose in their F-14 take on Viper and Jester in their MiGs is an example of one Ooda Loop being disrupted by another.

The dynamics of violence are oddly portable to the adversarial domain of dealerships. I’d suggest it’s exactly the same philosophically because you will be financially mugged if you allow the dealer to walk you onto his X. (That’s the picture they’ve got in their head.)

This dealer has advertised this demonstrator at this particular price. It’s got Daniel there, on the X. Dealer’s adding a delivery fee. The whole process is about extracting maximum cash from you, until you push back and get off the X. 

Next thing, guaranteed, David here will be staring deep into some Ming Moll’s silicone-enhanced cleavage and signing up for the genuine rooftop ashtray and friggin’ saxophone holder.

---

Pity Party

To Daniel, and others out there just like him, I’d say, the only thing that matters is the all-up price.

Do not walk into any dealership without knowing the fair value of the car you intend to buy - new, used, demonstrator, whatever. Know the fair value. Do the research.

This allows you to dictate the terms, and get the dealer to stand on your X. They hate that. The same principle applies in the service department >>

There’s no hard and fast rule for this, but I would say generally if you’re not getting at least 15 per cent off the drive-away price of the equivalent brand new car, walk away from a demonstrator. It’s just not worth it.

Reason being, with a brand new car you get to choose the exact specification - the powertrain, the colour, the factory options - whatever. 

A demonstrator is not like that. It’s a particular colour, maybe not the one you want. It’s got a particular powertrain and these specific factory options, so it’s likely a compromise, compared with what you really want. And the warranty clock is already ticking on a demonstrator. 

If you can get 10 per cent off a brand new car, and you usually can, you’re a mug if you buy a demonstrator that’s just 10 or 12 per cent off. So offer a fair, but low, price. 

You say, “Great. I like it. I’ll take it. I’m prepared to pay you ‘$X’ for this car, and not a cent more.” If they go for it, great. You got what you wanted without a fight. But they probably already have 50 pre-scripted reasons why your proposed price is impossible.

If they don’t go for it, just walk out. Leave your number. Polite but firm: ‘Sorry we can’t do business today. I do like that car. Thanks for your time. I’ll keep shopping. Here’s my number. Gimme a call if you reconsider.’

Don’t split the difference: you say $25. He says $30. Let’s meet in the middle: No.

If you offer the fair value, stay there. It’s fair. Splitting the difference is for softcocks. Do the deal at your proposed fair price, or not at all.

The sight of your corpulent arse departing from the showroom floor is devastatingly confronting for a car salesman. The thought of your money being injected into another dealership is most unpalatable indeed. Thus, walking out is one of the most powerful things you will ever do.

Added bonus: You get to be a bit of a bastard here, and there are no consequences - none - only benefits. Try doing that in most other situations.

The dealer can put whatever they want on the paper. If they want to charge you a delivery fee, and you agree, that’s perfectly legal. You fundamentally don’t care how the price is made up. The only thing that matters is the total price. 

The car Daniel is buying is what I would call a ‘bullshit demonstrator’ - it’s never been used to demonstrate the product to prospective buyers, or as a senior executive’s car, or as a promotional vehicle. That’s what real demonstrators are.

This car has been registered to fudge the sales figures in the preceding month, or as an under the table way to clear excess stock without screaming ‘fire sale’. But once any car has been registered it’s technically used. 

It’s technically been ‘delivered’ already, so a delivery fee sounds like bullshit to me. If it’s a demonstrator, the dealer has already copped a financial incentive (a back-hander) from the importer to compensate for the reduction in its value that accompanies its ‘demonstrator’ status.

The dealer is trying to maximise his profit, and you can hardly blame him for that. Your job is simply to take the market’s temperature, know the fair value, and don’t pay more than that. Know the new-car equivalent drive-away price and get a substantial discount off that at the very least.

---

Last rat standing

And don’t cop any of this ‘victim’ crap car dealers typically play, if you low-ball them.

“How do you expect me to feed my family at this price?” kind of thing. Who cares? You’ve got your own family to feed. Worry about that.

The dealership’s remuneration is frankly not your problem. New car sales are under extreme pressure right now in Australia. February just gone marked 23 straight months of declining sales. That’s a full-blown apocalypse, not a speed hump. 

You’re doing any dealer a favour just by darkening their doorway today. And if all they get from your sale is their costs covered … that’s a real plus. Remember that this is an adversarial process. So, be an adversary. And get off the damn X. It’s still a jungle out there.

Have your say