Study of New-Car Sales Finds That White Men Get Best Deals
White men who bargain on the price of a new car get better deals than women or blacks, a study of auto dealerships shows.
Ian Ayres, a Northwestern University law professor who wrote the study, suggested that the apparent discrimination may be the result of car salespeople looking for “suckers” to concentrate profits by targeting a relatively few customers who will pay higher markups.
Black women were offered the highest prices, averaging $875 per car more than white men, the study found.
Salespeople may assume that blacks and women are less knowledgeable about cars and the bargaining process than white males, and therefore more willing to accept a higher price, said Ayres, whose study is to be published in the Harvard Law Review’s February issue.
Allan Wilbur, a spokesman for the National Automobile Dealers Assn., said he had not seen the research and could not comment.
The findings by a research group established by the American Bar Assn. were based on visits to Chicago-area dealerships by researchers posing as middle-class car buyers. The researchers were prepared with carefully rehearsed negotiating tactics to get the best offer from salespeople.
In the study, three white male researchers divided among themselves 90 car dealerships, then visited them, trying to get the best deal on the same new car.
Each of the dealerships was also visited by one of three other researchers--a white woman, a black woman and a black man--who bargained over the same car.
The study found that white men received final offers that averaged about $11,362 on a new car with a sticker price of $13,465.
The white woman was given an average final price of $11,504, the black man an average final price of $11,783 and the black woman an average price of $12,237.
Ayres noted that discrimination appeared to be a factor even in the dealer’s initial offer, before negotiations had begun, when the same pattern of increasing prices was given to white men, the white woman, black man and black woman.
