My Salesperson Misled Me

mako1a

I don't have many Federal Reserve Notes as I have been trading them away for these since 1996. I wonder if these will buy a car.

cotmc

And I agree with both of you.

Even when my son gets into his early 20's, I'm going to make sure he brings me along whenever he is shopping for a car. The plan is for him to observe and learn, while we both go thru the car purchase process together. Hopefully, he will still be living in the same state, but who knows? When someone is far away at a college or university, sometimes the situation dictates that the student makes a purchase without a family member nearby to help.

When I was purchasing a car upon graduation from college, I thought I was well prepared for this process. Unfortunately, I still allowed the dealer to talk me into the added paint protection and undercoating. A wise family member might have saved me a few hundred dollars.

tidester

What, exactly, were the terms of the loan? Something is very amiss here.

tidester, host
SUVs and Smart Shopper

snakeweasel

%&#$& Typos. :mad:

snakeweasel

some mention window tint, or solar glass, so yes, in a way they do say they come with a windshield,

Ah but the windshield is not the only glass on the car, is it not? Window tint and solar glass may be the door windows or the back window. :P

snakeweasel

Did he buy his car at a "buy here, pay here lot"?

Most likely did as they usually finance their own and don't care the value to loan rate. Plus he most likely was the third or fourth person to buy that car.

de77

She took the three best offers, faxed the best to the second and third and within a day had what she figured was her best price and bought.

And let me guess, she bought closest to home?

nthe

while your son probably paid too much for the car, his interest rate was what he got for a reason. Banks don't let their dealers mark up the rate more than about 2-3 points. The bank is the one making the most money for taking the chance to lend your son the money cause obviously his credit isn't all that good. also KBB shows 14,400 retail for this car.

Its really sad that YOU did not help your son, or that your son being a college grad can't figure out how to use the internet or at least shop around for a good deal. How many cars have YOU bought in your lifetime?

There is no where near 125% markup, and after reading your post I can see where your son gets his sense from.

Next time, don't come here screaming about things you have no clue about, cause no one here feels sorry for you or your son. How is it you know about KBB after the sale, but not before?

to other posters, this was not a buy here pay here lot, cause they wouldn't carry 07s (most likely).

fezo

Nah. She lives in Manhattan. Was going to have to travel to purchase anyway. Within reason she bought the lowest price. That is, she wasn't doing the drive 100 miles to save 100 bucks.

Actually she did close to what you are saying - the nearest dealer that gave her a reasonable price.

lrguy44

It is quite evident what they read was the contract disclosure:

1 Amount finance
2. Maximum finance charge (if loan paid monthly until end of loan)
3. 1 + 2
4. 3 + down or trade equity.

The loan also includes D&H, other items purchased (VSC, Mop & Glow, etc.), taxes and any title fees.

His credit dictated the interest rate.

humblecoder

get a response from over half - "bought somewhere else" if nothing else. This month I got about 90 Internet leads, and sold about 10 cars to Inet customers, and I am sitting on 3 more deals. Some of them were a work in progress from months before, - sold orders and such.

Sounds like the Internet has been very good to you!

I think whether salespeople like it or not, the use of the Internet in car sales is only going to grow. From the comsumer side, it does seem to be a time saver and a convienence.

humblecoder

One thing that I have seen come up in this discussion (and it has been very interesting and lively) is how some of you salespeople don't like it when customer's "waste" your time. I've learned some new, interesting terms, such as "grinders" and "strokers" to describe customers who "waste" your time with very little in return.

After hearing some of the complaining about time "wasting" I feel that it is time to dispense with the sympathy and go into "tough love" mode!

[Puts on his drill sgt's hat]

First is that commission sales is all about failure. It is a fact that you aren't going to close on every sale, so by definition, there will always be people you will be spending time with who aren't going to end up making you any money. In a very real sense, they are "wasting" your time, since you are not getting paid for being with them.

That is just the nature of commission sales. I know from experience since I worked in sales on a commission (not selling cars though). So when I see salespeople complaining about how people are wasting their time, I wonder what they were expecting. Were you expecting that everyone who walked through the door was going to buy from you? Were you expecting that everyone who test drove a car with you was going to buy from you? Were you expecting that everyone who sits down at the desk with you was going to sign that contract? If you did, then you didn't go into this job with your eyes opened.

Sales is about accepting failure, picking yourself up, and moving on to the next prospect. Stewing over the failures only makes you bitter, which makes you less likely to sell successfully.

Second is that the car sales process is, in most cases, disrespectful of the customer's time. From the customer's standpoint, the car sales process consists of this whole song and dance:

- "What can I do to get you into this car today?"

- "Well, I'll have to write up that offer and take it back to my manager." Five minutes to WRITE up the offer, and then another FIFTEEN minutes into the back to "discuss" the offer with the sales manager.

- Salesman comes back with a counter offer. Again we spend time analyzing the offer and coming up with a counter proposal.

- Salesman writes up the counter-proposal and visits the back room for another 20 minutes.

- Salesman returns with his sales manager and the sales manager makes the final "take it or leave it" offer.

- Another round of negotiation with the sales manager until a final, final offer is made.

- Contract is written and signed, but it is not over yet.

- Customer now has to repeats variation of this song and dance with the business manager with respect to finance rates, extended warranties, etc.

A good friend of the family retired from the car sales business a few years back. He would tell me about how the whole "back room" thing was a farce. He said it was a variation of the "good cop, bad cop" routine where the salesperson was the good cop and the unseen "sales manager" was the bad cop. The salesperson would make a big show of fighting to get the customer's offer accepted, but the sales manager would always veto it, asking for more money. That way, the salesperson wouldn't have to look like the bad guy when offer after offer was revised by the evil sales manager.

Even if the salespeople out there deny my friend's story, how hard is it for salesperson to have access to the lowest acceptable price for every car on the lot. You can stick it on the salesperson's computer, or have some sort of cryptic printout for each car, or whatever.

The bottom line is that the entire car buying process seems to be disrespectful of the customer's time. So as a customer, you will have to forgive me if I don't feel any sympathy for salespeople who say that customers are disrespectful of their time.

[Takes off the drill sgt's hat]

Okay, the tough love is over. Let's have a group hug!

snakeweasel

to other posters, this was not a buy here pay here lot, cause they wouldn't carry 07s (most likely).

Ok but didn't he also say the car had 42K miles on it. How many 07's out there have 42K miles on them?

If it was an 07 with 42K miles on it how many reputable lots would be carrying it?

chikoo

Did he buy his car at a "buy here, pay here lot"?

does not look like that

http://jakesweeney.com/Splash/0012-0000-999-01-0000000000/

mackabee

Group hug. I would substitute the word "failure" with "rejection".
Mack

jlawrence01

My family has used Jake Sweeney on occasion and it is a legitimate and successful dealership in Cincinnati.

There is a market for high-mileage late model cars ... people think that they are getting a deal having a newer car and assume that the miles are largely highway.

jlawrence01

Two things that I don't understand -

1) Did your son NOT read the fine print to find out how much he would have to pay out BEFORE signing the documentation.

2) A 20% interest rate in this low-interest environment would indicate poor (or no) credit. Why is that the DEALER's fault?

jb_turner

"Second is that the car sales process is, in most cases, disrespectful of the customer's time. From the customer's standpoint, the car sales process consists of this whole song and dance:"

This whole process can be eliminated if the customer pays "sticker" (MSRP) for the car. Then no games and in and out as fast as posible.

krony

I agree with jlawrence01...it's not the dealers fault he has a poor interest rate and went over his head. I assume there was not handcuffs and a gun involved to force him to buy a car. I've walked off on probably a dozen car deals that were not going to be good.

1. Shame on him to not doing research. According to what info was provided he paid 17,585 on a 12,800 KBB car...that's his fault, not the dealer. We have the internet...use it.
2. Shame on him to not someone go along. Although "WE WE'RE SHOWN"...were you there? Shame on you too.
3. Shame on him to not get advice prior to signing the deal.
4. Shame on him to not know his budget (I assume he knew the monthly payment.)
5. Shame on him for going 72 mo...that's fine for 0% interest, or even 5% but irresponsible for 20%...

Depending upon the principal on the loan, with a 20% interest rate his best bet may be to trade the car for something a lot less ($6000-8000 range) and go to 36 mo terms to reduce the interest costs. Wait 'til the credit is better to buy what he really wants. "2007 MITSUBISHI GALANT ES (42,000 MILES) WHICH MY SON LIKED"...love that...I've bought a lot of cars I didn't like but I could afford.

joel0622

The young man did not pay that much for the car, that will be his total pay back if he keeps the loan full term. Tell him to make 18 payments and go refi at the bank or you could take him to the bank yourself now and co-sign on a loan and save him big bucks.

FYI if any of you have a kid who recently graduated or will graduate soon ask if the they have a College Student program. For example if a College Student comes in I can sell them a new car with a MAX rate usually of 9.9, allot of times it is as low as 0% with 3.9% being the average.

isellhondas

We know all of this and we accept this as part of the job.

Still, this doesn't mean we can't dislike people who waste our time with no intension of buying anything. We dislike joyriders, nasty people, people who are financially unable to buy anything.

We dislike the cheap people who frantically pit dealer against dealer in their zeal to "save" a lousy buck.

Every day, we make a decision.." Is this worth it?"

Just like ANY job.

I don't think anybody asked for any sympathy, just an understanding of what we put up with.

And, your family friend's story sure doesn't describe the place where I work!

oldfarmer50

"..This whole process can be eliminated if the customer pays "sticker" (MSRP) for the car. Then no games and in and out as fast as possible..."

Right,they would want to get the deal done before you sober up and come to you senses.

gogiboy

Joel, you're the F & I expert; so what got him that high finance rate? Stupidity? Poor credit history? No credit history? He probably hasn't begun paying back his student loans so I would guess that late payments on the student loan are not a blot on his credit report. If he has a really poor credit rating could he have done any better with--or even be financed by--a credit union or other reputable financial institution?

I agree with most others that the parent and son should have done more research. I'm guessing that a lot of my college students would make exactly the same mistake.

Except for the fact that he will become one of the myriad of disgruntled posters who float through these forums, firing off the requisite post about how "the dealer ripped me off", he and his parent both learned a valuable, if painful, lesson about financing big ticket items. The question now is whether they will use that knowledge for self empowerment or simply play the victim card from now on in all their business dealings?

Gogiboy

joel0622

Just to give you all an idea, these rates are not numbers some F&I guy pulls out of the air. They are controlled by the bank. Each bank has different rates with different guide lines but most allow 2 point mark up on 61+ months and 2.5 mark up on 60 months or less.

Here is a year old rate matrix from a bank. As you can see there is a wide margin from the lowest to the highest.

I would guess the reason this young man is paying 20% is because 1. He has no/limited credit history and 2. It was his first purchase and he got caught up in the emotion and excitement of buying a new car.

jlawrence01

so what got him that high finance rate? Stupidity? Poor credit history? No credit history? He probably hasn't begun paying back his student loans so I would guess that late payments on the student loan are not a blot on his credit report

I could see a few things:

1) Probably little or no credit, maybe not.
2) Recent graduates often graduate with an ungodly amount of debt. My summer intern was 3 years (of 5) and had $60k in student loans already.
3) I could not make out of he actually was working AND going to school or if it was school alone.

Personally, I did undergraduate and graduate work in Dayton and managed both without a vehicle ... but that was a different time.

Personally, if you are smart enough to graduate from a university, you should be smart enough to read the SALES CONTRACT(s) and related materials.

kyfdx

.. is cars can be refinanced...

If he really got taken advantage of, and his credit is not as bad as that rate suggests... then banks will be lining up to refinance him....

That's much better than paying too much for the car... That can't be fixed.

qbrozen

we'll never hear from that poster again anyway.

roadburner

we'll never hear from that poster again anyway

I call it "Vent and Run"...

gogiboy

Joel--

Thanks for that chart. It's darn informative. What accounts for the tier differences for a given score? I see that through this institution the 720+ buyer could qualify for 7.99 (tier 1) up to a whopping 18.94 (tier 5). Quite a significant spread.

Gogiboy

joel0622

As long as I have been doing this I have never seen a 720+ score in those upper tiers unless the PTI or DTI was way, way, way out of wack.

The biggest thing that drives the tiers is credit and over advance. A 705 Beacon might go a Tier 3 with a big overadvance where a 550 beacon might go tier 0 on the same car with $10K down

cccompson

How little I knew - always thought tiers were tied to credit scores.

Could you elaborate a bit here for those of us who are uninformed.

joel0622

Different banks weigh different things. The matrix I put up is an old FMCC rate sheet, thats the reason for the higher rates. There tiering is heavy, heavy, to over advance and collateral. the machine loves a customer with allot of money down on a new car. Where 5/3, Wells Fargo, etc all solely Beacon Score, i.e if you are a 740 then you are tier O, and your rate will fluctuate depending on the over advance.

That is why when you tell a salesmen that you have good credit and ask, what is my payment, they can't really tell you with out a good bit more information, and thats why they are hesitant to give you a payment with out an app. As you can see by the rate sheet, there is not a little room for error, there is allot.

humblecoder

We know all of this and we accept this as part of the job.

Still, this doesn't mean we can't dislike people who waste our time with no intension of buying anything. We dislike joyriders, nasty people, people who are financially unable to buy anything.

Hey, this is the United States. You are free to dislike anybody you want to!

I hear what you are saying. I know when I was a salesperson, I would much rather deal with people who DO have an intention of buying, too! And I certainly hated to deal with nasty people, even when they were paying customers!

Joyriders? Well, I guess there must be times when somebody is an obvious joyrider, in which case can't you just tell them to get lost? On the other hand, I know that when I am in the market for a car, I always make it a point to test drive all of the models that I am interested in, with full knowledge that I am not going to buy most of them. Does that make me a joyrider?

Maybe I am not a joyrider in the classic sense. However, if you consider that I might test drive 5 or 6 models before narrowing it down, then odds are less than 20% that I will buy a given model. So I guess I might be viewed as a joyrider in the sense that I am test driving a car that I will most likely not be buying.

However, consider things from the customer's standpoint. A car for most people is a very big purchase, so taking a few models out for a test drive seems like the smart thing to do. So again, this type of behavior, while disliked by the salesperson, is something that I can't blame the customer for doing.

Besides, dealerships offer these "test drive the new OldsmoBuick and get a free gas card" which pretty much encourages joyriding!

Regarding people with bad credit who won't be able to buy anything... Again, the dealers encourage these people to come in with all of those "no job? no credit? no problem!" types of ads. Therefore, from my standpoint, this type of behavior is to be expected.

We dislike the cheap people who frantically pit dealer against dealer in their zeal to "save" a lousy buck.

If you find those bucks in your pocket so "lousy", you can feel free to send them to me. I am always looking for a couple extra lousy bucks!

Actually, this strikes me as somewhat ironic considering that car dealers pretty much wrote the book on ways to pad the bill with extras. $80 for documenation fee. $500 for advertising (so I have to for the priviledge of being advertised to?), $100 for dealer prep, etc. All of this in the zeal to "earn" a lousy buck.

Also, it seems like salesman are enablers when it comes to the game of pitting dealer against dealer. If a customer tries to waste your time with that game, all you have to do is tell him to have a nice day! Simple and saves a lot of time.

Of course, you won't do that, since you don't make any money by saving time. You make money by selling cars! It's the same reason why people like me complain about having their time wasted with the negotiation song and dance, but still won't pay MSRP. So if the car industry is going to "encourage" people to negotiate the sticker price, then some people are going to negotiate for every last penny.

And, your family friend's story sure doesn't describe the place where I work!

His story may be true and it may not be true. The point is that it has happened to me that I have been left sitting at the salesman desk for periods of time when he ferried our offers back and forth to the "sales manager". Based upon what I hear from others, my experience seems to be more the norm than the exception.

Now I have never been in your dealership, so maybe you guys work differently. Maybe salesman have the freedom to negotiate their own deals without trips to the break room, er, I mean the sales manager's office. If so, if I am in the market for a Honda someday, I'll look you up!

humblecoder

This whole process can be eliminated if the customer pays "sticker" (MSRP) for the car. Then no games and in and out as fast as posible.

I have a counter-proposal. How about the car dealerships offer all of their cars from $100 over invoice? Then salespeople won't complain about how the "grinders" take up all of their time!

mackabee

"Pay sticker, in and out quicker"
:shades:

mackabee

That's been tried before.,i.e. one price stores. We did that in the late 90's at my store. Tercels $100.00 over invoice, Corollas were $300.00 over invoice, Camrys $500 over, Avalons $800 over and so on. Guess what? People still wanted to negotiate! Even though the prices were clearly marked. So we went back to the old in and out, back and forth and people actually paid more. Go figure?
Mackabee

joel0622

have a counter-proposal. How about the car dealerships offer all of their cars from $100 over invoice? Then salespeople won't complain about how the "grinders" take up all of their time!

It would never work, you wouldn't believe that it was really $100 over because your dad, uncles, friends, mail mans, next door neighbors, baby sitters, husband bought one 4 states over, 3 years ago for allot less then that one. Then when we showed you the invoice you would say it was fake, and then to top it all off some dumb [non-permissible content removed] dealer across town would start advertising them for $50 over invoice and screw up the whole thing any how.

mackabee

That's an UGLY one year old Matrix. This is what the new 2009 looks like:


and the new Corolla:



Civic,Sentra,Focus, and Mazda3 standby to have thy butts handed to you. Reply below:

mackabee

I call it "Troll Alert"

joel0622

Hey Big Boy you had better sell a ton of them to make up for that piece of crap you call a truck.

Oh and BTW I will make more selling one of these then you will selling 30 of any of those you listed at sticker price.

humblecoder

It would never work, you wouldn't believe that it was really $100 over because your dad, uncles, friends, mail mans, next door neighbors, baby sitters, husband bought one 4 states over, 3 years ago for allot less then that one. Then when we showed you the invoice you would say it was fake, and then to top it all off some dumb [non-permissible content removed] dealer across town would start advertising them for $50 over invoice and screw up the whole thing any how.

My suggestion was somewhat "tongue-in-cheek". I completely understand and agree with what you are saying.

I think it is apparent that the car buying "system", as it is constituted, is not very time efficient both to the customer and to the salesperson. However, with apologies to Winston Churchill, it seems like the current car buying method is the worst possible system, except for all of the other methods that have been tried from time to time.

So now that we have established that dealers aren't going to set prices at invoice+$100, and that customers aren't going to pay MSRP, I have another proposal for you all:

I promise to not complain any more about how the car buying "song and dance" is wasting the customer's time. In return, can the salespeople on this board promise not to complain about how the "grinders" waste the salespeople's time?

Please?

joel0622

Not to mention this one equals about 15 Corrola sales

joel0622

I promise to not complain any more about how the car buying "song and dance" is wasting the customer's time. In return, can the salespeople on this board promise not to complain about how the "grinders" waste the salespeople's time?

Please?

No, because then alls we would have to do around here is look at pictures of those ugly, bland cars mack keeps posting

But don't worry, at some point the conversation will turn to hold back, and then after we regurgitate that topic some one will come along and call all of the sales people liars and cheats and talk bad about us for about 3 days then disappear. Then after that mack and I will argue for a week about imports vs domestics, then we will get back to the time wasting thing again. So after it runs its course this time you should not have to read about it for about two months. Thats how long the cycle takes, depending on how long it takes for another troll to show up.

mackabee

"No, because then alls we would have to do around here is look at pictures of those ugly, bland cars mack keeps posting "

You mean like this one?


OTOH, I can sell one of these at MSRP and make twice as much as you can selling the Stang'

jescue

lin">k titleimg src="="
I wish I could make the picture post. Grrr. It is a 911 Turbo.

british_rover

Man old people...

Post the url in the raw form and I will make the image come up for you.

You need to right click in the picture, select properties and then copy and paste that url. It should end in .jpg or .gif.

jescue

link titlehttp://www.fahrcar.com/porsche-new-911-turbo-side.jpg

british_rover

jescue

Thats it. At least I got the other to come up. I can copy the photo but when I go to paste it is not available. I will check back with you in a few years and see if you feel old then. :P

fezo

"But don't worry, at some point the conversation will turn to hold back, and then after we regurgitate that topic some one will come along and call all of the sales people liars and cheats and talk bad about us for about 3 days then disappear. Then after that mack and I will argue for a week about imports vs domestics, then we will get back to the time wasting thing again."

You say that like it's a bad thing....