Sounds so pathetic it's almost like the salesman was using "playing dumb" as a ploy to get a deal.
Could well be, naivete (or a related gambit, a feigned lack of comprehension) can be an effective tool. If I were in his shoes, I might very well do something like that myself.
It's interesting how much people reveal their hot buttons with their actions, generally without even realizing it. A customer who demands the experienced salesperson and sees a need to go around the newbie is making it quite clear to the sales team that this buyer regards having the attentions of the pros as some sign of respect, and that this ego stroking is a key part of the buying process for this customer.
From the sales team's perspective, this is an ideal customer, because this customer can be easily pleased simply by catering to his sense of ego. Convince this buyer that he has attained VIP status and gets special insider benefits thanks to his privileged status and savvy demeanor, and you'll have a deal in pretty short order.
Total tax at 2.5% (great tax %) Title $16.50 Doc. Prep. $199.50 (not great, but could be worse--another local had $279, while another had $99)
Sorry, I was referring to just the doc fee. (You can't fault the dealer for its roles as tax and DMV fee collector, those are what they are.)
Doc fees are really just a form of added revenue, which both vary and are often not regulated. I was just trying to point that a deal which is, for example, "$200 over invoice" and includes a $400 doc fee is pretty much the same as a deal that was "$400 over invoice" with a $200 doc fee.
I remember once going to a dealership to look at a loss leader price new car advertised in the paper. Much to my shock, the car actually existed -- it was parked right on the lot, so no bait and switch for this -- but (and you knew there was a "but", right?) what was not clear in the ad was a "PDI fee" of only $600.
Of course, roll in this "PDI fee", and suddenly this deal wasn't all that interesting anymore. Since I was lukewarm about the car, I walked anyway (which in and of itself was an amusing experience) so no harm, no foul from my standpoint. But I do wonder how many people got snookered into paying some extra amount for a PDI that is already supposed to be included in the purchase price.
Didn't price of air just double last year? IIRC, it goes together with gas price, but it's amplified by a moon phase, or something like that
Oh, that clerk who fills the paperwork was a former stockbrocker at Goldman Sachs, so they definitely deserve every penny of that $699 from the fee, doesn't she? I wonder if I offered my doc services for just $299 apiece to a dealer, I could save him some really serious moolah, wouldn't I?
Now seriously - this is when they really lose my respect. Anybody who with a straight face say that anything above $199, or say for a more expensive vehicle $299 (and I am being generous here) is a reasonable charge for a prep and docs, cannot earn my respect, no matter what else they say or do.
I may buy a vehicle from them, if the total is good enough, but it really insults my inteligence that someone thinks I may actually fall for that "under invoice" or whatever crap. Of course, I just account for it and move on, but the "image damage" is already done.
The thing is, people will fall for the doc fee markup. I lost count of the number of times folks would buy a car from the other Infiniti dealer 20 miles down the road because they could get the quoted price of the car down a couple of hundred buks from our best deal. Of course, I would 'phone to follow up and be told, "We bought the car from Moes Manky Motors instead. They sold it for $200 less". Closer questioning would reveal that they paid a doc fee of $600 instead of ours at $45 (yes, forty-five). "So you really paid $355 more than ours then?", I would ask being in a bit of a snarky mood. "I guess so but the car was $200 cheaper". Cue the sound of me banging my head against the desk and vowing to find a job somewhere nice and quiet, like Antartica, where I would never have to deal with the public again.
Perhaps it would be a good idea to let the prospective customer know (when you are giving him (or her) your price, that you only charge a $45.00 doc fee AND YOUR COMPETITORS CHARGE AN EXUBERANT $600.00 DOC FEE. I am not advising this to be a smart a--, it just seems to me to make a lot of common sense. NORTSR
Anybody who with a straight face say that anything above $199, or say for a more expensive vehicle $299 (and I am being generous here) is a reasonable charge for a prep and docs, cannot earn my respect, no matter what else they say or do.
IMHO prep fees should be $0.00 as it should be included in the price of the car. I mean does Burger King charge you extra to put your hamburger together? Doc fees no more the $40 which would cover the salary of the person doing it any benefits paid and a small profit for the dealer.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
socal....I've been a poster here at Town Hall for nearly 10 years and I've got to tell you that you are becoming more than just a little insulting. I've seen other posters that have felt the same way by your back handed slights to both the dealership personnel and consumers that post here.
For the most part, I've tried to ignore you. You've proceeded, at one point or another, to insult some of the most well respected members of the Edmunds community.
I don't mind you telling anyone how you negotiate. Nothing wrong with that.
But, when you post what "easy" targets you believe we are, how the rest of us are wrong, and you, somehow by some divine covenant, know better than everyone else, it becomes irritating and not helpful in the least. There are people here who have been in the car business for decades. Personally, I've probably bought, or helped others buy, at least 20 new cars for myself, my immediate family, relatives and friends. I don't even remember how many used cars I've transacted. People I've done car business with are franchise owners, GMs, SMs and sales people. For the most part, I have a healthy respect for those folks as they are successful business people and they contribute positively to my community. They, in turn, value and respect me, as their customer.
As I mentioned before, there are many different ways to go about the business of buying a car. If someone goes about their car buying different than you, there's no reason to insult them. It doesn't mean their way is somehow not "right". Matter of fact, I can see you waltzing into a dealership, thinking you've got all their sales tactics/motivation "nailed", only to come away with little left other than some totally unfounded "smugness".
To Edmunds, the hosts, and other respected posters, I appologize in advance, as I'm certain I'm going to take some backlash over this post, but enough is enough.
I can see you waltzing into a dealership, thinking you've got all their sales tactics/motivation "nailed", only to come away with little left other than some totally unfounded "smugness".
And you'd be wrong about that. One point I've made consistently here is that negotiation is not rocket science, but it does require some preparation and understanding of your opponent.
It also requires knowing what cues you give off, and to brush off the newbie in favor of the professional is a very loud cue that I wouldn't suggest. If you make it obvious that you demand some sort of status-based relationship, then the seller will find a way to charge a premium for that alleged inside track. This happens in business all the time, and is a useful sales tool for those who tap into it.
Incidentally, I have a dear relative who is very much like this, and he always overpays by boatloads, while simultaneously believing that he did fabulously well. He's too focused on trying to feel like an important client to remember that it's ultimately about buying a commodity product at the best price possible.
Do yourself, and others, a favor. Spend more time listening, reading, watching and observing than you do posting. You may learn something (but I'm sure, you won't think so).
I've "known" you for the nearly ten years we've been around and I have always respected your level headed and logical postings.
I too, am totally fed up with Socal's continual droning postings about how he is "right" and the rest of us are "wrong". I keep hoping he will go away as others of his type have in the past. This hasn't happened.
Your post to him won't have the slighest effect. For him, the almighty dollar reigns supreme. He talks down to all of us like we are uneducated babes in the woods. I am sick of this!
I will stand alongside you and endure the backlash and, I too, apologize to the others.
I just hate to see forums ruined and watch good people leave, never to return.
Hello all. Friday, my sister and I went to look at a 2006 Ford Focus ZX3. We spoke with a guy in the fleet department because he was recomended to us. Let me tell you, this guy must believe in the Bobst method! He was very much to the point, no talking in circles or any sort of garbage. Anyways, the car is a 2006 Focus ZX3 SE, Auto, 6 disc CD changer, Power Moonroof, colored body side moldings, and Street Apperance Package. It is being offered to me at $17500 out the door with 3.9% financing. I have already called and told him I'd like to purchase the car, so we are meeting on Monday. My only hang up right now is the $399 doc fee. Ouch! What exactly does the doc fee cover anyways? He has tag transfer, title, and doc fees speratly on the paper he gave me. I live in Florida and I thought I saw a post about crazy doc fees in this state. Any advice would be appreciated.
Oh, he printed me out the invoice for the car and said "Don't tell anyone you are running around with an invoice, I could get into a lot of trouble"! His invoice has the same info that's on Edmunds, LOL.
amand....I agree with you. That doc fee seems a bit steep.
Doc fees cover the actual fee that covers the business paperwork of buying/trading in a car. It has to be filed with your community and there are fees involved in doing that. Usually, just the paperwork fee alone will run $10-$20-$50, depending on the community you're in.
The service that the dealership provides by preparing the paperwork, and filing it with the proper gov't agencies is worth something. $300+ seems a bit much, though.
Tell them you want to buy the car, but only if the doc fees are lowered to the actual fees, plus $20 for the service of the dealership to actually file them.
The thing is, people will fall for the doc fee markup.
It's a smart gambit for the dealership, because referring to something as a "fee" implies that it isn't negotiable. If they called it a revenue generator, which is what it really is, customers might be more likely to challenge it.
When someone tells me that there is a "fee", I always ask who determined the fee, and who gets to keep it. You can't fault the dealership for the license and registration fees, which are true fees, but the other stuff is often questionable.
Since you work in commissioned sales, I'm sure that you care about money as well.
In any case, you still haven't shown us how paying higher prices is a desirable purchasing strategy. I realize that using "relationships" to command higher prices is a smart sales strategy, but that isn't the thread topic.
I'm not posting this to be ...what you said , but if a salesman called me, after I had bought a competitiors vehicle, asking me what I paid for this and that....I would tell him it's none of his business. A little harsh to insinuate someone paid to much when they didn't even ask the famous,"How'd I do?" postsale question...even if they are a bonehead.
In reguards to the doc. fees. If you are wanting a quick transaction you may want to offer $150. I would try to get it for nothing, but certainly wouldn't pay more.
In reguards to the recent unplesantness. In honor of the July 4th holiday...I propose a truce. No more bickering...that is until our hosts return from their 4 day weekend. Have a safe July 4th everyone, and a bit of advice, don't pick up that firecracker, bottle rocket or simmering M-80 that you think is a dud...you could end up like this dude to the right
I bought a car two evenings after going back to the dealership where I had bought a previous car. The salesman I had before no longer was there but referred me to a someone at the dealership at the time. Couldn't negotiate. They needed a signed purchase to have the used car guy drive my 1977 Cutlass to give a tradein price. I don't sign nothing blank.
Two days later the salesman called me at WORK to ask if I was still interested. I laughed at him and told him I bought a car the night before. I asked him what he thought I was doing when I was doing at his place on Monday evening! I was there to buy a car and he was there to play games.
Just because people negotiate a lower price doesn't mean that the almighty dollar reigns supreme. I wish you would stop painting people who negotiate like that, your almost as bad as Socal.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
I guess you haven't worked in car sales? I always pointed that out up front plus the fact that we didn't do the etching, floor mats, wheel locks or pinstripe scams. No mop and glow, no uneccessary alarms, no crappy extended warranties, etc. But guess what? A lot of people just focus on the part of the deal that is important to them. For these guys, it was the figure that was written in the "cost of vehicle" box on the sales invoice. The fact that the total was over $1500 more (wheel locks, etching, doc fee) didn't matter to them. This is one of the reasons why the sales guys here are so skeptical of the "prices paid" forums here. I lost another sale once over a trade. I gave them the best price for the new car and what was fair for the trade. I didn't pick up on the fact that their trade was the key to the deal and they stormed out over my "insulting" offer. Saw them in service a month or so later and the guy was crowing over how he got $1000 more for his trade than I was offering and how I shouldn't have tried to rip him off. Needless to say, his bottom line was $300 more than the deal I put together for him but to him it didn't matter. His trade was his hot button and I didn't push it. My main problem with car sales was that I assumed everyone would think logically. That the figures would speak for themselves and what was obvious to me would be obvious to everyone else. Unfortunately, the majority of car buyers don't think like that. They get invested emotionally in the process and don't see things clearly.
You'll actually find that people are delighted to tell you how much they paid elsewhere when you make a follow up call. It certainly wasn't "grilling". Of course, if they hadn't wanted to tell me all the details I would have let it go but to me, learning where I'd lost the sale was an important part of my job.
BTW, all prepared for 4th July. The Union Flag is ready to fly and "Rule Britannia" is in the CD player
THIS IS THE END OF THE STORY -- WHAT I ACTUALLY DID:
First, I realized there was a typo, and it was Dealer "A" that offered the free oil change for two years. Sorry if that skewed the advice folks posted.
I consulted my dad, who is a long-time Lexus owner (though in a different state), and he said his dealer dropped the Dealer Advertising Fee completely.
In this case, the Dealer Advertising Fee was $583. Dealer "B" ($375 > invoice) would NOT drop this.
So, I decided that this was the reasonable counter-offer for Dealer "A" (originally %1,700 over invoice): meet the $375 > invoice, plus, drop the $583 AD fee. So I guess you could say that is $208 below Invoice, or $725 above Cost (which would include the $933 Dealer Holdback).
So that gave the dealer a 1.5% profit (they only have a $45 document fee). Now, since this was transacted on the last day of the month, and this is a 2006 gas-guzzling SUV, and the 2007's will probably be announced in the next 30 days, I was guessing that this really was a fair deal for all.
And Dealer "A" accepted. Price: $48,313 (MSRP $55,778), 36 mo. 15,000 lease payment: $768.02 Driveoff: $1,226.77.
Dealer "A" also had a different salesperson handle the deal, and the customer service was exemplary, with absolutely no mistakes in the lease this time.
I appreciated everyone's help and thoughts. Thank you all very much!
No apologies required, everyone's entitled to his or her views.
In any case, it would be preferable to use this thread as a chance for consumers to pose their questions and comment. The thread topic's main purpose is to get good pricing and negotiation advice, not to extol the virtues of car dealers, or to continually attack me on a personal level.
If one can show flaws in the points that I am making, that's fine, but if it isn't possible to offer a fact-based rebuttal, then I'd say that those arguments don't have much merit. It's interesting to note that while their comments are rather heated, they don't actually point out any errors that I may have made, which alone should tell you something.
(And that comment isn't directed toward Snake, by the way, who does have some sound advice to offer on the topic.)
I'm not posting this to be ...what you said , but if a salesman called me, after I had bought a competitiors vehicle, asking me what I paid for this and that....I would tell him it's none of his business.
I don't fault the salespeople for trying to learn from their successes and failures, continuous improvement and learning from mistakes are sound objectives for people on both sides. That might make an interesting thread for the salespeople -- stories about the fish that got away, and how they would do better next time.
No such thing as a "4-day weekend" for the hosts. We can light fireworks and monitor discussions simultaneously
MODERATOR /ADMINISTRATOR Find me at kirstie_h@edmunds.com - or send a private message by clicking on my name. 2015 Kia Soul, 2021 Subaru Forester (kirstie_h), 2024 GMC Sierra 1500 (mr. kirstie_h) Review your vehicle
jmonroe....no need to thank me. I'm sincere in my gratitude.
Back on topic, there seems to be a genuine fear of setting up a relationship with the dealership. I don't understand that. Most use the dealership for their service work (at least during the warranty period). As in any business, the more business you throw your dealership's way, the better the deal you get on the sales side, too. I think "audia" made this point earlier, and I've noticed it, too in my business dealings with car franchises. IT costs the dealerhips more to gain new customers than it does to find new ones. I'm certain they want to keep their current customer base and have them return again, and again.
I do believe a lot of it stems from most people questioning whether they got "a good deal", even after they sign the papers and drive away.
After doing some research and doing a bit of shopping, it always amazes me how I always shop at the same dealerships as they always seem to give the best deals to their returning customers.
there seems to be a genuine fear of setting up a relationship with the dealership. I don't understand that.
It's not a "fear", it's a waste of time for the typical car shopper who has minimal interaction with the dealership.
Relationships are important for a buyer when the transactions and interactions are frequent, or when the buyer's reputation matters. For buying a car every so often, this is not meaningful at all to the buyer.
The salesperson uses the "relationship" to get a higher price for the car. I'd rather pay less for the car, as the relationship has a negative economic value to me. Paying anything for it is a waste of my money.
The salesperson is not eager to maintain a "relationship" with the low-price buyer, so I don't end up with one. I would take the relationship if it was free of charge, but since it is actually rather expensive for me as a buyer, why would I possibly want one?
socal.....at least we agree on one thing....if you're an infrequent car buyer, you may not bennefit from a business relationship with a dealer....maybe.
I am a frequent car buyer, though.....one every 2-3 years for me personally....sometimes even more often (especially recently). It seems I'm in a dealership at least once per year for other family members and friends, though. That's where those relationships pay off. Never have those relationships resulted in paying more than someone else....usually it was less.
Case in point, a friend recently came to the end of a lease for her 3 year old RAV 4. She wanted one of the redesigned RAV 4s....only this time, she wanted to purchase. The original lease she signed wasn't all that great. She knew it and asked me to make a phone call to the GM of the Toyota dealership I bought my 4-Runner from last year. I've also bought other Toyotas from this same dealership/GM over time.
Result? Dealership personnel ended up doing most of the deal via phone. She could pick from any RAV4 on the lot for $300 over invoice. The GM faxed her the list of cars, colors and options she said she'd be interested in. Did a quick "check" here at Edmunds to see if the numbers matched up. They did. Checked the "Prices Paid" forum. It's the best deal I saw, at the time. Add-in a $50 doc fee (which was reasonable), plus he threw in a year's worth of oil changes. Easy-peasy. A quick test drive by my friend and it was a done deal....one phone call and a few fax pages later.
It took me all of 5 mintues of time for the phone call and to check the numbers. It took my friend all of 30 minutes at the dealership to test drive and to do the paperwork.
She's happy with her vehicle and the deal. Dealership's happy that they got a referral from me (which was one of many) and moved a unit.....no muss....no fuss!
Do you think my friend will refer someone to the dealership, too? Absolutely! I can't tell you how many deals this dealership has made with people I've referred to them. They're good deals, too. Now, they've got another customer who will refer people to them.
While I haven't received it, as is his custom, I'll probably get $50 sent to me for the referral from the Toyota GM, to boot.
As "isellhondas" has stated time and again, the vast majority of his business comes via referrals. That's why he's been successful for so long. His customers like doing business with him. They give him business he wouldn't ordinarily get by waiting for the next "up".
I am a frequent car buyer, though.....one every 2-3 years for me
I'm buying every few years, and I don't consider that to be frequent at all.
Frequency comes into play for someone such as a fleet buyer, who has other priorities in addition to price such as certainty of delivery and the ability to service a large number of vehicles. It doesn't affect the average car buyer at all.
She could pick from any RAV4 on the lot for $300 over invoice.
I'm helping a buddy of mine with his car shopping, and he's getting below-invoice prices being quoted on the phone. (We'll see if that's a bait-and-switch when he's ready to buy, but that's what has happened on the phone.) And I certainly paid less than that margin on a premium car that, according to the dealers here, is a price that I shouldn't be able to get.
As "isellhondas" has stated time and again, the vast majority of his business comes via referrals.
That's my point. The relationship is great for the salesperson. That doesn't mean that it's great for a buyer.
ISell actually proves my points on this, time and time again. He does not like low price buyers (they are labeled as "grinders", etc.), and he thinks that he deserves to fetch a premium in exchange for all of his time spent creating his "relationships". He also makes it clear that his best price will not be his first price, and that he doesn't like buyers who care a lot about price.
I don't blame ISell for doing what he does -- he's doing what he's supposed to do, trying to earn as much as he can. But he isn't using the "relationship" to hand out discounts, he's using them to increase his commissions. Unless he's splitting commissions with his buyers, that helps him, but comes out of their pockets. Again, that's not a relationship that I want.
I would imagine that below invoice pricing is focused more on the truck/SUV units that the domestic nameplates are offering. Aside from some modest rebates Toyota is offering on their bigger trucks/SUVs (relative to their domestic counterparts), they certainly aren't offering any incentives on their new offerings like the RAV4.
As in any business, any relationship is predicated on the fact that the best customers get the best deals to keep those customers "in the fold". In order for that to happen, the customer has to be "incentivized" to come back to the dealership for subsequent purchases and the subsequent referrals. That's the way a business or dealership keeps their best customers. As has been said, time and time, again....it's easier (and less costly) to keep a current customer than it is to get a new customer.
I've seen a couple of those "King of Cars" episodes. While I don't know anything about that dealership, I would imagine that with as many sales people they have, it's a "churn and burn" store similar to those found in southern California. They don't seem to care about anything other than that one sale at a time. That's a tough way to make an on-going successful business. Apparently, they have been successful in doing just that....trying to squeeze every last nickel out of each and every deal. They have to do that to make their dealership successful because they certainly aren't going to do it by referral business.
There aren't that many of those types of dealerships around my 'burg. The only ones that I'm aware of who might be that way, I don't shop at.
While I live in the suburbs of Cincinnat (a mid-sized metropolitan area with ~300,000 drivers), the numbers of dealerships aren't as plentiful as there are in a major metropolitan area like Southern/Northern CA.
For example...there are within 25 miles of me.....
--4 Ford dealerships --4 Chevy dealerships --4 Toyota dealerships --3 Nissan dealerships --3 GMC/Pontiac/Buick dealerships --3 Chrysler/Jeep dealerships --3 Honda dealerships --2 Dodge dealerships --2 Lincoln/Mercury dealerships --2 Lexus dealerships (both owned by the same dealership group) --2 Hummer dealerships --2 Acura dealerships --2 BMW dealerships --2 Volvo dealerships --2 Mercedes dealerships --2 Porsche dealerships --1 Infiniti dealership --1 Land Rover dealership
Point being, with so few brand dealerships, the customer knows all of them. The dealerships try very hard to keep the customers they have in the way of good pricing and good service. They don't want to lose a customer on price or service. They can't afford to. Referrals are a big part of their business....as are their customer relationships.
any relationship is predicated on the fact that the best customers get the best deals to keep those customers "in the fold"
It's actually the opposite of what you've described. In the eyes of the seller, the "best" customer does not buy at the lowest price. (ISell makes this obvious.)
The "best" customers pay more than the "grinders" whom they dislike, because the grinder delivers minimum margin, while salespeople are hired to get the highest prices possible. A salesperson who can only deliver low margin deals is not going to be considered to be a good salesperson (unless he's in an environment in which volume is given more of a priority.)
It seems that you have not had any professional sales training. A primary goal of any salesperson, particularly in a potentially high margin environment such as car sales, is to get the customer to focus on issues other than price, so that the buyer pays more than he otherwise would have. If you can get the buyer to pay too much and to feel happy about it, more the better.
A salesperson isn't being paid to give away margin to his "relationships", his relationships are meant to deliver his higher commissions and volumes. They are costly to buyers, which is why they are best off avoiding any efforts to use them as a means to get a discount. Discounting comes from making a salesperson fear that he may lose a legit sale that he worked to get, not by trying to be his new best friend.
I don't know "isellhondas" business, but I'd bet a dollar to a doughnut he couldn't stay as successful as he has, for so long, if he was "fleecing" his customer base.
At some point, either the customer, or the dealership is going to say..."all the money is on the table.....another $50-$100 isn't left in this deal". Someone either walks, or the dealership will let them walk.
While I'll admit when I was a young pup, I made some less desireable car deals. I was naive.
Now, I know because of research reading, listening, and a little observation, I'm getting a deal I feel good about when I drive away....knowing I didn't leave money on the table. It took plenty of mistakes to get to that point, though.
I don't know "isellhondas" business, but I'd bet a dollar to a doughnut he couldn't stay as successful as he has, for so long, if he was "fleecing" his customer base.
That's a strawman point. It's not a matter of "fleecing", it's a matter of getting the customer to pay more than he otherwise would have because price takes a back seat to the customer's other hot button issues. That's the goal of any professional salesperson: to make the relationship take precedence over the money.
The funny thing is that everyone I know who thinks he has a "friend in the car business" always ends up paying more. They don't realize that the friendship is rather one-sided, and the salesperson is simply giving you a mediocre deal while trying to get you to feel great about it. The salesperson wants you to believe that you've established some place of privilege, but that's just part of the game that is intended to get you to focus on the person, the service ,etc., instead of on the deal where your attention belongs.
False friendships are no substitute for negotiation. If you want the best deal, you need to learn about the pricing and incentives, and then play accordingly. Fortunately, it isn't difficult to do, and just as long as you don't kid yourself into believing that buddying up with the sales department is the best way to get the lowest price, when the sales team uses these relationships deliberately for the opposite reason.
socal....I manange professional sales people (as well as other depts within my company). I've sent my sales people through (and have personally participated in) more sales training than I care to remember.
To be sure, it's a different industry. While admittedly, I've never made sales a career at any point, I've been in front of enough customers (when my sales people ask for my help) to know what does, and what doesn't motivate a sale to be made.
As you admit, you feel you get the best deal by "grinding" on a car deal. I can remember going with my Father to car shop when I was young. He was a grinder. That's the only way he felt he was getting a "good deal". I remember asking him why he felt the need to grind? He was brought up during a time when there were no MSRP stickers on cars.....there was no "peeking" at the invoice....no holdback info....no incentive information available to him. When the dealership finally said "no" to his demands at a couple of different dealerships (and after many hours/days of negotiation), he finally knew he reached rock bottom, pricewise.
One time, we did a little experiment. He would spend an afternoon "grinding" for a car. I would call up dealerships I had extablished relationships with. At the end of the experiment, I got a better deal quicker and easier with a 5 minute phone call than he did by grinding for hours. From that point forward, he let me do his negotiations for him.
Your way works for you. My way works for me. Do I spend more? Nope. Do you? Don't know. As long as you're happy with your deals, that's all that matters.
As you admit, you feel you get the best deal by "grinding" on a car deal.
Where do I claim this? I never once claimed this, and in fact have advised buyers here that it is generally not necessary to use overtly aggressive tactics.
What I have said is that the salespeople label every low-price buyer as a "grinder". They don't like low price buyers, even if those buyers are polite and courteous. For the salesperson, all that sweetness and light goes away when the money on the table is minimal -- he's irritated to have invested the effort only to have made so little.
I don't need to grind to get the lowest price, but I don't fool myself into believing that a "relationship" is designed to give the customer the lowest price. A salesperson is on the team because he is meant to increase margins, not decrease them or give them away, and those "relationships" are all about increasing margins and volume. You don't buy enough cars often enough to have the best price handed to you during Round 1 of the negotiation, and you're sure not going to get it if you make the first offer.
mike....you're right. This is finished (at least on my end). Some people just don't get it.
Onto something different....I noticed over July 4th that many dealerships had tents, baloons, hot dogs and burgers flying off the grills they had set up.
Just curious, if this actually draws people in to buy a car. Or, do people scarf up the freebies and then leave?
Comments
Could well be, naivete (or a related gambit, a feigned lack of comprehension) can be an effective tool. If I were in his shoes, I might very well do something like that myself.
It's interesting how much people reveal their hot buttons with their actions, generally without even realizing it. A customer who demands the experienced salesperson and sees a need to go around the newbie is making it quite clear to the sales team that this buyer regards having the attentions of the pros as some sign of respect, and that this ego stroking is a key part of the buying process for this customer.
From the sales team's perspective, this is an ideal customer, because this customer can be easily pleased simply by catering to his sense of ego. Convince this buyer that he has attained VIP status and gets special insider benefits thanks to his privileged status and savvy demeanor, and you'll have a deal in pretty short order.
Title $16.50
Doc. Prep. $199.50 (not great, but could be worse--another local had $279, while another had $99)
Sorry, I was referring to just the doc fee. (You can't fault the dealer for its roles as tax and DMV fee collector, those are what they are.)
Doc fees are really just a form of added revenue, which both vary and are often not regulated. I was just trying to point that a deal which is, for example, "$200 over invoice" and includes a $400 doc fee is pretty much the same as a deal that was "$400 over invoice" with a $200 doc fee.
I remember once going to a dealership to look at a loss leader price new car advertised in the paper. Much to my shock, the car actually existed -- it was parked right on the lot, so no bait and switch for this -- but (and you knew there was a "but", right?) what was not clear in the ad was a "PDI fee" of only $600.
Of course, roll in this "PDI fee", and suddenly this deal wasn't all that interesting anymore. Since I was lukewarm about the car, I walked anyway (which in and of itself was an amusing experience) so no harm, no foul from my standpoint. But I do wonder how many people got snookered into paying some extra amount for a PDI that is already supposed to be included in the purchase price.
Oh, that clerk who fills the paperwork was a former stockbrocker at Goldman Sachs, so they definitely deserve every penny of that $699 from the fee, doesn't she? I wonder if I offered my doc services for just $299 apiece to a dealer, I could save him some really serious moolah, wouldn't I?
Now seriously - this is when they really lose my respect. Anybody who with a straight face say that anything above $199, or say for a more expensive vehicle $299 (and I am being generous here) is a reasonable charge for a prep and docs, cannot earn my respect, no matter what else they say or do.
I may buy a vehicle from them, if the total is good enough, but it really insults my inteligence that someone thinks I may actually fall for that "under invoice" or whatever crap. Of course, I just account for it and move on, but the "image damage" is already done.
2018 430i Gran Coupe
I am not advising this to be a smart a--, it just seems to me to make a lot of common sense.
NORTSR
IMHO prep fees should be $0.00 as it should be included in the price of the car. I mean does Burger King charge you extra to put your hamburger together? Doc fees no more the $40 which would cover the salary of the person doing it any benefits paid and a small profit for the dealer.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
For the most part, I've tried to ignore you. You've proceeded, at one point or another, to insult some of the most well respected members of the Edmunds community.
I don't mind you telling anyone how you negotiate. Nothing wrong with that.
But, when you post what "easy" targets you believe we are, how the rest of us are wrong, and you, somehow by some divine covenant, know better than everyone else, it becomes irritating and not helpful in the least. There are people here who have been in the car business for decades. Personally, I've probably bought, or helped others buy, at least 20 new cars for myself, my immediate family, relatives and friends. I don't even remember how many used cars I've transacted. People I've done car business with are franchise owners, GMs, SMs and sales people. For the most part, I have a healthy respect for those folks as they are successful business people and they contribute positively to my community. They, in turn, value and respect me, as their customer.
As I mentioned before, there are many different ways to go about the business of buying a car. If someone goes about their car buying different than you, there's no reason to insult them. It doesn't mean their way is somehow not "right". Matter of fact, I can see you waltzing into a dealership, thinking you've got all their sales tactics/motivation "nailed", only to come away with little left other than some totally unfounded "smugness".
To Edmunds, the hosts, and other respected posters, I appologize in advance, as I'm certain I'm going to take some backlash over this post, but enough is enough.
And you'd be wrong about that. One point I've made consistently here is that negotiation is not rocket science, but it does require some preparation and understanding of your opponent.
It also requires knowing what cues you give off, and to brush off the newbie in favor of the professional is a very loud cue that I wouldn't suggest. If you make it obvious that you demand some sort of status-based relationship, then the seller will find a way to charge a premium for that alleged inside track. This happens in business all the time, and is a useful sales tool for those who tap into it.
Incidentally, I have a dear relative who is very much like this, and he always overpays by boatloads, while simultaneously believing that he did fabulously well. He's too focused on trying to feel like an important client to remember that it's ultimately about buying a commodity product at the best price possible.
Do yourself, and others, a favor. Spend more time listening, reading, watching and observing than you do posting. You may learn something (but I'm sure, you won't think so).
I've "known" you for the nearly ten years we've been around and I have always respected your level headed and logical postings.
I too, am totally fed up with Socal's continual droning postings about how he is "right" and the rest of us are "wrong". I keep hoping he will go away as others of his type have in the past. This hasn't happened.
Your post to him won't have the slighest effect. For him, the almighty dollar reigns supreme. He talks down to all of us like we are uneducated babes in the woods. I am sick of this!
I will stand alongside you and endure the backlash and, I too, apologize to the others.
I just hate to see forums ruined and watch good people leave, never to return.
Oh, he printed me out the invoice for the car and said "Don't tell anyone you are running around with an invoice, I could get into a lot of trouble"! His invoice has the same info that's on Edmunds, LOL.
399.00 for a doc fee? WOW!
We charge 35.00.
Doc fees cover the actual fee that covers the business paperwork of buying/trading in a car. It has to be filed with your community and there are fees involved in doing that. Usually, just the paperwork fee alone will run $10-$20-$50, depending on the community you're in.
The service that the dealership provides by preparing the paperwork, and filing it with the proper gov't agencies is worth something. $300+ seems a bit much, though.
Tell them you want to buy the car, but only if the doc fees are lowered to the actual fees, plus $20 for the service of the dealership to actually file them.
See how that works.
It's a smart gambit for the dealership, because referring to something as a "fee" implies that it isn't negotiable. If they called it a revenue generator, which is what it really is, customers might be more likely to challenge it.
When someone tells me that there is a "fee", I always ask who determined the fee, and who gets to keep it. You can't fault the dealership for the license and registration fees, which are true fees, but the other stuff is often questionable.
Since you work in commissioned sales, I'm sure that you care about money as well.
In any case, you still haven't shown us how paying higher prices is a desirable purchasing strategy. I realize that using "relationships" to command higher prices is a smart sales strategy, but that isn't the thread topic.
I'm not posting this to be ...what you said , but if a salesman called me, after I had bought a competitiors vehicle, asking me what I paid for this and that....I would tell him it's none of his business. A little harsh to insinuate someone paid to much when they didn't even ask the famous,"How'd I do?" postsale question...even if they are a bonehead.
In reguards to the doc. fees. If you are wanting a quick transaction you may want to offer $150. I would try to get it for nothing, but certainly wouldn't pay more.
In reguards to the recent unplesantness. In honor of the July 4th holiday...I propose a truce. No more bickering...that is until our hosts return from their 4 day weekend. Have a safe July 4th everyone, and a bit of advice, don't pick up that firecracker, bottle rocket or simmering M-80 that you think is a dud...you could end up like this dude to the right
Two days later the salesman called me at WORK to ask if I was still interested. I laughed at him and told him I bought a car the night before. I asked him what he thought I was doing when I was doing at his place on Monday evening! I was there to buy a car and he was there to play games.
2014 Malibu 2LT, 2015 Cruze 2LT,
Just because people negotiate a lower price doesn't mean that the almighty dollar reigns supreme. I wish you would stop painting people who negotiate like that, your almost as bad as Socal.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
I lost another sale once over a trade. I gave them the best price for the new car and what was fair for the trade. I didn't pick up on the fact that their trade was the key to the deal and they stormed out over my "insulting" offer. Saw them in service a month or so later and the guy was crowing over how he got $1000 more for his trade than I was offering and how I shouldn't have tried to rip him off. Needless to say, his bottom line was $300 more than the deal I put together for him but to him it didn't matter. His trade was his hot button and I didn't push it.
My main problem with car sales was that I assumed everyone would think logically. That the figures would speak for themselves and what was obvious to me would be obvious to everyone else. Unfortunately, the majority of car buyers don't think like that. They get invested emotionally in the process and don't see things clearly.
BTW, all prepared for 4th July. The Union Flag is ready to fly and "Rule Britannia" is in the CD player
WOW...that truce lasted a whole 12 minutes.
That was a cheap shot though snake...you owe socala4 an apology.
First, I realized there was a typo, and it was Dealer "A" that offered the free oil change for two years. Sorry if that skewed the advice folks posted.
I consulted my dad, who is a long-time Lexus owner (though in a different state), and he said his dealer dropped the Dealer Advertising Fee completely.
In this case, the Dealer Advertising Fee was $583. Dealer "B" ($375 > invoice) would NOT drop this.
So, I decided that this was the reasonable counter-offer for Dealer "A" (originally %1,700 over invoice): meet the $375 > invoice, plus, drop the $583 AD fee. So I guess you could say that is $208 below Invoice, or $725 above Cost (which would include the $933 Dealer Holdback).
So that gave the dealer a 1.5% profit (they only have a $45 document fee). Now, since this was transacted on the last day of the month, and this is a 2006 gas-guzzling SUV, and the 2007's will probably be announced in the next 30 days, I was guessing that this really was a fair deal for all.
And Dealer "A" accepted. Price: $48,313 (MSRP $55,778), 36 mo. 15,000 lease payment: $768.02 Driveoff: $1,226.77.
Dealer "A" also had a different salesperson handle the deal, and the customer service was exemplary, with absolutely no mistakes in the lease this time.
I appreciated everyone's help and thoughts. Thank you all very much!
Any interesting exchanges between yourself and the customers you follow up with? I mean other than, "Dealership XXX gave me the car for $200 less"
What do most of your follow-ups say as to why you didn't get their business...besides the obvious money factor?
How has follow-up calls helped in making future sales?
Thanks.
Have a great 4th weekend.
tidester, host
In any case, it would be preferable to use this thread as a chance for consumers to pose their questions and comment. The thread topic's main purpose is to get good pricing and negotiation advice, not to extol the virtues of car dealers, or to continually attack me on a personal level.
If one can show flaws in the points that I am making, that's fine, but if it isn't possible to offer a fact-based rebuttal, then I'd say that those arguments don't have much merit. It's interesting to note that while their comments are rather heated, they don't actually point out any errors that I may have made, which alone should tell you something.
(And that comment isn't directed toward Snake, by the way, who does have some sound advice to offer on the topic.)
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
I don't fault the salespeople for trying to learn from their successes and failures, continuous improvement and learning from mistakes are sound objectives for people on both sides. That might make an interesting thread for the salespeople -- stories about the fish that got away, and how they would do better next time.
God bless them all!!!!!!!!!!!!!!!!!!!!!!!!
Just remember we lead the series 2-0
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
God bless them all!!!!!!!!!!!!!!!!!!!!!!!!
Thanks for bringing this up graphicguy. We live in the greatest country on earth and too many that live here don't even appreciate it !!
We even have a chance to join in these thread discussions/arguments.
Thanks again,
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
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2015 Kia Soul, 2021 Subaru Forester (kirstie_h), 2024 GMC Sierra 1500 (mr. kirstie_h)
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Back on topic, there seems to be a genuine fear of setting up a relationship with the dealership. I don't understand that. Most use the dealership for their service work (at least during the warranty period). As in any business, the more business you throw your dealership's way, the better the deal you get on the sales side, too. I think "audia" made this point earlier, and I've noticed it, too in my business dealings with car franchises. IT costs the dealerhips more to gain new customers than it does to find new ones. I'm certain they want to keep their current customer base and have them return again, and again.
I do believe a lot of it stems from most people questioning whether they got "a good deal", even after they sign the papers and drive away.
After doing some research and doing a bit of shopping, it always amazes me how I always shop at the same dealerships as they always seem to give the best deals to their returning customers.
It's not a "fear", it's a waste of time for the typical car shopper who has minimal interaction with the dealership.
Relationships are important for a buyer when the transactions and interactions are frequent, or when the buyer's reputation matters. For buying a car every so often, this is not meaningful at all to the buyer.
The salesperson uses the "relationship" to get a higher price for the car. I'd rather pay less for the car, as the relationship has a negative economic value to me. Paying anything for it is a waste of my money.
The salesperson is not eager to maintain a "relationship" with the low-price buyer, so I don't end up with one. I would take the relationship if it was free of charge, but since it is actually rather expensive for me as a buyer, why would I possibly want one?
I am a frequent car buyer, though.....one every 2-3 years for me personally....sometimes even more often (especially recently). It seems I'm in a dealership at least once per year for other family members and friends, though. That's where those relationships pay off. Never have those relationships resulted in paying more than someone else....usually it was less.
Case in point, a friend recently came to the end of a lease for her 3 year old RAV 4. She wanted one of the redesigned RAV 4s....only this time, she wanted to purchase. The original lease she signed wasn't all that great. She knew it and asked me to make a phone call to the GM of the Toyota dealership I bought my 4-Runner from last year. I've also bought other Toyotas from this same dealership/GM over time.
Result? Dealership personnel ended up doing most of the deal via phone. She could pick from any RAV4 on the lot for $300 over invoice. The GM faxed her the list of cars, colors and options she said she'd be interested in. Did a quick "check" here at Edmunds to see if the numbers matched up. They did. Checked the "Prices Paid" forum. It's the best deal I saw, at the time. Add-in a $50 doc fee (which was reasonable), plus he threw in a year's worth of oil changes. Easy-peasy. A quick test drive by my friend and it was a done deal....one phone call and a few fax pages later.
It took me all of 5 mintues of time for the phone call and to check the numbers. It took my friend all of 30 minutes at the dealership to test drive and to do the paperwork.
She's happy with her vehicle and the deal. Dealership's happy that they got a referral from me (which was one of many) and moved a unit.....no muss....no fuss!
Do you think my friend will refer someone to the dealership, too? Absolutely! I can't tell you how many deals this dealership has made with people I've referred to them. They're good deals, too. Now, they've got another customer who will refer people to them.
While I haven't received it, as is his custom, I'll probably get $50 sent to me for the referral from the Toyota GM, to boot.
As "isellhondas" has stated time and again, the vast majority of his business comes via referrals. That's why he's been successful for so long. His customers like doing business with him. They give him business he wouldn't ordinarily get by waiting for the next "up".
I'm buying every few years, and I don't consider that to be frequent at all.
Frequency comes into play for someone such as a fleet buyer, who has other priorities in addition to price such as certainty of delivery and the ability to service a large number of vehicles. It doesn't affect the average car buyer at all.
She could pick from any RAV4 on the lot for $300 over invoice.
I'm helping a buddy of mine with his car shopping, and he's getting below-invoice prices being quoted on the phone. (We'll see if that's a bait-and-switch when he's ready to buy, but that's what has happened on the phone.) And I certainly paid less than that margin on a premium car that, according to the dealers here, is a price that I shouldn't be able to get.
As "isellhondas" has stated time and again, the vast majority of his business comes via referrals.
That's my point. The relationship is great for the salesperson. That doesn't mean that it's great for a buyer.
ISell actually proves my points on this, time and time again. He does not like low price buyers (they are labeled as "grinders", etc.), and he thinks that he deserves to fetch a premium in exchange for all of his time spent creating his "relationships". He also makes it clear that his best price will not be his first price, and that he doesn't like buyers who care a lot about price.
I don't blame ISell for doing what he does -- he's doing what he's supposed to do, trying to earn as much as he can. But he isn't using the "relationship" to hand out discounts, he's using them to increase his commissions. Unless he's splitting commissions with his buyers, that helps him, but comes out of their pockets. Again, that's not a relationship that I want.
As in any business, any relationship is predicated on the fact that the best customers get the best deals to keep those customers "in the fold". In order for that to happen, the customer has to be "incentivized" to come back to the dealership for subsequent purchases and the subsequent referrals. That's the way a business or dealership keeps their best customers. As has been said, time and time, again....it's easier (and less costly) to keep a current customer than it is to get a new customer.
I've seen a couple of those "King of Cars" episodes. While I don't know anything about that dealership, I would imagine that with as many sales people they have, it's a "churn and burn" store similar to those found in southern California. They don't seem to care about anything other than that one sale at a time. That's a tough way to make an on-going successful business. Apparently, they have been successful in doing just that....trying to squeeze every last nickel out of each and every deal. They have to do that to make their dealership successful because they certainly aren't going to do it by referral business.
There aren't that many of those types of dealerships around my 'burg. The only ones that I'm aware of who might be that way, I don't shop at.
While I live in the suburbs of Cincinnat (a mid-sized metropolitan area with ~300,000 drivers), the numbers of dealerships aren't as plentiful as there are in a major metropolitan area like Southern/Northern CA.
For example...there are within 25 miles of me.....
--4 Ford dealerships
--4 Chevy dealerships
--4 Toyota dealerships
--3 Nissan dealerships
--3 GMC/Pontiac/Buick dealerships
--3 Chrysler/Jeep dealerships
--3 Honda dealerships
--2 Dodge dealerships
--2 Lincoln/Mercury dealerships
--2 Lexus dealerships (both owned by the same dealership group)
--2 Hummer dealerships
--2 Acura dealerships
--2 BMW dealerships
--2 Volvo dealerships
--2 Mercedes dealerships
--2 Porsche dealerships
--1 Infiniti dealership
--1 Land Rover dealership
Point being, with so few brand dealerships, the customer knows all of them. The dealerships try very hard to keep the customers they have in the way of good pricing and good service. They don't want to lose a customer on price or service. They can't afford to. Referrals are a big part of their business....as are their customer relationships.
It's actually the opposite of what you've described. In the eyes of the seller, the "best" customer does not buy at the lowest price. (ISell makes this obvious.)
The "best" customers pay more than the "grinders" whom they dislike, because the grinder delivers minimum margin, while salespeople are hired to get the highest prices possible. A salesperson who can only deliver low margin deals is not going to be considered to be a good salesperson (unless he's in an environment in which volume is given more of a priority.)
It seems that you have not had any professional sales training. A primary goal of any salesperson, particularly in a potentially high margin environment such as car sales, is to get the customer to focus on issues other than price, so that the buyer pays more than he otherwise would have. If you can get the buyer to pay too much and to feel happy about it, more the better.
A salesperson isn't being paid to give away margin to his "relationships", his relationships are meant to deliver his higher commissions and volumes. They are costly to buyers, which is why they are best off avoiding any efforts to use them as a means to get a discount. Discounting comes from making a salesperson fear that he may lose a legit sale that he worked to get, not by trying to be his new best friend.
At some point, either the customer, or the dealership is going to say..."all the money is on the table.....another $50-$100 isn't left in this deal". Someone either walks, or the dealership will let them walk.
While I'll admit when I was a young pup, I made some less desireable car deals. I was naive.
Now, I know because of research reading, listening, and a little observation, I'm getting a deal I feel good about when I drive away....knowing I didn't leave money on the table. It took plenty of mistakes to get to that point, though.
That's a strawman point. It's not a matter of "fleecing", it's a matter of getting the customer to pay more than he otherwise would have because price takes a back seat to the customer's other hot button issues. That's the goal of any professional salesperson: to make the relationship take precedence over the money.
The funny thing is that everyone I know who thinks he has a "friend in the car business" always ends up paying more. They don't realize that the friendship is rather one-sided, and the salesperson is simply giving you a mediocre deal while trying to get you to feel great about it. The salesperson wants you to believe that you've established some place of privilege, but that's just part of the game that is intended to get you to focus on the person, the service ,etc., instead of on the deal where your attention belongs.
False friendships are no substitute for negotiation. If you want the best deal, you need to learn about the pricing and incentives, and then play accordingly. Fortunately, it isn't difficult to do, and just as long as you don't kid yourself into believing that buddying up with the sales department is the best way to get the lowest price, when the sales team uses these relationships deliberately for the opposite reason.
To be sure, it's a different industry. While admittedly, I've never made sales a career at any point, I've been in front of enough customers (when my sales people ask for my help) to know what does, and what doesn't motivate a sale to be made.
As you admit, you feel you get the best deal by "grinding" on a car deal. I can remember going with my Father to car shop when I was young. He was a grinder. That's the only way he felt he was getting a "good deal". I remember asking him why he felt the need to grind? He was brought up during a time when there were no MSRP stickers on cars.....there was no "peeking" at the invoice....no holdback info....no incentive information available to him. When the dealership finally said "no" to his demands at a couple of different dealerships (and after many hours/days of negotiation), he finally knew he reached rock bottom, pricewise.
One time, we did a little experiment. He would spend an afternoon "grinding" for a car. I would call up dealerships I had extablished relationships with. At the end of the experiment, I got a better deal quicker and easier with a 5 minute phone call than he did by grinding for hours. From that point forward, he let me do his negotiations for him.
Your way works for you. My way works for me. Do I spend more? Nope. Do you? Don't know. As long as you're happy with your deals, that's all that matters.
Where do I claim this? I never once claimed this, and in fact have advised buyers here that it is generally not necessary to use overtly aggressive tactics.
What I have said is that the salespeople label every low-price buyer as a "grinder". They don't like low price buyers, even if those buyers are polite and courteous. For the salesperson, all that sweetness and light goes away when the money on the table is minimal -- he's irritated to have invested the effort only to have made so little.
I don't need to grind to get the lowest price, but I don't fool myself into believing that a "relationship" is designed to give the customer the lowest price. A salesperson is on the team because he is meant to increase margins, not decrease them or give them away, and those "relationships" are all about increasing margins and volume. You don't buy enough cars often enough to have the best price handed to you during Round 1 of the negotiation, and you're sure not going to get it if you make the first offer.
Onto something different....I noticed over July 4th that many dealerships had tents, baloons, hot dogs and burgers flying off the grills they had set up.
Just curious, if this actually draws people in to buy a car. Or, do people scarf up the freebies and then leave?
No! Firms spend millions on CRM to give better deals to customers! NOT!
Jokes aside, I cringe when I see "salesman of the month" decal on my salesman's desk for this very reason.
Me and my BIL used to catch a quick lunch every saturday at one Toyota dealership. That is until the politely asked us not to come back.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
While not often, I have scarfed a free lunch from time-to-time when they advertise "free food & drink".
Never bought a car because of those activities , though.
Yep, but to be honest we did do it for like 6 or 8 weeks straight.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D