Stories from the Sales Frontlines

Kirstie_H

Anyway I do not want to turn this forum into a lesson on economics so i will leave it at that. If you want to continue this we can always use e-mail.

Hey! Yet another thing we have in common... neither do I!

dino001

It's a Nobel price. It is a noble thing to get a Nobel price, though :P

div2

The reply from the editor mentioned that the 4.0 engine has several timing chains, some of which have PLASTIC tensioners that break very early in the engine's life, causing catastrophic engine damage.

Would it really be a Jag if there wasn't a possibility of it blowing up or catching fire? :surprise:

Disclaimer: I currently own a British motorcycle and I am also thinking about buying an '04 Mini Cooper S. What can I say? I'm a glutton for punishment :P

mark156

Dwilliam. I have to agree with snake on this. As a degreed Accountant myself, he is making total sense.

Keep in mind, if folks keep there cars until they are paid off, they will need continued service, parts, etc at the dealership. So, if the dealer was losing a little out front, they are going to pick it up out back.

There are so many types of buyers that I think everything would fall into place. A person leasing ever two years, in a sense, has a paid off car and is ready for another.

Keep the stories coming! I love'm! Mark

socala4

Your property, sales, and school taxes would go up.

I believe that Chuck's point wasn't to discuss the economy, but to point out that it's a bit much to hear all of these dealer complaints about "negative equity" when all of these customers are good for business. Not only do these buyers generate more sales for the dealerships, but it seems likely that these types of buyers who are most likely to think like payment buyers and to not understand what's going on when the four square comes out.

That, and a good amount of that "negative equity" comes from consumers accepting a low value for their trade-ins. If the sales team can lowball the value of the trade and make up for it with an inflated loan balance on the new car purchase, then the dealership made out on all fronts. I doubt that you want to pay more for the trade to help with the negative equity, unless it comes out of something else.

As for the economics of it, you'd be correct if would-be car buyers decided to divert that money not spent on cars into their savings and investment accounts, instead. If they shifting their spending to other products, then Snake would be correct, because the taxes would be generated from other spending.

I'd be curious to know how much employment and economic benefit comes from car dealerships. On one hand, they're great for municipalities that get a chunk of the large sales tax revenues, but on the other hand, I doubt that they provide a lot of jobs for every dollar of revenue generated compared to, for example, a supermarket or retail store.

graphicguy

Keep it, pay it off then put what you have been making as car payments into an interest bearing account and use that to buy your new car.

Absolutely true!

But, how many stories have we heard in these threads stating that customers come in with their trade, thousands upside down, and want to "make a deal"?

Sounds like being in a negative equity situation with cars is more the rule than the exception with a goodly number of buyers.

ateixeira

You are the target demographic for the new Chinese-owned MG comeback car to be built in the USA.

-juice

michaellno

I'd be curious to know how much employment and economic benefit comes from car dealerships. On one hand, they're great for municipalities that get a chunk of the large sales tax revenues, but on the other hand, I doubt that they provide a lot of jobs for every dollar of revenue generated compared to, for example, a supermarket or retail store.

I know that in California, cities fall all over themselves to get dealers (and better yet, 'auto malls') to locate within the city limits. Leads to lots of bickering between towns that are close to one another.

div2

You are the target demographic for the new Chinese-owned MG comeback car to be built in the USA.

LOL!!!

british_rover

Bah you are as bad as me.

I had a 2004 MINI cooper S. I want a Classic Range Rover for wheeling or a series two Disco. I would also really like a Vanden Plas for a long distance cruiser car.

The guy I sold the XK8 to came with his father and he has a 2001 Vanden Plas in Black with deep rich tan interior. Was really a great looking car.

danf1

Just this morning we have a customer come in to look at a small SUV. He is an engineer, so all of the salespeople here know where that is going. The salesperson did a very good job understanding the customer's wants and needs and helping hem select the perfect vehicle for him. Of course he is comparing us to three other makes.

I pencil the deal for him at $37 over invoice. He has his internet pricing reports and doesn't believe me even after I show him the invoice. I am accused of making fake invoices. This isn't the first time that that has happened so I take it in stride. After about fifteen minutes of reassuring him that my invoice is legit (it was stapled to the mso after all), We agree to a price that is $100 below invoice.

Want to guess what happens next? Out comes the trade in that was going to be given to his son. 1996 Subaru legacy with about 150,000 on the clock. My UCM hits it at $1500 which seems fair. Of course the customer feels that he should get $3500 for it. After some back and forth with the UCM, I manage to bump him another $500 on this pretty, rusted, bald tired, cracked windshield wholesale car. "The last dealer told me he'd give me $3800 for it." Now its time to explain trade allowance and ACV, but to no avail. He'll accept $3500 and not a penny less or he's leaving.

Guess who didn't sell a car this morning.

socala4

I know that in California, cities fall all over themselves to get dealers (and better yet, 'auto malls') to locate within the city limits.

That's absolutely true, because a given dealership generates huge tax receipts for whatever city in which it is located.

I was wondering more about the macro effects to the country or a region of the country, rather than a particular city that is focusing on one piece of the pie (the tax revenues). For example, I would guess that a supermarket needs a lot more employees to generate and support $25,000 worth of sales than would a dealership, but that's just a guess.

ateixeira

Tell him to private sale the car. Subies can fetch a lot, especially if he waits until fall.

July is the wrong time to sell a used AWD.

-juice

dwilliam

$1,400 per CAR on a one time purchase! Average dealer sells 100 new and used per month. Nowhere near enough sevice business in the short term to cover.

I will be happy to tell him you are wrong. Got a number?
Glad you got an A for an incomplete paper.

Ending the discussion as no one wants to hear it anyway. Sorry HOST

cannot share E-mail as I post on Prices Paid forums and am required to maintain anonymity. (Just ask the HOST :P )

The Anonymous Dealer

P.S. Dealerships and by association Manufacturers Have one of the LARGEST impacts on the economy. It is why the gov't will NEVER allow the big three Domestics to fail. It would cripple the nation. Do some research before you make that kind of statement!

jipster

Yet another thing we have in common...

hhhhmmmmmm...sounds like an internet romance is brewing in here.

You two may want to continue this "all we have in common" thread via personal e-mail though.

danf1

We went down that road. It was still a "deal breaker" for him.

dwilliam

Manheim Market report for that car (if it was the TOP of the line) $500.00 wholesale auction above average: $1500.00 before adjusting for mileage and condition: $2450.00

Value to the customer? Priceless

Sometimes perceived value just can't be overcome.

The Anonymous Dealer

mom2chaz

My mother-in-law co-signed for a "friend" who she believed was "the last person who would ever do something like this." :surprise: She didn't give me all the details, but wants to know what should be her course of action? I don't know how many payments have been missed, if the person is willing to a "voluntary repossession?" or what. What does she need to do? Thanks in advance!

danf1

Any type of reposession will destroy her credit. When she cosigned she agreed to make the payments if the primary buyer defaulted. She needs to get the car and catch up on the payments. Try selling it, but don't let it get reposessed.

snakeweasel

Sounds like being in a negative equity situation with cars is more the rule than the exception with a goodly number of buyers.

I am afraid that thats getting to be more of the case. The sad thing is that they roll that negative equity into a new car which will result in negative equity right off the bat that will take 3-4 years to get rid of. But then they turn around in two years (deeper in the hole) and do the same thing all over. Basically you end up making payments on a car you no longer have, its as bad a credit card debt. :sick:

steine13

i'm sure there are some experts here who can give you advice, but how about some information?
we don't even know if the repossession has happened or has only been threatened.
either way, even i can tell you the good news: as co-signor, your mom is fully responsible for repayment and her credit will definitely be trashed if she doesn't pay.

i mean, of course. that's what cosigning means. what, if anything, was she thinking?

good luck,
-mathias

thenebean

but a customer at the ford side of the dealership i used to work at would come in every year and buy a new focus or ranger (it would alternate) and roll the negative equity from the previous vehicle into the next loan. he was paying something like $600 a month for 60 month loans on a basic ford focus...no matter how much our salespeople would try to explain how stupid this was, he would just keep on buying...i guess some people just dont care...

:sick:

-thene

snakeweasel

Do one of two things, either put your e-mail in your profile or e-mail me through mine and I will tell you why this is wrong, as I said I am not going to turn this into a econ lecture.

Also know your not doing $1400 per car unless there is no trade in or your selling very expensive cars.

If anyone else is interested in my reply just e-mail me, its in my profile.

P.S....

The notion that whats good for GM is good for America is outdated.

deserth8r

I traded in my last car with about 2k in negative equity for a truck, mostly out of necessity. With the rebates domestic automakers offer, it more than compensates depending on what time of year you buy.

I have a question to the dealers in here also. I have a chance to buy a Shelby GT500 for MSRP through a military car sales program. My question is, have you ever heard of a really hot car like this being sold for less than MSRP, or do you just let a customer that offers you less walk, knowing the next guy will buy it?

danf1

Buy 2 for MSRP and put one on E-Bay immediately.

thenebean

yeah, do what danf1 says! wow! thats awesome that you have that opportunity!

for a hot car like that, dealers don't discount, and if you want a discount, they tell you to have a nice day.

oh, and by the way, thank you for your service! hopefully you come back soon!

-thene

ateixeira

Usually a high-demand car is excluded from programs like that. You sure you can get one? And in a timely matter?

-juice

deserth8r

You have to be stationed overseas to qualify for the program, it is through a 'dealership' run by the Army Exchange, and I will know by the end of this month how many allocations they have, I am number 3 on the list. I get home in October, and that is when it will be delivered if I can get one.

socala4

That car is almost destined to be a classic. Particularly if you can garage or store it, and you keep the miles off of it and maintain it impeccably, you'll likely make a profit on it.

graphicguy

Not saying that there aren't exceptions to every rule, but what most people don't realize, even with hefty rebates, the net result is you're paying interest and principle for essentially a vehicle you no longer own by rolling over negative equity. In other words, you're paying for nothing.

Rebates always lower the resale (and trade value) of any vehicle who sports them.

The GT500s are going to be tough to come by.....let alone one at MSRP. I'm #1 on my dealerships list for one at X plan. Signed onto the waiting list when they were announced. How much you wanna bet that when the time comes, they tell me they can't sell it to me at the xplan price? My dealer is getting 1 for sure with an outside chance of another one.....that's it.

black_tulip

Since he has since won a Noble prize in Economics you want to tell him I am wrong?

Well, Econ is a social science, and your professor will be the first to tell you that all opinions have some validity, since there is no "absolute truth" in economic predictions. I also find it somewhat amsuing that Econ, which essentially tries to model human behavior, uses mathematical tools almost comparable to theoretical Physics.

I think one of our presidents (forget which one) said it the best (paraphrased): "Give me a one armed economist because they are always telling me - on one hand ...., and on the other...."!

snakeweasel

How much you wanna bet that when the time comes, they tell me they can't sell it to me at the xplan price?

I'll do you one better than that, I will bet that FoMoCo will exclude it from the x-plan pricing. The GT isn't included so I am guessing the GT500 won't be either (and yes I know they are two different cars).

graphicguy

snake....I don't doubt what you're saying....although I did buy a GT when it first came out....selling for MSRP+ all over the country (that darned on Xplan made available to me by knowing the GM at my local dealership), kept and drove it for 9 months. And made a tidy sum when I sold it. They're more plentiful now, so that can't be done.

GT500s are different animals, though. Limited editions in limited production...Shelby name and development...1st (maybe only) 500 HP Mustang ever built, etc.

My guess is they'll give me right of first refusal on the GT 500, but that's about it. Besides, I'd want to drive the living daylights out of it. I couldn't stand to let it sit in the garage....the temptation would be too great.

nortsr1

danf'l: You might be runing out of stock shortly. I read in the Detroit News that the Hyundai workers All went out on strike. They want about 130.00 more/month (approx. a 9% raise) and the Company is offering around $67.00. Complete factory shutdown.

snakeweasel

Besides, I'd want to drive the living daylights out of it. I couldn't stand to let it sit in the garage....the temptation would be too great.

I know what you mean, I would love to have one, and still could get one if I wanted to. However it would be hard for me to justify spending another $45k+ for another high powered car. Not to mention that it would also cost me way to many favors and I most likely would only own it a few hours (wife would kill me the moment she found out I bought it).

I guess I will just stick with the Caddy.

danf1

Not to worry, they strike at least once per year. We are somewhat accustomed to that. It never seems to last long enough to effect our inventory much, but we are a large dealership that keeps more cars in stock than we probably need.

jack47

1894 of 1937 Re: Hidden trades etc. [snakeweasel] by dwilliam Jul 14, 2006 (6:55 am)
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Replying to: snakeweasel (Jul 14, 2006 6:27 am)



....If everyone stopped buying cars right now and waited until their CURRENT car was paid off:....

What % of all car purchases are bought on credit vs. the % paid in cash?

.....most dealers would file backruptcy,....

Without a factual (not subjective) answer to the above the following conclusion is suspect:

....the state and local gov'ts would not get anywhere NEAR the revenue they normally acheive and by the time they normalized (what does that mean?) they will have raised all other taxes to compensate.....

Or just maybe they would cut expenses (OK that's hard to believe).

tidester

I think one of our presidents (forget which one) said it the best ...

That would be Harry Truman!

tidester, host

cluedweasel

Never mind. There'll still be someone in the prices paid forums claiming to have paid $500 under invoice for one!
Hey! Where's my flag gone?

snakeweasel

Oh that is so true and you know for a fact those that buy them at sticker will get a deal.

tidester

Hey! Where's my flag gone?

They went away with our new look - not sure if they'll be back.

tidester, host

tsgeisel

Just out of curiousity, since it's been many, many years, but if I get my vehicle back from being repo'd does it still count against me? Or is the repo sale the killer?

explorerx4

in another couple of years, ford will start releasing boss models, then it will be shelby, shmelby.

danf1

It will show on your credit that it was late, possibly even repo status depending on the bank, but then paid current. You can recover from anything on your credit report. It all depends on what you do after the negative action. I have a good customer who has bought 3 cars from me after he had 2 repos. It was difficult to get him approved the first 2 times, but now that he has had a few good auto loans since his troubles, it is nice and easy for me (oops I meant him).

jmurman42

I received an email from a customer looking for a new Accord. We spoke on the phone yesterday and he mentioned "I might have some credit issues"

After he submitted his app, I find that he is in collections for almost $20,000.

I guess that he doesn'yt understand that when you get a loan, you actually have to pay it back.

graphicguy

tidester.....I vote to bring the flags back......

snakeweasel

Just remember that some people do get into financial trouble due to circumstances beyond their control. Loss of job, medical bills and other things can really hit you bad. It is possible that this person got into such a situation and is trying to get back on his feet and pay those collections.

danf1

Look on the bright side, at least he admitted he might have credit issues. I love when people try to hide that fact and then complain that the interest rate is high. But of course, the collections aren't their fault for any of a number of reasons.

british_rover

Identity theft is another major problem My wife had her identity stolen while she was in college and now almost four years later we are still working on putting it all back together.

One of my clients had his identity stolen as well. Just a week before he was supposed to take delivery of his new range rover someone opened some credit cards in his name. He called worried that this would be a problem as his credit monitoring service had just informed him what happend.

Luckily the person was caught rather quickly and the negative information was removed right away.

jmurman42

That could be however, it has been my experience that credit issues for the most part are the persons fault.

I do realize that there are some circumstances where matters are out of your control, but in 8 out 10 cases that is just not the case.