Any Questions for a Car Dealer?

jwats · April 2004

I have agreed on a deal and tradein value with a dealer I trust. He has not seen my trade yet, but I have sent pictures, vehicle history and VIN so he can run a carfax and he said he was comfortable with the trade in value after seeing all of this. He asked for $500 deposit until it arrives in 3 weeks or so. He is a couple of hours away.

My question is, how do I make sure there is no misunderstanding without being insulting? I planned to do a summary sheet on the deal itemizing price, color equipment on the new model with a summary of my trade as well ( known defects, etc.) and sending to him with my check.

Should I ask him to initial and send back to me?

should I stop being neurotic?

Thank you
John

qbrozen · April 2004

OK, I got a question on this. If you sign a PO and put a deposit down, the dealer can keep your deposit if you back out, correct? If that's not correct and they can never keep your deposit, then never mind and this next question doesn't apply. So why can the dealer back out of a PO with no consequences?

rroyce10 · April 2004

....... Depending on the situation and the circumstances, you do the right thing - you give the $$ back .......

           Remember, I said "depending on the situation and circumstances" .. if a guy gets a price and leaves a deposit and needs the wifes ok at 3pm and calls back before 9pm, or at least early am to touch base and if the Mrs. says no, then give the deposit back .. if a guy want's the vehicle but it must conform to size or color and there is no Big time lapse -and- the dealer hasn't chased the vehicle, then give the deposit back .. if the guy says his trade is like new and it's a high miler with a hand grenade interior, then give his deposit back, he gonna be a flake anyway, why buy problems ..? .. if the guy has shopped 10 stores and he's still unsure, then give him his deposit back ........

            In 20 years, I have never kept a deposit -unless- I had a dealer trade, or it was chase vehicle or it was an auction buy and even then, I only kept incurred expense, so if it was a $1,500 deposit and it cost me $217.58 in expense, then I returned the balance and thats more than fair, and that's happened maybe 3 times in 20 years ....

             I make mistakes, you make mistakes, everyone makes mistakes .. if I quoted a price and it's a stupid mathematical mistake, I'm not going to eat it .. just like my tile guy, he figured the square footage incorrectly, he knew it, I knew it and God knew it .. I didn't expect him to eat a $3,300 error, especially when he was "then" in-line with all the other quotes ... mistakes, it's kinda normal.

                         Terry.

mitzij · April 2004

I see no problem with sending a summary sheet along with your deposit. It will make sure you and the dealer are on the same page (literally). He should not be offended, but glad that you're making sure the deal is squared up.

kyfdx · April 2004

Did anyone read about the guy at NYU who was sleeping in the school library because he couldn't afford room and board after paying his tuition?

I guess he was keeping a blog online about it and became a minor celebrity. NYU ended up giving him a free dorm room.

Anyway..the point is.. His online screen name was: bobst boy

You don't think he could be related to our 'bobst', do you?

jratcliffe · April 2004

Interesting on the straightline function. I'd suggest a different explanation, though. There's clearly a model that drives the book numbers, and the model takes some sales data as inputs. The people creating the book may be fitting that data to a straightline function, in order to be able to predict values for cars somewhat different than those for which they have actual data points.

bowke28 · April 2004

i think bobst would be his dad...

it fits.

bobst made an offer to pay 40% of the housing because "he knows their TRUE cost."

bobst boy is there waiting for dad to finish making that offer to 37 other universities on the eastern seaboard. once bobst finishes, he will increase his offer to all 37 to 40.7%.

heck...bobst boy could be there for decades!

bowke28 · April 2004

yes, i agree, but it STILL becomes only a guide. a straight-line function doesnt write checks either.

grandtotal · April 2004

This link talks about hime being living in the Bobst Library. Maybe "our" bobst has a library named after him.

ldbricker · April 2004

but that's pretty much what came to mind when I read the post.

bowke28 · April 2004

gotta be quicker with the clicker!

;-)

MAN!! that sounded corny!

qbrozen · April 2004

Oh, I totally agree with you, Terry. But this isn't a deal between you and I we're talking about. I mean, looking at this from a legal standpoint, what holds true?

Let's say if you had 2 situations. One is that Joe Shopper put down $2500 on a vehicle that was coming in 2 months, 1 week before deadline, Joe decides against it, for whatever reason, but dealer won't refund deposit. In the other situation, similar to the example from that poster yesterday, orders a car, puts down deposit, then dealer says "no can do at that price" just before delivery. If both cases went to court, what are the verdicts?

I'm just asking out of pure curiosity. What can I say? Its a slow day.

jratcliffe · April 2004

Certainly, books don't buy cars. I was making that point that the fact that the UK books showed a linear depreciation curve doesn't mean they actually depreciate like that, but could also be because the people who design the models _made_ them fit a linear curve. Frankly, I think the data best supports the declining balance curve, that cars drop in value by some given % per year, as a percentage of the previous year's value (i.e. year 0 is 100, year 1 is 85, year 2 is 72, year 3 is 61, year 4 is 52, etc.). If the difference between the price of a new buzzmobile and a year old one with 15k miles is $4k, then the difference in value between an eight-year-old buzzmobile with 120k miles and a nine-year-old one with 135k miles will be a lot less than $4k.

jratcliffe · April 2004

My guess, and IANAL, is that, if you went to the trouble of sueing, you could probably win. The deal wasn't radically out of whack (i.e. the PO said $299.95, not $29,995), and the folks at the dealership making the deal are assumed to be educated negotiators (hence having less legal protection). The archetypal "reasonable man" could assume that the dealer really did want to do that deal (maybe there's a $20k incentive if they sell 10 blahmobiles in April, and they're at 9). That being said, would I sue? Nope, I'd say "you signed this, I signed this, I'm living up to my side, you should feel obliged to live up to yours." If they don't agree, take the deposit and walk.

bowke28 · April 2004

i think its more like this:

"original selling price"

"10 year old selling price @ 150k miles"

then they draw a straight line between the 2 points on the graph.

when someone wants to know what it will be worth after 3 years and 45k miles, you just find the point.

perna · April 2004

That's a great question. I'm curious what happens when someone orders a "Pepto Pink" $70,000 Mercedes convertible with purple cloth seats in Alaska AND then backs out at the last minute well after the car is built and on the way. Surely then the dealer would keep his deposit?

Once in awhile when I'm browsing a new car lot I'll see something like the aforementioned bovine Mercedes and think, "man, somebody sure stuck the dealer with that bad boy!".

Reminds me of a local mom'n'pop Dodge dealer. In 1995/6 when the Neon first came out, someone made an ordering mistake. Instead of ordering 8 identical white stripper Neons (no air, stick, am/fm), they ordered *80*. How such a thing would happen is anyone's guess, but it was all over the local news. They ended up renting out a local lot and piled them up there. It took them years to get rid of them all, and a friend of mine actually got one. They sold it to him insanely cheap, although Chrysler had the last laugh. He went through two head gaskets on it, and the beast finally died a month or two ago (he figured head gasket #3 just wasn't worth it). Bought a Mazda 6, he's much happier.

jratcliffe · April 2004

The only kind of price that would qualify as "insanely cheap" for a stripper Neon would be one where the dealer pays _you_.

Wow, the dangers of typos.

rroyce10 · April 2004

..... ** If both cases went to court, what are the verdicts? **

            This isn't really a court thing, it's a common sense thing .. if the dealer quoted a incorrect price and it was a loser, it would be easy to prove to the potential buyer .. so whats he want now.? .. the court to decide in his favor and have the dealer pay "his" lost purchase with the dealers $1,600 loss on the sale .. only Pee Ditty Combs and Ray Lewis get cases to fall their way like that .l.o.l..

            As far as ordering a vehicle with a $2,500 deposit, then dropping out at the last moment .. the dealer would just deduct the floorplan cost, and if it's a whacked vehicle like a dark blue A8 with cloth interior and no slider, then whatever the incurred cost would be, because of how long it would take to sell a beast like this, and that can be easily shown with current auction reports showing a "marketable vehicle" vs a slug .. but I would bet a smart dealer will have a slam tight contract on some odd ball vehicle .... so figure if it would cost the dealer $971.63, it would be deducted for the original $2,500 and ALL the papers to prove it ......

                    Terry.

thel · April 2004

Kind of a funny story (at least to someone like me who isnt in the business). A student of mine, an 18-year-old boy, that's a good kid, but hardly a gear head, has a job at the local Mercedes dealer washing cars, etc. Well anyeay, he is REALLY into the Mercedes line. His dad is well off, and so the boy has a C230 (I think...the hatchback one) himself. So the kid knows the Merecedes line inside and out.

Apparantly, last week, one of the new salesladies at the store was informing a couple about an E-series. She's been there for about 4 weeks and doesn't know much and the couple are getting a bit impatient I guess. So the man notices this student of mine and asks the kid about the car. Well the kid goes on and on about the car and apparantly makes an impression on the buyers so the guy asks to take the kid with him for the test drive. Of course, the kid goes and the couple end up buying the car siting the sales job by the kid.

I guess this sort of thing happened a couple of times so the salespeople have begun to seek out this kid for info on the cars.

It sounds to me like he may have found his calling. He wants to own a Mercedes dealership one day and he seems to understand the virtue of selling the Mercedes and justifying the extra cost vs. Cadillacs, etc. He plans on going to MU in Columbia and majoring in business management. Who knows, maybe there is a future "brother" as one troll from Edmund's past once put it in my own classroom...

jasmith52 · April 2004

Well I can see how this young man helps in a sale. It's always refreshing to find sales people that are actually knowledgeable and enthusiastic about their product.

Sadly one often runs into salespeople that know very little about the product that they expect you to buy. I would think that since salespeople spend so much time around the cars that they would know quite alot however this is not often the case.

jlawrence01 · April 2004

If he is that good, he ought to stay at the dealership and "learn" the business. He'll learn more there about running the business than he will at MU (speaking from experience).

volvomax · April 2004

Funny, thats exactly how I got in the business, working at a Benz store in high school and college.

tornado25 · April 2004

"i think its more like this:

"original selling price"

"10 year old selling price @ 150k miles"

then they draw a straight line between the 2 points on the graph."

I totally agree that's how they (the books) do it. The problem is (and the inherent problem with using the "book value") is to find the mythical 3 yr/45k mi price, it probably isn't on that line. I always thought of it as the right half of a bell curve. Initially, very steep depreciation, as time goes on, deviation from year to year is smaller and smaller. (That is the difference between a 7 yo car and 8 yo car is a LOT less than the difference between a 1 yo and 2 yo car).

I guess I never thought it occurred in a truly linear fashion. Again, I was no stats major!

bowke28 · April 2004

but the initial hard drop in depreciation isnt simply the value of the car. its the difference between the retail value that was paid and the wholesale value of trade-in. once that $3k-$4k is done, its pretty linear.

jwats · April 2004

This is not meant to slam sales professionals but to seek an answer to a question that I have often wondered about:

" WHY DO SO FEW SALESPEOPLE KNOW THEIR PRODUCT"?

It happened to me again last week when I stopped into a Subaru dealer and quickly discovered I knew far more about pricing than the salesperson--because he did not even know it had been released. It would seem to me that if your living depending on selling cars, you would be VERY knowledgeable about the basic and frequent questions. And if you were not, why would anybody buy from you?

I would be especially interested in answers from those in the business

Thanks

John

steine13 · April 2004

bowke said:
"[..] once that $3k-$4k is done, its pretty linear."

I dunno... on a Lincoln LS it'll be more, on a Mini Cooper S, it would be less... Steiner's Hard&Fast Rule of Car Values is that there IS no hard and fast rule...

If you make me, I'll scan some depreciation curves from a 1997 Automobile Mag Buyer's Guide... scary stuff, different cars and trucks doing all kinds of different things, and at the time, I believe it was an accurate predictor of history... but not an accurate predictor of the future :-)

-Mathias

mitzij · April 2004

Can any of you guys tell me what exactly is covered by GM's powertrain warranty? I have a customer with an '01 Chevy diesel pickup who says he has powertrain coverage to 100k. I've been digging around here for 1/2 an hour looking for a list and can't find one. Current brochures don't talk about powertrain warranty.

stickguy · April 2004

call a dealer and give them the VIN. They should be able to tell you whether the truck is covered, and I assume what is covered under the type of coverage it is covered under (say that 5 times fast).

maq4463 · April 2004

What can an ordinary customer with little car inspection knowledge and expertise do to save themselves from this?

http://www.cbsnews.com/stories/2004/04/29/eveningnews/consumer/ma- - in614819.shtml

"And she followed what experts say is a consumer's best bet, buying a certified used car from a new car dealer."

"You're buying a car that the factory has said, 'We and this dealer are telling you we're with you when you drive"

mseenviro · April 2004

Here's a question for you car dealer types out there. I've read the cbs article referenced in #7698 about rebuilt cars from wrecks.

Will accidents, rebuilds, salvage titles, etc. show up when a CarFax is run on the car? I've bought quite a few used cars and have never had a problem, but I've been using CarFax since it became available.

I look forward to your opinions.

Mike

151ranch · April 2004

All the Big 3 diesels come with a 5 or 6 yr/100,000 warranty on the engine, I think the Allison may not be covered on the Chevy, though.

mitzij · April 2004

but this guy says a transmission seal is leaking and thinks it's covered under powertrain warranty. GMVIS just says 'powertrain coverage blah blah blah', doesn't say what exactly is included in powertrain coverage. I know 'what is powertrain' is usually in the eye of the be-holder of the checkbook, but I can't find information on what GM includes in it's powertrain warranty.

driftracer · April 2004

service manager and service advisor - the coverage is for the engine ONLY, not the powertrain, like with some warranties where the transmission, differentials, driveshaft, etc would be covered.

mitzij · April 2004

That explains why I can't find anything!

driftracer · April 2004

submit the claim and have GM smack it back at you - if you need to prove the point to your customer...

volvomax · April 2004

The simple answer is that most salespeople are too lazy to learn.

Now, from a sales standpoint this is not always a detriment. Some of the best salespeople I've known were very weak in the product area, but very good closers or negotiators. Some of the best product people couldn't sell ice water in Death Valley.

Also, given the turnover rate in the business your salesperson may have been new to the brand.
Most dealers just throw a new salesperson out on the floor to learn as they go.
In our dealership, a salesperson has to wait 30 days before going on the floor in order to learn the product. Then they have to do a product walk-around for the General Manager and myself in order to graduate.

tornado25 · April 2004

" its the difference between the retail value that was paid and the wholesale value of trade-in. once that $3k-$4k is done, its pretty linear."

Oh, yeah. I guess that would make sense.

nickjc · April 2004

In the event a "deal" is verbally agreed to, but the contract price states otherwise, and is nevertheless signed, does the buyer have a right to rescind the contract? This takes place in Maryland.

Specifically, purchase price was agreed at $44k on a certified pre-owned vehicle AND the dealership was to payoff the buyer's lease (~$4800). Contract sales price has vehicle purchase at $50k w/ "We Owe You $4800)" promise from dealer. Is there anything that can be done, and if so, are there time limitations?

Thank you for your time.

rroyce10 · April 2004

.... Did you take delivery of the vehicle ..?

Terry.

nickjc · May 2004

Thanks.

stever · May 2004

Anyone care to comment about this thread?

mikey "Infiniti FX45 / FX35: Prices Paid & Buying Experience" May 1, 2004 1:53am

thanks!

Steve, Host

isellhondas · May 2004

We always get a SSN even if the customer is going through their own bank. A couple of reasons. first, we really need to know who this person really is. If they are getting their own loan through their own bank, we always do an "option contract". This means, we have them approved through our own bank if their financing falls through. They can take the car that day and drive away. I can't remember ever, once, having to switch anyone to our bank.

Now, once in a great while, we will get a very paranoid person who either is paying cash or using their own financing who is ademant about not giving out their SSN. Not a problem, we just won't deliver the car until we have a cashier's check or a check from the other bank in our hands.

This doesn't happen often, most people trust us.

Too bad, the things we have to worry about these days...

grandtotal · May 2004

I'm not paranoid but nobody gets my SIN (Canadian equivalent of an SSN) without a good reason. It's not paranoia, it's a sensible precaution against identity theft. Likewise it should not be interpreted as lack of trust of a dealer, though I'm sure I don't trust them any more than they trust me. After all it's not a question of trust it's a business transaction.

bill100 · May 2004

Like your input from active dealers and new car buyers please! We are currently developing a automotive reverse auction website that will be launched one major city at a time starting 1 June 2004. Some people don't know what a reverse auction is so I will explain...

Traditional or English auctions results from sites such as Ebay. Sellers add a item to sell and buyers bids ultimately raising the price of that item.

Reverse auctions is exactly opposite. A buyer adds their wish to the website and sellers (car dealers) places a bid or rebids to beat a current bid trying to sell to the buyer ulimately lowering the price of the new vehicle rather than making it go higher.

So you see the concept has alot of advantages for both the car buyer and the dealer. For starters now the dealers has the opportunity to make a sale to someone that might of never stopped at their dealership in the first place. Plus the dealer can now fight against competition prices and level the playing field. With our website the dealer will also be able to leave buyers dealer comments and upload pictures of the new car he or she is trying to sell. Plus buyers can leave feedback on the dealer even boasting the reputation of the dealer even further.

The buyer benefits simply because now they can really get a good feel on who will sell to them at the lowest possible price. Plus with our system there is no obligation to buy. No driving around, no wasting time, no hassle whatsoever. After the auction ends the dealer has agreed to honor the price for 7 days. We will be adding alot more features but just wanted to give everyone an idea on how its going to work.

The system will be free for buyers and we will only charge the dealer $125 per car sale. No registration fees for either the buyer or dealer.

I would like inputs from both the dealer and buyer. I know Edmunds.com policies so please don't ask for a link on the message board to the site. We should be releasing the site 1 June 2004. Once we do I will contact Edmunds and ask them if its ok to release my email address so I can provide potential users with a active link. Thank you for your time and inputs. If anyone has any ideas on how to make this better or if you just think the idea won't work please let me know why or how I could improve it.

Sincerely,
Bill

bill100 · May 2004

Steve,

In my opinion the dealer needs my SSN only if I could possibly lower my loan rate even further from what I am currently approved for. I see isellhondas point of having backup but personally if I am already preapproved through my own credit union I would not want the dealer to pull another report on me for the simple fact that it can lower your credit score. Not saying it will but it can its possible. What I would do is arm myself with my credit score before I showed up to the dealer. Once I was at the dealership I would then ask the salesman to walk down the hall and ask the finance manager if he thought I could possibly get a better rate from the credit score and debt to ration info that I provided for him. If he is a skilled finance person he should be able to tell you yes or no. If its yes then I might be willing to provide him or her my SSN so I can see if I could drop my rate even further.

audia8q · May 2004

As a dealer I'm not paying anyone $125 to bid on a sale to make a tiny profit sale, unless its a one time major fleet sale. 50+ plus cars to one buyer.

Look at the numbers...I must carry in inventory a car that cost me $20,000, I have maybe a total of $2000 profit in that car at a full MSRP deal. If I must bid to make the sale and maybe make $300 over invoice, if I'm lucky, and your making $125 of that, the salesperson gets a mini commission of $100 that gives the house $75. YOu say I may get a sale from somebody who never shopped my place before...well if they are from far away their value as a customer is much less than a local customer who will use the service and parts department...if they live near me, they are probably coming here anyway. So, I ask the questions, whats in it for me?...now if you want to share in my inventory expenses and other expenses we have something to talk about.

manamal · May 2004

College Park Honda in College Park, MD....Basically saying that the people who get the best prices are empoyees. There shtick was to make people honorary employees.

I am sure there is a catch. But, I am confidant that many people will come in expecting a great price....you know: " You mean I actually have to pay to drive this pilot...but I am an employee".

Arghh!

jaserb · May 2004

I gave a photocopy of my driver's license (with the SSN) to the dealer when I went to test drive a 15 year old car I had absolutely no plans to get a loan on. They used it to pull a credit report, which I didn't find out about until a year later when I paid the $30 or whatever for the 3 bureau credit report. I was not happy.

As it turns out, there's a specific loophole in privacy law stating that a car dealer is authorized to pull a credit report - even without notifying the customer - if the buyer is paying by personal check. I offered to bring in a cashier's check and I wish I'd have gone and gotten it anyway, since I'm pretty sure they had pulled the report during the test drive and without the personal check they'd have been in violation of the law.

Lessons learned?
1. This dealer is a slimebag (as I found out even more clearly when I tried to sell the car and learned it had had a washed salvage title).
2. Don't put your SSN on your driver's license!

-Jason

jdinnj · May 2004

I trying to lease a FX35. When I go to the Dealers, they always ask Lease or Finance. If I finance, they lower the price to $300.00 over invoice, which is a great deal. If I lease, they want to lease the car at MSRP price which I am not willing to pay. They also asked, what lease monthly payment you want to pay.
Can someone let me know the best way to get a lease of an FX at $300.00 over invoice.
Thank you
JD

bill100 · May 2004

Audia thanks for the response. Well first off you wouldn't pay $125 to bid. You would only owe us if you made a car sale. I see your point about selling to a local over a out of towner. Regardless though a car sale is a car sale. I currently have a partner who was a general manager for 13 yrs and has been in the business for 25 yrs so I will ask him if its really true if dealers can make as little as $300 on a new car sale. With hold back in the deal I find that hard to believe unless the car has been sitting on the lot 90 days or more. I guess it all depends on what your selling. But I am not an expert so I will ask one. Question for you! Do you currently use referral sites to bring in additional business? Well I know for a fact most dealerships in this area does and they pay for it. Also like I said we will be releasing this site to one major city at a time. That way we will bring in LOCAL buyers to our dealers. Did you know that there is a site out there like ours already and they have already done over 4000 auctions. Dealers are using them. Plus so far here in our local area we did a survery to see if dealerships would be interested in this idea and all dealerships that we contacted signed up on the same day we approached them. Plus we have more who has called because those dealers told others. They said it would be worth it alone just to get more advertisment for their dealership. Plus I can't tell you how many times I have referred a buyer to a dealer and they paid me a $100 birdie. One last question why in the world would dealers have a $50,000 to $1 mill advertising budget if they only wanted to get the word out to LOCAL customers? My point is ALL your customers regardless where they live should be inportant to you regardless if they use your extended services or not. Because I have to tell you word of mouth is powerful advertising. And if I felt I got a good deal from a dealer but I lived 100 miles away I will probably tell ten more people about you that might live within a 25 mile radius of you. Well again I appreciate your response Audia. Please send me somemore if you want. Thanks again!

Bill

PS. Audia would a per lead fee program interest you?

Any Questions for a Car Dealer?

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