Stories from the Sales Frontlines

im_brentwood

M3?

graphicguy

fezo.....you are courageous.

Bill....now you're making me feel bad. Look at it this way, I could have bought a new house when the market was appreciating at a crazy rate. I could have refinanced, too.

I did neither, now I'm almost finished with house payments. Slap that money into some sort of fund, and I'm good to go.

driver100

Buying a new car is flat-out idiotic. In my case the difference is SIXTY THREE THOUSAND DOLLARS!

You might not be saying that if you were selling new cars. But, since you are selling used cars you could make a good case that you will come out ahead buying used.

I prefer to buy new, mainly because of reliability, I like to have a car that won't need too much done to it for 3, 4 or 5 years.

If the car is being used for business, it is tax deductible to some degree. So, the government is helping to pay for it...you might as well get what you want and get a bigger deduction.

When you buy new you get the colors and features you want.

I don't think it costs too much more to drive a new car. If you keep a car for 5 or 6 years the difference might be $1000 or $2000 a year to drive a newer more dependable car than a used one.

I also find a 2 year old used car might cost half what a new model would cost, but about half the life is used up.

On the other hand, lots of choice when buying used and some really tempting bargains.

houdini1

It is impossible to own a new car. Pay that extra $20,000. for a new car vs CPO, and the minute you drive off the lot you are still driving a used car even though you paid a new car price !!

driver100

Pay that extra $20,000. for a new car vs CPO, and the minute you drive off the lot you are still driving a used car

It is still new to me, and I like that feeling. I don't like paying more to have it, but, I am willing to pay extra for that new car feeling.

It is definitely better to buy used if you want to be as financially responsible as possible. You could also buy used clothes and furniture too if just saving money was your most important goal in life.

When I buy a car I like to have a 98% chance it isn't a lemon and it won't have any problems for many years.

Nothing wrong with used cars, they can be excellent, but I just prefer new, and I cut back on a few other things that I don't need. Just personal preference.

houdini1

Absolutely. We all have preferences and just have to make our choices accordingly. I am not stuck 100% on buying new or used cars. To me it depends on a lot of variables at the time of purchase.

im_brentwood

Once it gets shipped out from Wisconsin my new daily driver is going to be a 56 Lincoln, so to me a 2 year old Vehicle is far from having half of its' life used up. My Jaguar currently has about, I dunno, 68k on it and it's over 5 years old now, it's not about to be scrapped.

And I also sell new cars as I work at a new car dealership. In fact not 10 minutes ago I closed out a deal on a new Accent. I also get paid on what the new car department does.

As far as color and equipment goes, unless you're looking for a VERY rare car it shouldn't be much trouble to find what you want. I can still write off mileage on a used car as well. Besides, what's the writeoff? You write off $10,000 and you net back what, $3,000-3500 in all probability?

I drive Luxury cars, I still can't see how $40k in depreciation in 3 years is ever going to get me remotely ahead of the game.

fezo

M3?

Boy, that's gonna break my $25K....

Wait until I'm I'm on the other side of the procedure.

nyccarguy

Bill

On the other side of the coin to your Lexus horror story, I do business with a salesman who just got rid of his 2002 (?) Lexus RX300 AWD. The transmission finally gave out after 430,000 miles. He's a north jersey guy too & serviced it at a particular dealer once a month (when he needed an oil change). About 3 months ago his CEL goes on. He's in PA, about 100 miles away from his dealership. Calls the service mgr he deals with & the guy tells him that the car can be driven, but SHOULD be towed. Anyway, he pulls into the dealer service area they give him a loaner and send him on his way. The problem? A bad ignition coil. The cost? Don't worry Mr. P, we had an ignition coil laying around the shop & put it in for you no charge.

When his tranny finally went, he bought a CPO 2008 RX350.

houdini1

Something similar happened to me at my Lexus dealer a few years ago. My wife's 2000 LX was showing a lot of paint oxidation. This was about 2006 and way past the warranty period. They repainted the entire vehicle free of charge, made it look like new. The invoice showed a cost of $7500. and the job they did was probably worth that much.

im_brentwood

Oh I'm not at all surprised. I'm like the ONE guy who has a Lexus that's a lemon, and also the one guy that Lexus refused to help at all.

That's what's keeping me from ever owning another one. Cousin's lease is expiring on his GX, talked him into an LR4 from the looks of it.

isellhondas

You talked your cousin into a LAND ROVER??

Do you hate him that much? :surprise:

roadburner

Once it gets shipped out from Wisconsin my new daily driver is going to be a 56 Lincoln, so to me a 2 year old Vehicle is far from having half of its' life used up. My Jaguar currently has about, I dunno, 68k on it and it's over 5 years old now, it's not about to be scrapped.

Ditto for my 2004 X3 as well as my 1995 ti(with over 120k on it). I simply don't think you can make a sound financial argument for buying a new car every 3-5 years. If you like to do it, it's your money and your choice, but it becomes an expensive habit over a couple of decades.

mako1a

Car salespeople have their own vocabulary. It describes their customers, the deals they make and the day-to-day life on the lot. Here is a sampling of how they talk when the customer's not around.

Be-backs - A customer who leaves the car lot promising to return later, saying, "I'll be back," or some variation of that statement. "The guy was a be-back. But I think he meant it. I'll see him again."

Boss - The typical way that salespeople address the managers or the GM. "Hey boss! Got a deal for you!"

Bumping - Raising the customer's offer for a car. "If Mr. Customer says he only wants to pay $250 a month, just say, 'Up to -- ?' He'll probably bump himself up to $300 without you doing anything."

Closer - An experienced salesman who is brought in to "close" the customer by making them agree to a deal. "If I worked with a better closer I'd have more units on the board."

Desk - This is the sales manager, not the place he sits. "Ask the desk if these rebates are still in effect."

Demo - This is the test drive. "This guy comes in, demos the car and I think he's ready to buy, right? Then he tells me the car's for his wife and he can't make a decision without her."

F&I - This stands for the Finance and Insurance office where the documents are signed. The F&I salesperson usually will push products such as extended warranties, fabric protection and alarms. "The wait for F&I is two hours. Better stick with your customer so they don't leave."

Full pop lease - This is when a vehicle is leased at 110 percent of the sticker price - the highest amount allowed by most banks. "I got them into a full pop lease. I'll get a nice voucher for that."

GM - The General Manager. The GM is the head honcho at the dealership. He runs the business from day to day. "The guys were standing out on the curb drinking coffee so the GM called them into the tower and read them the riot act."

Green pea - A new salesperson. "The funny thing is, green peas can outsell the veterans. That's because they don't know how hard this job is."

Grinder - A customer who negotiates for hours over a small amount of money. "We were only $500 apart but the guy wouldn't sign. Man, what a grinder."

Lay down - A customer who takes whatever deal the salesperson offers. "I quoted him monthly payments of $575 and he took it! I wish all the customers were lay downs like that."

Mini - The commission on a deal where the car was sold at close to invoice price. "Sure, the deal was only a mini. But I qualified for a weekend bonus and made a grand."

Mooch - A customer who wants to buy a car at invoice. "People are spending too much time on the Internet. It's turning them into a bunch of mooches."

Packing payments - Adding extra profit to the cost of a car. "This place I used to work got busted for packing payments. Next job I get is going to be in a no-haggle store."

The Point - The place on the car lot where the "up" man stands looking for customers. "The GM saw me standing on the point with my hands in my pockets. He went ballistic and sent me home for the day."

Pounder - A deal with $1,000 profit in it. "Doctor comes in and buys the top of the line model, fully loaded - and he pays sticker! That'll be a two pounder for me."

Rip their heads off - This describes taking a customer to the cleaners. "I stole their trade in, I sold them the car at a grand over sticker - I mean, I just ripped their heads off."

Roach - A customer with bad credit. Not to be confused with the "roach coach" (see entry below). "The guy looked good. But we ran his credit and he turned out to be a roach. We're talkin' a 400 credit score here."

Roach coach - The food truck that comes around to the dealership every day. "I should've known better than to eat that chili from the roach coach. My stomach's killin' me."

Spiff - A tip, kickback or payment of any kind, usually cash which is handed between salespeople. "I spiffed the F&I guy $20 bucks and he took my customers first."

Strong - This has a special meaning on the car lot. It means holding firm on your price and being a tough negotiator. "When they ask for your price you have to be strong. Hit 'em with high payments, then scrape them off the ceiling and start negotiating." (See also "weak.")

Tower - The office where the sales managers work. This is usually a raised platform allowing the managers to see over the roofs of the cars so they can watch customers and their salespeople. "Attention: All new car salesmen report to the new car tower!"

Turn over - Also known as "turning," this is the practice of passing a customer from one salesman to another. It is thought that this will prevent customers from leaving the car lot. The theory is that the customer might just have bad chemistry with the first salesman and he might like the next salesman. "I turned this guy to my partner and he wound up buying. I'll get half of the commission on the deal."

Up - A customer that walks on the car lot. The term probably comes from the order in which customers are taken, as in: "I'm up next." Many dealerships also have an up system. "We've got ups all over the lot, and you're in the back drinking coffee?!"

Voucher - Car salespeople receive a voucher to let them know what their commission was for selling a car. They don't know until the deal is finalized exactly how much they will receive. "Check out this voucher. I thought I had a pounder. Instead it's a mini."

Weak - This describes being a weak negotiator or coming down too quickly on price. "The guy was weak so he only lasted a few months. How are you going to make money in this business if you give away cars?"

driver100

You write off $10,000 and you net back what, $3,000-3500 in all probability?

That's about right. But then I am driving a pretty nice car for about $600 a month which is what the average guy is paying to drive a Camry. So, if I can get the payment down by 1/3 I can drive a nicer car, for a what an average car might cost.


I drive Luxury cars, I still can't see how $40k in depreciation in 3 years is ever going to get me remotely ahead of the game.

$40k in depreciation!
But what will the used car depreciate, let's say it goes from $40k to $20K. Plus at least $6k in repairs over 3 years. Cost to drive the car will be just over $8k a year.

The new car cost just over $13k a year, $5000 more a year! If I don't smoke a pack of cigarettes a day and drink a bottle of wine a day (which many people do) I have saved enough to be able to afford the new car.

Some people have money tied up in second homes, boats, skidoos, etc., or they travel, have a motorhome, put kids through university etc.

Just depends on how important it is to the person.

I'll tell you one thing. I saw a guy parked across two spaces on an angle, and the car looked like a Firenza sports car. I wish I had an old used beater car that I could have pulled up and parked it 2 inches from his drivers door. Ha ha.

A lady at work says she leaves a note on the other car, it says, If you can't park it properly in one space you should leave it at home! :P

fezo

I simply don't think you can make a sound financial argument for buying a new car every 3-5 years. If you like to do it, it's your money and your choice, but it becomes an expensive habit over a couple of decades.

I agree with you. A friend of mine does that - it's like a lease except he actually owns the car. About every three years he flips the car. Always a Subaru Outback. Because the value of Subarus holds up so well it kind of works and he can easily afford what he's doing so more power to him but, yeah, there's a cost that adds up over the years.

explorerx4

Some of the buy new/used equation is not as clear with lower priced cars.
Once I figured out that to replace the Fusion's tires was going to be north of $800 to get the same as replacements, it made the decision to consider trading it in easier.
I doubt I will ever have another car that was so inexpensive to maintain though 37k miles, though.

fezo

Yeah, you had quite the deal with that car.

explorerx4

One other time, I did really well with a trade in.
Traded my '86 Mustang GT on an '88 T'bird.
Back then, there was still a big backlash from the square light Mustang crowd to the 1987 and up aero front Mustangs.
Another thing about that '86 is that it was the car that made me feel like Steve McQueen more than any car I have driven.
Then there is legendary family story about mixing it up with a Ferrari on the Mass Pike.
Probably a good thing I let someone else enjoy that car after about 2 years.

roadburner

Plus at least $6k in repairs over 3 years.

$6k? Really? That hasn't been my experience with my BMWs- or even with my MS3, which has cost considerably more to run than either of my current Bimmers:
2004 X3 (7/08-7/11)- $2100 for maintenance and repairs($646 of that amount was for tires)
1995 318ti (7/08-7/11)- $1210 for maintenance and repairs($418 of that amount was for tires)
2007 MS3 (7/08-7/11)- $5402 for maintenance and repairs($1371 of that amount was for two sets of tires)

im_brentwood

Jaguar's MSRP was $67k or so, could have had one when new for $1,500 over invoice less incentives, or probably about $62k.

Paid $21,750 plus $300 or so to ship the car up here from Jersey.

2 years later it's worth about $15k wholesale, maybe $16k but let's say $15k.

$6,750 depreciation in 2 years.

Repairs? 50c worth of vacuum line to repair a vacuum leak, and a $200 or so to replace a coolant expansion tank that started to seep. Otherwise, brake pads and a set of Pirellis and a bunch of oil changes.

jayrider

Buying used is smart when you buy high end luxury rides. My price point is about 25k. Nice used cars that I want are going to push 20k[ maybe a bit more] for a 2 year old model with 25k miles. Buying new makes sense in that context. Now if the car depreciates to 13k, that's a different story. That doesn't happen anymore for well equipped rides.

jayrider

You forgot my favorite term. Leaker -- guy who comes into the showroom just to use the bathroom.

mako1a

Driver says since he doesn't smoke he gets a new car.

So that leaves Richard and myself shopping the 2 year old market.

That's fine with me. Smoke em if ya got em.

isellhondas

There is also a term for a customer usually a service customer with a cup of coffee in their hand.

They will look at the price sticker, whistle, and ask "Where's the bathroom?"

That person is a Whistlepisser!

fezo

Paid $21,750 plus $300 or so to ship the car up here from Jersey.

$300? That's pretty steep since you live in Jersey.......

fezo

Love that! Probably been called taht a time or two without knowing it....

driver100

Plus at least $6k in repairs over 3 years.
$6k? Really? That hasn't been my experience with my BMWs

I know you have done well with your used cars. I didn't think $2000 a year was unreasonable for a used car. A set of tires can be close to $1000, a transmission problem can be $4000.

You may be on the low side of average, but I think most people driving a 3 or 4 year old car should be prepared for a $1000 or $2000 repair.

driver100

Jaguar's MSRP was $67k or so, could have had one when new for $1,500 over invoice less incentives, or probably about $62k.
Paid $21,750

That is very unusual for a person off the street to be able to buy a Jaguar with a MSRP of $67k, to buy it 3 years later for less than 1/3 of it's original value. Maybe, being in the business gives you a huge advantage.

Your car costs about $3500 a year to drive. My car was bought new, is 4 years old and cost about $6500 - $7000a year to drive. Estimate with deductions about $4500 -$5400. Speaking just for me, the reliability and convenience are just worth the extra amount.

If money was the only factor, then you are way ahead by bying used, no question. If you factor in reliability, peace of mind, newest safety features, new car feel, not as risky (car that could be a lemon or was in a bad accident - and not on Carfax yet), then it is worth it to me to pay a few $1000 a year forthat. But, I truly do understand where you are coming from.

driver100

Driver says since he doesn't smoke he gets a new car.
So that leaves Richard and myself shopping the 2 year old market.

LOL Think of it this way, some people play golf twice a week at $80 a pop. That's over $8000 a year! That can by a pretty nice car. Some people belong to golf clubs that are a few $10,000s of thousand a year.

My tennis costs less than $500 for a full year of playing, no extra court fees.
I am not criticizing smoking or drinking, all I am saying is the money might be going somewhere else...it's just what is important to you.

roadburner

You may be on the low side of average, but I think most people driving a 3 or 4 year old car should be prepared for a $1000 or $2000 repair.

I still think your numbers are very high- for most any car on the market today. How many transmissions go south on a 3 or 4 year old car? Look, you like to drive new cars, and you are willing to pay for the privilege- I have no problem with that. But you simply can't make a convincing argument that flipping for a new car every 2-3 years is financially astute.
For what it's worth, I also realize that keeping five cars and a Brit bike around the house doesn't make a lot of financial sense; I just love cars/bikes and I don't even attempt to concoct a financial justification for my internal combustion powered tastes...

stickguy

heck man, you better find 2 of those discount BMWs, or we will have to fight over the one!

stickguy

in my case, it depends on the car. for me, odds are when I finally get a replacement (next one will be the 3rd car for when my daughter drives) 100% it will be used. My Accord I expect to have for a very long time,unless the kid kills it somehow (I plan to take the newly bought wheels for me, and let her drive the 2005 starting in late 2012).

But, for the wife, used would be a very tough sell. Maybe a high end, almost new CPO, but most of the time you can get new for little more (at least based on asking prices around here).

But, we also keep the family car for usually about 8 years or so (with the vans, less if they become problematic).IMO, minivans just do not age all that well. So, current plan is to replace the odyssey as a Christmas, 2012 present (also known as, Hey we just made our last tuition payment on kid 1!)

it will be turning 8 years old, and probably right about 80K on it. Certainly not all worn out, but should still have a reasonable trade value, and (cross fingers here) before anything expensive goes! really, no need for something so big,and wife will be tired of it by then.

nyccarguy

What roadburner says makes sense - flipping cars every 3-4 years is very expensive.

Now back to the new vs. used argument. I think most of you guys buying late model used cars are paying cash for them, correct? Would you still be pro-used car if there are finance charges involved?

So let's say for argument's sake that I go and buy a 3 year old BMW for $30,000. I'll be making $500 per month payments (5 yr loan) on a car with 1 year left on the b to b warranty (+ the CPO warranty which doesn't cover EVERYTHING). I plan to drive the car until it is at least 10 MY old. So I'm making payments on a car until it is 8 MY old + paying for maintenance & repairs. Even saving the $20,000 in depreciation, does it still make sense?

stickguy

it can, since you are still saving money, depending on what you are comparing.

the used BMW is 30K. new is what, 45K? so your payments are now 750/mo.

the used BMW has to be compared to a 30K new car, so something not as nice.

roadburner

So I'm making payments on a car until it is 8 MY old + paying for maintenance & repairs. Even saving the $20,000 in depreciation, does it still make sense?

It depends on the APR and duration of the loan; if I'm not paying cash I'll take out a 60 month low interest loan- but I pay it off completely within 2 years.

tallman1

I think most people driving a 3 or 4 year old car should be prepared for a $1000 or $2000 repair.

I usually keep my cars for around 10 years but I've never had a $1000 repair bill in the first 4 years of ownership. In fact, I'm not sure I've ever had a bill that high.

roadburner

In fact, I'm not sure I've ever had a bill that high.

I can only remember one repair bill that exceeded $1000; a few years ago I had put off changing a noisy idler pulley on my wife's 128K 1997 528i, and in late fall of 2004 my procrastination was rewarded by the pulley bearing disintegrating and taking out both belts as well as the fan shroud. I decided to let my independent BMW tech handle the repairs. While he had the car we decided to replace the radiator, the water pump, and the remaining idler pulley as a precaution. My tech also found and replaced a bad tie rod and had the car aligned. The total cost of repair? $1161.
And that was on a 7 year old car.

sterlingdog

Thanks for asking about our progress. We're behind schedule. We enjoyed Salt Lake City and Aspen so much that we spent extra time in those two places. We'll arrive in Denver/Colorado Springs area tomorrow. We'll do Pikes Peak by Cog Railway. There is no way that I'm driving my beautiful SRX to the top.

24.6 mpg?! That is fantastic. I know you're enjoying that new ride. I love the design.

Nyccg---You're correct. I was prepared to buy new. My wife spotted the current SRX and loved it. That, along with the large cargo space, was why I bought used. It was also the exact color combination that I had wanted. It was such a cream puff and still is. I've bought both new and used over the years; just depends on condition and what you desire in a car. I have never had major repairs on a used car---just new tires and regular maintenance.

Richard

tallman1

Richard... don't know if you caught my earlier post. Try to sit on the left side of the train (going up) when you take the Cog Railway. Unbelievable views.

You might also enjoy the Miramont Castle while you are in Manitou Springs.

imidazol97

>There is no way that I'm driving my beautiful SRX to the top.

Very smart.

> I've bought both new and used over the years; just depends on condition and what you desire in a car.

The choice goes to the credibility of the dealership from whom you're making the purchase. If there is a problem, would they warranty it or make it right out of warranty? Would they be thorough enough to find and actually fix some difficult problem. That was what graphicguy ran into with the Cincinnati Caddy store: they didn't take ownership of the problem.

I held my breath that you would have a good experience with your Cadillac. When you get home, you should read Bob Lutz's book Carguys and Bean Counters.

driver100

for a $1000 or $2000 repair.
I still think your numbers are very high- for most any car on the market today.

I have heard stories from many people about repairs over $1000. One guy bought a Dodge Caravan and the transmission failed.

I have traded in cars, that I had put in a few $100 worth of repairs, such as $300 several times in a year, and then I traded it in, and who knows what the next guy had to do.

Sometimes used cars are better than new. I have had those as well, never a problem. But, there is a risk involved. You could end up a winner, or you could lose big time.

I have a friend who bought an old Ford Tempo. He was spending about $300 to $400 a month to keep it running. I said you could be driving a new car for what it is costing you to drive the old Tempo. Spend the money you hand over to your naturalpath doctor guy (who can look into your eyes and see that you should be drinking more carot juice) and you could be driving a new car!
He finally bought a new Blazer when they were selling them off for $15000 and at least it had a 3 year warranty and no major problems, though he says it is a piece of garbage, but, it will last 10 to 15 years with the mileage he puts on it.

So, I am not against buying used cars, and in many situations it is the way to go. I am just not convinced people save as much as they think they do.

driver100

. I've bought both new and used over the years; just depends on condition and what you desire in a car. I have never had major repairs on a used car

Thanks for reporting in, and glad the trip is going so well. A little disappointed we won't hear what it was like driving the SRX up Pikes Peak though Heh heh.

I suppose Mrs. Richard is glad you are not attempting it.

You are a good example of someone who can buy new and used interchangeably. Some used cars are great buys, I just think there is more chance something major can go wrong (people don't always trade in their cars when they are running well), and so overall savings may not be what they appear to be. Remember, the new car is going to have a few more years of life in it too...so it isn't just figuring out monthly payments. A big factor might be how long you keep cars for.

Have fun and keep us posted.

jayrider

LOL on the whistlepisser.

graphicguy

nyc.....I think trying to make financial sense of car ownership is an exercise in frivolity. You can't do it, regardless of if you buy new or buy used. Truth told, unless you're buying a used car that may (or may not) be able to appreciated in the collector market, buying a car will not make financial sense.

You can't even make sense of buying a 5 year old Hyundai Accent, as cheap as those could be had for.

Some prefer used, some prefer new. Don't try to make financial sense out of it.

You asked for pics. Here 'ya go.....

EDIT....well, that didn't work out too well. I suppose Edmunds doesn't allow "IMG" files to post, anymore.

imidazol97

>doesn't allow "IMG" files to post.

They have to be hosted somewhere, photobucket.com, e.g., or this is a website with a nice Buick

fezo

That your new daily driver? I know you LOVE Buicks!

isellhondas

Wow, a 1950 Buick!

Just needs a good wax job and maybe a couple of headlights!

Or a person could just not drive it at night!

graphicguy

imid...I was using photobucket....

Let's try this again....

kyfdx

Wooooooooo!!! Nice!

I bet it's fast!