Any Questions for a Car Dealer?

raybear · April 2001

It's the 'pre' title

rroyce10 · April 2001

.........Who is that masked man ....? Johnny Cochran ----.... l......o.......l......

Terry.

mvargo1 · April 2001

As above Certificate of Origin. This is basically a "title" for a new untitled car. You would sign the title if you were buying a pre-owned car.

dlucas1 · April 2001

We visited a dealer, got a price, left. We told dealer we wanted to buy a particular car, however we wanted best price. Took a day to think his rate over. We faxed new offer a day later. Will he counter offer or blow us off if he doesn't like the offer?
Not trying to hard ball, however we've unfortunately done our research on the car we want and think the price could be better.

isellhondas · April 2001

He may or not accept your offer based on how bad he needs/wants to sell that car.

If he is confident that the car will be sold quickly to someone else for more money he will probably turn down your offer.

Why use the fax? I think had you presented that offer face to face, ready to drive the car home you would have a better chance.

audia8q · April 2001

I agree with IsellH...Since you had already been to the dealership and must have met somebody to get the price...why not pick up the phone and say the magic words..."If you can have the car I looked at yesterday ready tonight, I will buy for $xx,xxx. NOW"

You will find out in minutes if you have a deal or not

Rich

dlucas1 · April 2001

What does everyone have against faxes, e-mails? This is the future. Yes I could understand if that initial contact was not made, however it was. The offer I think was sent before they even opened, meetings all day. You know actually, maybe this happened for a good reason, a better deal might be right around the corner. It's just unfortunate that so much game playing must go on. I look forward to the day when we can just purchase cars directly from the manufacture. Sorry guys.

rworrell · April 2001

OK, I have another question. As you no doubt are aware, most consumer guides recommend saying no to the finance guy when he's trying to sell you rustproofing, undercoating, Scotchguarding, invisible bra material (let's keep it out of the gutter here, folks), etc. So far, so good--even the dealers here seem to tacitly agree that those are rarely a great idea as most cars are so well protected from the factory, there's simply no need.

Now, what about extended warranties. My BMW dealer, for example, referred to a 3rd party offering as "one of those Swiss cheese warranties--there's so many holes, nothing is covered." LOL. I liked that one. Anyway, what's the skinny on these warranties? Always say no? Always say no to 3rd party, but manufacturer's extended warranties are OK? Some 3rd party warranties are OK (i.e. NADG is a good one) but some suck (the offering from Amway/Qixtar or whatever)?

And before anyone jumps in, I have no idea if either of those 3rd party ones are good or not--I just picked them out of thin air to serve as an example.

Please help--sitting in front of the finance guy already sucks as it is. Finally, how negotiable are these extended warranties should they prove to be a good idea?

Thanks!

im_brentwood · April 2001

Well,

The problem with faxes and e-mail is simple. People who fax us very rarely buy a car from us.

Faxed price requests have a 1-2% closing ratio and are quite frankly, not often even worth pursuing. It's the one "lead" that I've told my sales dept to ignore unless absolutely nothing is going on.

Faxed offers, if realistic, are perhaps 10%, worth responding to certainly.

E-Mail leads from 3rd party services are at best 10%, from our own website, 20-25% or so.

People who walk in the door run 30-35% and people who phone and then come in are around 40% or so.

Bill

im_brentwood · April 2001

I dont liek most aftermarket warranties.

CNA/CNW (One of those) is good, I've heard that western diversified is also OK....

Wynn's stinks.. so do a lot of them. There's far more good than bad out there so I'd say that as a rule go with the Mfr's one.

And, unless you're in FL, I'd certainly try and negotiate the priceof a warranty. Theyre generally marked up at least $400 or so.

Bill

isellhondas · April 2001

I agree with Bill. Quite frankly, most faxes and e-mails are pretty flakey. They also get lost and misdirected.

Call me old fashioned, but a customer who returns to make a better offer MEANS BUSINESS and will be taken very seriously.

navy4 · April 2001

With a faxed or e-mailed offer to purchase, you have no substance to it. You have not put yourself into the offer. Faxes and e-mails are in most cases, as Bill pointed out, merely hot air. This doesn't mean in your case it is, but in a vast majority of cases they are.

Go to the dealership, make you offer then extend you hand and thank the dealership for accepting your offer.

You are participating in the last of the gladiator sports, mano a mano.

stever · April 2001

I bought my last car with a fax offer (after visiting the dealer and test driving). With a fax/email, everything is in writing; no "he said, she said". Relatively painless too. ymmv.

Steve
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raybear · April 2001

Steve, it's the method we use where I work. Very effective, but in our case you have to say what you want and how much you'll pay. Some folks aren't ready for that.

shaq2kobe · April 2001

1)I plan on purchasing the '02 Honda CRV, when do you think is the best time to buy it (best price-wise)? When it 1st arrives, after a few months, or when production for '03 arrives?

2)Why is it when you buy a car the salesman always has to go to the man in the other room? why aren't you all given a lowest price for each vehicle ( to sell) and given your own power to negotiate with the costumer from there?

isellhondas · April 2001

Even when presented with that "lowest price", most buyers still demand more.

raybear · April 2001

If you are dying for the car, just pay MSRP at your local dealer the minute it arrives.

If you want a better deal, wait a few months and follow this forum. We saw the new Civic go from sticker to near invoice in less than a year, maybe the CR-V will do likewise. The new RAV hasn't so be prepared to wait for your last choice, waiting for the '03 to debut.

When I worked at the dealership I had the authority to make a deal upfront, without going to my manager. Some customers actually were surprised when I said "okay" or "no, thanks" without padding off the the office. Eventually we adopted the time-tested policy of at least going into the office to discuss how the negotiation was going, since it's expected. Like isellhondas said, the customer doesn't expect the salesman to quote his best deal right away, they expect to haggle for it.

im_brentwood · April 2001

I'd say for the best price...

Not when it's first hitting the streets. In all likelihood they'll be going for full pop or close to it.

Wait till the car's out 6 months or so.

On the other hand... depends on how badly you want it. I'd look at it differently, although I tend to piss through money

Heck, how much more of a discount is there gonna be on a $20K honda? $1K?

I'd get it when it first came out myself and pay a higher price.

Bill

CarMan@Edmunds · April 2001

Shaq2kobe, generally speaking, the longer a new vehicle has been in production the better the supply of it will be and the lower the demand for it will be. When a new model is first introduced, it is in very limited supply as the automaker ramps-up production. Furthermore, many people what to be the first on their block to have a new, desirable vehicle. Similarly, many people will put off buying a particular car or truck if they know that it will be redesigned in the near future. The combination of pent-up demand and initial popularity will deplete the limited supply of a new model and drive prices up. Naturally if people are waiting in like to get a particular product, dealerships will try to make as much money as they can on them. Many new models are sold at or above MSRP for the first several months after they come out or longer. Of course, there are new models that will not demand high prices when they come out. Still, in general up to a certain point the longer you wait to buy after a new model is introduced the more willing dealers will be to negotiate. Given the fact that the CR-V is slated for a major redesign I have a feeling that you will be better off waiting a little while before purchasing one. By doing so you will be in a stronger bargaining position, and you may miss any sort of initial quality problems that many new models experience (like the recently redesigned Ford Explorer and GM's new mid-size SUVs).

Car_man
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shaq2kobe · April 2001

but the second ? came out wrong, when I said the lowest price, I meant you all knew the lowest price that you could sell each particular vehicle and you could haggle with the customers, as long as you sold it for more than what the set price was. ex- finance manager says 2001 honda accord vin# xxxxxxxx can be sold for no less than $20k (invoice is $20,500.00(this is just an example) and msrp is $23,750.00) you are free to negotiate with the consumers without having to report to us.(but you would be given the set value for each vehicle. I ask this because, when I see the salesperson leave everytime I make an offer, I feel I'm wasting my time talking to him, just let me talk to the person whose making the decision( especially if I am an informed consumer).

ccotenj · April 2001

well, i'm not in the car business, but i'm in a business, and i'll take a shot at that... i've got leeway to make certain decisions on my own, within a certain set of parameters... beyond those parameters, i go talk to my director and ask her opinion on it...

why?

number 1, she's got to live with the ramifications of my decision.
number 2, obviously, she doesn't tell me everything she knows about what's going on with the bigger picture. there's possibly something that i don't know about that's going on (i.e. maybe we are trying to make nice with a certain client because of other things going on, or maybe we are playing hardball with another one)... just like i don't expect to know all of the things that are going on at a management level in my business, i wouldn't expect the salesman to have a full view of the big picture in their business.

possibly i'm full of hot air on this, but it's my theory, anyway...

-Chris

ps. bill, i hope you are watching the game right now... i finally got smart and ran cable into my den so i can watch and surf at the same time...

im_brentwood · April 2001

Damn skippy I'm watching it...

Toronto IS gonna get it...

Anyways

Shaq2,

There's a lot of reasons why we dont let salespeople make decisions on the floor. Basically, and i hate to sound steroetypical...but...

That's why we have managers. Sometimes we have a trade-in shopper. I've seen people who dont care what they pay for the new car but want an asinine amount of their trade.

Fine, ya want $3K for that 89 Hyundai? Umm, we're gonna be at sticker....etc...

There's a myriad of reasons, also, in a lot of mass-market stores, finding salespeople who I'd trust in desking their own deals is no easy task. When I have a pro out there... sure. He gets a lot of leeway as I did when I was a salesman. I basically could (And did) write my own deals unless it was an unrealistic offer, in which case I'd bounce it off the boss for the heck of it ($500 over invoice on a Jaguar XK8 comes to mind).

I suppose it depends on who you're dealing with and where...

Sorry if it rambled a bit. But not every car is different. Want a super cheap deal? It's gonna generally be on a car I'm either overstocked in, has been around a while..etc...

A lof of times I've taken deals I otherwise wouldnt have on aged stock.

I.E. Customer wants to be $500 over invoice on a Jag, everyone else told him no way at all. Just so happens I got a British Racing green one in stock for 6 months....

Might just be his lucky day.

Now, if that guy walks in off the street and lives up the street from me and has that price from a guy 300 miles away, I might also do it.

If he's calling from Ohio and Im in Florida... "Umm, no thanks"

Basically it boils down to a sales manager's position of experience and knowing his inventory acutely and what he can and cannot sell certainc cars for.

Bill

hondobondo · April 2001

Here is a sure, quick, painless, and elementary MO for purchasing a car with absolutely the least money and you-know-what.

1) get the specs on the car you're interested in. Run it by a few of the Internet services. Don't expect to get the lowest price. The dealer is skipping the sucker tests and getting down to business with the assumption that he's dealing with an informed buyer. Now your supposed to take his offer because the dealer is giving you a break: he is sparing you the hassles for which the dealers are RESPONSIBLE.

Of course, it's ridiculous to ACCEPT an Internet offer. Making the first offer is a sign of WEAKNESS. After they've shown weakness, make 'em pay.

A few of the "smart" dealers know this and won't give any price. They would rather break their agreement with whatever Internet company they're dealing with. Nothing new.

2) fax or email a specific offer to the nearest dealer. Yes, you're making the first offer but it's the easiest way to establish one of the criteria necessary for succesful negotiations: credibility

Just make sure it represents a substantial savings over the Internet offers. You're not interested in the no-hassle high informed price. You want the no-hassle bare bones informed price.

Skip Invoice, hold-back, blaa, blaa. Just include a statement or two where the competition has it over your chosen vehicle. The dealer knows from your price you've got the current so-called invoice, holdback information. So now established are some more successful negotiating criteria: knowledge and rationality. The dealer knows your not in love with his brand.

Include a very short deadline.

3) Wait for the deadline to pass.

4) Don't be a jerk when the dealer calls back. Now a favorable negotiating environment have been established. Your original offer is null and void. The dealer must make the first offer.

It seems as though he needs to move some inventory quick to get an additional allocation of some of auto-big profit limited production inventory. If he almost has to give the car away, he's willing.

Congrats. You have made yourself "available" for a business deal.

This works best near the end of the month.

Or you could go in to the dealership for "psychological testing" as recommended in the response to my previous post.

Me, I think I'll stick with this MO.

im_brentwood · April 2001

However,

I don't personally enter negotiations with an attitude of "make em pay".

I'm different. If I want to buy a car, and I like the price I'm offered, I buy it.

Most recent purchase? 2001 740iL for mom. I called the dealer in Pompano Beach, FL (North Broward County) at 11am from my cell phone when I was in Miami, was there by 12:30 when he said he;d have the car ready and was on the road before 2pm.

Got a strong deal on the car.... Done.

Bill

achenator · April 2001

You seem to be the Honda man. Typically, what would be a good beacon score for Honda's special financing? My wife's score was over 700 and we were told even though she had a good score she had little in paid back credit. The business manager at our dealership first quoted 10.59% on 60 months at approx 20,000 borrowed (she put $4500 down) We intend to make overpayments to try to reduce to 48 mos. We balked at that rate so the bus. manager said he would "talk to Penny" and got us another point off. Still we think that is too high. Is beacon score all that they go by?
We intend to try to shop this loan but we would have really liked to get the 5.9 for 60. She is a recent college grad and they said they took her because of this. Does that really matter with a good beacon score? Any input would be greatly appreciated! Thanks,
The SE La. guy

im_brentwood · April 2001

If her score's over 700... no reason why you dont qualify for Honda's special rates.

I'd have her go to www.peoplefirst.com and refinance it if the deal is done,otherwise get a check from peoplefirst for like 6.95%... bring it in, tell em to match it otherwise use it...

Bill

carsellingpro · April 2001

One thing people should realize is that a beacon score is not the total equation.

I don't know about Honda, but for the product lines I sell, You can have a 800 Beacon score and still not qualify. If you have derogatory marks on your report, you'll not qualify for the "Special" Interest rates.

Credit scores are strange, I had a customer who had a bankruptcy less then 2 years ago and yet had a 710 Beacon. Yes they have good credit, Yet they CAN NOT get the special interest rate because they are still a risk due to the bankruptcy. of course they did get tier 1 financing through a national lender.

carsellingpro · April 2001

Every Dealership is different, but for the most part there are several reasons that the salesperson doesn't know the bottom dollar.

#1. To the consumer, the "desk" is the enemy, The salesperson is the middle man. So a Customer will not get angry with the salesperson if the desk rejects an offer.

#2 To make more money. If my dealership allowed a Salesperson to negotiate their own deals, a salesman who was struggling will give away every car, and blame the customer for it. I've had salesman who were struggling, and the desk told them, Thats as much as we can go, either they accept this offer, or they can leave, The Salesman went back, Sold the car, and still made more then a "Mini"

#3 Trade in value. In our dealership the salesperson doesn't know the appraised amount. They know what the dealership offers at first pencil, but whether the amount is above the Actual value, or below, the salesperson doesn't know. So the customer who wants 3K for that 89 Hyundai is getting a great deal, if they do pay sticker. Whether they believe it or not.

#4 Customer's love to Negotiate. We had an Invoice sale one weekend, Every new vehicle was priced at invoice, with the invoice prices clearly marked on the window. If requested the invoice was shown to the customer, yet they still wanted to negotiate. The customer must feel like they have won the "battle" before they will buy, Unless you're a laydown, and then you'll pay any price for a vehicle.

#5 Experience, In the Dealership where I work, every Desk Manager was a Salesperson. They worked the trenches for a couple years. The Turnaround in the car industry is outstanding. yet the desk manager has at least 2-3 years on the most experienced salesperson.

#6 The desk has to keep a specific profit per vehicle, for every person that pays invoice, someone else must make up for the profit lost on that deal. The desk knows these figures, for all salespeople in the store.

again, this may not be true at every dealership, but for the most part, It's the basis why salespersons don't know the bottom dollar.

lancerfixer · April 2001

What do you sell? I won't ask where, but I'd like to know which brand.

afk_x · April 2001

The dealership you describe would drive me absolutely crazy. I want to know where I stand with the deal, not be controlled by the whims of the desk manager.

isellhondas · April 2001

And I would guess it's a liner-closer place. I sure wouldn't want to work there.

RE: Qualifying for a Honda loan. They look at everything on the application and make a decision.

97vdpguy · April 2001

I bought a car last month (3/17). At the time, I traded in a car. The dealer is supposed to pay off my existing loan (which they did) and refund me the difference between what we agreed upon and what I owed.

Since it's been 6 weeks since the "deal", I'm wondering if I should bug the dealer, or if I should wait a little longer for the paperwork to clear all the necessary departments.

What is a resonable wait time?

afk_x · April 2001

Bug them

audia8q · April 2001

I'm with afk...bug them.
Often when a situation like yours happens its because somebody forgot to tell the office manager to cut you a check...just give the sales manager a call and aks for your check. 6 weeks is much more than patient.

Rich

audia8q · April 2001

I looked at a bureau on saturday...720 score but she only one j.c penny's card and a Visa with a $2500 limit and $2000 high credit. In this case her near perfect score wont get her a car without a co-pilot...

Rich

im_brentwood · April 2001

Good point.

I had just woken up and wasnt thinking as clearly as I ought to have been.

Bill

carsellingpro · May 2001

Well it's a shame that you'd not want to work where I work, As we sell more vehicles in our area then any other dealership. We've been #1 in the region for used car sales for several years. and our sales force makes a good buck. Last year the average salary was about 50,000 the low end was 35 and the high end was 90. it's a small market 80-100 cars a month, which is about 20-40 more then our biggest competitor.

As for being at the whim of the sales manager, it's his job to make as much money as possible. And he does a darn good job at it. we have people drive for 100 miles to get a deal with our store. I've worked at both types of dealerships, I prefer this way.

The burden of accepting a deal is on the sales manager, the customer knows this, and even with a "Bad" negotiation, the customer is angry with the sales manager, and the sales manager is angry with the customer, and I end up smelling like a rose.

carsellingpro · May 2001

Maybe I've been under a rock most of my life, but I'm not sure what you mean, liner closer ???? Please clarify

afk_x · May 2001

You have Liner salespeople. Their job is to get a customer, land them on a specific car, then test drive them. Once they have driven the car, the are Turned Over to a closer. The closer will attempt to close the sale, if he can't, he will Turn the customer Over to another closer.

These types of dealerships are known as T.O. houses, and typically engage in the more high pressure tactics than your standard dealer where one person does everything.

raybear · May 2001

No wonder I'm in business!

mvargo1 · May 2001

Gotta look at more than the score. I had a guy hit a 680 but was BK three years ago. No bank would touch him without 5K down and a strong Co-signer.

After a few months in a store a salesman should have a good feel for what he can and can not sell a car for. If someone gives me a low but reasonable offer and their a nice guy. I'll go to bat for them and push the manager to take the deal. If they are a jerk I won't do it. No money and a bad CSI just is not worth the trouble.

carsellingpro · May 2001

Well, no wonder I didn't know about it,, I've never worked in a dealer that had that style.

IN our dealership one person does everything, unless he can't close the deal. But everyone is given the chance to earn his/her own money.

Sometimes, it's just another face saying the same thing that gets the job done. Sometimes it's talking with a "floor Manager" that pushes them to purchase.

But if you're a good salesman, then you'll close about 95-98% of your buyers, and the other % will need a little help.

rroyce10 · May 2001

.....Whooooo... If a customer came into one of my stores with $5,000 down ..... he would be a owner right now ---- bankruptcy or not...

Banks and most of the lending instituations have changed quite a bit in the last 5 to 7 years......

Beacon scores as a rule ..are really not a fair way to -examine- someones credit...like Bill had mentioned....people with a 700+ score and a Burdines charge - just might not make it ......
but a customer with a -good strong history-.....and a 600+ score will..and .. should ..... ----

Beacon scores have been nothing more than a ..Pain.. in most finance mgr's job --- because beacon score's are not really reflective of what a person can pay for ---- Some times ..if you just bought a house..and some furniture and perhaps a boat.etc. you will see a a score drop from 800 to 600 --- anyone that has been in the business long enough, knows what I mean...

There is now legislation in front of the house --to hopefully amend most of this....we will see what George W. ... does with it ....

Terry.

carsellingpro · May 2001

fortunatly for my store, you can get credit through a secondary lender reguardless of your past credit history. Depending on the circumstances, but if you have 5k down, and only 1 bankruptcy, no more then 1 repo, you'll be driving away today. Of course, you'll be paying out the, *** in interest, but heck, 2nd chance finance isn't about saving people money.

Also, Depending on what you do with your money after your bankruptcy, depends on what you can do, If you don't have any redeeming credit, forget about a loan, No phone, No loan,

but if you've been paying good on the things NOT included in that BK, then you can even get bought through a regular bank.

raybear · May 2001

or stick with another dealer.

ccotenj · May 2001

this ought to be interesting...

1) holdback isn't profit.
2) your other assumptions need to be re-assessed.

i'm not saying you shouldn't stick to your guns, but if you "chewed him a new...." i'd say that was a bit of an overreaction and that if i was him, i wouldn't deal with you at all...

oh well.

-Chris

raybear · May 2001

If holdback isn't profit, what is it? I've always been of the opinion that it's the portion of profits "beyond the Pale", and that it only exists to keep stupid dealers from going out of business altogether.

hicaira · May 2001

It makes no difference whether the holdback is profit or not in this case. The dealer agreed to a price and is now trying to add on "Junk" charges for stupid stuff. A dealer like this will also try to add on junk at the finance level, such as extended warranties and the like.

Still, a proper reaction is "Thank you for that kind offer Mr. Salesperson but I'd like it without the scotchguard and rustproofing, just as we agreed to yesterday". Chewing out a salesperson for simply doing his job (and believe me, if he didn't try to add these junk items on, he would be chewed out by his boss - just the nature of a low margin dealership).

HiC

ccotenj · May 2001

gross revenue with profit (as many many of the car buying sites and some posters here do)... profit is what is left at the end of the day, once expenses and so on have been paid... gross revenue is what comes in through the door...

i'm just speaking from the perspective of someone who has had to deal with the business world for a long time... it's not unique to the world of car dealers... it's the same whether you sell cars or widgets..

i.e. grocery stores. have you noticed those special "snack aisles" and stuff that have popped up? pepsico or cocacola are paying the grocer to do that. it's not profit. it's part of gross revenue. the grocer uses that to offset the cost of that aisle. holdback really isn't any different.

people are convinced that the difference between what the dealer pays and what they pay is "profit". that's just not true. look at ANY business model and you can see that.

-Chris

ccotenj · May 2001

oh, i agree. that wasn't my point. the dealer shouldn't have tried to pull the scotchguard trick. my point was that the original poster was trying to go on about "fair profit" and so on, merely by subtracting what the dealer paid for the car from what he paid for the car. again, that's not "profit". that's "revenue".

-Chris

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