Do Car Dealers Really Overcharge Women? Here's What The Data Says

A major factor in determining overall sales for a manufacturer is the reputation of its dealerships. Whole workshops now exist online that break down in clinical detail how dealerships should prioritize certain elements like personalized experiences, handling reviews, encouraging and listening to feedback, and more. Furthermore, specialized sites allow consumers to review and rate dealerships and service centers, making for a more informed customer than ever before. An important factor considering how many things first-time buyers get wrong when buying a new car. However, even with all of these tools available at our disposal, are dealerships still exhibiting signs of something far more basic and fundamental: namely, sexism?

Sadly, though perhaps not too surprisingly for some women out there, surveys indicate that women still experience levels of discrimination. These include, but aren't limited to: deferring to a man who's present, name-calling, and other forms of microaggression, in addition to women paying more on average than men for identical cars. Collectively, this well-documented phenomenon is called the "pink tax," and yes, studies indicate it persists to this day. 

For example, Jerry analyzed sales figures in all 50 states and found that, on average, women pay $142/year more than men on car payments, up to $7,800 over the length of ownership. Women are also quoted slightly higher for insurance and service fees, with over 50,000 quotes analyzed and showing small percentage increases between each population. Similar studies exist from other organizations like Edmunds confirming such numbers. These numbers may be minor in isolation, but they certainly add up. Plus, there's the dealership experience to consider, and how to deal with that. Let's dive into it in more detail.

The pink tax refers to the general trend that women pay more for certain goods and services than men; in this case, with new car sales. In a larger context, it also critiques the gender wage-gap, which was formerly baked into the economy and known as "controlled" gender gap. While no such policies exist today, many businesses still openly or unknowingly discriminate against certain minorities, such as people of color and/or foreign nationalities, LGBTQ+ persons, and so on. 

This discrimination often trickles down to a more generalized level beyond just women when it comes to purchasing a new car. Moreover, certain minorities often face statistically-greater financial burdens in general, further discouraging new car purchases. Some brands actively capitalize on this discrepancy, such as Subaru's popularity within the LGBTQ+ community, Yamaha designing 'ladies only' motorcycles, and many women have impacted the automotive community in significant ways. But the pink tax remains a persistent issue regardless.

All of this ties back to women and dealership sales in one crucial aspect: namely, that women make up the majority of new car purchasers today. And if women aren't outright purchasing cars, they're certainly influencing those purchases; approximately 80% of purchases are influenced by women, according to an independent study by author Bridget Brennan. However, of those women visiting dealerships, 77% take a man to avoid being ripped off, and 74% feel misrepresented by automotive marketing, painting a grim picture for the average woman or minority. So what can be done about it?

The most important thing anyone can do, no matter what gender, is research prior to visiting the dealership. Not doing so, is one of the biggest mistakes to avoid when buying a car at a dealership. This is because various fees may be tacked on to the final price if you're not careful, and that's in addition to external factors like credit score. In general, researching for a new car purchase is a multi-step process which involves weighing different options, bearing in mind the MSRP, negotiating, figuring out the intricacies of loans if that's a concern, and repeating until you find the car you want. As such, impulsive or unplanned decisions often lead to higher prices, whereas conveying that you're well-versed in what you want makes you less of a target.

But why women, specifically? The simple reasons are that it's often stereotyped that women know less about cars, and there's far more men working at dealerships. According to the Bureau of Labor Statistics, only 21.4% of individuals in auto sales identify as women. This environment produces a feedback loop, whereby women and minorities are often patronized and men given preferential treatment. Naturally, one solid fix for this phenomenon is to simply find a dealership with a sizable female staff. 

This is also useful because women will likely know in more intimate detail what other women most often look for in a new car, such as safety features, interior space, and so on. In short, while the pink tax remains alive and well in automotive dealerships, it's less prevalent as the majority of purchasers are now women. Additionally, more people are researching their new cars instead of going on impulse-buys. As for the cultural disparity, when in doubt, look for female staff and go prepared.