Editorial: Tough times for top auto retailer in U.S.

Friday, Dec. 17, 1999 | 9:10 a.m.

AutoNation's used car superstore strategy was supposed to revolutionize the industry. Instead of haggling with salesmen over the cost, there was just one price, eliminating the frustrating negotiations that can seem more painful than a root canal. In addition, these superstores were plush by used car dealer standards. Along with laid-back salesmen, AutoNation superstores typically had nice carpeting and furniture in a bid to create a pleasant environment, a stark contrast to the high-octane salesmen and Spartan offices found in most used car dealerships.

But instead of embracing the no-haggling philosophy, too many customers bought vehicles elsewhere, causing huge losses for the company's superstores. So just two years later, AutoNation on Monday abruptly closed its 23 superstores across the nation, including one in Henderson. While the superstores have closed, the company's other 409 auto retail franchises, including 10 in Las Vegas, will continue to operate. These combination new-used franchises are no slouch, generating $20 billion in annual sales nationwide.

Still, the decision to close the superstores is telling. Analysts pointed to a number of factors as to why they failed: high overhead, a declining market for leased vehicles, and car makers offering rebates for new vehicles. Another intangible factor was the consumer, who apparently will search for the best deal no matter what. "You had people going into places like AutoNation, writing down used car prices, and then going over to a new car dealer and getting a better price and better warranty on brand new cars," Walter McManus, a J.D. Power and Associates executive, told the Washington Post.

Maybe, just maybe, Americans have a perverse love-hate relationship when it comes to buying a used car. While bad-mouthing the wrenching experience, it seems that deep down we secretly yearn to engage in the sometimes degrading, hand-to-hand combat with salesmen, in the hope we can get a killer deal. Quite possibly we're a nation of hagglers after all.