My email is sent to several dealers asking for a particular model, listed my "must have" options, "do not want" options, and preferred color choices.
1) No BS. Don't tell me "Come on down" and "check things out". That will get your email deleted and you go to the bottom of my dealer choices.
2) Tell me the closest match you have and possibly a couple alternates if you don't have an exact match.
3) Any price you give, list everything for an OTD price. Do not say $X plus TTL and fees. That will also result in your email getting deleted and you go to the bottom of my dealer choices.
Based on my experience buying an 05 Civic last September and also checking out the Corolla S, most Honda and Toyota dealers in central Florida are pretty decent doing internet business.
Why should anyone do that? A car dealership is in business to make money.
And I'm in business to save money.
Besides, you'll make money on the holdback, any amount over invoice, plus your rebate on advertising fees, post-sales service, etc.. Besides, you don't worry about my financial security, so why should I worry about yours?
Incidentally, it might help for readers to know that your true cost of the car is the financing cost, not the whole invoice price. You borrow the money to buy the car, then repay the loan when the car is sold, so your out-of-pocket is low and return-on-investment is high.
Example: If you pay $100 for a slotting fee and finance charges, and sell a $25k car for $1,000 over invoice, your return will look something like this:
$1,000 profit over invoice + $750 holdback (3% of MSRP, in this example) + $150 post-sale repayment of ad fees = $1,900
And this doesn't include any extra manufacturer payments for hitting sales targets and so on.
If you paid $100 for the financing, you earned $1,800 on that sale. Calculate it as an ROI number, and you made a 1800% return on your investment. What investor wouldn't want that kind of return on his funds?
" or if your closer attempts to add even $10 to the price or shove in insurance or a bunch of add-ons that I don't want "
That's only wasting your own time. Now you've gotta start over with someone else. Simply be ready for it and tell the guy to take a hike (professionally though). I've never lost a deal doing that.
Hey, while were at it, lets ask the grocery store to do the same?
If you want to pay more than I would, that's perfectly within your right. But I assume that the dealer isn't so stupid that he's going to sell me the car at a price at which he won't lose money. He'll make up for his overall profit targets from you.
In any case, there are some products for which you haggle, and some you don't. Anything expensive, such as cars, furntiure, real estate, A/V equipment, etc. are all subject to negotiation. If you don't want to, that's your choice, but I'll do it differently and pay less.
Do you actually think the dealer pockets $1800 on this *headtilt*
How do you suppose he pays for utilities, insurance, wages, commissions, telephone, legal, professional, advertising, rent, bank fees, and on and on...
For a person who understands the complications of the Rule of 78s I thinking your business acumen is a little underappreciated.
How do you suppose he pays for utilities, insurance, wages, commissions, telephone, legal, professional, advertising, rent, bank fees, and on and on...
I couldn't care less. It's up to the dealer to sort out how to turn that receipt into the resulting net profit. I don't see the dealer worrying about my expenses.
Perhaps he should cut me some slack so I can pay for my costs. Why is all this generosity supposed to go to his benefit, rather than mine?
Here's a great article from Edmunds that is long but worth a read, if but for the insights it gives about how sales people look at us, the customer
Not all salesmen are the same. Even that article shows that. FWIW I know one salesman that if I ever by that make of car I will buy from him no if's and's or but's simply because he treated us very good (he has gotten about 10-12 sales by my recommendation, maybe more).
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
That's only wasting your own time. Now you've gotta start over with someone else. Simply be ready for it and tell the guy to take a hike (professionally though). I've never lost a deal doing that.
It's a tenet of good negotiation that you have to be willing to walk if you really serious about securing a specific deal point. If you aren't willing to walk and the other party knows that, then your demand is meaningless.
But you're right, the dealer won't let you walk over something as minor as that, I was making that statement to prove a point. He may let you start walking back to your car, but he won't let you drive away...
That doesn't say much for your neck of the woods. Most loans are simple interest, most pre-computed interest loans go to high risk burrowers. If the rule of 78 applies to you its likely your a poor credit risk.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
I think that our prior poster shows us why getting the lowest priced deal out of the internet is not currently possible:
Even if I offer you a fair price close to invoice less ALL incentives in the first 10 minutes, you will still sell me down the river for $50.00 from someone else who you have to work for 3 hours.
Add to this the comment from ISellHondas, in which he makes it clear that he will not immediately offer you a near-invoice price.
Read between the lines, and you can see that there is an effort by the dealer to get more than what they'll ultimately accept after a proper negotiation.
By the way, I don't blame them for that, but that doesn't mean that I'm going to pay it. If I was on their side of the table, I would do the same...but I'm not, so I won't.
You assume (incorrectly) that all dealerships operate in the same fashion and you are dead wrong.
I never said that they act in an identical fashion. The higher volume dealerships will waste less time trying to maximize margin, and prioritize hitting hire volume targets.
But it doesn't matter that they don't all act exactly the same, the business is structured enough that the bottom line is still calculated similarly enough and I will pay the same price, regardless of the style that you may try to use.
I don't always act exactly the same, either; I, too, will adjust my tactics for each situation. (Please notice that I made it clear that I haven't told you everything here, and I won't.)
Perhaps he should cut me some slack so I can pay for my costs.
Have you ever told your boss "No thank you, I don't want that raise and you don't have to pay me overtime, I want to cut you slack so you can pay your bills"?
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Have you ever told your boss "No thank you, I don't want that raise and you don't have to pay me overtime, I want to cut you slack so you can pay your bills"?
Certainly not. (And please, do try to recognize sarcasm when it has been obviously intended.) I'd be as likely to do that as I would worry about whether the dealer is making enough profit to send his kids to Harvard.
I frankly don't care whether he makes a profit or not anymore than he cares about whether I can pay my expenses or not (just so long as I don't default on the car loan, I suppose), and I'm going to assume that he's smart enough to not sell cars at a loss. But if he does sell them at a loss, then I guess he'll be out of business soon, and he won't be selling cars for much longer.
If you won't cut others slack why do you expect others to cut you slack? Just go in get the best deal and don't worry about trying to drag someone through the mud.
I mean do you do this when you buy soup at the Piggly Wiggly?
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
You just don't get it. I know you can care less about his expenses and vice versa. But what you fail to understand is that his COST is not simply his invoice less rebates.
There are fixed and variable cost for doing business. If you can give me any example of a business that conducts its operations how you think I would enjoy to hear about it.
You have an obvious disdain for the auto industry, you are starting to become the "ugly woman" who has been dumped a few times and now just hates all men...but i digress.
The Domestic manufactor's set the market price now. Employee pricing, Green Tag sale and keep it Real Sale. Sales people are nothing more than clerks. The real problem is know when and what the makers are going to do with rebates. They drift w/inventory levels and you never know when it's the right time to buy. Most new car sales people I know make very very very small margins on new cars. They count on Used to make gross because on the right vehicle they can't be shopped. The New cars just allow the dealer to get the trade.
But what you fail to understand is that his COST is not simply his invoice less rebates.
I never claimed that these were his only costs. But let's compare apples-to-apples: If I buy a stock for $10, then sell it for $20 a year later, I don't claim that my rate of return was less than 100% because I had to pay for rent and electricity.
Again, the dealer isn't going to sell the car for a price at which he loses money (unless it's a rare circumstance in which he needs to blow out a unit for some sort of loss because of some unforseen circustance.) I'll trust him to negotiate for his team, I'll negotiate for mine, and then we'll meet at a point which is acceptable to both of us. He may not have loved my deal, but he'll prefer it to risking that there may be no deal at all.
Ok, using your example...when you buy the $10 stock do you tell Schwab or your online retailer you are not going to pay the $4.95 transaction fee?? Which is in essence the stock brokers cost and a profit. So you see, it is the same thing. So you actually paid $14.95 for you $10 dollar stock.
Or do you tell your broker, you know what, the stock cost $10, but I know you are get kick backs and load fees from the Mutual Fund companies, so...give me the stock for $9?
ok, your turn...enlighten us why this is different than a car?
So if you are willing to let your broker profit on your stock transaction, why won't you let car dealer?
So if you are willing to let your broker profit on your stock transaction, why won't you let car dealer?
I doubt that any dealer with whom I have dealt was so shamelessly ignorant that he would have sold me a car at a loss. I don't think it's my job to worry about whether my dealer knows enough about cars that he can make a living doing it.
If the rule of 78 applies to you its likely your a poor credit risk.
I generally pay cash or borrow from a bank, so it's not my problem, either. But in any case, there are plenty of people who end up with these loans, and probably never even heard of it until reading about it here. Good for you if you haven't had to bother with it.
You just don't get it. I know you can care less about his expenses and vice versa.
Your right I don't care about his expenses, I don't care about the grocery stores expenses, nor the video rental places, nor my local gas stations, nor... well you get the ideal. All I care about is the price, which is independent of the expenses of the person selling.
But what you fail to understand is that his COST is not simply his invoice less rebates.
Oh I fully understand the finances of a dealership as well as anyone else here (maybe better). But then again it shouldn't be the basis on what the car is sold for.
Do you go to the Safeway and say "I know you only paid 35 cents for this can of soup so I will offer you 38 cents for it"?
There are fixed and variable cost for doing business.
Not to mention semi-fixed and semi-variable costs.
If you can give me any example of a business that conducts its operations how you think I would enjoy to hear about it.
Could you rephrase that?
You have an obvious disdain for the auto industry,
You have a proven track record of misreading the obvious. I have no particular feelings one way or the other for the Auto industry.
you are starting to become the "ugly woman" who has been dumped a few times and now just hates all men...but i digress.
Thats it, thats the perfect description for you. Man you are cynical of dealers.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
You will only allow a car dealer to sell a car "at cost" BUT you let your broker charge a fee for his service.
Your question isn't relevant. The dealer is only going to sell me a car at a profit; he wouldn't sell it to me if it wasn't worth it to him to do it.
I'll trust that the guy knows enough about his business to make a profit on it. Are you trying to tell me that car dealers are so stupid that they need help from their customers to make sure that they can run their dealerships?
Thats more like comparing Apples to the Soviet Union. Since you are not in the business of buying and selling stock (I am presuming that you're not a stock broker) rent and electricity is not an expense associated with buying and selling stock. But it is for the car dealer (or even the stock broker that buys stock as inventory) because it is needed to run the business.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Snake, feel free to pay more than I would, no one's stopping you. Apparently, the dealers aren't smart enough to sell cars at a profit, according to some of the salespeople on this thread, so they could use your help.
By the way, did you haggle to buy your Cadillac and Hyundais, or did you pay the asking price?
Re stock purchases: I deal with an on-line discount broker, because I do not want to pay brokerage fees any higher than necessary.
Re groceries: indeed I look for the lowest prices. I either shop somewhere where I know the prices are generally low, use coupons, or watch the grocery store flyers for specials and plan menus accordingly. I don't pay any more for groceries than I have to.
Re internet buying: If I ask a dealer for a quote via internet, and he comes back with "come on down and we'll see what we can do," I delete the response and make a note NOT to go to that dealer. If he says "yes, I have the exact model you want," I go there, and turns out, oops, that model just got sold 10 minutes ago (or worse "Oh, I don't have that model on the LOT, but I can get it - from someplace 200 miles away" (which happened to me when I was shopping for an Infinit a few years ago), I leave and don't go back.
If he says "Yes, I have that model, list price is XXX, I can sell it for YYY," then we've got reason to talk, even if that price isn't quite the lowest it can get.
The whole point of the internet is to make things easy. A dealer who wants to make the easy, difficult, is not going to get my business.
Plus I doubt that I would pay more, just that I won't get an ulcer doing it.
If you paid the first price offered, odds are almost 100% that you overpaid. Look at the comments above from the dealers on this thread -- they don't give you their best price in the opening round. Don't bother thinking that you're an exception to the rule.
If you paid the first price offered, odds are almost 100% that you overpaid.
In most cases I would agree but not in all cases.
You asked me about my cars in two of them I paid the first price offered. On the Elantra I was dealing with someone I know and trusted and the price was extremely low (it was the prior years model and the dealership wanted it gone). I have known this guy for some time and would trust him with my life if need be. He has proven himself to me many times and Visa Versa. I believe what he tells me (he has earned it) and he came right out and said this is the rock bottom price.
The caddy is a strange story in itself. Needless to say I would have paid more for a lesser vehicle.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
I've been around these forums almost from the beginning and I have seen troublemakers come and go.
If you IGNORE them, they ALWAYS go away! I know it's hard to do this but if we don't, this topic will get shut down as so many other great topics have been in the past.
I've been around these forums almost from the beginning and I have seen troublemakers come and go.
I guess that "troublemaker" must be defined as "guy who knows what a holdback is, and knows that marketing incentives are fair game."
You've already admitted in effect that you don't offer your lowest price during the preliminary round, so why shouldn't someone negotiate with you when we know that the price is going to fall as a result?
About the internet car buying concept, recently, I requested a Chrysler Town & Country brochure. The local dealership sent me an e-mail, and I replied with something along the lines of "Thanks for the e-mail but right now I'm just collecting preliminary information about all minivans on my list."
He replied with "I like buyers who have already done their homework and if I can be of any assistance just let me know."
Seems like this dealership has a REAL internet department unlike the Infiniti dealership, where the guy kept telling me to "come on in". I'm satisfied with my experience at this dealership and if I ever get a Chrysler Jeep or Isuzu (they sell all 3 brands) I'd go there first. (Plus they're closest to home)
A perfect example of an "Internet Sales Department"
I think all Internet departments should be like this- no pressure, courteous, and friendly.
I've been reading this with interest. If I buy a new car next time, I 'm wondering what I expect from internet shopping. I think each person has a different expectation of how they feel it should go; I'll bet each salesman and department has a different expectation.
I usually run when I'm browsing and a salesman becomes pushy on the car lot or showroom floor when I clearly said, "I'm just looking." I accept a card and leave.
Eventually it will become clearer what the pattern of contact and response should be for internet communication. I think I'd like the real information given, and a tactfully contact me when you're ready for more and just give the signature of email and phone, etc. Let the buyer make the contact.
"I 'm wondering what I expect from internet shopping"
I think you should expect no more than for the dealer to tell you if a certain type of car is in stock. For example, if you ask them if they have a polka-dot Roller in stock, they should give you a clear Yes or No.
They may give you more info than that, but you should not expect it.
"Eventually it will become clearer what the pattern of contact and response should be for internet communication."
That is a great comment and it is absolutely right! The 'rules' for internet transactions are still evolving so we buyers should be tolerant of the dealers who don't respond exactly like we want them to.
Actually there is a real reason for selling a vehicle at a loss and it's the same in all businesses.
When I was in the steel business we had an allocation from the mill to sell 'x' amount of tons say in 2 weeks. I/we would visit the clients and negotiate prices on millions of dollars of steel come back to the office and total everything up and make sure there was a profit on the whole position. Obviously this is done by paying attention to each sale and making sure that each one stood on it's own merits ( was profitable )... however sometimes we didnt sell all of it.
Round No2.. go back to the same clients and offer them another parcel of tons at a lower price. Good for them as they can average down their overall buy.
Or, Round No3. in a last desperate effort going to lowbal buyers and say we have 'X' amount of tons left.. 'What price?' This was always at a loss it was just a matter of how bad a beating we took.
After it was all sold we totalled everything up and the big plusses balanced out ( hopefully ) the big losses and the overall position was profitable. Nearly always was.
In a strong market we didnt have to go this final step.. In a stupidly strong market, like now, the customer's used to come to us and make sure we 'reserved' their tons for them.
All this leads up to a Saturday at an auto store. If the day is a good profitable day it is much more important to take another unit or two in order to reduce inventory and increase the owner's 'holdback-retention' then to forego a loss. This is a real loss after all rebates and adding all expenses. This analysis is done every Saturday and every month, as I am sure you know.
what is your personal and professional opinion, granted based in your specific region, of the two internet models.
A) FitzMall / Carmax - everything is on the net like LLBean, 'tell us when you'll be here to pick up your vehicle'. Do you publish your entire inventory like they do?
Answering individual email inquiries and 'encouraging' people to come in and visit you to find the right vehicle for them.
All this leads up to a Saturday at an auto store. If the day is a good profitable day it is much more important to take another unit or two in order to reduce inventory and increase the owner's 'holdback-retention' then to forego a loss. This is a real loss after all rebates and adding all expenses. This analysis is done every Saturday and every month, as I am sure you know.
As usual, you make fair points. But even in this scenario, one loss is preferable to another loss, which is why it is accepted and chosen.
My basic point -- the sales guys represent the dealer, and will act in what is -- or at least, what they believe to be -- the dealer's best interest. (If they fail to act in that best interest, then the dealer made a hiring mistake, but that is not my problem.)
Ultimately, I expect the dealer to do the best he can for his team. I, of course, will play for mine, which means getting the best deal possible for me. Since I know that dealers have tried and true methods, I expect them to be used on me, and will act accordingly.
It's a shame that the sales folks have gotten so upset here, but they don't see the irony that they have helped to prove why customers and dealers can both be frustrated with the internet sales model. The customer wants simplicity and a streamlined process, but the entire traditional method of selling cars has been designed to avoid simplicity, because confusion is a tool in the sales person's arsenal.
The internet has changed the technology, but the sales attitudes and methods remain, which creates conflict and frustration for both sides.
Internet customers who have posted on this thread want a minimum of in-person communication, few trips to the lot, simple straightforward answers to their questions, and what they consider to be a reasonable price. For them, the simpler and less ambiguous, the better.
Yet the sales guys are trying to run the customer into the traditional process, which thrives on ambiguity and a lack of straightforwardness. The sales guys don't want to begin with the "reasonable price" (even though they would willingly take less after a good joust), complaining that there is too little profit, and they are still trying to get the test drive, etc. because they want a "relationship" that they hope will help them get additional price increases. It's no wonder they struggle with it -- it goes against everything they were taught.
An articulate, insightful, helpful post, sans the heavy layer of spite or vengance! :shades:
As has been stated earlier, an internet quote without a test drive can be difficult. Logically, you want to quote a fair price, good enough for the dealer to make a "reasonable profit", which means different things to different people.
Let's say you have a $30k truck, like Dodge Ram, that sells nicely, with the Hemi, for example, but is not a close-to-sticker type vehicle.
I, personally, think around $1k over invoice for a Hemi Ram is both fair and reasonable. This includes the current 0% promotion. TMV for this truck is around $1k, that's where I got this example from.
Do I quote TMV, $1k over invoice, to the customer online? Won't he try to knock this down once he reaches the dealership? How much margin for negotiation should I leave in the quote, while still being "competitive"?
Time of the month is also important. Many dealerships have sales bonuses for sales by the 10, or by the 15th, call a "Fast Start". And the end of the month both the sales rep and dealer would take shorter deals to pad their stats.
This can be confusing, as there are fewer actual buyers during the first half of the month, so deals should be easier to come buy, as competition for those few buyers is greater.
I start Monday, and I will definitely take a lot of the very good advice here and try to make car buying quick and easy for my "Clients".
I think Edmunds TMV is a very fair price guide, and it maybe useful to me, as well as my "clients".
High demand vehicles have higher gross, low demand can go for close to invoice. Shouldn't be that hard to pull off. Offer a test drive, but don't force it on people. If they want a quote, give them something I can stick to, that's fair. Have the paperwork filled out for them to sign.
Going through the traditional 10-12 step "sales process" is not exactly a joy for the sales rep either. But it is a great foundation, as it covers all the bases of making a deal.
The process isn't the problem itself, it's how you well you implement it.
Respect the customers time and intelligence, make timely responses, give the buyer money-saving options, be honest, streamline our "process", low-pressure buying experience.
The test drive builds gross into the deal, which is what I want. And it builds value into the purchase, which is what most buyers want.
The appraisal is what it is, and can't be done over the phone. That's the sales manager and used car manager's deal. I'm not taking too much credit/blame for appraisals.
Part of my job is to "silently" appraise the car, to keep their head our of the clouds on it's value, so I will work for my dealership on that end.
But working with me should be as good as it gets. I'm no hustler, even though I'm from Brooklyn! :P
Do I quote TMV, $1k over invoice, to the customer online? Won't he try to knock this down once he reaches the dealership? How much margin for negotiation should I leave in the quote, while still being "competitive"?
I think that some consumers are highly price sensitive, others are highly time-sensitive, and others still perceive themselves and claim to be price sensitive, but are probably more interested in reducing hassle. You'll have to decide which ones might be your best market. The good thing about TMV is that it is a credible, third-party source that people believe. (The fact that I don't buy it myself doesn't mean much, if most of your customers do -- after all, I wouldn't buy a car on the internet, anyway.)
IMO, if the internet model is going to work for you, you should endeavor to eliminate the in-person contact as much as possible. I guess where your problem lies is creating "stickiness" with the customer that ensures that he actually buys from you, and possibly becomes a repeat customer.
I would think that the best way is to follow Amazon -- creating a one-stop shop where the site provides the customer with the info he needs, and in the format he wants it, while you become "easy to do business with". Rather than focus on the percentage of customers you can close, focus on closing more deals, and funneling more customers through the channel so that the total number of sales you get increases. (Whether you lose some doesn't matter, just so long as you close sales efficiently and easily.)
You can see here on this thread that many dealers are unwilling to part from the traditional model. Since you already have enough of these guys working the showroom, differentiate yourself by being different and reaching the customers who can't be reached via the old methods.
Or to put another spin on it, perhaps you need to borrow from companies such as both Amazon and Saturn, with the one-price policy. Maybe you offer some sort of price "guarantee" (some amount related to TMV, or we'll refund the difference, etc.) to allay buyer fears, and cater to their desire to limit contact so that you stand out as a legit guy. Pretending that the Rule of 78 doesn't exist probably wouldn't be a way to do that...
Basicly they wanted a lease quote but they did not tell me specficly what car, they listed two different vehicles they were interested in, they didn't tell me what options they wanted, and they didn't tell me what terms they wanted for a leas.
I am not going to spend the time to work out a lease quote where I have to guess at 95% of the info. The only thing I knew was that they wanted a Range Rover and right now there are four different types of Range Rovers with about a dozen options between them.
Comments
1) No BS. Don't tell me "Come on down" and "check things out". That will get your email deleted and you go to the bottom of my dealer choices.
2) Tell me the closest match you have and possibly a couple alternates if you don't have an exact match.
3) Any price you give, list everything for an OTD price. Do not say $X plus TTL and fees. That will also result in your email getting deleted and you go to the bottom of my dealer choices.
Based on my experience buying an 05 Civic last September and also checking out the Corolla S, most Honda and Toyota dealers in central Florida are pretty decent doing internet business.
And I'm in business to save money.
Besides, you'll make money on the holdback, any amount over invoice, plus your rebate on advertising fees, post-sales service, etc.. Besides, you don't worry about my financial security, so why should I worry about yours?
Incidentally, it might help for readers to know that your true cost of the car is the financing cost, not the whole invoice price. You borrow the money to buy the car, then repay the loan when the car is sold, so your out-of-pocket is low and return-on-investment is high.
Example: If you pay $100 for a slotting fee and finance charges, and sell a $25k car for $1,000 over invoice, your return will look something like this:
$1,000 profit over invoice
+ $750 holdback (3% of MSRP, in this example)
+ $150 post-sale repayment of ad fees
= $1,900
And this doesn't include any extra manufacturer payments for hitting sales targets and so on.
If you paid $100 for the financing, you earned $1,800 on that sale. Calculate it as an ROI number, and you made a 1800% return on your investment. What investor wouldn't want that kind of return on his funds?
That's only wasting your own time. Now you've gotta start over with someone else. Simply be ready for it and tell the guy to take a hike (professionally though). I've never lost a deal doing that.
If you want to pay more than I would, that's perfectly within your right. But I assume that the dealer isn't so stupid that he's going to sell me the car at a price at which he won't lose money. He'll make up for his overall profit targets from you.
In any case, there are some products for which you haggle, and some you don't. Anything expensive, such as cars, furntiure, real estate, A/V equipment, etc. are all subject to negotiation. If you don't want to, that's your choice, but I'll do it differently and pay less.
How do you suppose he pays for utilities, insurance, wages, commissions, telephone, legal, professional, advertising, rent, bank fees, and on and on...
For a person who understands the complications of the Rule of 78s I thinking your business acumen is a little underappreciated.
I couldn't care less. It's up to the dealer to sort out how to turn that receipt into the resulting net profit. I don't see the dealer worrying about my expenses.
Perhaps he should cut me some slack so I can pay for my costs. Why is all this generosity supposed to go to his benefit, rather than mine?
Not all salesmen are the same. Even that article shows that. FWIW I know one salesman that if I ever by that make of car I will buy from him no if's and's or but's simply because he treated us very good (he has gotten about 10-12 sales by my recommendation, maybe more).
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
It's a tenet of good negotiation that you have to be willing to walk if you really serious about securing a specific deal point. If you aren't willing to walk and the other party knows that, then your demand is meaningless.
But you're right, the dealer won't let you walk over something as minor as that, I was making that statement to prove a point. He may let you start walking back to your car, but he won't let you drive away...
That doesn't say much for your neck of the woods. Most loans are simple interest, most pre-computed interest loans go to high risk burrowers. If the rule of 78 applies to you its likely your a poor credit risk.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
You assume (incorrectly) that all dealerships operate in the same fashion and you are dead wrong.
I gave you the benefit of the doubt because I believe you are in So. Calif. This is a snakepit and no doubt the reason for your nasty position.
At this point, I for one, am done with you.
Another thread ruined and probably soon to be shut down I would guess. Too bad.
Even if I offer you a fair price close to invoice less ALL incentives in the first 10 minutes, you will still sell me down the river for $50.00 from someone else who you have to work for 3 hours.
Add to this the comment from ISellHondas, in which he makes it clear that he will not immediately offer you a near-invoice price.
Read between the lines, and you can see that there is an effort by the dealer to get more than what they'll ultimately accept after a proper negotiation.
By the way, I don't blame them for that, but that doesn't mean that I'm going to pay it. If I was on their side of the table, I would do the same...but I'm not, so I won't.
I never said that they act in an identical fashion. The higher volume dealerships will waste less time trying to maximize margin, and prioritize hitting hire volume targets.
But it doesn't matter that they don't all act exactly the same, the business is structured enough that the bottom line is still calculated similarly enough and I will pay the same price, regardless of the style that you may try to use.
I don't always act exactly the same, either; I, too, will adjust my tactics for each situation. (Please notice that I made it clear that I haven't told you everything here, and I won't.)
Interesting. Well, here's Edmunds listing of the holdbacks. You can see for yourself whether I was close to the mark:
http://www.edmunds.com/advice/incentives/holdback/
Have you ever told your boss "No thank you, I don't want that raise and you don't have to pay me overtime, I want to cut you slack so you can pay your bills"?
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Certainly not. (And please, do try to recognize sarcasm when it has been obviously intended.) I'd be as likely to do that as I would worry about whether the dealer is making enough profit to send his kids to Harvard.
I frankly don't care whether he makes a profit or not anymore than he cares about whether I can pay my expenses or not (just so long as I don't default on the car loan, I suppose), and I'm going to assume that he's smart enough to not sell cars at a loss. But if he does sell them at a loss, then I guess he'll be out of business soon, and he won't be selling cars for much longer.
If you won't cut others slack why do you expect others to cut you slack? Just go in get the best deal and don't worry about trying to drag someone through the mud.
I mean do you do this when you buy soup at the Piggly Wiggly?
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
There are fixed and variable cost for doing business. If you can give me any example of a business that conducts its operations how you think I would enjoy to hear about it.
You have an obvious disdain for the auto industry, you are starting to become the "ugly woman" who has been dumped a few times and now just hates all men...but i digress.
I never claimed that these were his only costs. But let's compare apples-to-apples: If I buy a stock for $10, then sell it for $20 a year later, I don't claim that my rate of return was less than 100% because I had to pay for rent and electricity.
Again, the dealer isn't going to sell the car for a price at which he loses money (unless it's a rare circumstance in which he needs to blow out a unit for some sort of loss because of some unforseen circustance.) I'll trust him to negotiate for his team, I'll negotiate for mine, and then we'll meet at a point which is acceptable to both of us. He may not have loved my deal, but he'll prefer it to risking that there may be no deal at all.
Sarcasm, Snake, sarcasm. Read back, and see the context of the comment.
I mean do you do this when you buy soup at the Piggly Wiggly?
Do they attempt to sell extended warranties and Tin Protection Packages on soup? If they start doing that, I'll probably start haggling there, too.
Did you haggle to buy your Cadillac and Hyundais, or did you pay whatever the first price that they named?
Or do you tell your broker, you know what, the stock cost $10, but I know you are get kick backs and load fees from the Mutual Fund companies, so...give me the stock for $9?
ok, your turn...enlighten us why this is different than a car?
So if you are willing to let your broker profit on your stock transaction, why won't you let car dealer?
I doubt that any dealer with whom I have dealt was so shamelessly ignorant that he would have sold me a car at a loss. I don't think it's my job to worry about whether my dealer knows enough about cars that he can make a living doing it.
I generally pay cash or borrow from a bank, so it's not my problem, either. But in any case, there are plenty of people who end up with these loans, and probably never even heard of it until reading about it here. Good for you if you haven't had to bother with it.
Answer the question? what is the difference? Its one way or the other.
Your right I don't care about his expenses, I don't care about the grocery stores expenses, nor the video rental places, nor my local gas stations, nor... well you get the ideal. All I care about is the price, which is independent of the expenses of the person selling.
But what you fail to understand is that his COST is not simply his invoice less rebates.
Oh I fully understand the finances of a dealership as well as anyone else here (maybe better). But then again it shouldn't be the basis on what the car is sold for.
Do you go to the Safeway and say "I know you only paid 35 cents for this can of soup so I will offer you 38 cents for it"?
There are fixed and variable cost for doing business.
Not to mention semi-fixed and semi-variable costs.
If you can give me any example of a business that conducts its operations how you think I would enjoy to hear about it.
Could you rephrase that?
You have an obvious disdain for the auto industry,
You have a proven track record of misreading the obvious. I have no particular feelings one way or the other for the Auto industry.
you are starting to become the "ugly woman" who has been dumped a few times and now just hates all men...but i digress.
Thats it, thats the perfect description for you. Man you are cynical of dealers.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Your question isn't relevant. The dealer is only going to sell me a car at a profit; he wouldn't sell it to me if it wasn't worth it to him to do it.
I'll trust that the guy knows enough about his business to make a profit on it. Are you trying to tell me that car dealers are so stupid that they need help from their customers to make sure that they can run their dealerships?
Thats more like comparing Apples to the Soviet Union. Since you are not in the business of buying and selling stock (I am presuming that you're not a stock broker) rent and electricity is not an expense associated with buying and selling stock. But it is for the car dealer (or even the stock broker that buys stock as inventory) because it is needed to run the business.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
By the way, did you haggle to buy your Cadillac and Hyundais, or did you pay the asking price?
The Caddy paid the first price they named.
The Elantra paid the first price they named.
The Accent haggled.
sometimes the price is just right.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
How does this address my post? Plus I doubt that I would pay more, just that I won't get an ulcer doing it.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
The hosts in this forum are much nicer and seem to understand how males communicate. We fight like hell and then we go out and have a beer together.
Re stock purchases: I deal with an on-line discount broker, because I do not want to pay brokerage fees any higher than necessary.
Re groceries: indeed I look for the lowest prices. I either shop somewhere where I know the prices are generally low, use coupons, or watch the grocery store flyers for specials and plan menus accordingly. I don't pay any more for groceries than I have to.
Re internet buying: If I ask a dealer for a quote via internet, and he comes back with "come on down and we'll see what we can do," I delete the response and make a note NOT to go to that dealer. If he says "yes, I have the exact model you want," I go there, and turns out, oops, that model just got sold 10 minutes ago (or worse "Oh, I don't have that model on the LOT, but I can get it - from someplace 200 miles away" (which happened to me when I was shopping for an Infinit a few years ago), I leave and don't go back.
If he says "Yes, I have that model, list price is XXX, I can sell it for YYY," then we've got reason to talk, even if that price isn't quite the lowest it can get.
The whole point of the internet is to make things easy. A dealer who wants to make the easy, difficult, is not going to get my business.
If you paid the first price offered, odds are almost 100% that you overpaid. Look at the comments above from the dealers on this thread -- they don't give you their best price in the opening round. Don't bother thinking that you're an exception to the rule.
Update on my internet lead from earlier in the week. No response still I am writing him off come monday.
So right now I am 0 for 1 as of the start of this thread.
In most cases I would agree but not in all cases.
You asked me about my cars in two of them I paid the first price offered. On the Elantra I was dealing with someone I know and trusted and the price was extremely low (it was the prior years model and the dealership wanted it gone). I have known this guy for some time and would trust him with my life if need be. He has proven himself to me many times and Visa Versa. I believe what he tells me (he has earned it) and he came right out and said this is the rock bottom price.
The caddy is a strange story in itself. Needless to say I would have paid more for a lesser vehicle.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
If you IGNORE them, they ALWAYS go away! I know it's hard to do this but if we don't, this topic will get shut down as so many other great topics have been in the past.
Just ignore them!
Did you give him the specific information requested?
I guess that "troublemaker" must be defined as "guy who knows what a holdback is, and knows that marketing incentives are fair game."
You've already admitted in effect that you don't offer your lowest price during the preliminary round, so why shouldn't someone negotiate with you when we know that the price is going to fall as a result?
Geez... you try to get something done on a Saturday and the same old nonsense breaks out. Any further personal "banter" is simply going to be removed.
If you can't make a post to disagree with someone without trying to take them down, please don't post it!
He replied with "I like buyers who have already done their homework and if I can be of any assistance just let me know."
Seems like this dealership has a REAL internet department unlike the Infiniti dealership, where the guy kept telling me to "come on in". I'm satisfied with my experience at this dealership and if I ever get a Chrysler Jeep or Isuzu (they sell all 3 brands) I'd go there first. (Plus they're closest to home)
A perfect example of an "Internet Sales Department"
I think all Internet departments should be like this- no pressure, courteous, and friendly.
I usually run when I'm browsing and a salesman becomes pushy on the car lot or showroom floor when I clearly said, "I'm just looking." I accept a card and leave.
Eventually it will become clearer what the pattern of contact and response should be for internet communication. I think I'd like the real information given, and a tactfully contact me when you're ready for more and just give the signature of email and phone, etc. Let the buyer make the contact.
2014 Malibu 2LT, 2015 Cruze 2LT,
I think you should expect no more than for the dealer to tell you if a certain type of car is in stock. For example, if you ask them if they have a polka-dot Roller in stock, they should give you a clear Yes or No.
They may give you more info than that, but you should not expect it.
"Eventually it will become clearer what the pattern of contact and response should be for internet communication."
That is a great comment and it is absolutely right! The 'rules' for internet transactions are still evolving so we buyers should be tolerant of the dealers who don't respond exactly like we want them to.
When I was in the steel business we had an allocation from the mill to sell 'x' amount of tons say in 2 weeks. I/we would visit the clients and negotiate prices on millions of dollars of steel come back to the office and total everything up and make sure there was a profit on the whole position. Obviously this is done by paying attention to each sale and making sure that each one stood on it's own merits ( was profitable )... however sometimes we didnt sell all of it.
Round No2.. go back to the same clients and offer them another parcel of tons at a lower price. Good for them as they can average down their overall buy.
Or, Round No3. in a last desperate effort going to lowbal buyers and say we have 'X' amount of tons left.. 'What price?' This was always at a loss it was just a matter of how bad a beating we took.
After it was all sold we totalled everything up and the big plusses balanced out ( hopefully ) the big losses and the overall position was profitable. Nearly always was.
In a strong market we didnt have to go this final step.. In a stupidly strong market, like now, the customer's used to come to us and make sure we 'reserved' their tons for them.
All this leads up to a Saturday at an auto store. If the day is a good profitable day it is much more important to take another unit or two in order to reduce inventory and increase the owner's 'holdback-retention' then to forego a loss. This is a real loss after all rebates and adding all expenses. This analysis is done every Saturday and every month, as I am sure you know.
A) FitzMall / Carmax - everything is on the net like LLBean, 'tell us when you'll be here to pick up your vehicle'. Do you publish your entire inventory like they do?
An ordertaker vs a consultant?
As usual, you make fair points. But even in this scenario, one loss is preferable to another loss, which is why it is accepted and chosen.
My basic point -- the sales guys represent the dealer, and will act in what is -- or at least, what they believe to be -- the dealer's best interest. (If they fail to act in that best interest, then the dealer made a hiring mistake, but that is not my problem.)
Ultimately, I expect the dealer to do the best he can for his team. I, of course, will play for mine, which means getting the best deal possible for me. Since I know that dealers have tried and true methods, I expect them to be used on me, and will act accordingly.
It's a shame that the sales folks have gotten so upset here, but they don't see the irony that they have helped to prove why customers and dealers can both be frustrated with the internet sales model. The customer wants simplicity and a streamlined process, but the entire traditional method of selling cars has been designed to avoid simplicity, because confusion is a tool in the sales person's arsenal.
The internet has changed the technology, but the sales attitudes and methods remain, which creates conflict and frustration for both sides.
Internet customers who have posted on this thread want a minimum of in-person communication, few trips to the lot, simple straightforward answers to their questions, and what they consider to be a reasonable price. For them, the simpler and less ambiguous, the better.
Yet the sales guys are trying to run the customer into the traditional process, which thrives on ambiguity and a lack of straightforwardness. The sales guys don't want to begin with the "reasonable price" (even though they would willingly take less after a good joust), complaining that there is too little profit, and they are still trying to get the test drive, etc. because they want a "relationship" that they hope will help them get additional price increases. It's no wonder they struggle with it -- it goes against everything they were taught.
As has been stated earlier, an internet quote without a test drive can be difficult. Logically, you want to quote a fair price, good enough for the dealer to make a "reasonable profit", which means different things to different people.
Let's say you have a $30k truck, like Dodge Ram, that sells nicely, with the Hemi, for example, but is not a close-to-sticker type vehicle.
I, personally, think around $1k over invoice for a Hemi Ram is both fair and reasonable. This includes the current 0% promotion. TMV for this truck is around $1k, that's where I got this example from.
Do I quote TMV, $1k over invoice, to the customer online? Won't he try to knock this down once he reaches the dealership? How much margin for negotiation should I leave in the quote, while still being "competitive"?
Time of the month is also important. Many dealerships have sales bonuses for sales by the 10, or by the 15th, call a "Fast Start". And the end of the month both the sales rep and dealer would take shorter deals to pad their stats.
This can be confusing, as there are fewer actual buyers during the first half of the month, so deals should be easier to come buy, as competition for those few buyers is greater.
I start Monday, and I will definitely take a lot of the very good advice here and try to make car buying quick and easy for my "Clients".
I think Edmunds TMV is a very fair price guide, and it maybe useful to me, as well as my "clients".
High demand vehicles have higher gross, low demand can go for close to invoice. Shouldn't be that hard to pull off. Offer a test drive, but don't force it on people. If they want a quote, give them something I can stick to, that's fair. Have the paperwork filled out for them to sign.
Going through the traditional 10-12 step "sales process" is not exactly a joy for the sales rep either. But it is a great foundation, as it covers all the bases of making a deal.
The process isn't the problem itself, it's how you well you implement it.
Respect the customers time and intelligence, make timely responses, give the buyer money-saving options, be honest, streamline our "process", low-pressure buying experience.
The test drive builds gross into the deal, which is what I want. And it builds value into the purchase, which is what most buyers want.
The appraisal is what it is, and can't be done over the phone. That's the sales manager and used car manager's deal. I'm not taking too much credit/blame for appraisals.
Part of my job is to "silently" appraise the car, to keep their head our of the clouds on it's value, so I will work for my dealership on that end.
But working with me should be as good as it gets. I'm no hustler, even though I'm from Brooklyn! :P
DrFill
I think that some consumers are highly price sensitive, others are highly time-sensitive, and others still perceive themselves and claim to be price sensitive, but are probably more interested in reducing hassle. You'll have to decide which ones might be your best market. The good thing about TMV is that it is a credible, third-party source that people believe. (The fact that I don't buy it myself doesn't mean much, if most of your customers do -- after all, I wouldn't buy a car on the internet, anyway.)
IMO, if the internet model is going to work for you, you should endeavor to eliminate the in-person contact as much as possible. I guess where your problem lies is creating "stickiness" with the customer that ensures that he actually buys from you, and possibly becomes a repeat customer.
I would think that the best way is to follow Amazon -- creating a one-stop shop where the site provides the customer with the info he needs, and in the format he wants it, while you become "easy to do business with". Rather than focus on the percentage of customers you can close, focus on closing more deals, and funneling more customers through the channel so that the total number of sales you get increases. (Whether you lose some doesn't matter, just so long as you close sales efficiently and easily.)
You can see here on this thread that many dealers are unwilling to part from the traditional model. Since you already have enough of these guys working the showroom, differentiate yourself by being different and reaching the customers who can't be reached via the old methods.
Or to put another spin on it, perhaps you need to borrow from companies such as both Amazon and Saturn, with the one-price policy. Maybe you offer some sort of price "guarantee" (some amount related to TMV, or we'll refund the difference, etc.) to allay buyer fears, and cater to their desire to limit contact so that you stand out as a legit guy. Pretending that the Rule of 78 doesn't exist probably wouldn't be a way to do that...
Link
Basicly they wanted a lease quote but they did not tell me specficly what car, they listed two different vehicles they were interested in, they didn't tell me what options they wanted, and they didn't tell me what terms they wanted for a leas.
I am not going to spend the time to work out a lease quote where I have to guess at 95% of the info. The only thing I knew was that they wanted a Range Rover and right now there are four different types of Range Rovers with about a dozen options between them.