Any Questions for a Car Dealer?

rroyce10

.... That boy sells some units up there .....

                            Terry.

robr2

Yeah - Herb is doing pretty good for himself. Started out selling copiers then bought the copier dealer and finally sold that before getting in the car biz less than 20 years ago. According to his newsletter, they'll sell 40,000 vehicles this year.

He has a beautiful MB dealership near my office in Boston with a parking garage for the inventory and a helipad on top. My understanding is he used to commute from Fairfield, CT to Boston via helicopter.

stickguy

Penske bought the local dealers row change by me at some point. The name is still the same, but they are rebuilding all the showrooms into palaces (the old ones were small and dated), and already put in a huge holding lot. Really upgrading the facilities and business practices.

Most interesting thing is they are putting in some kind of test track or test drive loop around the complex. I would still insist on a real drive, so it will be interesting to see what they do with it. If nothing else, it will make it easy to test a few cars back to back under controlled circumstances.

bobst

Or I will tell my story about the keys again.

Then, as an afterthought, I will tell how the F&I lady tried to charge me a dollar more than the OTD price I had offered.

In addition, the doughnut they gave me was stale. Too bad there wasn't a 'quality of doughnut' question on the CSI survey.

driftracer

I worked for Lithia from 1997-1999 - I saw no changes while I was there, except for more formalization in their training plans for managers and salespeople, and unbelievable growth and promotions. They had 41 stores when I went to work for them and they now have over 200....Sid Beboer, CEO, is one of the coolest and most easy-going guys I've ever met - you'd never know he was a billionaire.

About once a week, he'd drop into my F&I office with a cup of coffee and talk with me about everything from sports to music. Great guy, worked his tail off, started with one Chrysler store way back when, and just built on good business.

Most of the time, when Lithia would acquire a new dealership or dealer group, they tried to keep as many people as they could, maintaining solidity with the current employees and customers, as not to lose customer base and hurt their position. Eventually, a few management changes may occur, but not always. All that mattered was that dealership management bought into the Lithia way of doing business lock, stock, and barrel - it's a good, formal, disciplined plan and it works.

xcel

Hi Terry and Stick:

___Thanks for some of the inside scoop. I wish Isellhondas would pipe in to see exactly what Honda does behind door #1? As both of you have mentioned in the past, said buyer wants last months V10 See-dann at invoice and walks out with a $3K MVA on top of sticker for the latest and greatest Soccer Mom Special with all the jingle …

___Bobst, once the 00 Insight 5-speed moves, I am interested in an 05 Accord I4 EX-L w/ NAVI for a much shorter commute. With Accord sales falling 5 - 7% year over year, a fat cash factory to dealer incentive would punch my ticket. Except that it has to be a PZEV and that means possibly Chalmer’s in MA or Ray Laks in NY? If it isn’t a PZEV, it isn’t in my drive and Illinois “don’t do PZEV Accord’s” :-(

___Danf1, I don’t know how Bobst is planning on purchasing but he might be one those that beats the local by $100 and drives a 350 mile round tripper to do it? In other words, Terry’s favorite ;-)

___Good Luck and thanks to you all.

___Wayne R. Gerdes

bobst

Since you seem to know what kind of car you want, do you know exactly how much you are willing to pay for a car like that?

xcel

Hi Bobst:

___As seen over at TOVTEC and here at Edmunds:

http://www.hondanews.com/CatID1000?mid=2004120151841&mime=asc towards the bottom:

Accord* November 03 vs. 04 - Month to Date: - 12.5%
Accord* November 03 vs. 04 - Year to Date: - 6.1%

___Does this kind of negative number on what used to be the number 1 seller in the US years ago (cars, not trucks ;-)) scare any of this forums membership? Maybe it makes some here happy knowing they can sell that many more G6’s, Malibu’s, Camry’s, Altima’s, 500’s, and Mustang’s for those that cross shop :-D

___If the 05 Accord’s downward slide continues, I don’t think $1,300 FTD incentive is going to cut it in the near future like that on the 04’s now. A brand new 04 EX-L w/ NAVI Sedan was offered at $22,500 incl. dest. from both Chalmer’s in MA. and Grand here in IL. 2 months ago when there was only a $1,000 FTD incentive.

___How are these large Honda dealerships offering below invoice and staying in business? Terry made a good comment in regards to the real world vs. Edmunds, Carpoint, etc. but I sure would like to hear the details from a Honda salesman?

odyssey1 "Honda Accord: Prices Paid & Buying Experience" Dec 3, 2004 2:37pm

2005 Accord EX-L w/ NAVI: I paid: 23,700 plus TTL

___Maybe $21,500 - $22,000 for a PZEV after Honda comes to its senses and adds the 05’s to its FTD incentive program(s) in 3 to 6 months? Imagine what a Ford dealership will offer new Taurus’ for at that point in time let alone the 10.375 billion used ones on every rental lot in the solar system 8-)

___Good Luck

___Wayne R. Gerdes

imidazol97

"Accord’s downward slide continues, I don’t think $1,300 FTD incentive is going to cut it in the near future like that on the 04’s now. A brand new 04 EX-L w/ NAVI Sedan was offered at $22,500 incl. dest. from both Chalmer’s in MA. and Grand here in IL. 2 months ago when there was only a $1,000 FTD incentive. "

The folks in a couple of Honda discussions tout that Honda doesn't do incentives. Their product is so good they don't need rebates.

Are you saying that there's a _non-hidden_ rebate on Hondas?

bobst

Did you say that you are willing to pay $21500 Out-the-Door for the Honda of your choice?

isellhondas

Wayne,

Let's just say that some of these so called "prices paid" are a bit over the wall.

Don't believe everything you read on the internet.

xcel

Hi Imidazol97:

The folks in a couple of Honda discussions tout that Honda doesn't do incentives. Their product is so good they don't need rebates. Are you saying that there's a _non-hidden_ rebate on Hondas?

___There are indeed ;-) They aren’t really hidden since Edmunds and the rest of the car sites list them. They aren’t called “rebates” in the normal sense but are called “Factory to Dealer” or “Manufacturer to Dealer – Marketing Support” (Edmunds terms), not rebates to the customer.

___Here is Edmunds own incentive list on the 04 as well as the 05 Accord’s as just 2 examples:

2004: http://www.edmunds.com/incentives/RebateController?tid=edmunds.n.- optionsresults.ntmv.2.6.Honda*&styleid=100336787&popuppag- e=on

2005: http://www.edmunds.com/incentives/RebateController?tid=edmunds.n.- optionsresults.ntmv.2.6.Honda*&styleid=100452170&popuppag- e=on

___A FTD incentive is actually a better deal for you depending on where you live as many states tax you on the amount of sale before rebates whereas a FTD incentive shows up as whatever you paid, that is what you pay taxes on.

___What I see is something else altogether with thousands of Accord’s hitting the street at below invoice?

___Good Luck

___Wayne R. Gerdes

xcel

Hi Bobst:

___No one from the general public that I know of can pick up an 05 I4 4-Door - EX-L w/ NAVI for that price today. The key is yet. If (**this is a mighty big if**) Accord sales are sliding like they have been over the last year, Honda will probably offer a bigger incentive to move the 05’s then what is currently being offered on the 04’s today. When this happens, $21,500 - $22,000 for that particular 05 model and trim might be possible?

___Sorry to all for the OT diatribe on a particular model as this thread is probably meant for the discussion of general questions to a salesman, dealer, or dealership from the likes of Terry, Stick, Kydfx, Isell … If that is what you all do? Terry and Isell certainly do anyway.

___Good Luck

___Wayne R. Gerdes

xcel

Hi Isellhondas:

___It is one thing to see it posted on the Internet in the “Prices Paid” threads time after time after time. It is an entirely different matter to be offered an 04 - I4 - 4 door - EX-L w/ NAVI for $22,500 from Chalmer’s in MA. and Grand in IL. over the phone as well as Rosen in IL. (the local Honda dealership where I took one out for a drive). There was $1,000 FTD available at that time so either these 3 Honda dealerships are/were blowing out 04 Accord’s at below invoice (this was actually below the HB from my calc’s!!!) or there is some kind of hidden incentive for yearly total sales, month end sales, sales in a week, salesman of the month, whatever that I am asking about? Do manufacturer or car dealerships offer these special incentives that don’t show up in the automobile press? Honda is pretty tight lipped about everything but I do not see dealerships digging into their “Hold Back” or giving their automobiles away at a loss day after day, week after week, month after month for the goodwill of the average customer. This is not a way to earn a living even if it is the lowest overall parentage profit center?

___Thanks to all for the replies. I should go back into my hole now before I cause any more trouble around these parts ;-)

___Good Luck

___Wayne R. Gerdes

bobst

Do you want to buy a car now?

xcel

Hi Bobst:

___Only after the 00 Insight sells which could be today, tomorrow, next week, next month, or whenever? If I see the FTD incentive for the 05 Accord pop up, then the Insight will be advertised appropriately instead of a single one liner in my sig across the few Hybrid boards I post to on a daily basis …

___Don’t forget that the 03 on up 7th gen Accord’s reliability appears to be far less bulletproof then the later previous generations.

___Good Luck

___Wayne R. Gerdes

bobst

My guess is that you will see FTD incentives on the 2005 models in about a year when the 2006 models start to appear.

xcel

Hi Bobst:

___9 months at the latest (just like this years $1,000 first, $1,300 now) and probably sooner as the 05’s are already being dumped below invoice as you have seen in the “Honda Accord - Prices Paid” thread.

___Good Luck

___Wayne R. Gerdes

jontalus

jontalus

My autocheck shows the car I want to buy was sold at an Auto Auction with only 2000 miles on it. The car was bought by another dealer in another state. Why would a dealer sell at new car at an Auto Auction?

rroyce10

....... Could be a lot of things, maybe a rental, could be the last dealer had too many expensive vehicles in inventory and Christmas is coming, could be a buy-back, maybe a traded lease and/or a purchase .... or - the same reason why you see 2,000 mile Touaregs, Buicks, Honda Ody's, Chevys or Yota's .. they get traded because ~ they can ..............

              Low mileage vehicles are common at the auctions .....

                              Terry.

sdjb34

I traded in my 1999 Chrylser Town and Country for a 2004 Envoy XL but must admit I did not do as much research as I should have. The payment is about $100 more than my Mini van was and increase in the insurance is astronomical. Combine that with the poor gas mileage and I'm strapped. I'm at a loss and don't know if there's a way for me to get out of this vehicle. I just made my first payment in Sep 04. Anyone ever found themselves in this situation and have any suggestions on what I can do? Thanks.

stickguy

At this point, it's just an object lesson for others on the board. In your case, you would have to take a bath to get out of the Envoy. Sure you could trade it in, but you might have a hard time getting something suitable that will have a l ower payment, and enough added MPG to matter.

Any new car will likely have higher insurance. A 6 YO minivan is pretty low for insurance.

Only you know what your requirements are, so no one here can tell you to trade in on a leftover PT cruiser or Ford Focus (just making up a couple of examples).

Just remember, if you trade, and you owe more than it is worth, the difference will have to come from someplace.

marciz02

drift, you are the man. tell me more.

driftracer

so I can't write for days.....every day brought something new and unique that consumers and car people could learn from - I would have no idea where to start.

Ask away, and I'll do my best to answer, but for me to just to talk uncontrollably will certainly cause posting problems...

marciz02

Anyone work at a dealership for AutoNation, Lithia or Sonic or United Auto Group? Any thoughts on working for the big dealer group?

marciz02

hey drift, do you think F&I regulation is needed?

blckislandguy

Have dealer showrooms and the sales people in them, gottern less and less similar when compared across brands? Recently, I've been in a number of dealerships and the difference between the European imports and the American dealerships seems to be getting larger. The sales guys in a BMW store, for example, are significantly different in dress, looks, age, education, etc. from a domestic store. The import showrooms are also less cluttered and have high tech stainless steel decor and free coffe set up for customers. Porche dealers seem the most brand-consistent with their stainless steel exteriors, spotless interiors, absolutely spit shined service areas, etc. (They also seem to have zero floor traffic so keeping all this clean may not be a problem.)

On the other hand, the only free coffe in domestic stores seems to be the stains in their carpets. Rather than "Client Advisors" the domestic stores have overly-groomed "managers" posted up in elevated podiums just like the PT instructors at Ft. Benning to watch the sales guys work over the prospects. No one is going to offer to show you the service area in a domestic store. Even a multiline dealership (e.g., Tully BMW, GM, Buick, in NH) with their brands located in adjoining buildings exhibits this pattern. Seems like dealerships and their people are becoming more and more specialized?

driftracer

F&I is already HEAVILY regulated, more so in some states - many states cap extended warranty pricing, nearly all states control credit life and disability insurance premiums, lenders control markup on rates...on and on...

Some states have disclosure laws concerning "stripped" payments....you can't get any more regulated than trying to sell aftermarket products with a stripped payment - been there, done that, it ain't easy.

jlawrence01

There are a lot of differences between say a Lexus dealership and say, a Chevy dealership. You are talking about a different clientele with different expectations. There are positives and negatives in both approaches. Personally, I am not used to having to make an appointment to purchase a $46k vehicle that I have already spec'ed out with the lease company. On the other hand, the Lexus dealerships and some of the Cadillac dealerships do a great job of education the buyer about their product and it is well received.

As for me, when I walk into the Lexus dealership,my gut reaction is "why am I paying for all this overhead?" When I buy my personal vehicles, I purchase from a Cadillac dealership's used car lot in a converted gas station. I get great service from a knowledgable staff. On the other hand, I don't get to watch CNBC for 30 minutes on the big screen drinking Starbucks, but to each his own.

jasmith52

Jlawrence:

I'm with you. I wonder about all that overhead and I know whos paying for it. It must be, like dentist and lawyers offices, that people won't buy at stores that aren't up to snuff.

The showroom goes with the whole mindtrip that luxury cars represent.

asafonov

There is a difference between overly posh (I am assuming some luxury brand dealerships are like that - never been to one) and clean, professional and cheerful. Our family owns a Honda and a Chevy (both good cars) and the difference between the dealerships is rather pronounced (guess which one is more pleasant to visit.) The Honda dealership, however, is a standalone one located in a fairly gentrified old first-ring suburb, while the Chevy place, also selling Kia and Dodge, is out in the sticks, about 25 miles farther away from downtown.

robr2

As I understand it, the manufacturers have design and operating standards the dealers have to meet. Buildings reflect a consistent look and image and I believe dealers get bonuses and extra allocation for updating to the new look.

Have you noticed that Honda dealers seem to be going to a consistent look in their exterior design with wave shaped awnings? Cadillac dealers going with black and chrome? Subaru dealers with tan buildings and proper signage? Ford Blue Oval Certified had a look component to it IIRC. It's all about the brand and making it consistent for the customers - just like McD's.

weaselinsuit

You get caught though. If you don't have relative nice digs, people think you're incompetent but if you go over the line people think they're paying for the decor. The trick is finding where the line is and carefully tapdancing along it.

blckislandguy

Re: "Why am I paying for all this overhead?" is a good question. So isn't "where is the money coming from?". I'm told that the import lines have very limited profit margins (e.g., BMW is a 7% line, MB I think is only a 5% line) on new unit sales. So, where does the money come from? Sure, they make some in the F & I operation, some on warranty, and maybe a lot on CPOs, but I've always thought the manufacturers with their hefty requirements really squeezed the margins on import dealers. I must be wrong though because an import dealership sells for perhaps a multiple of 6 times earnings, vs. 1X earnings for a Chevy store. So, where does the money come from for the free Starbucks and flat screen TV??

ksccts

Thought everyone would find this poll interesting. Car salesmen rank dead last in this poll of honesty and ethics. Comments?
http://www.gallup.com/poll/content/login.aspx?ci=14236

bobst

Who cares? I buy a car, not a salesman.

I have had wonderful salesmen (our 2003 Acura) and very sleazy salesmen (our 1999 Accord). It makes no difference to me. Once we drive away, all we care about is enjoying the car.

rroyce10

**The lowest rated professions tend to be those connected with sales or big business, lawyers, elected officeholders, and reporters.**

           "Oh no" ~ not reporters.! .. you know things are bad when salesman are rated less than reporters ....... where's those razor blades.?

                               Terry

isellhondas

They actually rated us BELOW lawyers ???

jglackin

don't forget - polls like that generate emotional responses. A person is much more likely to buy a car (every 36 months or so, right) than to deal with a lawyer. Unfortunately, as all of us in the business know, there are lots of nasty folks out here. I personally, would not buy a car from 7 out of the 10 people on the floor where I work - even though I don't buy a salesperson either.

turboshadow

Since Drift has worked closely with both, maybe he can give us the inside view of who is truly the least trustorthy ;-)

<ducks under desk>

Turboshadow

driftracer

field has its own stars and slugs, without a doubt. Bear in mind, this survery was taken based on people's perceptions, and neither field has favorable examples when the thought first comes to mind - you think of ambulance-chasing personal injury attorneys and leisure suit and white shoe wearing used car salesmen, both characters glamourized and defamed in the movies, both moreso than deserved.

There have been salesmen I've worked with that I wouldn't loan a dollar to, but folks that I'd trust with my life and my checkbook. Same to be said about lawyers I've worked with.

I think both fields suffer from unfair stereotypes, just like saying all nurses or all accountants are perfect people - I have several medical career friends who are great folks, but the NJ and PA district courts have just gone through a 6th round of indictments on a male nurse in NJ who worked in NJ and PA and has admitted to killing over 50 people while on duty..

People will ALWAYS believe in these stereotypes, and the urban legends, just like people believe there's a 3 day return rule on car purchases and Monday and Friday cars are bad, although most factories have been 7 day operations for the last 30 years...it just doesn't fit with reality.

Folks are gullible, and when car salesmen are selling laser-guided SUVs, the stigma will still be there, just like the manager of the local supermarket, in the year 2050, will immediately call his risk management office if someone falls in the store, because he knows a lawsuit is soon to follow...

robr2

I'm told that the import lines have very limited profit margins (e.g., BMW is a 7% line, MB I think is only a 5% line) on new unit sales. So, where does the money come from? Sure, they make some in the F & I operation, some on warranty, and maybe a lot on CPOs, but I've always thought the manufacturers with their hefty requirements really squeezed the margins on import dealers.

Follow this link to Group 1 Automotive and check out their results:

http://www.group1auto.com/irfs.html

39% of revenue and 79% of profits came from used cars, service, parts & F&I. What does that tell you? New car sales are a loser compared to the other operations.

weaselinsuit

Hee hee hee hee......hmmmm good thing they weren't rating maturity

driftracer

klbrmb

Here is a question.....

What recourse does a dealer have when they made a $2,000 mistake in the buyers favor on the fiance paperwork? Ex. they took the value of the new car rather than the trade value to determine negative equity.

The question has been bothering my husband and I. The deal is done and I was nice enough to correct their mistake before we signed the paperwork so the dealer didn't loose their money but everyone has told me how stupid I am for doing this. I guess I am just the type of person who couldn't have done something like this and still taken the car there for service and felt good about myself.

ddelise

You did the right thing - enough said.

My two cents.

Damon

weaselinsuit

I agree. Nothing wrong with being honest. And yes I am aware of the bitter irony of my posting that.

jasmith52

Here's what I would do:

I would keep the $2000. Finders keepers !

But I would report it on my income taxes as income because I wouldn't want to be dishonest.

kyfdx

You did the right thing..

What you did wrong, was discussing your personal finances with others.. (not including us, of course..lol)