Stories from the Sales Frontlines

mikefm58

I too am an optimist and you seem to be an eternal pessimist. I'm in Florida and even though home prices have been hit, not as much as I expected. I just checked the Orange County property appraisor's website and my house is down about 20% from a couple years ago.

Not too bad, but it doesn't affect me as I still have a chunk of equity. I refinanced a couple years ago and took out way less than the bank wanted me to, surprise surprise. Same story with my co-workers, but you don't read about us in the paper, just the idiots who borrow everything they can and then wonder why they're broke and homeless, boo hoo for them.

I went looking at Civics and Accords last weekend, quite a few folks in the show room and a decent amount of inventory, not over flowing the lots by any means. Same way at the Toyota and Hyundai places on either side.

You're just like my father-in-law, he'd find something bad in the best of times, keep pitching your doom and gloom.

Sorry for going off topic.

graphicguy

nycar.....I have no doubt someone would write a check for $20K over on a Cobra when they first hit the street. The people who are fans of these cars are....well....fanatics.

Cars as investments? I never could rectify that in my own mind. Maybe it's because I don't know enough about the collectible car biz (like Mr Shiftright does). I know what I see on those auction shows that are televised. One of my faves is Meachem (sp?). They specialize in collectible muscle. I'm actually amazed that some folks will lay down $200K, $300K, $750K for vintage muscle iron.

But again, I know just enough to be dangerous. Not nearly enough to lay down my own greenbacks.

I know if I were to buy something like a present day, or even a vintage Cobra, the pull to drive it would be too great for me to just let it sit.

I like Jay Leno's attitude. He's got a whole stable of great, historically interesting, collectible cars. He drives them.

snakeweasel

It's rare that any car is a good investment, with some, but very rare exceptions (thinking about some of the original muscle cars that I've seen cross the auction block like the original Cobras from 40 years ago...maybe an original big block 'Cuda or Challenger).

The question I have is what price do those 40 year old Cobras bring and how much did they originally cost? Because at a low 3% interest an investment will grow over 325% in that same time period, over 7 times at 5%.

snakeweasel

When things go back to normal and the car market gets better, is it ok for us to ask MORE than normal? Its the same logic, if you wanna pay nothing when the economy is bad, be prepared to pay more when it gets better.

Thats the way the economy works. Times get bad sales slow down you take a hit just to move product. You may be taking a loss but the alternative is have higher carrying costs and eventually a higher cost and more of a loss later down the road.

Conversely when things get better and people are buying more you can always afford to say no and wait for someone else willing to pay more as they will walk through the door soon.

Its basic supply and demand. High supply and low demand equals low prices. Increase the demand and prices go up. Its Economics 101.

snakeweasel

Comes down to who is a better and more experienced negotiator. Just like gambling, the odds are always in the houses' favor

Come on now its selling a car not negotiating the Paris Peace Accords. Negotiating a car purchase is rather simple, try negotiating a union contract or a multi million dollar business contract involving three or more companies. Its buying a car not rocket surgery.

fandiguy

Damn, some of you (dino001 and duke23) are just pessimistic to no end! I didn't realize we have so many economist and shrinks here. I live in the midwest, and i can say first hand, things are fine here. I never said we won't be affected by whats going on in the economy, i simply stated it usually takes longer to hit us. It was the same way after 9/11. You two seem to think the world is gonna end, what? is this the first time the economy has taken a plunge? If thinking all us dealership employees are gonna be jobless makes you feel better, go ahead and think it. The fact that i work at a dealership AND live in the midwest, probably gives me a little insight to how things are going around my area. DINO, as far as your comment about deere, my father has worked there for 30+ years and you should see what their stock has done over the last 6 years

snakeweasel

I think you are right when we reach new "balance point", AFTER a few dealers like Bill Heards will drop off and supplies adjust.

When this mess straights out car dealers will fair far better than now. But until then there will be some pain as the market makes its changes. I can see a drop in dealerships and supply that will raise the prices somewhat. It won't be drastic but it will be noticeable.

fandiguy

Its buying a car not rocket surgery

Well you "experts" sure like to pat yourselves on the back when you THINK you've gotten a better deal than someone else. If its so simple, why are you on here talking about it? Why are there hundreds of websites dedicated to it? Why do sooooo many people beg for help when buying a car? You're right, its not "rocket surgery," but it takes a lot more than an analytical brain...it takes commen sense and balls.

snakeweasel

So it'll be awhile before things flow into my area, hopefully long enough for things to get better.

I have to ask where in the midwest are you. Unless you are in a metropolitan area the economy in the midwest has been in the tank for years. Most of the people making a fortune off of corn are the big corporations. The family farm sees little of that cash crop,

cdnpinhead

"Just like gambling, the odds are always in the houses' favor. . ."

In the aggregate, absolutely, but individually. . .card counters can (and do) beat the house at 21 and are barred when detected, and individuals who know what they're doing get much better deals than the great unwashed.

I could give a rip less about the aggregate. I'm an individual.

Snake, I realize this wasn't your quote, but I didn't want to bother to go back to the original.

snakeweasel

I hate to break it to you - it's coming. It's just not there yet.

I hate to say this but it is here and has been for some time. The rural midwest has been pretty much in the economic toilet for many years. More urban areas have had better times as well as areas that have a tourist industry the greater area of the midwest is nothing to be excited about economically. Even the smaller cities have had tough times recently.

jipster

but how could they pay the rent with this deal or am I missing something?

About $9.5k off MSRP... not bad.

But, $5.5k of that is coming from GM. The dealership probably discounted as much as they could... threw in hold back. So, unless, you paid a high doc. fee and bought some mop n glow, or useless dealer add ons... they didn't make a dime on you. Which is a good customer service move considering you've been leasing GM for 40 years. The dealership will try to make up any loss or low profit on the next guy who walks thru the door.

Congrats on your Impala.

graphicguy

snake....I'm with 'ya. Right here....right now....things are depressed, not only in the car biz, but in many businesses. Some places it's a little more depressed than in others. The market will adjust.

At least for GM and Ford, they've been wanting to cut some of their dealerships for awhile. No real cheap way for them to do it. The market is taking care of it for them. Consolidation of dealerships has been happening for at least the last 10 years, so this is no surprise either.

Financial markets have been teetering for a good bit. As a painful example, I'm getting my home rebuilt. I just got the first check from my insurance company for the rebuilding process. It was made out to me. Unfortunately, my insurance company also made it co-payable to my mortgage holder. I went to the office where I originated my loan over a decade ago to get it signed. It's gone. Closest one to get a signature? Over 1,000 miles away. And I was informed they're closing that one at the end of this month. That makes the closest office for my mortgage holder nearly 2,000 miles away.

Fact is, financials and car biz is contracting, not expanding. They're both responding to the lack of demand for their products and services, regardless of the reason.

The glut of new vehicles will be cleared out eventually from the lots. Those that can buy (good credit) will buy. Those who can't, won't. I expect that the reduced demand for new iron will cause some dealerships to close (Heard, the biggest, most recent example), some to consolidate. Equilibrium will be restored.

But, I don't expect the public's demand for big trucks and SUVs to return any time soon, if ever. Car manufacturers and their dealers, across the board, will adapt. So will the consumer's buying habits.

An an FYI, I just filled up last night for the cheapest gas price I've seen in a while.....$3.36/gal. Never thought I'd consider that cheap. But, that's almost $1.00/gal less than what I filled up for in July. Demand is still down 7% for the quarter....even with the shut down of the refineries, oil stock levels are still high. So, all the old restricted supply "tricks" aren't working.

fandiguy

Ok, so we don't have to go back and forth forever on this; the consumers who post on here are car buying experts, who know all the "secrets" and always leave the dealership with a victory!!! Wow, it was hard not to vomit while typing that.

I can only speak for myself and the people who i know around me, that being said, we're all doing just fine in the midwest (about a half hour west of chicago). Do any of you expert economist actually live in the midwest? Just curious, because its one thing to read a generalized article about something, but another thing to actually live and see things on a day to day basis.

madmanmoo

Yes, people are really doing this. I had someone offer $22k off a 911 Cab. She figured with the market the way it was, that that was an acceptable and reasonable offer......

Yes, the market is off. Noone is denying that. However, my store is rocking. We're selling cars. Have we missed a little business? Yes, but we're not feeling the effects like other dealerships and manufacturers.

Another thing to consider, some manufacturers actually drop their production in slower markets so that the dealerships and markets don't get glutted with vehicles. What does that mean? We don't have to have fire sales to get rid of inventory because the manufacturer has responded to the times. We still get to hold gross and value does not suffer for both consumer and seller.

graphicguy

wes....jipster....we're seeing the same thing around here. Leasing isn't favored.

But, at least the GM dealerships are clearing inventory at, sometimes below, cost. Just to get the units off the lot.

Wes....I second Jip's congrats on the new Impala. You scored a very good deal.

british_rover

I am writing this from my phone so I can't say much right now. I have been so busy over the past few months that I haven't been by here at all. I did make the move to one of our other dealerships at the end of june beginning of july and things are much busier here.

I have had double digit sales every month and hit multiple bonuses every month too. We are selling mostly used cars for the past few months with little new car business. Last month was a little higher on the new side then lately but still off when compared to last year. Over the past few months our used car business has been 2/3s to 3/4s of our total sales.

dino001

I am pessimistic in a short term - next year, maybe two if things are really as bad as some people say. Long term it will all come back to some balance point and perhaps will restart once China returns to the markets (but of course that also means higher gas price again, but I'd rather have $4/gal gas and good job than $2/gal and no job).

Now it's the time we are all paying for that one (or five) too many candy we have eaten since 2002. I'm saying crisis is coming - but not end of the world. Usually it means marginal businesses (Bill Heard) and employees (this guy across your cubicle who comes half hour late and leaves half hour early and doesn't seem to be doing anything) go first, if it deepens, the avearge performing ones may also experience some pain. I'm hoping we averted the depression, which means there wan't be much loss in best performing people and businesses area.

fandiguy

I agree with you dino001. Things are gonna be tough, but its not the end of the world. It'll basically separate the performers from the fakers, those who do their jobs well and correctly, will be fine. Those who skate by and walk the thin-line, won't make it. Its basically a "cleaning" for all businesses, that's why i'm so optimistic.

snakeweasel

Well you "experts" sure like to pat yourselves on the back when you THINK you've gotten a better deal than someone else.

Who is here patting themselves on the back? And who is here thinking that they have gotten a better deal than someone else? Most people here seem to be aiming at a good deal and not a better deal than everyone else.

If its so simple, why are you on here talking about it?

It is simple, but even simple things have instructions.

Mr_Shiftright

There you go: "always trust in action, never trust in words".

A dealership that is flexible, has good staff, decent product, productive service department, not too much fat, is going to do okay. They adjust to conditions.

As for carmakers, look at cagey Henry Ford. Right in the middle of the Depression he comes out with an affordable V-8 for the masses, and the brilliant Alfred Sloane starts a Color and Design department at GM to style cars to brighten up a very grim landscape----while Pierce Arrow and Duesenberg and Auburn and hundreds of other companies just went on "doin' the same old thing" or complaining to the government.

As for Kubler-Ross---remember, she ended up talking to the dead :P

fandiguy

Hahahaha, i've got to be the most quoted individual on this site. Every post i make is quoted and disected by the same few posters who use their assumptions vs. my actual facts from the "biz" to try and prove a point. I should just write a book, i could probably retire with the sales from that, but most would try to negotiate and buy it at cost

Can anyone tell me the last time snakeweasel made a post that didn't include a quote from someone else?

Now rather than quoting this post, like i'm sure some of you will, does anyone have any "stories from the sales frontilines?"

snakeweasel

about a half hour west of chicago

Depending on what you mean by Chicago that could put you anywhere from Maywood to Aurora. My best guess puts you somewhere in the area of Downers Grove.

Do any of you expert economist actually live in the midwest?

Yeah, Bachelors in Economics from Elmhurst College class of 91 and still live nearby.

As I said most of the Midwest has been hit by economic hard times and has been for some time. But for you you are in the Chicago Metro area which has the great benefit of being a huge metro are with multiple industries which make it weather out economic bad times better than most areas. Even with that the Chicago area is hitting the skids economically. Go to Rockford, Peoria or the Quad cities and things are not as rosie. Get into the rural areas in between and it gets worse.

fandiguy

The economy has been down EVERYWHERE, why are you trying to make it seem like the midwest is in a deep struggle. I know people in the Quad Cities who are doing fine. A lot of farmers, deere and alcoa employees in that area. I don't know a single person who's lost a job, and all the farmers i know are making a ton of money right now....they're family owned farms, not big businesses. I guess for me the glass is always half full, and for you its half empty. We can both agree things are down, but its not as bad as you claim.

graphicguy

BR....good to see you back. What line do you represent now? Probably a good move...getting away from Rover.

No.....no depression. No "doom and gloom". Just some economic weeding being done in the automotive garden. Probably needed to be done for awhile. This isn't going to last two years. It won't even last a year. Right after the election, things will have shaken out. The car biz (both buyers and sellers), the financial biz, the oil biz will have changed (they're all kind of linked). But, I think it will be for the better.

Shifty...as always....you're the voice of reason.

moo....I would think the upper end of the automotive world, like Porsche, may be a little less affected. But, as you say, it's hit everyone. I would imagine you have to be a bit more cognizant of the real buyers, as opposed to those on the fringe (like your customer offering $22K off on a 911). You know your business better than I do. Spend less time with those marginal types. And, spend more time with the real buyers. How's the market on Cayennes right now?

wesleyg

thanks for the congrats, no I dont buy mop &glo and the doc. fees were just normal. GraphicGuy: This is the first car in 40 years that I've bought, never had one in my name, the fact hit me that leasing is history, perhaps, at least for individual accounts such as me, but businesses are surely going to have access to leasing, right?

I've heard of skinny deals obviously, but I never got one like this before, without dickering back and forth, which by the way I don't do very well at all. Now I'm actually feeling sorry for GM, hows that for a change of attitude.

I paid cash for the car, but those people who can only afford to lease a particular model, are going to have to change their asperations. I know they are in over their heads and shouldn't be leasing something they could never afford to buy, but lets face it, many do and this just eliminates their chances of driving that model. This will surely negatively impact near-lux and even lower new models, since many can only stretch for a lease.

fezo

Hey, rover! Long time no see. was beginning to worry about you.

Same message as a lot of folks here - it will be down for a while and it will come back up. This current situation may long take longer to get through but it eventually works out. New car sales are down but sooner or later the fleet still ages and has to get replaced. it's no fun going through a down cycle. We've gotten spoiled.

madmanmoo

Overall? It's down. Porsche is cutting production. With our store? A little down. We've been selling a ton the last couple of weeks though. I sold 3 in the last 2 days of the month.

I drove to my customer's house to get his Turbo Cab. It had a little issue that we needed to quickly take care of. As I was driving back, with the top down, I was thinking that someone has done something right in their life to own one of those automobiles. That is a slice of pure driving heaven. Nice car.

jescue

I picked up my customers Turbo cab last night. 4500 miles sitting in his heated garage. You could fit my house into his master bath. :surprise:

madmanmoo

Hah. I hear our Turbos are going to be released on the 10th. My customer is currently wiggling his way out of the deal. Not cool.

jescue

I hear the same. The car I picked up is the trade for mine. My customer is still taking it, but his 04 has dropped because of the delay. That will come out of our gross. Also not cool.

boomchek

I am not too worried because even in worst of times people still need vehicles to drive around in.

The way I see it is in a average city of 2 million, with about a 100 dealerships (new and used), and an average of 10 sales a day per dealership = 1000 car sales a day in the city. If 1000 people do buy and walk in closing ratio is 10% that means about 10000 people a day are out car shopping.

Now let's be conservative and because of the slow times we cut that by half, meaning 500 deals a day, and 5000 shoppers/day.

The key basically is to grab as big a slice of those 5000 shoppers as possible thru advertising, marketing, product appeal, and pricing.

It now doesn't look so gloomy knowing there's 5000 folks out today looking for a vehicle in your city!

oldfarmer50

"...The family farm sees little of that cash crop..."

Bingo!

fezo

That's a very good way to look at it.

There are always people who do well no matter what the market. My dad was in sales for decades (not cars). You'd never know that things were considered slow - he was always selling.

tidester

Hahahaha, i've got to be the most quoted individual on this site.

Not even close. That distinction would likely go to Bobst.

tidester, host
SUVs and Smart Shopper

fezo

What the heck ever became of bobst? Maybe he got clubbed liek a baby seal on a deal and is embarrassed to show up....

obyone

Maybe he got clubbed liek a baby seal on a deal and is embarrassed to show up....

Probably got bored going thru the same routine explaining how it all works and still having people not understand the basic bobst buying method. Get's old after awhile.

snakeweasel

You must not know very many people at Deere for many are very worried about losing their jobs. The Midwest has not been doing that great for many years. Its very good that your farmer friends are doing good but the family farms are slowly disappearing and a big part of that is that they aren't doing all that well.

Yeah things are down but they are not as great as you make them out to be.

snakeweasel

I am not too worried because even in worst of times people still need vehicles to drive around in.

Yeah but in bad times they tend to hold on to their old cars much longer.

snakeweasel

Maybe he got clubbed liek a baby seal on a deal and is embarrassed to show up....

Doubt it. Bobst had a good system, knew what he wanted and what he wanted to pay, offered it and if accepted bought. I seriously doubt he would be clubbed like a baby seal.

cdnpinhead

Good to hear from you -- welcome back!

If you're still at a RR store, your knowledge is being put to good use. Otherwise, what's your new brand?

Keep us posted.

cdnpinhead

Well, aren't you just a breath of fresh air.

Are you this confrontational when you're trying to sell a car, or do you just save it for the internet? 125 posts since Sep 23 says you may (or may not) have an axe to grind. Please direct me to your post(s) that helps someone or says something even moderately positive.

Where, by the way, are your sales stories from the front line (or wherever it is that you inhabit)?

jmonroe

...it takes commen sense and balls.

Well, that must explain why I get good deals.

Although I have to give most of the credit to my “common sense” because it’s bigger than those other two things.

Believe it or not, just because buyers don’t buy everyday doesn’t mean they can’t be well informed and another believe it or not thing…car buying ain’t as tough as a lot of people make it out to be.

jmonroe

fezo

Oh, I know bobst had a good system. He'd be the first one to tell you. And the second.....

The baby seal comment was in jest. I do wonder what happened to him. He was everywhere then he was gone.

duke23

fandiguy wrote :
"
Damn, some of you (dino001 and duke23) are just pessimistic to no end! I didn't realize we have so many economist and shrinks here. I live in the midwest, and i can say first hand, things are fine here. I never said we won't be affected by whats going on in the economy, i simply stated it usually takes longer to hit us. It was the same way after 9/11. You two seem to think the world is gonna end, what? is this the first time the economy has taken a plunge? If thinking all us dealership employees are gonna be jobless makes you feel better, go ahead and think it. The fact that i work at a dealership AND live in the midwest, probably gives me a little insight to how things are going around my area. DINO, as far as your comment about deere, my father has worked there for 30+ years and you should see what their stock has done over the last 6 years "
Sorry, fandi, I really do like your posts but I will expect your apology in 6 months,that would be May 4th, 2009, if you would like to mark your calendar. Per Deere, that was then, this is now. Market high, $92.68, current price, $39.24. Your Dad did sell didn't he ? The versus the dollar plays have gone out the window, gold, copper, oil , agricutural equipment , ad infinitum.

duke23

Mr.Shiftright wrote:
"As for carmakers, look at cagey Henry Ford. Right in the middle of the Depression he comes out with an affordable V-8 for the masses, and the brilliant Alfred Sloane starts a Color and Design department at GM to style cars to brighten up a very grim landscape----while Pierce Arrow and Duesenberg and Auburn and hundreds of other companies just went on "doin' the same old thing" or complaining to the government.

As for Kubler-Ross---remember, she ended up talking to the dead "
Color me impressed, not only can he revive a dead automobile better than Macgyver with a spool of string and some chewing gum but a student of history is he, as well as a pundit.
Good Show ,Good Show.

snakeweasel

Most likely Bobst just moved on as everyone will.

driver100

Congrats on your new Impala Wes. You can't lease a GM or any domestics in Canada any more. They got hit with a triple wammy - the Canadian dollar shot up from about 70 cents to 95 cents and so had to lower prices in line with U.S. pricing. This lowered prices by about $3000 to $8000 a car. Then the cars coming off lease they had to buy back at very high prices agreed to 3 years ago. Then the market is cooling off and especially SUV's and trucks and gas guzzlers are sitting on lots. So, the domestics are out of the leasing business - they got burned big time. I guess another factor is the big loss in depreciation for domestics - you can buy a new car for less than a 2 year old used one.
GM lets you pay for 72 months or so to bring down monthly payments...the payments will go on longer than the car. Of course this is hyped up to be better than leasing, you are gaining equity, and you will own your vehicle.
Leasing companies will take the risk and still do leases, and some importers with cars that maintain their value continue to lease.

RE: The poor economy. One good thing is a recession does clear out a lot of dead wood. The last major recession of early 90's was followed by 10 years of great economic expansion. Maybe we will learn how to live on less, go out to eat less often, buy smaller more fuel efficient cars, business has to learn how to cut costs and be more efficient, rules have to be in place to control credit and spending....this could be a good thing one day!

imidazol97

May I recommend his posts to his blog on
his CarSpace pages

graphicguy

moo....good to hear that things are going good for you, personally. In your segment, I would think that an extra $500 off won't make or break a deal. Maybe some of the marginal buyers fall out of the funnel.

Any thoughts on the VW take over? Most of the VW stores I'm aware of are standalone....just like Porsche stores. Pure speculation, but with Porsche upping their ownership of VW, I could see some consolidation happening. Maybe far fetched, but I could see a business model whereas the person coming into the showroom looking for a Jetta, aspires to a Cayman sitting right next to it. At 25, he/she buys the Jetta.

Using the old GM business model, the buyer moves on up the ladder as their income dictates...maybe going from the Jetta, to the Passat, finally ending up at a Cayman, then to the 911, that's been teasing them the entire time...all at the same store.

wes....as I think you've found out, it's relatively simple to score a good deal right now. It seems GM is being particularly aggressive. Your particular dealership recognized you as a long standing customer. They don't want to lose your loyalty. They got real aggressive (with the help of GM's corporate money), to compensate for their inability to go your preferred leasing route. On monetary terms, it was a real skinny deal for them. They moved a unit off their books. And, they kept you as a customer. IMHO, that's the way to weather this storm right now for the dealership. Get real aggressive. Keep the customers they have. When everything finally shakes out, those folks will keep coming back.

fandi....I truly wish you nothing but success. Really, no need to be so defensive. Granted, I'm not on the front lines like you, and some of your car sales colleagues are. I don't think anyone here is trying to beat you into submission. But, it shouldn't be "us vs them" type of mentality. That just hurts in the long run.

You, and your store, just have to decide, maybe even on a case-by-case basis whether they can, or can't....will or won't make very aggressive deals. Believe me, I've been told "NO" plenty of times on some of the offers I've made when trying to buy a car. No hard feelings.

Sometimes it's harder to say "no" to a deal, than it is to say "yes" to one....for both the buyer and the seller. Some people won't recognize a very aggressive deal if it smacked them on the side of the head. Some dealerships recognize that this is a rough patch.....fewer people in the showroom. Of those that are in the showroom, the less of them you can write paper on. I'm sure it's frustrating.

You just hunker down. Get aggressive. Move as many units as you can. Finance those you can finance. Let those you can't, walk. And ride it out.

I don't think it's business as usual right now, though. From my perspective, just like in the real estate biz, currently....it's a buyers market. In truth, very few of us HAVE to buy a car. We can patch up 'ole "Christine" and drive her for a little while longer if need be.