It actually a very good guide - the key word being guide. What happens in the real world is customers look up the highest value they can find, (usually Kelly), appraise the car in excellent condition, do not take into account tires, pads, etc., and get upset if local market conditions and/or the car itself are worth less. They then say the dealer is trying to steal the trade.
There is no profit to be had when a customer trades in a car that has an extended warranty. The customer may request a refund of the unused portion as some warranty companies do but there is no such thing as profit. Joel can explain this better than I can, he does warranties I do cars. :)_
enough with the personal stuff. Posts have been removed. Let's stick to Internet v Traditional buying here, folks.
MODERATOR /ADMINISTRATOR Find me at kirstie_h@edmunds.com - or send a private message by clicking on my name. 2015 Kia Soul, 2021 Subaru Forester (kirstie_h), 2024 GMC Sierra 1500 (mr. kirstie_h) Review your vehicle
What i'd actually like to see is the manufacturer buy out these dealerships and have corporate owned "factory" stores, eliminate the middleman altogether, possibly split the difference. Heck I'll even take a 20/80 on that. MFG increases GP, controls the quality of the final piece of the puzzle...that of service for new car buying.
That is probably a bad idea. Sony or Whirlpool don't own Sears and Best Buy, so why should Toyota or Ford? Let them do what they are actually good at (or at least we hope them to be), i.e. design and build cars. Somebody else might take the task of selling to the end customer.
The problem is not in ownership - it's in business model that had worked for decades, but becomes slowly obsolete as information is more available (the model was based on tight control over the information), but nobody inside the industry (car retail that means) wants to acknowledge that shift. You can see lots of effort to actually keep things running old way. Sort of "change a lot to keep things the same" approach.
There is no profit to be had when a customer trades in a car that has an extended warranty.
Right, what I meant to imply was this was a customer that could be sold another extended warranty on whatever new car she were to buy. My understanding is selling things like extended warranties can be more profitable than selling the car itself.
My understanding is selling things like extended warranties can be more profitable than selling the car itself.
Boy I wish that was true. There are occasions where I will make more on a Service Contract then they do on the front, but as a rules its not true.
Some may do it different, I know guys who like to make over $1000 a copy but a great profit for me on a warranty is $600. Sell allot at $100 over. It is a numbers game. We are more interested in the quantity of the contracts we sell and not so much the quality of the profits on them. The goal of a SC is not the profit as much as it is to tie you to our service department and get you to come there all the time. While we are doing warranty work we might be able to sell you a set of tires for example, a transmission service, wiper blades etc. Service penetration is huge. In the grand scheme of things if you use our service department the odds of us selling you and your family more cars increases greatly.
A question I will ask from time to time if some one is on the fence is:
Mr Customer, the car you are buying is $35000 and comes with a 36K mile factory warranty with power train out to 60K. , but for now lets just talk about the 36K of complete coverage. If I told you there was no 36K coverage what so ever on this car and you were responsible for repairs from day 1 how much more would I have to discount it for you to buy it?
The desired response is $5K+
If I get that response I then ask them if 36K miles of coverage is worth $5000 why in the world would they not want to spend another $1795 to almost triple that coverage plus have all of there scheduled maintenance covered for 60K miles.
It is not so much a close but a question to bring it in to perspective.
Nice sales technique...obviously everyone would want some warranty. A fairer question, but not better for making a sale, would be how much discount would you want to reduce the warranty to, say, 12 mo/12K mi? I might settle for $500 on that question. I am thinking the actual value of the extra 2 years is probably less than $500, on average.
What I got was a display of a copy of a $4000+ transmission replacement bill. But that did not sell me on an $1800 extended warranty on my $16,000 car. I just said something like: it's not worth the potential hassle, I rather not have multiple parties involved and be able to just say "I have cash, fix my car". Since the warranty price includes commission to the salesperson, dealership profit, and extended warranty company profit, chances are I'll spend significantly less than the cost of the warranty. But a lot of people do seem to have inordinate fears of owning a car without a warranty.
You can either pay profit on the $1800 warranty or the $4000 transmission repair. The only known and unknown factors are that you know you will spend the $1800 you don't know if you will have to spend the $4000. People who can afford to write checks for major repairs and not have their life style effected do not need a Service Contract as much as the guy who is just getting by. That is one point I will never argue, if you can afford and have the discipline to self insure.
But I have pulled this conversation off topic enough and will now hush up.
If I get that response I then ask them if 36K miles of coverage is worth $5000 why in the world would they not want to spend another $1795 to almost triple that coverage plus have all of there scheduled maintenance covered for 60K miles
Because it is about probabilities. Under normal and not abusive operation machines tend to break when they are brand new or when they are worn out. Extended warranty covers portion after they are brand new but before they are worn out.
So it is risk-reward probability. 36-100K coverage is low risk-medium reward (i.e. reward that is not negligible, but the loss likely not catastrophic). Perfect for the insurer.
By the way - in Florida service contracts sell at list price as they are regulated by the state. That basically makes them 25%-50% more expensive than those got by good negotiators in other states - i.e. not worth the money.
Here is a fresh example of a "quality" Internet lead:
Vehicle Information : interest buy status new
make Volkswagen model Jetta Sedan trim S Manual year 2008
Prospect Information : timeframe Within 48 hours
Simple enough, right? I have the timeframe, the trim and transmission, and these car don't have any options, so I write a competetive quote, it takes me about 5 minutes, I send it, and call the custumer 5 minutes later to confirm. She picks up: apparently they bought a used Jetta yesterday, it came with one key, and she was wondering where to go to get another key. :mad:
This one cost us $15 I hope no one else beats us to the sale
Good day Sale, I will like to purchase some product from you to my own company in united kingdom and am paying you with the card type listed below (MasterCardand Visa Card), I will also like to know if you can ship through this courrier service (DHL, TNT or UPS 2-3 days express). Pls let meknow ifeverything is accepted and get back to me with your web siteaddress sothat i can email you back with the items and quantity needed. Your urgent reply is needed. Thanks.
If I get that response I then ask them if 36K miles of coverage is worth $5000 why in the world would they not want to spend another $1795 to almost triple that coverage plus have all of there scheduled maintenance covered for 60K miles.
When I ever move to F&I I will have to remember that one Joel....
Speaking of Internet and Traditional Car buying. I ran across a site called Ebuyfigure.com. Was curious if anyone is familiar with these guys- seems they can provide a guaranteed price on your car via internet. Some of there claims are 2-4k higher than KBB!!
Anyone seen this before? Seems pretty innovative....
I got this customer today that misled me. Not sure why customers do this. This is why we never quote our lowest price. They kinda force us to start at MSRP.
He asked for our bottom bottom absolute bottom price. After I gave it to him he asked why is your price SO MUCH HIGHER THE OTHER DEALER DOWN THE ROAD? I told him no it's not. He says yes it is I'm not dumb I did my research before I came here. I said really, So what price did they give you down the road. He tells me $1800.00 less then yours (FYI I gave him a quote for $50.00 under Net Net). Then I ask him which dealer did you get that quote from? He then tells me the dealers name and tells me which sales person too. Funny thing was I knew the exact sales person he was talking about. He was a close friend of mine. So I called my friend and asked him did you meet with MR. So & So today> he says yeah I did. Then I ask him did you quote him this price. He tells HELL NO THAT FOOL IS ON CRACK!!!!!!! This whole time I had my friend on speaker phone. The customer got very very red like a tomato and starts yelling you sales people always play games. I don't know why you cant just be honest.
Why do customer lie like this then accuse us of lying?
He was a close friend of mine. So I called my friend and asked him did you meet with MR. So & So today> he says yeah I did. Then I ask him did you quote him this price. He tells HELL NO THAT FOOL IS ON CRACK!!!!!!! This whole time I had my friend on speaker phone. The customer got very very red like a tomato and starts yelling you sales people always play games. I don't know why you cant just be honest.
Why do customer lie like this then accuse us of lying? ------------------------------------------------------------------
This just shows that birds of a feather stick together. The above is clear and compelling evidence of a type of collusion that might be going on with so-called competiting dealers.
That is why I get written Internet quotes (via email), as a matter of record, from competitng dealers. Also, when I make and offer, I give the dealers my reasoning behind my offer, which is usually based on Edmunds TMV.
Seems like everytime I mention Edmunds TMV to some dealers their faces frown up. Or they won't get back in touch with me. Anyone else notice that? The name Edmunds just scares some of them out of their wits.
The power in name "Edmunds" is like the power of the cross you see in vampire movies. "The power Edmunds Compel you" :shades:
Seems like everytime I mention Edmunds TMV to some dealers their faces frown up. Or they won't get back in touch with me. Anyone else notice that? The name Edmunds just scares some of them out of their wits.
I do. Whenever people mention Edmund's TMV to me I start having seizures.
This just shows that birds of a feather stick together. The above is clear and compelling evidence of a type of collusion that might be going on with so-called competiting dealers.
That is probably dumbest post in Edmunds in quite some time - perhaps ever.
This just shows that birds of a feather stick together. The above is clear and compelling evidence of a type of collusion that might be going on with so-called competiting dealers
It's a worldwide conspiracy of car dealers. They are also all Jews,and they made 9/11 happen too. I call for a Congressional hearing on the 3 days cooling off period emergency marshal law.
Me too! I get so scared that I pee my pants... I love Edmund's, anytime I get a customer that wants to pay TMV on any of my cars it's a quick and easy deal. Keep 'em coming!
Comments
ps - Thanks for serving
MODERATOR /ADMINISTRATOR
Find me at kirstie_h@edmunds.com - or send a private message by clicking on my name.
2015 Kia Soul, 2021 Subaru Forester (kirstie_h), 2024 GMC Sierra 1500 (mr. kirstie_h)
Review your vehicle
What i'd actually like to see is the manufacturer buy out these dealerships and have corporate owned "factory" stores, eliminate the middleman altogether, possibly split the difference. Heck I'll even take a 20/80 on that. MFG increases GP, controls the quality of the final piece of the puzzle...that of service for new car buying.
The problem is not in ownership - it's in business model that had worked for decades, but becomes slowly obsolete as information is more available (the model was based on tight control over the information), but nobody inside the industry (car retail that means) wants to acknowledge that shift. You can see lots of effort to actually keep things running old way. Sort of "change a lot to keep things the same" approach.
2018 430i Gran Coupe
Right, what I meant to imply was this was a customer that could be sold another extended warranty on whatever new car she were to buy. My understanding is selling things like extended warranties can be more profitable than selling the car itself.
Boy I wish that was true.
Some may do it different, I know guys who like to make over $1000 a copy but a great profit for me on a warranty is $600. Sell allot at $100 over. It is a numbers game. We are more interested in the quantity of the contracts we sell and not so much the quality of the profits on them. The goal of a SC is not the profit as much as it is to tie you to our service department and get you to come there all the time. While we are doing warranty work we might be able to sell you a set of tires for example, a transmission service, wiper blades etc. Service penetration is huge. In the grand scheme of things if you use our service department the odds of us selling you and your family more cars increases greatly.
A question I will ask from time to time if some one is on the fence is:
Mr Customer, the car you are buying is $35000 and comes with a 36K mile factory warranty with power train out to 60K. , but for now lets just talk about the 36K of complete coverage. If I told you there was no 36K coverage what so ever on this car and you were responsible for repairs from day 1 how much more would I have to discount it for you to buy it?
The desired response is $5K+
If I get that response I then ask them if 36K miles of coverage is worth $5000 why in the world would they not want to spend another $1795 to almost triple that coverage plus have all of there scheduled maintenance covered for 60K miles.
It is not so much a close but a question to bring it in to perspective.
What I got was a display of a copy of a $4000+ transmission replacement bill. But that did not sell me on an $1800 extended warranty on my $16,000 car. I just said something like: it's not worth the potential hassle, I rather not have multiple parties involved and be able to just say "I have cash, fix my car". Since the warranty price includes commission to the salesperson, dealership profit, and extended warranty company profit, chances are I'll spend significantly less than the cost of the warranty. But a lot of people do seem to have inordinate fears of owning a car without a warranty.
People who can afford to write checks for major repairs and not have their life style effected do not need a Service Contract as much as the guy who is just getting by.
That is one point I will never argue, if you can afford and have the discipline to self insure.
But I have pulled this conversation off topic enough and will now hush up.
Because it is about probabilities. Under normal and not abusive operation machines tend to break when they are brand new or when they are worn out. Extended warranty covers portion after they are brand new but before they are worn out.
So it is risk-reward probability. 36-100K coverage is low risk-medium reward (i.e. reward that is not negligible, but the loss likely not catastrophic). Perfect for the insurer.
By the way - in Florida service contracts sell at list price as they are regulated by the state. That basically makes them 25%-50% more expensive than those got by good negotiators in other states - i.e. not worth the money.
2018 430i Gran Coupe
Vehicle Information :
interest buy
status new
make Volkswagen
model Jetta Sedan
trim S Manual
year 2008
Prospect Information :
timeframe Within 48 hours
Simple enough, right? I have the timeframe, the trim and transmission, and these car don't have any options, so I write a competetive quote, it takes me about 5 minutes, I send it, and call the custumer 5 minutes later to confirm. She picks up: apparently they bought a used Jetta yesterday, it came with one key, and she was wondering where to go to get another key. :mad:
Good day Sale,
I will like to purchase some product from you to my own company in united kingdom and am paying you with the card type listed below (MasterCardand Visa Card), I will also like to know if you can ship through this courrier service (DHL, TNT or UPS 2-3 days express). Pls let meknow ifeverything is accepted and get back to me with your web siteaddress sothat i can email you back with the items and quantity needed.
Your urgent reply is needed.
Thanks.
If you'll direct your attention to ebolamonkeyman.com you'll see how well I've fared with these particular buyers.
-moo
Ya know, when I was a kid I looked up that name in the phonebook. And there was one in there. Did someone change their name to that ya think?
-moo
What a coincedence, Heywood is from GA. Must be the same guy.
When I ever move to F&I I will have to remember that one Joel....
That is a nice close :shades:
GP
Ebuyfigure.com. Was curious if anyone is familiar with these guys- seems they can provide a guaranteed price on your car via internet. Some of there claims are 2-4k higher than KBB!!
Anyone seen this before? Seems pretty innovative....
So they thought they could get another key by making bogus internet requests? Could you get me some of what they were smoking? :surprise:
2019 Kia Soul+, 2015 Mustang GT, 2013 Ford F-150, 2000 Chrysler Sebring convertible
So they thought they could get another key by making bogus internet requests? Could you get me some of what they were smoking?
You can always send me a bogus quote, wait for me to call you, and then ask for some of that stuff... :confuse:
He asked for our bottom bottom absolute bottom price. After I gave it to him he asked why is your price SO MUCH HIGHER THE OTHER DEALER DOWN THE ROAD? I told him no it's not. He says yes it is I'm not dumb I did my research before I came here. I said really, So what price did they give you down the road. He tells me $1800.00 less then yours (FYI I gave him a quote for $50.00 under Net Net). Then I ask him which dealer did you get that quote from? He then tells me the dealers name and tells me which sales person too. Funny thing was I knew the exact sales person he was talking about. He was a close friend of mine. So I called my friend and asked him did you meet with MR. So & So today> he says yeah I did. Then I ask him did you quote him this price. He tells HELL NO THAT FOOL IS ON CRACK!!!!!!! This whole time I had my friend on speaker phone. The customer got very very red like a tomato and starts yelling you sales people always play games. I don't know why you cant just be honest.
Why do customer lie like this then accuse us of lying?
Why do customer lie like this then accuse us of lying?
------------------------------------------------------------------
This just shows that birds of a feather stick together. The above is clear and compelling evidence of a type of collusion that might be going on with so-called competiting dealers.
That is why I get written Internet quotes (via email), as a matter of record, from competitng dealers. Also, when I make and offer, I give the dealers my reasoning behind my offer, which is usually based on Edmunds TMV.
Seems like everytime I mention Edmunds TMV to some dealers their faces frown up. Or they won't get back in touch with me. Anyone else notice that? The name Edmunds just scares some of them out of their wits.
The power in name "Edmunds" is like the power of the cross you see in vampire movies.
"The power Edmunds Compel you" :shades:
Seems like everytime I mention Edmunds TMV to some dealers their faces frown up. Or they won't get back in touch with me. Anyone else notice that? The name Edmunds just scares some of them out of their wits.
I do. Whenever people mention Edmund's TMV to me I start having seizures.
-moo
That is probably dumbest post in Edmunds in quite some time - perhaps ever.
2018 430i Gran Coupe
Does he win a prize? Perhaps a parting gift? How about a box of Kleenex to dry those tears he sheds every night.
-moo
It's a worldwide conspiracy of car dealers. They are also all Jews,and they made 9/11 happen too.
I call for a Congressional hearing on the 3 days cooling off period emergency marshal law.
I love Edmund's, anytime I get a customer that wants to pay TMV on any of my cars it's a quick and easy deal. Keep 'em coming!
And the winner again, you guessed !!
Car salesmen. beating out lawyers and politicians.
http://www.strangecosmos.com/content/item/3760.html
Now that's a pretty high bar, but. . .you could be right.
I might have changed my mind three times, since then..
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Edmunds Moderator
Mack :shades:
What did we win? I hope it's more of your money.
-moo
Don't forget cyclists.
2018 430i Gran Coupe
I bet they are colluding with pedestrians as we speak
Dang, I did it again! :shades:
I am having a hard time relating this to the designated topic. Let's try a little harder to stay on it.
tidester, host
SUVs and Smart Shopper
maybe it's easier to be hateful online than it is face to face.
That help?
Mack
I tried to click on his web site that he posted and " Big Brother" Wouldn't let me on because of "adult content"
GP
Mack :shades: