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Got a Quick Question for a Car Dealer?

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Comments

  • fezofezo Posts: 9,346
    Yeah, I have a quick question for a car dealer - why are you guys all such lying thieves? :P

    Hi, Bill!
  • imidazol97imidazol97 Crossroads of America: I70 & I75Posts: 18,183
    >why are you guys all such lying thieves?

    Ooooh. Oh. You're going to get a host-o-gram. I once said that buyers got cheated the most on the trade value of their used cars at the dealerships. Later two others said the same thing, in a slightly different wording. And even salesmen have said customers have no idea of the real value of their tradein. Customers focus on the "price" for the new one as shown on the payments contract.
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 44,838
    the dealer can declare any trade in value he wishes as long as he's manipulating the MSRP of the new car.

    Sure I'll give you $10,000 for your 1990 Ford Taurus and here's your $40,000 Mini Cooper. :P

    MODERATOR

  • fezofezo Posts: 9,346
    Yeah, that works!

    I know when I go in I have an idea of what I want the difference to be but I'm not nutty enough to go to the old here's my one offer take it or leave it approach. I'm sure dealers make more off me than they do some others but they make a fair piece less with me than others as well.

    Ask Bill how much he made selling me the Camry......
  • A trade is worth what it's worth.

    After 14 years of appraising cars and wholesaling/appraising/buying thousands of cars I have found that Edmunds/KBB/etc are inaccurate more often then they are accurate.

    If your trade is worth $12k, and Edmunds says it's worth $14k, the only way you're going to get $14k for it is by paying $2k too much for the new car.

    I once had a customer when I worked at Toyota come in waving a KBB printout for his Tacoma.. he insisted that he wasn't taking a penny less than KBB good, which was $18k. When I tried to give him my number he cut me off, got nasty and insisted on KBB. OK, so that's what we did. Traded his $22-23k truck for $18k.

    There's one way for the general public to get a true idea of what their car is worth, find a few dealers that sell cars like yours, ask them what they would pay for it. Tell them that you just want to sell the car and you're shopping it.

    After 3 or 4 bids you should have an idea of what it's really worth.
  • Hmmm...

    $50 or $60 I think.
  • michaellnomichaellno Posts: 4,300
    Sure I'll give you $10,000 for your 1990 Ford Taurus and here's your $40,000 Mini Cooper.

    If it's a loaded Cooper Countryman or loaded JCW, then that $40K might be pretty close to MSRP!
  • fezofezo Posts: 9,346
    I think at the time you said $45. The guy with his Tacoma made up the difference for you.
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 44,838
    You gotta hand it to the Germans---they have option lists longer than the car's wheelbase. :P

    MODERATOR

  • That guy was hysterical.

    I think his printout that he was waving around was for something stupid like $18k... at the time Galves was over $22k, but these were doing $23-24k at auction.. i'd have easily gone a grand over book.

    Best part was, and remember that this guy literally would NOT let me get a single word in edgewise, even to the point of telling me to shut up, he came back about 6 weeks later with his friend. Looked at me, then told his friend how he told me how the deal was gonna go down, etc.... and basically laughed at me. I grinned, and said, yeah, too bad the book that we used hit your truck at $22,500! He looked like he wanted to kill me, and I remonded him "Look, you wouldn't listen to ANYTHING I had to say.. you even told me to shut up and give you what you wanted so I did..." :)

    Shoulda seen the look on his face...
  • fezofezo Posts: 9,346
    I think I'd have paid money to see the look on his face.

    Hey, do you know if Hyundai is planning a new Elantra Touring? Nice little vehicle.

    Sometime after I'm through recovery I'm thinking a nice, smaller vehicle.
  • andres3andres3 CAPosts: 5,330
    Seriously!!!
    If you want to charge me advertising fees on a vehicle, why don't you add this while your at it:

    1) water bill
    2) water cooler bill
    3) landscaping bill
    4) electricity bill
    5) postage bill
    6) vacation bill
    7) Holiday bill
    8) cable bill
  • Because back when I sold Infinitis, those other items weren't added to the invoice by Infiniti. A $400 advertising fee was.
  • jprocjproc Posts: 133
    the advertising fee is a charge that the manufacturer passes on to the dealer.That is the difference between the other expenses you cited.
  • ken117ken117 Posts: 194
    edited September 2011
    Perhaps, but it is not a legal fee and it is not on the sticker. There is no requirement for it to be paid by a buyer. For the dealer it is actually a cost of doing business, part of the overhead which is why we pay $80 plus an hour for the dealer to work on our cars, a part of the $80 plus amount is the cost of the labor and the rest is for overhead including advertising. Personally, I have only had one dealer spring this on me, Nissan. I was going to walk from the deal, always a good tactic, and the dealer relented. Consumers must be vigilant about fees of all kind or a good deal can be turned into a bad deal very quickly.

    In cost accounting there are two types of costs. Direct costs which relate directly to the product, in this case price of the vehicle being purchased, and indirect costs, in this case the cost of the dealer doing busines. When a person buys a vehicle, it is reasonable for the buyer to pay the direct costs. That would be the negotiated price of the vehicle and the directly related costs which would include freight, tags, tax, etc.

    The indirect costs, dealer advertising and other costs of running the business are a bit different. These the buyer should not be concerned about as separate items. For the dealer, these items should be built into the negotiated price of the vehicle and not sprung on a customer as separate charges. The results may be the same but the perception to the customer is radically different.

    Once a price of the vehicle is negotiated, both parties should be happy. The buyer should only add the direct fees to that price (freight, tax, tags). The dealer should include all overhead and profit (each dealer will have different overhead and profit objectives so it pays to shop around) should be considered in the negotiated price they can live with.

    Regarding a dealer's overhead and profit objectives, there are many reasons a dealer will sell a vehicle for less than a profitable amount. Some may need the sale to cover fixed cost (another concept), some may need the sale to meet some internal goal. A customer does not need to be concerned about these things other than to find the right dealer with the right price at that time.

    When I shop for a vehicle I do my homework using Edmunds, TrueCar and other sites. I then work the internet with various dealers. I am not out to screw the dealer, not really possible in any case, I am just locating the right dealer. Some will not provide a price and I dismiss those out of hand. They usually ask me to visit for them to provide me a price. I fing this quite disingenuous, since I contacted them via the internet they should assume I do not want to visit for a price. Others will offer a price which is obvious way beyond my objective. I also dismiss those dealers as their profit objectives obviously don't match up with my numbers. With those dealers the chances of reaching a fair deal are slim. Almost always a couple will respond with a fair price. Those I visit and work the deal. Interestingly it is not always the same dealers who offer a good price. Therefore, it pays to work the process anew every time.

    I am curious as to why a dealer will not provide a price over the internet. I understand they may fear a customer using it at another dealer. However, if they provide a fair price they greatly increase the chance the customer may actually visit. If they give no price or an unfair price, it is highly unlikely a customer will visit. In additon, I know I do this, a customer will almost always suggest, when asked, those dealerships who provide a fair price to friends and relatives. While I may not have bought from them, the people I send to them may buy.
  • Perhaps, but it is not a legal fee and it is not on the sticker.

    It is not on the sticker, but it is on the invoice to the dealer. It is charged by the manufacturer to the dealer on the invoice. It is a seperate line item, as it varies by market. The dealer pays this, and you never see it unless you see the invoice. You will pay this, as it is included in the dealers cost of goods. And again, it has nothing to do with the actual MSRP or "sticker" as it only affects the dealers cost. And it is most certainly legal.

    Now if you run into a dealer who tries to charge an additional advertising fee, simply insist it be removed or walk away.

    And to answer your question about why some dealers won't give you a price over the internet, it's because they feel they have a better shot if selling you a car if they get you into the dealership. Their feeling is that if they give you a price, you will simply shop it until you find someone who will beat it by $50 or whatever. This policy works very well for some stores, as they consistantly sell a lot of cars.
  • Advertising fees, if on the invoice, are simply part of the invoice.

    An invoice is nothing more than a billing document from the manufacturer to the dealer. That's basically the dictionary definition of invoice.

    Most manufacturers hit dealers with advertising fees, if it's on the invoice, it's part of the invoice. If it's on the retail order it's probably BS.
  • isellhondasisellhondas Issaquah WashingtonPosts: 17,693
    edited September 2011
    What people have to realize is quite often the dealer simply has no use for the car someone wants to trade in. It may be an unpopular car, a bad color, it may be a stick or simply car that the store knows is going to be hard to sell.

    Maybe it's a car that the dealer knows they can buy at the auction for thousands of dollars "back of book" yet the shopper brings in reams of printouts from various sources and he "knows" what it's "worth".

    These customers have to be treated with kid gloves. If one disparging comment is made about his trade in or his numbers are scoffed at he/she will never return.

    Oh, they'll find out after visiting six stores that don't want the trade in but they sure won't give the satifaction of a sale to a store that blew them off.
  • fushigifushigi Posts: 1,235
    And to answer your question about why some dealers won't give you a price over the internet, it's because they feel they have a better shot if selling you a car if they get you into the dealership.

    I understand that's their perception. But that perception is, to many people, no longer valid. "Call for price", "Stop by to talk", etc. stinks of Internet circa 1996 when an Internet presence was primarily used to generate showroom traffic. Doing that today means that the company is only paying lip service to Internet shoppers, which can easily be interpreted by folks like ken & me as: "I don't respect or really want to deal with your method of shopping."
  • michaellnomichaellno Posts: 4,300
    And to answer your question about why some dealers won't give you a price over the internet, it's because they feel they have a better shot if selling you a car if they get you into the dealership.

    I understand that's their perception. But that perception is, to many people, no longer valid. "Call for price", "Stop by to talk", etc. stinks of Internet circa 1996 when an Internet presence was primarily used to generate showroom traffic. Doing that today means that the company is only paying lip service to Internet shoppers, which can easily be interpreted by folks like ken & me as: "I don't respect or really want to deal with your method of shopping."


    A couple of weeks ago, I was on the ford website looking at Mustangs. I inadvertently sent out a request to my local Ford dealer. I got a couple of canned emails, then a third email with a specific quote for a Mustang GT with only the security option. This quote was very competitive (not that I'm looking seriously at this point) - so much so that I went to the dealer for a quick look at the car in question.

    Turns out it was for a car they would have to get in trade, but I did have a chance to chat with the internet salesperson who provided me the quote. He knows that he has to be aggressive precisely because of the issue noted above - that it would be easy for me to take his quote and 'shop' it at other dealers.

    I was surprised at how candid he was and that he provided a quote in the first place. He did tell me that he would sell me any Mustang at invoice (minus incentives) and to keep him in mind should my shopping take a serious turn.
  • andres3andres3 CAPosts: 5,330
    I'll usually award the best initial quotes the most consideration.
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 44,838
    I think that it behooves a person to check a dealer's reputation rather than throw a dart at the one who is $50 cheaper.

    MODERATOR

  • isellhondasisellhondas Issaquah WashingtonPosts: 17,693
    In the minds of many, the internet has hurt the car business.

    People want hard quotes so they can take that numebr and shop it to death.

    If you don't give them a number (we never would) some would get upset and take you off their list.

    Some stores would really mess with people. They would give low quotes on cars they didn't have and couldn't get or they wouldn't include the destination, things like that.

    I would tell people." Make sure they have the car and have included everything"

    Sometimes they would say..." Ah, they don't have that actual car in stock but they can get it"

    " Well, there is ONE in the state and we happen to have it and we aren't about to dealer trade it".
  • andres3andres3 CAPosts: 5,330
    Often the quotes I've received are not $50 apart but more like $400 apart. If it was $50 apart and one was 5 miles away vs. 50 miles away, the gas you waste going further would offset the savings significantly; not to mention wasted time.

    I'm particular about options and I only like certain colors, so I'm often better off just visiting a dealer that has what I want on the lot (trades add complications, costs, and wasted time).
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 44,838
    Well I see your point but if you pick a bad dealer, that $400 is going to seem like mighty poor compensation in very short order.

    Or look at it this way. On a $35,000 vehicle, $400 represents .0115% of the total price.

    Would you, say, order dinner for two at a restuarant with a surly wait staff and dirty tablecloths (same exact food, with wine) to save $1.15? :P

    MODERATOR

  • isellhondasisellhondas Issaquah WashingtonPosts: 17,693
    Shifty,

    I had people waste three hours of my time on a busy Saturday driving cars etc only to learn that they drove 200 miles the next day to "save" 200.00.

    I never realized how downright cheap some people can be until I got into this business.

    Then they sometimes had the gall to come to OUR store to see if we wojuld fix some scratch they hadn't seen at thae other store.

    And, guess who get's to do the warranty work?
  • fushigifushigi Posts: 1,235
    In the minds of many, the internet has hurt the car business.

    It's certainly changed the way most businesses need to operate. If they don't adapt they wither & die. On the retailer side, see Borders Bookstores, Circuit City, and countless others. On the industry side, see how the music industry is still struggling to come up with a viable long-term business model (IMO the RIAA's days are numbered) that includes digital tech.

    The Internet has a way of commoditizing things. If you're looking for Item X and have no seller preference, relationship, or obligation, why not go with who offers it for the best price?

    This is the new reality. (And really, it isn't all that new; it's just a different communications medium that's faster and can handle automated querying. Using the 'net v. making lots of phone calls or driving around on a Saturday afternoon.)

    Questions for the group: How are you using the 'net to drive business? Beyond having a dealership web page, does your dealership have a Facebook page? Is it maintained, i.e. actively updated with wall posts at least once a week? What attempts are being made to engage the public? Do you post video walkarounds of your used cars? Let people know about the next hot dog & pop corn event? Have contests for $50 gas cards or other promotions? Ask trivia questions about your cars or local events? In short, what is being done to build presence, excitement, and ultimately a relationship that'll encourage someone to buy from you v. the guy down the street?
  • isellhondasisellhondas Issaquah WashingtonPosts: 17,693
    Yeah, it is the "new reality" and this has driven a lot of brick and morter business out of business. Stores that have survived for generations by providing good service and good value.

    but, I guess this is a "good" thing since it's all about paying the least a person possibly can for something.
  • andres3andres3 CAPosts: 5,330
    Circuit City had serious customer service issues and was notorious for bad service which led them to go under. The internet just expedited it.

    What is ironic, is CircuitCity.com was one of the best electronic items websites around! They had some good deals on there. I remember they had very competitive music (CD's) prices.

    I do find it annoying that you can't really go into a brick and mortar store anymore and sample/test electronics products in any meaningful way. Everyone abused the stores for "tests" then made a cheaper purchase online from someone with lower overhead. Hard to get around that or defeat it. Now all the stores are gone.
  • isellhondasisellhondas Issaquah WashingtonPosts: 17,693
    That's right. Go into the stores and twist all of the knobs and pick the salesperson's brains asking dozens of questions.

    Then, scour the internet with zeal to maybe save 20.00 on that smart phone!

    " Now all the stores are gone"

    Well, I wonder why?

    They are not ALL gone. Some survive and then people complain about their return policies!
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