I do think it's very entertaining how people think they got this business all figured out, but don't have a clue of what goes on.
Despite what you think, the car business is like (not identical to, but like) a lot of other retail sales businesses and a lot of the same parameters apply. You might be surprised at how many people have a pretty good handle on how that sort of business operates. Sure the transactions are more complicated than the average, but it ain't rocket science.
you wouldn't be able to tell that from some of the people i dealt with, and im sure many other salespeople have dealt with.
people here on edmunds seem to forget that not everyone is as educated in how to buy a car as you guys. the majority of people i dealt with (and our dealer was in an affluent CT town) had some pretty skewed ideas of what we had to work with on our cars...
i would think that those who see all kinds of customers on a daily basis can make a better judgement of how many people have this business "figured out" than an onlooker...
"people here on edmunds seem to forget that not everyone is as educated in how to buy a car as you guys."
Well, you know..., we're kinda special, in a strange and slightly perverted way.
I think it takes a certain level of education to pass the Edmunds Town Hall "Entrance Exam". Thankfully, I passed that exam on only my 3rd attempt!! (i.e., I remembered my third password.) :P
Seriously, one of the primary reasons many of us enjoy this forum is to read your stories about those other customers, along with their skewed ideas!
You are incorrect on how dealers beat your bank's rate and what the F&I office's cut is. The reason that auto dealers can beat your bank rate is based on volume. They are essentially working as an agent of the lender. Once you deal is submitted the F&I gets an acceptance or declination form the finance company. The acceptance includes a "buy rate" this is the rate that the finace company is charging. The rebutable dealer then "bumps" the rate by adding 1-2 percentage points to the rate. An example would be your bank offers 7.25%. The F&I person submits your deal to financers and get a "buy rate" of 5.9%. He can then "bump" the rate and offer you 6.9%. This is a better deal and more convieniant than financing on your own, but the F& I office just pocketed 1% of your total finance charges. On big ticket vehicles this can represent thousands of dollars. The other items that F&I sells are just icing on the cake!
LAM contribution is advertising budget that is added to every car from the manufacturer. Depending on region it usually represents about 2% of invoice. These dollars are then spent by the manufacture on marketing in your region, ie; billboards, tv ads, etc.
If the consumer gets a lower rate (and pays less in finance charges) what does it matter what the dealer makes? Many time the customer gets buy rate and the dealer gets a small flat for originating the deal. It is just like a mortgage broker on a smaller scale.
I agree with you but consumers have been trained by manufacturers to focus soley on price, (mainly domestic) not value. As someone inside the business who does battle with consumers everyday on my "best price," I find it amusing that in some cases the same customer who squeezed every dime out of you on the front end, lays down on the back end and stuffs money back in my pocket. I am in the unique position of being at a dealer where each salesperson is their own F&I so the contrast in front and back end is interesting. My state requires that if a customer asks you must disclose "buy rate." You are not obligated to complete the deal at buy rate but you must disclose it.
however, if ALL stores went to a one price model, then there would be no reason to reduce the MSRP price, because there is no fear of being undercut by the store down the street.
Let me guess you don't have a business degree. Yes there will be a reason to price below MSRP, just like appliance stores sell for below MSRP. That is because they can sell more and make more money.
Let us say every dealership goes to a one price and makes it MSRP. Well someone somewhere will undercut everyone else by selling just below MSRP then someone will undercut them and so on and so forth until the market price is met.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Snake, he did use the hypothetical IF EVERYONE went to only MSRP. No different than some of your what if retorts. The only difference that in the real world it would never happen - just like I would never lose a deal over $25.
It is a shame that Wisconsin is too far away to be feasible for my next car purchase. I really like the idea of knowing the true buy rate/factor. I have always called around to the various banks/credit unions that I am banking with at the time and allowed the F&I office the opportunity to hit me with his best rate. If his is lower than mine, great. If not, I use mine. Not quite as effective as knowing the true rate, but at least I am satisfied that I have obtained the best rate that I can get with the information that I have.
I once ran into a situation where the dealer had a better rate from a certain bank than I had been quoted from the local branch of the same institution. I do not remember the specifics, but his rate was 1 point or so less than what I had been quoted. ...which leads me to believe I must have paid dearly on the front end -- Is there such a thing as buyers remorse on a transaction 4 trades ago??? HAHA
At the time of my last purchase, Ford Credit had additional rebates attached if you financed through them. The catch was that their rate was higher than the going rate. I mentioned in passing that I intended to refinance as soon I received an account number and paid the first payment or so. He pleaded with me to wait 90 days (IIRC) before doing this. Evidently, there must have been some chargeback to him or the dealership if the loan was repaid before a certain time. ( yes, I waited)
I can identify somewhat with the poster who stated that some people freak out in the F&I office. I could not care less if my neighbor bought his car $200 less than me but it really galls me to think I may be paying a higher interest rate than what my good credit enabled me to obtain through the buy rate. I guess I would rather take it from the front end than from the back end
We talked earlier how some folks will want more even if you give everything away. Here's something I ran into (a little off topic)
I posted about 20 not too old original VHS movies on craigslist for FREE, as I have them on DVDs or don't watch them anymore.
Some dude calls me and wants me to deliver it to him. :surprise: I mean did he want me to throw in my VCR and my DVD collection too? Then he asks me to meet him half way (he lives not more than a 15 minute drive from where I'm at).
I was going to tell him "if it's halfway, how hard is it for you to drive another 5 - 7 minutes".
Then the prick hung up on me!!!
These are the kinds of people who will grind you for 4 hours as Isell was saying, and then promise to come back, only to go somewhere else and buy. :mad:
Out of all the things I do in my job as an F&I guy (or as I am supposed to call my self, Financial Services Manager)that irritates me the most is when a customers bank/credit union plays me.
Here is the scenario:
Mr Customer comes into my office and says his bank will get him 7.25% for 60 months with a $125 loan fee.
I tell Mr. Customer that with his good credit I can get him 6.25% for 60 months with no loan fee.
Mr. Customer says "great" then he pulls out his cell phone and calls Agnes at the Under ware Elastic Employees Federal Credit Union and tells Agnes that he can get 6.25% with no fee here at Good Guy Ford. Agnes tells him no problem I will get you 6% and waive the fee because your are such a great customer.
Mr Customer says "Thank You Agnes your the best".
Ok If Agnes is the best then why did she try to stick him with 7.25% and a $150 fee to start with? If she was the best, and he is a loyal long time customer why didn't she offer the 6.25% and no fee when he called yesterday.
When I cut a rate for someone to get a loan they tell there friends that the F&I guy tried to stick it to them with some ridiculous rate but I told him no way. Old Agnes at the UEEFCU does it and he tells all his friends at the elastic plant to go see old Agnes she will hook you up.
Or when the call the CU and ask for there best rate and they tell them, see what the dealer will do, we will beat it. HELLO!!!!!! The CU is not trying to help, they are doing the same thing we do, they don't want to leave money on the table.
So now when I get one of these customers I quote a point below prime and make the CU squirm to meet there promise. I always make sure first though that I have an avenue where I can meet the promise.
Yes, I know that has to be frustrating. I think its pretty tacky for a customer to do his wheelin' and dealin' with other banks in front of you like that, playing one off of the other. If you can do better than my bank(s) then I am all for F&I doing the deal. Much easier than running around town filling out paperwork and transferring money to cover a check.
Thanks for all your posts. I know dealing with the public requires way more patience than I can muster...glad I don't have to in my job.
Or when the call the CU and ask for there best rate and they tell them, see what the dealer will do, we will beat it. HELLO!!!!!! The CU is not trying to help, they are doing the same thing we do, they don't want to leave money on the table.
I know that when anyone says something like that they are not giving me their best deal. I usually reply "just give me your best now and if its better than the other guys you will get my business".
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
I once ran into a situation where the dealer had a better rate from a certain bank than I had been quoted from the local branch of the same institution.
since we deal with the indirect lending department of the bank, and national or regional rather than local, we always get better rates (volume) than you can at a local branch. I have even had customers who did millions of dollars with the bank locally and I could beat the rate with the same bank.
Evidently, there must have been some charge back to him or the dealership if the loan was repaid before a certain time
Sure is - most banks will charge back any reserve if the loan is satisfied in 90-120 days.
Although you technically have to have some sort of connection to belong to a credit union, some have started operating almost like banks.. and the connection can be pretty vague. Just living in a certain city is good enough for some.
My credit union is company based, and the rates are set in stone, according to the posted variables. They are very good rates. No game playing allowed. If you could beat their rate, there would be no point in me calling them back.
I don't get it...These are probably the same folks who, when they gross $40K yearly, and get a tax refund of $165.00, go out and tell everybody that "they didn't pay any income tax this year"...
Scary isn't it?
Every time I'm in a voting booth I think about people like this who are probably in the next booth. No wonder my vote never seems to count. :mad:
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
I was born and raised in a second world country - Ukraine, and me and anyone that understands economics will tell you - one price does not work. You would have one product collecting dust on a shelve, while another will be sold by a clerk through the backdoor, for triple the price. Some stores used to sell "packs": you want this color TV that we have only 10 of, and the line outside stretches to the horizon?? Great, you will pay MSRP, but you will have to buy this foot massager as well! Market changes, income level differs from one area to another, brand preferences are different from one place to another - the price has to be adjusted! One price that you paid on a Dodge Durango 3 years ago - no one will pay tyday with the gas prices, to the price has to go down. And by the way - why don't we demand MSRP on gas prices? :mad: On the other end, take the LR Defender: one local dealership had a policy of no-markup, so they had to sell it for MSRP, but once they sold A defender - they begged the customer to sell it back - so they can double the price, because then it's a used car, and you can price it any way you want.
The reason you had that in a "planned" economy is because prices were not representative of the market and the amount allowed to be produced was not always the same as the demand. Lets say the Soviet government stated that 100,000 widgets will be produced and sold at $5 each. Yet the market dictates that at $5 each people will only buy 10,000 then you have widgets sitting on the shelf collecting dust.
On the other hand if the market dictates that at $5 each 200,000 can be sold then you create long lines and a black market where it is sold for three times the price out the back door.
It has nothing to do with a dealership selling a car at a set price.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
I really like the idea of knowing the true buy rate/factor. I have always called around to the various banks/credit unions that I am banking with at the time and allowed the F&I office the opportunity to hit me with his best rate.
I guess I would rather take it from the front end than from the back end
I don’t want to take it from either end and I didn’t.
In the late 70’s I agreed to buy a car and then the F&I woman (I don’t think that name was used then but there usually was a person that performed that function) tried to play her game with me. When I sat down with her I told her I already had a rate from a bank in the shopping center across the street. She asked me which one (there were 3 of them) and I said what difference does it make, I already had a rate. She proceeds to tell me she can beat any banks rate. Since I had heard dealers could get pretty good rates because of the volume they give banks, I said what is your rate and she said she wanted to know what the rate was that the bank gave me. Now I knew she was playing a game so I said just write it up as if I’m going to the bank across the street and I’ll be back the next day to take delivery. She gets upset and gives me her rate which was 2.5% more than mine to which I said, “and you call that a good rate”? She then says what rate were you given so I told her. She says you must have a very good credit rating to get that and I said everybody I called can beat your rate and the rate I gave you was better than the others by ½ % so that’s why I’m going to the bank for the loan.
She says let me see what I can do (this is before the day of the computer) so she leaves and goes to some magical place and comes back and says, “I can give you a rate that is 1/4 % more than what you were given” and without giving me a chance to say anything she goes on to say, “do you really want to waste another day (I had taken a few days vacation to do some other things and decided to spend one day to buy a car) applying for a loan and then coming back here when we can take care of this right now”. So I said, “you’re right, let’s do it right now but write it up at the rate I got from the bank or I’m not buying”. She says, “wait a minute you already agreed to buy the car and now you’re going to back out for a measly ¼ % and I said that’s exactly what I’m going to do and if it’s so measly, why do you have a problem with this”?
She calls the salesman to let him know what’s going on and as soon as he hears the story he walks out and comes back with the sales manager and now he hears the story and immediately says, “write it up at his rate and lets get this car off the lot”.
I just couldn’t put up with her arrogance and the dealer, apparently, couldn’t either because when I went back about a month later for some minor adjustments, I bumped into the salesman and he said she wasn’t there anymore. He went on to say it wasn’t too long after he almost lost my sale, that one night when the sales manager left early, another salesman lost his sale because she pulled the same thing on another customer and since the salesman couldn’t get help from the sales manager the guy walked out. The salesman called him the first thing in the morning to tell him they would match his rate but the guy said forget it , I don’t like how you people do business !!! As a salesperson it must be tough to lose a sale because someone else in the store wants to throw their weight around.
I didn’t know my brother even dealt with that dealer. :surprise:
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
I choose No 1. He was an older guy who wanted to have a movie night but free wasn't enough for him. If he can drive across the bridge from a neighbouring township to within 7 minutes of my house, then he can also come and get the movies.
The movies were mostly from this century and did not start with "Debbie" :P
I am required by my wife who is also part Ukrainian to disagree with your statement that Ukraine is a second world country. She says it is a first world country...by a substantial margin.
2019 Kia Soul+, 2015 Mustang GT, 2013 Ford F-150, 2000 Chrysler Sebring convertible
In the old nomenclature a 2nd world country referred to countries that were supported by the USSR. In that sense the Ukraine was 2nd world but when the USSR collapsed it stopped being a 2nd world country.
disagree, by a substantial margin. Ukraine, as well as most of the countries from the former USSR and the Soviet bloc has a loooooooooooooooooong way to go before they could be considered a developed country. Pride left aside, even my home country which is currently a member of the EU is not close. With an average annual wage of about $3,000.00 (no, I did not miss a zero) the closest would be "a developing country".
Sorry, Hosts, to go off topic but it's Sunday, I hope you'd cut me break
you know what snake? i don't have a business degree. but that doesn't make me stupid. if you have businesses "undercutting" each other, then eventually i would think everyone would just get back to negotiating prices.
and i don't agree that retail stores like best buy sell below MSRP. in fact, i found an item at a best buy store that was retailing at their store for OVER MSRP!
the only time i would think they get below MSRP is if the product is on sale, or if a newer, better product has come out by that same company, so they are trying to move the old stuff.
but what do i know, i don't have a business degree. i'll just go sit in the corner and keep my mouth shut while all the folks with the business degree talk "business"
Thought I'd share an interesting story, somewhat related to retaill/asking/selling prices...
We had a community garage sale this past weekend, started on Friday and we were still pricing some stuff as we put it out. Even the stuff we had priced, almost everyone would ask if we would take less. The stuff that wasn't priced, people would ask how much, we'd tell them and they'd ask if we'd take less. Not a big deal, trying to get rid of stuff more than make a killing, but there were some items we weren't going to just give away. A nice, pretty new crib for example that we had marked at $75, which we paid over $200 a few years back. A couple asked if we'd take $50 and I said no, they left. So Saturday, I decided to mark up most of the items a buck or so JUST to see what would happen, and I marked the crib at $85. As you can imagine, people would ask if we'd take a dollar less or so and I said sure There were some people that I'd actually take the lesser price from, like for the kids toys, etc, guilty conscience maybe? funny thing is the couple who had asked about the crib came back, saw the price and asked if we'd take $75...SOLD So maybe it's just a matter of them feeling like they got "their" price instead of mine, similar to some of the discussions here. I even put a for sale sign on our car, probably a little higher than "book", definately more than I would pay for it right now, but if I got it or even close to it, I'd be happy!
Awesome story that I think is completely on topic. The reality is, people like to negotiate. They may say they don't like to do it, but I don't think that's entirely true. They may not like to negotiate in particular circumstances or where they don't feel like they have any control.
Smaller ticket items are easy to negotiate on because you don't NEED them. Perhaps houses and cars raise the hairs on people's necks because they may need them. The most successfull people in auto sales (from my experience) have been the salespeople who can make the customer feel like they got a great deal.
I told a story a couple months ago about an Armada customer I had been working. It was pre-owned and I set the price about 9-10k over what we had in it. After much negotiation, I made a good profit and the customer felt like they got the deal of the century. It's all in perception.
If the business model wasn't working, then it would change. I think the folks posting on here about going to a one price system are the minority. It's not what people really want. They want to feel like they got a great deal. What's the best way to have that happen? Negotiate.
On a sidenote, the other factor with car sales is how liquid the market is for these vehicles. Resale values plummeting on SUV's because of gas prices. Resale values on 4cylinders getting stronger because of those same gas prices. Different incentives from month to month. Seasonal cars (like convertibles) gathering momentum as they move into the summer or winter. A one price system certainly wouldn't work because of how liquid the market is.
im sorry - but i don't feel that i need to have a business degree to make a comment. i am tired of people on here who feel the need to put down others by questioning their "education". i went to school for graphic design - so can i not talk about anything other than graphic design?
some comments just end up pushing the wrong button with me!
funny thing is the couple who had asked about the crib came back, saw the price and asked if we'd take $75...SOLD So maybe it's just a matter of them feeling like they got "their" price instead of mine,
I live by the fact that you have to leave the customer room to win.
One time sticks out in my mind. We had two used Taurus's years ago. This was in the day when the sales people put a price on them when they traded for them. Usually it was ACV + $3000 rounded up to $999, meaning if we gave $5200 for a car the price would be $5200 + $3000 rounded up to $8999.00.
Any how I was working a deal on one of the cars it was a white one we were asking like $9995.00 for it. I worked the deal and the guy's hot button was $2500 off the list price. Times were good and I refused his offer on a $700 or so profit, but would do $2K off on the car. He said no I want $2500 off.
We had the same car in black that we had $200 more in but the sales person had priced it at $10995. Told him I could do it on the black car.
So he passed on buying the white car he picked out for $7995 and bought the black car $8495 because of the higher discount :confuse:
Turned a $700 deal into around a $1000 deal and the customer was happy because he got his $2500 off.
Isn't there some study out there that says the majority of people don't do anything related to their degree? The caveat to that being if their degree is technical in nature.
This is a UPS story not a sales story so tune out if you want to.
Of the four young up and comers at my UPS hub only one had a business degree.
I was the youngest of the four with a Poli Sci BA. I was also the youngest in my job position in my particular hub at 24.
My first boss was the second youngest with a general Business degree and he was again the youngest in his position in that particular hub at 28. He should have been one premotion higher but he married a fellow UPS member which is a huge taboo and that blunted his rocket like rise through the ranks. He was lucky he wasn't fired.
My second boss was the third youngest and also the youngest in his position again for that hub at 32. He had a BA in History.
My boss's boss was 45 and the second youngest person in UPS history to reach his particular position. He had a BA in English but went back to school later and got his MBA.
So of the four STARS in my particular operation only one had any formal education in the business world.
Comments
Despite what you think, the car business is like (not identical to, but like) a lot of other retail sales businesses and a lot of the same parameters apply. You might be surprised at how many people have a pretty good handle on how that sort of business operates. Sure the transactions are more complicated than the average, but it ain't rocket science.
people here on edmunds seem to forget that not everyone is as educated in how to buy a car as you guys. the majority of people i dealt with (and our dealer was in an affluent CT town) had some pretty skewed ideas of what we had to work with on our cars...
i would think that those who see all kinds of customers on a daily basis can make a better judgement of how many people have this business "figured out" than an onlooker...
my two cents though...
-thene
Well, you know..., we're kinda special, in a strange and slightly perverted way.
I think it takes a certain level of education to pass the Edmunds Town Hall "Entrance Exam". Thankfully, I passed that exam on only my 3rd attempt!! (i.e., I remembered my third password.) :P
Seriously, one of the primary reasons many of us enjoy this forum is to read your stories about those other customers, along with their skewed ideas!
heheh that is an understatement.
You are incorrect on how dealers beat your bank's rate and what the F&I office's cut is. The reason that auto dealers can beat your bank rate is based on volume. They are essentially working as an agent of the lender. Once you deal is submitted the F&I gets an acceptance or declination form the finance company. The acceptance includes a "buy rate" this is the rate that the finace company is charging. The rebutable dealer then "bumps" the rate by adding 1-2 percentage points to the rate. An example would be your bank offers 7.25%. The F&I person submits your deal to financers and get a "buy rate" of 5.9%. He can then "bump" the rate and offer you 6.9%. This is a better deal and more convieniant than financing on your own, but the F& I office just pocketed 1% of your total finance charges. On big ticket vehicles this can represent thousands of dollars. The other items that F&I sells are just icing on the cake!
I just want to know if I am a rebutable F&I guy or not
Yes, we do have to disclose money factor or rate on a lease. I have never had anyone ask.
Hey no problem, I get called stuff all the time, just wondering if it was a new one
Are you in California? That buy rate disclosure crap is all part of the car Buyers Bill Of Rights isn't it?
My contracts just say that the rate is negotiable.
Let me guess you don't have a business degree. Yes there will be a reason to price below MSRP, just like appliance stores sell for below MSRP. That is because they can sell more and make more money.
Let us say every dealership goes to a one price and makes it MSRP. Well someone somewhere will undercut everyone else by selling just below MSRP then someone will undercut them and so on and so forth until the market price is met.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
I know, but thats the argument some are making.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
I know, but thats the argument some are making.
The Toyota stores here are one price and that one price is MSRP
2016 Audi A7 3.0T S Line, 2021 Subaru WRX
Which in turn makes that the "Market" on Toyotas in your area.
All sounds pretty simple to me.
The Toyota stores here are one price and that one price is MSRP
Well wouldn't I love to sell Hondas in your market.
And I don't even sell cars.
-Mathias
You meant you'd love to sell Toyotas right?
2016 Audi A7 3.0T S Line, 2021 Subaru WRX
I once ran into a situation where the dealer had a better rate from a certain bank than I had been quoted from the local branch of the same institution. I do not remember the specifics, but his rate was 1 point or so less than what I had been quoted. ...which leads me to believe I must have paid dearly on the front end -- Is there such a thing as buyers remorse on a transaction 4 trades ago??? HAHA
At the time of my last purchase, Ford Credit had additional rebates attached if you financed through them. The catch was that their rate was higher than the going rate. I mentioned in passing that I intended to refinance as soon I received an account number and paid the first payment or so. He pleaded with me to wait 90 days (IIRC) before doing this. Evidently, there must have been some chargeback to him or the dealership if the loan was repaid before a certain time. ( yes, I waited)
I can identify somewhat with the poster who stated that some people freak out in the F&I office. I could not care less if my neighbor bought his car $200 less than me but it really galls me to think I may be paying a higher interest rate than what my good credit enabled me to obtain through the buy rate. I guess I would rather take it from the front end than from the
back end
I posted about 20 not too old original VHS movies on craigslist for FREE, as I have them on DVDs or don't watch them anymore.
Some dude calls me and wants me to deliver it to him. :surprise: I mean did he want me to throw in my VCR and my DVD collection too? Then he asks me to meet him half way (he lives not more than a 15 minute drive from where I'm at).
I was going to tell him "if it's halfway, how hard is it for you to drive another 5 - 7 minutes".
Then the prick hung up on me!!!
These are the kinds of people who will grind you for 4 hours as Isell was saying, and then promise to come back, only to go somewhere else and buy. :mad:
2016 Audi A7 3.0T S Line, 2021 Subaru WRX
Here is the scenario:
Mr Customer comes into my office and says his bank will get him 7.25% for 60 months with a $125 loan fee.
I tell Mr. Customer that with his good credit I can get him 6.25% for 60 months with no loan fee.
Mr. Customer says "great" then he pulls out his cell phone and calls Agnes at the Under ware Elastic Employees Federal Credit Union and tells Agnes that he can get 6.25% with no fee here at Good Guy Ford. Agnes tells him no problem I will get you 6% and waive the fee because your are such a great customer.
Mr Customer says "Thank You Agnes your the best".
Ok If Agnes is the best then why did she try to stick him with 7.25% and a $150 fee to start with? If she was the best, and he is a loyal long time customer why didn't she offer the 6.25% and no fee when he called yesterday.
When I cut a rate for someone to get a loan they tell there friends that the F&I guy tried to stick it to them with some ridiculous rate but I told him no way. Old Agnes at the UEEFCU does it and he tells all his friends at the elastic plant to go see old Agnes she will hook you up.
Or when the call the CU and ask for there best rate and they tell them, see what the dealer will do, we will beat it. HELLO!!!!!! The CU is not trying to help, they are doing the same thing we do, they don't want to leave money on the table.
So now when I get one of these customers I quote a point below prime and make the CU squirm to meet there promise. I always make sure first though that I have an avenue where I can meet the promise.
Thanks for all your posts. I know dealing with the public requires way more patience than I can muster...glad I don't have to in my job.
I know that when anyone says something like that they are not giving me their best deal. I usually reply "just give me your best now and if its better than the other guys you will get my business".
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
since we deal with the indirect lending department of the bank, and national or regional rather than local, we always get better rates (volume) than you can at a local branch. I have even had customers who did millions of dollars with the bank locally and I could beat the rate with the same bank.
Evidently, there must have been some charge back to him or the dealership if the loan was repaid before a certain time
Sure is - most banks will charge back any reserve if the loan is satisfied in 90-120 days.
Here are my Top 5 possible reasons why this might have happened:
5) He drives an Excursion, and he didn't want to pay $10 in gas to get another Steven Seagal movie?
4) He lost interest when he discovered none of your movies began with the title "Debbie Does ..."?
3) He was paying a "Truth or Dare" game with his drunken buddies? ("Hey, dude, make him deliver the movies to you!")
2) He decided it still wasn't the best time, yet, to invest in a VHS player. He is still waiting for prices to drop.
1) He is a prick. And he's coming to your Nissan dealership later today to negotiate that $5000 profit margin off a new Sentra!
Although you technically have to have some sort of connection to belong to a credit union, some have started operating almost like banks.. and the connection can be pretty vague. Just living in a certain city is good enough for some.
My credit union is company based, and the rates are set in stone, according to the posted variables. They are very good rates. No game playing allowed. If you could beat their rate, there would be no point in me calling them back.
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Scary isn't it?
Every time I'm in a voting booth I think about people like this who are probably in the next booth. No wonder my vote never seems to count. :mad:
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
Market changes, income level differs from one area to another, brand preferences are different from one place to another - the price has to be adjusted! One price that you paid on a Dodge Durango 3 years ago - no one will pay tyday with the gas prices, to the price has to go down.
And by the way - why don't we demand MSRP on gas prices? :mad:
On the other end, take the LR Defender: one local dealership had a policy of no-markup, so they had to sell it for MSRP, but once they sold A defender - they begged the customer to sell it back - so they can double the price, because then it's a used car, and you can price it any way you want.
On the other hand if the market dictates that at $5 each 200,000 can be sold then you create long lines and a black market where it is sold for three times the price out the back door.
It has nothing to do with a dealership selling a car at a set price.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
I guess I would rather take it from the front end than from the back end
I don’t want to take it from either end and I didn’t.
In the late 70’s I agreed to buy a car and then the F&I woman (I don’t think that name was used then but there usually was a person that performed that function) tried to play her game with me. When I sat down with her I told her I already had a rate from a bank in the shopping center across the street. She asked me which one (there were 3 of them) and I said what difference does it make, I already had a rate. She proceeds to tell me she can beat any banks rate. Since I had heard dealers could get pretty good rates because of the volume they give banks, I said what is your rate and she said she wanted to know what the rate was that the bank gave me. Now I knew she was playing a game so I said just write it up as if I’m going to the bank across the street and I’ll be back the next day to take delivery. She gets upset and gives me her rate which was 2.5% more than mine to which I said, “and you call that a good rate”? She then says what rate were you given so I told her. She says you must have a very good credit rating to get that and I said everybody I called can beat your rate and the rate I gave you was better than the others by ½ % so that’s why I’m going to the bank for the loan.
She says let me see what I can do (this is before the day of the computer) so she leaves and goes to some magical place and comes back and says, “I can give you a rate that is 1/4 % more than what you were given” and without giving me a chance to say anything she goes on to say, “do you really want to waste another day (I had taken a few days vacation to do some other things and decided to spend one day to buy a car) applying for a loan and then coming back here when we can take care of this right now”. So I said, “you’re right, let’s do it right now but write it up at the rate I got from the bank or I’m not buying”. She says, “wait a minute you already agreed to buy the car and now you’re going to back out for a measly ¼ % and I said that’s exactly what I’m going to do and if it’s so measly, why do you have a problem with this”?
She calls the salesman to let him know what’s going on and as soon as he hears the story he walks out and comes back with the sales manager and now he hears the story and immediately says, “write it up at his rate and lets get this car off the lot”.
I just couldn’t put up with her arrogance and the dealer, apparently, couldn’t either because when I went back about a month later for some minor adjustments, I bumped into the salesman and he said she wasn’t there anymore. He went on to say it wasn’t too long after he almost lost my sale, that one night when the sales manager left early, another salesman lost his sale because she pulled the same thing on another customer and since the salesman couldn’t get help from the sales manager the guy walked out. The salesman called him the first thing in the morning to tell him they would match his rate but the guy said forget it , I don’t like how you people do business !!! As a salesperson it must be tough to lose a sale because someone else in the store wants to throw their weight around.
I didn’t know my brother even dealt with that dealer. :surprise:
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
The movies were mostly from this century and did not start with "Debbie" :P
2016 Audi A7 3.0T S Line, 2021 Subaru WRX
Yeah you wouldn't give those away....
I am required by my wife who is also part Ukrainian to disagree with your statement that Ukraine is a second world country. She says it is a first world country...by a substantial margin.
2019 Kia Soul+, 2015 Mustang GT, 2013 Ford F-150, 2000 Chrysler Sebring convertible
I would call Ukraine a developed country.
With an average annual wage of about $3,000.00 (no, I did not miss a zero) the closest would be "a developing country".
Sorry, Hosts, to go off topic
but it's Sunday, I hope you'd cut me break
LoL! You made it by 18 minutes - if you're on Pacific time.
tidester, host
SUVs and Smart Shopper
and i don't agree that retail stores like best buy sell below MSRP. in fact, i found an item at a best buy store that was retailing at their store for OVER MSRP!
the only time i would think they get below MSRP is if the product is on sale, or if a newer, better product has come out by that same company, so they are trying to move the old stuff.
but what do i know, i don't have a business degree. i'll just go sit in the corner and keep my mouth shut while all the folks with the business degree talk "business"
-thene :mad:
We had a community garage sale this past weekend, started on Friday and we were still pricing some stuff as we put it out. Even the stuff we had priced, almost everyone would ask if we would take less. The stuff that wasn't priced, people would ask how much, we'd tell them and they'd ask if we'd take less. Not a big deal, trying to get rid of stuff more than make a killing, but there were some items we weren't going to just give away. A nice, pretty new crib for example that we had marked at $75, which we paid over $200 a few years back. A couple asked if we'd take $50 and I said no, they left. So Saturday, I decided to mark up most of the items a buck or so JUST to see what would happen, and I marked the crib at $85. As you can imagine, people would ask if we'd take a dollar less or so and I said sure
Smaller ticket items are easy to negotiate on because you don't NEED them. Perhaps houses and cars raise the hairs on people's necks because they may need them. The most successfull people in auto sales (from my experience) have been the salespeople who can make the customer feel like they got a great deal.
I told a story a couple months ago about an Armada customer I had been working. It was pre-owned and I set the price about 9-10k over what we had in it. After much negotiation, I made a good profit and the customer felt like they got the deal of the century. It's all in perception.
If the business model wasn't working, then it would change. I think the folks posting on here about going to a one price system are the minority. It's not what people really want. They want to feel like they got a great deal. What's the best way to have that happen? Negotiate.
On a sidenote, the other factor with car sales is how liquid the market is for these vehicles. Resale values plummeting on SUV's because of gas prices. Resale values on 4cylinders getting stronger because of those same gas prices. Different incentives from month to month. Seasonal cars (like convertibles) gathering momentum as they move into the summer or winter. A one price system certainly wouldn't work because of how liquid the market is.
Ok, enough babbling. I hope you get the point.
-Moo
im sorry - but i don't feel that i need to have a business degree to make a comment. i am tired of people on here who feel the need to put down others by questioning their "education". i went to school for graphic design - so can i not talk about anything other than graphic design?
some comments just end up pushing the wrong button with me!
-thene
I live by the fact that you have to leave the customer room to win.
One time sticks out in my mind. We had two used Taurus's years ago. This was in the day when the sales people put a price on them when they traded for them. Usually it was ACV + $3000 rounded up to $999, meaning if we gave $5200 for a car the price would be $5200 + $3000 rounded up to $8999.00.
Any how I was working a deal on one of the cars it was a white one we were asking like $9995.00 for it. I worked the deal and the guy's hot button was $2500 off the list price. Times were good and I refused his offer on a $700 or so profit, but would do $2K off on the car. He said no I want $2500 off.
We had the same car in black that we had $200 more in but the sales person had priced it at $10995. Told him I could do it on the black car.
So he passed on buying the white car he picked out for $7995 and bought the black car $8495 because of the higher discount :confuse:
Turned a $700 deal into around a $1000 deal and the customer was happy because he got his $2500 off.
thanks joel!
This is a UPS story not a sales story so tune out if you want to.
Of the four young up and comers at my UPS hub only one had a business degree.
I was the youngest of the four with a Poli Sci BA. I was also the youngest in my job position in my particular hub at 24.
My first boss was the second youngest with a general Business degree and he was again the youngest in his position in that particular hub at 28. He should have been one premotion higher but he married a fellow UPS member which is a huge taboo and that blunted his rocket like rise through the ranks. He was lucky he wasn't fired.
My second boss was the third youngest and also the youngest in his position again for that hub at 32. He had a BA in History.
My boss's boss was 45 and the second youngest person in UPS history to reach his particular position. He had a BA in English but went back to school later and got his MBA.
So of the four STARS in my particular operation only one had any formal education in the business world.