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Yes, it was just a month ago. They are trying to move these off their lots quickly as this is the last year they will be offered. I guess the wagons generally are not as popular as the raised wagon/SUV version, so there is dealer money there to move them.
That's why I liked this dealer. I had done some research and knew about the $2500 available, so I WOULD have asked for it, but it just made things so much simpler for her to offer it first. Offering it off *invoice,* and not off MSRP, got to a very good price, according to "truecar" and other sites. Once she did that, I really didn't see the need to push and haggle a lot further; I like dealing with straight-forward people and try to be straight-forward myself.
This particular car had just arrived at their lot four days earlier. Since it was equipped exactly as I wanted, and that was a rare thing, I was ready to move on it immediately.
I'm sure they still made some money on the deal, and who knows, they may have even made some money on my trade-in, although for sure it went straight to auction. Ten years old, 120,000 miles, bashed-in trunk lid and cracked rear light. Still ran just fine and tires were good, so if anyone wanted to put the money into fixing it, they could get a few more years out of it, for sure.
It always amazes me how salespeople assume that if they talk to you, you owe them something.
For example. I was trading in Honda Accord that was purchased from a local store. I go back to the same store to check out Pilots. I just looked at it, didn’t even drive it, and decided that it was too small, and I told the salesman that. However, the salesman insists that I speak to his SM. SM spent half an hour selling me on Odyssey. At that time new Sienna just came out, and I wanted to buy that. To make a long story short, Sienna was too expensive, and I found a great lease deal on an Odyssey online from a different store. That store even faxed me the lease agreement. I took that lease agreement back to my local store and asked them to match it. They were grinding me for an hour and half to pay more. When I finally got up to leave, same SM started screaming at me: “How dare you! You wasted an hour of my time last time, and now you have wasted another two hours. You owe me to buy from me!” The fact of the matter was that they were wasting my time by refusing to match a written offer.
Another example. I have test driven a Nissan. Had some reservations about it and told the salesman that I want to test drive another brand first before I make a decision. The salesman asked when that would be, and I told him that I am not in a hurry. He replies that he is in a hurry because he needs to make a sale. To which I jokingly reply that it was his problem. That irritated him, and he says: “You came to my store, and now it is your problem too.” Whatever.
Absolutely true. I hate also that they try to get your contact details so that they can lay claim to you for an indeterminate length of time into the future should you ever step into their dealership again. Their SM demands that they get your details. Well Ok, take me to him and I will tell him that I refused to give them. This usually when I am just looking, yes really, just looking.
I am 6'2", 220lbs with East European accent, I don't need a weapon. My SIL calls me Tony Soprano because I look like him (not as fat), and sometimes I act like him (although, I haven't killed anybody, yet).
I have sarcastic sense humor and not afraid to use it. Usually I have salespeople laughing, but sometimes I piss them off. Ether way I have good time shopping.
It always amazes me how salespeople assume that if they talk to you, you owe them something.
Some are like that, others act like they could care less. Despite some lieing, most salesmen, and sales ladies, have treated me fairly well. Must be very difficult to have a job where if you don't sell, you don't eat... or make your house payment.
Seems like a lot of salesmen these days are right out of school, or in semi-retirement.
It was a joke. Reference to the East European organized crime. Don't you watch TV anymore? It's the biggest stereotype going around these days. Nevermind, if you have to explain it, it doesn't work.
No, it's a part of the job. If they can't deal with that then they should find something else to do. It is VERY unprofessional!
But some customers have no idea what it's like to spend hours with a customer. Answering scores of questions, test driving cars etc only to have them stop by another store to "look at the colors again" and buy the car from someone who basically did nothing except write up the order.
But, then, unless a person has ever worked on straight commission they probably have no idea. They took a salesperson off of the floor for two hours on a busy saturday for nothing.
Just part of the business and another reason why good people leave the business.
Yes, silly me - I usually presume that in any business, a salesperson should earn your business through superior service, rather than bullying. My last car salesperson's attitude, sense of concern over what *I* wanted in a vehicle, and assistance in getting me through F&I quickly earned her the sale. I had all day Saturday open for vehicle shopping/purchase, but bought on Friday afternoon instead. If she'd pressured me, I probably would've walked and just started my search anew on Saturday as planned.
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
Isn't it amazing what a good salesperson can do for you? We've purchased our last FOUR vehicles from the same person because he earned it on our first purchase and has continued to do so with each subsequent purchase....and don't you just love it when they actually help you get through F&I rather than just leave you to the dogs
You also point out something that many forget when purchasing...you have to be able to walk...if you can't, you're doomed to complaining after the purchase about all you did not like....and I've even had some friends who complain not just about the process, but about the vehicle they drove off with like 'not the color I wanted...I wanted 'X', and my favorite: "It's not really the vehicle I wanted"...etc....that's just plain silly and is no one's fault but the buyer's....I mean, that new car smell is not that intoxicating, is it?
I came across few pushy, abrasive, high pressure salespeople and SMs. I usually walk away from these people, but there must be a reason why they act this way. Do they bring better numbers than nice, personable salespeople.
Yes. The salesperson that exercises the most control over a potential client is the one that is going to make himself and the dealership the most money.
Our goal at my dealership is to treat our customers with as much respect as possible and do our best to make them happy. Unfortunately sometimes sales are missed out on because it is possible to be "too nice".
It is also normal for the most pushy and abrasive salespeople to have the shortest shelf life at the delaership because their tactics are only put up with if the numbers stay high.
Yeah, I had an hour to complete the transaction that Friday afternoon (kid pickup pending) or I could've come back on Saturday - she made sure I got through within the hour, so both of us won.
It was a shop that one of our members used to work at (I'll give him the code name "glasseye" since he has a habit of popping in and out), and he'd told me they were good. I've moved, but will consider driving back across the state for my next purchase. It's been said a number of times, but it's worth repeating - the best method is to get recommendations from satisfied friends & family.
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
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
Except the people who tell us they want a quick and easy transaction are very often the ones who want to drag out the process the most. They will spend a lot of time driving cars, looking at colors, talking on their cell phones etc.
Then when a deal is finally struck, they look at their watch (never good!) and suddenly remember that they have to be somewhere, have to pick up a child etc.
At thiat point, I would go into high gear and I'm very good at this!
They would pace the floor, look at their watch and generally make everyone nervous. I would tell the F&I person how this person HAS to be somewhere and to please hurry...They just love this!
The Finance Person would rush through their paperwork and get them out quickly.
Then they would tell me, " Craig...I've gotta run...I don't need to go over the car with you...I've had four Hondas...if I cna't figure something out, I'll call you"
I would make them walk around the car to make sure there was no damage, scratches etc and have them sign a release to that effect. I would slap on a temp lic and off they would go!
Then, two weeks later, it wasn't unusual to get a survey from them.
" Our salesperson was excellent but we felt rushed at the end. It would have been nice if there had been a bettter explanation of how the NAVI system works..etc...There is a scratch on the LR door that we didn't see...etc.
lol, yes very typical of a customer who had all the time in the world to grind over $50 but has no time to finish up the paperwork and take a proper delivery.
The cell phone people used to drive me nuts too. I would never answer my cell phone when I was with a customer. That's just rude.
Incoming cell calls to customers were never a good thing.
Often it would be a friend who upon discovering they were at a car dealership about to buy a car, they would tell them that they should buy it somewhere else, from a guy who is a friend of a friend etc or not to trade in their car because they knew someone who "might" be interested etc...
Generally speaking, is there a consensus about how much a dealer should make on an individual sale or lease of a car? I am trying to be a realist in the fact that the dealerships need to make money but I want to get the best deal I can. I am looking to lease a new car and have searched invoice prices, Money Factors, and residuals but am stuck with what is fair for me to be discounted and allowing the dealer to be able to sustain itself as a business. Does anyone have any thoughts or ideas regarding it? Thank you in advance.
I don't think anyone can give you a set amount or percentage, because it depends greatly on the vehicle, and how in-demand it is. What vehicle are you considering?
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
is there a consensus about how much a dealer should make on an individual sale or lease of a car?
I don't think there can be a consensus. You're probably interested in gross profit while the dealer must be concerned with net profits. The latter involves expenses and overhead specific to the dealership and can vary significantly from one side of the street to the other.
Generally speaking, is there a consensus about how much a dealer should make on an individual sale or lease of a car?
yes... what a dealer has paid for the car is what he should sell it for. That is "fair". :surprise:
But really, don't worry about the dealership making enough money to stay in business. They are big boys and can take care of themselves... so don't worry about being "fair". Their goal during every transaction is to maximize profit. Your goal should be to minimize their profit. For some it's let the other guy pay the profit to keep them in business.
If you worry about being fair to the dealer, you will worry yourself until your hair falls out. I'd suggest you only worry about what price that you would consider a decent deal to YOU, not what is fair to the dealer.
IMHO, a "fair" profit to the dealer is as much as they can legally sell the car for. Invoice? $500 over invoice? $1000 over invoice? $25000 over invoice? Whatever the market will bear. And no, I'm not in the biz.
Just took delivery on a 2010 MB C300 4matic. No trade, cash deal. My price negotiation consisted of presenting a price from USAA buying service and them agreeing to come within $400. Took 5 minutes. Since the next closet dealer is over an hour away, I was surprised at how easy the deal was. To look at the prices online you would think I paid several thousand below invoice.There are no listed rebates that I have seen. SInce the dealer is not a nonprofit, there was money made somehow. Dealer profit is never the buyers issue. If the price is too high for you don't buy.
" What a dealer has paid for a car is what he should sell it for. That is "fair"
So, using that thinking, if I open up a sandwich shop, I should sell them for what I pay for the ingrediants?
Your last paragraph makes sense. Rather than worry about what kind of a profit the dealer should be making, the shopper should focus on paying what they are comfortable with!
I've been told the dealer is willing to sell at "invoice" because he is going to get more $ later due to a "holdback". Tell me more about this "holdback". How significant is it & can the amount be enough to enable selling at "invoice"? The public is made to think "invoice" is the wholesale price to the dealer, but due to "holdback" is it really? :confuse:
In the case of Honda, it's 2% of MSRP so on a 20,000 car it would be 400.00.
Despite what some will tell you, this is not "pure" profit that falls to the bottom line.
Holdback was put in place back in the 70's. It was designed to help cover some of the flooring (interest) charges that banks charge dealers to floor their inventory.
The overhead and expense it takes to open a store's doors every month is staggering. I never wanted to have a customer think about that but I didn't want to hear about how our holdback was bottom line profit either!
I sold a new Silverado yesterday at invoice price.....less rebates. The customer had no trade so it became a no brainer. The vehicle was in our inventory. I told the customer about the holdback and what it was used for. I wanted to be clear, honest, and up front with him. The sale was at INVOICE.....not at COST. It took me a while to convince him that Chevrolet had such a small margin between invoice and sticker price. That's my biggest challenge sometimes. The sticker price on the truck was $22359 and the invoice was only $700 less. We regularly sell our new ones at invoice if they are in stock. The boss says...."this is a car lot....it ain't no museum"!! LOL We make money....but it's a very competitive business right now.
Well remember you are getting this information from the salesman viewpoint. Only the high ranking finance guys (Those that keep the books) know whats really going on there.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Sometimes there are inventives which end suddenly.
It's like feeding a drug habit sometimes. The shoppers demand constant incentives and low finance rates so the manufacturers keep them going.
Not a fun business anymore.
I've been in retail all of my life and I just think it's pretty pathetic when a store has to sell a high dollar item for a few measly bucks more than they paid for it.
The manufactures don't care. It's all about moving product.
No but there are some things that go on that would affect the bottom line cost of the car. Some of these things are common to all businesses that order inventory and sales people would not always know about.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
I long for the day when a car dealership has the same mindset at Walmart. Is it possible that a customer could go into Walmart......tell the checkout person that they will only pay $2.50 for an item that costs Walmart $2.44 but is retailing for $4.50. I wonder how far that customer would get on their purchase. Customers seem to think they have the right to determine how much money a car dealer can make. I have always thought that was curious.
tell the checkout person that they will only pay $2.50 for an item that costs Walmart $2.44 but is retailing for $4.50
I don't think it's quite that trivial. Let's push those numbers up into the same league. Now we're talking about retailing for $45,000 with "dealer" cost at $24,400. The difference is $20,600. You may not regard that as a significant amount but I do and it would seem to me there is some wiggle room for dickering.
Okay, so real world margins aren't quite that high. However, in my opinion, anyone who wouldn't try to negotiate the price of a big ticket item either has so much money that it doesn't matter or is asking to be fleeced. It works the same way with houses, yachts, airplanes and so on. It's just not the same with regard to a few pennies on a box of Kleenex.
Tidester.....if you look back at a post I submitted last week, the margins on new GM vehicles are ridiculous. From sticker to invoice price is less than a $1000 on a $22000 Silverado. Same thing on Cobalts, Malibus, and some Impalas. If your numbers were even close to accurate, I'd tend to agree with you. Would you expect Walmart to exist on less than a 4% margin? That's what sticker to invoice is. Is that excessive??? How much should we charge....and still be able to stay in business??? Those are REAL WORLD numbers.....not conjecture.
I'll tell you what, go out and do audits of dealerships books. Until then you have no ground to stand on making statements like that. Or work in the finance department of a manufacturer, then we can talk.
You may know selling cars but how much work did you do in finance?
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Comments
She gave you $2,500 under invoice without you even asking... no haggle? Must have had a pretty big rebate on it.
'11 GMC Sierra 1500; '98 Alfa 156 2.0TS; '08 Maser QP; '67 Coronet R/T; '13 Fiat 500c; '20 S90 T6; '22 MB Sprinter 2500 4x4 diesel; '97 Suzuki R Wagon; '96 Opel Astra; '11 Mini Cooper S
That's why I liked this dealer. I had done some research and knew about the $2500 available, so I WOULD have asked for it, but it just made things so much simpler for her to offer it first. Offering it off *invoice,* and not off MSRP, got to a very good price, according to "truecar" and other sites. Once she did that, I really didn't see the need to push and haggle a lot further; I like dealing with straight-forward people and try to be straight-forward myself.
This particular car had just arrived at their lot four days earlier. Since it was equipped exactly as I wanted, and that was a rare thing, I was ready to move on it immediately.
I'm sure they still made some money on the deal, and who knows, they may have even made some money on my trade-in, although for sure it went straight to auction. Ten years old, 120,000 miles, bashed-in trunk lid and cracked rear light. Still ran just fine and tires were good, so if anyone wanted to put the money into fixing it, they could get a few more years out of it, for sure.
For example. I was trading in Honda Accord that was purchased from a local store. I go back to the same store to check out Pilots. I just looked at it, didn’t even drive it, and decided that it was too small, and I told the salesman that. However, the salesman insists that I speak to his SM. SM spent half an hour selling me on Odyssey. At that time new Sienna just came out, and I wanted to buy that. To make a long story short, Sienna was too expensive, and I found a great lease deal on an Odyssey online from a different store. That store even faxed me the lease agreement. I took that lease agreement back to my local store and asked them to match it. They were grinding me for an hour and half to pay more. When I finally got up to leave, same SM started screaming at me: “How dare you! You wasted an hour of my time last time, and now you have wasted another two hours. You owe me to buy from me!” The fact of the matter was that they were wasting my time by refusing to match a written offer.
Another example. I have test driven a Nissan. Had some reservations about it and told the salesman that I want to test drive another brand first before I make a decision. The salesman asked when that would be, and I told him that I am not in a hurry. He replies that he is in a hurry because he needs to make a sale. To which I jokingly reply that it was his problem. That irritated him, and he says: “You came to my store, and now it is your problem too.” Whatever.
I have sarcastic sense humor and not afraid to use it. Usually I have salespeople laughing, but sometimes I piss them off. Ether way I have good time shopping.
Stories like this are not uncommon.
This is why most stores turn over a quarter of their staff everh month.
Some are like that, others act like they could care less. Despite some lieing, most salesmen, and sales ladies, have treated me fairly well. Must be very difficult to have a job where if you don't sell, you don't eat... or make your house payment.
Seems like a lot of salesmen these days are right out of school, or in semi-retirement.
Usually I have salespeople laughing
Hopefully salespeople not laughing at him.
I weigh 220 also, but at 5.9 nobody I intimidate.
2016 Audi A7 3.0T S Line, 2021 Subaru WRX
But some customers have no idea what it's like to spend hours with a customer. Answering scores of questions, test driving cars etc only to have them stop by another store to "look at the colors again" and buy the car from someone who basically did nothing except write up the order.
But, then, unless a person has ever worked on straight commission they probably have no idea. They took a salesperson off of the floor for two hours on a busy saturday for nothing.
Just part of the business and another reason why good people leave the business.
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2015 Kia Soul, 2021 Subaru Forester (kirstie_h), 2024 GMC Sierra 1500 (mr. kirstie_h)
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You also point out something that many forget when purchasing...you have to be able to walk...if you can't, you're doomed to complaining after the purchase about all you did not like....and I've even had some friends who complain not just about the process, but about the vehicle they drove off with like 'not the color I wanted...I wanted 'X', and my favorite: "It's not really the vehicle I wanted"...etc....that's just plain silly and is no one's fault but the buyer's....I mean, that new car smell is not that intoxicating, is it?
Our goal at my dealership is to treat our customers with as much respect as possible and do our best to make them happy. Unfortunately sometimes sales are missed out on because it is possible to be "too nice".
It is also normal for the most pushy and abrasive salespeople to have the shortest shelf life at the delaership because their tactics are only put up with if the numbers stay high.
It was a shop that one of our members used to work at (I'll give him the code name "glasseye" since he has a habit of popping in and out), and he'd told me they were good. I've moved, but will consider driving back across the state for my next purchase. It's been said a number of times, but it's worth repeating - the best method is to get recommendations from satisfied friends & family.
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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)
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Would galsseye now be working in Westchester County, NY?....
My kingdom for a quick transaction!
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Review your vehicle
Then when a deal is finally struck, they look at their watch (never good!) and suddenly remember that they have to be somewhere, have to pick up a child etc.
At thiat point, I would go into high gear and I'm very good at this!
They would pace the floor, look at their watch and generally make everyone nervous. I would tell the F&I person how this person HAS to be somewhere and to please hurry...They just love this!
The Finance Person would rush through their paperwork and get them out quickly.
Then they would tell me, " Craig...I've gotta run...I don't need to go over the car with you...I've had four Hondas...if I cna't figure something out, I'll call you"
I would make them walk around the car to make sure there was no damage, scratches etc and have them sign a release to that effect. I would slap on a temp lic and off they would go!
Then, two weeks later, it wasn't unusual to get a survey from them.
" Our salesperson was excellent but we felt rushed at the end. It would have been nice if there had been a bettter explanation of how the NAVI system works..etc...There is a scratch on the LR door that we didn't see...etc.
2016 Audi A7 3.0T S Line, 2021 Subaru WRX
The cell phone people used to drive me nuts too. I would never answer my cell phone when I was with a customer. That's just rude.
Incoming cell calls to customers were never a good thing.
Often it would be a friend who upon discovering they were at a car dealership about to buy a car, they would tell them that they should buy it somewhere else, from a guy who is a friend of a friend etc or not to trade in their car because they knew someone who "might" be interested etc...
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2015 Kia Soul, 2021 Subaru Forester (kirstie_h), 2024 GMC Sierra 1500 (mr. kirstie_h)
Review your vehicle
I don't think there can be a consensus. You're probably interested in gross profit while the dealer must be concerned with net profits. The latter involves expenses and overhead specific to the dealership and can vary significantly from one side of the street to the other.
tidester, host
SUVs and Smart Shopper
yes... what a dealer has paid for the car is what he should sell it for. That is "fair". :surprise:
But really, don't worry about the dealership making enough money to stay in business. They are big boys and can take care of themselves... so don't worry about being "fair". Their goal during every transaction is to maximize profit. Your goal should be to minimize their profit. For some it's let the other guy pay the profit to keep them in business.
IMHO, a "fair" profit to the dealer is as much as they can legally sell the car for. Invoice? $500 over invoice? $1000 over invoice? $25000 over invoice? Whatever the market will bear. And no, I'm not in the biz.
" What a dealer has paid for a car is what he should sell it for. That is "fair"
So, using that thinking, if I open up a sandwich shop, I should sell them for what I pay for the ingrediants?
Your last paragraph makes sense. Rather than worry about what kind of a profit the dealer should be making, the shopper should focus on paying what they are comfortable with!
I think Jips was just having a little fun. We can call it the Jipster Fairness Doctrine.
tidester, host
SUVs and Smart Shopper
In the case of Honda, it's 2% of MSRP so on a 20,000 car it would be 400.00.
Despite what some will tell you, this is not "pure" profit that falls to the bottom line.
Holdback was put in place back in the 70's. It was designed to help cover some of the flooring (interest) charges that banks charge dealers to floor their inventory.
The overhead and expense it takes to open a store's doors every month is staggering. I never wanted to have a customer think about that but I didn't want to hear about how our holdback was bottom line profit either!
That's right... "spread that wealth around".
Wow. Just once a year? Now that's not fair!
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
It's like feeding a drug habit sometimes. The shoppers demand constant incentives and low finance rates so the manufacturers keep them going.
Not a fun business anymore.
I've been in retail all of my life and I just think it's pretty pathetic when a store has to sell a high dollar item for a few measly bucks more than they paid for it.
The manufactures don't care. It's all about moving product.
There isn't.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
ignorant;
it's just that they know so much that isn't so."
- Ronald Reagan
I don't think it's quite that trivial. Let's push those numbers up into the same league. Now we're talking about retailing for $45,000 with "dealer" cost at $24,400. The difference is $20,600. You may not regard that as a significant amount but I do and it would seem to me there is some wiggle room for dickering.
Okay, so real world margins aren't quite that high. However, in my opinion, anyone who wouldn't try to negotiate the price of a big ticket item either has so much money that it doesn't matter or is asking to be fleeced. It works the same way with houses, yachts, airplanes and so on. It's just not the same with regard to a few pennies on a box of Kleenex.
tidester, host
SUVs and Smart Shopper
You may know selling cars but how much work did you do in finance?
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D