Dealerships. How Much Cash Have You Thrown in the Trash?

Have you ever purchased a car or motorcycle from a dealership?

If you say yes, you have been ripped off.

This weekend I contacted a dealership about a motorcycle similar to the one pictured above.

Dealerships get away with charging over blue book value and customers continue to be tricked into thinking they are getting a good deal.

I wanted to purchase a 2001 Suzuki Bandit 1200 from a dealership this weekend but they were asking 1000 dollars over blue book value.  How do they get away with this?  

The reason they get away with this is because people think that dealerships care about them.  People think that when you buy from a dealership, you don't have to worry.  In reality, when you buy from a dealership, you are throwing away cash.  You are basically paying at least 20% over what the vehicle is worth, and throwing that cash in the toilet.

What happens when you buy a brand new vehicle?

Well, if you buy a 2014 model vehicle, go home and list it for sale, you will instantly lose at least a few thousand dollars depending on how much you paid.  Is it worth it?

Every day, someone goes to a dealership and pays 24,000 for a brand new prius that gets around 50 mpg.  What they don't realize is that they can go buy an early 2000's corolla and get 35-40 mpg, and pay about 21,000 dollars less.  Unless they drive a million miles per year, there is no way to justify spending what dealerships ask for new vehicles.

To make a long story short, dealerships are full of con artists who will do and say anything to make you believe they care about you.  This is why I think it's a great business to get into.  I can go buy cars at auction for $3000 dollars and sell them to you for $7000 because you don't know anything about cars.

Edit:

Just to make sure you see how this relates to marketing, I am trying to demonstrate the fact that dealerships have a certain image, much like certain brands.  For the most part, people feel that they can trust a dealership because they get warranties and all the bells and whistles.  Or the dealership "certifies" their pre-owned vehicles.  Much like paying a premium for Nike brand shoes, many people pay a premium for cars.  The only difference with dealerships is the fact that you can get the exact same car from a private seller for thousands cheaper.