Stories from the Sales Frontlines

tayl0rd

I hope it's not that long! :surprise: I was shocked to find out that there's actually financing for 84 months!

volvomax

With our product, about 40% lease, 30% pay cash and 30% finance.
Lease terms are generally 24-48 mos.
Finance terms are generally 60 mos. Some people do 72 mos.

madmanmoo

Ya, I might be wrong. Some guys around here are saying 54 months as the average. Maybe some F&I guys will share a little.

-Moo

plekto

First off - yes, like I said, I really don't like anything Toyota makes as a rule - because they are the definition of blandness. But they do have a few excellent trucks.

That said, if I *had* to actually buy a small SUV(not a crossover bastardization) instead of a proper one(used current generation 4-Runner, hint, hint...), Toytota would be the only one I'd consider.

Almost all AWD systems are a total joke when you actually need them. There's a video floating around of a Subaru versus a whole slew of AWD vehicles and they failed over and over to actually get up dirt hills and keep from spinning out on wet roads and so on. They are next to useless most of the time because of how the computers try to out-think you and transfer power back and forth.

That said, Toyota and the Subarus(but they don't make SUVs) are the only things that I'd actually put my life on the line with if I had to. And Toyotas are also nearly indestructable. BTW, if you can, get the 4 cylinder with stickshift instead of the 6 with auto. Toyota's 4 cylinder engines are probably the most reliable things on the planet that are currently made.

Now as for cars... yeah, as much as I hate how Hondas look, they are much better than Toyota. Of course, Toyota's first vehicle back in the 50s was a Jeep clone(which later grew into the FJ) - so they know off-road.

Now, if you want AWD for "safety" only and don't ever plan to use the thing like a SUV... just get a Subaru Forester instead. It's without a doubt the best AWD car made(the Audi AWD is about as good, but the cars cost a fortune and a half)

dino001

Car as a real estate :sick:

traindriver

Volvomax,
That is pretty much what I figured, except that I would have guessed 50% lease, 15% pay cash, and 35% finance on a Volvo. ( I assume that is what we are talking about, given your user id)

BTW, as a rough guesstimate what would you say the X-plan savings are on an XC90 or S60 or the like? It seems that on most of the Ford/GM/DCX vehicles that I have priced, 7 to 10% off of MSRP is a general rough guide, depending on how high the MSRP was in the first place.

graphicguy

moo....if 72 mos is now the majority of the paper a dealership writes, I'm woefully out of touch.

I can think of dozens of reasons that's not a good idea, but clearly I'm in the minority. Hell, by the looks of things, it's clear I'm in the minority regarding 60 mos finance contracts.

1racefan

Assuming the interest rate is the same (regardless of length of the loan), is it better for one's credit score to take out a 60month loan, and pay it off in 36 months, or to just take out the same loan as a 36 month loan, and pay it off in 36 months?

grandtotal

I don't really have a problem with 72 month finance per se. The way I view it there is not a lot of difference in amortization terms between a 72 month loan and a 48 month lease. Any way you look at it a car is going to cost you $x00 a month whether you lease it, take a loan on it or buy it outright.

abraindrainer

A thought: get an email address from another sales person at the dealership and contact him/her from another email account. This would allow you to pretend to be someone else as far as the dealership is concerned. :confuse: Then compare the stories... Liars are never consistent enough! :P

drolly

2) If you are looking at a 3.5yr old car with 40K miles, and you only drive 10K/yr, then the warranty/maintenance may not be worth the expense... But, if you are looking at a 3yr old car with 45K, and you drive 15K/yr, then the warranty/maintenance will be good for an extra 40K miles, and will probably pay off.

For the past 4 years, I've averaged close to 20k a year, so the maintanence add-on is a must for me. Will definitely pay for itself.

drolly

Ha, but the last thing I want to do is negotiate against myself!

cotmc

"Assuming the interest rate is the same (regardless of length of the loan), is it better for one's credit score to take out a 60month loan, and pay it off in 36 months, or to just take out the same loan as a 36 month loan, and pay it off in 36 months?"

I'm not in the finance business, but I've researched credit scoring with mortgage bankers and others. Plus, I stayed at a Holiday Inn Express last night.

While you still have the loan account active (before you pay if off), your credit score will be lower if you have the 36 month loan rather than a 60 month loan. Why? Because your monthly debt obligation is larger. The credit score is based on your minimum required payments, not your actual payments.

I'm not sure if there is a difference -AFTER- you have paid off the loan. I suspect your score is the same. Either way, you've successfully paid off a major loan.

lrguy44

Moo, the average here is 60 months. Rarely a 72 or 84 is done.

lrguy44

Here in Colorado, loans are simple interest with no prepayment or over payment penalties. Because I hammer my loans, my monthly statement says $0 due. Yet in a bad month, I give the minimum payment which is smaller because I did a 60 month vice a 48 - same rate

madmanmoo

Hey GG, I think I should clarify. I remember one of my finance managers telling me that when I was working at Nissan. However, the average term all depends on what product you're selling.

After discussing a little bit with the guys here at Honda, they said that 54 months was probably the average.

I know old school training tells you that if you can't afford 48 months financing on a car, then don't buy it. I don't think that's bad advice. I also don't think that telling someone not to drink alcohol is bad advice. I just don't think that most people are going to follow those rules.

Since automobiles are such a huge part of someone's life, I don't think there is much of a problem in financing longer terms, especially when you can pay them down early.

-Moo

drolly

As a fellow car enthusiast who is not in the business, I don't see much of any fault with the dealer or the salesperson, other than the questionable "Hurry -- We've got another customer looking to buy this car!" tactic.

I agree with you to an extent. I guess I expected the negotiations to be I make an offer, they make a counteroffer, and then continue until a compromise is reached. I could do without sob story "dealership losing money, we'd be giving the car away" drama. Am I whining to the dealership that they're stealing money from my dinner table, etc? No, I give them an offer, end of story.

But, as an add-on and an update to this ongoing story, I did up my offer to $22,500 like I said I would. Interestingly enough, they were now willing to come down $400 off the previous "rock bottom" price of $23689. So, I countered with an offer of $23689 including the maintanence add-on. A little higher than my $22,500 and a little lower than their $23,289. Of course, right back to garbage from the dealer. They countered back with the car and maintance package together for $24,484. Hmmm, where have I seen that number before? Oh yeah, that's the same price from 2 weeks ago only with the numbers moved around on each to get the same price. That to me is an absolute insult. Really, you don't think my math or memory skills aren't going to recognize THE EXACT SAME PRICE.

lokki

I don't think that you can set a loan length that is problematic without knowing all the conditions of the loan including the estimated resale value of the vehicle at the end of the loan term.

I think that any loan where you are upside down at any point is a bad idea. So, if you have an 84 month loan where you can unload the vehicle at month 83 for more than the loan payoff, what's the problem?

isellhondas

Hyundai has come a long way but they are still a Korean car with dismal resale values down the road.

Unless you plan to keep this a long time you may find you actually paid more for it in the end.

oldfarmer50

I can't figure the logic of not offering the same price if a car is ordered. Aren't there fewer cost on a car that rolls off the truck and off the lot? It would seem in the dealer's interest to move a unit on order and then sell the in-stock cars to the next guy. In this case the dealer lost a sure deal and still has the same number of cars on the lot. Could this sales manager be so short sighted that next months' sales figures don't mean anything? Unless there is some double secret handshake bonus money on in-stock units this guy really shot himself in the foot.

lrguy44

without knowing all the conditions of the loan including the estimated resale value of the vehicle at the end of the loan term.

If I knew that number 4-6 years from now, I would have retired years ago.

grandtotal

It's possible to come up with an educated guess. Start with a lease residual for the term you are interested in and adjust from there according to taste.

user777

well you're being mighty generous. i think you should leave that stupidity behind you and move on.

lrguy44

And if you knew how much banks lost in the last 5 years on residual vs. real world at the end of the lease, it would stagger you.

bobst

Oldfarmer, I think we can safely assume the sales manager is a skilled professional. If they go around shooting themselves in the foot, they wouldn't keep their job.

The sales manager can decide what deals to accept and what deals to refuse and we do not have to understand the logic behind their decisions.

jmonroe

Extending it to 6 years / 100k is what the poster was paying $800 for.

I got that but the poster ('cotmc') used the words free and $800+, so I guess he was referring to "free" as a description of how BMW refers to their maintenance plan as it applies to the car when new.

Something tells me that it's never really "free", rather built into the price of the car when new, kinda like "there is no such thing as a "free lunch".

Hey, what do I know, I've always had to pay for any maintenance for all of the cars that I've ever owned. :mad:

jmonroe

abraindrainer

Yes, you are right in theory! However, in practice dealerships are often uninterested in taking orders. They much prefer to guestimate as to what consumers really want? It may be another way to bait-and-switch a customer out of the comfort zone?

wavegrl

Here's the round-up, the "check engine light" that the dealer said cut my trade in value in half turns out to be exactly nothing. Mechanic says engine is fine and sensor is "oversensitive" Now it's off and car is fine. He advises to sell it ourselves.

Those of you who are trying to share the joy of owning a Honda will be glad to know that a great salesman whose a friend of a friend at a Honda dealership in RI spent a lot of time with me on the phone, loads of empathy and tons of insight as to why something like this happened and how to avoid it in the future. He did all of you proud. If I go for the CRV again I'm going to try and work with him.

mako1a

Wed Feb 14, 11:26 AM ET

WASHINGTON - Retail sales, hurt by a big drop in auto purchases.

Drolly, cut bait now before they reel you in.

Time to wait is on your side.

isellhondas

Unless your trade was an old car of little value a check engine light wouldn't cut the value by half.

Still, it can amount to nothing as it was in your case, or it can cost a fortune. The person appraising the car has to assume the worst because that is what it will probably be.

cotmc

Ok, from that perspective, it isn't "free". I take this 50K miles of BMW-provided maintenance into perspective when I look at that expensive sticker on the window! :surprise:

I suppose there's no such thing as Santa Clause, either?

As a side note, there was a time a few years ago when nearly every European car manufacturer provided a "free" maintenance program for the initial 3 or 4 years of ownership. Mercedes stopped providing this a few years ago, and I believe Audi just dropped it for 2007.

wavegrl

I can understand their dubiousness completely, they don't know if I'm an honest person or a lyin' dog trying to get something for nothing.

dreasdad

Any body here working at an autonation store?

volvomax

BTW, as a rough guesstimate what would you say the X-plan savings are on an XC90 or S60 or the like? It seems that on most of the Ford/GM/DCX vehicles that I have priced, 7 to 10% off of MSRP is a general rough guide, depending on how high the MSRP was in the first place.

With the incentives included it is about the same.

isellhondas

A couple of years ago, we had an Audi traded in with it's airbag light on. The owner tried to convince us it was of little significance and " just a bad connection or something"

So, we do the deal and take it to Audi to get the light fixed. Turns out, the previous owner had brought it in for the light a couple of weeks earlier and refused the repair when the estimate came to over 1000.00!

Nice, huh?

volvomax

You don't get any style points for paying a loan off early.
The size of the loan and the payment history are more important.

user777

but it didn't take your people anywhere near the 1K to fix it. :shades:

isellhondas

Do you think dealership shops give the sales departments massive discounts? This doesn't happen!

Besides, in this case, we took it to the Audi dealer. We pay the same as a customer off the street!

snakeweasel

I wouldn't go that far. The Hyundais are much less expensive so it works out in resale value. Case in point if I would have gotten the comparable Honda when I bought my Hyundai I would have lost in value on the Honda what I paid for the Hyundai by now. Unless all other things are equal one really shouldn't look at resale values to hard.

snakeweasel

I can't figure the logic of not offering the same price if a car is ordered.

The faster a store (any store) can turn over existing inventory the lower their inventory carrying cost (on a per unit basis).

It would seem in the dealer's interest to move a unit on order and then sell the in-stock cars to the next guy.

No as it means 1.) that they are going to have to wait for that profit and 2.) the cost of maintaining an aging inventory goes up.

isellhondas

Still, you get what you pay for.

As far as resale, I know we sure can't get anyone to step up at all on Korean cars. They allways hit us well "back of book". The times we decide to take a chance and just keep one, they usually end up at the auction when they haven't sold after two months.

Maybe your neck of the woods is different?

drolly

What is this article? I'd like to view the full article...

snakeweasel

Turns out, the previous owner had brought it in for the light a couple of weeks earlier and refused the repair when the estimate came to over 1000.00!

What was wrong with it that it would cost a grand to fix? Oh wait it was an Audi wasn't it?

snakeweasel

Still, you get what you pay for.

Ah the cry of the "I really just paid to much for it but can't come to accept it" crowd. Face it while you do get a higher resale value you pay for it upfront. To me thats no bargain. Add to the equation the interest you pay on the additional loan amount or the loss of interest on the additional cost (if you pay cash) any advantage a higher resale value has is lost very quickly.

Again unless all other things are equal resale value should have little weight in the buying decision.

drolly

If that doesn't happen and the car gets older, esp this month with a book change coming March 1st, you should be able to get it for less.

Sorry to show my lack of knowledge, but can you expound on the "book change"? Interested in knowing what this is...

isellhondas

Yeah, a typical Audi!

isellhondas

That is assuming a Hyundai is as good of a car as a Honda.

lrguy44

We know why snake buys Korean, You know why people drive Hondas, and I know why people drive Range Rovers. It is different priorities for different people. Doesn't make them all good or bad, just different.

snakeweasel

Well mine has been the most reliable car I have ever owned. Most people that I know that drive them have similar views. I know a few Honda owners that are thinking of getting a Hyundai next time around after our experiences. trash them all you want they are good reliable cars.

snakeweasel

We know why snake buys Korean,

Actually bough Korean. Not sure what the next one will be but since she who must be obeyed wants a ragtop Korea might be out of the picture.

In reality I never bought any 2 new cars from the same manufacturer.