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Out The Door (OTD) Pricing questions

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  • jlawrence01jlawrence01 Posts: 1,828
    Why does a salesman want to spend HOURS tied up with a buyer who makes an offer that is off the wall? The last time that I checked, salesman receive compensation based upon the number of units they move, not the amount of time they spend yakking it up with prospects.

    I have nothing against looking for a good price, but be realistic. If a dealer has $20k invested in a vehicle, he is not going to let it go for $16k just because you are a good negotiator. Especially if the car is one of the hot models.

    On a number of occasions, I have walked from a used car purchase because the dealer overpaid for a vehicle and can't let it go for what I am willing to pay for it. But there are thousands of other cars out there.
  • KCRamKCRam Mt. Arlington NJPosts: 3,516
    Not here, you two. Argue in email if you want, but this will stop right now on these boards.

    kcram
    Host
    Smart Shopper and FWI Message Boards
  • bobstbobst Posts: 1,783
    Audia, there is a difference between being stupid and being ignorant.

    All of us buyers are ignorant of the lowest price you will accept for a particular car. All we can do is guess. Sometimes we guess too high, and we pay too much. Other times we guess way too low, and you laugh us out of the store. Ignorance is nothing for us to be ashamed of.

    Yeah, I agree that most buyers want you to counter-offer, but I don't quite understand it. Why should I consider a counter-offer until I am sure my original offer has been refused? And I don't know my original offer has been refused until I walk out the door and drive home. Therefore, I only make one offer on each visit to the dealer. Seems logical to me.

    In fact, that is how it was on our last two car purchases. We make offer, they refuse, we get up to leave, they say they accept. Kind of like the Japanese Kabuki Theatre where everyone knows the outcome but they still have to go through the motions.
  • bobstbobst Posts: 1,783
    In message 10446 under the Inconsiderate Buyers topic, you described how you would handle a nice customer named Bob who came in and offered to buy one of your cars. It was a very educational post, and taught me even more about how car sales people operate. As best I could tell from reading your post, you never even gave poor old Bob an answer.

    I posted my rejoinder in message 10447.
  • dbgindydbgindy Posts: 351
    Went back and reread 10446-100448.Looked to me as if he was describing someone who was either looking for too low a price or wasn't sure what they wanted. Where he ( cliffy) comes off as inconsiderate I didn't get.
    bobst your method works great for you and I'm glad. It doesn't work for over 99.5 % of the car buying public who do talk to the salesmen so I don't see cliffy in the same bad light as you do.
    I guess we'll agree to disagree. :-)

    Duncan
  • isellhondasisellhondas Issaquah WashingtonPosts: 19,657
    I read nothing "inconsiderate" in Cliffy's post.

    Cliffy just knows there is a small percentage of shoppers he is better off without.
  • audia8qaudia8q Posts: 3,138
    your are trying to compute this from your buying perspective....but your buying methods are very unique. I'm not saying its bad or good, just different....maybe we have had people who use your offer and leave concept but I can't recall it. So it's hard for me to look at things from your side of the table....

    I remember you saying you normally make an offer and if its not accepted you leave, even if they chase you out the door and agree to your price...so when you actually got up and then came back and purchased the car I was surprised.
  • bobstbobst Posts: 1,783
    When we make an offer, we are serious. If they accept, we buy the car.

    If they accept while we are sitting at the table (as happened in 1995), we buy the car.

    If they accept over the phone (like in 1993, 1995, and 1997), we come in and buy the car.

    If they accept as we are getting out of the chair and heading for the door (like in 1998), we buy the car.

    If the follow us into the parking lot and say they accept our offer (like in 2003), we buy the car.

    Either way is OK with us.
  • bobstbobst Posts: 1,783
    In the very first sentence of Cliffy's post, he says that a buyer named Bob come in and makes an offer.

    That is like, you know, an actual offer to buy one of his cars.

    Don't you think he should have given Bob a 'Yes' or 'No' answer?
  • cliffy1cliffy1 Posts: 3,581
    You're not serious are you? You've taken a post I wrote about the importance of qualifying a customer and extracted from that the idea that I wont give a straight answer to a customer? It was a hypothetical situation anyway. Didn't you wonder why I called the guy Bob?

    Are you aware of what the word "qualifying" means? I'm not slamming you if you don't but keep in mind where you read this post. It was in a discussion among car salespeople. Its a word that means making sure the customer can actually follow through with what he claims.
  • Um, Bobst, I think what Cliffy did made perfect sense. Are you serious in saying that you wouldn't engage in any conversation to validate how serious you were? He's trying to make sure 1, that you're real, and 2, you're getting the best product for your needs.

    See, 1/3 of my job is focussed on sales. I have customers come to me all the time saying "I need this for X price." Before I say yes, I need to determine if that's what they really need, and explore all options with them, and make sure that the solution really meets their needs. The only time I will take a request like that is with an existing customer who knows what we have, and is making an informed buying decision. I might have a cheaper option that meets their needs.

    If I don't do this, and the requested product doesn't hit the target because they miscalculated, who do they get mad at? My company. That's why if you spend a little time up front, you ensure success for the both of you.
  • bobstbobst Posts: 1,783
    I see your point. If a buyer makes an offer and you say 'Yes' and then discover the buyer doesn't have enough money to pay for the car, you have given away important information (i.e. the price you will accept) while getting nothing in return. I can see why you don't want to do that.

    However, that has never happened to me. When we bought our Acura I didn't dress to impress (shorts, tee shirt, fleece, tennis shoes) and we didn't pull up in a fancy car (97 Accord), but they didn't make any attempt to 'qualify' us before telling us they would accept our offer.

    By the way, just to show what a nice guy I am, I will actually answer your other three questions.

    Yes, I am serious.

    Yes, I read your original post and extracted the idea that you won't give a straight answer to a customer.

    No, I didn't wonder why you called your hypothetical customer Bob.

    Would you care to answer the question I posed in post 134?

    You see, I am such a 'considerate poster' that I only ask one question in each message I write.
  • bobstbobst Posts: 1,783
    No, I can't recall saying that I wouldn't engage in any conversation to validate how serious of a buyer I am.

    There, I answered your question. Do you care to answer the question I asked in post 134?

    As I told Cliffy, I have never been asked to validate that I am a serious buyer.

    I think we have paid for our last 6 cars with personal checks, but I can't recall ever being asked to show any evidence that our checks were worth anything. I would not have been the least bit insulted if they had asked, but they never have.

    Could they have gotten the license plate number off our car while we were test driving the new car and used it to check up on us somehow? If they had, it would be fine with me. I guess we mere mortals don't understand everything about the car selling business.
  • cliffy1cliffy1 Posts: 3,581
    Its more than just qualifying. Its about psychology. To immediately answer yes or no to the offer in my hypothetical example would be the best way to ensure the sale never took place. That is because I did nothing as a salesman to firm up the customer's commitment.

    If I said, "yes, I'll sell the car for that price" before probing just a bit further, most customers will think that they offered too high of a price. They will almost always back away from their offer if it is taken too quickly. I can't put into words how many times I have seen this happen. In the example, I didn't even say no. I said I just probed a bit further to make sure we were on the right car and that the customer was fully committed to the particular car in question.

    You also failed to notice a key word in that post. That word is "yet." I placed it there for good reason. The word "yet" implies that there is action impending but that action is waiting just a bit to see what else transpires. A yes or no response would be forthcoming as soon as I figured out what kind of person was standing in front of me.

    Understanding human nature may not be part of what you do for a living. It has everything to do with my career. Its more than being a cashier. Its about making sure the customer is pleased with their decision before, during and after the fact. By firming up a commitment, I accomplish that.
  • I think your indian name would be "Man who walks on no"

    You said: "No, I can't recall saying that I wouldn't engage in any conversation to validate how serious of a buyer I am."

    but before you said

    "Since I didn't see the word 'Yes' in your third paragraph, my wife and I would assume your answer is 'No'. Before you got halfway into your fourth paragraph, we would be out the door heading to Bertuccis for our favorite pizza."

    "Don't you think he should have given Bob a 'Yes' or 'No' answer? "

    So,

    Walks-on-no talks with forked tongue.

    Are you expecting him to say yes before he qualifies you? Wouldn't it make sense for him to determine who the heck you are, how educated on the vehicle you are, and understand your needs before accepting and rejecting a price?

    Once he does that, and you are still on your offer, Sure, he should give you a yes or no.

    Bobst, you ain't the average car buyer, in fact, I don't know anyone who buys cars your way, but come on, man, let's give the sales person a break.
  • bobstbobst Posts: 1,783
    I should not be a car salesman. I have always known that I don't understand human nature, and I really don't even care to.

    I can appreciate your way of doing things. It probably makes most customers very happy.

    In my mind, however, a car salesman is simply the person who carries my offer to the sales manager.
  • bobstbobst Posts: 1,783
    Wow, do I ever hate the word 'expect'. I don't think I ever use it.

    Since all of our offers to buy cars in the past have either been accepted or rejected without the salesman trying to qualify us, I assume it will be done that way in the future.

    However, maybe it won't. I am not worried. We could find a way to deal with it.
  • Expect the unexpected.

    Actually, based on your buying style, I'd think the internet approach would be right up your alley.
  • bobstbobst Posts: 1,783
    I think a dealer is more willing to accept a low offer if the buyer is right in front of them with his checkbook in his hand.

    Besides, I love visiting car dealers and talking with the salesmen. Yeah, I really do.

    But when I do make an actual offer, I don't like to wait long for a response. Time for talking is over. Time for a decision.
  • I'm close to making a purchase on one of the following: Saab 9-5 wagon, Volvo V70, or Chrysler Pacifica. By virtue of my employer I am qualified to participate in the supplier purchase plans for each of the above manufacturers.

    In each case I've been given quotes from $350 to $2000 under invoice, with a further deduction of any current incentives. My understanding is that the dealer gets a very generous reward (up to $1800, on the Saab) from the manufacturer for handling these special purchase transactions.

    Are these dealers likely to be willing to negotiate further and dip into the holdback or the supplier plan reward in order to close the deal? In two cases I've dealt only with the Sales Mgr, and in the other I've dealt only with the fleet manager so this transaction won't cost them a salesperson's commission.

    I can't complain about any of the prices I've been quoted, but I'd hate to leave money on the table.
  • rroyce10rroyce10 Posts: 9,359
    **My understanding is that the dealer gets a very generous reward (up to $1800, on the Saab) from the manufacturer for handling these special purchase transactions** ...

              Your in the right church, but your sitting in the wrong pew ...

              For starters, the dealer doesn't get any special "handling" or generous reward for doing this, they might make $200, and if you think you could be "dipping" into the holdback you might find yourself "dipping" in your pocket looking for your keys for a ride home ...

               Depending on the plan, X, whatever, the have a certain level of rules and they will go by that for you to "qualify" for that particular program .. I think you might be getting your figures a little confused, or someone has given you "net" figures, minus the rebates and/or the dealer cash ...

                           Terry.
  • The invoice the dealer showed me for the SAAB 9-5 had line items for employee price, supplier price, and below that something called "DLC" with an amount of $1159. Is this the fee the dealer receives from the manufacturer for handling a special program sale?

    Also, does the dealer still get the holdback percentage even on program deals?

    I'm not going to ask them to negotiate on the program price, just trying to get a feel for how much the dealer profits on a supplier program deal versus a straight sale.

    Thanks.
  • what is the difference between tmv and otd? does tmv include taxes (typically)? what about on a "hot" car? i dont know what i should offer on a car...please help!

    thanks!
  • KCRamKCRam Mt. Arlington NJPosts: 3,516
    Hi matgarf

    Edmunds TMV is an average selling price of the car as it stands on its own. It does not include incentives (which may vary regionally) or taxes/fees. Out-the-door (OTD) is just that - the exact dollar amount it required to get that car legally off the lot: the net of selling price, trade-in value, down payment, applied rebates/monetary incentives, taxes, motor vehicle fees, etc.

    Hope that helps!

    kcram
    Host
    Smart Shopper and FWI Message Boards
  • danf1danf1 Posts: 935
    Refer to drift's post in Any Questions for a Car Dealer.
  • isellhondasisellhondas Issaquah WashingtonPosts: 19,657
    Yes, read driftracer's accurate response. How many forums did you post this in anyway?
  • That's rich,

     

    Who, pray tell, "needs" anything more than a geo metro????

     

    I find out what I WANT, then find out how much is should reasonable SELL FOR and then go try to buy it.

     

    Some popular or "hot selling models" are not going to go for anywhere near invoice, but as one can read, some people don't seem to understand this. Three years ago, if you walked into a honda dealer and tried to offer anything less than MSRP for an S2000, you would get laughed out the door, but you could get a Miata for considerably less than MSRP at the same time. So guess which one I bought? And, no I didn't NEED a Miata, but I WANTED one (for my dearest wife).
  • Kirstie_HKirstie_H Posts: 11,041
    OK, we're off the subject of OTD pricing. The "spam" has been removed.

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  • If the factory is offering a $500.00 factory rebate can I still negociate for $500,00 over invoice from the dealer or does the rebate cancell that option?
  • danf1danf1 Posts: 935
    The rebate is your money. No sale price can cancel that unless you choose to use promotional financing offers instead of rebates.
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