Did you recently take on (or consider) a loan of 84 months or longer on a car purchase?
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Stories from the Sales Frontlines
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NOBODY WANTS CARS LIKE THIS AT ANY PRICE!!
I think that a lot of people are in the state of denial that the car that they bought a few years ago is worth so little.
I had a car in the fleet - the infamous SAAB 9-3 Linear. The driver **had** to have the sunroof (which NEVER worked right) and the fancy wheels (which chewed up tires like you would not believe). Totaled $33k. Four years and 65k miles later, the beast brings $6500 at auction.
(Personally, I recommended that we buy him a 2002 Lexus ES300 for about $28k preowned, but that was vetoed by the big guy.)
"Uh Sir, you are the next guy"
And I understand that the street runs both ways, I did not make my comment earlier to start a us vs them controvesy. I just figured with the topic name that it would be exceptible to throw out of the things that irk the crap out of us
One salesman tried to start negotiating on a 2002 Mazda 626 EVEN THOUGH the check engine light was illuminated the entire test drive. That was a sale that was not going to happen immediately.
And today, I just bought an Lexus RX350 for the fleet. The dealer estimate for INSTALLATION of the XM radio package ... was $850. OUCH. We decided to go in a different direction.
What hasn't happened at this point is having a greenpea come up to me and try to sell me a midsized domestic sedan north of MSRP and tell me how good a deal it is ...
Of course, that is always good for a laugh or two.
2019 Kia Soul+, 2015 Mustang GT, 2013 Ford F-150, 2000 Chrysler Sebring convertible
It could very well be that there are there looking at the cars and nothing more. People do window shop and they do it with cars too.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
We get people all of the time who have no intension of buying anything. It's like cheap entertainment for them or something? I don't understand the mentality but we get this a lot. Sure, some of these can be turned into a sale but you make it sound like this is the norm when it isn't.
The worst are the joyriders.
i take exception to a comment made by isell w.r.t. used vehicles. i'm sure you take a bath on some used cars as trades, but it's not a always thing, and you aren't doing it to loose money, and we know this...
There are times, we make mistakes and pay too much and lose in the end. Not often but it happens.
I didn't say "always", you did.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
The only way I can see them having paid that much for that car was if it was on paper that way to give someone enough of a down payment to finance them on something else.
How does that work? I don't think they will be able to move the car for what they said, does it go to auction and they take it as loss for taxes?
You ask about the "logic or rationality" of us not calling a sales person back.
You young people try to live lives that make sense logically or rationally. We older poeple from the 60's live by the motto, "if it feels good, do it".
If we feel like calling a sales person back, we do it. Otherwise, we don't. That's about it.
Of course, we try to live up to our word. If we say we will call you back, then we do it. If we make no such promise, then we are free to do whatever we feel like.
When car salespeople say things like that it's just talk. Don't believe it too much.
If you want a better price just ask for it. Who cares how much profit they make. The market sets the price not the dealer profit requirements.
Get a reasonable price in your mind that you can live with and offer that. If they want to move the car at that price then you've got a deal otherwise move on.
There are places that thrive on bankruptcy cases.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
After stopping at several dealers and several test drives, she decides that she really wants a new Caliber. OK. No problem. I know we can get close to the payment she wants because I've already researched the invoice, rebates, and trade-in value of her car.
1st dodge dealer didn't have the one she wanted and could only find one at another dealer for swap, but it had about $800 in extra add-ons we didn't want. He proceeds to work up a price. He wants full MSRP. I then have to point out the rebate. So he knocks that off. That's it. I nicely explain that, the way I look at it, rebates are there because the cars aren't selling themselves, so a discount from MSRP would seem to be in order. Nope. He's not interested. Fine. No problem. On to the next dealer.
Turns out dealer 2 has the one she wants in stock. Only has about $400 in extras on it. Ok. That will work. I tell him what we are looking for in a payment (yes, i know, don't shop payments, but, in this case, i started with the payment and then worked backwards). I said $325/60 months (we're really looking to pay $350). He comes back with a number written down of $373. So I say, "this isn't a bad start. now how did you arrive at this number?" So he shows me MSRP, trade-in = $11,500. Ok. My counter is invoice + $100 MINUS $500 rebate. That should get us where we need to be. He comes back with $358. Ok. Great. We're almost there. NOW, what interest rate are you using? You haven't run her credit yet, and I think you'll find you can get her a better rate. Sure enough, he comes back with $343. Wow. Even better than I had hoped.
It was quick and painless. Now we just gotta wait for the F&I guy to free up and this is a done deal.
Well, to make a long story short, something was bugging me in the back of my mind. We get to the office after waiting about 90 minutes. He states the payment and I quickly ask, "how long is that for?" His answer is 72 months!! Turns out this guy had all kinds of crazy numbers. High interest rate (where they heck did they start out at if they dropped $15/mo after they ran her credit??!). Still had near MSRP on the car. Etc. Etc.
So I ask for the plates they had prematurely removed from my sister's truck because we were leaving. They promptly call in the big guy who, after some showmanship and saying he's firing that salesman, blah, blah, blah. He cuts the deal that I thought we were getting all along. Invoice minus the rebate and he even bumps the trade up $500. So, all in all, it worked out for the best. But, man, I can't believe the teeth I had to pull.
Oh, I left out the best part. They tried charging us TWICE for destination! Both during the early negotiations when he showed me sticker PLUS destination and then towards the end when he showed me invoice plus destination. I obviously didn't pay it. He even pulled out a stack of done deals stating, "all of these people paid it. its standard procedure." Hahahahahaha! I said I felt very sorry for those people, but they have NOTHING to do with me.
The kicker to the whole thing is that they were very nice people. Really. We all had some good laughs, got along great, etc. It was just a friendly battle of numbers. REally weird buying experience.
'11 GMC Sierra 1500; '98 Alfa 156 2.0TS; '08 Maser QP; '67 Coronet R/T; '13 Fiat 500c; '20 S90 T6; '22 MB Sprinter 2500 4x4 diesel; '97 Suzuki R Wagon; '96 Opel Astra; '11 Mini Cooper S
what i found very interesting was you had no issue working the deal on a payment basis.
right then and there, the vast majority of people are in my opinion doomed to pay way too much.
personal opinion: i think if you're a payment shopper, you really shouldn't be on a dealer's lot.
But what assurance does a shopper have that this is truly the amount that the dealer is offering for the trade-in?
Why wouldn't the dealer try to make an extra grand or two here? He is trying to maximize his profit, right?
right then and there, the vast majority of people are in my opinion doomed to pay way too much.
personal opinion: i think if you're a payment shopper, you really shouldn't be on a dealer's lot.
I don't have any problems working deals on a payment basis either.
While I'm sure there are quite a few people who, when focusing only on payment, can lose track of other elements (amount financed, term, rate, etc.) and pay too much... You must concede that there are also quite a few people who can talk payments with a dealer and still get the deal they want.
When I buy a car, I take the little $30 Texas Instruments calculator I got for my business classes back in college. It has a loan function built in, 5 buttons. You enter the four elements that you know, then hit compute for the fifth. It takes 30 seconds.
Example- dealer only wants to negotiate in payments. They say $350 for 60 months. I know my credit union will do 6.5%, so they'd have to meet or beat that. I press "N" and enter "60", press "I" and enter "6.5", press "PMT" and enter "350", and press "FV" (Future Value) and enter "0". Then hit "Compute" and "PV" (Present Value) and the machine says they are selling me the car for the $17,880.74.
What's wrong with that?
It also gives me the added bonus of ensuring nothing changes from the initial handshake to the business office. If anything looks "off" I can double check the math very quickly. (Keeps me from getting a rate "bump" or having hidden "fees" slipped into the final payment).
There is nothing wrong with being a payment buyer as long as its done wisely. Once you establish parameters (i.e. downpayment and term) and stick to them you should be ok.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
The kicker to the whole thing is that they were very nice people. Really.
They sound more like sneaks to me. It’s these stunts that give car dealers the bad reputation that they have.
It was just a friendly battle of numbers.
No it wasn’t. If this were done to me I’d call it deceitful and would have gone elsewhere. The games just started at the negotiating table and will probably continue for the duration of going back to this dealer over the years for service. It would be a good idea to go elsewhere for service.
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
The minute I make a generalization about a group I get barraged with counterexamples!
tidester, host
SUVs and Smart Shopper
you are quite a character bobst! you definitely make this board more entertaining with your thoughts and ideas!
for those NOT from the 60's then - what's your excuse? (benzserviceguy said embarassment, which i can see - but still find it to be silly...really, you'll never see the guy again, what do you care?)
anyone?
-thene
If a customer comes in and says they want a new Limited Explorer, you go pick one out, go on your ride and drive and through your walking talking qualification you find that your customer has a budget of $450 a month. Well quick math tells you that $450 payment on a $38K ride is like oil and water, they don't mix. So you suggest that they look at an XLS or a program car, they hem and haw and tell you that they need to think about that, they really want the limited and they will call you back. They get in there car and leave, not to go home to think about it but to go to the next dealer, get out of there car and say, "Hey got any pre-owned Limited Explorer's" There pride is not hurt, they did not lose face cause this sales guy has no idea that not 20 minutes ago you thought you could buy a $38K car for 450 a month.
I cannot count the number of times that I have been in this scenario where a weak or scared sales person did not find this info out early, failed to ask the question because they were afraid of the answer, they get in the office with me and I show them what they can buy for $450 a month, they decide to think about it. I call the next day and they left are store and went to the one 15 minutes away and bought a used one.
For the same reason that they pull out in front of you on the highway, or let the door slam in your face as you walk into the Post Office, or let their kids run riot inside a store.
It's simple, they truly don't care. They are the center of their own universe, and unless you can be of some immediate benefit to them you are just a blur at the edge of their peripheral vision.
Bottom line, they have the car, they don't need you any more, why on earth would they spend a couple of minutes of their precious time for something that's only a benefit to you?
What used to be common courtesy doesn't wear well with a "Me, Me, Me" personality.
i just have to shake my head...
-thene
F&I: "This warranty covers so and so and etc..."
Sidekick: "No, don't take it it's not worth it,it's junk"
Customer: I don't want it cause my friend says I don't need it"
F&I:"Great, so is your friend going to fix your transmission when it breaks, or pay for your repairs?"
Fact is, I've yet to see any empirical data stating where extended warranties are worthwhile. Now, if I were looking to buy something that's known to be problem prone, I might consider it. But, why on earth would I want to buy something that's problem prone to begin with?
Are there isolated incidences where an extended warranty was a "good deal" because some catastrophic breakdown occured? Of course! Those are rare, however.
The minimum warranty I'm aware of is 3/36. Some companies even go further with their "bumper-to-bumper" warranties. GM has extended their warranties on major components to 100,000 miles. Could a transmission fail after that period? Yep. My guess is it would be caused by some defect if that were the case. Moreover, if you're not confident enough in your product to push and exteneded warranty, maybe I should be looking elsewhere for my new vehicle purchase.
Fact is, extended warranties are a tough sell. I don't blame anyone for listening to friends or family to tell the car buyer to decline them on a new vehicle.
I’ve said this before you came aboard and FWIW I do like your insight into the biz; we’ve all heard of this and it’s too bad that buyers can’t be more honest and willing to accept when they are wrong. After all, isn’t this the way us buyers want dealers to be but in the real world it’s not going to happen. That said, I’m willing to bet that for every sale you loose like this you get one, therefore, it’s a wash, right?.
Note that I didn’t say it is right for buyers to be like this because it’s not but isn’t this part of the biz?
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
The one recent car purchase I did negotiate on (BMW), the dealership was really very up front. It was a straight $xxx above invoice. Doc fees were upfront and not out of the ordinary. No funny business with TTL or delivery fees.
For me, anyway, I do business with people I trust. If someone were going to charge me extra for delivery fees, I don't think I'd trust them and would walk away.
I'm going to have to humbly disagree with you on this one. Compare extended warranties on other products such as electronics and such. Those typically run around 15-25% of the total cost of the electronic. The cost on a warranty for a vehicle is around 5-10% of the cost of automobile. Seems like a pretty good deal in that light. Some people will purchase those as insurance in case anything does go wrong.
No matter how great the product, sometimes things fall apart. When I was selling Hondas, I was a little suprised at the number of people purchasing extended warranties. Little things goes wrong and they want them to be covered and not have to worry about them.
I think that auto warranties are typically a very good deal in light of what you are receiving. Some people just prefer to come out of pocket for them.
-Moo
Just as often as you lose a sale to such a customer, you gain one. It most certainly evens out at the end.
No.
By definition they are not.
Remember - warranty companies make money.
The things I say and relate here are when I am dealing with the general buying public. the folks here are I guess informed consumers. You don't here many stories about y'all because there boring
BTW Thanks for the compliment, I think on my third post Bobst made it clear he would never buy a car from me, and he lives around here
in the end, all businesses are about money. i bought the extended warranty on my car as an insurance policy. for a few bucks a month over the life of the loan, i knew that it was all covered until 75k miles. if nothing happens, it didn't break my bank...
my two cents
-thene
I would say on my make and model, there is a 30% chance it will need a head gasket, and that service runs about $1400. That means the warranty should be about $450, but its worth it to me to not have to worry about it for the extra $100.
You use insurance to guard against catastrophe.
If you lose your health - or if your house burns down, if you don't have the means to recover from that loss, then you insure against it.
IF you get into a car accident and someone sues you for a million bucks, then you need insurance to protect you.
If a car repair is gonna cripple you, then you need to insure against it. But if it's not, then there's no need and in the long run you'll be better off.
These aren't my words - they are Warren Buffet's
otherwise, they are just solving an emotional issue, ...not that there isn't anything wrong with that
You oughtta be just about out of those by now wouldn't you say? Then you're going to have to start financing your posts.
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
i just took out a home equity line of credit in order to pay for my posts!
-thene
Stuff happens. I'm of the mind that any vehicle I buy better have a reasonble expectation not to have some sort of catastrophic break down. Could it happen? Yeah. I could be hit by lightening, too. But, it's unlikely.
I believe I'm ahead in the game paying for an unexpected/out of warranty repair out of my own pocket than to buy an extended warranty every time I buy a new vehicle. I feel the same way about electronics.
Again, if I'm so worried about having to pay for something out of warranty with any vehicle, I probably won't be buying that particular model or from that particular manufacturer.
Good point, but it doesn't convince me to buy an "extended warranty" - more properly called a service contract because it's really not an true extension of the factory warranty.
I carry health insurance because a severe injury or catastrophic illness might otherwise bankrupt me. But car breakdowns don't fall into that category. If you're handling your money properly, you should have enough money in the bank to handle car repairs - even repairs involving transmissions or climate control systems.
Sorry to sound uncharitable, but if you don't think that you can manage repair costs without a service contract, you have a core problem with your personal finances. You should seek help.
To get this back on topic: when I bought a Honda CR-V in Nov. 2005, my refusing to buy any of the aftermarket add-ons didn't rattle the F&I guy until I turned down the service contract. That upset him.
When my wife and I bought our Ford 500 I purchased a 6 yr 100K Premium Care Contract and a 5yr 60K maintanence contract. All of the managers on our staff buy Service Contracts when they purchase vehichles. Why??? because we see on a daily basis how much it cost to have your car worked on. Average Labor rate in a Ford Store in are area is $85PH, plus parts. With the plan I have on my car the only thing I will have to spend money on for the first 5 years is gas and tires. The maintanence plan covers all scheduled maintanence to include the 30K and 60K service which in themselves would run about $400 each. So thats $800 of the $1110 retail price right there. That leaves $310. You cannot get the other 10 service visits it covers to include the 15K/45K for $310, plus your break pads belts, hoses, windshield wiper blades, and spark plugs are covered for 60K. Anyone ever had to have brake pads put on a car prior to 60K miles? How is that not good money spent. By the way none of my figures covered sales tax.
Service contracts are not for everybody, if they were my penetration level would be 100%. But it is impossible for any one to make a blanket statement like, No one needs a Service Contract, or for me to say, Everybody does need a Service Contract.
There are some folks who writing a $1800 check to pay for repairs will not effect them. There are some that writing a $200 check will cause a major rift in there budget and cause other bills to go past due. The guy who needs an ESP is the guy who sits in front of me trying to figure out if he can afford the $20 a month it cost. If $20 a month is going to break your budget what would having to come up with $1500 do to you.
and what about all those many yr, many K mile warranties where the service techs can't fix the vehicle, or they use any excuse to avoid honoring the warranty?
i view the extended warranties as a chance to bump the cost of the product to pad profit. is the warranty cost fixed across the board? if not, why not?
I totally understand your position, and don't blame you. I just have a different mindset about it. I really do see it as a game and I have fun with it. Its kind of like Survivor. They are constantly stabbing each other in the back. But its all a game to get money in the end. I really try to not harbor any hard feelings about it.
By the way, she won't be going there for service. Its too far for her.
'11 GMC Sierra 1500; '98 Alfa 156 2.0TS; '08 Maser QP; '67 Coronet R/T; '13 Fiat 500c; '20 S90 T6; '22 MB Sprinter 2500 4x4 diesel; '97 Suzuki R Wagon; '96 Opel Astra; '11 Mini Cooper S