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Educating Rico: The car lot

Rico Gagliano Dec 29, 2006


KAI RYSSDAL: Our associate producer Rico Gagliano recently suffered a Los Angeleno’s worst nightmare: His car died. Last month, on our series “Educating Rico,” he learned the value of buying used over new. Rico’s back this week, having learned another important lesson: Some used car dealers will take you for a ride.

RICO GAGLIANO: Hi. I’m Rico. And the first thing that happened when I started shopping for a used car is everyone started telling me about the time they did it . . .and got swindled.

Jodi, she’s one of the editors here at the office, her story takes the proverbial cake:

JODI: I had already bargained for more than an hour for this used Volvo that I saw on the lot that had a sticker price on it of $12,000. And I finally got him down by almost $2,000, and I pick up the newspaper and I’m like, ‘Oh, I’m gonna see if I’m getting a good deal here.’ And I go and I look in the classifiedsand I see: ’96 Volvo 240′ . . . this is my car!

RICO: The car in the ad is your car.

JODI: This is my exact car. For $9,500. I just negotiated like crazy for almost two hours with this guy to get him down to about $10,000.

When I hear this kind of story? This is the music that plays in my head.

[ John Zorn’s “Naked City” ]

Mildly frustrated, you know? I mean, a car’s among the most expensive things you’ll ever buy. And we go in blind. The seller knows everything about that car . What do we know?

Well, actually, quite a bit. You may recall last month I spoke with Philip Reed of Edmunds.com.

PHILIP REED: To tell you the truth it’s little harder to buy a used car, but we have tools available. For example: Carfax is a powerful way to check up on the history of the car.

Yes, thanks to the internet, the consumer can learn plenty about almost any car on the road! So when I saw an ad on Craigslist for a sweet-looking 2000 Toyota Corolla, a different tune played in my head. A tune of impending triumph!

I checked out the car’s value at Kelly Bluebook.com! And at Edmunds! And researched its history on Carfax! And then I bought the car! And I got rooked.

Yep, cheated. So what I’d like to do now is present a dramatization of my experience. Here with color commentary is Alex Rosten. He used to be a car salesman. Now he works for the forces of light at Edmunds. Alex, how devious can these sales tactics get?

ALEX: Uh, gee I don’t know where to start . . .

RICO: Never mind. OK, since Marketplace Money can’t shell out for real actors in my little re-enactment, the part of the salesman will be played by my roommate.

JON: Hello.

RICO: And the part of me, by a young girl.


RICO: Act One. In which I approach the dealership.

JON: Welcome to my dealership.

ALEXIS: Hmmm! This is not like any dealership I, Rico, have seen. It is in an office complex and there are only a few cars for sale in the parking lot.

JON: Do not worry about that.

RICO: Brilliant! OK, Alex. I should’ve run right there, right?

ALEX: That might not’ve been a bad idea. Any outfit that has only 10 or 12 vehicles, they’re gonna try to charge as much as possible, because they only have so much inventory to sell.

RICO: Now, they have to have a license to sell cars. Is there a way to find out of they’re reputable?

ALEX: No there’s not. I mean, it’s not that difficult to get a license to retail vehicles — you go into the local DMV and you get your salesperson’s license.

RICO: Well isn’t that nice for them. All right, on to Act Two. In which I test-drive the car.

JON: Now we are test-driving. The car.

ALEXIS: There are cigarette burns on the door. And the air vent flops around. And the car will need new shocks.

JON: Do not worry, we will fix that.

RICO: Now I should have walked, right?

ALEX: Yeah. A reputable used car dealer will have already fixed it before they try to retail the car.

RICO: Now let me ask, though: Doesn’t it then play to my benefit? Don’t I now have a lot of firepower with which I can now talk them down? I mean, it’s a 6-year-old car, I didn’t expect it to be perfect, I just want it cheap.

ALEX: I wouldn’t even try to bargain with them in the first place. Also, I’m sure they offered to fix it, but did they offer to do it for free?

RICO: No. It was part of the negotiation over the price of the car.

[ Alex Laughs. ]

RICO: You’re laughing at me! I deserve it. So OK, speaking of price, the car was advertised for $7,000, which leads to Act Three: The negotiation.

JON: This car is perfect!

ALEXIS: No it is not. So I will offer . . .umm . . .

[ ALEXIS thinking: Gosh, I only know the value of this car in good condition. I forgot to check what it is worth in average condition. ]

ALEXIS: $6,000 dollars!

JON: Sold immediately!

RICO: Ahem, Alex?

ALEX: That’s another warning sign. If they take your initial offer right away? You probably could’ve gotten a little more off.

RICO: All right, but aside from the fact that I should have done better research; I have friends who told me later my opening bid should’ve been like 25 percent less than the asking price. True?

ALEX: I would recommend not even opening with your own price. Because as soon as you give them a price, they’re gonna negotiate up from there. But if you keep pushing , “What can you do for me, what can you do for me” and they come down in price immediately, bam, that’s your ceiling, and you can negotiate down.

RICO: Well, I . . .didn’t. I took the car home. And here’s a fun little epilogue to this playlet-I-wish-was-fictional. Happened a couple weeks ago.

ALEXIS: Hm. There is frost on my rear window. I, Rico, will simply turn on the rear defroster. There is no rear defroster button!

RICO: Yeah, there is no defrost button. There’s actually a hole in the dashboard where it should be. What I’m recommending to people is to get a manual for the car beforehand.

ALEX: That’s good advice. Another thing consumers can do is go to the Toyota Web site — if they’re buying a Toyota — and they can print out the actual checklist that’s used for the certification process for certified used vehicles. That way they at least have a list of all the different points and components they wanna look for and check for. Like a defroster button.

RICO: Alright. And finally, I can’t let you go without asking you: What should have a paid for a car in that condition?

ALEX: $5,250.

RICO: So about a $700 dummy tax, something like that?

ALEX: About that.

RICO: Well, maybe I got off light.

Alex Rosten is the pricing manager at Edmunds.com. I am the latest in a long line of suckers, and hopefully you, dear listener, now have some idea of how not to be the next.

In Los Angeles, this is Rico Gagliano for Marketplace Money.

RYSSDAL: This episode of Educating Rico featured the master thespianship of Jon McDonald and Alexis Pavenick.

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