Stories from the Sales Frontlines

lilengineerboy

would definitely buy one since I keep my cars till the wheels fall off

I hear this all the time and am curious, have any of you ever been hurt when you were driving down the road and all the wheels fell off your car?

My friend actually did just that. He wiped out a '77 Accord when the suspension finally rusted through (in the mid-90s).

thenebean

now, i haven't been in the business in about 2 years, but i found most shoppers were maybe "partially" educated, or not educated at all. i wouldn't call you a typical buyer, but i would prefer a buyer like you to one that has no idea. if we can do the deal, great, put it together, send you on your way, move on to the next customer. i hated dealing with folks that wanted to take 5 hours of my time to drive 4 vehicles, price them all out, appraise 2 vehicles (not sure which one they wanted to trade yet) and then tell me that their 2nd cousin twice removed in nebraska got this same car 3 years ago for $3000 less than my offer.

just wanted to share

-thene

jmonroe

to quote snake - its not rocket surgery (liked that one!)

You shouldn’t have said that. His head is probably going to swell and he won’t want to talk to us commoners any more. On second thought, you probably said the right thing. :shades:

jmonroe

biancar

"We will probably send it to our Hyundai store if it doesn't sell in another 2 weeks."

Just curious, why didn't you send it to your Hyundai store right off the bat? People who shop there would seem to be your natural customers for a used one. Seems like that would be the place to sell it, not let it hang around for two or three months at your other store.

Our local car columnist, Warren Brown, has been singing the praises of Hyundai recently and has made the point that Hyundai is VERY competitive, wants to prove themselves against the Japanese (racial rivalry), and their quality is way better than it used to be - just like Toyota and Honda and Nissan all have way better quality now then when they started out in the U.S. market.

epiney

Opps, I missed the word 'not'. I meant to say say I'm not a typical buyer I do understand the 5 hours and indecisive nature of some customers that can be burdensome.

I really do try hard to give the business to the people that invested the time. I'm really sorry I could not do it this time. I think it's bit short sighted of the management. It's not like I was asking them to beat the market, just be at the market. I was bascially at the point of, the sale is yours, just be reasonable. I'm in the market again in a couple months for a luxury CUV. They just signalled to me that they are not competitive and to not even bother trying.

BTW: This was a 2008, spec'd order. Both dealers were on the same playing field a steh cars have not been built and it would be out of their early allocations. Delivery in a couple months.

british_rover

How much was the difference between dealer ones offer and dealer twos offer?

thenebean

you did the right thing. there is loyalty, but there is also your wallet. there comes a point where it just doesnt make sense to pay so much more, regardless of loyalty.

you sound like a stand up guy - we sure could use more like you out there in the world...

-thene

mackabee

"Coming from a Toyota guy this has gotta hurt. "
Not really. I live in reality USA When I said that Hyundai's quality was just as good as Toyota or Honda to one of my sales manager and he looked at me like I was stupid or lost my mind. But then what do they know? They sit behind their desk all day long and have no clue as to what we are selling. I learned a long time ago never to put down the competing brands but rather highlight the strenghts of your product.

Lucky for me the wheels have fallen off while the vehicle was parked and I was not in it.
Mackabee

epiney

How much was the difference between dealer ones offer and dealer twos offer?

A little over $4,000 :sick:

british_rover

Ouch someone screwed up somewhere. One of those stores is way out of touch with the market and it looks like it is Dealer one.

mackabee

Not necessarily. The seasoned vet tries to hard to push the overaged unit on the customer and they sense it. I've been in that spot before and sometimes it works the opposite way too. A few months back there was a $650.00 spiff on an overaged 2003 RAV4 2WD base model. No roof, or alloys just the power windows, locks and mirrors, cruise, cd, etc. A really nice and friendly middle aged couple comes in with Saturday's paper and it so happenes that vehicle was one of the advertised specials. "We'd like to look at this RAV4." the gentleman tells me as I introduce myself. He tells me his name and I introduce myself to his wife. I walk over to where the vehicle sits, open it up and start going over the features. We take it for a test drive and when we get back he says "Ok, let's talk turkey." (yes Virginia, customers do say the funniest things!) We go inside I write it up, check their credit, bring the aftermarket girl over, they buy paint and fabric protection and are as happy as a clam in the Chesapeake Bay. They get out of finance and take delivery of their vehicle. "Mackabee, that's was a very enjoyable experience. You are very professional. Thank you." I thank them for their business and the wife tells me her daughter is in the market for a vehicle and she will tell her to come and see me. A week later, I sell their daughter a Corolla S, and she is also delighted. Some days you just can't lose!
Mackabee

jmonroe

XG has 194 horsepower. Sonata has 234 or so. Big difference. And, the XG weighs more too.

Slower XG acceleration should not surprise anyone.
Sonata gets better fuel economy too.

You sure do know your Hyundai's.

How many do you have?

jmonroe

joe131

I've had 6 under my roof. A baker's dozen in my extended family. More to come no doubt.

epiney

Ouch someone screwed up somewhere. One of those stores is way out of touch with the market and it looks like it is Dealer one

British Rover,

Here is more background. I politely explained to both of them that I wanted a 2008 since I drive low miles, any discount for a 07 would be more than offset by trade in value in the future. I also made it known that it wasn’t important to be the first on the block with an 08 and that delivery was flexible. If the car arrived in September and they wanted me to pick it before month end, fine. If they wanted me to wait a couple weeks until October, that was fine too. I even told them that if they wanted me to wait for the next allocation, I was fine. The only reason for me ordering now, was to get it over with. I could order it in October as well. I don’t need a new car. I just wanted a new toy to play with. There was no trade and payment would be in whatever form they wanted. Like I said before, an easy, flexible sale.

The first dealer’s perspective was no way we are discounting the first 08s. They started at MRSP and ended up with a discount off MRSP. The second dealer understood what I was saying and my circumstances and treated it as such. We made the deal based on a premium over invoice. I don’t even know what the final price is yet, but have a pretty good idea. I was not asking for silly things like below invoice on an order on a luxury car.

You know, I thought for a millisecond about calling a couple of other dealers, but quickly killed that notion. Dealer two dealt with me in a straightforward manner and I would keep my word, even if it meant I passed on possibly saving a couple of hundred.

jipster

I think joe makes a good point. Your dealership buys a 2002 Honda Civic (or whatever) for say 10k. You put it on sale for $14,500. Typically, how far and how long would you drop the price before it goes to auction? Do you drop the store price "close" to what you think it will go for at auction... say about $500 over your cost to cover expenses and maybe lower than expected offers?

I see dealerships list "going to auction" cars for sale quite a bit. They don't seem priced "auction low" at all.

mackabee

Most used vehicles are priced at around $3000.00 over what the dealer owns them for. Your example is a bit out of line as far as the pricing goes. Just look at KBB and compare trade in, private party, and retail on a particular vehicle and you will see. But for simplicity sake let's assume Isells dealership puts it up for sale at $14,500.00 most Honda buyers are typically educated and know the market. There is always an exception to the rule. But let's say the first customer that looks at the car, drives it and likes it tells Isell there is now way he/she is paying $14,500.00 for the car and offers $12,990.00 plus taxes and fees. The used car manager thinks he's got a good chance of getting $14.5k for the car and lets the customer walk. A few weeks go by and no takers on the Civic so UCM decides that maybe their pricing is a bit out of line and drops the price to $13,990.00 and puts and ad in the paper and also on their website. The car still doesn't sell so after a month of having it in their inventory they drop the price to $12,990.00 \ Isell calls the first buyer and tells him the price has been reduced and to come back. Buyer comes in and tells Isell he will buy the car today for $12,490.00 plus taxes and fees. Isell takes the offer to UCM and they have a deal. The store has a $2490.00 gross profit and after they deduct the "pack" which can vary from store to store in this case we'll say $350.00 Isell now has $2140.00 commisionable gross. He's stores pay plan pays 30% on any gross over $1500.00 so he makes $642.00. This fictional vehicle would probably not go to auction. Why? Honda Civics are very popular with the twenty-somethings they like to soup them up and personalize them so they wouldn't have any problems selling it if they priced it right. On the other hand if the vehicle was already customized and the previous owner had put the "coffe can" exhaust, the 18 inch alloy wheels with the low profile tires that ride like a "horse and buggy", and tinted the windows all around, then you might have a hard time getting rid of it. Most dealerships if not all pay floor plan interest to their financial institutions. Typically 90 days is the most a dealership will hold on to the inventory before sending it to auction. New cars also have floor planning but this is a different story.
:shades:
Mackabee

greenca

Check out http://www.greenca.tv for news, videos and photos on the environment and being green!

volvomax

Not to mention that his sales manager ans ASM's would be screaming at him for burning so many ups.

isellhondas

Joe,

You are blowing this WAY out of proportion. No dealer is ever going to pay TWICE what a used car is worth. Not even close, so please get off of that.

It's simply business. We make a decision to pay top dollar because we think we will come out OK.

But, the shop discovered the trade needed brakes and some other work that we were unaware of. So, we are "in it" 1000.00 more than we should be. The car finally sells and we lose 1500.00. this happens to the best of places but it can't happen too often.

mackabee

I missed it. What kind of car was this on?
Mackabee

isellhondas

I'm one of those who disagree with you, at least for the time being.

I tend to judge cars after 150,000 miles or more. I agree the new Hyundai offerings are MUCH nicer than before but, in my book, the jury is still out.

I just think there are better choices especially since most of su don't keep our cars to the point depreciation doesn't matter.

mackabee

Bianca, as you probably know the Toyota location is the biggest of all the other stores in the company. We keep all brands in inventory so customers have more to choose from. The vehicle was traded here so it's policy to keep the vehicle where it was traded be it a Honda, Hyundai, Vokswagen, Bmw, Audi, Jaguar etc. Only exception is probably Porsche. I've yet to see a Porsche that was trader here, stay here. Next day it's sent to the Porsche store. If it looks like the car won't sell at this location then it's transferred to that brands location. Last resort is the auction. Did you ever get your convertible?

Mackabee

jipster

Thanks for the response mackabee. But, let's take the fact that it is a Honda Civic out of the equation, and just say this car is not in high demand... say low to medium.

The price started at $14,500 and is now down to $12,900, still no buyer. You paid $10,000 for the car, it didn't need a thing, you put a oil change and wash & wax on it. How much further would you drop the price before sending this car to auction?

joel0622

9 times out of 10 it is better to retail yourself out of a car or wholesale it then it is to take it to auction. The auction is not free, you have to pay to run the car. If you retail yourself out of it there is always a chance you can pick your losses up in finance and depending how a store is set up there are write down procedures going on with aged inventory. There is a butt for every seat on the lot, its just a matter of putting the right butt in the right seat.

The conversation in our meetings is never "How much $$ did you make at the auction today"?

jlawrence01

How much further would you drop the price before sending this car to auction?

It is almost always better to retail it to avoid auction fees AND you NEVER know what you are going to get when sending the car to the auction.

tidester

I think you're looking for this discussion: What is the GREENEST car out there?

tidester, host
SUVs and Smart Shopper

joe131

I'm not stuck on 100% over what the car was worth.
Makes no difference to me if a dealer pays twice as much or only 25% or 50% more than the car is worth. Or even 10 times more than its worth. The dealer can pay less than its worth. I don't care.
My point, that you keep missing I guess, is that if you have anything worth selling, you WILL sell it IF you lower the price enough. Otherwise, you won't sell it.
Do you think your dealership made a mistake on that Hyundai by keeping its price too high? You know, the one that would not sell on the lot or at auction?

lrguy44

The point is pointless. You could also give the darn thing away and it would be gone. The problem you have is we think of an asset in terms of ROI, and losing money is not a practice or a goal. Selling at any price is not an option.

isellhondas

Thank you!

I guess I have a tough time trying to explain that to Joe.

isellhondas

You are the one missing the point.

Yes, if you lower the price of an item enough, someone will eventually buy it. This is, however a very weak way to do business. You wouldn't want a person with that mentality running a business you own.

Sometimes a car (or a house for that matter)will sit in inventory for 60 days only to have three buyers the same day.

joe131

Hahaha!
Of course its better to sell for a profit. I get that.
But your dealership had a car it just refused to sell. Period. Is that a strong way to run a business? If yes, why? (I touched on that before with a question you would not answer.)
Why is that so smart? And what finally happened to that car? Did you take it to the desert and torch it?
And how come you avoid answering questions so often?

Someone on here thinks cars are just like real estate. Not true. A car is even more of a commodity than a house is. At least a house has location, location, location. A car does not. Cars (and houses) will usually only sell for what they are worth, which is not necessarily the amount a dealer is wishing for. So lower the dang price if you have one that is not selling for months on end. Maybe that overly emotional careless shopper is not going to come in after all. In a business sense, what's wrong with that?

joel0622

We don't floor our trades so we can sit on them suckers for a year if we wanted to. Any good used car man can get you out of anything eventually. Sometimes you just have to pair a car you are in right with one that has water and bust between the two. Or eventually a buyer will come along. The only person it effects really is the poor guy who has a trade in that is rhe same thing that you have been sitting on for 60+ days.

mac24

And how come you avoid answering questions so often?

Just a general point (as it sounds like this is becoming personal) but this isn't a chat-room, it's a message board.

I'm often here a lot, but others are busy making a living selling cars, which I'd guess takes precedence over posting for them.

madmanmoo

I'll try to get this back on track. I'm sitting in my office and see a gentleman come through the door. He wanted to look at Versas. We looked at 'em. He picked one out and then he bought it. Since he now had 2 vehicles on our lot, I drove him back to his house and then he drove me back to the dealership.

Along the ride, he warned me about the dangers of smoking. Not ever having heard that smoking was bad for you, my ears quickly perked up. We chatted for a bit and then we pulled up to the dealership. I asked him to fill out the survey and he said he would.

I got out of the car and went inside. And sat back down at my desk. And twiddled my thumbs.

Yup, pretty boring sale. I wish there was something else to tell you guys. I'm just trying to get us back on track here.

-Moo

mac24

We don't floor our trades so we can sit on them suckers for a year if we wanted to.

That's an aspect of the used car business I've always found interesting. Some dealerships have a policy of auctioning all stock over 90/120/ whatever days old. If it's badly bought stock it makes sense, but if it was well bought then it's just as likely to sell at 91 or 123 days. Sounds like the regular rotation is a beancounter solution. Your way makes more sense to me.

mac24

Yup, pretty boring sale.

Well, a boring sale is better than no sale.

isellhondas

I don't avoid your questions but when I see I'm talking to a wall, I simply give up.

The car eventually sold. They all do.

madmanmoo

Got that right. It was raining like crazy here too. I'm pleased.

-Moo

snakeweasel

I actually had that happen to me. Bought a beat up old Camaro when I was in the service for a few hundred bucks. I knew it wasn't in the best condition but when there really is no place to drive so what more did I need. Well one time I was going down hill and I felt something funny and wouldn't you know I was passed by my right rear tire.

snakeweasel

Selling at any price is not an option.

It may not be the best option but it is an option. Also you must consider there comes a time when you must cut your loses and get rid of non moving inventory. Its better to but a car for $2K and sell it for $1K 6 months later than to buy it for $2K and keep it forever.

dino001

Joe - Isell is trying to say (I think) that his business' mistake was to ACQUIRE that Hyundai at the first place - they might price that particular one "to sell", but would not be able to do it on consistent basis and turn profit.

It appears that in spite of big strides in new car market, used Hyundai's are still suffering from stigma they got in 90s. Non-transferability of that great warranty is not helping, either. So acquiring one for a lot is a losing proposition, as it appears it is togh to make profit on them (sell it for more than it was paid).

It is evident that there is a substantial lag between new car market and used car. I bet you in 3-6 years Hyundais will get much easier to sell and their prices (and margins) will get better and seasoned salespeople won't run from customers pulling in 3-year-old Sonata or Elantra. I see their resale values matching those of Chevys and Fords. They may not be able to get to Hondas or Toyotas anytyime soon cause too many are sold to Enterprise, Alamo et al - this will drag their values for a while. But it is realistic to expect people buying used Sonatas similar way as they do with Malibus, Impalas or Tauri - or perhaps slightly better.

biancar

"Did you ever get your convertible?"

Yes, got a Nissan 350Z Touring Edition, Redline, in April '06.

Absolutely love it! It was 90% luck, since I found it when I took the Maxima in for an oil-change, and the Z was out front with a fabulous discount since it was a left-over '05 model. Test-drove the Volvo, the Toyota, couple others, and the Z just hit me in that sweet spot - small enough to be lots of fun and large enough to feel safe in on the Beltway. I'm really enjoying driving it; am in the OBX right now and it's the perfect beach car.

I think the salesman was surprised that a woman wanted to buy it, or maybe surprised that a *middle aged* woman wanted to buy it. Taught him not to pre-judge his customers!!

mackabee

I had this young Navy couple earlier this evening. And I mean young! He's 21 and she is 20. Both on active duty stationed at two of the local bases. They are married and expecting their first child (a daughter) in November. She currently drives a Saturn and he drives a Nissan Sentra SER Spec V which they were looking to trade for a small SUV which in his words would be "Family friendly". We started looking at used and I showed them a Mazda Tribute which he liked, but the price was a little high for them. They wanted something in the 10-12k range and had to have good fuel economy. I looked thru my used car list and the only thing close in price was a 2002 Nissan Xterra that we are asking $11,990.00 for. I let them take it for a test drive and looked up the gas mileage on it while they were gone. When they came back I told them it was 18 city 22 highway. She was hoping for higher. I looked at both of them and since safety, storage space and good fuel economy was their hot button I suggested the new 2008 Scion xB. 5spd speed, very well equipped, good fuel economy, standard side and curtain airbags, abs,ebd, ba, vsc/trac and all for the low price of $16,230.00 She asked if they could drive it since it only had 1 mile on the odo. I said "Sure! Do you mind if I go with you?, I haven't sat in the back seat as a passenger on these yet." We leave and go on my normal test route. The vehicle is smooth, quiet, and quite peppy. They are both loving it. We get back and they want to look at some numbers. I ask for the keys to their trade and also the registration and exact mileage. He grabs the registration and tells me the mileage: "75707" he says. We walk into the showroom and I sit them down and print out and appraisal form with their vehicle information. I ask if they know the payoff and they look at me with a question mark on their face. "Payoff is the amount you pay the bank or credit union if you were paying the car off today. It's not the same as the loan balance." He tells me he has the contract with him and he hands it over. As soon as I unfold the disclosure statement I see the selling dealer's name and a red flag pops up. It's a buy-here pay-here outfit which caters to young military members. The contract is dated Jan 6th 2007. The selling price of the vehicle is $15,499.00 and the interest rate is 17%. I excuse myself and take the appraisal form and keys to the used car manager even though I already have a feeling these kids are "tanked" in their trade. The used car manager comes back with the appraisal and he puts $6300.00 on it. He tells me he had to deduct for high miles. "I think its a moot point anyway. They paid $15,500.00 in January." I tell him. "Where they buy it at?" he asks so I tell him. "They clubbed him like a baby seal." he replies as he gives me the keys back. I go out to the desk and with my best face forward I begin to tell them the bad news. "First, don't shoot me. I'm only the messenger." I begin. "I hate to tell you this but whoever sold you this car was probably high 5ing it all the way home that day," "what he did is almost criminal. There is no other word to describe it." I show them the appraisal and then I go to Kbb.com and do trade and retail value on their vehicle. We are a couple of hundred off on the trade and I tell them that is normal as we deduct for reconditioning as it states on Kelly's. I also show them the retail value for their car and it shows $11,250.00 Although six months have passed it shouldn't be much different today then what it was six months ago. He is visibly upset and says: "I'm going to hurt someone." I tell him "Hey, just see it as a learning experience. I know it's hard to do but sometime or another it has happened to all of us. It happened to me when I was 23."
"What do you think I should do?" he asks. "If you're a member of a credit union, refinance the car through them. You'll get a lower rate which will save you some money, and build up your credit. In a couple of years you'll be in a better position to try this again. Another thing you can do is go to your legal office and talk to your legal officer. They probably can't do anything now but if the commanding officer gets word of this he may put that business off-limits until they treat the military a little better." They thank me for my time, I give them a business card and tell them to call me anytime if they have any questions.
Mackabee
,

frankcjames

That's encouraging to hear. I've noticed that the internet guys are pretty reasonable and have been upfront after I've told them what the dealmakers and dealbreakers are. If they can't meet the price, they've told me to snag the deal (leading me to belive that I've hit the price low in the market) and wish me well. Telling them I don't want to waste their time and being respectful of their livelihood seems to break the ice and establish a good rapport.

stickguy

You didn't actually tell a story in 1 pass, did you? I hope not, because I wasn't feeling too good at the end!

isellhondas

You summed it up pretty well. We try to be fair with appraisals but some cars are so "back of book" that it's amazing. If your prediction is correct and Hyundai gets to the point where their resale values match those of Ford and Chevy, they will still be pretty dismal.

I don't see things changing very fast myself but I guess I could be wrong?

metro123

Sounds like the guy in the upside down forum who is $9000 upside down on a Trailblazer.

Somehow, I didn't feel good when I read that story but at least you didn't put them in a worse situation. Ahhh...a salesman with a heart.

joel0622

If there is one thing that irritates the crap out of me is to see young military folks get taken advantage of. I guess it stems from my 8 1/2 years in the Army. I bend over backwards for my military brethren when they come in, and we get a good bit with Ft Campbell just up the road. One advantage they have is they can buy tax free if they are stationed at Campbell.

Mack, if you have the kids contact numbers tell them if they are not already to join USAA, it has great rates on everything. As bad as they are hooked I don't know if they can refinance but it would be worth a shot. If nothing else they could probably lower there insurance rates which would help.

The great thing about military people is they appreciate those that step up for them and they tell every one. At least that is my experience

chetj

because some salesmen and business managers are lying sleazy ------, and of course some potential customers would be more than willing to issue a bad check...all i really expect out of a salesman or dealership is to be honest and maybe we can both win...you can make a living and i can buy a halfway decent car at a price we can both live with

chetj

i have seen that more than once...pay thru the nose just to get a loan...yea, yea, yea, i know it is a 2 way steet