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Purchasing Strategies - Questions & Success Stories
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Here's another link about typical ploys and tactics:
"Spotlight: Ploys, Gambits and Tricks"
You opened your account today and your first post was asking if it was ok to get someone to do an unethical deal. Your only other posts were to move this thread along. That is all the signs of someone who spends a lot of time under a bridge.
If business is business, than I am simply doing what I can to get to the lowest number the fastest way. Dealerships try to do the opposite for the sake of "business" and we've all accepted that so I don't see what the difference is.
First off it doesn't matter what someone else is doing you should act ethical and professional. Secondly if you feel that someone is doing you wrong you can always walk and find a better dealer, they are out there.
Right now all you seem o be doing is trying to justify why you should do what everyone else is saying is wrong. Because of that maybe those who labeled you a troll may be right on the money.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
The salesperson is just a go-between -- the real negotiators in the dealership are the sales manager and the F&I guy.
Our poster could have gotten the same $X deal with or without the salesperson, and without the bribe. Whatever spiff he paid to the salesperson was a waste of money -- he got taken.
I agree 100% with socal on this.
Just remove the sales guy for a second. If the sales manager agrees to take $500 off the price. The the SM was willing to to take $500 off, no matter WHAT the sales guy tells the SM.
So, in essence, you just paid the sales guy $250 for no reason. What, you think that extra $250 allowed the salesman to convince the SM to drop the price?
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Things have changed, though, and now the dealership would actually prefer you to obtain financing from the F&I department or else lease the car. This has actually been true for decades, but it takes awhile for the word to get out...
Perhaps, also, that "back in the day", paying by check or financing through a lender took a relatively long period of time... maybe a week or two. (?) Cash is instantaneous. Nowadays, lenders transfer funds electronically which is also instantaneous. The advantage you used to have for paying cash is gone now, since the dealer gets paid just as fast with financing... and they don't even need to physically take the cash to the bank.
From Yesterday, we talked about things that influence deals
I thought of some more.
1. Does the customer seems as though he/she will send us business or use our service department? We will take a short deal if the customer seems pleased with us and says will send his/friends and family, or we think we will retain their service business.
2. Is the customer being an arrogant,rude or unfriendly? Most managers are very protective of their people and any sign of disrespect makes the ball roll slower or even out the door. Sometimes its just not worth selling to a jerk because they will come back and be a jerk to service department. We have a list of 86d customers in our service department.
I am sure I will come up with some later
If this is true, then he doesn't even realize that he could have cut the original deal without any help. In fact, I would bet that if the sales manager had minimal involvement, that's probably because the price was already very high, because a sales manager will get more involved if he believes he can help to clinch a higher price, while his intervention can be lower key if the deal cut by the salesperson is already very favorable for the dealershiop.
I'd be curious to see how this deal compared to invoice, plus whatever incentives were available at the time, and what might have happened with the financing and trade-in.
There is a big difference between the two. Wal-Mart has set, non-negotiable prices. The Wal-Mart example is theft because it is like taking money out of the register. Selling the item for $5 and then taking $4 out isn't much different that selling it for $1 and getting a kickback.
The car sales is a completely different matter, the selling price of the car is negotiable and cab vary greatly at times. Plus the sale usually has to be approved by a manager or the owner, especially if it is below asking price.
Doesn't matter if the price is fixed or negotiable. Offering an employee a kickback/bribe regarding the price on a product owned by their employer is stealing.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Now since a car is a negotiable item it would be easy to argue that the employer was not harmed because the car could very easily have gone for that amount. That is presuming you didn't sell at a unreasonalbly low price such as selling a $40k car for $5k.
In this case you didn't steal from the employer you just took advantage of a gullible customer. Which in and of itself is not a crime.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
The Wal-Mart example was $5 selling price. Buyer has $3.50. Sell it $2.50 and exployee pockets a buck.
Car scenario - agree on a vehicle. Offer salesman $50 for every $100 he can get off the price. Even though the dealership is willing to drop the price by $100, the buyer is still willing to pay $50 for that $100 price. That $50 belongs to the dealership.
It's stealing in my book.
Yes thats why the wal-mart example is different than the car example.
With the car if the dealer is willing to drop $100 the dealer is still getting his money. If the dealer is willing to drop $100 for the guy giving the salesman a kickback the dealer is willing to drop $100 for anyone. The dealer doesn't lose money, the buyer just pays to much.
Unethical yes, but you will never get a conviction.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
You would be walking trouble and not worth any amount of profit. I would cut my losses before it ever started.
How so? If I go to Socal and say "hey there is this car at Jr. Samples used car lot for $18,000. If you go there and negotiate a better deal I will give you have of what you save me." is that also stealing? No. The only difference is that salesman would have a conflict of interest.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Hey golic, thanks for asking. The wife and kids weren't quite as excited about my new tires as I was hoping. :surprise:
I like the Yokohama Avid T4's a lot. Compared to the old replaced tires, they grip as if the tred had been soaked in Gorilla Glue. A very smooth and quite ride...maybe a tad bit softer over bumps. I can actually take a sharp corner now and not fear I'm going to be pulled out the drivers side door due to body lean...which is quite a feat when driving a Buick Regal LS.
All this conversation about the "salesman" and special "wink" pricing is absurd ....
First and foremost, the "salesman" is not a decision maker .. he doesn't know what the dealer might or might not do .... with technology today, dealerships run on a DTS (Daily tracking system) .. they know where they stand in their inventory, they know their running totals and they know how much of the holdback has already evaporated and how much of it has already spent the SG (standing gross) .. and these are updated every 24 hours.
So when you say: ... "I want us both to come away happy from this deal. I really respect what you do, and understand you are under alot of pressure and that you need to make a decent living. Let's see how much we can come down on this price." ..... that's all well and fine, but you're actually speaking with the "echo or the shadow" of yesterdays DTS which is handled by management and owned by the dealer .. not the salesperson ...
So whether you give him $100 or $900 is up to you .. but the final price would have been the same .... can a certain salesman at certain times get a better price.? .. it depends on the salesman, it depends on his standing in the store, and "most important" - his production .. a hundred here a hundred there, maybe .. big figures.? - it ain't happening ..
The average guy selling 8/9 cars a month isn't going anywhere without a management decision, but the guy selling 18, 22, 25 cars a month has a little more horsepower ... and even that is run on a "deal to deal basis" and approved and signed off by management ...
That said, once his figures start falling below the running average (which is tracked on a daily basis) they'll clip his wings in a hurry ..... have them find out he's "curbed" a car or "choked" a deal and he/she will be gone faster than the second coming of Jesus .. plus they will hold/keep any of his pay that can be documented off the DTS .. and hopefully not charged with a 3rd degree felony ...
Terry.
Scenario: Car sits on lot with MSRP of $20,000. Salesman bamboozles customer, whom he gets to believe that the "best deal" is $19,000, unless the salesman works his magic and gets him a price of $18,000, which can be had for the price of a $400 bribe. Sales manager signs off on deal at $18,000, customer pays $400 bribe to salesperson, for a total of $18,400.
Now, what happened:
-The dealer hires the salesman to get the best deal possible for the dealership, given the negotiatign ability of the customer, etc. and has created a payment/commission structure based upon some formula tied to unit sales, price above invoice, etc. The salesman is expected to make a good faith effort to generate a deal that is good for the dealership. Here, the salesman could have easily gotten the customer to pay the dealership $18,400 (obviously, that's what the customer actually paid), but let him close at $18,000, plus he pulled $400 to which he was probably not entitled out of a deal.
Result for the dealer: The salesman effectively defrauded the dealership out of $400 that belonged to the dealership. (The amount might shrink a bit based upon whatever additional commission that he would have been paid had he booked the deal at the higher sales price.)
-The customer got snowed into thinking that this $18k deal wasn't doable without the salesperson. He is the victim of a con, even if he has yet to realize it.
Result for the customer: The salesman effectively defrauded the customer of $400 of his money.
-The salesman probably also lied to the IRS, too. So he owes them taxes based upon $400 of unreported earnings.
-Stretching things a bit, the DMV and sales tax authority might be upset that their respective fees and taxes weren't charged to the $400 that the customer would have officially paid had he done the deal on the up and up. So they have a bit of residual damage as well.
In all this, the salesman is culpable to all the parties. He defrauded the dealership because he isn't supposed to engage in double dealing with the dealership's customers, as he did in this example, plus he conned the customer into believing that he could pull strings that the customer himself couldn't pull. The salesman has wronged (at least) two parties, not just one.
The salesperson is a thief.. and the buyer would be abetting the theft..
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Except for the Landmark dealer trying to cheat us out of the keys we wanted, all of our experiences at Rosenthal have been very good.
Bingo..!
Terry.
My advice is to read through this forum and see what type of buying style you feel most comfortable with. Use that style to see if you can knock that price down a grand or so.
Also looking at alternatives to the Porsche I see that a brand new Corvette convertible (base convertible few if any options and not the Z06) can be had for a little bit less than what they are asking for those demos (a coupe for 9K less). Plus it gives over 100 HP and almost 150 pounds of torque more with 1 MPG better gas mileage. I would try using that as leverage to see if you could get the price down (personally I would just get the Vette, but thats just me).
Plus you have two with pretty much the same deal, so don't be afraid you negotiate and walk out of one, you still have the other if it doesn't work.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
I think he's looking at a Cayenne S - the SUV - not a Cayman - hardtop Boxster - so the Corvette is a different animal.
Cayennes can be gotten under sticker. Caymans are so new so I doubt they are having firesales already.
Cayennes can be gotten under sticker.
Yes some can, but I know the $110K turbo version is still selling at sticker, as well as some of the higher priced ones IIRC.
But its obvious that he is talking about the Cayman S, so comparing it with the Corvette is right.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
It is no different than a business negotiation between representatives of company A that buys supplies from Company B, during which representative of said company A would pay 50 cents to representative of Company B for each dollar off the price. It is a classic bribery and conflict of interest. One party act as a legal custodian of interest of a business and accepts benefits from another party to act in exactly opposite manner. It is not only immoral, but also illegal.
As much as I would like to buy anything cheap, this scheme is reprehensible to me and anybody who takes participation in such conduct, should be prosecuted, IMHO.
50 cents to dollar saved woule be acceptable if the salesman was not an employee but either owner (the same pocket, which of course makes it moot) or an independent broker, say a "negotiator" or "advisor", not employed by the store.
2018 430i Gran Coupe
There is a Cayenne S and it starts at $57,200 right in the ballpark.
The Cayman S starts at $58,900 - also in the ballpark - but has been out for less than 3 months. I doubt they're already knocking out demos at $4K off list.
TMV shows Caymans at MSRP and Cayenne S at about $2K of MSRP.
Just Cayenne as the base trim with V6. Just an expensive Toureg really.
Then Cayenne S with the V8
Then Cayenne Turbo
Then Cayenne Turbo S
http://www.edmunds.com/new/2006/porsche/cayenne/suv/midsize/index.html
I have taken many Cayennes, both Turbo and S models, in trade for Range Rover Sports.
Since the salesman can only present the price to the sales manager and the sales manager either accepts it or rejects it it is not illegal. If the person getting the kickback has the authority (thats the key word) to accept it then you might have a case, but not here.
50 cents to dollar saved woule be acceptable if the salesman was not an employee but either owner (the same pocket, which of course makes it moot) or an independent broker, say a "negotiator" or "advisor", not employed by the store.
Thats why it is not stealing since the dealer doesn't lose out either way. Now it maybe unethical and a conflict of interest but good luck getting a conviction.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
But let us have him clear this up.
FWIW Porsche has a Cayman S but no Cayman [sans 'S'], thats why I picked up on Cay S as a Cayman S.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
First off if you want an SUV don't go Porsche or any other high priced vehicle. If you actually need an SUV with the utility that only and SUV can offer then any of the high priced ones won't work. If you don't need that specialized utility then there are other alternatives. All you're doing at this point is buying a nameplate.
Secondly you say these were used at a tournament. that means that they were courtesy cars. I have worked at some tournaments (golf and tennis) and have seen what happens. What some people do to those things would make your hair stand on end. Golf tournaments were the worse. So be careful about buying one.
But seriously I think spending more than $30K on a car is foolish, but I would make an exception for a high performance sports car like the Cayman but not an SUV like the Cayenne. My advice is don't buy it.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Since you are an accountant, it might help you to understand that dealership profits are all about leverage. A dealership finances 100% (or to be clear, a bit more than 100%) of the "invoice" price, and measures margins based upon his ability to pay off his interest and borrowing costs (the "floorplan"). In addition, a dealership gets additional monies in addition to your purchase price for selling a car, including a "holdback" (a post-sale payment, which is technically an offset to the floorplan, but that generates bona fide profit if the inventory is turned quickly enough.) It also hopes to capture additional money from the margin gained from any trade-in, as well as profits it stands to gain through the F&I process.
The Cayenne is a slow mover with abundant inventories, according to Automotive News, so you should be able to buy a new one at a minimal profit. (There is also a financing deal currently available.) Remember, unsold inventory costs a dealer additional money the longer he carries it (more interest charges, and the ongoing risk that the car will sit unsold without a buyer), so a car that is a slow mover is a burden that he would prefer to pay off, in order to eliminate the interest expense and additional borrowing fees associated with the floor plan. And if you borrow from the special financing (or at least negotiate with the prospect that you will be using this financing), then the dealer can get F&I profits that help to offset a low purchase price.
You can attempt to negotiate by phone, but that is unlikely to yield the best price, although it may yield a pretty good one. If I were to buy a "demo", I'd be buying what is effectively a used car, so I would want a price substantially below what I would expect to pay for a new one, which in this case means I would probably want to buy one for a fair bit below invoice, whatever that works out to be.
You can get price comps from a number of sources, including here, enthusiast forums and ads in the paper, the latter of which may or may not give you a loss leader figure. Auto brokers can also offer decent comps -- assume that they pack a fee for their services on top of the sales price, then reduce accordingly to guesstimate what a savvy negotiator could pay without them. However, since there is no "magic price" and the range of prices is wide, you will need to filter through that data and try to figure out what the savvy buyers are paying currently, not what they used to pay or what the not-so-savvy buyers have been willing to spend.
Above, there are some links re: negotiation that I have posted that I find useful. Edmunds here has information re: invoice prices, incentives available to both the buyer and dealer (the latter listing is not completely comprehensive, but certainly helpful), as well as some tips on negotiation.
This link is also pretty good, it's a bit academic but covers the process reasonably well: "Negotiating New Vehicle Purchases"
One last bit specific to this vehicle -- Snakeweasel's point is well taken, the Cayennes really aren't that great from a reliability standpoint, they are one of the most unreliable new luxury cars being sold today: Forbes article re: Consumer Reports data -- see attached slideshow for list of cars If you want an upmarket SUV with some cachet value that will retain its value and offer you minimal problems, I would seriously consider some alternatives, such as the Lexus RX and possibly the Infiniti FX series.
Champagne can be had on the cheap (real pagne too :P ) and there are some rather expensive beers out there too.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
However, the law was amended that now limits these vehicles to a maximum $25,000 Section 179 election. Still beneficial, and you can depreciate the vehicle over the remaining 5 years.
Let me add this caveat. If your mercedes will result in a tax loss, it is not advantageous to trade the vehicle in as the "loss" will get suspended and rolled into the Porsche.
Final, point you can take advantage of the Sec. 179 election wheather you pay cash or finance. But, it is a good strategy to get the immediate tax benefit while the cash is still in your pocket.
There's no reason why the customer shouldn't look at your inventory in the same way. I'd say that having someone else driving it around town, spending a fair bit of time in the car and putting some miles on it, decreases its value. I don't really care how the miles got there, I'm still not going to pay for them.
I don't blame you for possibly preferring it to the Japanese alternatives, as the Germans have a way with intangibles that the other makers do not. My personal concern wasn't about the price per se, but with the lack of reliability and the questionable future for the values of SUV's like this, particularly this one given its relatively lack of popularity and its poor repair record, the latter of which I would expect to translate into even worse real-world residuals than you might expect.
I'm not generally a proponent of leasing, but if you could stay under the mileage limits and negotiate favorable lease terms (i.e. a low money factor, reasonable mileage limit, a purchase price at invoice and no/very low down payment), I would consider leasing this, rather than buying it. I suspect that if negotiated effectively, a lease would also be pretty good for you from a tax standpoint.