Dealers basically try to "steal" your trade in and charge you as much as possible for their car. It is a joke to listen to their lies. Just for fun I have them come out with the first price. They tried to charge me MSRP for a 2006 Honda Odyssey. I laughed in their face! I thought that was bad, they tried to charge my brother $1,500 over MSRP for a Town and Country van. This, mind you, is a van the manufacturer has a 4K customer rebate on.
Sales managers make north of 300K a year. Get the car for as low as possible. Make sure to walk out of several dealerships before you settle on one.
Wow 300k a year. Let me know where that kind of money so I can have my boss get a job there and then I will follow.
The Odyssey was a very hot vehicle at one point so I can see them asking MSRP for it. No need for you to pay that but since most people were paying MSRP you are going to have to work to get it under that. I have never had a customer laugh in my face but if one did I would show them out the door right away. I don't want to sell cars to those kind of people.
I used to be a real jerk. As I have gotten older, I have gained more respect for people. Maybe the same will happen to you.
LOL... You're calling the man a jerk, and this is suppose to show how you've gained more respect for people as you've aged???
But, I don't think laughing at a ridiculous offer is being a jerk. Now, if stockmanjoe had stuck his face up into the salesmans grill and laughed in his face...yeah, that's being a jerk.
But, I don't think laughing at a ridiculous offer is being a jerk.
I'd say that anything is all fair in love and war...and car negotiation. The ultimate question is whether the tactic works or not.
IMO, laughing in the other guy's face is not usually a good idea when you're haggling for the best deal. As a buyer, you want the lowest price possible, and that will be harder to get if you insult the other party. You need to give the dealership a chance to save face for him to accept a price that is well below the norm -- if you rub it in, he may decline just out of pride, even if he could profit from it.
I know that some of the stuff that dealers say is so absurd that it can be hard not to chortle, but sometimes you just have to let it pass and stay focused on getting your deal. Try to find the entertainment value in it, and get a good war story of it (which you will share here, of course...)
What does a sales manager need to do to increase his/ her compensation, and how can a consumer use those incentives to his/her advantage when buying a car?
It depends on what that title means in that store, it depends on what a SM does in "that" store .....
is he/she a "desk manager" with a SM title.? is he a GSM that has the horsepower over the sales staff.? is the dealer principle active in the business, does he run service and sales..? does the sales department use the majority of the trades for their UC department, or are they wholesaled.?
There's 2,894 variables .. and they can be 2.5 miles apart ...
That said ... without all of the mystery and without all of the Inspector Clouseau agenda you feel is needed - all a customer needs, is proper information.
If they know what they want, know and understand the options, have a good grasp on the current market (new and used) understand their credit and have sat down and "looked" at their budget - then there is no mystery ...
Dealers LOVE well informed buyers .. grinding a deal out for the next 2 or 3 hours is a complete waste of time when the consumer has bounced from vans to convertibles - it's common..... based on most stores, the GSM's end is 10 or $20 per unit plus a bonus somewhere and that can be based on model, color, type and time of the month - and that can change in a heartbeat based on the dealer principles run sheet (which he looks at daily, sometimes 2/3 times a day) ...
So, good ones will be looking to separate a time wasting consumer with the time wasting salesperson.
As far as what a SM can and can't do is very simple and basic ... they look at their daily running total that is updated after every sale, and that will determine if the next deal is even doable - simple.
If I were to use an "average" ... they are in and around $95,000/$150,000 a year income area .. some a little more, some a little less .... all that for 80 hours a week.
If you want to start a discussion called, "which profession can claim the greatest number of jerks," then by all means, please do - just not in the Edmunds.com Forums.
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in the sense that there shouldn't be laws to govern it. But the process of buying a new car can be an amazing PITA, and I think all dealers would be wise to go to the no-haggle system that GM seems to be adopting.
People seem to be advocating this here and I'll say that we ran this in our market for about 4 years. First 12-18 months was great and this was on Lexus, Honda, Toyota, Hyundai and Ford. Accord's were $3k under MSRP. Lexus ES were $4500 under MSRP. Brand new Elantra's with A/C full power and keyless entry were $9k etc etc etc. We had people from all over the country coming here to buy cars. In fact right on these boards many people would suggest to just visit our website as a benchmark. Now what happened with ths is that people woudl come to out lot and could get our rock bottom price in seconds. Sounds great right. We didnt even have to be open nor did you even have to talk to a salesperson it was hanging from a tag off the rear view mirror. Sounds Great right. The tag would show the MSRP, any package discounts any public rebates that everyone gets, the dealr discount which was very very aggressive and then the bottom line rock bottom price. Suonds Great right. What we did tho was doumented every customer and why they did or didnt buy. What we found out that was 70% of the people that didnt buy from us didnt buy because they simply took our tag to another dealer to leverage our "honest" price against us. So what did we do. Went back to selling cars the old way and marking them up over sticker and fighting for every penny of our profit just like a customer fights for every penny of our profit.
So dealers wil sell no haggle systems but it's the market (the customers buying them) that will determine if it lasts or not and if that really is what people want. In this case it really wasn't what people wanted and we werwe forced to change.
When they shopped your "rock bottom" price to another dealership, how much would they typically save? I'm guessing it was probably over $300-$400, and that if the rock bottom price could have been chisled down a bit more you may have been able to keep a much larger % of the buyers who left. A fine line yes... but doable.
and that if the rock bottom price could have been chisled down a bit more you may have been able to keep a much larger % of the buyers who left. A fine line yes... but doable.
then that would be haggling. the idea was to be a no haggle dealer. what reallt confuses me is the guy who comes in and says I know what i want but i dont wanna wheel & deal or haggle and play the game. "So sir what youre telling me is youre willing to pay full asking price?" Uhhhh well uhhh
the same guy that says they want no haggle is the first guy to bicker over price and no matter your offer they always beat you for more
No, what I was saying was that your "rock bottom" price was probably set to high. i.e Instead of your dealership setting a rock bottom price of 22k for the Toyota Camry LE...maybe they should have set it at 21.5k The competition adjusted to your no-haggle sales method(after a year). It sounds like your dealership failed to adjust or take appropriate measures to counter.
But, you didn't answer my original question on how much more customers saved by going to other dealerships. I think most people would be overjoyed to go the no-haggle way and pay an extra $300-$500 from what they could get at the typical dealership. But, if what they are paying is above $500... well,for the dealership there is that point of diminishing return.
Well, when asking question why they didn't buy is a good one, the ones you should have been more concerned about what was the overall market share, profitability and other important metrics vs. previous period or other benchmarks (if you didn't have them). Focusing on those you didn't score is valid as "room for improvement", but more important is how your sales and profits compared to "comparable" (in terms of size, brands, etc.) others in the area.
Remember people often lie, also to themselves, as they think they saved but they did not. If they did and your price was really lowest, it means the other guy lost money or you had too high cost. If your price was not lowest than your claim of being lowest was not valid.
When you went back to the old model, did you really make more money overall in comparable time period? I bet your gross might have risen, but did the average profit per total transaction? What happened to your CSI scores? What happened to your costs, e.g. by time spent with each customer "fighting for every penny", as opposed to quick "in and out"? Did you have to hire more sales force to take care of grinding process?
I'm not claiming your assertion of "market forced us to do it" is wrong, but these are some validating questions of whether it is really true or not.
In reality people really don't want a no haggle system and we probved by going basck to old school method. Avg gross profit for the dealership is up about $250k for the store on a per month avg. Volume has not gone down, market share has stayed steady and CSI has actually gone up.
The guy that pays me $1000 over sticker always ALWAYS every time leaves a with a huge smile, a hug and request to marry his daughter and never comes back complaining about stupid stuff. The guy that pays $100 over net is back in the next day bitching about free floor mats and oil changes and is just in general miserable. That guy thinks youre screwing him and are still making a boat load of money off him while the guy that paid you $1k over doesnt even care what youre making
And as a salesperon if you even think one customer will ever be honest about what they paid for a similar car at another dealer I have a bridge to sell you
And as a salesperon if you even think one customer will ever be honest about what they paid for a similar car at another dealer I have a bridge to sell you
I take offense to that. You just called everyone who's not in the biz here a liar. That's like me saying EVERY car sales person is a crook and a slime ball.
I also take offense. I'll dig out whatever records I have for the two cars in the garage and might even have the previous car's records and tell you what I paid by check and subtract tax, title, and $20 doc fee off if you want.
Perhaps your attitude and how you feel about customers is reflected in that statement more than the reality of customers' ethics being reflected by what you said about them.
"And as a salesperon if you even think one customer will ever be honest about what they paid for a similar car at another dealer I have a bridge to sell you"
OK, that's fair enough. We buyers don't believe anything a car salesman tells us and we don't expect you to believe anything we tell you. That's fine with me.
In your example, a salesperson is like a waitress who works like a dog then gets a 2% tip instead of the customary 15%. But, the fact of the matter is you rely on your boss for your "tip money"... and shouldn't blame the customer for wanting to get a true "rock bottom" price. So, don't blame the customer about your pay... blame "The Man".
...whatever the market, the consumer, and the ethics of the transaction bear.
If the market is hot for a certain model, then the dealer will make a good profit. If the market is cool, then the dealer won't make so much.
If the consumer is a sucker - straight off the street, no research, but with money to burn, then they probably deserve to get scalped, and the dealer deserves to make what he/she can. If the consumer has done the research, has considered many options, and has time and patience, the dealer still deserves to make what he/she can, but it might not be as much or as easy.
Lastly, are the ethics of the parties involved. These are determined by the individual, and are the wild card in the profit equation. I consider myself an informed consumer; thus, I should be able to determine when a seller is being honest with me. If a seller is honest with me, then I will be honest with him about my intention to buy his product, and I will not waste his time with low-ball offers, stupid questions or any other games.
If a consumer takes the time to shop around, the consumer will quickly distinguish the shady salespeople from the hustlers.
Yeah, how does that work, hyundai_salesman? You're not marking them up beyond MSRP, are you? Does the guy walk up to the window sticker and actually say "I'll pay this + $1000 + TTL"?
FWIW, my intelligence was so insulted when I shopped for a Sienna this past month that I doubt I'll ever consider buying a Toyota again. I went to four different dealerships and they all pulled the same tricks -- they'd agree to my proposed deal in an e-mail or over the phone, then when I got there, the van configured the way I wanted it (I'm getting a headache just thinking about Toyota's option packages) was all of a sudden sold, even despite my putting down a deposit in one case. Or they'd low-ball my trade by $5-6 thousand dollars, or they'd lie and say the Toyota Financial 0% rate only applied for customers paying MSRP.
I guess the dealers do this because it works some or a lot of the time, and that's depressing.
I feel your pain - the trouble is not when the dealers "ask" for more and get it. If they did that means the true market price was higher. It is when they lose a sale because they got too greedy and could not recognize quickly enough that they dealt with someone who would not buy a bridge.
When I step into a lot with ADPs, protection packages, appearance kits, etc slapped on every vehicle, I pretty much know I'm not buying here, not today, not tomorrow. It becomes a serious uphill battle for the dealership to win me over. I can smell their corporate culture and pretty much want to run away. But it may just be me...
I should be able to determine when a seller is being honest with me
There is no way you can determine if a seller is being totally straight with you. You can keep him honest on the most important part of the transaction... price. But, if you are ordering a vehicle, or a dealership is trading another dealership for the vehicle you want, then it is difficult to know if your are being strung along when your order doesn't show up, or the vehicle was sold to a higher bidder.
There are about 1000 different ways a salesperson could b.s you. Unless you have access to the dealerships books, you have no way of knowing if you are being lied to or not.
Sounds familiar. I had ordered a Toyota Sienna 2 years ago from the general manager who was good friends with my cousin. A few days after it's arrival date the G.M calls me and says my $30,000 van has arrived. Trouble was I had ordered a $27,000 van. I could actually hear him lieing thru his teeth, saying the options package was written incorectly...blah, blah, blah. They can order me a new one. I give him the benefit of the doubt, despite knowing he more than likely sold this "semi-hot" vehicle to someone willing to pay more. So, I let him reorder me another one. When the arrival date of the newly ordered van came and went(by weeks), and the dealerships had a negative attitude when we called to inquire about the vans whereabouts,we decided to shop elsewhere. Ended up buying a Mazda MPV which we have been very happy with.
When we shopped Honda Ody, the dealership tried to add a bogus $400 extra into the low interest loan they were offering at the time. They also had just about every worthless mop n glo added onto every Ody they had on the lot.
So, how much should a dealership make? If you're the customer... as little as possible. Because you know the dealership is going to try to squeeze as much out of you as they can.
You are correct; there is no way I can determine if a dealer is being totally straight with me.
However, if I am an informed consumer, and the seller knows this early on, that might dissuade the seller from trying to mislead in the first place. It is kind of like having a dog. Thief hears barking dog, possibly moves on to next house. This is no guarantee, simply a deterrent. As the consumer, I still have to be vigilant by researching my potential vehicle and asking the right questions, and, ultimately, remembering that I have the final power: the ability to walk away from the deal.
But no, you are never going to be able to know completely that someone is being completely honest.
Serioiusly, welcome to the boards and we're enjoying your posts thus far.
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dino001: It seems as though the ADM's (protection pack, appearance kits, LoJack, pinstriping, etc.)are more the "norm" in the Florida area and the So.NJ area. It is almost impossible to find a new car dealer "without" all the extra's!!! I do not ever bother to add them into my "OFFER" and have never once had to pay for those beauties. Just because they are the "extra" window sticker" should "NOT" discourage you from making your "OFFER"!!! If they don't like it....Walk!!!
The ADP and addons on the lot are an indication of the dealer's mentality in the salesroom.
That dog you mention doesn't change its spots. That was a message from a coworker long ago about a treachery-riden coworker who had no scruples about undercutting anyone doing a good job to make himself look good. And that employee is still there doing the same old tricks 25 years later. A dog doesn't change its spots.
I know. I live in Tampa - have not seen a lot of straight-up ADPs, but the "appearance" and "protection" packages are omnipresent for "regular" brands (everything below Subaru/VW, which I consider "transition" brands). Same with $499-$699 doc/clerical/whatever fees. $299 is not even worth arguing here, as it is a low end. Of course then you have screamer ads with "below invoice" claims all over the place, or others with "$3000 trade" with big "you pay" values decreased by that amount (which suggests that the trade or cash down was paid by Santa, not the customer).
I guess I was lucky so far not to be shop in an ADP/mpg&glo store yet, so I still get really turned off by them. Perhaps once you see it's just for a show, one will just ignore them, but my problem they get more and more inventive with that crap - last time I checked local Toyota store, they had worthless "Toyoguard" package included in the Monroney sticker, as it became a port installed option, put by the distributor before the cars get to the dealer. This of course makes it so much harder to argue, at least to someone less sure of their own knowledge. "It's on the Monroney sticker - must be legit".
If dealers would be willing to discuss price right off the bat when you visit in person, that's the tack I'd take.
Unfortunately, it's been my experience that very few dealers want to discuss price in person. They want to get all your info on a credit app, they want to take your trade for a spin, and they generally want to distract you from the most important part of the deal. I think it's foolish to go through all that when you haven't talked turkey. Call me intimidated, call me someone who doesn't have a lot of spare time. Whatever.
I find I spend less time car shopping when I establish price first, then sort out the details. Of course, this method does carry with it a risk of having the dealer straight-up lie to you, as I learned while Sienna shopping.
Yeah, how does that work, hyundai_salesman? You're not marking them up beyond MSRP, are you? Does the guy walk up to the window sticker and actually say "I'll pay this + $1000 + TTL"?
Not exactly like that but pretty close. Some a little more some a little less. And I know it's hard to believe since so many here are too good for a Hyundai but some models can be very in demand. Try finding a stick shift anything Hyundai or an 03-06 Elantra new with ABS. Those will almost always fetch over sticker.
I had a customer point to the ADMU sticker and say "what the hell is that?" "You think im stupid enough to pay that?" Well apparently not sir but just in case you were I didnt want to miss an opportunity. We had a chuckle and he bought the car for invoice. It was this hard "I'm not paying that, I'm not even paying MSRP, I'll pay invoice minus rebate and I'll drive it home today" "OK so If I understand this correctly if I sell you the car today at invoice you will take delivery today" That took about 5 minutes of his time got the deal he wanted and it was done. It was the first place he had been, first car he drove whole process took 2 hrs of his day from meet and greet to burning gas.
I dont know about most dealerships but If you came to me and said "I will take delivery today at invoice". It's just a matter of how quick F&I can bill the deal.
Also regarding
I also take offense. I'll dig out whatever records I have for the two cars in the garage and might even have the previous car's records and tell you what I paid by check and subtract tax, title, and $20 doc fee off if you want.
Perhaps your attitude and how you feel about customers is reflected in that statement more than the reality of customers' ethics being reflected by what you said about them.
You are not a customer enggaed in a transaction with me leveraging my deal against another dealer. I'm talking about the guy you call back that you walked at dead net saying the guy down the street sold him the same car for $1k less. I actually have had several customers tell me prices they paid at other dealers that I talk to a salesperson I know there and find out that the customer didnt even know they actually paid more than I had them at. Customers are conditioned to lie to protect themselves, like the guy that says my payoff is $14,972 when he knows it's $3k less and is just trying to get you to put more in the trade. Or the guy that writes a deal with you and promises he'll be back tomorrow to pick it up and then just uses your purchase agreement to leverage a better price with someone else. Dealers have laws they have to abide by, customers dont. And as a customer when a salesperson you were working with called you back what youre actually gonna tell them you paid the same or more somewhere else...of course not youre gonna verbally sitck it to em and make them think they were in left field on their price. The best ones are the 480's you get that you tell them that if the red sea happens to part and all the palents are in line they may get approved at 24.99% and then they say "well X Bros GM had me approved at 4.9%" and then there isnt even an inquiry from said dealer or even from anyone on their credit report. I've caught so many people in blatant lies that I dont even keep track anymore. I'm sure salespeople do it too but I can only speak for myself. Atleast when a customer gets a salesperson in a blatant lie there is legal reprocussion.
When you meet someone, do you even try to gage if this person may be truthful, or do you simply assume everybody is a liar, so it's not even worth listening what they have to say about themselves and their situation? Just curious...
every customer and situation is different. Goal #1 is to find the customer the right car that fits their budget. If I don't do that then nothing else happens. Obviously goal #2 is to make the most I can off of the car. That rarely happens as most deals pay out less than $300. Generally there is nothing to be gained by not treating people right. Most people no matter how good of a deal you give them or how well you treat won't remember you a day later let alone next time to buy their next car but if you treat them poorly you dont even have a shot. Everyone walking in the door walks in with a wall up and is always very defensive at first, when they realize im not a liar and there to screw them they usually open up and relax.
Also everyone jumps and screams when they see ADMU stickers but you always hear "yeah i think 5% is fair profit" well if you take the avg hyundai and add $500 or $800 to the MSRP you get about a 4-7% markup
I actually remember my sales guy very well and would give him a legitimate chance again, but guess what - he aint't there anymore.
Also everyone jumps and screams when they see ADMU stickers but you always hear "yeah i think 5% is fair profit" well if you take the avg hyundai and add $500 or $800 to the MSRP you get about a 4-7% markup
Well, add $499 "dealer fee", $699 "protection package (wholesale cost whopping $50), and nice markup on the interest rate, and suddenly it becomes well above "fair" 5%.
Besides - as some other people said "fair" may be zero if you happened to be a in business of selling a dud, as marketplace already rejected it. Obviously not the case for Hyundais, but just for the sake of argument - 5% may or may not be a fair profit - just depends on the circumstances.
I accept reality of "outrageus" profits for cars in high demand as long as you have no problem in swallowing loss when selling something not so hot. Nature of business - your reward, but also your risk. If you don't care about my kids when you sell me this Solstice, don't bring yours when selling that Taurus, that's all I say.
yeah the add ons kinda piss me off too cuz we always end up having to give up front end gross to compensate for them and we dont get paid on doc fees and paint protection.
some truth about mop n glo's. the chemicals cost the dealer very little. they do however have to pay someone in their staff to apply them which can take about 3 hours to do it right and the warranty that is placed on the vehicle is where the cost comes in. just like anything else that stuff is negotiable. also we dont just go ahead and put it on every vehicle. it is a customer choice to purchase it
The reason for the fire storm against you was that you came across as stereotyping all the consumers here as like the person with the 480 score you mentioned. In fact, I would say most consumers here who are regulars have quite a decent credit score and that they deal fairly with car salesman, well unless they run in to a slime ball.
I'm sure there are a fair number of slime ball consumers out there. No one said sales was easy. But I'd bet there are also a fair number of consumers who would still treat salesman fairly while yet still pushing for the lowest price.
Comments
Sales managers make north of 300K a year. Get the car for as low as possible. Make sure to walk out of several dealerships before you settle on one.
There is no need to do that.
I used to be a real jerk. As I have gotten older, I have gained more respect for people. Maybe the same will happen to you.
The Odyssey was a very hot vehicle at one point so I can see them asking MSRP for it. No need for you to pay that but since most people were paying MSRP you are going to have to work to get it under that. I have never had a customer laugh in my face but if one did I would show them out the door right away. I don't want to sell cars to those kind of people.
:confuse:
I feel sorry for those poor shmoes. Our sales managers all make 350-400K per year and they all wear Rolex Presidentials.
LOL... You're calling the man a jerk, and this is suppose to show how you've gained more respect for people as you've aged???
But, I don't think laughing at a ridiculous offer is being a jerk. Now, if stockmanjoe had stuck his face up into the salesmans grill and laughed in his face...yeah, that's being a jerk.
That was 3-7 years ago that the Ody was a "hot" vehicle. Stockmanjoe was talking about the 2006 Ody...which is going for below invoice(not hot).
If it has a base MSRP of less then 40,000 dollars I don't see it very often and don't know that much about it.
So excuse me if I am not up to date on what the current hot minivan is.
I'd say that anything is all fair in love and war...and car negotiation. The ultimate question is whether the tactic works or not.
IMO, laughing in the other guy's face is not usually a good idea when you're haggling for the best deal. As a buyer, you want the lowest price possible, and that will be harder to get if you insult the other party. You need to give the dealership a chance to save face for him to accept a price that is well below the norm -- if you rub it in, he may decline just out of pride, even if he could profit from it.
I know that some of the stuff that dealers say is so absurd that it can be hard not to chortle, but sometimes you just have to let it pass and stay focused on getting your deal. Try to find the entertainment value in it, and get a good war story of it (which you will share here, of course...)
Really......?!?
I know 200+ SM's in 48 states, and they don't make even close to that ... Dealer principle, maybe ...
.... so you must be talking about another country --- maybe Tibet....?
Terry.
How are their pay packages typically structured?
What does a sales manager need to do to increase his/ her compensation, and how can a consumer use those incentives to his/her advantage when buying a car?
(and I don't mean the kind you wear ....)
It depends on the store ....
It depends on what that title means in that store, it depends on what a SM does in "that" store .....
is he/she a "desk manager" with a SM title.?
is he a GSM that has the horsepower over the sales staff.?
is the dealer principle active in the business, does he run service and sales..?
does the sales department use the majority of the trades for their UC department, or are they wholesaled.?
There's 2,894 variables .. and they can be 2.5 miles apart ...
That said ... without all of the mystery and without all of the Inspector Clouseau agenda you feel is needed - all a customer needs, is proper information.
If they know what they want, know and understand the options, have a good grasp on the current market (new and used) understand their credit and have sat down and "looked" at their budget - then there is no mystery ...
Dealers LOVE well informed buyers .. grinding a deal out for the next 2 or 3 hours is a complete waste of time when the consumer has bounced from vans to convertibles - it's common..... based on most stores, the GSM's end is 10 or $20 per unit plus a bonus somewhere and that can be based on model, color, type and time of the month - and that can change in a heartbeat based on the dealer principles run sheet (which he looks at daily, sometimes 2/3 times a day) ...
So, good ones will be looking to separate a time wasting consumer with the time wasting salesperson.
As far as what a SM can and can't do is very simple and basic ... they look at their daily running total that is updated after every sale, and that will determine if the next deal is even doable - simple.
If I were to use an "average" ... they are in and around $95,000/$150,000 a year income area .. some a little more, some a little less .... all that for 80 hours a week.
Terry.
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People seem to be advocating this here and I'll say that we ran this in our market for about 4 years. First 12-18 months was great and this was on Lexus, Honda, Toyota, Hyundai and Ford. Accord's were $3k under MSRP. Lexus ES were $4500 under MSRP. Brand new Elantra's with A/C full power and keyless entry were $9k etc etc etc. We had people from all over the country coming here to buy cars. In fact right on these boards many people would suggest to just visit our website as a benchmark. Now what happened with ths is that people woudl come to out lot and could get our rock bottom price in seconds. Sounds great right. We didnt even have to be open nor did you even have to talk to a salesperson it was hanging from a tag off the rear view mirror. Sounds Great right. The tag would show the MSRP, any package discounts any public rebates that everyone gets, the dealr discount which was very very aggressive and then the bottom line rock bottom price. Suonds Great right. What we did tho was doumented every customer and why they did or didnt buy. What we found out that was 70% of the people that didnt buy from us didnt buy because they simply took our tag to another dealer to leverage our "honest" price against us. So what did we do. Went back to selling cars the old way and marking them up over sticker and fighting for every penny of our profit just like a customer fights for every penny of our profit.
So dealers wil sell no haggle systems but it's the market (the customers buying them) that will determine if it lasts or not and if that really is what people want. In this case it really wasn't what people wanted and we werwe forced to change.
I'm guessing it was probably over $300-$400, and that if the rock bottom price could have been chisled down a bit more you may have been able to keep a much larger % of the buyers who left. A fine line yes... but doable.
then that would be haggling. the idea was to be a no haggle dealer. what reallt confuses me is the guy who comes in and says I know what i want but i dont wanna wheel & deal or haggle and play the game. "So sir what youre telling me is youre willing to pay full asking price?" Uhhhh well uhhh
the same guy that says they want no haggle is the first guy to bicker over price and no matter your offer they always beat you for more
But, you didn't answer my original question on how much more customers saved by going to other dealerships. I think most people would be overjoyed to go the no-haggle way and pay an extra $300-$500 from what they could get at the typical dealership. But, if what they are paying is above $500... well,for the dealership there is that point of diminishing return.
Remember people often lie, also to themselves, as they think they saved but they did not. If they did and your price was really lowest, it means the other guy lost money or you had too high cost. If your price was not lowest than your claim of being lowest was not valid.
When you went back to the old model, did you really make more money overall in comparable time period? I bet your gross might have risen, but did the average profit per total transaction? What happened to your CSI scores? What happened to your costs, e.g. by time spent with each customer "fighting for every penny", as opposed to quick "in and out"? Did you have to hire more sales force to take care of grinding process?
I'm not claiming your assertion of "market forced us to do it" is wrong, but these are some validating questions of whether it is really true or not.
2018 430i Gran Coupe
The guy that pays me $1000 over sticker always ALWAYS every time leaves a with a huge smile, a hug and request to marry his daughter and never comes back complaining about stupid stuff. The guy that pays $100 over net is back in the next day bitching about free floor mats and oil changes and is just in general miserable. That guy thinks youre screwing him and are still making a boat load of money off him while the guy that paid you $1k over doesnt even care what youre making
And as a salesperon if you even think one customer will ever be honest about what they paid for a similar car at another dealer I have a bridge to sell you
I take offense to that. You just called everyone who's not in the biz here a liar. That's like me saying EVERY car sales person is a crook and a slime ball.
Perhaps your attitude and how you feel about customers is reflected in that statement more than the reality of customers' ethics being reflected by what you said about them.
2014 Malibu 2LT, 2015 Cruze 2LT,
OK, that's fair enough. We buyers don't believe anything a car salesman tells us and we don't expect you to believe anything we tell you. That's fine with me.
tidester, host
1000.00 over sticker for a Hyundai?? :confuse:
If the market is hot for a certain model, then the dealer will make a good profit. If the market is cool, then the dealer won't make so much.
If the consumer is a sucker - straight off the street, no research, but with money to burn, then they probably deserve to get scalped, and the dealer deserves to make what he/she can. If the consumer has done the research, has considered many options, and has time and patience, the dealer still deserves to make what he/she can, but it might not be as much or as easy.
Lastly, are the ethics of the parties involved. These are determined by the individual, and are the wild card in the profit equation. I consider myself an informed consumer; thus, I should be able to determine when a seller is being honest with me. If a seller is honest with me, then I will be honest with him about my intention to buy his product, and I will not waste his time with low-ball offers, stupid questions or any other games.
If a consumer takes the time to shop around, the consumer will quickly distinguish the shady salespeople from the hustlers.
Yeah, how does that work, hyundai_salesman? You're not marking them up beyond MSRP, are you? Does the guy walk up to the window sticker and actually say "I'll pay this + $1000 + TTL"?
FWIW, my intelligence was so insulted when I shopped for a Sienna this past month that I doubt I'll ever consider buying a Toyota again. I went to four different dealerships and they all pulled the same tricks -- they'd agree to my proposed deal in an e-mail or over the phone, then when I got there, the van configured the way I wanted it (I'm getting a headache just thinking about Toyota's option packages) was all of a sudden sold, even despite my putting down a deposit in one case. Or they'd low-ball my trade by $5-6 thousand dollars, or they'd lie and say the Toyota Financial 0% rate only applied for customers paying MSRP.
I guess the dealers do this because it works some or a lot of the time, and that's depressing.
When I step into a lot with ADPs, protection packages, appearance kits, etc slapped on every vehicle, I pretty much know I'm not buying here, not today, not tomorrow. It becomes a serious uphill battle for the dealership to win me over. I can smell their corporate culture and pretty much want to run away. But it may just be me...
2018 430i Gran Coupe
There is no way you can determine if a seller is being totally straight with you. You can keep him honest on the most important part of the transaction... price. But, if you are ordering a vehicle, or a dealership is trading another dealership for the vehicle you want, then it is difficult to know if your are being strung along when your order doesn't show up, or the vehicle was sold to a higher bidder.
There are about 1000 different ways a salesperson could b.s you. Unless you have access to the dealerships books, you have no way of knowing if you are being lied to or not.
I give him the benefit of the doubt, despite knowing he more than likely sold this "semi-hot" vehicle to someone willing to pay more. So, I let him reorder me another one. When the arrival date of the newly ordered van came and went(by weeks), and the dealerships had a negative attitude when we called to inquire about the vans whereabouts,we decided to shop elsewhere. Ended up buying a Mazda MPV which we have been very happy with.
When we shopped Honda Ody, the dealership tried to add a bogus $400 extra into the low interest loan they were offering at the time. They also had just about every worthless mop n glo added onto every Ody they had on the lot.
So, how much should a dealership make? If you're the customer... as little as possible. Because you know the dealership is going to try to squeeze as much out of you as they can.
However, if I am an informed consumer, and the seller knows this early on, that might dissuade the seller from trying to mislead in the first place. It is kind of like having a dog. Thief hears barking dog, possibly moves on to next house. This is no guarantee, simply a deterrent. As the consumer, I still have to be vigilant by researching my potential vehicle and asking the right questions, and, ultimately, remembering that I have the final power: the ability to walk away from the deal.
But no, you are never going to be able to know completely that someone is being completely honest.
Serioiusly, welcome to the boards and we're enjoying your posts thus far.
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2015 Kia Soul, 2021 Subaru Forester (kirstie_h), 2024 GMC Sierra 1500 (mr. kirstie_h)
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J.D(litman) has been a member for 5 years kristie. Better late than never, though. :P
It seems as though the ADM's (protection pack, appearance kits, LoJack, pinstriping, etc.)are more the "norm" in the Florida area and the So.NJ area. It is almost impossible to find a new car dealer "without" all the extra's!!!
I do not ever bother to add them into my "OFFER" and have never once had to pay for those beauties. Just because they are the "extra" window sticker" should "NOT" discourage you from making your "OFFER"!!! If they don't like it....Walk!!!
That dog you mention doesn't change its spots. That was a message from a coworker long ago about a treachery-riden coworker who had no scruples about undercutting anyone doing a good job to make himself look good. And that employee is still there doing the same old tricks 25 years later. A dog doesn't change its spots.
2014 Malibu 2LT, 2015 Cruze 2LT,
I guess I was lucky so far not to be shop in an ADP/mpg&glo store yet, so I still get really turned off by them. Perhaps once you see it's just for a show, one will just ignore them, but my problem they get more and more inventive with that crap - last time I checked local Toyota store, they had worthless "Toyoguard" package included in the Monroney sticker, as it became a port installed option, put by the distributor before the cars get to the dealer. This of course makes it so much harder to argue, at least to someone less sure of their own knowledge. "It's on the Monroney sticker - must be legit".
2018 430i Gran Coupe
Yes, but j.d. has only been an observer until just a few days ago.
tidester, host
Unfortunately, it's been my experience that very few dealers want to discuss price in person. They want to get all your info on a credit app, they want to take your trade for a spin, and they generally want to distract you from the most important part of the deal. I think it's foolish to go through all that when you haven't talked turkey. Call me intimidated, call me someone who doesn't have a lot of spare time. Whatever.
I find I spend less time car shopping when I establish price first, then sort out the details. Of course, this method does carry with it a risk of having the dealer straight-up lie to you, as I learned while Sienna shopping.
Actually j.d was a poster almost 6 years ago(i.e 12/18/00)according to his bio.
He has been an observer for the last 6 years, until this past week, which is very interesting to say the least.
But, I do hope to read more of your posts j.d. Always good to have old/new people chiming in.
Gosh, now tell me why I expected you to point that out? LoL.
It was a single post in a now archived discussion so I think j.d. deserves a warm welcome for his belated emergence from lurkerdom.
tidester, host
Yeah, how does that work, hyundai_salesman? You're not marking them up beyond MSRP, are you? Does the guy walk up to the window sticker and actually say "I'll pay this + $1000 + TTL"?
Not exactly like that but pretty close. Some a little more some a little less. And I know it's hard to believe since so many here are too good for a Hyundai but some models can be very in demand. Try finding a stick shift anything Hyundai or an 03-06 Elantra new with ABS. Those will almost always fetch over sticker.
I had a customer point to the ADMU sticker and say "what the hell is that?" "You think im stupid enough to pay that?"
Well apparently not sir but just in case you were I didnt want to miss an opportunity. We had a chuckle and he bought the car for invoice. It was this hard "I'm not paying that, I'm not even paying MSRP, I'll pay invoice minus rebate and I'll drive it home today" "OK so If I understand this correctly if I sell you the car today at invoice you will take delivery today" That took about 5 minutes of his time got the deal he wanted and it was done. It was the first place he had been, first car he drove whole process took 2 hrs of his day from meet and greet to burning gas.
I dont know about most dealerships but If you came to me and said "I will take delivery today at invoice". It's just a matter of how quick F&I can bill the deal.
Also regarding
I also take offense. I'll dig out whatever records I have for the two cars in the garage and might even have the previous car's records and tell you what I paid by check and subtract tax, title, and $20 doc fee off if you want.
Perhaps your attitude and how you feel about customers is reflected in that statement more than the reality of customers' ethics being reflected by what you said about them.
You are not a customer enggaed in a transaction with me leveraging my deal against another dealer. I'm talking about the guy you call back that you walked at dead net saying the guy down the street sold him the same car for $1k less. I actually have had several customers tell me prices they paid at other dealers that I talk to a salesperson I know there and find out that the customer didnt even know they actually paid more than I had them at. Customers are conditioned to lie to protect themselves, like the guy that says my payoff is $14,972 when he knows it's $3k less and is just trying to get you to put more in the trade. Or the guy that writes a deal with you and promises he'll be back tomorrow to pick it up and then just uses your purchase agreement to leverage a better price with someone else. Dealers have laws they have to abide by, customers dont. And as a customer when a salesperson you were working with called you back what youre actually gonna tell them you paid the same or more somewhere else...of course not youre gonna verbally sitck it to em and make them think they were in left field on their price. The best ones are the 480's you get that you tell them that if the red sea happens to part and all the palents are in line they may get approved at 24.99% and then they say "well X Bros GM had me approved at 4.9%" and then there isnt even an inquiry from said dealer or even from anyone on their credit report. I've caught so many people in blatant lies that I dont even keep track anymore. I'm sure salespeople do it too but I can only speak for myself. Atleast when a customer gets a salesperson in a blatant lie there is legal reprocussion.
2018 430i Gran Coupe
Also everyone jumps and screams when they see ADMU stickers but you always hear "yeah i think 5% is fair profit" well if you take the avg hyundai and add $500 or $800 to the MSRP you get about a 4-7% markup
Also everyone jumps and screams when they see ADMU stickers but you always hear "yeah i think 5% is fair profit" well if you take the avg hyundai and add $500 or $800 to the MSRP you get about a 4-7% markup
Well, add $499 "dealer fee", $699 "protection package (wholesale cost whopping $50), and nice markup on the interest rate, and suddenly it becomes well above "fair" 5%.
Besides - as some other people said "fair" may be zero if you happened to be a in business of selling a dud, as marketplace already rejected it. Obviously not the case for Hyundais, but just for the sake of argument - 5% may or may not be a fair profit - just depends on the circumstances.
I accept reality of "outrageus" profits for cars in high demand as long as you have no problem in swallowing loss when selling something not so hot. Nature of business - your reward, but also your risk. If you don't care about my kids when you sell me this Solstice, don't bring yours when selling that Taurus, that's all I say.
2018 430i Gran Coupe
some truth about mop n glo's. the chemicals cost the dealer very little. they do however have to pay someone in their staff to apply them which can take about 3 hours to do it right and the warranty that is placed on the vehicle is where the cost comes in. just like anything else that stuff is negotiable. also we dont just go ahead and put it on every vehicle. it is a customer choice to purchase it
I'm sure there are a fair number of slime ball consumers out there. No one said sales was easy. But I'd bet there are also a fair number of consumers who would still treat salesman fairly while yet still pushing for the lowest price.