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Dealer Holdback questions

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Comments

  • Kirstie_HKirstie_H Posts: 10,837
    Customers figure that it's ALL gravy. To hear some talk, you'd think that salespeople would be living on easy street just for opening the doors every day.

    Dealers say that NONE of it is gravy. To hear some talk, you'd think that the dealer is in the red every day and keeps the biz open just for public service.

    I suspect the truth can be found somewhere in the middle.

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  • isellhondasisellhondas Issaquah WashingtonPosts: 17,626
    Oh, I think most mechanics would be happy to tell you about the gravy jobs. It's a good thing there ARE gravy jobs or there would be a bigger shortage of techs than there already is!

    Finding a rattle under a dash or trying to track down an intermittent drivability problem can be vexatious work!
  • I think you would find most new car operations are run in the red almost all the time. The used car side might make money on its own but once you lump in the new car side loses then over all sales department probably runs at a loss or at best break even.

    The money is made in parts and service.
  • exb0exb0 Posts: 539
    Isell, I was just following up on Joel's post that basically said that the holdback alone pays for 25% of all the expenses of his store that includes the lights, building, salaries and the porter. If that's the case, then you guys are doing really well and you have nothing to complain about when a customer hits you below invoice, especially if you keep in mind all the other sources of revenue.

    However, I understand your point of view, it doesn't matter how much you sell the car for, you will always want more and you will always have a justification for it. It is human nature to always want more, and it is also human nature to blame somebody else when you can't get that.

    I personnaly know some store owners and members of their immediate families. Trust me, they are not suffering. However, they are always whining about what cheapskates their customers are, even though they enjoy a lifestyle that exceeds 99.9% of their customers.
  • joel0622joel0622 Posts: 3,302
    personaly know some store owners and members of their immediate families. Trust me, they are not suffering. However, they are always whining about what cheapskates their customers are, even though they enjoy a lifestyle that exceeds 99.9% of their customers

    Kudos to them for being successfully business people and having the balls to take a chance on owning there own business. You don't speak badly of them so they must be ethical business people.

    (the following is not directed at exb0, just talking)
    Success is not a bad thing in the car business and you can't hold a dealer at fault or immediately brand them crooked because they are successfully

    We work in the only industry in the world with the exception of the Crude Oil business that people dislike you for being profitable.
  • ventureventure Central PAPosts: 446
    We work in the only industry in the world with the exception of the Crude Oil business that people dislike you for being profitable.

    Well...I'm not exceptionally happy about what my attorney charges me per hour.

    My real estate agent charges 6% too which doesn't make me jump for joy either.

    :D

    2014 Fusion, 2013 Impreza, 2011 Forester

  • joel0622joel0622 Posts: 3,302
    True, the commission structure in the realty world baffles me also.
  • jeffyscottjeffyscott Posts: 3,855
    Kudos to them for being successfully business people...Success is not a bad thing in the car business...We work in the only industry in the world with the exception of the Crude Oil business that people dislike you for being profitable.

    What I dislike is as was posted above..."Dealers say that NONE of it is gravy. To hear some talk, you'd think that the dealer is in the red every day and keeps the biz open just for public service." When reality is, as was also posted above..."they enjoy a lifestyle that exceeds 99.9% of their customers".

    Note that this is talking about the owners of dealerships not sales people or other employees. Do sales people not see where and how the owners live? Maybe they should demand a bigger slice of the pie from ownership, instead of blaming the customers...just a thought :) .
  • jeffyscottjeffyscott Posts: 3,855
    Do you go into a department store and demand to see invoices of the clothes you are buying and then try to get some of the stores own money on top of that?

    What would happen if I did?

    Am I holding a gun and demanding this information from the car dealership? If you don't like it just say "no you can't see that" and/or "no I won't sell for that price". I think that is what the department store would do.
  • joel0622joel0622 Posts: 3,302
    Its just profit, nothing more, nothing less. Holdback, Dealer Cash, Bonus Cash, working a wholesaler after you leave to put more money in your trade, its all profit.

    I wish the the manufacture would do away with all of it to include rebates and just give us about $5K mark up in each car. Then may the best man/women win when the smoke clears. It would be a level playing field for all concerned. I want you to pay all $5K and you want to pay me $100 now lets meet in the middle. There would be no mystery for the customer wanting the elusive holdback on the car we have had in inventory for 210 days.

    It would also help my check because I don't get paid on holdback or any other after sale money :D

    Now allot of that is tongue in cheek but I do wish the process was simplified

    I have a very long rant on the demise of the car business from a sales point of view but I won't get into all that. I will just summarize it by saying we have given the consumer to many decisions to make when they come to buy a car. That may be good Blog material
  • dino001dino001 Tampa, FLPosts: 3,476
    I want you to pay all $5K and you want to pay me $100 now lets meet in the middle

    Means... $150? ;) :P

    2012 BMW 328i wagon, manual and sports package. No. sold in the US: 1. Probably.

  • jeffyscottjeffyscott Posts: 3,855
    There are some dealers that put a price tag on a car and stick with it, the price is what it is...at least on any given day. Examples are Fitzmall, Carmax, Saturn (they still do that, right?).
  • I think Saturn stopped.
  • greanpea68greanpea68 Posts: 1,996
    There are some dealers that put a price tag on a car and stick with it, the price is what it is...at least on any given day. Examples are Fitzmall, Carmax, Saturn (they still do that, right?).

    The fun begins when they appraise your trade :P

    "KElly Blue book says my car is worth $12,900"

    "Why are you only giving me $9000" ;)

    GP
  • exb0exb0 Posts: 539
    The fun begins when they appraise your trade.

    Nonsense. A month or so ago I went to the Fitzgerald Toyota in Gaithersburg MD to test drive Camry SE V6. The store has 6 pcs in the center of the showroom that the customers and salespeople use to check their inventory on the public web site. The salesman searched their inventory on one of those pcs and printed out the specs and the price of for all SEs V6 available from their public web site. Their price was $300 under invoice w/ $99 processing fee and no other junk fees.

    After the test drive the manager appraised my trade-in: 04 Acura TL base w/ 30K on the clock that was in a minor accident. They gave me a detail appraisal with the KBB good condition and the Black Book avg. cond. values written on the appraisal. Values they gave me matched the online values for those guides. They offered me $20K minus $600 for a new set of tires. The price they offered me was in between KBB and BB, BB was about 1K lower than KBB. $20K was the most any traditional store had offered me for that car at that time.

    The whole process was extremely painless and polite. No lies, no pressure, just smiles; it didn’t feel like I was in car store.
  • jeffyscottjeffyscott Posts: 3,855
    I think Saturn stopped.

    I don't know for sure, but I do see that edmunds lists TMV at MSRP, so I am guessing they still do the one price thing.

    Maybe doing rebates is something new for them???
  • Yeah maybe that is right and the rebates are new.
  • deskmandeskman Posts: 485
    Holdback belongs to the dealer.Consumers need to get a life and understand profit is what every business is based on.

    Next time anyone asks me about my holdback i will give them directions to a different dealer. :shades:
  • oldfarmer50oldfarmer50 Posts: 6,271
    "...Next time anyone asks me about holdback I will give them directions to a different dealer..."

    If I understand correctly when you do a dealer trade holdback stays with the other dealer. If that's correct why do salespeople seem to prefer dealer trades vs.ordering from the factory?

    Is it really because they think the customers are likely to back out if they have to wait?

    2009 PT Cruiser, 2008 Eclipse, 1995 Mark VIII, 1988 GMC Van

  • deskmandeskman Posts: 485
    I only dealer trade if i am making a big gross or i am close to a stairstep level from the factory.
  • volvomaxvolvomax Posts: 5,274
    If you are "trading cars" then in essence, you are trading holdbacks.
    If dealer A sells a car to dealer B, but doesn't take one of dealer B's cars in return, then dealer A keeps the holdback.
    Since you have to swap cars to keep the holdback straight, thats is why it is called a deaerl trade
  • greanpea68greanpea68 Posts: 1,996
    If dealer A sells a car to dealer B, but doesn't take one of dealer B's cars in return, then dealer A keeps the holdback

    Here in the world of Nissan...

    Who ever reports the car sold gets the hold back. When ever we do swaps we in clude all hold back plus any add ons... ussualy only wheel locks...

    Did have one dealer charge us the resistall pkg. It was a sticker deal and they had the car what are you gonna do. :confuse:

    GP
  • kyfdxkyfdx Posts: 27,896
    Wow... a dealership getting stuck with the Mop-n-Glo.. :surprise:

    Bad karma... ;)

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  • volvomaxvolvomax Posts: 5,274
    With Volvo, the holdback is paid when the car is wholesaled to the dealer.
    CSI money is paid or RDR's,assuming that the dealer qualifies
  • deskmandeskman Posts: 485
    Collect holdback from the customer? I LIKE IT!!!!!!!!!

    I like to pencile a non lease payment like a lease.payment plus tax always gives my closer a move if they need one.
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