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Stories from the Sales Frontlines
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I hate dealing with these nebulous moving target numbers, and all the "maybes" like ou heard.
If you do just make that firm offer, suddenly you go from a maybe to a done deal walking out the door, which translates to money not going into there pocket.
You may have also led them to be evasive since you indicated that you "might" but within a week. If nothing else, that took away any urgency.
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
As you say, either side can say no and walk away. But, as long as the potential customer is in the dealership, they have a captive audience too. That's one (not only) reason that I've always believed that the longer you try to stay and negotiate, the more apt you are to complicate the deal, and ultimately paying more, in one way or the other.
Hijacking keys, however, is a tactic that I thought was long gone and IMHO, not even ethical.
As the old adage goes, a car (or anything, for that matter) is only worth what the buyer is willing to lay down their hard earned cash for.
And you are right - large superstores seem to be worse in salesperson manners (generally) than smaller "family-style" dealers.
I also believe there is a tipping point in length of stay, after which one is more likely to lose than win over the dealer. Keeping it simple enough so we can understand it is probably more important than anything else.
2018 430i Gran Coupe
dennis
Good point. I don't think the dealer was being deceptive, but I do think they were inconsiderate for taking so long to pencil a deal that they admitted wasn't their best price.
As it turned out, the local BMW dealer had just taken a clean 528i in on trade a couple of days before our Audi appointment. On the morning of the appointment I saw the ad for the Bimmer in the paper. My wife and I still wanted to keep our appointment and see what the Audi dealer would do. After the Audi "offer", we decided not to waste any more time and instead drove over to the BMW dealer, who threw us the keys to the 5er and told us to take it for a spin. When we returned, they had penciled a deal that gave us $1500 more for our trade and a fairly decent price for the 5er. I offered a little less for the 5er, they countered and we shook. The experience was so much more pleasant and professional that we didn't give a thought to re-entering the negotiations with the Audi jokers. And, FWIW, we paid more OTD for the 528i. For me, value trumps price.
I think many of the stories of poor expereinces can be attributed to unclear expectations. Too many people aren't sure what they want, so the really aren't negotiating, instead they are just trying to get a "sorta" price. I assume salespeople can tell when this is going on, but who knows how they react?
That's why a frim offer, take the car now situation changes the dynamics, and should be like waving raw meat in front of a lion!
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
No doubt. And then there are some buyers who just want a number so that they can shop it to other dealers. Still, I guess what really annoyed us about the Audi dealership was the fact that we had made an appointment with the salesperson and we told him we were going to buy a car within the week. And to be honest, I think that excuse about the used car manager being gone was a lot of bull.
But, in the 'big city', what about not giving them the keys, go along for the appraisal? Them them you don't like people messing with 'your stuff' if you are not around. Tell the salesman to 'write up your best offer' for the new car while you are gone. If a salesman needs to 'ride along' when you test drive their new car, you should do a ride along when they test your used car.
I don't see taking 2 keys to a car lot. With a 'chipped' key or a key containing a remote control starting at $100 for a replacement, I'm not going to leave one at a dealer.
It's not about that. They have not interest in really taking your keys. However, showing them second key when the first is lost you can say "well, please call me when you find them. If you don't, I think I will have to talk to your GM about compensation for that mishap - perhaps duplicate reimbursement?" Likely the keys would be found within next 2-5 minutes, while you're walking to you car.
2018 430i Gran Coupe
btw, we never pulled that stunt at our place...sketchy!
What was your trade in?
I am not looking to make excuses for them but I would like to know a little more about your situation.
As you point out, some of it is ritual to find out what each side is thinking....or what the real bottom line is.
I've heard the "pitches" of "this price is good today only"....and..."these vehicles are blowing out of here at MSRP", when I see 20 of them on the lot (as you say, "good luck with that"). Those are usually the "green peas" that make those pitches. That's why I try to find a more experienced sales person when I'm buying.
The longer the negotiation, the more likely your going to give up more than you gain. It's not that complex. I've seem some people simply "outwit" themselves, all the while thinking they outsmarted the dealer....by staying longer at the negotiation desk.
It's either a good deal, or it's not. Even though I may not be at the final number, I can tell in pretty short order, just by observing, if a good deal can be reached or not with any dealerhsip. If I don't get the "feel" that a good deal can be reached easily, my instincts always tell me to move on. I won't waste any more of my time, or their's.
Yes.
What was your trade in?
A 1998 318ti automatic with Active Pkg and heated seats, one owner with FSH. Just FWIW, the BMW dealer's trade offer was also a buy offer-just like Carmax-and they did not know how much the Audi dealer had offered. The dealer consensus on the "Real World Trade-In Values" board was that I scored a very good deal. One more thing; a friend of mine was a good friend of the GM at the Audi dealership. My friend asked the GM who I should deal with. The GM gave him the name of the guy who wound up taking an hour to pencil the deal. Bottom line, it's simply not worth the hassle for me to ever try to deal with those guys again.
A couple of weeks ago I was in Lexington for a conference. On the way back home I decided to stop by the Lexington Triumph dealer to see if they had any interesting used bikes. At the time, I was driving a 2005 645Ci convertible from BMW NA's press fleet because I was writing a Roundel article about the car. The big sled had an MSRP of $84700. I parked it right in front of the shop's big plate glass windows. You want to guess how many people asked if they could help me? Zero. Now, if they wouldn't give the time of day to a guy driving an $85K drop top, I shudder to think how they'd treat me if I had showed up in my muddy six year old Jeep Wrangler.
Morons.
Postscript: I did end up buying a Triumph bike-from a private owner. And I order any needed parts from an authorized Triumph dealer in Iowa, who offers excellent prices and doesn't charge for shipping. Life is way too short to deal with people who don't want my business.
Then there was the little old lady in the Pink hat who turned up at the busiest time on a Saturday afternoon. I got to her within a minute of her getting out of her car but that wasn't good enough. "Young man, I expect someone to help me as soon as I park my car." and off she went to the MB dealership across the road. Oh well.
I've got my favorites, too. They know me. I know them. I stay away from the other dealerships I've not had good experiences with, or just don't trust, for the most part.
It's usually a phone call to any of my preferred places to see if they have a car I/we might be interested in. I'm also usually able to get their bottom line price, right off the bat.
My issue is with some of the dealership groups...those places that ownership has several stores. I can tell their sales people all went through the same training. They are set up to keep you in the dealership as long as possible to close you. It just so happens that those same dealerships are the one that have ADMs, etching, etc. as part of the price of the car. Those are also the places that have the highest doc fees and other inflated charges on the back end of the deal.
In my experience, I always get the best deals from the single ownership stores. They usually have employees that have more tenure. They're "straighter shooters" and also the easiest folks to deal with. They also happen to have the best deals, when all is said and done.
So if you are a commisioned sales person who has to deal with this 599 or 699 doc fee that is just pure profit to the dealer and you know the customer knows this as well you get frustrated. That 599 or whatever could be part of the profit of the deal that you get paid on but no instead it goes right to the owner.
So lets just say that instead of 699 it was a more reasonably 199. If that extra 500 dollars was in the gross profit of the car and you got paid 20% on that you would get an extra 100 dollars a car.
A 100 dollars a car adds up fast and that is one reason you will not see seasoned sales people at the kind of store. The managment/owner does not want to pay the sales people the right way and are just plain greedy.
The BMW dealer I use is part of a large dealership group, but they've always treated me great. My BMW salesperson is also able to sell a car from any of the other group dealerships, so that can come in handy if another store in the group has a new/used car I'm interested in. That said, the Audi dealer is part of another group, and that group's reputation is not the greatest-though that might be changing as they recently sold off their mass market domestic and Asian stores to concentrate on Audi, Land Rover, Porsche, and Saab.
I remember going to a VW/Hyundai/Suzuki dealership, and working with one salesman who tried to tell me "I've never seen a GLS hatchback." I'm disappointed in myself that I didn't take him over to the Hyundai side of the building and show him the big standup which did that comparison, but instead wound up taking a bunch of their time, and not buying anything. On the other hand, I told them I wasn't going to be buying anything, and they walked me through the process anyway (I had time - no biggie).
I did eventually go back to the dealership because they had the car I wanted, with the discount for being a model year old (an '05), but I made sure I dealt with a different salesman.
But anytime you mix automakers on the same lot, the higher margin cars are going to get more attention.
Admittedly, I'm a bit of a car nut. I've worked for Ford, Rover, Jaguar and Lola Racing but is it really too much for dealers to expect their sales people to know about the product they're selling as well as their direct competitors.
It ended up that my sales suffered because I was spending so much time fielding questions from my collegues and their customers most Saturdays and Sundays.
Some say bargain for an OTD price as it is easier...let the dealer divide it up however they want. Only problem
is, as you posted, some owners get greedy and just leave the crumbs.
My brain is just a steel trap for random bits of automotive knowledge so I just soak all of this stuff up. Eventually someone has a specific technical question and they come ask me.
I am thinking of putting a sign on my desk that says something like "facility technical director" or words to that effect.
In my case, right across the river in MD there is a state law that limits doc fees to $99. I've never bought there, but if I hadn't found a reasonable place in VA, I would have looked there on my most recent purchase.
Possibly not a coincidence that the VA dealers with low doc fees tend to be close to the MD border.
I would think knowledge about the car would be worth more in the ability to sell than sales techniques. One time I was at a Subaru dealership many years ago. The car I was looking at had (if memory serves) a 2.0 and a 2.4 liter engine. The salesman was telling me about the 4 cylinder 2.0 and then about the 6 cylinder 2.4. Then he opened the hood and showed me the 2.4, after which I told him it was a 4 cylinder engine. He told me it was the 2.4 liter 6 cylinder, I agreed that it was a 2.4 liter (it was stamped on the engine) but that it only had 4 cylinders. The salesman insisted that it was a 6 cylinder to which I replied it only has 4 spark plug wires. :confuse:
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
I will admit, every BMW dealership I've ever been to employ THE most knoweledgeable sales people I've ever encountered. They all know, and can explain the engineering that go into the cars, every function and it's application of every feature of the cars. Plus, they know how to do a test drive. I had one that did a test drive for about 45 minutes, over all sorts of roads and conditions, showing why BMW was superior to its competition. Compared to a Lexus dealership, where the sales people offer you all of the lattes you want, but very little in the what the cars are capable of, how their built, and even correct operation of the features, BMW sales people are Einsteins.
The respective BMW salespeople that I've run across also have been with their dealerships for multiples of years, as opposed to weeks or months.
Big difference.
Someone mentioned the sales people having more "closing" training than they do product training....I say that should tell you worlds about the the mission statements of their respective dealerships.
Its the reason why I research the you know what out of the car I plan on purchasing.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Nothing ever changes... that's why they should do away with traditional dealerships and have the whole thing either over the internet or with manufacturer "kiosks" set up in malls, etc.
nothing ever changes because consumer don't want a change..if consumers really wanted change you can bet your bottom dollar change would happen. From the dealer standpoint there isnt any need to change the process since that change usually leads to failure.
Consumers have a way of talking big about change but when the time comes to put the money where the mouth is...the tune changes.
I see some slow movement away from that, though. Look at the MINI....you pay MSRP. Same with Scion. Saturn has always been there with the "no haggle" approach, but then they slap rebates on their cars (or, as they call it....price adjustments).
As has been discussed ad nauseum here and elsewhere, everyone is looking for a "deal". GM tried last year to "right price" their vehicles by lowering the MSRP. But, they then proceed to offer rebates. So, the net effect is no matter what price they put on their vehicles, the consumer will wait for more price movement from the dealership.
From the consumer end, it's about expectations. I don't expect to walk into Tiffanys and get a discount on that $30K diamond ring. I know they don't discount. I DO expect a discount when I go to my local jewelry store to buy a diamond ring, though....because they've done it before.
I expect a discount whenever I walk into my nearest Chevy, 'Yoda, Ford or Honda store....because they've done it in the past.
Well I was impressed that you were aware of the Mercedes E-class chassis in our Chrysler 300 line. I point that out to customers as well.
As a salesman, product knowledge should be a given. Especially on competing products. Doubly if you resell trade ins. I have to say that Land Rover would be my undoing. But I have only seen one driving around town so far. But heck, I would love to trade for it.
I would hate to see the results of someone mystery shopping a 4x4 Jeep product actually asking for a Quadra Drive II demonstration. I never see it explained or demoed and wonder how many Jeep salespersons understand it to begin with. I always look forward to the experienced Jeep buyers. They end up lying underneath the drivetrain discussing the finer points. IFS...Solid Axle...gear ratios...I should name my first born Dana. Mopar Dana KS
No consumers do want change. When consumers are ASSURED they are getting the best price, sales go through he roof. A perfect example was GM's employee pricing for everyone last year. The vast majority of people knew that the price was the "best". Consequently, sales went through the roof. AND dealers didn't like it because it affected THEIR BOTTOM LINE. That is why things are not gonna change!
It is just the apperance of the best price and to some extent the knowledge that your neighbor did not pay less then you.
But most people are not as knowledgeable as the poster to whom you referred to. Indeed, most people who post here on Edmunds are not your average buyer. It's about perception.
I agree. However, it does beg the question as to why the manufacturers don't return to that that campaign, especially as it caught the public's attention so well, and was apparently putting more money in the manufacturers pocket too.
That makes no sense...what business / industry assures people they are getting the best price?
dealers didn't like it because it affected THEIR BOTTOM LINE. That is why things are not gonna change!
Well duh, a business plan that doesn't include a profit isnt going to thrill anyone who just invested millions of dollars in a business....If the mfg wants to dictate price they should own their own dealerships...oh yeah, I forgot..they tried that and got their collective butts handed to them by the little ole local dealers.
It is not MSRP vs. rebates. It's full prior disclosure vs. games, half-truths, evasive manouvers and all possible tactics. Prices posted may or may not be retail.
Why is it that when I buy a TV or a fridge, I can see the price posted there (full retail or discounted) and when I buy a car it is not possible?
The main difference why it works in other industries is that consumers learned through experience that if Smith from across the street came to the same store at the same time to buy that TV, they'll almost certainly get the same price the said consumer. The store has that price clearly posted (whether retail or discounted) and many have a real price match, not a gimmicky "we will beat every deal, but we won't show ours before".
There was only one time when a store salesman offered me larger discount than that posted on the items I bought for buying more stuff at once (appliances). Howvere, he was so secure about them that he wrote himself those prices on a piece of paper and handed it to me and TOLD ME to make comparison myself. Now show me a car dealer doing just that. And by the way those prices by the way could not be touched by anyone - not even close, so I was back in that afternoon. And by the way, the most stay in the store was about a suitable product for me, not the prices.
So IT IS POSSIBLE to shopping experience can concentrate on the product itself and price comparison becomes a simple one-two afternoon tasks.
I always wonder why car salemen are so resentful about people shopping around. It's not even funny when you hear those complaints. It's like price shopping for milk or a new tv is OK (and how many of us still buy in not the cheapest place so long we feel we are not being ripped off?), but a car - that's a no-no - once you stepped in, you are to buy and don't you even dare ask for the details, especially before you stamp in your blood that you're buying - leave the details to the specialist and that mysterious "customer service".
What it would take to change is several really large dealer conglomerates going CARMAX style (for good or bad) and sticking to it. Find your real price, put it on and try. Even temporary markdowns may work, as long they are the same for everyone. But I would not be optimistic. It really is chicken and egg problem, but the problem is is not in people shopping around - it is in people expecting they are not being told everything there is.
2018 430i Gran Coupe
Because it's a highly competitive business, and the salesperson with a low closing ratio won't survive for long.
The incentive structure of the dealership, which rewards the salesperson for some combination of high prices and transaction volume, and includes both a sales manager whose job is to "bad cop" and close the deal and an F&I manager whose intent is to upsell, creates this result. This troika works for them most of the time, so there isn't much need to change it, while the experiments in one-price shopping such as Saturn have failed to revolutionalize the business, reinforcing that the current system works pretty well as is.
What it would take to change is several really large dealer conglomerates going CARMAX style (for good or bad) and sticking to it.
The market is too dispersed for any one dealer to radically change the business by going against the grain. That would become a niche business model that may well not work for the dealer, ala Saturn.
From the dealer's perspective, a better solution would be for the manufacturers to improve their inventory management policies, so that supplies are fairly limited and the buying environment becomes competitive by design. The reason that cars can be purchased for invoice by savvy buyers is largely because the supplies are generally more than ample, and there are plenty of competitors to choose from.
Corner a market and limit supplies, ala the Prius or MINI, and you end up with very little chance to haggle. But that situation can't occur unless the manufacturer limits supplies to equilibrium levels.
But that will never happen, since generally car manufacturing and selling business is a place populated notorious optimists
I think the "troika" works for dealers, not for consumers (not most of them anyway). However, as long as they make consumers believe they "won" or got it "under invoice", traded with an "overallowance" and never mind $799 fee and $500 paint sealant/scotchguard package, the dealers will have not reason to change. The only way to force them is to stay at home and still demand service (I mean of course in numbers, not in individual cases) - when the customer mood and expectation shifts, they will have make a change, but no earlier.
I would not dismiss a possibility of "going CARMAX" so easily. Market tends to consolidate and "superstores" seem to be gaining ground, especially in large cities. I don't believe it is going to happen anytime soon, but they cannot ignore reality of information availability forever. Sure, they'll resist, but I'm sure at Autonation headquarters they already have a plan, just in case the competition makes a move. I'm not saying it's happening tomorrow, though.
2018 430i Gran Coupe
I agree that it probably won't happen, although I'd say that it's because that the manufacturers are generally more interested in gaining market share and more wholesale revenue, which leaves the dealer to do the usual stuff. If Honda has a choice between selling a certain number of cars and grabbing more of the market (and more underlying demand for its parts), and selling perhaps 20% fewer cars in order to let the dealers make more money, then Honda is more likely to go for the larger sales numbers.
The MINI might be different, because BMW has only premium nameplates in its lineup, so as an automaker, it can benefit from limiting supplies a bit in order to maintain its prestige and exclusivity. Toyota seems to be experimenting with this with Scion, because it wants the dealers to upsell customization and to work the relationship angle of the sale with these buyers. But whether the whole industry would follow suit, I really doubt it, too.
That makes no sense...what business / industry assures people they are getting the best price"
One word "Walmart". One is hard pressed to beat their prices, especially on their house brands. Try to find a 2 liter bottle of soda (Sam's brand) for .58 cents anywhere else....
As it was a slow day, I was quickly greated by a salesman. I met the guy a year ago when I was having my problem SAAB in for service. He told me that business was great and that he has been selling 25 cars per month.
After he gave me the price for the truck, I headed out back to see what was available. (And to see the Carmax prices.)
The first car that I looked at was a 2001 Taurus SE white, 50k miles in very good condition. The CARMAX price was ****$10,600****!!!!!! I have bought 2003s off of leasing companies for $5,600.
However, people flock into the place because of the "no haggle pricing.
The no haggle thing is a joke. People can get on the internet and research everything about their respective purchase but they for the most part are to lazy. Then they want to complain about how the mean dealer took advantage. Like someone held a gun to their head and made them sign the paperwork.
Ssshhh! Don't give away all my sales secrets!
Yeah right. Pull the other one, it's got bells on. A couple of years back I wen't to buy a 57" telly at Best Buy (the old trouble and strife is a bit short-sighted). $1699 or some such with $150 off. I asked the sales guy if that was really the best they could do. Off he scuttled then came back with his department supervisor and it was mine for $1350. Of course they tried to sell the warranty, surge strip, over-priced connection cables, etc. (sound familiar?) but I stood firm and it was mine for almost an extra $200 off their sales price. All for just asking.