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Would You Buy a Car From Wal-Mart?

This article was written by in Consumer. 19 comments.


After General Motors’ bankruptcy, there is no question that the automobile industry will change significantly. With less competition and higher costs of production, prices will increase. It will be more difficult and more expensive to find parts and service for some vehicles. The selection of vehicles will be more limited.

Perhaps more brands will opt to adopt the sales philosophy held by Saturn and Scion: the price advertised is the price you pay. At first, the concept seemed like a scam. You always negotiate car prices, but with Saturn’s entrance to the market, the manufacturers or dealers said, “Don’t negotiate with us anymore; it’s our price or no sale.”

This method, where cars were sold more like a commodity than a luxury, proved to be quite popular, especially with younger individuals who do not have haggling experience. Taken to the step beyond prix fixe voiture, cars could be sold “off the shelf” in retail stores rather than dealerships. According to US News & World Report, at least one retail outlet in Mexico sells cars in addition to other typical retail products, and the United States may follow.

Just about the only place to buy a car these days is a traditional dealership, thanks largely to powerful franchise laws in most states that keep other competitors at bay. But as automakers slash their retail networks, dealers are losing their clout. For new offerings such as minicars, and perhaps cheap Chinese imports, a big showroom with a dedicated sales staff might not even make sense. That could open the way for retailers like Costco or Wal-Mart to start selling cars.

Smart Cars

This may be the future of automobile sales: View the floor models in an open area of the massive store, talk to the salesperson, and as if the product were a high-definition television, let the salesperson try to talk you into the extended warranty and other options. Wait for him to bring the car from the stock garage in the back to the cashier, where you pay the price on the sticker. Perhaps you’ll put your purchase on your credit card (store credit will be offered) and earn loyalty points.

I expect most popular brands, like Honda and Toyota, might not accept this model. It may be suitable for lower tier brands and low-cost models not yet popular in the United States. The New General Motors may see this sales avenue as the path back to profitability.

Would you prefer to buy cars from retail stores like Wal-Mart or Costco if this new sales philosophy reaches the United States?

How buying a car is going to change, U.S. News & World Report, June 4, 2009
Photo credit: schoschie

Published or updated June 4, 2009. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 19 comments… read them below or add one }

avatar Rassah

Perhaps the already used SMART car vending machines (http://farm1.static.flickr.com/87/210530393_eec2300ab6.jpg) will eventually become more or less common for other models some day.

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avatar aa

If they’re sold in Wal-Mart, it needs somebody just like the dealers to answer questions.

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avatar dawn

For most people, a car purchase is the 2nd or third biggest expenditure, right after the mortgage and college tuition bills. For such an important purchase, I’d rather deal with a knowledgeable salesperson who knew the car inside and out. I would expect no less.

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avatar Kyle

I would be willing to by a car off the shelf at Wal-Mart or Costco. I haven’t found a salesman who really knew much other than the sales literature about a car, so it wouldn’t really be that much different.

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avatar Jason

Absolutely. Why not? I’m shopping for a car right now. I know what kind of vehicle I want, what options I want, and what the maximum price I’m willing to pay is. The dealer is an obstacle. I’d love to be able to walk into a retail store, say “I’ll take the black one,” and get on with my life. I don’t need to haggle until the sun goes down, and hear the salesman’s sob story about how he has two kids to feed. Better yet, let me configure my car on the internet, and ship it straight to my driveway.

Yes, it’s a big purchase, but I don’t think the experience needs to be so much different than purchasing anything else. Allow the customer 30 days to return or exchange it. If they keep it longer than that, they can always sell it privately.

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avatar Zyzzyx

I really don’t care if they sell there or not. I don’t ever have any intention of buying a new car. My current ride is the newest I’ve owned, a ’99 Audi, and its in excellent shape. Folks think its many years newer than it is. At most in the future I may be a 3 year old car, but I’ll let other folks take the hit on the new car. And find out where the lemons are.

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avatar Yana

I don’t know if I’d want to buy a car that way, but one thing I do know – I would much prefer buying a car without knowing that there is a game attached, where the sticker price doesn’t mean very much. I don’t like haggling; I want to know the price of an item without having to play games. It took me 3 weeks to buy my new car, because I was in the midst of a game that seems to be required by car dealers. Not fun. As it is now, you’d better not want a car *today*, because you will probably pay too much.

Assuming that the car I wanted was available both ways, and one showed the actual price, I would take the one that was honest – labeled with the price and without games.

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avatar Chris

Sam’s and Walmart already have car buying programs in place for members that allow you to look at the wholesale pricing and (theoretically) go to a participating dealership and purchase the car with no haggling. So in my eyes, aren’t they already selling cars in more of an affiliate program type of way?

http://samsclubauto.com/
http://www.costcoauto.com/

I am not sure the auto companies would want to sell cars to a Walmart. Factories get paid automatically and you know Walmart would at least get 30 day terms to pay for it. In addition the factories make money on the floorplan pricing. If anything, I think the big three would try and get the laws changed that would allow them to sell direct instead of through a dealership network.

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avatar MyJourney

100% Hell yeah! Why not?

Can I remind everyone that if the following scenario was placed in front of you, you’d think I was nuts:
Someone, Somewhere in the world puts up an item for sale – you bid and then buy that product. You pay that person THEN they send you the item you never touched! Would you do it?

Now everyone gets stuff online!

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avatar Jim

Absolutely not. Their service is atrocious, and inside sources say that when you bring the current vehicle in for service or tire repair, they are to keep you an hour so you shop. Imagine how it would be if you bought a car from them and took it back for warranty. You’ll wait an hour only to be told to come back when they get the parts in.

Once again – Absolutely NOT!!

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avatar KC

No way. I don’t shop at that store now because I don’t like their products and its a pain to get in and out with all those people milling around. I like to haggle. I can go to a dealer armed with information and just walk away if I don’t get what I want. If you want to pay sticker price for a car go to CarMax – you can do that for used or new (certain makes only). But my problem with CarMax is you can’t haggle. They had a practically new Camry (7k miles) and wanted $23k for it. I went to the dealer, and got the exact same model, same color, same features, but mine was NEW and I paid less for it. I had done my research, had my checkbook, and was willing to walk out the door of the dealer when they accepted my offer – you can’t do that at CarMax. BTW, this was my husband’s car – I’d never buy new for myself – complete waste of money.

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avatar Manshu

Yeah, I wouldn’t mind buying from Walmart and I suspect a lot of other people won’t either. I say this because people buy used cars from other individuals all the time. And that happens because they have a fair degree of confidence in the brand and things like Carfax report etc. If the brand is powerful enough, it will sell itself without the help of dealers and such.

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avatar *flash*

Yes, I would. Getting small cars moving with haggle-free purchase makes good sense. Costco sold a few Gem electric cars here a few years ago and what an excellent way to make a purchase: buy food, buy hardware, oh yeah- out the door a few feet- buy a car!

Spent the whole day in a car dealer “how about this.. How about that…. How about extended warranty…..” each time running to the back room to ask the manager. Not a fun way to spend a day.

Sad that the electric car didn’t seem to hit mass production. YET!!!

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avatar Nikki

This is certainly interesting, although, where we’re at in AZ, a car sales business has leased space inside various Wal-marts to sell cars. The inventory is not at Wal-mart, but customers can browse listings in the kiosks and haggle, etc. from there. It does seem to generate a number of visitors.

We would probably be open to shopping for cars at retailers if the sticker price is on par or better than the competition (dealer or private).

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avatar JD

You bet I would buy a car from Wal-Mart! First off, it would be resonably priced (like all Wal-Mart Stuff), and GM is going under because the Unions bled them dry, and the result was their products were poor quality. I know this from personal experience- 92 Buick Skylark. And salespeople- minus a select few true salesman, the bulk treat buyers like marks. Haggling will not be missed. Long live Honda! If you build a quality product they will come. And I know people will say, oh, well Wal-Mart killed the Mom and Pop and created the big boxes on the hillside, but at the end of the day, who wants to spend more on necessities? It’s very easy for people to tell you how evil Wal-Mart is, but whenever I shop there its hard to tell there’s a recession on. People decide with their feet.

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avatar Ron

Sure. They’re subject to the same market forces as other dealers (at least for now), so why not? Chances are very good the cars would be cheaper there than anywhere else. Besides, my father works there and it would help support HIS job as a truck driver.

About 40 years ago, the Federal government nationalized Amtrak. How’s THAT going? They were “projected” to be profitable in 3 years, but here we are 38 years later and we’ve wasted $30 BILLION on them.

Today, we’re in the process of nationalizing the automobile manufacturing industry. Don’t kid yourself. That IS where it’s headed. We have bureaucratic fat-cats with almost no business background and with zero experience in the auto industry calling the shots. Do you really think they won’t be dictating everything about how a car is built? At least Wal-Mart knows how to generate profits for it’s shareholders (which includes pension funds, mutual funds, and many retirement accounts).

So yeah, I’d buy from them. Long live free-enterprise.

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avatar megscole64

Costco already sells cars, though not a lot. There’s always one or two cars in their showroom when I go in. I don’t know if they are selling them directly or working with a dealer, but it certainly wouldn’t shock me to see cars for sale at my Walmart. Nor would it bother me a bit. I don’t do research at the dealership, nor do I take most of what the salesman says to heart. I do research ahead of time and know what I want. Just like when we buy a TV, computer, etc.

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avatar Wise Finish

The real question is: Would you by anything from Wal-Mart :)

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avatar Mike Reitz

The way we buy cars today is changing dramatically to what we were used to in the past. As long as you do your own personal research you can make good choices. You can’t always believe what a car salesman tells you about a specific vehicle, after all they do want to sell you that make and model.

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