Member-only story
Why are Some of the Most Important Prices Secret?
End price opacity!
I have always hated buying cars.
You have to go into the dealership, endure a commissioned salesman’s manipulative mind games, and then haggle over the price. It always feels like the system is designed to make it easier for the dealer to screw me over, and I have been screwed over. The salesman knows more than I do; there’s an information asymmetry. The whole thing makes me feel angry and anxious. Any financial decision that large would be stressful. Giving the dealer an informational advantage just compounds that.
Luckily, in the last decade or so, it has become easier to buy used cars (I always buy used, we’re not Rockefellers!) in a more straightforward way. Chains like Carmax and online retailers like Carvana tell you what the car is going to cost upfront. I know from the beginning what they have in stock and what it will cost. There’s no haggling, the salespeople aren’t sweatily trying to manipulate me, I have the ability to return the car within a certain time window if I discover something wrong with it, and I don’t end the process wondering if I just got swindled. It’s much better.
You could argue that much of our capitalist system is built on information asymmetry or at least confusing consumers about prices.
