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Behind the Scenes at a Car Dealership | Edmunds.com

Edmunds.comEdmunds.com Posts: 10,059
edited May 2016 in General
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Behind the Scenes at a Car Dealership | Edmunds.com

Do you wonder why it can take hours to buy car? Or what the salesman is doing when he huddles with the manager? We've got answers for you.

Read the full story here


Comments

  • mshadermshader Posts: 1
    I feel spoiled now after buying a Tesla. I stopped in on my lunch break wanting to learn more before making the final decision. I was expecting to need to come back another day but was able to get everything done for the reservation in a half hour. Financing they work out over email and its extremely convenient and takes little time.

    Given the experience- as long as Tesla is around I will continue to buy their cars. I was a life long Toyota guy prior to Tesla. I hope other automakers will have the opportunity to change how their dealers work based on Tesla's example. It seems insane that the dealer has to survive on the misfortune (service needs) of their customers.
  • karhill1karhill1 Posts: 163
    It is important to note, the F&I manager is usually the dealerships top sales person. While their job includes arranging the financing and preparing the paper work, their main objective is to increase dealer profit by convincing buyers to purchase products and/or through dealer reserve.

    The dealer F&I person is the one person in any dealership a car buyer must view with considerable skepticism. Without sufficient caution, even the best deal can go bad in the F&I office. These are one example of people who really are out to take your money.

    The products the F&I manager sell do have some value. However, they are sold at grossly inflated prices which results in the products actually having dubious value. Dealers spend a lot of money training their F&I people how to sell these products. The F&I people have a variety or word tracks and props all designed to invoke a sense of fear in the minds of the buyer. A buyer should simply say no to any of these products. All can be purchased elsewhere for much less money.

    It is always better not to buy something on the spot but, rather, take some time to consider the purchase. F&I people know if a buyer has a chance to think they almost never will buy a product. That is why they expend so much time and effort on these products at the time of the sales. Be smart, say no.

    For people who do not know, dealer reserve is when the buyer qualifies at a rate (perhaps 3 percent) but the F&I person writes the finance contract at a higher rate (perhaps 5 percent). The increased interest paid is split between the dealer and the financing source. This is actually legal. Dealer groups fight hard for this practice. A buyer should always ask the F&I person to disclose the actual buy rate. Knowing the buy rate allows the buyer to negotiate the finance rate rather than simply accept what the F&I person quotes.

    I have noticed a huge difference between the F&I experience at high end dealerships compared to mass market dealerships. F&I managers at the high end dealerships seem much less likely to apply pressure to buy their products and they seem less likely to incorporate dealer reserve. I suspect this is because the average buyer at a high end dealership is much less likely to have credit issues.

    Finally there is the infamous documentation fee. These are not fees! A fee is something applied by a third party, such as sales tax. In reality these fake fees are simply part of the selling price. Dealer F&I folks concocted this scam to deceive buyers. The intend is for dealers to be able to advertise a lower price, thus increasing traffic to the dealership. The F&I folks use the word fee because they know this attaches a sense of legitimacy to the scam. And it is a scam. Buyers should simply negotiate a price which includes the fake documentation fee.

    By definition, the selling price includes all dealer costs, including any cost of paper work. Note dealers do not attempt to charge fees for rent, power, supplies, clerks, sales people, etc.

    F&I people strive to convince buyers they are separate from the sales people. They are not. They are just dealer employees. There is nothing unique or special about these F&I managers.

    If any dealership person tells you the fee is required, that person is lying. The fee is not required. However, if a dealership applies the fee to one contract it may likely, for legal reasons, have to show the fee on all contracts. If they do not they run the risk of being sued for disparate sales practices. But, once again, this does not mean the buyer has to actually pay the fake fee.

  • thebeanthebean Parts UnknownPosts: 1,005
    Whenever I buy a new car, I never pick up the car the same day I do the deal. By the time I get the deal done, I'm too tired to deal with the F&I folks. I always come in fresh the next day and am much better able to read and understand all the F&I paperwork. It helps to be fresh when you are declining all of the warranty, prepaid maintenance, and other "offers" they throw at you. A weary buyer can be persuaded easier just to get it all done and be able to go home.
    2015 Honda Accord EX, 2017 Honda Civic EX-T
  • rowdyaudirowdyaudi Posts: 2
    hey @karhill1 that was such a nice comment i had to register to say THANK YOU haha :-D
  • nelson124nelson124 Posts: 0
    edited October 2016
    Good day everybody my name is Nelson Mac am from Canada but few years back i was financially strained i rushed to my bank to apply for a loan to start up my business but i was denied by my bank because of my credit score and they could not help and due to my desperation i was scammed by several online lenders who promised to help me but at the end i was scam i lost my money and my hope because i was so frustrated, One day when i was going through the internet again i found one lender call Mr Larry Scott i thought to give it a try one more time to my biggest surprise he was able to lend me a secure loan totally the amount of $200,0000 for the first time in my life i realize that there are few lender who don't scam people his name is Mr Larry Scott i will advice any body that are in need of loan to contact him with his [content removed] he can be able to help you because he was a God sent to me this year and i will never forget him for the help he render to me.

    God bless him

    Nelson Mac
  • I have a 2006 Chevrolet Impala. Two weeks ago I could not start it, the power windows, door locks, remote trunk release, lights, horn and any and all other electrical parts would not work. I took it to my traditional mechanic and was told that my Body Control Module (BCM) might be bad and could need to be replaced. I was told that they could replace it but a GM dealership would need to complete the installation by programming it to the car. At this point I contacted a Chevrolet dealership and was told that I was better of having them install it and program it. This seemed like sound advice. I had my vehicle towed to the dealership and was told by the service manager that they could replace the BCM, but if that was not the problem I would be looking at additional charges. This seemed like good advice as well. He then told me that they could do a complete diagnosis and ascertain what the problem was. He quoted me a price of 140.00 for the diagnosis. He called me up later that day and told me that it was the BCM and they could replace it for 600.00 plus the 140.00 for the diagnosis. I agreed to have the work done. I then asked the service manager if he could inspect the vehicle, since I needed to get a new tag. He told me that they would not be able to inspect it until it had been driven a few days in order to sync the new BCM with the vehicle. The next day I went to the dealership to pick the vehicle up. I made a full payment for the diagnosis, parts and labor. The car seemed to run OK. Twelve days later my wife was out at night and tried to start the vehicle and it would not start. The lights would not work, the car would not start, power windows and door locks would not work and there was no evidence of any electrical components working. These were the very same problems that we were experiencing with the vehicle when we were told that it needed a BCM in order for correction. I went to the dealership that had installed the BCM and told them that the vehicle was experiencing the very same and exact problems that they had stated were contributed to a bad Body Control Module, (BCM), which they had replaced. The service manager said that he would have the vehicle towed to the dealership for repair. Later that afternoon the vehicle was towed. The following day we received a call from a different service manager. He informed us that the vehicle needed to have the positive battery cable replaced and with the tow fee it would cost around 550.00. He spoke with my wife who conveyed this information to me. I called this individual and he told me the same thing. I then asked him this question: If the vehicle was doing the exact same thing as it was before the BCM was replaced, how could they be sure that the problem was the BCM and not a bad positive battery cable all along. He told me that he was basing his diagnosis on what his service technician had told him. Again I asked him if it was possible that the BCM was once again failing, given the fact they the problems were exactly the same. He told me that when the vehicle was previously diagnosed that it had been determined that the BCM was bad. I requested all receipts and documentation concerning the replacement of the BCM that the dealership had done twelve days earlier. I was denied this information. I paid the dealership 120.00 for the tow fee and drove the vehicle to another mechanic, who told me that the battery cables needed to be replaced. I purchase the battery cables for a local auto parts store for about a 100.00 and had them installed for around 80.00. This fixed the problem. Due to the conversations that I had with the second service manager, his answers, body language and what is reasonable, I believe that the battery cables may have been the problem all along. I further believe that the dealership did not replace the BCM, but the vehicle cranked once they were working on it. I based this belief on the following: After the BCM was replaced and the vehicle was driven for a few days, when we tried to start it, there would sometimes be a click and everything would go dead; dashboard lights, interior lights and other electrical components. Upon a second or third try the vehicle would then start. When I had the vehicle towed to the dealership, the first service manager told me that once the tow truck arrived and they attempted to crank the vehicle it started. It is my belief that after a period of time passed or due to the vehicle being jolted or moved around the faulty cable made contact and that is what allowed for startup of the car. I do not believe that the dealership ever replaced the BCM. I took the cover off of the dash underneath where the BCM is located and the unit did not look new. This is my question. Is there any way to confirm whether or not the BCM that is now in the vehicle is the one that was originally installed, whether or not it was recently installed, when it was purchased, when it was synced to the vehicle or what is the age of it? I sincerely believe that I may have been defrauded by the dealership in which I paid almost a thousand dollars to fix my car. I further believe that they placed my wife's safety in jeopardy by not being honest about the repairs that they claimed to have done. I would appreciate any and all assistance, comments, and opinions and/or shared similar experiences that anyone could offer. My sincere gratitude is offered in advance.
  • berriberri Posts: 9,864
    Sadly, I think at more than a few dealers these days the service rep really isn't there to help you, but more to sell you stuff.
  • mankumanku Posts: 64
    I just bought a Subaru (Jim Nielsen @ Subaru Pacific)...we worked out deal over the phone, I gave me credit app info over the phone, texted DL and insurance...took less than 30 minutes once I arrived at the dealership the next day.

    Get the information to the dealer beforehand...it will save you tons of time, and may even get you a better price...after all, you are showing a decent level of commitment.
  • steverstever Posts: 52,462
    edited December 2016
    You messed up - next time have them deliver the Subaru to you. :D

    Congrats on the new ride!
  • Question............I bought a brand new BMW a few years ago. The local BMW dealership goofed up on one of my tires and they had to keep my car overnight. A thief broke in the service department that night and my key was on the service managers desk. He took it, found my car with the alarm button and stole it. Is it not protocol to lock a customers keys up overnight in a lockbox or safe? After a bunch of damage to the car when found two days later and some items stolen, the dealership's attorney says they are not liable for the theft and will not spend a dime as a result of the theft. Now I apparently have a stolen and recovered on the Carfax/Title which depreciated the value of my car.
  • MichaellMichaell ColoradoPosts: 110,217
    footdoc50 said:

    Question............I bought a brand new BMW a few years ago. The local BMW dealership goofed up on one of my tires and they had to keep my car overnight. A thief broke in the service department that night and my key was on the service managers desk. He took it, found my car with the alarm button and stole it. Is it not protocol to lock a customers keys up overnight in a lockbox or safe? After a bunch of damage to the car when found two days later and some items stolen, the dealership's attorney says they are not liable for the theft and will not spend a dime as a result of the theft. Now I apparently have a stolen and recovered on the Carfax/Title which depreciated the value of my car.

    Each dealer manages the keys differently.

    If I were you, I'd 1) talk with an attorney; and 2) reach out to the local consumer reports person in the local media.

    How, if the car is in the garage, is the dealer not liable?

    Did you get a good deal? Be sure to come back and let us know! Post a pic of your new purchase or lease!


    MODERATOR

    2016 VW Jetta 1.4T SE / 2015 Subaru Outback 3.6R / 2014 MINI Countryman S ALL4

  • K76K76 Posts: 1
    The documentation fee is not fake. Even employees at the dealership have to pay this fee when they buy a car there. Every single dealership has a documentation fee however they are all not the same amount. Usually will range $199-$499.
    This fee is for the title application fee, inspection sticker and any other type of fees the dealer pays to the State. And credit card fees.....all these type of fees add up that the buyer doesn't really think about. The scam really is when the dealer tells you oh youre first oil change is free, oh your inspection included....well its not because technically all of that is the Documentation Fee. Remember nothing is free in this world.
  • kyfdxkyfdx Posts: 119,801
    K76 said:

    The documentation fee is not fake. Even employees at the dealership have to pay this fee when they buy a car there. Every single dealership has a documentation fee however they are all not the same amount. Usually will range $199-$499.

    This fee is for the title application fee, inspection sticker and any other type of fees the dealer pays to the State. And credit card fees.....all these type of fees add up that the buyer doesn't really think about. The scam really is when the dealer tells you oh youre first oil change is free, oh your inspection included....well its not because technically all of that is the Documentation Fee. Remember nothing is free in this world.

    $199 here, $499 there... capped by law in NY at $75, in CA at $85, in OH at $250. FL and GA dealers have doc fees as high as $999. And, none of those fees go to pay state fees, those are itemized separately.

    So, exactly what would it take to call it a scam?

    Did you get a good deal? Be sure to come back and share!

    Edmunds Moderator

  • berriberri Posts: 9,864
    Scam - total rip-off
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