Has Car Shopping Changed Since "Confessions of a Car Salesman"?
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Has Car Shopping Changed Since "Confessions of a Car Salesman"?
In 2000, an Edmunds editor went undercover as a car salesman and found some unsavory practices. Have things improved for car buyers since then?
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He was taking up space at a desk, he was not a salesman.
I've been selling for 16 years. My number one goal is to do a good enough job to get a permanent customer, and referrals.
I never concern myself with how much gross profit there is on any one car deal.
The biggest and costliest mistake a consumer can make, is to buy the wrong car.
Buying a midsize SUV for example when you've got three young children who will outgrow it in several years can cost you $10,000 dollars.
A good salesman presents you with good alternatives, and earns his or her commission.
This profession is in no danger of going away, except for individuals and dealerships who don't adapt.
I'm curious, do you folks think the transport drivers, and rail companys bring these cars to you for free.
Why is that a negotiable item?
You folks make this harder thatn you need to.
Simply get quotes from three or four dealers, and you will get the "best" price. If you want to be a total jerreal sure, then call them all back and offer them a chance to beat it.
None of the other garbage you read on these sites really matters.
I suggest your working with the wrong salespeople or dealers.
Every dealership charges Doc fees, limits set by the state.
Every dealers passes along transportation cost.
Every dealer charges tax, title, and license.
Every dealer trys to sell aftermarkets, because margins as so low even on used cars now.
If you never feel pressured or tricked into buying a car or aftermarkets walk away.
Consumer Reports buying guide is very thorough, 3-4% over net, net is pretty close to invoice.
The most important question is. Is the car worth it, and will someone else sell it to me for less.
Dealers have to pay fees, to get the laons approved. As much as 15% of the purchase price.
In most cases, that is the total margin in the car. As a salesperson, I don't enjoy working with people who have screwed up credit.
They are timeconsuming, rarely satisfied, and get turned down about 75% of time that you do the same worked that would have otherwise earned you a commission.
They also come back frequently because of misleading applications.
The only reason I work with them, is to be helpful and because I am obligated to by my dealership.
Occasionally it turns out really well, with a lower than expected rate or just a really satisfied customer.
Nowadays, I'm asking myself these questions
1. What is the purpose of a salesmen when I do my own homework and know what it is I want in terms of needs, performance, price, and colour? Isn't there a way to cut out the middleman(salesmen) and get the car for it's (true) invoice price?
Now I understand the dealer has to make money as well and that's fine. I'm more than happy to pay the dealer for their services and all but the salesmen are obsolete in this day and age. You spend 4 hours helping someone? I spend 3 hours a night for 2 months researching my next big purchase in life. I'm entitled to my hard earned money.
2. is the listed invoice price truly what the dealer pays for the car?
I compared invoice prices from cars in the 90s to cars now. I'm seeing a difference of $2,000 to $3000 from invoice to msrp from older cars in the 90s.
Checking invoice prices for cars within the past year or so, I'm only seeing a difference of about $1000. This comes off as a bit fishy and reading how people are paying invoice for their cars and walking out happy strikes me as odd. Where is the dealer making the cash if they're selling the cars for the amount they've bought it for?
I've got a feeling the invoice price has been manipulated in some way or another or some other fees were added to ensure that the dealers would still make money despite internet buyers walking in and demanding to pay invoice. This is the only explanation I can come up with.
This is a shady business indeed. I have not concluded that I'll be buying from private owners instead of ever buying from dealerships. I just can't trust the practice the more articles I read about how dirty these folks are.
I often see these salesmen come on here and cry to the public about how they're good people just trying to make a living yet would turn around and laugh at the buyer after they've duped them. Sure, not everyone is shady like that, but from what I've got and experienced, it seems that way. You make a living by marking up the prices of cars to earn a bigger commission? I don't get why your dinner and your kids tuition has to come at our expense. You guys don't manufacture the cars yourself. Your only job is to hand us the keys and be present as we take the car out for a test drive. I don't think that's worth 3-4 grand over invoice. People should be able to tip you for the time. 10 bucks and hour you spend helping is fair.
I also see these salesmen come on here and tell us that if we're nice and polite to the salesmen, we'll walk out with a good deal and it'll be a better buying experience. DEFINE a GOOD DEAL!?
Seriously, this is what i've seen from all the "good guys" in the sales department. A good deal for me is buying the car for (true) invoice as well as paying the dealer a set amount for their troubles and work. Everyone is happy except the obsolete salesmen.
In both articles the two gentlemen do say how difficult selling automobiles are. They both seem to make light the reason. The reason it is difficult isn’t because of an “old school” boss or dealership. The reason it is difficult is the consumer. Why blame anyone for selling you something that you are not either educated or smart enough to walk away from something you don’t want? We live in times where you can scan a television and see who has the best price within 30 miles! We live in times of the internet, where you can shop car prices from San Francisco, CA to Mt. Airy, NC!
Every customer deserves the right to be treated 100% as they treat others! That is true in every aspect of life, not just the Automobile business. Walk into a restaurant treat a server with no respect, the dinner has the right to kick you out! Making a offer on a car, is no different than making a offer on a home! No one stands outside of a home, and makes an offer without stepping a foot inside the door! “Give your best price, or I am leaving!” A) In most states a real estate agent isn’t allowed to quote any price other than the seller’s price!
Buying a car is simple, research your purchase. Attempt to sell your trade (if you can’t don’t expect to receive equal compensation as to what a Dealer would sell your trade). Call a bank and get pre-approved (we all believe banks are way more trust worthy than car dealerships, banks didn’t get 1 cent of bailout money). Make a offer, why wait for the dealer to give you their best price? Buy the vehicle at Your best price! I am not a journalist, but sell Vehicles; I do and have made very good friends with customers in the process, people have also gotten very mad at me, this happens to every person in every profession, it is called life…not the car business!
customers stop complaining do research and stop calling us criminals were ppl like you that show up to work and go home to our families, except we have the joy of being abused by you consumers daily. Read this and dont misunderstand anger for frustration.
I'm glad I had the experience and especially dealing over the internet. I found that working with people online was tedious at times, it afforded me the opportunity of spending more time doing what I like best in sales...going over product details. Once I got a customer in it would go pretty smoothly, because I was just delivering what we had talked about. The only issue I have with all that you've reported on about the car business is that you try to make it comical in a way that people are manipulated and practices are somehow neandrathal and creepy. I believe that those things really reside in the person. The sales people, managers, customers, and in your case the sneaky quasi undercover agent. You may find that you are more "car sales guy" than someone pretending that he was just moonlighting to expose the big bad wolf.
That being said, buying and selling cars can actually be fun. Vehicles are really a marvel, and the process to some is engaging. My older brother actually enjoys going on lots to talk with salesmen and buying cars. He does it to release tension if you can believe it. It's absolutely true.
We now have the internet which takes most of the guess work out of it for the customer. All they have to do is a little home work. The prices are easy to find and it really isn't brain surgery. The only difficult part for the custamer is being able to look at their trade the way the dealer does. It has a cash value and sentiment had nothing to do with it. Kelley blue book is generally fairly close but it is an investment. They are investing money in your car for one reason and that is to turn a profit. Trade-in values are always going to be wholesale. The dealer will on many occasions put $1000.00 - $2000.00 or more into a trade just to make it lot ready.
I read where one guy actually said they would like to have it like Wal-mart. That's just stupid. As long as people need to finance and title the vehicles let alone learn how to use the GPS, the blue-tooth and all the other idiosyncrasies of each and every vehicle. It could never be done by a retail location like that. It generally takes at least an hour to do a proper presentation for the customer. That would never happen at Wal-mart or K-mart.
You guys have reaped what you sowed. My former profession (Life Insurance Sales - 18 years) has done, and continues to do, the same thing: there are far, far more unscrupulous sales "professionals" out there than honest ones. Your industry has refused to police itself for the past 60 years (at least) and you wonder why people don't want to deal with you? For every 'honest' dealership out there, there are dozens who are not and who drive their sales staff to use the same "hammer" methods they used 10, 15, 20 years ago. (One guy told my girl friend that the car had "heated" rims and was therefore safer. Another finance jerk wanted to sell her overpriced "replacement" insurance. Needless to say, standing up and walking out was the result.)
I regret moving too far away to keep my old sales professional (who I purchased four cars from in 10 years ...the last two I drove over three hours to pick up the cars).
Thank goodness for the Internet and sites like Edmunds.com. Even with their help, buying a car from most dealerships is like pulling teeth. It may be necessary, but I don't have to like it.
I know the answers to these questions and millions more in great detail. This is my profession. To assist a client to the right car for his or her wants and needs. The money is secondary. The mark up in cars has dropped as incentives have gone up. The Factory rebates and special interest rates are paid for by dealers by reducing the markup in the price. So give the client a fair price in the right car and a deal is made. No drama needed or wanted on either side. I take care of the client after the sale with loaner cars and help with any service problems and they will spread the word.
To think that you have an intimate knowledge of the car bussiness because you spent a couple of months stumbling blindly into a few deals a month is like saying I am a professional journalist because I just wrote a comment on a blog.
and cheats and making tons of money off the unsuspecting customer..This just isnt the case, first of all the Automobile Dealers have millions of dollars invested to provide you with a good selection of vehicles which is a necessary product for Americans and the Dealers are intitled to make a profit as are the salespersons to make a living for being there to SERVE YOU! Thats right SERVE YOU, as the average salesperson works seventy to eighty hours a week, goes to classes every week and must be certifited in product knowledge to sell Automobiles and unless you can sell in volumn of ten to fifteen vehiles a month and hold a respectfull profit you will likely end up making mimimum wage, thats why only one out of a hundred Automoble Salespersons can make it a year in the business. If you really want an enjoyable experience buying a car, drive into a dealership, meet a salesperson, select a vehicle you want to own, have your trade appraised, tell the Salesperson you want to pay MSRP,Manufactured Suggested Retail Price, take the trade value offered, provide a 10% cash down payment and except the financing terms and insurances offered, the dealer makes the profit he deserves, the salesperson a decent living and you can have the best damn car buying experience of a lifetime...
Thats not going to happen though, thats when the negotiations start and in a Capitalist Society that is the way it should be, if you could not negotiate your back at paying full MSRP anyway and the Dealers who do not negotiate only pay there Salespersons a base salary and minimum commissions that amounts to minimum wage no Automotive Professional Salesperson will work for that and your left again with a GREEN PEA who doesnt know anything about the product your looking at or how to access your wants and needs... Buyers always want to much for there trades and want to believe that a Dealer can keep his doors open by selling at Dealer Invoice without any profit, folks that will kill the American Car Buying Dream.
The East Germans under Soviet control during the cold war, were
only ALLOWED to attain a automobile if they were a devout communist, waiting seven years for there car to be built a Trabaunt,
making payments on a car for seven years that they
could NEVER own before they could drive it. (All realestate and automobiles were property of the state) they kept the same car FOR EVER as they were only allowed to have one. The Trabaunt had a three cylinder engine, manual transmission, no emissions, no safety items or safety glass, metal, a poor grade of tires, no heater, radio or air conditioner, a choice of six colors a body so thin it may have been made from tin and thats exactly what the American people will get if the art of negotiation dies in the Automobile Industry. If you dont believe it take a look at Flint Michigan, my home town the six Automobile Factories there gave thousands of hard workers the American dream, today the factories have been bull dozed down to the concrete slab and now Flint is one of the poorest cities in the US. So next time you go to buy a car be nice to the Salesperson who is there to ASSIST YOU, providing information, asking questions so that they can HELP YOU find the right vehicle for your needs and wallet, they dont like the manager to have to come in to close a deal and once you have arrived at
an exceptable offer the Dealer can make a small profit by taking
the deal and HOPE you have good enough credit and down payment to purchase or you have just wasted three hours of a salespersons time!!! I had a 99% customer satisfaction average and sold many of my customers cars for years to them and there family members. Hey you know what might be a noval idea would to return to Dealership, whether you purchased or not and surprize
your Salesperson by offering them and there significant other
a Gift Certificate to a Steak House for working for hours and hours
in the heat, rain or cold, making minimum wage and putting up with your crap just to HELP YOU find the right vehicle and deal!!!
Totally fed up with the customer is always right and that the PROFESSIONALS in the Automobile Industry are inhuman, unfeeling, liars and thiefs, if you really think so try working as one and see if you can even make six months....
I went to the dealership (one of the largest in the area) that Saturday to do the deal. The price is $2,000 more than the relative got on a trade-in. They "can't find the title" so I have to suffer two hours of hard-sell on extended warranties, paint treatments, etc. etc. When I said I was going home and will come back when they find the title, they say they called someone at home to come in and find it, so I should wait just a little longer.
In reality they hadn't finished detailing the car (the detailing my relative paid $100 to have done). When I again said I was leaving they miraculously found the title but then admitted they hadn't finished the detailing. I wasn't going to come back if I didn't have to so I took it as is, with the det
I'm OK with people making a profit so they can stay in business. I did not expect them to handle it for free. But it turned out the extra $2,000 included $800 profit and $250 "documentation fee".
My relative has bought cars from this salesman for 20 years and was astounded they would mark it up so much for a guaranteed sale in two days. He's not a confrontative person so he won't say anything about it, he's just not going to buy cars from that dealer any more, and there's no chance I ever will after that "looking for the title" BS.
I was a Auto Sales Consultant at 3 different dealerships, all differnt brands, sizes and ownership for about 5 years. I made decent money and built a great clientele. After completing my BA in accounting and passing CPA exam im a partner in a Accounting Firm in Washington D.C. . I wouldn't be here if I hadn't worked in the automotive sales field. I do miss the crazy Saturday Sales and Joking around in the down time, it was fun.
and "closers" the dealer principal tries to control the transaction, and is looking for a "front" for the dealerships dishonesty. This is why "straight sales" stores are a thing of the past ,along with professional salespeople.
The invoice price you beleive is being manipulated is the true invoice price. I sell Chevrolet, and I can promise you that. The way that we are able to make money still by selling at invoice price is what we call a Hold Back. Basicall
If I can offer one piece of advice to future car buyers is this: When shopping for a new car narrow it down to three, most Rental agencies such as Enterprise,Hertz, Alamo ect already have that same car in their inventory. rent one for the weekend, drive it in the country, on the freeway or on a rough road. Pretty soon you'll find things you like and things you don't and that makes you an informed buyer. At the end of the day a Car dealership is only interested in one thing: Ringing the till, everything else is secondary.
Let me put it this way: who ever thanked their local alcohol distributor for making things more costly, propping up an unnecessary oligopoly and then of course having the honor of being charged 10, 20+ % more?
I sincerely hope the useless car dealership's days are over. I don't need to pay them extra money to finance a car. Cars sell themselves, right?
That's why it's a good idea not to buy unless they advirtise a special deal with 0% financing at 60 months minimum and dollars off the bottom line.
Since we're painting pictures here why not paint the entire picture. Most dealerships the salesman is paid on commision which a percentage of the gross PROFIT.(key word being profit) that being said, if I own a vehicle for $25,000 and it sells for $27,000 then the salesman is paid on a percentage of $2,000. Now considering there is still an overhead cost which is taken out of the $2,000 and most dealerships in my particular area that will average to be around $600, so the salesman is paid on a percentage of $1400. A lot of dealerships pay around 20-25% of gross profit so on that particular car deal the salesman would make around $280. This is assuming he sold a vehicle at full sticker with a $2000 mark up. The average salesman nationwide will sell 8-10 vehicles per month, so assuming every car he sells has a $2000 mark up and he sells them all at full asking price then that gives him $2800 per month income. Granted some salesmen sell more and some sell less we are just talking about average here. From what I have seen the majority of new vehicles DO NOT have $2000 worth of mark up in them. Yes people like to say "hey I want the vehicle at TRUE COST, I want to own it for what you own it for etc... but remember IT IS A BUSINESS AND INTENDED TO MAKE PROFIT and how can you get upset with someone for trying to make profit in a business. I am not saying to go pay full sticker for the vehicles you choose to own but that doesn't mean to get ridiculous in the pricing of the vehicle you would like to own. If your budget is $35,000 then find a vehicle thats $35,000, not a vehicle that is $45,000 and get upset when you cant get it for $35,000...Someone made a comment that they spent 3 hours a night for2 months researching their vehicle and putting down the salesman for spending 4 hours with them..well YES the salesmans time IS WORTH SOMETHING and although it may be 4 hours with you it sometimes turns into more than 4 hours and sometimes less than 4 hours. Its not a proffesion that is for everyone and not anyone can just walk in and perform that job, it is indeed a talent and a skill..its great you spent 2-3 hours a night for a couple of months now try going to work everyday from 9am-9pm and not knowing if you're going to sell anything and make any money...YES there are some shady characters out there but every industry has them but not every dealership is "OUT TO GET YOU" and not every salesman and now maybe this provides a little insight on why some salesmen may be a little aggressive..
I've been doing this a few years and have watched a variety of personalities selling vehicles and purchasing vehicles and as much as we like to express our bad feelings towards car sales, salesmen,dealerships etc...the fact of the matter is this,that aggressive salesman that people love to hate is the one that sells cars and makes a living,if the salesman was to just sit back and wait he would starve..very rare is there a situation where the customer walks onto the lot left alone and walks right in and says "I'll take that one sign me up" it just doesnt happen like that..customers left along on a lot get in their cars and drive away. there is a preowned dealership very popular that has a no haggle policy, no negotiating what you see is what you get and even though its been very successful their customers dont realize they are making a KILLING on them, but the customer doesnt feel that way for the simple fact there is no negotiating..
A fair car deal is the customer getting a bit of a discount and the dealership still making money and everybody whens, when lopsided it is not a fair deal any longer..
a good car deal is the vehicle you wish to own at a price you can afford..
if you worry about how much money someone is making off you then you are concerned with the wrong thing.
think in your own profession how many times you would like to go to work and work for free..
The ONLY benefit they provide is a guaranteed market of third party funding that can absorb makers' output stream. Even so, a well-managed and disciplined maker that produces only to the level of organic demand rarely needs such float - and the additional cost dealers impose upon the transaction are rarely worth their existence to either buyers or makers.
It was ONCE true that co-located service and sales were necessary. Now that people can research and make perfectly qualified independent buying decisions, no reason exists why makers couldn't or shouldn't fulfill them directly.
Thank God Tesla is at least starting to try to cast off the vestiges of an anachronistic system established only to perpetuate the status quo.
The future will be one of fewer, but better sales outlets where buyers could actually see the full compliment of a makers' offerings rather than needing to settle for seeing what a dealer has on hand before making a buying decision - before which many won't even offer a test drive.
Makers will begin building more flexible vehicle configurations that can be regionally staged in various degrees of completion and fully fitted out on a just-in-time basis to fulfill customer orders in near real-time.
About the only sensible franchise opportunity that SHOULD exist is for localized service which should ideally be more densely situated to accommodate buyers every several months than sales centers to which buyers could travel once every several years - and through which franchisees could sell certified used vehicle manufacturers have taken in trade.
The current scheme will continue to evolve, but to the least extent it can get away with rather than as progressively as it otherwise could. The very first maker that manages to pierce the veil of outdated franchise laws will open a floodgate of new and beneficial changes that will FINALLY have a chance at doing away with once and for all the most aggravating aspect of buying a new car - being haggled with by sales staff who is often less well-informed about the products they sell than the people buying them while adding thousands of dollars in expense without a whit of additional value.
I throughly enjoy sales. At least better than being in the Military which I might add, my integrity is above reproach. I find it offensive when people like you spout off at the mouth not knowing what you're talking about.
In my 57+ years, I purchased my first automobile 'used' from a private party, and my next 3 new cars from dealerships, keeping them each 11 years.
In addition, I will happily accompany any of my clients, colleagues, or friends that request my assistance with this "dreaded task." (They always treat me to a really nice dinner, unless negotiations go late into the night, then we celebrate the following evening.)
Each time, I've viewed the experience as an opportunity to observe the "Ultimate Dance of Communication & Presentation[R]", as I have named it. It's very entertaining, educational, and wildly humorous.
I use to be in outside sales (usually top salesperson.) In 1985, I started my own company, specializing in Professional Organizing & Life Coaching. So for the past 27+ years, I get to do 100% of everything M.Y. W.A.Y.
That's one of the reasons I relish new car buying. I know that as the consumer, I'm completely "in charge" at all times, and that's very empowering. Kind of like taking a "new age workshop" and discovering that I control my own destiny... except, the workshop was FREE!!!
Mary E. Rossow,
Rossow Resources