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Since the first of the month, we have walked a number of deals and raised our internet prices. We would rather pass on ten very thin deals then continue down the path we were headed.
That simply means we are no longer going to keep up with the Jones' and try to snag a few extra deals. In the long run our customer service scores will rise (as you can never please the guy who gets the best deal - internet customers are the WORST in our store), our gross will rise and everyone will be happy when come this summer the other dealers that have short-sold them self out of prime inventory, come begging for a dealer trade and we turn them down.
But, based on a recent "dealer 20" meeting, we're not the only ones who see this trend. Prices are going to rise, it's the only way a dealer can survive.
I was going to mention this early. The dealers that we see closing their doors are
the ones that always undercvut everyone else with their prices. And I don't mean by a few bucks, but usually by quite a bit under cost where we wondered how they can operate like that. Now we know how...they operated at a loss. They might have gotten some extra volume, but in the end it closed their doors.
You're right about the internet or the "best deal" customer. They will not be loyal to you, they will go for the cheapest oil change, service, and maintenance as their loyalty is to the dollar, not to convenience, good service, genuine parts, or warrantied work.
Dealers can't work at slim margins like that, as all deals end up being minis. You won't retain very good salespeople either by paying minis, and giving away cars. It's a recipe for disaster.
2016 Audi A7 3.0T S Line, 2021 Subaru WRX
The deal went down as follows after we looked and did a test drive on Friday:
Offer #1 on Friday: $9,500 for lemon '06; $19,995 for the '08 (I walked.)
Offer #2 on Saturday morning by telephone: $9,500 for lemon; $18,000 for the '08 ( I showed sincere appreciation, but declined.)
Offer #3 on Saturday afternoon by telephone: $9,500 for lemon; $17,000 for the '08 (I told him that I would seriously consider it.)
Offer #4 on Monday morning by telephone: $9,500 for lemon; $16,500 for the '08 (I told him that we had decided to wait for another year.)
Offer #5 at Noon on Monday by telephone: $9,500 for lemon; $16,500 for the '08 plus free Gap insurance---a $300-$500 value (I PULLED THE TRIGGER!)
Research Conducted: KBB, NADA, Edmunds showed the $9,500 lemon to be worth between $7k and $9k as a trade. I got top offer for it. The same three sources showed the '08 in the $18k range as retail. I think that I did ok.
Salesman: Super nice guy---professional, no pressure, answered all questions with patience, loves his product
Dealership Owner: Made the last two offers himself with no pressure, wanted to build his local trade, praised his service department, and his sales staff.
F&I Lady---professional, easy going, no pressure. and handed me a list of "Mop & Glo" items to look over if I was interested. I declined them all except for the free Gap insurance. She said that was fine. She went over each page to be signed and answered all questions fully.
Side note: The salesman and I had joked about me being a baby seal---my idea, not his. When I arrived to get the car this afternoon, he smiled and said, "Here is the baby seal and HE has clubbed us." During our visit today, he asked me where I learned the car lingo. I told him that all of my sales friends on Edmunds had taught me. He said, "That's fine, but did they have to teach you how to club us?"
As I was leaving, I told the salesman that I sincerely hoped that they made a profit. I told him that I knew times were lean. He said that the deal was a little skinny, but that it was fine. He said that the dealer had gotten good deals on four program cars. Mine was one of those.
This is a small dealership---had six salesmen but are now down to four. My favorite service guy was laid off---had the least seniority. The entire staff is so very nice. I hope that they can hold on for better times.
Thanks to all of you for your advice, knowledge, and patience. I can't tell you how nice it has been to be a part of this thread.
Richard
tidester, host
SUVs and Smart Shopper
Richard
You really played the "walking game" really well. You had a price in mind and stuck to it. When the dealership didn't get the sale on the car that weekend, they had to hand over the dealerships club so you could whoop them with it.
You are right though. The cheap customers who only care about price don't care about anything else. They never seem to be happy. They give the worst surveys and only use our service department when the car is under warranty. Afterwards, they only bring ther cars in when they have a problem other shops can't fix.
They go to whoever the cheapest quickie lube shop is.
Congratulations on the new car. So the GM search is over, huh? Since you bought something else, you know *the* perfect GM will show up any day now.....
What about 2 new cars in the family? The economy needs stimulation, you know.
Congratulations Richard, it sounds like you know how to use the “Salesman Seal Club”, hereafter to be known as the SSC. Enjoy the car; you and the Mrs. deserve all the best.
I’ve pretty much decided not to buy at this time. I’m just not all that interested anymore; can’t really explain it and it has nothing to do with what Mrs. jmonroe said this past weekend. Maybe it’s because the two cars we have now are in near perfect condition with no problems. I hope I didn’t just jinx myself.
Congrats again, put the top down and let the wind blow your hair out.
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
They go to whoever the cheapest quickie lube shop is.
I have friends and family with small businesses like landscaping or pool service type companies and I think it's the same for most businesses where the general public is the primary customer, not just auto dealerships. Everyone is looking to save some money, and some go about it in an unprofessional manner.
Quick story, I have a buddy who went to "Just Brakes" for their $99 special thinking he was going to get a bargain. Now this is after he's been raving about his new Saturn, how good the dealer was to him and especially the price he got. After a few calls from them where the price eventually went up to over $400, I laughed at him and told him he deserved it. In the work estimate they wrote up "turn rotors" AND "replace rotors". He finally got fed up and told them where to stick it, but they wanted about $75 for diagnostic services, saying the wheels were already off and the brakes were apart. They eventually relented and he picked the vehicle up without having to pay anything. You should have heard him when I showed him where the lug nuts still had brake dust on them. They never even took the wheels off, LOL.
Very nicely done Richard. Just a rough calculation but the 06 cost about $3000 to $4000 a year to run (depending on when you actually bought it) which isn't a bad average. Now you have a new car with a new warranty so you really came out of it great.
Thanks for the details of the actual sale. It was interesting to see how it all worked out and your negotiating was done to perfection.
2017 MB E400 , 2015 MB GLK350, 2014 MB C250
Don't feel too bad JM. I was just reading an article that says the thrill of buying a new item wares off within 3 months. Seems that if you need it you should buy it, if you need a thrill, buying something isn't going to solve your problem.
Maybe you should discuss this topic at the dinner table tonight.
2017 MB E400 , 2015 MB GLK350, 2014 MB C250
haha... good one. Us married folk know better than that. :P
A net profit means you were able to pay all your expenses, salaries, etc., the upkeep and maintenance and interest payments on a $25 million dollar facility for the month all out of $52,538. and still have a profit left over? With the actual dollar amounts you mentioned, frankly that doesn't seem possible even if the facility is completely paid for.
I am trying to understand this, but are you sure about those numbers? Maybe you made a killing on used cars and or service?
2013 LX 570 2016 LS 460
Maybe I will contribute to his defense fund....NOT !!
2013 LX 570 2016 LS 460
I can understand and appreciate that. I was growing a little weary of looking, researching, and sitting on the fence. Three things motivated me in the end. One, we had all of those problems with the '06 and the warranty had run out. Two, the Chrysler dealer really wanted our business and tried to make it happen. Three, my wife just never liked the GM idea from the beginning. This way, hopefully I have a better car and one that we both can enjoy.
To Traindriver: Thanks for finding all of those GM's. You're right. I'll see the perfect one next week at an unbelievable price.
Thanks guys for the nice comments this morning. I don't know if I negotiated that well or just couldn't get off the fence.
Richard
Richard
2016 Audi A7 3.0T S Line, 2021 Subaru WRX
Awesome dude!
My next project is going to be setting up a plant that manufactures used cars :sick:
You are in a great part of the country to have a convertible. I would not suggest driving around too much without the wife. These young girls are pretty aggressive these days and I would hate to see you taken advantage of !!
2013 LX 570 2016 LS 460
awesome.....it is called corruption and bribery.
Alright, dammit, that does it. I’m back in, maybe :shades:
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
You mentioned getting offers by phone. I'm curious, were you calling them or were they calling you? Either way it sounds like a good deal.
2019 Kia Soul+, 2015 Mustang GT, 2013 Ford F-150, 2000 Chrysler Sebring convertible
Translation: With me working two jobs to pay for the new house I don't have time to shop.
"...I'm just not all that interested anymore..."
Translation: The bruises my wife gave me look so bad I don't want to be seen in public.
You should have brought her that furniture.
2019 Kia Soul+, 2015 Mustang GT, 2013 Ford F-150, 2000 Chrysler Sebring convertible
We all know that all the manufacturers monitor these boards and hang on our every word. Mercury thought they had it all wrapped up and were playing hard ball by trying to save all their black GMs for the funeral homes, etc.
Chrysler thought they did not have a chance because of the list of bad things that Richard hit them with on the 06. He was playing so "hard to get" with them that they simply would not take no for an answer and made him that ridiculous offer....and that was when THE CLUB came out !! BLAM !! Our boy struck like a cobra !!
2013 LX 570 2016 LS 460
That's the spirit! I've just e-mailed you a copy of my latest booklet, "The Jipst Method of Staying Happily Married.. and Still Getting the Car of your Dreams."
The dealerships around here aren't taking canned goods for automobiles just yet, but it may be just a matter of time. I'm doing my part to get this economy jump started. I'm going out to buy new tires tomorrow, as driving home yesterday I got a bolt in the right front tire after driving over a... well... a big [non-permissible content removed] bolt. Time is the only variable in me getting a new car to put over those tires. So, yeah, I'm back in too... maybe.
They called me with each offer. I actually started to call them back after offer #3 for $17k. But I waited. When they called with offer #4 for $16,500 I really was going to call them back that afternoon. In fact, my wife thought that I should have accepted the $16,500 when they called. Instead, they called back before I had a chance with offer #5 for the free gap insurance. With each offer, I tried not to act very excited...just business like. It's hard to know how long to wait. You can wait so long that you can lose the deal. I guess the stars were just lined up correctly.
Richard
Why are you surprised by that? People do that everyday in our Prices Paid Forums.
tidester, host
SUVs and Smart Shopper
Richard
2016 Audi A7 3.0T S Line, 2021 Subaru WRX
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2015 Kia Soul, 2021 Subaru Forester (kirstie_h), 2024 GMC Sierra 1500 (mr. kirstie_h)
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tidester, host
SUVs and Smart Shopper
Yeah it does. Many dealers are bleeding money right now. If they weren't strong or operating in the black during the past few years when times were half decent, they're very likely to close doors during this year because they don't have any cushion to fall back on.
And once again giving away cars will not sustain a dealership, or any business in this economy. I think the dealerships that will survive are the ones with a loyal customer base, ones that don't work on minimal margins alone, but rather higher margins and lower volume.
Also lower volume means less inventory to finance, and pay interest on, less real estate to pay for to keep that inventory on (holding lots, compounds), less possibility of lot damage, and less insurance to pay for on that inventory.
Overall it translates into lower operating costs which everyone is trying to achieve nowadays.
2016 Audi A7 3.0T S Line, 2021 Subaru WRX
Shouldn’t that be Jipst started?
I got a bolt in the right front tire after driving over a... well... a big [non-permissible content removed] bolt.
I had a 3/8 inch bolt puncture a tire on my 68’ Olds back in the early 70’s. The guy at the indy tire shop where I had bought tires for years said, “the factory says I have to try to repair this so I can’t give you a new tire until I try to put a heat patch on it”. I said, “fine, put the patch on it, I’m sure I can get it to leak while still in your parking lot before I leave”. He patched it, I made it leak and he replaced the tire. Sometimes you just have to play along.
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
mnplshondadlr.....while it's a tough nut right now, something seems more amiss....running $52K gross and only ~$2K net. There's some adjustment needed in the business plan.....either lowering payroll (which is what everyone else is doing) and/or lowering general overhead expenses. I think what that tells us is that it's a new day in the dealership biz. You can't raise the prices of the cars, because your competition down the street will cut into your unit sales. So, the cuts have to come from somewhere else. There are just too few customers chasing ever expanding inventory.
Maybe time to revolutionize the way the dealership works. Maybe use the "concierge" approach. One price (like FitzMall does), cut to the bone. Instead of paying commission on the gross, the concierge gets a flat $100/car just to fetch it, explain the details, and move on. No more "4 square....no more negotiation....just one flat "skinny" deal on each car. F&I does whatever financing that's available and also the final delivery of the car.
isell....I understand what you're saying about posting gross/net numbers for a dealership. But, posting those numbers don't change them. Plus, he's quoting past (last year's figures) numbers. Public companies do the same thing every quarter...every year.
There's no doubt it's a buyer's market. Problem there is, there aren't many buyers....even when prices are cut to the bone.
BTW....latest phone call I got about the Genesis, they want me to split the $6K difference we've got on the deal. In other words, they came down $3K on my Tahoe, and they want me to come up with another $3K.
We're still too way far apart for any deal to be made. I'm probably being unreasonable regarding what the Tahoe is worth. But, they started this by offering a free tank of gas to get me into the showroom.
As I told the very nice sales person...."I think we're trying to fit a square peg into a round hole, so let's not continue".
That's easy. Build new cars, sell 'em to your brother-in-law & then buy 'em back. Presto - instant used cars.
congrats on the new ride. i'm really jealous about the part where you are going to go for a ride with the top down.
save up some money every month for possible future repairs and if they don't happen, you can spend the money on some chrome dubs. :P
...."I think we're trying to fit a square peg into a round hole, so let's not continue".
That could be but they may be playing the call today then call again tomorrow making an even better offer, like Richard’s dealer did. So, if they call again and say lets split the 3K, are you in? :surprise:
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
Congratulations!
I enjoyed very much the first four years of ownership of an Eagle Vision Tsi purchased in the mid-90's -- was a gung-ho Chrysler guy back then. Drove it over 80K miles in that period.
You don't want to hear about the last year; I had the car a little over five years total and sold it for a song with 98K miles on it. I'm sure your luck will be better.
Have a good time with the new car.
Loose lips sink ships.
If I owned a dealership and maybe he does, I sure wouldn't want my P&L results posted on a public forum.
And stories like that just feed the mooches who will now move in for the kill as they try to suck every last dollar out of every deal based on information like that. I'm sorry but I can't believe he posted that!
We WILL get through these times and I'm just sick of all of the negative press!
I hate that you did that because I want you to have the Genesis if that is what YOU want. Don't close the door completely. Why not give him a call and just say that if anything new develops, you're open to discussion. Then again, you may have done the right thing. Remember on my offer #4 that I said that we were going to wait a year. He did call back with the final offer #5.
At offers #1 and #2, I really considered the deal a loss cause. I was surprised to have received three more offers by telephone. I made friends with the salesman two years ago. We would sit and chew the fat when I would be in for service. I really think that he wanted to sell me a car, and that he stuck his neck out a little with the dealer to make it work. During the two years that I have known him, neither one of us discussed trading cars. After all, I was driving an '06 that I purchased in '07. He did mention a couple of months ago that I was in for repairs rather often. When we drove on to the lot last Friday, he figured we were in for more repairs. When he saw the wife with me, he said, "Don't tell me we're going to do business." It went from there.
The Grand Marquis idea began to unravel about a month ago. The latest repair had happened to the Chrysler; I couldn't seem to find the GM that I wanted close by; I knew the wife was covering up her disappointment with the GM; and I was feeling the "old man" syndrome about the GM. I still like the GM's very much, but I do love the new convertible. I've owned them all of my adult life and enjoyed them. Who knows? When I grow old, I may buy a GM. :P
Don't give up your dream. I'll be pulling for you.
Richard
You are writing about the top of the car, right?
'21 Dark Blue/Black Audi A7 PHEV (mine); '22 White/Beige BMW X3 (hers); '20 Estoril Blue/Oyster BMW M240xi 'Vert (Ours, read: hers in 'vert weather; mine during Nor'easters...)
You're giving me too much credit. I'm not that bright. I just listened to you guys and tried to act accordingly. Still, it is very nice of you to say so.
Richard
I would love a convertible myself, but we still have snow on the ground here!!!!
I am checking the sales forums too but would appreciate the input from the pros here.
thanks
At offers #1 and #2, I really considered the deal a loss cause. I was surprised to have received three more offers by telephone.
They’re salesman, they never give up. That’s why I don’t like to give them my phone number. I used to think they didn’t need a phone number because if they were serious about selling they would make the deal then and there with no need to make a phone call. As far back as 1988 I remember one of the first things a salesman did was to get my name and number, saying that’s the way their store did business. The first time this happened I walked but when I saw they all operated like that I either had to give them my number or buy a used car privately.
In 95’ when I was in South Carolina I ran into the same thing. After I bought I got a call from the two dealers I had gone to first. Both of their offers were pretty good when they called back (not as good as the price I bought at but pretty good). I told each of the salesman that I had already bought but if they had started out at the price they were giving me over the phone, we could have probably done business. Of course they both wanted to know the price I paid but I didn’t tell them although I was tempted, just to hear them tell me how much better their selling price would have been. It makes you wonder why they will let a person walk away when they know the deal is doable only to call later and risk the loss of a sale. The only thing I can think of is they swing hard with the hope of killing the baby seal because it must work enough times or they wouldn’t do it.
Don't give up your dream. I'll be pulling for you.
I don’t think ‘graph’ was the one who was dreaming. That was me, remember. Then I woke up. :confuse:
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl