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Culture War Roundup for the week of December 11, 2023

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I would love to read a "how not to get screwed at the dealership" post from someone who interned in finance at Ford. You're in a unique position of being both a noob and an insider and that perspective is pretty rare.

I wouldn't know - partly because Ford corporate try very hard not to know the details of how their dealers are screwing retail car buyers, but mostly because the stuff I did learn about the car market was specific to the UK in my youth.

The core fact about the UK car market in the late 20th century was that most new cars were sold to fleet buyers. The reason for this is that, as long as you drove at least 2,500 business miles a year, you qualified for relatively favourable tax treatment on a company car. For most of my youth, my mum did the school run in my dad's company car while he commuted to work by train - and this was completely normal for the middle class. In order to market to fleet buyers, the list price (dealers normally paid 90% of list as in America) was inflated - making the fleet buyer feel he had got a better deal because he negotiated a 12-15% discount. (The way the cost of the discount was split between corporate and the dealer who handled the face-to-face aspects of the sale was the subject of brutal negotiations, and one of my tasks as an intern was to access the computer system that the middle managers didn't understand and pull a list of all fleet discount disputes that had been outstanding for more than a year, and then walk round the accounts receivables department telling a whole bunch of low-end white-collar drones who were mostly 10 years older than me that if they didn't know how to put an update on the system then they had better let me do it because their grandboss was going to be Noticing in a few days' time.) So in the 1990's UK, "How not to get screwed at the dealership" was basically "Never enter a negotiation where the starting point is the list price." The easiest way to do that was to buy nearly new.

Some of this came up in our antitrust training - there was a competition enquiry going on while I was at Ford about why new car prices excluding tax were higher in the UK than in Continental Europe, and we had to learn what we could and couldn't say about it. The official reason was:

  • We don't update prices instantly in response to exchange rate moves, so there is a temporary effect where the strong pound pushes up UK prices.
  • Manufacturers absorb part of the new car tax, so pre-tax prices were lower in countries with higher taxes. The real reason was the point about fleet buyers.

Actually motteizean AMA posts seem like a really interesting thing we could potentially have on the front page in general.