I've not been asked to sign anything in 4 new car purchases over the years (last in '01). I would have no problem with a signed (or initialed) offer. Once I start talking price, I'm there to buy, not waste time, and if signing helps prove it to the salesman and his manager, fine.
re post6948. I agree 100%. I can think of no other retail consumer product where the question of "how much does this cost?" is met with such obfuscation as the car industry practices. If a salesman can't answer a direct question with a direct answer then I will take my $ elsewhere.
then you must visit an awful lotta dealerships because, like it or not, that's the way the industry operates. It almost has to work that way because there are just so many "tire-kickers".
In general, the one-price method has been a failure... too many people shopping that one-price elsewhere to save $100.
I'm not saying I LIKE the way it is, but I take that process for granted since I cannot change it, and simply operate within that system to my best personal advantage.
I would be curious as to the statistics as to the number of showroom "ups" and the percentage of those closed in that visit... I'm guessing it is under 5%.
If you could close 5% of your ups within that one visit, wouldn't you be selling about 15-20 cars a month? How many ups do you get in an average day? Five percent seems awfully high.
"Isn't this true whether the offer taken to the desk is verbal, or a signed silly little sheet?"
No. If it's verbal, then neither of us is "committed" until the sales contract is signed. With the silly little sheet, the dealer has the feeling I have committed to something where I have no idea if they will or will not commit. Personally, I don't really care if they do or don't, but my point is why should I have to commit if they don't? Isn't that what the contract is for?
No, the contract comes after you quit yanking their chain, quit shopping their price all over town, and decide to buy a car.
So many car biz people get lied to about how serious a person is until they get a number, then they bolt. It makes very good business sense to prevent that as much as possible.
As much as I hate to... I have to disagree with you... If you aren't committing, its not an offer. Otherwise, it is just a question "Will you sell me the car for $XXX? You will? Okay, thanks.. I'll think about it." It is similar to an auction. You don't know for sure if you will get it for your bid price, but if you bid it, you are committed to buy for that price. It is also similar to making an offer on a house. If it is accepted, you can't back out.
The buyer always has to commit to a price first in a negotiation. Unless you just want to pay what is on the sticker.
5% close ratio yielding 15 deals a month would mean working 300 ups per month. In a 26 working day month, that would mean working 11.5 ups per day. That's just not possible. A decent salesman has a 20% closing ratio. Not a superstar, mind you, just a decent salesman. That person will sell 10-12 units a month.
On another point by another poster, I think the "how much is it question" can be frustrating for everyone involved. Comparing this question at a car dealership and other retail outlets isn't an apples to apples comparison.
The reason is that typically a car dealership is the only place where a customer questions an already posted price. The answer to "how much is it" is MSRP. Now if you'd like to offer less, we will entertain that as well. When someone asks, "What's you best price?" My answer is MSRP because my best price is one that generates the most income for me. The customer is really asking what is his or her best price, and only they know the answer to that question.
"then you must visit an awful lotta dealerships because, like it or not, that's the way the industry operates. It almost has to work that way because there are just so many "tire-kickers".
In general, the one-price method has been a failure... too many people shopping that one-price elsewhere to save $100."
As I said in a previous post, anything but a direct answer to the "How much?" question would probably have resulted in no sale for any dealership. I don't want to verbally spar with someone to buy a car I really don't need.
I told this story on the boards earlier. I didn't go into the showroom mouthing off or showing disrespect to the sales staff. I took the opportunity to talk with my saleswoman and I think we established some sort of relationship. She seemed to give me the room I needed in order to not feel pressure, but the price I needed in order to make a decision.
and handled you just right. She recognized you were not the "typical" shopper/buyer, but might go on impulse.
But I understand why most salespeople, with most prospects, choose not to give an explicit answer to the "How Much" question without first establishing the prospect's ability and willingness to discuss price in good faith towards reaching a firm deal.
"No. If it's verbal, then neither of us is "committed" until the sales contract is signed."
Doesn't this contradict your earlier comments that when YOU make a verbal offer, then its a 100% genuine offer backed by your "rep"? Then you say when you make a verbal offer you are not committed.
Well, she was an eleven year veteran. I got the sense that this was her (and maybe the dealerships) modus operandi.
I know that many of the salespros here don't like to give a price because it can be "shopped" and we've all heard that "bebacks" don't buy cars.
Maybe I'm the "exception". I doubt it. I've never been exceptional at anything.
Why wouldn't the average person want to deal with someone that gives them a "fair" price, and allows them to make a decision without loads of pressure? I know. I know. They'll run down the street and try to beat the price by a $100. But, do most prospects really do that? Again, when given a "fair" price and no pressure.
When looking for a car, it is common to be comparing a few choices (ie Camry/Accord). So, to decide which one to get, a buyer needs to look at them both, and will normally tell the salesperson they have another option to look at.
Price, however, is one of the considerations. So, if I look at the Camry, I can evaluate the ride/features, etc. to compare to the Accord. But, I still need to know the price of each to make a final decision (assuming I am otherwise indifferent between them).
So, in my example, if I ask "will you take 20K for that Camry with an MSRP of 22k", it doesn't mean that I will buy it know, just that I need the number to put it into context of my other choices.
Also, there are some of us that don't like to finalize the deal on the spot. Some people know they get caught up in the emotion of the situation (and intoxicated by that new car smell), and want to take the deal home so they can think about it objectively (and do some town hall due dilegence). I've bought most of my cars this way (finalizing the deal over the telephone).
I know that sales people are loath to let a prospect out of the store without the new car, which is one factor that leads to a lot of the "conflict" in the sales process.
"They'll run down the street and try to beat the price by a $100. But, do most prospects really do that?"
I am not in the business, but I'd hazard a guess that over half, maybe WAY more, would do just that. They'd buy from Hitler himself to save $100.
Or come back unannounced on Tuesday (the original salesperson's day off) and do the deal with whomever else waits on them.
Salespeople live on commissions (as I have in a different business), and I think most (car) buyers are either not sophisticated enough, or thoughtful enough to care one hoot beyond their own wallet.
one thing that you are completely missing here is the fact that the dealer is ALWAYS committed to selling a car. thats what they are there for.
you said: "signing a handwritten offer that may or may not be approved or honored by the dealer."
i think i understand your point now. you just dont want to negotiate. period. you want to make a verbal offer, have the dealer either say yes, no, or counter. if they counter, then you either say yes or no. the end.
but a true negotiation might take 2 or 3 counter-offers from each party before a price is reached. this is what you would be wise to accept.
let me ask you another question:
if the dealer told you:
"mr. tornado, if you sign your offer, i will promise no more than one round of negotiations."
Well, here is my experience in buying new cars since 1968. Very few salesmen are astute enough to judge a serious customer. On more than one occasion I have stood in the middle of a new car showroom and asked "who wants to sell a car today?" In my younger days I looked considerably younger than I was and was essentially refused service by salesmen who walked right by me. The joke was that not only was I ready to buy a car "today" but I had the cash in the bank to pay for it. So several "pros" lost a comission because they were just too "smart". What I find eternally amusing is the blind acceptance by several on these boards that it is the customer's job to figure out how much a dealer is selling a car for. But, remember, don't offer too little lest you insult the sales staff. OH PLEASE! A savvy negotiator, and that includes most car dealers, always tries to make the other guy make the first offer. I understand the game which differs from dealer to dealer and brand to brand so I adjust accordingly. My Toyota, I had a choice of dealers, made an offer based on internet research which was accepted. My Audi, with one local dealer, asked for best price via email, got a reasonable quote and accepted. My son's used Nissan, one dealer gave me the "what do I have to do to put you in a car today" line, bought it elsewhere. Over the years I have done businees with many really terrific salesmen and some ordinary ones. The jerks didn't get my money. peace.
"Very few salesmen are astute enough to judge a serious customer."
Sadly, I agree. There are certainly many pros, but they are far outnumbered by the journeymen-losers-greenpeas.
And it is because of that fact that so many stores probably feel they have to implement these (admittedly offensive to the buyer) techniques of signing offers or getting deposits. Management doesn't have the confidence in their own staff to discern a "live one" versus a "tire kicker".
I just know I can't change it, so I operate within these constraints as best I can to my best advantage, without being insulting, disrespectful or deceitful.
Like you, I've dealt with some who are quite good, and many who are not. Unfortunately, I have moved quite a bit in my adult life, and have lately not been very brand-loyal, so I've never really struck up a long-term relationship with any one store or salesperson.
"No, the contract comes after you quit yanking their chain, quit shopping their price all over town, and decide to buy a car."
<sigh> This is because you are assuming I'm not serious (and probably justifiably so) because I don't do it your way.
"So many car biz people get lied to about how serious a person is until they get a number, then they bolt. It makes very good business sense to prevent that as much as possible."
And I never said otherwise, drift. I understand your job puts you in situations where you have to develop ways to prevent the shopping the number types and tire-kickers and stuff from wasting your time. I don't begrudge you that, at all.
"As much as I hate to... I have to disagree with you... If you aren't committing, its not an offer."
kyfdx, that's because I'm not committing the way I'm "supposed" to. Just because I don't sign the handwritten scrap of paper doesn't mean I'm uncommitted--it just means the salesperson THINKS I'm uncommitted.
"Doesn't this contradict your earlier comments that when YOU make a verbal offer, then its a 100% genuine offer backed by your "rep"? Then you say when you make a verbal offer you are not committed."
Hankr, notice where I put committed in quote marks in the phrase to which you refer. My point is that if I don't sign, the salesperson doesn't think I'm committed, but if I do or don't sign, I don't know the salesperson is committed either way. Again, if I offer, I'm committed. And I'll prove it with my signature--when the signature means something.
"one thing that you are completely missing here is the fact that the dealer is ALWAYS committed to selling a car. thats what they are there for. you said: "signing a handwritten offer that may or may not be approved or honored by the dealer." i think i understand your point now. you just dont want to negotiate. period. you want to make a verbal offer, have the dealer either say yes, no, or counter. if they counter, then you either say yes or no. the end.
bowke, sort of. I am willing to negotiate--because my offer may be wildly wrong--I'm might have had a bad day with arithmetic, whatever. Or I misjudged the market. Or I realize the one vehicle I want is there and I am willing to pay more, but I need to offer the least I want to pay first. With that in mind, I know my offer will be countered. I would be shocked if I made an offer and the SM didn't try to get a couple more bills out of me. What I am saying is I offer a number and you want me to "commit" but I have no assurance that anyone other than me is *committed* to that number. It may be too literal, I know. It may be nitpicky or even silly. But you are asking me to physically do something that you are not doing. When the contract comes out, we are both doing the same thing and I feel sooo much better, because we *both* have to honor what's on the paper.
"but a true negotiation might take 2 or 3 counter-offers from each party before a price is reached. this is what you would be wise to accept."
And I'll be happy to do so. This comment, though, is exactly why I don't want to sign the offer. If it's going to take 2-3 counters, why sign it? Maybe I offered higher than you would have accepted otherwise. That's my own problem, because you certainly aren't going to counter lower.
"let me ask you another question: if the dealer told you: "mr. tornado, if you sign your offer, i will promise no more than one round of negotiations." would you sign then?"
No. Because 1 round of negotiations equals contract time and I'm all jumpy to sign by then, because I love cars and trucks and can't wait to get in mine, program my favorite radio stations, set the mirrors and cruise for a while.
Look, everybody. I know it seems like you're arguing with brick wall here. I know you probably think I'm even a troll that's arguing for the sake of arguing. But, what I'm not doing is spouting half-truths about salespeople or calling names. People that I seen do this on this and the "inconsiderate" boards probably don't LOVE cars like me and the other Edmunds ethusiasists do. They want simply the very lowest actual price without regard to sanity. I simply want a car at price pretty close to what I should be paying. If that costs me a few hundred, I don't care. This is just one issue I can't let go of--I may someday go into a dealership not serious or committed--tire kicking. The staff will know this, because I won't offer anything. If I sit down and talk a number, that's my sign I'm ready to drive away something other than I came in with.
It's not that, like I said - I don't care at all, in theory about whether I get a set of initials, a signature, a thumbs up sign, or if you can't speak, a head nod in a forward motion.
That tells me you're serious and gives me commitment on your part - I'm committed, no matter what - no doubt about it.
I've never gone to work saying "I don't feel like selling cars today", or "I think I'll go easy on the salesmen for a change", or I'm only approving a deal if the moon aligns with Mars and the tide is at exactly 3'6"..
you said: "...if I don't sign, the salesperson doesn't think I'm committed, but if I do or don't sign, I don't know the salesperson is committed either way."
if the salesman doesnt think you are committed, what motivation does he have to go to bat for you? 99.999999% of the time, your excuses for not signing your offer are seen as red flags.
i have more to say on this, but a customer just came in...ill finish later.
I don't think anyone here means to question your integrity or motives. And I don't view the discussion as an argument. I find it very interesting to hear from one whose approach is different from mine (I'll play the game, but control it. The key is that I have the money they want, and they have the car they don't want. And I don't "want" any car... I buy when I need one, but don't fall in love).
I think some here are just a bit confused by your refusal to adjust your behavior to "the system", flawed though it is, to get more-quickly to where you (and the dealer) both want to get... a deal.
"The system" can't / won't be changed by you or me. But we can change to adapt to it; and not necessarily in ways detrimental to our interests. Such as signing the silly sheet.
I look at it this way. In my earlier years, I found the easiest way to get a girl naked was to get naked first. So to buy a car, I'll go first (at a rather low offer).
"It's not that, like I said - I don't care at all, in theory about whether I get a set of initials, a signature, a thumbs up sign, or if you can't speak, a head nod in a forward motion."
Well ok, then. This is a step in the right direction. A thumbs up or some kind of enthusiastic action (like wanting to negotiate in the vehicle 'cause I love it so much) would be fine if that shows committment to you.
"I think some here are just a bit confused by your refusal to adjust your behavior to "the system", flawed though it is, to get more-quickly to where you (and the dealer) both want to get... a deal.
"The system" can't / won't be changed by you or me."
Interesting. I see it as a salesperson who has a way of figuring out if I'm serious and won't believe anything other than their system. I'm not there to simply a) get there quicker or b) grind out the lowest price at any cost. I want both to be reasonable.
"I look at it this way. In my earlier years, I found the easiest way to get a girl naked was to get naked first."
Hank, this is some of the most helpful info I've gotten in awhile. I can't wait for the weekend. ;-)
"if the salesman doesnt think you are committed, what motivation does he have to go to bat for you?"
bowke, perhaps this is where you and I are not connecting. I don't see the salesperson as on my side--as someone to go to bat for me. I want it to be friendly and for us to get along--but you work for the store and your objectives (properly so!) are diametrically opposed to mine). Think about these scenarios:
A:
I offer invoice, but sign anything you put in front of me, sign over Packer seat licenses and ticket rights, agree to mow your lawn. But it's a mini for you and whatever dealer cash might be there for the store.
B:
I offer $500 over market rate for the vehicle, but take my stated position. This means perhaps another $100 for you more than an "average" deal (not even a mini).
Truthfully, which one would you rather have done? You might say A because you know it won't be shopped, they "committed", etc. But, other stories tell me that people that offer such silly amounts are gonna grind no matter what. Yet, in B, if you can close ME (and you will since I've told you an offer is a committment) you will have made maybe $250 more than you would have in A.
Lastly, are saying you will go to bat for me, bust the SMs balls on a mini simply because you think by signing the offer, the deal will be easier? I doubt it, but what do I know? Maybe you will. I know I'd take the deal that makes me the most money.
I'm not sure if it's been mentioned here, but it seems to me that these "sign this commitment letter" type tactics only occurs at "regular dealerships" - ie. GM, Ford, Toyota, Nissan, etc. I have never experienced these tactics used at BMW, MB, Lexus or Infiniti dealerships. Maybe you guys can address this, but if this is true, it suggests that the more affluent, educated, savvy buyer (generalization) would be offended by these practices. I've described experiences before on these boards about Nissan (and other mainstream) dealerships asking me to sign letters of intent/commitment prior to test driving a vehicle, which I found obnoxious and somewhat intimidating. We've also purchased several higher-end vehicles (BMW, MB, Lexus) and have never been approached with any similar demands.
Have you guys seen the letter of intent/commitment technique used at BMW, MB, or Lexus dealerships? Because if you haven't, it would suggest that these practices may be offensive- otherwise why wouldn't all dealerships do this?
i understand the argument, but in this business, the adage about a bird and a bush applies more than a couple hundred dollars. without a commitment in writing, a $500 profit CAN be shopped. a closed deal CANNOT. i would take the 1st one in a heartbeat. any day of the week, and twice on sunday...(we arent even open on sunday, so im even taking the mini on my day off!)
the letter of commitment before a test drive is usually only done by sleazy dealers. we are discussing a signed offer to buy...same as if you are buying a house.
This is where the car biz is WAAAAAYYYY out of line. MOST car dealers ask for a commitment before the customer knows what the price even is. I am not committing to anything before I know what the price is. If you don't want someone to shop your price, don't let them leave before you sell them a car. If you are doing your job they will not be leaving on a deal that is very beatable anyway. if you are on a $500 deal, how much over your min commission will that put you anyway??? Give it up and gain a happy customer! Word of mouth is the best advertisement!!!
"MOST car dealers ask for a commitment before the customer knows what the price even is."
If YOU as a consumer have the research in hand and the guts to say what you'll buy it for, why wouldn't you already know the price when you walk into the store?
You're looking at a car with package x, y, and z - figure out what you're paying, and make a reasonable offer. If you're asked if you'll buy the car at that price, you can tell them "I just said I'll pay $xxxxx for the car".
Of course, if you're yanking someone's chain and just trying to get a number to shop all over town while wasting the time of someone trying to earn a living for their family....
Bear in mind, the dealership isn't where you do your pricing research, unless you came in with off-the-wall expectations.
I view complaints about the "system" of buying cars in the same way that I view complaints about cold weather in winter. All the complaining in the world won't change it. Sometimes the most you can hope for is to understand why it happens. :^)
.. and trying to work downwards is simply poor negotiating strategy for the buyer. Very poor.
The first thing taught in Negotiating 101 is that the buyer should always take the offensive with a low offer, and shop / negotiate up from there. It is a strategy much more likely to result in "lowest" than working from a seller's high figure and trying to work down.
In 10 or so new cars purchased, I have NEVER had my first offer accepted anywhere. To me, that's good, cuz it tells me I've done my research properly and am not yet in the selling zone. Typically, they just say thank you and good day. We've spent maybe 15 minutes. But I make it clear that I will test that same offer elsewhere, and return with a higher offer if I am unsuccessful at the other store(s). But I have set the agenda. And they always take my call-backs.
On my second offer, typically handled via phone, I might come up anywhere from $250 to $400 (on widely-available mainstream cars selling in the teens or low 20s). Usually I am successful on this round, typically giving in another $100 or so to get it done.
On that first low-offer visit, they'll be very dramatic about how the offer is too low, asking how I got that figure, doesn't the store deserve a profit, yada-yada. I just say: "Sure, and that's why you should not sell me that car today. But I gotta be sure that offer is ridiculous by testing it elsewhere. If it is ridiculous, I'll be back with a higher offer".
Fact is, none of us (buyers) really know the selling zone price, what with all the holdbacks, spiffs, contests, whatever. Edmunds and Consumer Report help us some, but we as buyers never really know. But starting low and working up seems the most fruitful way to find out.
They might think I'm a no-good grinder, but I don't care. And actually, having been in sales (hi tech) many years myself, my colleagues and I probably express lower (personal) regard for those of our buyers who negotiated most poorly, resulting in the sweetest deals for us... a distain for those we beat badly, and professional respect for those who held our feet to the fire and struck good deals.
"A savvy negotiator, and that includes most car dealers, always tries to make the other guy make the first offer."
I think your statement is true of the "typical" negotiator, not the "savvy" one. Reasons in my prior post. (I think) savvy negotiators take control, and set the agenda to make the opposing party work to move savvy negotiator's initial position.
This may not hold true, however, in car sales; I don't know.
It may be plausible that because the average consumer is SO poor in negotiating skills, and so worried about what the dealer personnel might think of him or her, that their first-number offer might be entirely acceptable to the dealer right out of the gate. We hear often of buyers being afraid to "insult" the dealer or look like a rube with a truly low offer.
So maybe in the car biz, it is preferable to let the buyer go first. Then, with some additional professional negotiating "work" on that buyer by the rep / manager team, the deal can only get better (for the dealer) from there.
I'd be curious to know the common wisdom in the car-selling biz... Do dealers want the first number from the buyer, or prefer to give the first number themselves??
"I'd be curious to know the common wisdom in the car-selling biz... Do dealers want the first number from the buyer, or prefer to give the first number themselves??"
When is the last time you got a serious # from a car salesman right out of the gate?
... cuz I've never asked a car salesman for a number, ever. I've always firm-offered my number first. And have always ignored any counter they may try to provide. We work up from MY number.
Your very question points to the uselessness (to the buyer) of asking a seller for the first number... why frame a discussion over seller's position?
Someone made an interesting point a few posts back about how the "high line" dealers differ from the "regular" dealers.
My wife and I once considered the purchase of a BMW. We knew that price-wise, the only BMW we could consider was the 318i. So, we went and test drove one. The dealer we met was very professional and, for a change, knew more about the car he was selling than I did. He showed us every feature, then accompanied us on a test drive.
Upon our return to the dealership, he took us into his office and asked a very civil but very direct question: "Now, what are your intentions?"
That simple question was, in my view, a very effective tool for him to quickly determine if we'd be buying a car or not. That well-phrased question leaves virtually no wiggle room for the customer, but is not rude or obnoxious.
Our simple and honest response was that we found the 318i underpowered, and since we couldn't afford the 325i, we wouldn't be buying anything. He gave us information about pre-owned 325's and then we parted on very good terms.
I've have always been impressed with the way we were treated there, and have always thought his simple question was an incredibly effective "prospect qualification" tool.
... and probably works well in a high-line store, where buyers are generally more sophisticated and businesslike.
That technique might be less fruitful in a Ford store on a Taurus. I think many buyers are every bit as deceitful as salespeople are purported to be.
I say purported, because my personal experiences have been that most car salespeople are more professional than their reputation suggests.
On the other hand, I know many many buyers (friends of mine) don't think twice about lying in their dealings, most frequently over the condition of their trades where they hope a looming repair won't be discovered in the dealer's appraisal.
"without a commitment in writing, a $500 profit CAN be shopped. a closed deal CANNOT. i would take the 1st one in a heartbeat. any day of the week, and twice on sunday"
I can understand why. In your view, you've gotten the "committment" they way you wanted it--they way your experience tells you means the deal is closed. And a half-hour mini is a lot easier than a 15 min potential $500 profit that's lost. I know you can't tell it's me when I show up--so logically you ask for the committment. I will say no, but all I ask is that you at least consider the offer. Like I've said before: to ME, if in the back room with the SM, I'm blown off or the salesperson comes back with uh, umm, err...maybe we'll take it, then I know I'm in the wrong store anyway. In my case, if I could afford to buy the vehicle myself I want right now, there are 4 or 5 stores within 30 mins of my house I could choose from. I want to buy from the first store I go to, but will go to all 5 if I have to. NOT to save $200, but to have the deal done on my terms.
It's been an interesting discussion for sure. I still don't understand your logic.
If I understand correctly, you are saying you won't sign your offer until you get a commitment from a dealer, because you don't know if the offer will be accepted?
I guess I don't understand the big deal. Let's break down the scenario.
You make an offer You sign it (not knowing if it's accepted
Scenario 1:
Dealer accepts, writes up the deal, you're done.
Scenario 2:
Deler rejects and counters. You are now without obligation, free to walk or free to re-counter.
Either way, you win, and your sig essentially means you'll buy for the price you articulated.
So, all I come down to is that you are playing your own psychological game to keep yourself from playing the dealer's game.
Business build processes around what they find works. I'm sure back in the stone age when terry was selling Brontasaurus's with Fine Pleistocene Pteradactl wing leather, they started out with the make offer, no sig approach (probably because writing hadn't been invented). They probably discovered that if they got some token of commitment (at that time, the first born was offered to the salesman in lieu of a signature), the chances of a close went up.
Sure not a big deal...a buyer is either committed to buy or they are not. Signing a properly filled out worksheet shouldn't bother them if they are serious.
Your little smiley may have been intended sarcasm, but I think that truly is what it means. There is no extra equipment, just a higher price. The dealer posts higher-then-MSRP cuz they can (or think they can) get it.
Is it a high-demand vehicle?
I, for one, do not resent this practice. Just as at times they sell a dog-colored, manual-shift stripper at a loss, when they have a winner, why not go for more if you can get it?
Market economics, supply and demand, is the American Way !
who uses logic in this conversation. thanks, hank.
tornado...yet another thing that escapes you is the fact that the dealer has already committed to a price before you even arrive. the price on the window of the vehicle you want is what they commit to. if you want another, its up to you to offer.
and when you DO offer, its not you doing the dealer "a huge favor by gracing them with your presence". you are ASKING for them to give up money by discounting their vehicle. another scenario...
me: "tornado, my good friend, im in a financial pickle. i need $1000 to afford a car. i know you have $2000 in the bank. i dont want to ask for it, so i want you to tell me you are giving it to me first. but if you dont, i wont be your friend anymore."
or
me: "tornado, im in a financial pickle. i need $1000 to afford a car. can you help me out please?"
which way would you be more likely to help me out? if you agreed, wouldnt you want me to agree to YOUR terms?
for example:
you: "ok, keith, but please sign this form stating that you actually WILL use it for the purchase of the car you so desperately need."
I already bought the vehicle. Didn't even notice this AMV until after the sale was complete and I was looking over everything at home, and I was just wondering what it meant. Was concentrating on the OTD price beforehand.
The vehicle was an 04 Outback Wagon. The totally redesigned 05's will be out in a few months. Plus, it was a manual, which as Hank mentioned, probably reduces demand.
24005 was MSRP (or 25000 if you count that AMV) 22182 was Edmunds TMV 21846 was Invoice 21746 was Negotiated Price
The only costs in addition to the negotiated price were tax and tags. No doc fee, processing fee, etc. No trade in.
There was a $1500 customer incentive that reduced my cost further, and I think there was a $500 dealer cash incentive that helped out the dealer.
This dealer was quite pleasant to buy from. It was, by far, my best new car buying experience to date.
... and pretty gutsy of a Subaru dealer to post AMV on a 5-speed Outback. Good for you that you didn't nibble.
Aren't cars a good deal these days? $20K for an Outback is a great value.
When I think of the crap I drove 35 years ago (yeah, I'm old) like a Chevelle, Opel Kadett, Valiant. Cars are just so much better today, and so much cheaper in terms of percentage of average earnings.
Comments
I've not been asked to sign anything in 4 new car purchases over the years (last in '01). I would have no problem with a signed (or initialed) offer. Once I start talking price, I'm there to buy, not waste time, and if signing helps prove it to the salesman and his manager, fine.
But doesn't that also make it harder for YOU to buy a vehicle too? And doesn't signing their silly little sheet help cut through it?
"With an offer, *I* don't know that the dealer is committed, but they know *I* am. "
Isn't this true whether the offer taken to the desk is verbal, or a signed silly little sheet?
I gotta say, your views on this sound more to me about ego than it is trying to get business done.
In general, the one-price method has been a failure... too many people shopping that one-price elsewhere to save $100.
I'm not saying I LIKE the way it is, but I take that process for granted since I cannot change it, and simply operate within that system to my best personal advantage.
I would be curious as to the statistics as to the number of showroom "ups" and the percentage of those closed in that visit... I'm guessing it is under 5%.
regards,
kyfdx
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No. If it's verbal, then neither of us is "committed" until the sales contract is signed. With the silly little sheet, the dealer has the feeling I have committed to something where I have no idea if they will or will not commit. Personally, I don't really care if they do or don't, but my point is why should I have to commit if they don't? Isn't that what the contract is for?
So many car biz people get lied to about how serious a person is until they get a number, then they bolt. It makes very good business sense to prevent that as much as possible.
The buyer always has to commit to a price first in a negotiation. Unless you just want to pay what is on the sticker.
regards,
kyfdx
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On another point by another poster, I think the "how much is it question" can be frustrating for everyone involved. Comparing this question at a car dealership and other retail outlets isn't an apples to apples comparison.
The reason is that typically a car dealership is the only place where a customer questions an already posted price. The answer to "how much is it" is MSRP. Now if you'd like to offer less, we will entertain that as well. When someone asks, "What's you best price?" My answer is MSRP because my best price is one that generates the most income for me. The customer is really asking what is his or her best price, and only they know the answer to that question.
In general, the one-price method has been a failure... too many people shopping that one-price elsewhere to save $100."
As I said in a previous post, anything but a direct answer to the "How much?" question would probably have resulted in no sale for any dealership. I don't want to verbally spar with someone to buy a car I really don't need.
I told this story on the boards earlier. I didn't go into the showroom mouthing off or showing disrespect to the sales staff. I took the opportunity to talk with my saleswoman and I think we established some sort of relationship. She seemed to give me the room I needed in order to not feel pressure, but the price I needed in order to make a decision.
But I understand why most salespeople, with most prospects, choose not to give an explicit answer to the "How Much" question without first establishing the prospect's ability and willingness to discuss price in good faith towards reaching a firm deal.
Doesn't this contradict your earlier comments that when YOU make a verbal offer, then its a 100% genuine offer backed by your "rep"? Then you say when you make a verbal offer you are not committed.
What am I missing here?
I know that many of the salespros here don't like to give a price because it can be "shopped" and we've all heard that "bebacks" don't buy cars.
Maybe I'm the "exception". I doubt it. I've never been exceptional at anything.
Why wouldn't the average person want to deal with someone that gives them a "fair" price, and allows them to make a decision without loads of pressure? I know. I know. They'll run down the street and try to beat the price by a $100. But, do most prospects really do that? Again, when given a "fair" price and no pressure.
Price, however, is one of the considerations. So, if I look at the Camry, I can evaluate the ride/features, etc. to compare to the Accord. But, I still need to know the price of each to make a final decision (assuming I am otherwise indifferent between them).
So, in my example, if I ask "will you take 20K for that Camry with an MSRP of 22k", it doesn't mean that I will buy it know, just that I need the number to put it into context of my other choices.
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
I know that sales people are loath to let a prospect out of the store without the new car, which is one factor that leads to a lot of the "conflict" in the sales process.
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
I am not in the business, but I'd hazard a guess that over half, maybe WAY more, would do just that. They'd buy from Hitler himself to save $100.
Or come back unannounced on Tuesday (the original salesperson's day off) and do the deal with whomever else waits on them.
Salespeople live on commissions (as I have in a different business), and I think most (car) buyers are either not sophisticated enough, or thoughtful enough to care one hoot beyond their own wallet.
you said: "signing a handwritten offer that may or may not be approved or honored by the dealer."
i think i understand your point now. you just dont want to negotiate. period. you want to make a verbal offer, have the dealer either say yes, no, or counter. if they counter, then you either say yes or no. the end.
but a true negotiation might take 2 or 3 counter-offers from each party before a price is reached. this is what you would be wise to accept.
let me ask you another question:
if the dealer told you:
"mr. tornado, if you sign your offer, i will promise no more than one round of negotiations."
would you sign then?
Sadly, I agree. There are certainly many pros, but they are far outnumbered by the journeymen-losers-greenpeas.
And it is because of that fact that so many stores probably feel they have to implement these (admittedly offensive to the buyer) techniques of signing offers or getting deposits. Management doesn't have the confidence in their own staff to discern a "live one" versus a "tire kicker".
I just know I can't change it, so I operate within these constraints as best I can to my best advantage, without being insulting, disrespectful or deceitful.
Like you, I've dealt with some who are quite good, and many who are not. Unfortunately, I have moved quite a bit in my adult life, and have lately not been very brand-loyal, so I've never really struck up a long-term relationship with any one store or salesperson.
Either that, or you've been thrown out of 10 other places for being unreasonable and combative.
No thanks. I can't tell, through the horror flashbacks of you announcing that, whether you have money in the bank or not.
That question is kind of a joke in our industry because NOBODY who asks that question ever actually buys a car!
The others here will support me on this.
I have probably heard that question maybe six times. Five of the six times I was smart enough to go the other way.
I guess you were the rare exception.
And, the dealer already gave you his price. It's on the sticker!
<sigh> This is because you are assuming I'm not serious (and probably justifiably so) because I don't do it your way.
"So many car biz people get lied to about how serious a person is until they get a number, then they bolt. It makes very good business sense to prevent that as much as possible."
And I never said otherwise, drift. I understand your job puts you in situations where you have to develop ways to prevent the shopping the number types and tire-kickers and stuff from wasting your time. I don't begrudge you that, at all.
"As much as I hate to... I have to disagree with you... If you aren't committing, its not an offer."
kyfdx, that's because I'm not committing the way I'm "supposed" to. Just because I don't sign the handwritten scrap of paper doesn't mean I'm uncommitted--it just means the salesperson THINKS I'm uncommitted.
"Doesn't this contradict your earlier comments that when YOU make a verbal offer, then its a 100% genuine offer backed by your "rep"? Then you say when you make a verbal offer you are not committed."
Hankr, notice where I put committed in quote marks in the phrase to which you refer. My point is that if I don't sign, the salesperson doesn't think I'm committed, but if I do or don't sign, I don't know the salesperson is committed either way. Again, if I offer, I'm committed. And I'll prove it with my signature--when the signature means something.
"one thing that you are completely missing here is the fact that the dealer is ALWAYS committed to selling a car. thats what they are there for.
you said: "signing a handwritten offer that may or may not be approved or honored by the dealer."
i think i understand your point now. you just dont want to negotiate. period. you want to make a verbal offer, have the dealer either say yes, no, or counter. if they counter, then you either say yes or no. the end.
bowke, sort of. I am willing to negotiate--because my offer may be wildly wrong--I'm might have had a bad day with arithmetic, whatever. Or I misjudged the market. Or I realize the one vehicle I want is there and I am willing to pay more, but I need to offer the least I want to pay first. With that in mind, I know my offer will be countered. I would be shocked if I made an offer and the SM didn't try to get a couple more bills out of me. What I am saying is I offer a number and you want me to "commit" but I have no assurance that anyone other than me is *committed* to that number. It may be too literal, I know. It may be nitpicky or even silly. But you are asking me to physically do something that you are not doing. When the contract comes out, we are both doing the same thing and I feel sooo much better, because we *both* have to honor what's on the paper.
"but a true negotiation might take 2 or 3 counter-offers from each party before a price is reached. this is what you would be wise to accept."
And I'll be happy to do so. This comment, though, is exactly why I don't want to sign the offer. If it's going to take 2-3 counters, why sign it? Maybe I offered higher than you would have accepted otherwise. That's my own problem, because you certainly aren't going to counter lower.
"let me ask you another question:
if the dealer told you:
"mr. tornado, if you sign your offer, i will promise no more than one round of negotiations."
would you sign then?"
No. Because 1 round of negotiations equals contract time and I'm all jumpy to sign by then, because I love cars and trucks and can't wait to get in mine, program my favorite radio stations, set the mirrors and cruise for a while.
Look, everybody. I know it seems like you're arguing with brick wall here. I know you probably think I'm even a troll that's arguing for the sake of arguing. But, what I'm not doing is spouting half-truths about salespeople or calling names. People that I seen do this on this and the "inconsiderate" boards probably don't LOVE cars like me and the other Edmunds ethusiasists do. They want simply the very lowest actual price without regard to sanity. I simply want a car at price pretty close to what I should be paying. If that costs me a few hundred, I don't care. This is just one issue I can't let go of--I may someday go into a dealership not serious or committed--tire kicking. The staff will know this, because I won't offer anything. If I sit down and talk a number, that's my sign I'm ready to drive away something other than I came in with.
It's not that, like I said - I don't care at all, in theory about whether I get a set of initials, a signature, a thumbs up sign, or if you can't speak, a head nod in a forward motion.
That tells me you're serious and gives me commitment on your part - I'm committed, no matter what - no doubt about it.
I've never gone to work saying "I don't feel like selling cars today", or "I think I'll go easy on the salesmen for a change", or I'm only approving a deal if the moon aligns with Mars and the tide is at exactly 3'6"..
you said: "...if I don't sign, the salesperson doesn't think I'm committed, but if I do or don't sign, I don't know the salesperson is committed either way."
if the salesman doesnt think you are committed, what motivation does he have to go to bat for you? 99.999999% of the time, your excuses for not signing your offer are seen as red flags.
i have more to say on this, but a customer just came in...ill finish later.
I think some here are just a bit confused by your refusal to adjust your behavior to "the system", flawed though it is, to get more-quickly to where you (and the dealer) both want to get... a deal.
"The system" can't / won't be changed by you or me. But we can change to adapt to it; and not necessarily in ways detrimental to our interests. Such as signing the silly sheet.
I look at it this way. In my earlier years, I found the easiest way to get a girl naked was to get naked first. So to buy a car, I'll go first (at a rather low offer).
Well ok, then. This is a step in the right direction. A thumbs up or some kind of enthusiastic action (like wanting to negotiate in the vehicle 'cause I love it so much) would be fine if that shows committment to you.
"I think some here are just a bit confused by your refusal to adjust your behavior to "the system", flawed though it is, to get more-quickly to where you (and the dealer) both want to get... a deal.
"The system" can't / won't be changed by you or me."
Interesting. I see it as a salesperson who has a way of figuring out if I'm serious and won't believe anything other than their system. I'm not there to simply a) get there quicker or b) grind out the lowest price at any cost. I want both to be reasonable.
"I look at it this way. In my earlier years, I found the easiest way to get a girl naked was to get naked first."
Hank, this is some of the most helpful info I've gotten in awhile. I can't wait for the weekend. ;-)
"if the salesman doesnt think you are committed, what motivation does he have to go to bat for you?"
bowke, perhaps this is where you and I are not connecting. I don't see the salesperson as on my side--as someone to go to bat for me. I want it to be friendly and for us to get along--but you work for the store and your objectives (properly so!) are diametrically opposed to mine). Think about these scenarios:
A:
I offer invoice, but sign anything you put in front of me, sign over Packer seat licenses and ticket rights, agree to mow your lawn. But it's a mini for you and whatever dealer cash might be there for the store.
B:
I offer $500 over market rate for the vehicle, but take my stated position. This means perhaps another $100 for you more than an "average" deal (not even a mini).
Truthfully, which one would you rather have done? You might say A because you know it won't be shopped, they "committed", etc. But, other stories tell me that people that offer such silly amounts are gonna grind no matter what. Yet, in B, if you can close ME (and you will since I've told you an offer is a committment) you will have made maybe $250 more than you would have in A.
Lastly, are saying you will go to bat for me, bust the SMs balls on a mini simply because you think by signing the offer, the deal will be easier? I doubt it, but what do I know? Maybe you will. I know I'd take the deal that makes me the most money.
Have you guys seen the letter of intent/commitment technique used at BMW, MB, or Lexus dealerships? Because if you haven't, it would suggest that these practices may be offensive- otherwise why wouldn't all dealerships do this?
;-)
If YOU as a consumer have the research in hand and the guts to say what you'll buy it for, why wouldn't you already know the price when you walk into the store?
You're looking at a car with package x, y, and z - figure out what you're paying, and make a reasonable offer. If you're asked if you'll buy the car at that price, you can tell them "I just said I'll pay $xxxxx for the car".
Of course, if you're yanking someone's chain and just trying to get a number to shop all over town while wasting the time of someone trying to earn a living for their family....
Bear in mind, the dealership isn't where you do your pricing research, unless you came in with off-the-wall expectations.
I view complaints about the "system" of buying cars in the same way that I view complaints about cold weather in winter. All the complaining in the world won't change it. Sometimes the most you can hope for is to understand why it happens. :^)
The first thing taught in Negotiating 101 is that the buyer should always take the offensive with a low offer, and shop / negotiate up from there. It is a strategy much more likely to result in "lowest" than working from a seller's high figure and trying to work down.
In 10 or so new cars purchased, I have NEVER had my first offer accepted anywhere. To me, that's good, cuz it tells me I've done my research properly and am not yet in the selling zone.
Typically, they just say thank you and good day. We've spent maybe 15 minutes. But I make it clear that I will test that same offer elsewhere, and return with a higher offer if I am unsuccessful at the other store(s). But I have set the agenda. And they always take my call-backs.
On my second offer, typically handled via phone, I might come up anywhere from $250 to $400 (on widely-available mainstream cars selling in the teens or low 20s). Usually I am successful on this round, typically giving in another $100 or so to get it done.
On that first low-offer visit, they'll be very dramatic about how the offer is too low, asking how I got that figure, doesn't the store deserve a profit, yada-yada. I just say:
"Sure, and that's why you should not sell me that car today. But I gotta be sure that offer is ridiculous by testing it elsewhere. If it is ridiculous, I'll be back with a higher offer".
Fact is, none of us (buyers) really know the selling zone price, what with all the holdbacks, spiffs, contests, whatever. Edmunds and Consumer Report help us some, but we as buyers never really know. But starting low and working up seems the most fruitful way to find out.
They might think I'm a no-good grinder, but I don't care. And actually, having been in sales (hi tech) many years myself, my colleagues and I probably express lower (personal) regard for those of our buyers who negotiated most poorly, resulting in the sweetest deals for us... a distain for those we beat badly, and professional respect for those who held our feet to the fire and struck good deals.
I think your statement is true of the "typical" negotiator, not the "savvy" one. Reasons in my prior post. (I think) savvy negotiators take control, and set the agenda to make the opposing party work to move savvy negotiator's initial position.
This may not hold true, however, in car sales; I don't know.
It may be plausible that because the average consumer is SO poor in negotiating skills, and so worried about what the dealer personnel might think of him or her, that their first-number offer might be entirely acceptable to the dealer right out of the gate. We hear often of buyers being afraid to "insult" the dealer or look like a rube with a truly low offer.
So maybe in the car biz, it is preferable to let the buyer go first. Then, with some additional professional negotiating "work" on that buyer by the rep / manager team, the deal can only get better (for the dealer) from there.
I'd be curious to know the common wisdom in the car-selling biz... Do dealers want the first number from the buyer, or prefer to give the first number themselves??
(I know..."it depends")
That question is kind of a joke in our industry because NOBODY who asks that question ever actually buys a car!"
Thanks for making my point. Somebody does because I did more than once.
When is the last time you got a serious # from a car salesman right out of the gate?
Your very question points to the uselessness (to the buyer) of asking a seller for the first number... why frame a discussion over seller's position?
My wife and I once considered the purchase of a BMW. We knew that price-wise, the only BMW we could consider was the 318i. So, we went and test drove one. The dealer we met was very professional and, for a change, knew more about the car he was selling than I did. He showed us every feature, then accompanied us on a test drive.
Upon our return to the dealership, he took us into his office and asked a very civil but very direct question: "Now, what are your intentions?"
That simple question was, in my view, a very effective tool for him to quickly determine if we'd be buying a car or not. That well-phrased question leaves virtually no wiggle room for the customer, but is not rude or obnoxious.
Our simple and honest response was that we found the 318i underpowered, and since we couldn't afford the 325i, we wouldn't be buying anything. He gave us information about pre-owned 325's and then we parted on very good terms.
I've have always been impressed with the way we were treated there, and have always thought his simple question was an incredibly effective "prospect qualification" tool.
That technique might be less fruitful in a Ford store on a Taurus. I think many buyers are every bit as deceitful as salespeople are purported to be.
I say purported, because my personal experiences have been that most car salespeople are more professional than their reputation suggests.
On the other hand, I know many many buyers (friends of mine) don't think twice about lying in their dealings, most frequently over the condition of their trades where they hope a looming repair won't be discovered in the dealer's appraisal.
God, I'm glad I don't sell cars for a living!
I can understand why. In your view, you've gotten the "committment" they way you wanted it--they way your experience tells you means the deal is closed. And a half-hour mini is a lot easier than a 15 min potential $500 profit that's lost. I know you can't tell it's me when I show up--so logically you ask for the committment. I will say no, but all I ask is that you at least consider the offer. Like I've said before: to ME, if in the back room with the SM, I'm blown off or the salesperson comes back with uh, umm, err...maybe we'll take it, then I know I'm in the wrong store anyway. In my case, if I could afford to buy the vehicle myself I want right now, there are 4 or 5 stores within 30 mins of my house I could choose from. I want to buy from the first store I go to, but will go to all 5 if I have to. NOT to save $200, but to have the deal done on my terms.
Thanks for the great discussion!
If I understand correctly, you are saying you won't sign your offer until you get a commitment from a dealer, because you don't know if the offer will be accepted?
I guess I don't understand the big deal. Let's break down the scenario.
You make an offer
You sign it (not knowing if it's accepted
Scenario 1:
Dealer accepts, writes up the deal, you're done.
Scenario 2:
Deler rejects and counters. You are now without obligation, free to walk or free to re-counter.
Either way, you win, and your sig essentially means you'll buy for the price you articulated.
So, all I come down to is that you are playing your own psychological game to keep yourself from playing the dealer's game.
Business build processes around what they find works. I'm sure back in the stone age when terry was selling Brontasaurus's with Fine Pleistocene Pteradactl wing leather, they started out with the make offer, no sig approach (probably because writing hadn't been invented). They probably discovered that if they got some token of commitment (at that time, the first born was offered to the salesman in lieu of a signature), the chances of a close went up.
Sure not a big deal...a buyer is either committed to buy or they are not. Signing a properly filled out worksheet shouldn't bother them if they are serious.
I was just wondering what it stands for. My only guess was Additional Marked-up Value. :-)
Concentrate on the OTD price and make sure it's what you want to pay - ignore the ADM.
Your little smiley may have been intended sarcasm, but I think that truly is what it means. There is no extra equipment, just a higher price. The dealer posts higher-then-MSRP cuz they can (or think they can) get it.
Is it a high-demand vehicle?
I, for one, do not resent this practice. Just as at times they sell a dog-colored, manual-shift stripper at a loss, when they have a winner, why not go for more if you can get it?
Market economics, supply and demand, is the American Way !
tornado...yet another thing that escapes you is the fact that the dealer has already committed to a price before you even arrive. the price on the window of the vehicle you want is what they commit to. if you want another, its up to you to offer.
and when you DO offer, its not you doing the dealer "a huge favor by gracing them with your presence". you are ASKING for them to give up money by discounting their vehicle. another scenario...
me: "tornado, my good friend, im in a financial pickle. i need $1000 to afford a car. i know you have $2000 in the bank. i dont want to ask for it, so i want you to tell me you are giving it to me first. but if you dont, i wont be your friend anymore."
or
me: "tornado, im in a financial pickle. i need $1000 to afford a car. can you help me out please?"
which way would you be more likely to help me out? if you agreed, wouldnt you want me to agree to YOUR terms?
for example:
you: "ok, keith, but please sign this form stating that you actually WILL use it for the purchase of the car you so desperately need."
I already bought the vehicle. Didn't even notice this AMV until after the sale was complete and I was looking over everything at home, and I was just wondering what it meant. Was concentrating on the OTD price beforehand.
The vehicle was an 04 Outback Wagon. The totally redesigned 05's will be out in a few months. Plus, it was a manual, which as Hank mentioned, probably reduces demand.
24005 was MSRP (or 25000 if you count that AMV)
22182 was Edmunds TMV
21846 was Invoice
21746 was Negotiated Price
The only costs in addition to the negotiated price were tax and tags. No doc fee, processing fee, etc. No trade in.
There was a $1500 customer incentive that reduced my cost further, and I think there was a $500 dealer cash incentive that helped out the dealer.
This dealer was quite pleasant to buy from. It was, by far, my best new car buying experience to date.
Aren't cars a good deal these days? $20K for an Outback is a great value.
When I think of the crap I drove 35 years ago (yeah, I'm old) like a Chevelle, Opel Kadett, Valiant. Cars are just so much better today, and so much cheaper in terms of percentage of average earnings.