Make Me a Better (Online) Car Salesman!

british_rover · February 2006

DING DING DING DING DING

We have a winner Robbie tell them what they won.

(In my best price as right announcer voice)

WELL THEY WON A PLEASENT PURCHASE EXPERICENCE AND PROBABLY SAVED THEMSELVES A FEW GRAY HAIRS DOWN THE ROAD BOB.

socala4 · February 2006

Fine commentary, very much on point. But I'll take issue with one part of it:

My guess would be that the GM or the sales manager are the biggest idiots in the whole system. They demand the charade be played no matter who it is.

I don't see it as stupidity, but rather a strategy. It may or may not be the best strategy for the dealership, but the intentions are sound, i.e. to maximize the profits of the dealer.

One inherent difference between the informed customer (or at least the one who goes in with a firm decision about what s/he wants) and the dealership is this:

*The buyer wants something specific, i.e. a 2006 Chevrolet Smogblower GTZ with Options A, B and C.

*The dealer wants something else well beyond that. For example:

--If he can, he will try to upsell you options, in order to sell you a more costly car with a higher margin.

--As an alternative, he will try to sell you a car that he needs to move off of his lot. If he has a slowmover that has only Options A and is of the wrong color, then he will try to convince you that Options B and C aren't so important, anyway. There may be a little commission kicker attached to moving this crate off the lot, which inspires him to "educate" you that the options you wanted aren't really needed, and that you'd be better off with the beige wundercar with the extra commiss dollars.

--Or he may want to move you to the "previously owned" section of the lot, where the margins are actually better than they are on the new cars.

--In any case, he will tend to prefer selling inventory on the lot, because doing so eliminates a financing charge being paid to service that inventory. (If you want to do a dealer trade or special order, he will attempt to make you pay a premium for it.)

--In addition, he would like you to either lease the car or else finance it through the dealership, so he can earn additional profits from financing fees. Offering the financing also allows him the opportunity to dance between financing terms, so that you can end up with a lower payment by extending the term, with a rate increase to boot, all serving to effectively increase the price of the car. (Plus, for those loans under five years, you may have an opportunity to do a Rule of 78 on the unsuspecting borrower..."Er, what's the Rule of 78?")

--He'd also like to upsell you extended warranties, weatherproofing, ding protection, etc. etc. etc. for your new Smogblower.

--And of course, he wants your trade obtained at a low price, because used cars bought below wholesale actually generate better margins than do the new cars on the lot.

You can see the problem here. The REAL problem with the Amazon-style internet model is that a lot of these margin increasing opportunities are much harder for the dealer to get if you aren't in the showroom and in the heat of the moment, with your coffee getting cold, your kids crying and your fear that you will have spent hours shopping to come away with nothing.

If he sells on the internet, he is not only accepting a mediocre profit, but he is also highly unlikely to get a shot at those financing fees, upsells, opportunities to dump a loser, or whatnot. The internet buyer most likely has a specific car in mind, but if that new car isn't in the dealer's existing inventory, doesn't include a trade, and won't require dealer financing, then that internet customer's business is that much less desirable. The in-person buyer may prove to be someone like me (and they will sell to me, too, for reasons I've described), but he may also not be, and that latter overpaying customer will more than make up for the low profits from the shrewd negotiators who also buy from them.

A large dealership may view it differently -- like major stores such as Costco, their business model may be based on selling (turning) inventory as quickly as possible, maximizing their revenues per square foot via volume, and minimizing their inventory financing costs, all while preventing competitors from making the sale. (Interesting tangent about businesses such as Costco: some of their profits come from the "float" of their inventory financing -- they actually acquire the goods on credit, sell them before the payment is due, and then invest the revenues from the sales between the sale and payment date in order to increase their returns.)

But the average dealer wants as many of these other opportunities for a return as possible, because many of the potential profits actually come from these other aspects of the transaction. That, and in many cases, the final price paid by that heat-of-the-moment customer would be better than if they did a one-price deal online, as the in-person meeting helps to kick up dust and confusion.

So no, they aren't stupid. The question is whether the technology will create fundamental changes that could erode the entire nature of the business or not. I have my doubts that they would let that happen any sooner than they need to.

biancar · February 2006

Excellent post. You've hit all the major issues.

biancar · February 2006

You would probably pay a bit more somewhere else but money isn't the most important thing to you like it is to so many others.

You're right about that. But I notice you didn't answer the question about whether or not you would confirm, by e-mail, if you had the specific car someone is looking for. Would you or do you do that much?

isellhondas · February 2006

Oh, sorry...missed your question. Of course I would confirm that I had the specific car. Another reason why I like a phone call so I can make sure I know exactly what the customer really wants.

About half the time the e-mails aren't clear.

isellhondas · February 2006

I know in some areas there is so much cut throating betwen stores nobody trades with anybody. It's also a hassle.

We trade with most of the stores in our area. A couple we won't trade with because of bad experiences in the past.

rroyce10 · February 2006

... **They couldn't find it because other dealers didn't want to trade or they wanted $500 down just to look for me. I can understand if you find it THEN want $500, but not before..**
=======================

Finally .. after all these wasted posts.! ... the rubber finally hits the pavement.

You wanted a vehicle that is hard to get and hard to find, and the dealers (plural) wanted $500 to do a search, locate and a dealer trade (if possible) and "we" don't know if you even agreed on price with any of them .l.o.l.. -- all 15 of them -- .. what's that tell you.?

Let's see if I have this right .... dealer #1 passed on your deal .. dealer #2 passed on your deal .. dealer #3 passed on your deal .. dealer #4 passed on your deal .. dealer #5 passed on your deal, #6, #7, #8, #9 - and the list goes on and on .... what's that tell you.? ~ helloooooo, are the lights flickering yet.?

Of course they wanted a deposit .... you wanted them to spend their time, their money, start flipping checks and titles and hire drivers without a firm commitment.?? ...l.o.l.....

When I ordered my last golf club, they wanted a deposit .. when I ordered new tops for the kitchen, they wanted a deposit .. when I ordered new screens for the patio, they wanted a deposit .. then they knew I was serious, it's called a commitment - business 101 .... that said, if any of the items weren't done in a timely fashion, the money would be returned - per the contract ... you never "even" got that far, and you had 15 swings at bat ...

The dealers had no deposit, no contract and no real commitment ---- and you "now" wonder why you couldn't come to terms with the dealers -- All **15** of them ..l.o.l...

..... your right Isell, all these wasted posts.

Terry.

jmurman42 · February 2006

well thought out post SoCal.

I'd like to make a couple of comments.

"So no, they aren't stupid. The question is whether the technology will create fundamental changes that could erode the entire nature of the business or not. I have my doubts that they would let that happen any sooner than they need to."

If I read this correct, you would like to have the manufacturers sell directly to the public? I don't think you would want that, even though it sounds good. Here is why and I'll use another industry as an example.

The largest manufacturer of eyeglass frames in the world is a company called Luxocitta (sp?) anyway this company had a COMMANDING amount of retail space in the local optometrist/otical shops, and prices were very competitive. Well, Luxoticca bought out the Lenscrafters chain and now they are the largest mfg of eyewear in the world, both in manufacturing and in retail.

I challenge you to go to Lenscrafters and buy a complete set of frames and lenses for under $300-400. I know of for a fact that a decent set of lens blanks wholesale for less than $20 yet they charge $300 for the lens if you went in and had them make a set of lenses for your own frames. Now you'd think that the "other guy" would benefit tremendously from this, right? Not so...you see all they have to do is to price their product just s little less then the big chains

We are in a strange place in the car business right now. Speaking now for the Honda brand...we are sold cars at retail from Honda, and then we wholesale them to you the customer. Do you think that the spread between MSRP and invoice is getting larger? It decreases everytime there is some sort of pricing or model change.

If the manufacturers sold directly to the public, you would have no way to actually negotiate the sale...you either buy it or you don't.

I hope this makes sense.

mackabee · February 2006

"My guess would be that the GM or the sales manager are the biggest idiots in the whole system"

Bingo!

socala4 · February 2006

If I read this correct, you would like to have the manufacturers sell directly to the public?

No, I never meant to imply that. Manufacturers are experts in wholesale distribution, financing and mass production, but are not necessarily particularly adept at retail sales. Just as publishers work with Amazon, Borders, B&N, etc. to sell books, I don't see why carmakers wouldn't continue to work with dealers going forward unless they could increase their profits by selling directly. As is true in most industries, in exchange for giving up the markup between wholesale and retail, the product producers (automakers) also offload much of the management and site expenses of the retailing component onto people more qualified to sell than they are.

My question is whether the internet will ultimately serve to reduce dealerships to a few major players who must turn huge volumes of inventory to survive, in exchange for reducing their margins and losing some of those additional sources of profit.

I'm sure that the guys at the top of the auto retailing industry fear that over the long run, the internet could effectively commoditize the cars, rendering them to be boxes that are interchangable, regardless of nameplate. The last thing a dealer (or automaker) wants you to do is to view his nameplates as being the same as someone else's, and they view the sales process as one way to prevent that from happening. (IMO, with a couple of exceptions, I'll bet that the dealers probably grossly overestimate how much value they add to brand perception -- people seem to like Toyotas even if they hate the dealers, for example.)

jefk · February 2006

I've really enjoyed reading all of your posts. Here's my feeling of the internet purchase.

I like to take my time shopping for cars. I will take 6 to 8 months if need be and in your "horror" I will go to 5 different lots and talk with 15 different salesmen to find the ones I want to do business with.
What I like the internet department to do is answer questions I have about financing, lease #'s etc.

An example is right now, I am searching for a new car, and luckily i can get employee price through my brother-in law. So I sent out price requests to get contacts of salesmen that I can talk to by e-mail while I am at work.

After talking to 15 different people - face to face, over the phone, and by e-mail, I know that when I am good and ready to buy that I will go to one certain salesman... why???

Because he has answered my questions. I have only talked to him by e-mail, but his answers have been fast and accurate.

One dealership, I asked what the employee price was - not a price mind you, but the benefits. He told me 1.1% over invoice. That seemed insane!!!! I don't think I've ever paid that much over invoice without employee discount. then I asked about leases, what the residual % was and money factors. he came back with a lease quote of per month. Never once answering the questions I wanted to know. I am smart enough to use all the websites I can find to back track the # and still couldn't figure out where his numbers were coming from. When I mentioned to him that the residuals I have been seeing are in the high 48% to mid 50% range (after 3 years/12,000 miles per year) he basically told me that there was no way, and if it were true he wouldn't have a car on his lot!

OK, I'll stop bashing him, and bring in the good.

The salesman who is going to get my business is the one that I e-mailed and asked the same questions. Immediately he responded with money factors and residual %'s so that I can do my own calculations (which were @ 52%). He also informed me that the employee discount was 4% UNDER invoice (which makes much more since).

I have had a few conversations about vehicles on his lots and what I am looking for, but I have also made it know that I may be looking for a while. He has no problem with that, and I have told him to continue sending me the bi-weekly reminders that he is there, because I will give him first chance at my business.

Now I know that my situation is different because I don't need to haggle him down, but the main point I want to put out here is that his honestly and willingness to share information is what's going to give him the deal in the end. Many of us use the internet for what it is for...a tool. That way when I step into the office and say, here's the price per month I have come up with, what is yours....if they aren't far off, he made a sale, I know where I'm at and I'm driving away.

That's my thoughts.

Sorry for the interuption!!

biancar · February 2006

Speaking now for the Honda brand...we are sold cars at retail from Honda, and then we wholesale them to you the customer.

I don't think so...pretty much a recipe for disaster if this were true!

british_rover · February 2006

That is true even at our end of the spectrum.

Rover issued a price increase accross the board for all models on Jan. First. Base prices went up along with the price of some options.

Our margin however shrank by a handful of percent depending on the model and the type of options.

golic · February 2006

Socal-

That was a well thought out post, and what do you think the contributing reason to all of that is?

Answer- an uninformed buyer.

Everyone one of those things you pointed out can be circumvented by:

1. Doing research and figuring out exactley what vehicle and options YOU want.

2. Determining in advance the absolute top price you will pay.

3. Gettng pre-approved with your own financing.

Three incredibly simple things that both you and I know. And since for the large segement of american a new car is one of the largest purchases they will make they should make a conscious effort to do the research.

If you don't know what you want, not sure what you will pay and allow the dealer to be your main financier you are not going to come out with the BEST deal for YOU.

I think the fundamental difference between how you and I look at this is that I don't expect the dealer to look out for my best interest. As with any purchase I think it is MY responsability to do my own research and determine what is the price I will pay.

Look at this example...I do tax returns, every year I shake my head at the people who take the "RAPID REFUND" loans from the 1040 shops.

When you do the math, people often pay "1040 Co" equivelant to 60-70% interest to get thier own money back from the government that they could have gotten back in two short weeks for free. And yet they are happier than pigs in sloth *headslap*

Heck, "1040 Co" doesn't disclose this, they call it some "fee" and say you can have it TODAY. I don't blame "1040 Co" for giving someone what they want at a fee they will agree to pay.

Yes, dealers are out to make money, they don't need to apologize for it..and yes there are those that imploy tactics which surf the ridges of legality and lost the sight of morality in the rear view mirror.

But all of those tactics are gone, just by making your self an informed purchaser.

biancar · February 2006

...if I've got this backwards, but don't the manufacturers sell you the cars at *wholesale,* and you sell them at *retail*? Other way around would certainly make life interesting.

Jeflk, good post and I can see why the one dealer who answered your questions will get your business.

jmurman42 · February 2006

You should attend a Honda meeting some time. Unfortunately that's how it is...we just have to deal with it.

biancar · February 2006

...I will expect to see news of Honda dealers going bankrupt by the thousands in the near future.

jmurman42 · February 2006

Ok...how much profit is in a new car?

On the manufacturing end I heard that, using Ford as an example has almost $10,000 profit in an Explorer...how much do you think the dealer makes? $1,000 $2,000? less? more?

I can speak for our brand in that the AVERAGE profit from the areas multi-dealerships (I see the reports) is far less than what the manufacturer has in it...far less.

jmurman42 · February 2006

why do you think that you see all of these multi-mega groups now? The small guy is a dying breed for sure. They wont go bankrupt, they'll just sell to another large car group.

socala4 · February 2006

I think the fundamental difference between how you and I look at this is that I don't expect the dealer to look out for my best interest.

When did I ever say this?

I've actually made the opposite point several times -- the dealer is working for the dealer, not for the customer. The dealers on the thread keep telling us how much value they add to the buying process, but that's certainly debatable.

The dealer (understandably) plays for his team. Of course, I play for mine, as I should. I don't care about "fairness" or "establishing a relationship" (and a pretty useless relationship at that) because I am an advocate for my side, and a win-win is totally irrelevant. I assume that the dealer is intelligent enough to sell me his wares at a price that won't bankrupt him (and even if by some weird fluke that he did make a fatal error, I still wouldn't be concerned.)

I have advised readers of this thread to accept that the dealers set the rules of the game, whether we like it or not. Our mission is to embrace the process, because it easily be turned to work in our favor IF we go with the right approach.

You can see from this thread how testy dealers can be if challenged or questioned. Remember, for the lower-level guys, it is a commission-driven system, with the managers all having come up throught the trenches and then only because they knew how to work the game, so they have the egos to match. (By the way, that's not entirely a criticism -- anyone successful in his line of work is likely going to have some ego.)

The great thing for us is that those egos can be easily turned back on them, because they tend to wear them on their sleeves. Again, watch the court scene of A Few Good Men to watch how the Tom Cruise character uses the ego of the commander (played by Jack Nicholson) to provide the rope needed to hang him. If you watch it carefully, it offers a great lesson in how to turn an opponent's apparent strength into a tremendous weakness.

biancar · February 2006

I'm sure that's true, but that doesn't mean the manufacturers are selling you the car at *retail* prices. They're still selling to you at wholesale, and you sell to the final customer at retail (whatever price you can get).

Perhaps you occasionally sell a given car at below wholesale prices, but that can't happen very often or you'd go out of business.

snakeweasel · February 2006

No, I never meant to imply that. Manufacturers are experts in wholesale distribution, financing and mass production, but are not necessarily particularly adept at retail sales.

There would be nothing to stop them from becoming adept at retail sales, especially if they were the only game in town. The issue with manufacturer owned retail outlets only would be a legal one. It would bring up anti-trust issues and most likely would be broken up by the government. Much the same way the Government forced movie studios to sell their movie theaters nearly 100 years ago.

jmurman42 · February 2006

Ok let me try to illustrate what I am talking about here. Lets say that the invoice on a certain car is $30,000 and the holdback is $1,000. The net cost of that car to a dealer is $29,000. Now of course the dealer will receive funds from their advertising, but for all practical purposes this amount is not calculated into pricing as we know it.

Ok, so Honda has NO employee pricing program for us here at the dealership level. You see we are not Honda employees, but dealership employees. There are times during the year when we are asked to take delivery of a car for an employee purchase. Lets say that a Honda employee in CA has a relative here and that relative gets their car from them. We receive the invoice for that car and the difference is in the thousands...we look at that invoice and our eyers pop open at what they are paying...2-3K less than what we do.

When we pay invoice less hold back based on what the employee pays...and that difference is in the multi thousands, thats "retail" in my book. Does this make sense?

socala4 · February 2006

There would be nothing to stop them from becoming adept at retail sales, especially if they were the only game in town.

What might stop them is the inability for them to do it very well, or as well as the dealer network, or to do so while maintaining the same degree of net profit.

Most manufacturers are not in the retail sector and vice versa, because they are distinctly different functions that require differing expertise, and the cost and risk of acquiring all that expertise may not be worthwhile. You do have some that break the mold, such as Apple, but for the most part, you find that firms generally do one or the other.

Antitrust may also be an issue, but if anything, automakers will probably be offloading functions, not adding them. Automakers already buy many of their parts, rather than build them in-house, and the next wave promises the possibility that automakers may even begin farming out more of their R&D and design. Their major value-added contribution to the supply chain is their ability to mass produce and assemble costly, expensive products, and probably the area in which they can achieve the greatest efficiency. Daewoo tried this vertical integration model and failed doing it, and I don't see why it would be particularly attractive in the cutthroat US auto market.

To add to that, vertical integration exposes the automaker to the full brunt of the seasonality inherent in the auto business, as well as its susceptability to macroeconomic changes. Like airlines and other massive consumer industries with large fixed cost structures, automakers tend to boom and bust -- in good times, profits are significant, while during recessions, they bleed mountains of cash. Owning the dealers would simply magnify their needs to absorb large fixed costs while exposing them to greater risk during downturns. In the current model, the retailers help to absorb some of that downside.

mikefm58 · February 2006

" See where it says in that big column MANUFACTURER TO DEALER INCENTIVES? "

Doh, as much time that I spend here on Edmunds, I never saw the manufacturer to dealer incentives. Thx crandleman.

rroyce10 · February 2006

.... It's ok Mike, we still love ya ...........

Terry.

mschmal · February 2006

It is very surprising to me the number of people that think an internet person should just "send me a quote."

Would you call 15 different Walmarts and ask how much the same exact item costs?

Dealers all pay the same for their cars. Invoice is easy to find online. Why wouldn't you just call up a dealer and say "I see you have 3 silver Ford Explorers on your lot with the equipment I am looking for, will you accept $200 below invoice?"

A good sales man will than respond by trying to get you to visit the showroom.

If you know exactly what you want, call and make an offer?

I think people that sit at home collecting quotes are totally wasting their time. Probably 90% of the quotes they receive will be on something other than what they are looking for.

Further, you can't make a decison about a vehicle purchase until you actually drive the car in question.

GET OVER THE PRICE ISSUE! Find a dealership you like and a salesperson that respects you and answers your questions. Then go pick out a car and buy it. If its a new car, make sure you see the invoice for that car.

Mark

biancar · February 2006

Does this make sense?

No, but never mind. I assumed you were talking about the usual customers you sell to, not the once in a rare while Honda employee who gets a super-good deal.

If you have a car, net cost to you $29,000 from the manufacturer, I assume you ordinarily try to sell that car for more than $29,000.

socala4 · February 2006

Would you call 15 different Walmarts and ask how much the same exact item costs?

Well, I guess we've moved from supermarkets to big box stores.

OK, when someone is going to spend $20,000 on a can of tuna or a roll of paper towels, or if the paper towels are offered with pinstriping and weather protection, or if Walmart starts trying to get you to bring in cans of soup as a down payment for the tuna, then perhaps all these analogies will be relevant.

Until then, they won't be. Can this "car negotiations should be like buying milk" rebuttal be retired once and for all, please?

biancar · February 2006

Would you call 15 different Walmarts and ask how much the same exact item costs?

Would I call? No, of course not. I would go on-line and see where I could buy something the cheapest. I would not waste all that time on the phone.

I bought a television last summer, on-line through Amazon (which got it from Office Depot). I saved about $200 over buying it locally. Delivered to my doorstep at no extra charge. I'd do that again in a heartbeat.

jmurman42 · February 2006

Sure lets leave the grocery store anagies alone...how about buying a house? :-)

The car business is the ONLY business where you can do this in right now...that is negotiate a price on a product like this. You have the right to go into a dealertship and play your games with car pricing, trade in, financing etc...and we have the right to accept said games or reject them. Most people don't like game playing and the more straightforward a delaership is with their quotes and financial dealing with that particular customer, the more sales we close.

Its when I have someone who says "Just send me your best price...no games" and then after we do we then receive more requests and finally comes the email "Can you beat this price" Then who is playing games?

british_rover · February 2006

Well I got a customer service issue that is unfolding right now.

One of our customers, not my customer our other sales guide, calls up and says he broke one of his wiper blades could his sales guide run him down a spare. Normaly this would not be a problem cause that is how their relationship is. They live fairly close to each other, are in the same social circles and hell they treat each other to dinner at least once a month. It probably helps that this guy has bought TWO Supercharged Range Rovers, on a sport the other a full size, in the past three months both at full list. After taxes that is close to $200,000 worth of trucks.

But his sales guide is not here this is his day off and he is way out of town. I am the only member of the sales department here cause our F&I guy is sick with the flu and our centre manager has a half day off on friday. So I am by myself and I am like, "Bob(not his real name) I would run it down to you but I am all alone here and explained him the situation. I will try and figure something out for you let me call you back."

Not 10 min later our centre manager comes back in because he forgot some paper work. I tell him the story and he says he will just run the wiper blade down to him no problem at all he is going to be fairly close to his house anyway.

Now would he/we do that for just any customer? I would like to say yes but that is just not true. The guy that agreed to a price signed a buyers order then called two days later to say his wife looked at a Tahoe/Gr Cherokee/XC90 and now she really wants that I am gonna need some incentive to convince her to buy your car. We drop the price a few more hundred over the phone he agrees to that but swings by after work the next day cause he wants to add 500 dollars worth of accesories and oh yeah he wants them for free. Tells us I understand you want to do this for the end of the month/year so I will do the delivery before then no problem.

Then he drags his heels for a week so we miss the end of year and month. Drags his feet for another week so one of the 750 bucks of conquest cash has expired now expired and we told him it would expire on this date. He still wants the price we gave him but that 750 bucks was pretty much all of the profit in the deal. Then he comes up with one of the 1500 dollar land rover private offers and wants us to honor that on top of all the other discounts. His private offer certificate has already expired though cause it expired at the same time as the conquest cash.

Oh yeah and he wants us to hold the value of both his trades even though over a month has gone past since we put a number on them.

I would not be driving 30 minutes one way to give this guy a wiper blade.

socala4 · February 2006

Most people don't like game playing and the more straightforward a delaership is with their quotes and financial dealing with that particular customer, the more sales we close.

I'd correct that -- most customers don't want the game playing, and will probably knowingly pay a modest premium to avoid it. If you are in a high-volume, medium-margin shop, then you probably do business as you say.

The car business is the ONLY business where you can do this in right now...that is negotiate a price on a product like this.

Not true. As noted above, I haggle on all kinds of purchases. Admittedly, the cost/invoice information is more readily available for cars, but the real-world asking prices are actually easier to obtain for other goods than they are for cars, because the actual sales prices of sold cars can vary so greatly. Both cars and non-car products have their advantages and disadvantages in terms of the type of information obtainable.

jmurman42 · February 2006

I received an email for a CRV LX 2wd in a very specific color. We had one in stock and I responded with a price of $200 under invoice, which means I'm still making a profit on the car.

A day later I get another request from this woman to list out all of the fees, taxes, tags etc. I respond quickly with VIN and fees.

I receive a nasty email from her about having splash guards and wheel locks on this car. The email was rude...so I try to explain to her why we do this, but no answer.

A week later I get another email and she says has an offer for $X price...which is dead or net cost. Zero profit, and she wants to know if I'll beat that price.

So...why would I ever wanbt to sell a car at ZERO profit? Secondlt and this is pretty important to remember...based on her emails, why would I EVER want to sell this person a car?

socala4 · February 2006

It probably helps that this guy has bought TWO Supercharged Range Rovers, on a sport the other a full size, in the past three months both at full list.

So with the additional cost of paying a low price versus MSRP, how much did these wiper blades end up costing him? A couple of thousand dollars per inch?

Your "sales guide" sounds like a great friend -- HE SELLS CARS TO HIS DINNER BUDDY AT FULL RETAIL! Who on earth needs friends like that?

snakeweasel · February 2006

It is very surprising to me the number of people that think an internet person should just "send me a quote."

Would you call 15 different Walmarts and ask how much the same exact item costs?

Ok let me address two things here. If I call any Wal-Mart and ask them for a price on an item I will get it. Why can't that happen with Joes' Honda down the street.

Secondly all Wal-Marts are owned by the same company. Each dealer is owned by a different person/company. Wal-Mart headquarters sets the price across the board for each Wal-mart location and manages their costs. Each dealer sets their own prices and manages their own costs.

GET OVER THE PRICE ISSUE! Find a dealership you like and a salesperson that respects you and answers your questions. Then go pick out a car and buy it. If its a new car, make sure you see the invoice for that car.

Good advice if you don't care about paying to much for a car.

british_rover · February 2006

You totally missed the point of this but whatever. This will be the last time I respond to you because I am a firm beliver in not feeding the trolls and if you ignore them they will go away.

Somebody who ground me for every last penny would not get my free time or our centre manager's free time, remember this his half day off, to run him a 50 dollar part for free that he doesn't need to have right this minute.

Supercharged Range Rovers actually sell for more then MSRP in most of the country. They are only sending 1,200 or so a year to the US this year. Last time one went through auction around here regionaly it went for over MSRP at the auction. There is a huge demand for these cars and we are wait listed for a minimum of six months on them.

We could probably ask for over MSRP for these cars but we are not going to do that it is not how we do business.

Secondly these guys weren't friends before the deal was done. They met here and found out they had all these mutual friends but had never ran into each other. When Bob wanted a SC Sport in a particular color it was explained to him that they were almost as hard to get as his SC full sized range and might take a while. He understood but we lucked out and found one at another dealer that would just take a production slot for the car they had in inventory. Managed to get his SC Sport in just a couple of months instead of six months.

MSRP on a SC sport is not full retail because people are asking and getting thousands of dollars above MSRP for them.

This same guy has talked about buying a LR3 for his wife and of course that car would be discounted heavily. Hell we would probably sell it to him at below invoice.

golic · February 2006

Rover-

Next time you are in this pickle- two suggestions.

1. Tell the guy your predicament an offer to FED EX next day the parts to him - total cost $20 and you don't have to leave the shop.

2. If he hems and haws about one day, you can send using a messenger service which will run you about $30-60, again, much more cost effective then having sales men run all over town.

Just some ideas.

snakeweasel · February 2006

Supercharged Range Rovers actually sell for more then MSRP in most of the country.

A perfect example of why looking at the invoice and other items is not a good way to start figuring out your bargaining position. Better to first find out what the car is actually selling for first.

mackabee · February 2006

Well, there seems to be an "invoice fetish" in these boards.
:shades:
Mackabee

british_rover · February 2006

Yeah that is what me and him were thinking. Having the part fed exed to him but that would be next day air saturday delivery. I used to work for UPS that is not cheap no matter who does the shipping.

Our centre manager walked in while me and Bob were talking about what to do, asked what was going on and suggested he would just drop the part off for him. It was sort of on his way anyway.

But you are right in any other situation that is probably what we would have done. If the stars had not aligned just that way I would have just had it fed exed or messangered over.

Make a mention about what cars sell around the country. In parts of florida and California supercharged Range Rover Sports are selling, key word selling, for as much as 25,000 dollars over MSRP. No way I would pay that much over for any new car but when you just have to have the newest and latest and they only make 1,500 of them for the US market supply and demand really come into play.

We get calls from all over the country from private individuals, leasing companies and assistants to some high up muckty muck looking for these two vehicles(Supercharged Range Rover Sport or Supercharged Range Rover).

When the Sport just came out they made 155 first edition Suprcharged models. We got two of them. The first one we did sell for over MSRP to cover the loss in business builder, our version of holdback, since it was old outside of our market area. The second we sold at MSRP to a guy that lives 5 miles away from our dealership.

Now while we were waiting for our second first edition car to come in. We would get a couple of calls a week from someone somewhere in the country offering 10,000 over MSRP 30,000 over MSRP and even more on a couple of ocasions for that very vehicle.

Our response: I am sorry sir we have already sold that car at MSRP and it is no longer avaliable.

Customer: But I am gonna pay more why can't I just buy it.

US: I am sorry that vehicle is already sold it is not avaliable any longer. We are not going to back out of our purchase agreemant with the customer.

Customer: But I want it. Sell it to me I will give you more money.

US: I am sorry the car is not avaliable have a nice day.

snakeweasel · February 2006

Yeah it seems that there are many out there believe that the invoice should drive prices and not market conditions.

golic · February 2006

In parts of florida and California supercharged Range Rover Sports are selling, key word selling, for as much as 25,000 dollars over MSRP.

Yes, it sounds ridiculous, but I have clients where that dollar amount is "pocket change" there is a culture out there which is just unfathomable and the dollars are so excessive it is mindboggling.

And I am sure the negotioting can be just as comical. I have a client just like you said rover...he would pay 25K, 30K + whatever you wanted for that car. And then on the flipside he walked out of the Ferrari dealer over a lousy 1,000 bucks. *rattle*

british_rover · February 2006

Great when those kind of people want to buy used cars and try and figure out what we paid for them.

You will never figure that out cause every used car is unique. In addition to that depending on what the turn over rate for used cars is at a store they might be willing to sell the car for a significant loss to avoid sending it to auction.

Just for example we had a couple of vehicles that were at the end of their 60 day turn over. We had them priced at essentialy what we owned them for plus 500 or so bucks so we could show some discount.

Had someone come in offer us 1500 dollars off of what we were asking so a 1000 dollar loser. After a little work we sold them the car at a 500 dollar loss cause at the auction after transportation costs and fees we would have lost at least 2000 dollars. Better to take the 500 dollar loss then the 2000 dollar one.

sbell4 · February 2006

Well, there seems to be an "invoice fetish" in these boards.

Mackabee
_______________________________________________________

Fargo (?)..... I haven't thought of that phrase in awhile. LOL

How about some quotes from "Suckers"...well, we better pass on that one.

golic · February 2006

What do you think 500 off invoice? *snicker*

For you guys who are successful in what you are doing, do you aspire to be in the upper end luxury market? Or is the ultimate goal to move up and get a piece of a dealership?

rroyce10 · February 2006

.... **then perhaps all these analogies will be relevant....**

But these analogies are relevant - very relevant ...

Walmart, Home Depot, Lowes, Golf stores, Boat dealers, etc have pricing differences in different parts of the country all the time - on all kinds of products ..

Right now, you can purchase fishing and boating equipment in most of the Yankee stores for 40/50 cts on the dollar ... patio equipment gets sold at the Walmarts up north for $69/$99 when folks down south are still paying $199/$289+ ..... Barbeque grilles that usually get $250/$450 down south, they're getting bought up north for half that .... you take a Home Depot that's 2 maybe 3 miles away from the beach, and you'll pay $11.99/$13.99 for Marine plywood .. you go 20/30 miles inland and you'll pay $8.99 ...

Come winter time .. ceiling fans up north get sold for $79/$129 at Home Depot - down south, they're still getting $199/$300+ .. same goes for mortgage rates, depending on where you live, mortgage rates are still 5.75/5.85%ish for a 30 year note and no points, travel to some different regions and you'll see 6.25/6.5% ..

Another perfect example .. (since I'm an avid golfer) I just bought 170 brand new Topflite and Loco golf balls for $48 from the Walmart by my Aunt's house in Ohio, and she'll bring em' down in another month -- that's 28 cents a ball, it don't get any cheaper than that ~ unless you go swimmin' (especially with my slice) ... if I would have went to Golfsmith or the Edwin Watts golf store down the street I would have paid $155 ...

Like I said .. these analogies are relevant - very relevant ...

Terry

socala4 · February 2006

Sorry, but something about your story doesn't smell right:

-You mentioned that he paid MSRP as if that was a big deal. ("It didn't hurt" that he paid it.) So that implies that paying MSRP is unusually high.

-You also mentioned other people haggling in similar situations. This implies that others have paid less.

-Then I look at Edmunds TMV based upon an LA zip code, and I find the car selling at a fair bit of a margin below MSRP. Perhaps Edmunds is wrong, but based upon my shopping, I found it pretty easy to beat TMV. (I presume that TMV is an average, not a low point.)

-Then I look at the inventory report at Automotive News, and I see that overall Land Rover inventories are about 52 days as of February 1. For comparison's sake, that's about the same as inventories for the Honda Accord, a car that is currently being sold with a $500 dealer marketing incentive.

-Then I checked with a well-known auto broker, and got a quote at about MSRP. (Let's remember that an auto broker has packed a fee into the price for his profit, so a savvy negotiator can pay less than that.)

All of this adds up to something being wrong with that story. If I had to pay a $2,000 premium, I'd hope to get a free wiper blade, too.

british_rover · February 2006

Yeah that new Veroyn I am sure you can get it for at least 500 over maybe less.

I mean come on they are only making 200 of them a year they gotta get those things of the lot.

I used to be a manager for UPS. I did that for a couple of years but got tired of the hours, the extremely hostile work enviroment and the peak season rush.

Just for example during peak season Working 18 hours a day or more was pretty much the norm. Yeah the year end bonus you get is huge but at the end you gotta ask if it is worth it.

I wanted to get out of managment for a while and I have always loved cars. I figured if I was gonna do sales I was gonna do high end because the contacts would be better. I need to go back and get my masters which my auto group will help pay for. At that point I would go back into managment either at a dealership or some where else.

socala4 · February 2006

I thought that this website was about cars.

In America, we have information available about invoice pricing which is useful for carshopping. In fact, all of us are posting on one of the country's premier websites for such information as we speak.

I use this information, and I, along with many other people, use it to pay lower prices. The topic isn't about Home Depot, or Walmart, or Mabel's Pie Shop, but cars.

In this country, we negotiate the purchase of cars. The last thing any consumer should do is to allow a dealer to convince them that a car price isn't negotiable, when it clearly is.

It simply is, everyone knows it is, and if the consumer is smart, then s/he will negotiate intelligently to get the lowest price possible. If you prefer Home Depot, then perhaps you should be in the category killer hardware business. If you sold Honda's at $2 above your cost, just as Home Depot might price a hammer $2 above its cost, then perhaps you'd offer a superior place to shop.

Make Me a Better (Online) Car Salesman!

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