Dealer's Tricks - bait & switch, etc.

danf1 · January 2005

That is it exactly.

Kirstie_H · January 2005

That's a rather unnecessary slam. Although we often call the F&I room the "rip-off" room because uneducated buyers can buy something for an inflated price, or agree to add-ons that they don't need, that doesn't mean every F&I guy is deceptive.

"Deceptive" implies that the customer is told a deliberate untruth, i.e., "this extended warranty covers intentional damage to the vehicle." Or, adding a product onto the sales invoice without the customer's knowledge. Selling a customer something he later regrets buying is just buyer's remorse.

People who bow to high-pressure sales or who make a snap decision to purchase an add-on without taking time to evaluate the product have only themselves to blame.

jif · January 2005

amen

kyfdx · January 2005

"People who bow to high-pressure sales or who make a snap decision to purchase an add-on without taking time to evaluate the product have only themselves to blame."

On the other hand... businesses that can only make money by preying on unsophisticated consumers, really have nothing to be proud of...

Just because people earn a living and need transportation doesn't mean they should be "suckered" into useless crap like paint protection and $249 scotchguarding.. Money doesn't come with an instruction manual (well, except for here on Edmunds).

I, for one.... do not admire PT Barnum..

regards,

kyfdx

imidazol97 · January 2005

a desire to serve the customers, they would tell them BEFORE they get them into the FI room for what they believe will be a finalization of the financing. The discussion would be like this, "We are going to ask you in a while if you want to have the windows etched for $299 with the VIN number of the car because that may make it easier to find after it's stolen (if the cops are looking at every window as they go past cars) and we would like to coat your car with a wax for a couple hundred dollars that may be better or worse than what you can do yourself at home one or two times a year and we would like to ScotchGard your seats for $99 and we would like to ...

"Think about this for a while and when you get into the final step you can tell us yes or no."

If the dealer has a customer who's just looking, tell them the same info so that they can be prepared when they return to negotiate further on the deal.

Don't wait until the last minute when everyone's all tired. That's not the customer bowing to pressure, that's the customer being blown over like a willow tree in a hurricane.

Kirstie_H · January 2005

I wouldn't and couldn't do that to someone either. But being aware that there are people in the world who will is facing reality. Timeshare sales, QVC product sales, and the like can be high pressure and likely to attract consumers who aren't informed, so it's wise to be wary that such people exist.

driftracer · January 2005

where the salesman or the lotboy has to forewarn the customer that the F&I person might try to sell them an extended warranty.

This doesn't work, from a business perspective, for several reasons. First, most salespeople can't answer all of the picky questions about warranties that I've gotten in F&I. I think that having someone greepea trying to give a customer info does a disservice to the consumer.

In many states, all of this info MUST be disclosed properly and certified by the consumer - what folks don't realize is that if Mr and Mrs Smith aren't properly disclosed that they could have gotten an extended warranty when they bought their new car, and now the transmission went out at 40,000 miles and the service guy is showing them a $2500 estimate, the dealer can be on the hook since proper disclosure wasn't given.

Finally, PLEASE.....if you're old enough to sign for a car and/or sign for a car loan, and you're not informed enough or gutsy enough to make good decisions, bring your dad with you when you take delivery...

I'm sick to death of hearing about how the dealers "rip people off" because people are too stupid to do 10 minutes worth of research as to what is a good price, trade value, interest rate, etc - all the info is out there, especially these days - you can get on a PC at the freakin' library, for goodness sakes...

No more excuses. Do the research, or don't complain.

uga91 · January 2005

I received a price quote on a 2005 Jeep Grand Cherokee from Carl Gregory Chrysler-Jeep in Columbus, GA on Thursday, December 30, 2004. I went in after work--did not have my trade, but I told the salesman what it was and he wrote that info down. I picked out a black 2WD Laredo model and drove it. Told the salesman I liked it and to get up a price and give me a call. He called me later that evening and told me $23,500 after $2000 in rebates. Did not have time to go in Friday or Saturday. Went in Sunday afternoon, with our trade, and drove the Grand Cherokee again. Went in to do the papers and the finance guy said they would not sell it for $23,500. I told him that was the quote and he said he did not know I had a trade. The problems with that are: 1) the salesman DID know I had a trade; and, 2) what difference does it make? The sales price is the sales price. Even the salesman was standing there in disbelief that the finance guy said they would not honor their price quote. He was embarrassed and apologized profusely when my wife and I went back to our car. I've never seen anything like it. That's why everyone hates buying cars.

bobst · January 2005

Not everyone hates buying cars. We love buying a car, and we are looking forward to getting a new one pretty soon.

bobst · January 2005

"it's wise to be wary that such people exist."

That's right. Instead of complaining that some sales people are trying to take advantage of us, it is better, and healthier for our blood pressure, if we assume the worst and learn how to deal with it.

bobst · January 2005

You mentioned that a F&I guy like yourself is "trying to sell you stuff".

Do you honestly think the things you offer a customer are worth the price you change?

Would you purchase these extras if you were buying the car yourself?

Who do you think is the hottest babe on "Desperate Housewives"?

Remember, you are supposed to answer these questions truthfully.

isellhondas · January 2005

About the time I start to think you're really an O.K. guy with a twisted sense of humor, you come out with one of your insulting posts.

I know I would not want you for a customer.

driftracer · January 2005

Do you honestly think the things you offer a customer are worth the price you charge?

Yes, I strongly believe in extended warranties if (a) you're going to keep a vehicle for a long time and (b), it's not a Honda, Toyota, or Nissan.

I sold lifetime oil changes when I was with the Lithia Group - proved much less expensive in the long run.

I believe in credit disability insurance IF you're in a risky job (construction, or another that would get you injured) or credit life if you risk dying.

I don't believe in mop and glo and never had to sell any of those products.

Would you purchase these extras if you were buying the car yourself?

Yes - on both of my recent vehicle purchases - extended warranties, manufacturer-backed, of course, and credit life (very dangerous hobbies, protecting the wife from being hit with the balance of two loans after losing my income).

Who do you think is the hottest babe on "Desperate Housewives"?

Always had a thing for Terri Hatcher ever since she was Lois Lane with Dean Kane on "The New Adventures of Superman".

boomer1b · January 2005

A few years back a furniture store in the NYC area called SYMS?

The pitchman in the ad always closed with the saying.........

"A informed consumer is our BEST customer" or something to that effect.

jif · January 2005

of course it too bad we (car dealers) can't be like furniture sales people, independent contractors, jewelry sales people, lawyers,insurance sales people, cell phone providers etc. etc.

driftracer · January 2005

RIGHT! and have some REAL profit and markups!!

imidazol97 · January 2005

"RIGHT! and have some REAL profit and markups!! "

Just in the last month two owners of groups of dealer groups in Cincinnati (Joseph and Jeff Wyler) sold their franchises for automobiles and turned the showrooms into furniture stores with cellphone kiosks at the entrances because there was more money to be made in furniture!!!

The bodyshop areas became armorered storerooms for the jewelry salesmen to work out of and the service departments became boiler rooms for telephone solicitors making calls to sell insurance.

They're taking full page ads in Sunday papers for employees to apply for all the work.

I think we forgot the carpet business (or was that a part of furniture stores?).

kyfdx · January 2005

If the only defense of your profession, is to bring up all the other professions with poor reputations.... then that isn't much of a defense...

I have nothing against car salespeople... they have a tough job, and I wouldn't want to do it..

But, most F&I managers don't operate the way drift describes his experience in the business.... It is mop 'n glo, window etching, 3rd party warranties (did we mention insurance agents?), and obscuring and obfuscating just what the bottom line is, and what it is the customer is paying for... Add a trade, with a loan balance to the mix... and people get taken advantage of..

I'm all for personal responsibility, but taking advantage of someone still isn't right, and I wouldn't defend those kind of actions.. I think there are plenty of dealers that make money honestly, and don't need to resort to those kind of tactics...

regards,

kyfdx

driftracer · January 2005

Agreed, and those F&I folks who slam-banged people made my job a lot harder than it had to be...

yhs · January 2005

unfortunately i only had a few days to buy a car as my other car was involved in an accident, and the other driver's insurance would not pay for the repairs after they evaluated the damage. after getting a letter from the insurance company and calling them the next day i was issued a check for the value of my car.

i thought the $278 monthly payment was a little high but brushed the idea aside as I was confused about the 2nd quote of $269. I made 2 calls to diff friends to ask about the two options, but no one caught it. the extended warranty was $1767, a ridiculous amt so I felt funny about it. normally i would never pay that much for it and originally was not intending to buy the extended warranty.

bobst · January 2005

Thanks for your honest answers. I believe you. Some sales people (like you, it appears) really do try to sell things they truly believe help their customers. Others just see us customers as a walking wad of cash. That is why we have to be on our toes at all times.

What is our disagreement? Teri Hatcher is OK, but I like the girl who plays her daughter. OK, I cannot tell a lie. I really preferred Mrs. Hooper.

bobst · January 2005

Good for you for sticking with your hobby, even if it is dangerous. Like I have always said, I feel sorry for any man who grows up.

danf1 · January 2005

You are making some large assumptions here. As far as "most" F&I managers and how they operate, that falls under the control of the dealer itself. Yes we are going to try to sell you stuff, and yes you can say no to anything that we offer.

My dealership does not tolerate any misleading information being provided to customers. We offer every product to every customer every time we get a deal. It does not matter who you are or what you know, you are going to hear my sales pitch.

As far as believing in the products, they all have value. Some people feel that the value is greater than the price and purchase them, and others do not. Either way if you sit in my office you know what is available and can't say four years from now that none of it was offered to you.

kyfdx · January 2005

When I say "most", I'm speaking of my own experiences in 28 years of buying new and used cars... Of course, that isn't a scientific survey.. And, I've seen plenty of "good guys".. and I tend to go back to those places...

But, I've also seen too many greasy slimeballs to think that it is a relatively rare occurrence (disregard this if you aren't a greasy slimeball..lol).

I realize this all starts at the top of the dealership... either the general manager or the owner decides what kind of store they want to run.. Too many choose the low road... Which is where the car business gets the unfortunate reputation that they have..

This isn't meant as a slam against all F&I guys.. just my own personal observations...

regards,

kyfdx

stickguy · January 2005

in the spirit of truth (this is the internet after all), Syms is a men's clothing store.

OT, they do have a true one-price policy that would be interesting for used cars. They price an item at X, and put a series of dates on the tag, along with different prices. At each date on the tag, the price changes, and it's all listed up front.

So, you can buy that Escort for $8,995 today, wait until the 10th and get it for $8,5995, or the 16th when it is $7,995. Of course, you run the risk that someone else buys it first, but that's the exciting part.

dglozman · January 2005

My friend bought a Honda Pilot recently. While in F&I office he was offered a security system installed on his car for around $700. At first he declined, but than he was told that if he does it, his interest rate on the loan will be reduced. So he bought it. This guy works on Wall Street as Financial Analyst and very smart, but apparently he didn't realized that there is no connection between expensive alarm and interest rate (and he knows his FICO score and reviews his credit history every year)

When we discussed his purchase (he loves his car btw), he said, "they got me", he understood that he made several mistake that cost him.

1. He should have arrange his own financing (which whould be lower at his Credit Union (he checked))

2. He should of known that there is no connection between alarm system and interest rate

3. He should be always AWARE of any tricks by the dealer when he decides to buy another car.

He wasn't that pissed, he called it "learning experience"

If you living with wolfs - you should act like one

driftracer · January 2005

is when you come in on one vehicle and are told that either the vehicle has been sold, or "you don't want that one"...and you're switched to a higher priced vehicle that isn't on sale.

Your scenario is still a dealer trick, and because the F&I guy stood to profit from the alarm system, he gave up some rate (that was already being marked up, evidently). This is fact, unless the amount to finance hit a threshold where the lender dropped the rate - that's an honest reason for dropping the rate, but could have been done with less cash down, also...not an alarm system.

zepboy · January 2005

Remember when Clark Grizwold wanted his sportscar and was sold the Family Truckster....Now that was a bait n switch

"1st post ever to the forum"

ksccts · January 2005

Congrats on your first post.

jif · January 2005

you should be careful how you word your posts.

sweeping generalizations are what fuel consumers fear more than a few unscrupulous dealers. sterotypeing tends to do more harm than good. with any purchase you should do your research and be informed so you can avoid being taken advantage of. most salesmen would prefer an educated customer because they tend to know when they are getting a good deal or not. they also tend to waste less of their own time

thank goodness for edmunds

boomer1b · January 2005

Haven't seen those ads in a looong time. So confused.....But wasn't that their "tag line"?

2099 · January 2005

Yes, that was their line...Sy and Marcy Syms. Bought a few sport coats/suits there years ago. Good value if you didn't mind digging through 500 sport coats to find one. Back to topic.

kyfdx · January 2005

I don't think I made any "sweeping generalizations"... but, I did say those type of F&I people aren't rare, and I believe that.. I didn't create these stereotypes, just pointing out that they aren't based on fictional occurrences, from my own experience.

Not sure why I should be careful, though.. I'm not going to have to take a quiz later, am I?

Hopefully, anyone here on Edmunds is doing their research... Pointing out that they need to be careful in the F&I office is my version of a public service... (okay, that might be pushing it)

regards,

kyfdx

raleighwolf · January 2005

On December 23rd my wife and I went to the Honda dealer in Myrtle Beach, SC. (East Coast Honda) We purchased an Odyssey. (2005 Touring)



The Business Manager told me that the 2.9% financing was based on purchasing the extended warranty and that if I did not want the extended warranty then the finance charge would go up. She even did some math for us that illustrated that it was a "better deal" to get the warranty and the 2.9% financing.



I confronted her on this and said I thought that it was illegal to offer it that way. She assured me that it was not. So we got the warranty.



After I have thought about this some more I really think that it is.



Bottom line is this IS Illegal

driftracer · January 2005

a certain amount to finance? If so, then perhaps - but just setting two contracts side by side, I can't see it. You either qualify for the 2.9% or you don't - the amount financed, with or without a warranty, shouldn't matter.

kyfdx · January 2005

Sounds like a better deal for the F&I person, anyway...

Don't you have 30 days to rescind the extended warranty? If so, and you do that.. they won't refund any money to you, but they will take it off your loan balance...reducing the number of payments you will make..

I'm pretty sure that will still let you keep the 2.9% financing... and the F&I person will get a chargeback... meaning they won't get their commission or profit for selling the warranty..

Whether it is illegal? I've always heard it was.. but, that could be a state law.. But, for sure, she lied to you, telling you it was required.. Banks don't work that way.

regards,

kyfdx

driftracer · January 2005

although I've seen many lenders that give a 1/2 pt drop if you break over a certain amount, like $20 or 30k.

Honda doesn't have those restrictions on their AHFC rates, only term restrictions (you can't go 84 months at 2.9...)

Yeah, I think she lied - illegal, probably not, but darned sure unethical. This is a conversation I'd be having with the dealership's general manager, though. ASAP.

dbauer · January 2005

there is a law on the federal books that addresses this, but from what ive known, there are so many loopholes, you would have to try to avoid them on purpose...lol.

danf1 · January 2005

You should be able to cancel the warranty for a full refund within 60 days of receiving the contract. The money will go to the bank because the bank paid for it.

driftracer · January 2005

who would do the "interest rate juggle" when selling a warranty - if you're holding 2 points, and the buyer balks at the warranty at a $20 payment jump, drop the rate 1/2 point or a point and the bump is only $8-10.

It works, it's easy enough to do, but to turn around and say that they HAVE to take the warranty to get a better rate is ridiculous.

guitarzan · January 2005

There is ZERO value in dealer paint protection packages & wax jobs. EVERY new car I have EVER seen at a dealer has swirl marks in the finish. You tell me, do they come from the factory like this? If not, it is the dealer's prep, synthetic applicators (polyester), minimum wage labor that ruin every new car. Someday when I am rich, I am going to order a new car, and tell the dealer not to touch the finish, and to get my okay before repairing any marks on it.

Interest rates-salespeople should stress to the customer, for their own good, that they should do anything they can to get the subsidized interest rate-don't roll over mileage penalties into a new lease, try to budget 5 years instead of 6, etc. If the dealer just asks the customer how many years they want financed, and the terms, they are not doing the customer any favors by letting them pick it. The customer should get the best professional finance advice from the salesperson. Be proactive salespeople, and you'll get a great deal of respect for that.

dbauer · January 2005

i understand the point, but salespeople will have to fight the uphill battle forever, regardless of whether the customer is "educated" by one.

the other problem is that a salesperson that educates a customer must often tell them something they dont want to hear. this has 2 possible effects:

1. customer gets mad and leaves, only to use the info. at another dealer to get an identical deal. this makes the salesperson an unpaid consultant. he did all the work for someone else's commission.

2. customer buys the car and slams the salesperson on the survey.

the way it should be done is the way it is now...salesperson stays the good guy, and creates a relationship with the customer...the managers stay the bad guys that people expect of them.

bobst · January 2005

I think it is perfectly alright for the F&I guy to tell a customer they will only get a low interest rate if they also buy a warranty.

We buyers have the right to make any offer we want and the sellers have the right to make any counteroffer they want. If their counteroffer includes us buying a warranty to get a low interest rate, what's the problem?

driftracer · January 2005

I disagree, since to say that isn't true, it's a lie.

dw438 · January 2005

Syms is a discount clothing retailer, mostly in the Northeast. Sy (Merns) Syms and his children Marcy and Robert star in tv ads with the slogan...."An Educated Consumer is Our Best Customer."

Great store, excellent quality clothing. Nice people who work there. Syms is one of the original merchants who had to move when New York's World Trade Center was being built in the 1960's.

mikefm58 · January 2005

After reading the discussions about the F&I guys getting people to buy the extended warranty if they lowered the interest rate, I helped a friend negotiate a pretty good deal. They had already agreed on a purchase price and trade in amount, and the F&I guy gave the sales line of seomthing like 8% w/o the warranty, but 6% with the warranty, don't recall the monthly payment amounts. My buddy was pretty ticked since he knows he has excellent credit and he knew he had already made the mistake of not getting pre-arranged financing. I told him to insist on the 6% rate but without the warranty sice we both felt they had already marked up the financing. We stuck to our guns and was almost out the door when they called us back and did the deal...LOL.

rroyce10 · January 2005

in the spirit of truth (this is the internet after all), Syms is a men's clothing store.

OT, they do have a true one-price policy that would be interesting for used cars. They price an item at X, and put a series of dates on the tag, along with different prices. At each date on the tag, the price changes, and it's all listed up front.

So, you can buy that Escort for $8,995 today, wait until the 10th and get it for $8,5995, or the 16th when it is $7,995. Of course, you run the risk that someone else buys it first, but that's the exciting part.

       ===============================

          I love it, it's a great idea, lets start today.! ..

              The only difference is, Syms like all of the other clothing stores (like furniture and jewelry stores) have a 80/120/200%+ mark-up .... most car dealers are trying to survive off a 3-7% mark-up -- Big difference .....

                               Terry.

bobst · January 2005

You and your friend made an offer, and headed for the door when it was not accepted. The salesman, as usual, then decided to accept your offer. That's how the game is played.

bobst · January 2005

The salesman says: "If you buy this car, we will offer an 8% loan. If you also buy the warranty, we offer a loan of 6%."

I don't see any lie in an offer like that.

driftracer · January 2005

have to buy the warranty to qualify for the 6% - you obviously already do - it's a sham.

Dealer's Tricks - bait & switch, etc.

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Dealer's Tricks - bait &amp; switch, etc.

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Dealer's Tricks - bait & switch, etc.