Stories from the Sales Frontlines

rlatham

If there is a guy ou there, who is willing to simply say "Sir, I understand - unfortunately we don't have it, nor does any other guy in Florida, the closest there is now is no sunroof and different color, but factory order is not a problem - here is the offer and the papers and I'm SO HAPPY to take that order for you" - he is my guy.

That's exactly how I work with my customers.

jimmy2x

Well, Jimmy, you sound pretty scatterbrained to me. You just wanted to sit in a 4-Runner but then you got all involved in some discussion about doing a factory order.

Maybe I did not make myself clear - was trying to accomplish (3) things - Sit in car, find out how their cars normally come equipped, and find out if "orders" were possible.

jimmy2x

Have to admit to being a bit anal about a car purchase - but then we are OK financially but certainly not wealthy. While its true that a car is primarily transportation, long term quality, comfort, and looks do count. Whatever I buy I'm stuck with for a long time.

I remember many years ago my younger brother bought a "babysh*t" brown Nova cause the price was right. He(understandably) hated it within a week

toyotagal

What is interesting when I look at my pending contract on my 2007 Toyota Highlander is that the Dealer charges Sales Tax on the Rebate. That does seem a little strange since I will paying sales tax on something that I didn't pay for.

Is this "normal" to pay Sales Tax on a Manufacturer's Rebate?

rlatham

By definition a rebate is money back. If it's classified as a rebate, you always have to pay tax on it because it's cash back whether it's a car or a TV or a toaster.

tidester

Rebates are generally not regarded as discounts for sales tax purposes.

tidester, host
SUVs and Smart Shopper

rlatham

But don't people who buy off the lot a lot of times are talking about the perfect car they just bought to all their friends, and they are talking about you as the salesperson?

Also don't you get a lot of referrals from people that have bought off the lot?

Yes...you get that too...however...the most you get of someone bubbling about their new car is a month or so. When you order their car you get them bubbling about their new car from the time they sign the deposit until the same month or so after! Which would you rather have, someone talking about the car they just bought for a month, or four months of them talking to all their friends about the car they're getting and just got?

boomchek

Jimmy, you didn't do anything wrong imo.

If someone comes up to me and tells me those things, I'd give them a brochure, let them sit in a 4Runner, and tell them to check in with me a few months before making the purchase so I can check on the incoming orders, and see if one matches what he would be looking for.

I don't mind spending 5-10 minutes with someone today, giving thme some info on how the process works. I'd just hope they come back and see me in the future.

snakeweasel

Yes but there are only so many people you can tell about your new car. Strangers mostly don't care and people you know will just turn it off after the 10th time.

snakeweasel

Is this "normal" to pay Sales Tax on a Manufacturer's Rebate?

Yes.

toyotagal

Well that settles it with the vote going 3-0 on my paying a Sales Tax on the Rebate. Which of course I have no option to do otherwise.

At least the Government comes out ahead and I am sure that they could find something to do with my Sales Tax..........................

Thanks, Guys

jimmy2x

If someone comes up to me and tells me those things, I'd give them a brochure, let them sit in a 4Runner, and tell them to check in with me a few months before making the purchase so I can check on the incoming orders, and see if one matches what he would be looking for.

I don't mind spending 5-10 minutes with someone today, giving thme some info on how the process works. I'd just hope they come back and see me in the future.

Thanks - if I had been treated in that manner, I would certainly come back to him. After all, I am in sales myself.

dino001

It depends on the state law, I guess. My state - yes. Consumer cash back is the same as a manufacturer's coupon you tender at register of your supermarket or a mail-in rebate you get at Best Buy, i.e. you pay tax on the price posted by the merchant, which of course may be lower that the list price, as merchant elects to cut their markup, but that's like Publix selling Tide detergent for $5.99 and WalMart for $5.49 - the tax on the latter is lower, but in any case if you tender the $1 mfr coupon you'll pay tax based on original price.

Sometimes dealers would advertise some low price with "all rebates to dealer", which I'm not sure what it really means. My guess is some manufacturer give them option of assigning the rebate to the dealer. Anyone in industry cares to explain that?

jmonroe

Sort of my general feeling - but others feel differently.

Don't worry about what others say. If you don't like the way you are treated by a salesman or a barber why would you want to go back to that person?

It's really quite easy, the one with the money gets to call the shots unless, of course, you're dealing with your wife.

jmonroe

dino001

Perhaps you gave him some "wrong" vibes - at this stage telling the guy "I know how you guys work, cause I'm in sales, but we don't buy today anyway" is like saying "Look man - if you nice to me, and I mean very nice, you may get a mini, but it will not even happen in next ten months". Now with those megastores' turnover, they guy is not likely be around when you order, and even less likely when you actually pay for it - so in his mind why would he care about you on Saturday, when tons of other people buying TODAY are running around. Not very professional, but I guess he's just trying to survive and not get fired for no sales (as you know - in sales everybody is as good as their last month).

jmonroe

Is this "normal" to pay Sales Tax on a Manufacturer's Rebate?

It sounds to me that it's dependent on the state you live in.

I live in Pennsylvania and the last two times I bought (2005 and 2006) there were rebates on both cars and I did not pay sales tax on the rebates. I paid sales tax on the bottom line only.

FWIW, you don't pay sales tax in PA on food or clothing purchases. Now don't get excited, you do pay sales tax at restaurants.

jmonroe

tidester

I did not pay sales tax on the rebates.

Are you sure about that? There is a difference between rebates and cash discounts for sales tax purposes. Rebates are taxable while cash discounts are not. You may have gotten a cash discount rather than a rebate.

tidester, host
SUVs and Smart Shopper

jimmy2x

"...unless, of course, you're dealing with your wife."

Agreed.

jimmy2x

"Perhaps you gave him some "wrong" vibes - at this stage telling the guy "I know how you guys work, cause I'm in sales..."

Point taken - have been fortunate to have worked in only two adult jobs - USN for 20 years and industrial sales with the same company for another 20 years. Guess I lose sight of how cut-throat most (especially consumer) sales positions are.

batista

I know you didn't say that.
You are from BC? +$2k in damages is considered a rebuild.
Do you know when this will change?

jmonroe

Rebates are taxable while cash discounts are not. You may have gotten a cash discount rather than a rebate.

It appears we are talking technicalities here. At least as far as the terms used on the sales contract.

My sales contract shows the terms "Selling Price" minus "Factory Incentives" (this is what I referred to as a Rebate in post 10545) and I paid sales tax on the difference.

FWIW, as you know Edmunds uses the term "Incentives & Rebates" on the "TMV Pricing Report" page.

IMO, if some states have sales contracts that use the term "Rebates" as a line item (and Rebates are taxable) this is just a way to extract more tax money on a car purchase. I thought PA was bad as far as taxes go but at least they aren't this bad.

jmonroe

au1994

Hey Moo,

There's a chance we crossed paths down on the plains!

Might have to drop you an e mail. My better half is interested in the Murano so we might be paying you a visit!!

joel0622

I loved order units. As a previous poster said, they are like a free unit. it is a good feeling to know on the first of the month you already have a few units in the bank. Customers are usually happier with an order unit because it is exactly what they wanted, and plus they get a kick out of seeing there name on the Window Sticker, (at least with Ford its on there, don't know about the rest) and being able to say there car was a "special" order just for them.

madmanmoo

Very cool.

I don't remember what the policy is about broadcasting where you work. Hosts? What's the best way to get in touch with someone on this forum?

-Moo

cdnpinhead

"Mister - nobody buys those manual transmission wagons . . ."

Have you been listening in on my conversations with car dealers? Big brother lives!

Seriously, great post.

Yeah, I order my cars.

gasman1

Are car salespeople rated by number of units sold or by their gross margin dollars (GMD) generated? It appears to be solely on units sold.

I don't want to change the focus from vehicle, but offer the following as a GMD example.

My industry generally rates sales people on GMD. Their commission is based on GMD rather than gallons sold. Our best sales people SELL the customer on service and strength. Many times they can do this at up to a 20% premium over their competitors. I've seen it time and again where the customer knows the competitors pricing, but goes with the higher priced company due to the strength of the company and the sales person.

A common saying is, "Any fool can "sell" propane if they're the cheapest (giving it away)... It takes a solid company staffed with professionals to deliver the same product at a higher price." This may not be a fair comparison as propane sales are based on a "per gallon" unit. Service is normally what makes or breaks a company/customer relationship.

jimmy2x

"I loved order units............."

Some of the jobs that I work on can take up to two years before the order and subsequent pay-off happen.

joel0622

Are car salespeople rated by number of units sold or by their gross margin dollars (GMD) generated? It appears to be solely on units sold.

Gasman, it is usually a combination of the two. The percentage level usually goes up with the more cars you sell. For example my store pays

1-9 1/2 units=25%
10-13 1/2 units=30%
14 or more units=40%

So you need the units and the gross

BTW, now when ever I read one of you post it is in my mind as Hank Hills voice from King Of The Hill

drewba

Out of curiosity, is the percentage retroactive? If you sell over 20 cars, does the 40% apply to the gross on all 20 or only on units 14-20?

joel0622

Out of curiosity, is the percentage retroactive? If you sell over 20 cars, does the 40% apply to the gross on all 20 or only on units 14-20?

All are retro to the first unit you sell. It is once in a blue moon we get 20 out of any one now days.

paisan

20 cars in a month? That doesn't seem like that crazy of an amount to want to get.

-mike

metro123

Heck, the salesman on "King of Cars" regularly sell 20 or more per month, and that's at a Dodge store.

paisan

That is also TV....

-mike

joel0622

20 cars in a month? That doesn't seem like that crazy of an amount to want to get.

-mike

in some stores its not. Allot of thee folks at isell's store must do it every month with the numbers they turn and the size sales force they have.

Right now we are just not a store that will do that. When we get into are new store in the fall we will be running with the big boys then and should have quite a few turning those types of numbers.

151ranch

I have not had a problem ordering Euro cars (Volvo, BMW) but for the life of me have NEVER been able to get Toyota or Honda dealers to order. It must be a real PITA because I am always upfront when they suggest a dealer trade....I tell them I am going to find the car I want myself and buy direct if they won't order. The salesguys won't even take an order offer to the manager, even when I will pay EXTRA since I will save the 800-1200 mile drive. :mad:

grandtotal

Maybe I did not make myself clear - was trying to accomplish (3) things - Sit in car, find out how their cars normally come equipped, and find out if "orders" were possible.

Since the salesman didn't ask you to leave you were at liberty to sit in the vehicle all you wanted while 'your' salesperson attended to others.

You already knew that "orders" were possible.

audia8q

national avg is between 8-10 units per month...

For every salesperson selling 15+ units per month there are 20 green peas selling 5 per month.

toyotagal

Do Dealers normally want you to sign the papers before you test drive a new vehicle that comes in on an order?

I would kind of like to test drive the vehicle before putting my signature on the dotted line.

joel0622

Do Dealers normally want you to sign the papers before you test drive a new vehicle that comes in on an order?


No

oldfarmer50

Perhaps it was feedback from the Toyota or Honda salespeople that gave me the impression that salespeople don't like to order cars. It's nice to know that most other dealers have no problem with it. If I'm paying a few thousand for a used car I'll take what they have but when I plunk down 25K or more, I'd like things just right.

I remember a Dodge dealer once telling me if I bought off the lot I'd get a discount but if it was ordered I'd have to pay MSRP.

dreasdad

With Toyota you want to talk to the fleet sales or if they have one an internet dept. Some stores will have niether. and true order would take 4 to 5 months if it is built in Japan, less if a domestic plant

dreasdad

dpends on the state tax laws, every state can be diffrent, in texas you pay on the balance after any taxes, trade in and discount.

robr2

...but for the life of me have NEVER been able to get Toyota or Honda dealers to order.

IIRC, neither can really order. They work on an allocation system where they can preference what they want but take what is given to them.

Besides with Honda why order? You pick your model, your trim level, your color, and your transmission. Most dealers will have what you want in stock.

dino001

I think it may be side product of the industry consolidation - in megastores everything is about efficiency. The less time you spend with a customer, the more you can sell. That also allows them to cut margins slimmer, so remain competitive and make it up in volume. Like WalMart - we all love it, don't we?

Plus, I understand some mfrs, like Honda do not do orders at all. All you can hope for is "fitting" your order to whatever comes off the assembly line, which may take months.

151ranch

Besides with Honda why order? You pick your model, your trim level, your color, and your transmission. Most dealers will have what you want in stock.

Well, DH and I only drive MTs. Last time we shopped for DH, only one dealer in Dallas/Ft Worth had an MT Element. When I got my TSX, you had 5 MTs to choose from .... and they were all black.

D/FW is as flat as a pancake, but to get a MT I have to go to Colorado :confuse:

robr2

Well, DH and I only drive MTs As do I and we represent less than 5% of the market so I wouldn't expect to find an MT Element on the lot - especially in DFW. It's not exactly conducive to driving a stick hence they don't preference sticks.

I can see why a dealer would be hesitant to preference a stick Element - unless you're willing to do a non-refundable deposit I wouldn't expect them to be too keen on the idea. A manual Element would be a hard sell if you changed your mind.

toyotagal

I don't know whether Toyota Dealers "like" to order cars or not but they do order them. I have a Toyota Highlander coming in from Japan on an "order" this week after only 5 weeks and not the 4-5 months that some talk of.

kdhspyder

This is the truth...then there are the over-the-top sales guys.

The No 1 guy at our store averages 45 per month. Now think of that number and 23 working days a month!!! Hes done over 50 several times...

...and he's nowhere near the top performer in the Mid Atl region.

Then in another universe there's Longo Toyota where several do 60+ each month.

kdhspyder

IIRC, neither can really order. They work on an allocation system where they can preference what they want but take what is given to them.

Besides with Honda why order? You pick your model, your trim level, your color, and your transmission. Most dealers will have what you want in stock.

This is correct. The regional sales department decides what will sell in that region and they give Toyota, the manufacturing arm, the total orders for a given month or quarter. Most of these are unsold obviously but to assist buyers wanting it 'their way' the dealers know what configurations will be available in that given region. A buyer could order a specific combination as long as it's in Toyota's brochure. Some combinations might be easy to do and others might be nearly impossible to do.

We have a Tundra now that's been ordered in the least popular color with an equipment package that is not often ordered to a plant that's just begun to ramp up for a new model. Our 'ordered' vehicle has been bumped twice now.

Kirstie_H

A consumer reporter with a local television station in San Francisco (SF and surrounding residents only) is looking to interview consumers who are shopping for a new car and might consider purchasing “gap” insurance. If you are interested in speaking to the reporter, please reply to ctalati@edmunds.com no later than Monday, April 30, 2007 with your daytime contact info.