"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"
No way, no how - if you're paying by check (we know how check fraud works) or you're pre-approved from your credit union or bank (anyone can fake a document), the dealer has no assurance that you're not a thief. No offense, but they don't know you, you aren't neighbors, your kids don't play soccer together and they aren't in the same Cub Scout Troop.
Checking credit assures the dealer that you're not a credit criminal - if you have a 400 beacon, it's likely your check is no good and you're certainly not pre-approved somewhere! If you're a 700 beacon, the dealer can either roll the car and call for a bank/CU draft, or do a temp contract like isell said.
Whatever you do, don't ever ask me to let go of a $30-40k vehicle without some kind of assurance that I'll get my money - to do otherwise is stupid business and a direct cause for heartache and stress.
..that does it, i'm paying cash from now on! of course, the last time I tried THAT, the finance office miscounted my money... made a mistake of $1,000... in my favor. the joys of car buying.... -m
I see your point. But now a days there is technology that can verify a check for insufficient funds for you without pulling someones credit history. I know my local grocery store uses it. If I was in your shoes I would invest in something like this. Never know it could very well keep your customers happy.
One last thing if I had a buyer who was preapproved from a outside lender personally I would pick up the phone and verify this for myself. I would not simply go off a credit check to see if this guys payment was credit worthy or not. Plus I would not deliver the vehicle until I have verified payment with the bank.
So what is your take on reverse auctions? Would you be interested in using it to attract more business?
I appreciate your enthusiasm, but as sales and marketing director, I won't present any wild notions like that to my dealer group owner.
It wreaks of "auto broker" and is an unnecessary, costly step that doesn't need to be added into a scenario where dealer profits on new cars are already a joke.
The SSAN idea - I don't care if I telecheck you - all that shows is that you haven't had any bad checks RECENTLY and says nothing of your credit worthiness. I've known many folks with a sub-500 beacon who had a clear Telecheck history - you can write a check, but it doesn't mean you have the money to cover it and probably can't get a loan.
I want to see who you are, and your credit history shows that - if I can't run your credit during those scenarios, I won't do business with you - I'll certainly pass on a deal to protect the business.
you asked a couple good questions, let me see if I can answer them for you..
...Do you currently use referral sites to bring in additional business?
We have used a bunch of them in the past, but most have gone out of business. None did much for us. We use auto trader for our used cars and it works well but because it's tied to a major online website that is a brand name is the big reason it works well. we pay a monthly fee not a per car fee. based on the sales it is much less per car than $125 per car sold.
....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?
well this has a few twists to it. the first is for service and parts. new car sales only represent a very small percentage of the dealerships bottom line profits. But a big number of new car customers come back for service for years. If we do a good job they also bring their other cars and refer friends. over time this is much more profitable than a single car sale. It also leads to more sales. The other is new car allocation. Some brands only allow the dealer to earn additional allocation if they sell cars to people in their assigned marketing territory. On a hot car this is very important.
So if I'm going to sell a car at a minimal profit, I'm much more likely to serve my local customers than the guy from 100 plus miles away. The far away customer is much more likely to take the bid price and go to the local dealer who can beat it by $125 dollars...since he does not have the additional expense in the sale.
I see your point. I was under the assumption that those systems could tell that there was current funds in the bank.
As for reverse auctions. How do you compare our system with a auto broker? Our system has nothing to do with a auto broker. All our system does is connect qualified buyers with dealers. We step in at no time and try to negotiate the deal with you. Actually the dealer is under total control. If he wants to beat another dealers bid then he can. If he doesn't then he can say I don't want the business. All dealers will only be able to see the most current bid. Identities will be available only to the buyer. Do you currently use referral programs such as Edmunds.com offers here? If so what would be the difference from what we are doing and they do? Think about it everyday I see salesman sitting around hoping traffic comes through. Now you have a one stop shop to get that traffic flow into your dealership instead of watching them drive into another dealerships parking lot. Our system really levels the playing field for all dealers and buyers alike. Another question do you all offer customers birdies if they refer a friend who buys a car? Well if you don't your the first one I have heard of who doesn't. I have been paid $100 birdies over and over just because I referred business to a dealership and a sale was made. Our site will only charge $125 if a sale is made. Our site will be free for the buyer. If no sale is made your dealership owes us 0. Now you see why I am confused on how you think we could be a broker? There is a difference between a broker and a referral site. Brokers help the buyers make you loose profits. Our site will enable you to make your own decision to sell to a buyer at a lower price.
Thanks for the awesome info. Now you have answered exactly what I was looking for. We are trying to figure out if per sale would be best or charging a dealer per month. Now I see why you would use select sites. Most sites are national and cater to alot of dealers in return you don't see much going on because they don't advertise in your local area. Our site will be local and advertised as such. So like I said before this will bring in alot of local business. We conducted a local survey to see how many people that is currently in the market be interested in using this service. The results were outstanding! Almost everyone said they would even pay to use our service. But we have no plans on charging the buyer unless they start posting false auctions. Bottom line they were very excited about it. Now say if we charged the dealer a monthly fee. How much would you be willing to pay monthly? And even if you didn't sell any cars which I know you could as long as your bid was competitive wouldn't a small monthly fee be worth the advertisment alone? You guys spend a bundle just hoping someone watches your commercial or listens to your radio ads.
"All our system does is connect qualified buyers with dealers"
That's the EXACT same phrase I got from the last 10-12 auto brokers that approached me.
I don't need to discuss this further - I don't need a bidding war from folks 100 miles away - that kills the dealership's business (large amounts of out of town buyers), not helps it.
Rich summed it up very well, for the same reasons as mine.
Not the same as a autobroker and I am not advertising. I have never told you who I am or where you can find my link.
You need to learn the difference between a broker and a referral.
Brokers are one that helps a buyer by negotiating the deal for them.
Referrals are self explanatory. Plus like I said three times now our system will only be available for buyers in 1 major city. Now if a buyer wants to participate and drive 100 miles to visit your dealership well then thats on them. I find it hard to believe that you wouldn't want to make a sale regardless of where one lives.
you DO realize that if someone is internet savvy enough to find your site/service, then they are savvy enough to find the manufacturer's site, click on "locate" and be referred for free to the dealer with the car they want...right?
along with that, a 3 minute jump over to edmunds or KBB reveals the invoice price for the particular equipped vehicle. so now they have the same 3 tools you have...in 10 minutes.
I don't work for a dealership, so this is just a consumer opinion.
You mentioned the site would be free for the buyer and that there is no commitment to purchase. There would have to be some sort of process to sort out the shoppers from the buyers, otherwise the dealers could be wasting their time quoting prices. I would think a $500 refundable deposit or something on that nature would be fair and may help sort out people that aren't serious.
Of course I do. But thats just it this site is designed to find the lowest price for a buyer without having to go to multiple sites to get a quote. Plus we also inform them what invoice is on the car amoung other things. By the way I know as well as you do quotes are not free for atleast the dealer! Dealers pay for them them through referral fees or monthly fees. I would not waste my time and effort to design a site and send you business with no compensation. I have a feeling all sites out there are compensated by you guys one way or another.
Yes I see your point. We thought about charging 19.95 to start a auction. Once a buyer buys then the fee will be refunded back to them. The only thing bad about this is now were cutting out all the buyers who are weary of putting credit card info on the net. So were going to try to free option first and if we get to many shoppers then we will start charging.
"You need to learn the difference between a broker and a referral"
No, I don't - I get referrals from former customers and business contacts. Also, I pay for advertising that fits the dealer group - your ideas would encourage ebay-style buying from people (non-local) who would never come back for service, or send a friend in for a used car, or whatever - it's worthless to me.
And please, I have 15 years in the car business, most as a manager, lately (3 years) as a court expert - please don't tell me what I NEED to do.
"SSN... by bowke28 May 03, 2004 (9:31 am) is a federal requirement on all vehicle purchases regardless of how its paid for. most states also require it for tracking of sales/property taxes."
Federal requirement? Got a link Bowke?
We dug up the info about form 8300 in the other thread.
I used a check in '98 for my van purchase and didn't knowingly provide my SSN to the dealer. No sales tax where I got it so that wasn't an issue. I don't remember what DMV required on the title application. Thanks for the info!
Question for car dealers re: SSN. I bought my last two cars simply by writting out a personal check. Just let them zerox a copy of my driver's license and insurance card. Drove off with both cars right after finishing signing the check. I didn't need to give them my SSN. So what happen there?
"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."
Uggh. Honestly, isell, this would be quite disturbing to me. I certainly understand why you need to know how serious I am, not knowing whether I am really pre-approved or not, or if I have the cash. However, if I tell you I am pre-approved or that I am paying cash, then I would expect "no spot delivery". Seems fair to me that you wouldn't give me a product without paying for it first. If I am preapproved or have the cash, you get the cashier's check, I get a car. If I can't make it happen, then I guess I look like the jerk. Thus, you would not get my SSN in a situation like this because either way, it's an additional, unnecessary pull of my bureau, will can ultimately affect my score. In any event, if I am financing, I actually prefer to do it at the dealer anyway, since spot delivery is available and I would tend to get a decent rate without having to shop.
"I want to see who you are, and your credit history shows that - if I can't run your credit during those scenarios, I won't do business with you - I'll certainly pass on a deal to protect the business."
Drift, are you actually serious with this comment? I go in and say "I want car x. How much?" You say, "sticker plus tax/fees=y". I come back 15 mins later with a cashier's check, that you verify is authentic by calling the issuing bank. And you're saying you would not complete this transaction without my SSN? I can't see why you pass on this deal simply because "you don't know me". I am not trying to be antaganostic, I seriously don't understand that. I can see it when you get a buyer of the "eh, I think I'm approved at the bank, but I think I'd like to lease, errr, geez, not sure yet" type. But not when the buyer is solid as to how he/she is going to complete the transaction.
Finally, it's not a paranoia thing. I agree that it's a sensible precaution to take when you don't know when or if you will be next victim of identity theft. That doesn't mean I won't use a credit card on the internet (I do) or provide the card to waiter at a restaurant for him to scamper off with (I do), but it's about minimizing the release of this info, that's all.
When priceline did auto sales we used their service and I actually liked it. If you don't remember...the consumer had to pony up $75 to make an offer on a specific car. Priceline sent out a fax/email to their dealers (several in each market) and the dealer could say yes, no or counter offer with a price. The dealer knew he had a "real buyer" and the sale happened within 60 minutes or so of the dealers acceptance. The dealer had to pay a fee that was up to $200 depending on the vehicle....I always figured that into the deal. We sold about 50% of the offers we received. If the offer was absurd it went in the trash but knowing I had a buyer who had plunked down a deposit eliminated alot of goofy offers, windmerchants and kids.
I think it is important that the consumer takes some of the expense off the dealer...remember the consumer is getting all the work done for them, by saving time and effort. The dealers expenses are actually higher than a traditional walk in consumer to make less money by using a service to sell one to two extra cars a month..
Not to throw a wet blanket on your plan but we are buried in new schemes everyday. Our fax machine overlfows with these creative new ways in which we can sell more cars.
Most of these upstarts are here today and gone tomorrow.
Bowke - Question for you first. Like I said before I have been paid by dealers numerous times $100 birdies. As for your question yes its per deal. Not per lead. Now would you be more interested if we charged a flat monthly fee and if so how much would you be willing to pay? That way if you sold 25 units that month you it would cost you alot less to participate.
Driftracer - You said, "your ideas would encourage ebay-style buying from people (non-local) who would never come back for service, or send a friend in for a used car, or whatever - it's worthless to me".
Driftracer your must not understand how a reverse auction works. Totally opposite from a tradition or English auction such as EBAY! Plus how would you know that a buyer would never come back for service or send a friend in for a used car? Do you have a crystal ball?
The way I see it this site is ANOTHER source to bring you possibly alot of business that you previously might not of ever had. You guys spend big money competing against each other all ready. I can call five dealerships right now and tell them I live 300 miles away but be willing to drive if the price is right and I will get a competitive quotes from all five. I know I have done bought cars in Dallas several times and I live 300 miles away. I have also sent friends and family to Dallas because of the lower prices and I was paid a $100 birdie fee every time for doing so. Plus I don't recall telling you what you NEED TO DO. I am just trying to get some opinions.
Are you trying to tell me that you have never sold to a out of towner? Also are you trying to say you have never had a referral from someone that wasn't close to you? I find that hard to believe. My partner sells to people all over the country. Seems to me that you loosing out on potential profits if you expect to only do business within your local community.
<<<your ideas would encourage ebay-style buying from people (non-local) who would never come back for service, or send a friend in for a used car, or whatever - it's worthless to me>>>>
i think what Drift is saying is these type of long-distant leads are not worth much to him, and probably a lot of other dealers.... ie- no service revenue, which I believe is where a large portion of the profit (not revenue, profit) comes from within a dealership. New car sales don't deliver much profit margin, I think we can all agree on that....
So, my question to you is how will you improve my overall business, ie - my bottom line. I may sell a few more units per month at little or no margin/profit, but what are you going to do for me to help increase my business and make it more efficient? What does paying you for a one-off lead/sale do for me in the long-run? It may not be worth that extra $500 in margin/profit for that one unit in the long-run if I am selling to someone 300 miles from me, they sure aren't returning to me for their oil changes and/or other service issues.
you're offering a sales pitch to us, wanting us to jump on the bandwagon, and that's fine, except I gave at the office.
I'm not interested in your product or ideas - like isell said - his fax is flooded with these great schemes for selling cars. So is mine...
I wish you luck, but would prefer that you leave me out of future discussions - you have no idea what my business practices or preferences are, and there's no way that you will. Please cease in assuming you know the car business - at least from my perspective, your views are skewed.
You may be willing to drive 300 miles save a couple hundred on a car, but I have to think that the majority of people would not. Yeah, maybe with your "reverse" auction a dealership would make more sales, but I can't see them making much profit on those sales. The auction itself would automatically drive the price down, and then you would subtract an additional $125. I just don't think that the numbers would justify the effort.
I am looking into a new 2004 Chevy silverado and was wondering is it wrong or off base to assume that I would be able to go into a dealership and get a price that is under invoice by the different rebates that are currently being offered? Lets say the truck is 25K and there is currently a $2500 and additional $1000 in rebates. . . Can I get this truck for $3500 under invoice? . . . I have never bought an American vehicle new and also have $2000 in GM Card dollars to spend towards a Silverado. . . am I dillusional that I may be able to get a brand new truck for $5500 under invoice?
Do I have to pay taxes on the rebates? Or the after rebate price?
Thanks for your help in making sure I am not overlooking anything before I head down to the dealership and looking like a donkey.
"i have been selling cars for almost 5 years, and have closed over 600 deals in that time.
of all the deals...cash, finance, lease, etc..., there has been a SSN on EVERY buyers order. NO exceptions."
Fair enough, bowke. I'm not one of these consumer-activist wackos, where everytime something a business does that might benefit them is perceived as a horrible thing (namely, profit). Every business has a right to put policies in place as they see fit. That said, I have the right to shop wherever. Since the dealers you have worked for seem to have been very succesful with this policy of requiring SSNs, it probably matters little to you if someone like me (non SSN provider) chooses not to buy there.
That said, if I come in with a verifiable cashier's check (whether the product of a loan with my lender or my checking account), you will not get my SSN. Or rather, I will not be coming in with that check, I guess. No harm there. I just don't understand it.
bobst, I agree if I tried to write a $25000 personal check, by all means, call my bank, run my credit if you must. Personal checks in general are not exactly the most trustworthy form of payment (from you, it's likely rock solid, I just mean generally). My point is, I would likely run to the bank for a cashier's check and I don't see why my SSN is needed--although, I won't argue with the right of the dealer to request it.
also, by the ACTUAL privacy laws, i cannot run your credit without a signature on the original form. i also dont remember more than 1 or 2 times that a cash buyer's credit was actually run.
we dont run it unless your check doesnt go through. at that point, we will draw up a contract, ask you to either sign it or return the car. if you do neither, we can put our own lien on the car, and it will report to your credit bureau as past due payments.
Driftracer - Good luck to you to. Your going to need it! We have surveyed over 2000 new car buyers in the last two months alone that is currently in the market and 95% said they are very interested in using our service.
Mirth - I saved more than a couple of hundred. Actually it was about a grand. Plus I have fun in Dallas. So it was worth the trip.
As for the numbers what if we charged a set monthly fee? You and I both know that the internet could drive in hundreds if not thousands of new qualified buyers especially once the word gets out about this new service. Like I said our survey numbers speak for themself. Everyone thinks this is a great idea. I am not trying to recruite your dealership like drift thinks. I am just trying to get your opinion.
Question for you? Do you have a internet salesman? What does he do? He works leads from the internet right? Well our service will help bring in even more business. Plus he only has to log in once and he won't have to read so many emails. Were also including a section where you can leave dealer comments to a buyer plus were implementing a way to upload pics of the car your trying to sell to the buyer. And everytime a dealer bids all other bidding dealers will get a email asking if they want to place another bid to beat out the last one. All auctions will only last for 7 days. All quotes will be void by the dealer 7 days after the auction ends.
So if you think about it your internet salesmen is already quoting people over the internet pretty close to invoice. I know because I have done it. Our system now allows the dealer to have a fighting chance to earn the customers business by quoting them in a bid format NO DIFFERENT than a regular quote. But as of now you have no clue if your competition is quoting them as well. Well now you have a clue and now you can beat your competition! In the long run helping your bottom line possibly in a substantial way. Plus your getting CHEAP advertising.
Please don't make assumptions that you don't understand.
"Your going to need it!"
Hardly - my dealer group has expanded by 4 stores, to 11 stores and is looking at another buyout on a 6 store group.
With my primary job, I'm now making more money than the GM I worked for 5 years ago who ran a 4-line store for Lithia. With the additional income of this dealer group position, I make as much as he and his wife combined (she was our office manager).
I don't think luck has anything to do with it, but if you're wishing me some, I appreciate it.
I'm proud of you! It must be nice to be able to choose your business. Last time I checked most dealerships didn't have that luxury. Question for you with all the business you get and since you couldn't stand for more business why is it that the average dealership will spend thousands on local advertisment to pursue new customers?
By the way I thought you said you was done talking to me?
Well, depending on your negotiating skills you just may be able to buy your truck for close to invoice less any rebates. So for example on your $25k truck the invoice is maybe $21800. Perhaps then you could negotiate this deal for $22000 less the $3500 rebates gives you a price of $18500. If you have $2000 additional GM card rebate credits then subtract those off too giving you a price of $16500.
It is unlikely that the dealer will sell your truck for less than invoice unless there are either additional factory-to-dealer incentives or your truck is distressed merchandise that can't be easily sold.
And yes sales taxes are due on the all of the rebates. Vehicle registration fees and sales taxes are payed on the negotiated amount before rebates.
as if we turn business away or wouldn't sell to someone from out of town - of course we would, but we spend $175k a month (4 big stores, 7 smaller stores) in advertising, hitting the NW Philadelphia and Reading/Allentown areas. Local customers. It does us no good to advertise in Pittsburgh when there are 100 delareships there to complete with.
Spending money outside our selling area doesn't make sense to me - we make some low profit, one time deals selling to hard-core shoppers who never visit our service or parts departments?
Doesn't make sense.
I was done with you, until you started making incorrect generalizations and assumptions. Are you sure your weren't an IT consultant in a former life?
jasmith52 is exactly right. It also depends on what state your buying your new truck in. Supply and demand really has alot to do with it. For instance you would probably get closer to invoice in say Florida than you would Oklahoma or Texas. Big truck selling states.
Ok now lets get back to what said hours ago. We are not trying to pull in out of towner. If it happens so be it. We are directing our advertising to a local market (Our metro area). Now you already spend 175K just to try to drag in new buyers why in the world would you not use our service? We could possibly help you sell numerous units a month on top of the business your already doing? I am sorry sir but your not making economical sense to me as well!!
I have dealt a LOT with Free Markets and other "reverse auctions" in procuring commodity products and fabricated metal parts with several large companies. Our purchasing departments occasionally have Free Market events and I am asked to evaluate the results.
My feeling is that they are long on promise and short on delivery. They promise that the buyer will save a lot of money. That is great. Then they tell you the supplier is in Malaysia. That also is OK. Then when it gets time to buy the goods, they don't deliver. Oh we have to use *that* quality of steel (even though it was clearly in the specifications). The reverse auction people are counting their money and you have to find a new source. The guy that you USED to do business with, sure he will help you, but now he wants a price increase.
Car folks, avoid these people like a plague. They destroy your profitability by converting everything to commodity products.
Here is how it works. Joe Smith needs a Blogmobile. MSRP 18000, Invoice 16200. Ok, lets start at $15,800. Seller 1 bids 15700. Do I hear 15600 ... Eventually, you get to sell the car at a rate that noone else is willing to match.
I have found that reverse auctions alienate suppliers more than things like late payments. Have a problem, maybe they'll help you. More likely they will say, "your bid and PO were for this much, we gave it to you and that's all we need to do."
from a customer's standpoint, lets go through the process.
steps: 1. sign up on your site 2. wait for the lowest bidder 3. become obligated to buy from the lowest bidder 4. lowest bidder is 250 miles away, and only $50 lower than the next lowest that is 20 miles away.
now im stuck driving 250 miles for $50. if this scenario happens, do i get to pick the local guy instead of the low bidder?
drift...leave this one alone, man...i got it covered.
you weren't advertising or trying to sell something...
"Now you already spend 175K just to try to drag in new buyers why in the world would you not use our service?"
Looks like a trial close to me! Look, when I came to the group, they were averaging over $40k a store to hit TV, radio, newspaper and internet sources. That's $280k a month - the number of stores have increased to 11, and I've reduced the budget to $175k by combining store groups and doing domestic groupings and import groupings when advertising. Our sales have increased by 5.5% since LOWERING the advertising budget.
I'm not about to risk the credibilty and effort I have on the line for a fly-by-night idea that is just as jlawrence says "they are long on promise and short on delivery".
I can't take a goofy, half-baked idea like that to my dealer group owner and say "hey boss, I've already saved you 1.26 million dollars a year in advertising, plus sales are up 5.5% and CSI is improving - why not try this idea that this guy told me about on Edmunds!!"
<<<Now you already spend 175K just to try to drag in new buyers why in the world would you not use our service? We could possibly help you sell numerous units a month on top of the business your already doing? I am sorry sir but your not making economical sense to me as well!! >>>>
Wow, this guy is a salesman, sign me up!
Honestly, I am still awaiting the answers to the big questions... How are you going to help increase my bottom line (profit margin) and help increase my efficiency, help increase my sales where it really counts? By possibly sending one to two of out-of-towners my way a month ain't going to cut it.... i'm still waiting b/c I have a feeling you don't really understand the car biz.
<<<We have surveyed over 2000 new car buyers in the last two months alone that is currently in the market and 95% said they are very interested in using our service. >>>
Really... b/c they are willing to save money any way they can... doesn't mean its a great idea for a dealership to purchase, does it? Try asking the consumer again, and asking them if they will pay the referral fee or a processing fee to do it, I think you'll get a very different answer.
>>>Everyone thinks this is a great idea.<<<
Who is everyone? all the consumers where you tell them they can save thousands of dollars by drving 300 miles to buy a car? When you polled people, what are the type of qualifying questions you are asking?
>>>But as of now you have no clue if your competition is quoting them as well<<<
As drift said, don't make conclusions about answers you have no idea about, some people are successful in this business for a reason... If I was a betting man, I'd bet he knows more than you think about his competition
You said "3. become obligated to buy from the lowest bidder 4. lowest bidder is 250 miles away, and only $50 lower than the next lowest that is 20 miles away"
With our service there is no obligation on the buyers part only the dealer. The dealer must hold true to his or her bid 7 days after the auction ends.
Plus we are only advertising this service in 1 city! But I see your point. Well then a dealer needs to keep in mind to alter his bid accordingly. That is why I feel Dallas beats Oklahoma so much is that they make it worth your drive.
Bill, not that I direct the advertising for the company, but as a salesperson I can't see your reverse auction at all. The premise of the auction is to see just how much margin one can give up to make a sale. Whoever gives away the most loses... I mean wins. Maybe there are stores somewhere that would jump on the idea but here at our store the idea is to maximize margin, not minimize it. If there were some minimal cost, perhaps $20 or at most $25 per unit sold, that might change things somewhat but anything over $25 is too much under a reverse aution methodology.
Dillydill, as already mentioned, somewhere around $5000-5200 below invoice based on your scenario sounds reasonable. Now, you could always go for the inconsiderate buyer list and ask for the whole $5500 or you can leave them 2 or 3 Ben Franklins to pay the salesman, detail guy, etc.
in Dallas - the car guys there are serious about their game.
Maybe they sell better than Oklahoma City because they aren't wasting their time trying to come up with pipe dream/get rich quick scheme way of selling cars. The folks I know in DFW do things the right way - no BS, great follow-up, take care of the people - THAT makes for good business, not some "if come maybe" we'll send you a few people idea.
Comments
let me ask this:
what are the respective payments...buy vs. lease?
No way, no how - if you're paying by check (we know how check fraud works) or you're pre-approved from your credit union or bank (anyone can fake a document), the dealer has no assurance that you're not a thief. No offense, but they don't know you, you aren't neighbors, your kids don't play soccer together and they aren't in the same Cub Scout Troop.
Checking credit assures the dealer that you're not a credit criminal - if you have a 400 beacon, it's likely your check is no good and you're certainly not pre-approved somewhere! If you're a 700 beacon, the dealer can either roll the car and call for a bank/CU draft, or do a temp contract like isell said.
Whatever you do, don't ever ask me to let go of a $30-40k vehicle without some kind of assurance that I'll get my money - to do otherwise is stupid business and a direct cause for heartache and stress.
of course, the last time I tried THAT, the finance office miscounted my money... made a mistake of $1,000... in my favor. the joys of car buying.... -m
One last thing if I had a buyer who was preapproved from a outside lender personally I would pick up the phone and verify this for myself. I would not simply go off a credit check to see if this guys payment was credit worthy or not. Plus I would not deliver the vehicle until I have verified payment with the bank.
So what is your take on reverse auctions? Would you be interested in using it to attract more business?
Bill
It wreaks of "auto broker" and is an unnecessary, costly step that doesn't need to be added into a scenario where dealer profits on new cars are already a joke.
The SSAN idea - I don't care if I telecheck you - all that shows is that you haven't had any bad checks RECENTLY and says nothing of your credit worthiness. I've known many folks with a sub-500 beacon who had a clear Telecheck history - you can write a check, but it doesn't mean you have the money to cover it and probably can't get a loan.
I want to see who you are, and your credit history shows that - if I can't run your credit during those scenarios, I won't do business with you - I'll certainly pass on a deal to protect the business.
...Do you currently use referral sites to bring in additional business?
We have used a bunch of them in the past, but most have gone out of business. None did much for us. We use auto trader for our used cars and it works well but because it's tied to a major online website that is a brand name is the big reason it works well. we pay a monthly fee not a per car fee. based on the sales it is much less per car than $125 per car sold.
....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?
well this has a few twists to it. the first is for service and parts. new car sales only represent a very small percentage of the dealerships bottom line profits. But a big number of new car customers come back for service for years. If we do a good job they also bring their other cars and refer friends. over time this is much more profitable than a single car sale. It also leads to more sales. The other is new car allocation. Some brands only allow the dealer to earn additional allocation if they sell cars to people in their assigned marketing territory. On a hot car this is very important.
So if I'm going to sell a car at a minimal profit, I'm much more likely to serve my local customers than the guy from 100 plus miles away.
The far away customer is much more likely to take the bid price and go to the local dealer who can beat it by $125 dollars...since he does not have the additional expense in the sale.
As for reverse auctions. How do you compare our system with a auto broker? Our system has nothing to do with a auto broker. All our system does is connect qualified buyers with dealers. We step in at no time and try to negotiate the deal with you. Actually the dealer is under total control. If he wants to beat another dealers bid then he can. If he doesn't then he can say I don't want the business. All dealers will only be able to see the most current bid. Identities will be available only to the buyer. Do you currently use referral programs such as Edmunds.com offers here? If so what would be the difference from what we are doing and they do? Think about it everyday I see salesman sitting around hoping traffic comes through. Now you have a one stop shop to get that traffic flow into your dealership instead of watching them drive into another dealerships parking lot. Our system really levels the playing field for all dealers and buyers alike. Another question do you all offer customers birdies if they refer a friend who buys a car? Well if you don't your the first one I have heard of who doesn't. I have been paid $100 birdies over and over just because I referred business to a dealership and a sale was made. Our site will only charge $125 if a sale is made. Our site will be free for the buyer. If no sale is made your dealership owes us 0. Now you see why I am confused on how you think we could be a broker? There is a difference between a broker and a referral site. Brokers help the buyers make you loose profits. Our site will enable you to make your own decision to sell to a buyer at a lower price.
That's the EXACT same phrase I got from the last 10-12 auto brokers that approached me.
I don't need to discuss this further - I don't need a bidding war from folks 100 miles away - that kills the dealership's business (large amounts of out of town buyers), not helps it.
Rich summed it up very well, for the same reasons as mine.
You need to learn the difference between a broker and a referral.
Brokers are one that helps a buyer by negotiating the deal for them.
Referrals are self explanatory. Plus like I said three times now our system will only be available for buyers in 1 major city. Now if a buyer wants to participate and drive 100 miles to visit your dealership well then thats on them. I find it hard to believe that you wouldn't want to make a sale regardless of where one lives.
along with that, a 3 minute jump over to edmunds or KBB reveals the invoice price for the particular equipped vehicle. so now they have the same 3 tools you have...in 10 minutes.
car, dealer, price. for free.
You mentioned the site would be free for the buyer and that there is no commitment to purchase. There would have to be some sort of process to sort out the shoppers from the buyers, otherwise the dealers could be wasting their time quoting prices. I would think a $500 refundable deposit or something on that nature would be fair and may help sort out people that aren't serious.
No, I don't - I get referrals from former customers and business contacts. Also, I pay for advertising that fits the dealer group - your ideas would encourage ebay-style buying from people (non-local) who would never come back for service, or send a friend in for a used car, or whatever - it's worthless to me.
And please, I have 15 years in the car business, most as a manager, lately (3 years) as a court expert - please don't tell me what I NEED to do.
let me break down a referral fee to you.
total fee=$50
salesman's contribution: $25 (at least)
dealer's responsibility: $25
until you quote a dealer $30 per deal or less, you wont get anywhere.
i assume you would only charge the dealer on a sold deal, right?
if you charge the customer $25 up front, and had the dealer pay for the deal afterwards, then you make $50 a deal, and $25 for "tire clickers".
is a federal requirement on all vehicle purchases regardless of how its paid for. most states also require it for tracking of sales/property taxes."
Federal requirement? Got a link Bowke?
We dug up the info about form 8300 in the other thread.
I used a check in '98 for my van purchase and didn't knowingly provide my SSN to the dealer. No sales tax where I got it so that wasn't an issue. I don't remember what DMV required on the title application. Thanks for the info!
Steve, Host
Regards,
Leo
Uggh. Honestly, isell, this would be quite disturbing to me. I certainly understand why you need to know how serious I am, not knowing whether I am really pre-approved or not, or if I have the cash. However, if I tell you I am pre-approved or that I am paying cash, then I would expect "no spot delivery". Seems fair to me that you wouldn't give me a product without paying for it first. If I am preapproved or have the cash, you get the cashier's check, I get a car. If I can't make it happen, then I guess I look like the jerk. Thus, you would not get my SSN in a situation like this because either way, it's an additional, unnecessary pull of my bureau, will can ultimately affect my score. In any event, if I am financing, I actually prefer to do it at the dealer anyway, since spot delivery is available and I would tend to get a decent rate without having to shop.
"I want to see who you are, and your credit history shows that - if I can't run your credit during those scenarios, I won't do business with you - I'll certainly pass on a deal to protect the business."
Drift, are you actually serious with this comment? I go in and say "I want car x. How much?" You say, "sticker plus tax/fees=y". I come back 15 mins later with a cashier's check, that you verify is authentic by calling the issuing bank. And you're saying you would not complete this transaction without my SSN? I can't see why you pass on this deal simply because "you don't know me". I am not trying to be antaganostic, I seriously don't understand that. I can see it when you get a buyer of the "eh, I think I'm approved at the bank, but I think I'd like to lease, errr, geez, not sure yet" type. But not when the buyer is solid as to how he/she is going to complete the transaction.
Finally, it's not a paranoia thing. I agree that it's a sensible precaution to take when you don't know when or if you will be next victim of identity theft. That doesn't mean I won't use a credit card on the internet (I do) or provide the card to waiter at a restaurant for him to scamper off with (I do), but it's about minimizing the release of this info, that's all.
I wouldn't need a bureau or your SSAN in this case. I also excluded, in my statement, situations where money is confirmed, repeat customers, etc.
I want a bureau when I don't know you and can't confirm your money.
I think it is important that the consumer takes some of the expense off the dealer...remember the consumer is getting all the work done for them, by saving time and effort. The dealers expenses are actually higher than a traditional walk in consumer to make less money by using a service to sell one to two extra cars a month..
Most of these upstarts are here today and gone tomorrow.
Driftracer - You said, "your ideas would encourage ebay-style buying from people (non-local) who would never come back for service, or send a friend in for a used car, or whatever - it's worthless to me".
Driftracer your must not understand how a reverse auction works. Totally opposite from a tradition or English auction such as EBAY! Plus how would you know that a buyer would never come back for service or send a friend in for a used car? Do you have a crystal ball?
The way I see it this site is ANOTHER source to bring you possibly alot of business that you previously might not of ever had. You guys spend big money competing against each other all ready. I can call five dealerships right now and tell them I live 300 miles away but be willing to drive if the price is right and I will get a competitive quotes from all five. I know I have done bought cars in Dallas several times and I live 300 miles away. I have also sent friends and family to Dallas because of the lower prices and I was paid a $100 birdie fee every time for doing so. Plus I don't recall telling you what you NEED TO DO. I am just trying to get some opinions.
Are you trying to tell me that you have never sold to a out of towner? Also are you trying to say you have never had a referral from someone that wasn't close to you? I find that hard to believe. My partner sells to people all over the country. Seems to me that you loosing out on potential profits if you expect to only do business within your local community.
of all the deals...cash, finance, lease, etc..., there has been a SSN on EVERY buyers order. NO exceptions.
drift isnt the only one that will turn away business. the 3 dealers ive worked for will as well.
i think what Drift is saying is these type of long-distant leads are not worth much to him, and probably a lot of other dealers.... ie- no service revenue, which I believe is where a large portion of the profit (not revenue, profit) comes from within a dealership. New car sales don't deliver much profit margin, I think we can all agree on that....
So, my question to you is how will you improve my overall business, ie - my bottom line. I may sell a few more units per month at little or no margin/profit, but what are you going to do for me to help increase my business and make it more efficient? What does paying you for a one-off lead/sale do for me in the long-run? It may not be worth that extra $500 in margin/profit for that one unit in the long-run if I am selling to someone 300 miles from me, they sure aren't returning to me for their oil changes and/or other service issues.
Just some questions to chew on for a bit.....
I'm not interested in your product or ideas - like isell said - his fax is flooded with these great schemes for selling cars. So is mine...
I wish you luck, but would prefer that you leave me out of future discussions - you have no idea what my business practices or preferences are, and there's no way that you will. Please cease in assuming you know the car business - at least from my perspective, your views are skewed.
I don't think it would have unreasonable for them to ask for my SSN or any other evidence to indicate that our piece of paper was worth something.
I am looking into a new 2004 Chevy silverado and was wondering is it wrong or off base to assume that I would be able to go into a dealership and get a price that is under invoice by the different rebates that are currently being offered? Lets say the truck is 25K and there is currently a $2500 and additional $1000 in rebates. . . Can I get this truck for $3500 under invoice? . . . I have never bought an American vehicle new and also have $2000 in GM Card dollars to spend towards a Silverado. . . am I dillusional that I may be able to get a brand new truck for $5500 under invoice?
Do I have to pay taxes on the rebates? Or the after rebate price?
Thanks for your help in making sure I am not overlooking anything before I head down to the dealership and looking like a donkey.
Dillydill
of all the deals...cash, finance, lease, etc..., there has been a SSN on EVERY buyers order. NO exceptions."
Fair enough, bowke. I'm not one of these consumer-activist wackos, where everytime something a business does that might benefit them is perceived as a horrible thing (namely, profit). Every business has a right to put policies in place as they see fit. That said, I have the right to shop wherever. Since the dealers you have worked for seem to have been very succesful with this policy of requiring SSNs, it probably matters little to you if someone like me (non SSN provider) chooses not to buy there.
That said, if I come in with a verifiable cashier's check (whether the product of a loan with my lender or my checking account), you will not get my SSN. Or rather, I will not be coming in with that check, I guess. No harm there. I just don't understand it.
bobst, I agree if I tried to write a $25000 personal check, by all means, call my bank, run my credit if you must. Personal checks in general are not exactly the most trustworthy form of payment (from you, it's likely rock solid, I just mean generally). My point is, I would likely run to the bank for a cashier's check and I don't see why my SSN is needed--although, I won't argue with the right of the dealer to request it.
we dont run it unless your check doesnt go through. at that point, we will draw up a contract, ask you to either sign it or return the car. if you do neither, we can put our own lien on the car, and it will report to your credit bureau as past due payments.
Mirth - I saved more than a couple of hundred. Actually it was about a grand. Plus I have fun in Dallas. So it was worth the trip.
As for the numbers what if we charged a set monthly fee? You and I both know that the internet could drive in hundreds if not thousands of new qualified buyers especially once the word gets out about this new service. Like I said our survey numbers speak for themself. Everyone thinks this is a great idea. I am not trying to recruite your dealership like drift thinks. I am just trying to get your opinion.
Question for you? Do you have a internet salesman? What does he do? He works leads from the internet right? Well our service will help bring in even more business. Plus he only has to log in once and he won't have to read so many emails. Were also including a section where you can leave dealer comments to a buyer plus were implementing a way to upload pics of the car your trying to sell to the buyer. And everytime a dealer bids all other bidding dealers will get a email asking if they want to place another bid to beat out the last one. All auctions will only last for 7 days. All quotes will be void by the dealer 7 days after the auction ends.
So if you think about it your internet salesmen is already quoting people over the internet pretty close to invoice. I know because I have done it. Our system now allows the dealer to have a fighting chance to earn the customers business by quoting them in a bid format NO DIFFERENT than a regular quote. But as of now you have no clue if your competition is quoting them as well. Well now you have a clue and now you can beat your competition! In the long run helping your bottom line possibly in a substantial way. Plus your getting CHEAP advertising.
"Your going to need it!"
Hardly - my dealer group has expanded by 4 stores, to 11 stores and is looking at another buyout on a 6 store group.
With my primary job, I'm now making more money than the GM I worked for 5 years ago who ran a 4-line store for Lithia. With the additional income of this dealer group position, I make as much as he and his wife combined (she was our office manager).
I don't think luck has anything to do with it, but if you're wishing me some, I appreciate it.
By the way I thought you said you was done talking to me?
Well, depending on your negotiating skills you just may be able to buy your truck for close to invoice less any rebates. So for example on your $25k truck the invoice is maybe $21800. Perhaps then you could negotiate this deal for $22000 less the $3500 rebates gives you a price of $18500. If you have $2000 additional GM card rebate credits then subtract those off too giving you a price of $16500.
It is unlikely that the dealer will sell your truck for less than invoice unless there are either additional factory-to-dealer incentives or your truck is distressed merchandise that can't be easily sold.
And yes sales taxes are due on the all of the rebates. Vehicle registration fees and sales taxes are payed on the negotiated amount before rebates.
Spending money outside our selling area doesn't make sense to me - we make some low profit, one time deals selling to hard-core shoppers who never visit our service or parts departments?
Doesn't make sense.
I was done with you, until you started making incorrect generalizations and assumptions. Are you sure your weren't an IT consultant in a former life?
My feeling is that they are long on promise and short on delivery. They promise that the buyer will save a lot of money. That is great. Then they tell you the supplier is in Malaysia. That also is OK. Then when it gets time to buy the goods, they don't deliver. Oh we have to use *that* quality of steel (even though it was clearly in the specifications). The reverse auction people are counting their money and you have to find a new source. The guy that you USED to do business with, sure he will help you, but now he wants a price increase.
Car folks, avoid these people like a plague. They destroy your profitability by converting everything to commodity products.
Here is how it works. Joe Smith needs a Blogmobile. MSRP 18000, Invoice 16200. Ok, lets start at $15,800. Seller 1 bids 15700. Do I hear 15600 ... Eventually, you get to sell the car at a rate that noone else is willing to match.
I have found that reverse auctions alienate suppliers more than things like late payments. Have a problem, maybe they'll help you. More likely they will say, "your bid and PO were for this much, we gave it to you and that's all we need to do."
steps:
1. sign up on your site
2. wait for the lowest bidder
3. become obligated to buy from the lowest bidder
4. lowest bidder is 250 miles away, and only $50 lower than the next lowest that is 20 miles away.
now im stuck driving 250 miles for $50.
if this scenario happens, do i get to pick the local guy instead of the low bidder?
drift...leave this one alone, man...i got it covered.
;-)
"Now you already spend 175K just to try to drag in new buyers why in the world would you not use our service?"
Looks like a trial close to me! Look, when I came to the group, they were averaging over $40k a store to hit TV, radio, newspaper and internet sources. That's $280k a month - the number of stores have increased to 11, and I've reduced the budget to $175k by combining store groups and doing domestic groupings and import groupings when advertising. Our sales have increased by 5.5% since LOWERING the advertising budget.
I'm not about to risk the credibilty and effort I have on the line for a fly-by-night idea that is just as jlawrence says "they are long on promise and short on delivery".
I can't take a goofy, half-baked idea like that to my dealer group owner and say "hey boss, I've already saved you 1.26 million dollars a year in advertising, plus sales are up 5.5% and CSI is improving - why not try this idea that this guy told me about on Edmunds!!"
>>>>
Wow, this guy is a salesman, sign me up!
Honestly, I am still awaiting the answers to the big questions... How are you going to help increase my bottom line (profit margin) and help increase my efficiency, help increase my sales where it really counts? By possibly sending one to two of out-of-towners my way a month ain't going to cut it.... i'm still waiting b/c I have a feeling you don't really understand the car biz.
<<<We have surveyed over 2000 new car buyers in the last two months alone that is currently in the market and 95% said they are very interested in using our service. >>>
Really... b/c they are willing to save money any way they can... doesn't mean its a great idea for a dealership to purchase, does it? Try asking the consumer again, and asking them if they will pay the referral fee or a processing fee to do it, I think you'll get a very different answer.
>>>Everyone thinks this is a great idea.<<<
Who is everyone? all the consumers where you tell them they can save thousands of dollars by drving 300 miles to buy a car? When you polled people, what are the type of qualifying questions you are asking?
>>>But as of now you have no clue if your competition is quoting them as well<<<
As drift said, don't make conclusions about answers you have no idea about, some people are successful in this business for a reason... If I was a betting man, I'd bet he knows more than you think about his competition
>>>Plus your getting CHEAP advertising<<<
For what?
You said "3. become obligated to buy from the lowest bidder
4. lowest bidder is 250 miles away, and only $50 lower than the next lowest that is 20 miles away"
With our service there is no obligation on the buyers part only the dealer. The dealer must hold true to his or her bid 7 days after the auction ends.
Plus we are only advertising this service in 1 city! But I see your point. Well then a dealer needs to keep in mind to alter his bid accordingly. That is why I feel Dallas beats Oklahoma so much is that they make it worth your drive.
Dillydill, as already mentioned, somewhere around $5000-5200 below invoice based on your scenario sounds reasonable. Now, you could always go for the inconsiderate buyer list and ask for the whole $5500 or you can leave them 2 or 3 Ben Franklins to pay the salesman, detail guy, etc.
Maybe they sell better than Oklahoma City because they aren't wasting their time trying to come up with pipe dream/get rich quick scheme way of selling cars. The folks I know in DFW do things the right way - no BS, great follow-up, take care of the people - THAT makes for good business, not some "if come maybe" we'll send you a few people idea.