Did you recently take on (or consider) a loan of 84 months or longer on a car purchase?
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Dealer's Tricks - bait & switch, etc.
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Why would anyone want to stress out over $.50 a day?
What's more, it doesn't add anything to the transaction. In a face to face negotiation, agreement is the goal. The money adds nothing. If we were somehow dealing by phone, or on-line, then a deposit might be in order. If I were asking the dealer for a service, like holding the vehicle in my absence (while I go to the bank, talk to my wife or whatever), then it certainly would be appropriate. But to ask for a check to take to the desk? For what?
Passing money indicates consideration (legal term). In a face to face negotiation, what is the consideration - what will the dealership do in return for the deposit money? Make the deal "go smoother"? That might be the way business is done in Brazil, but here it's called bribery.
Agree to my price and we can sign. I have only given a deposit once, on a used car and it was after we had signed off on the deal.
Give me a check to show good faith- right, watch my butt as I go across the street!
Otherwise, I don't understand why I should pay for a car until it is ready for me to drive away. It has worked for me since the early 1970s, but then I arrange my own financing or just pay cash.
John
I'm sure this is as a result of bad experiences.
I too have heard the horror stories of lost keys, etc. No doubt these practices continue today.
For you to make a statement like "You will never get your check back" is pure rubbish however if you are dealing with a reputable dealership.
I will hand you your check immediately if we can't come to terms along with the keys to your trade in.
And I think the VAST major majority of dealerships would do the same thing.
Also, your attitude will always determine to a large extent how you are treated.
If you expect your word to be your bond with someone you met only minutes or even hours ago you better move to Mayberry. Unfortunately, your word cannot go unquestioned because of the unscrupulous people that have preceded you. It's not a personal insult. It's a reality of doing business.
It also appears that I may have made an error in judgement in considering the people that post here to be informed shoppers (they sure should be with the info available here). I have been making the assumption that you people are doing your research, coming up with the price you want to pay, and then offering it to the dealer. I was under the impression that you want to be in the position for the dealer to just say yes or no to your offer and avoid the negotiating that everyone claims to hate. Yet here is hiwaysanity talking about reaching agreement in face to face "negotiations." And using inflammatory terms like "bribery" is no more appropriate than saying giving a dealer a price ultimatum is "extortion."
As for "consideration", what are you getting in return for your deposit with a real estate offer? I don't see anything beyond having your offer considered. Of course, you may consider this a grave insult to your character as well.
It appears that many here are blinded by their hatred of the car business and have lost sight of their original goal - to buy at a good price and have a better buying experience. All I hear on this board is how customers wish they could level the playing field and have some leverage with the car dealer.
Presenting a deposit with an offer is probably THE most powerful thing you can do to put pressure on a dealer to accept your offer.
I am confident that everyone here who has ever been a Sales Manager will agree with that.
Now what I suspect really happens with many of you is that you do your research and still go in and ask "what's the best you can do?" because of your fear that somehow you'll still pay too much. If you are doing this then, yes, you better brush up on your face to face negotiating skills.
I don't think I'm speaking out of turn when I say that I and the others here that are in the business are not here trying to subvert the car-buying public into doing things for our personal gain. Personally, I am here because I enjoy cars and the car business and would like to see more people enjoy buying their cars.
Sitting at a desk in a dealership after agreeing on a price for a car should not require a deposit to get an answer if that is acceptable or not. If the dealership doesnt like the offer, they say no or more than likely make a counter offer. The deposit does nothing to help that decision. If the price is fair then its fair. A fair price plus $100 doesnt make sense since you can still decide not to buy and there is no written purchase agreement.
I just bought 2 cars this year, a Chrysler and a VW passat. In both cases I was not asked for a deposit and in both cases I told them what I would pay and in both cases they said yes and that was that. Now I have never even worked in sales, much less at a car dealership so maybe I just cant see it from your perspective, but if someone says they will buy the car for that price and that price is fine with the dealership, what difference does a deposit make since you have to give it back if the buyer changes their mind?
Additionally, the measure of intent is far more important when there is but a single house to sell, and the risk of tying it up (and taking it off the market) usually has much greater consequences if the buyer backs out.
I see no such consequence on a new car, unless it is a special order (or other special circumstance).
I don't see how a small deposit achieves anything. The squirrely (sp?) buyer is going to back out anyway if they have any doubt or hesitation, check or no check. Am I wrong?
landru2: You say: "If you expect your word to be your bond with someone you met only minutes or even hours ago you better move to Mayberry. Unfortunately, your word cannot go unquestioned because of the unscrupulous people that have preceded you. It's not a personal insult. It's a reality of doing business."
Yes, I do expect that, and I extend the same courtesy to the salesman. If I'm sitting in his office, and not leaving, what does he have to loose by simply taking my offer to the desk? What does he gain by disbelieving my statement that I will buy at that price? Please answer my question: Just excactly how does the deal go smoother because you are holding my money in your hand? How readily you will return it is not my issue. I don't hand people money without at least the promise of something in return.
I used the term "face to face negotiations" to underline my point that we are there together, in person. My comments do not relate to phone or email conversations, or situations where the customer is leaving the dealership before buying for the car, all situations where the request for a deposit might be entirely appropriate. I use the term "negotiation" to mean any discussion relative to a purchase, even including an offer form a well informed customer and acceptance by the seller. Real estate transactions are usually bidding situations conducted blind, through a third, and sometimes fourth party. Not relevant.
My post was in response to earlier descriptions of scenarios where the salesman refused to carry the customer's offer to the sales desk without a check. Asking for a deposit is one thing. Demanding one, after I decline but say that if we agree to my price I'll buy, is insulting.
I don't know how long you've been selling cars, landru2, but there is a good chance I've been buying them longer. I manage a fleet of them now. I'm not from Mayberry.
And you seem to misunderstand what a deposit is. It is not an extra charge beyond the price of the car. Your post makes it sound like you are expected to pay a fair price plus $100 for a deposit. The deposit is part of the agreed price not something extra.
If my average gross profit on a truck is, say, $1800 and someone is offering me a $200 gross profit deal I am going to consider accepting their offer much more seriously if it is accompanied by a deposit and a commitment that they will take it if I agree.
Just as you have no obligation to buy from me, I have no obligation to sell for a profit I may consider insufficient. If someone expects me to accept a deal for much less than my average profit I want to be compelled to do so. A serious buyer that indicates through actions (deposit) and words that will buy now and is friendly and respectful will have their offer accepted 95% of the time.
My experience tells me that someone that is not commited enough to give a deposit will burn me 95% of the time. So if this person walks because of being asked for a deposit I don't consider it a lost sale at all but rather a savings of my time for something more productive.
Say that we agree on a price, and I say "If your manager approves that price, I will buy it today. I have my check book and I will make the down payment right now."
You say "Fine. Will you give me a check for $xxx to show your commitment?"
I answer, (pleasantly, mind you) "No, unless you have another buyer who wants that very car, you don't need a check binding this. Please just take my offer to the sales manager. If he approves it I will write the check for the down payment right now."
Are you saying that you will refuse to carry the deal to the desk because I haven't demonstrated enough commitment? You're not saying that . . .are you? I mean, you'd really say "Fine, I'll take it over right now." Right?
Right?
I would also appreciate you not making assumptions on my experiences. In fact, outside of a few transactions, my car buying experiences have been fine.
I should also point out that I am very seldom angry or crave feelings of "moral superiority" with anyone, much less a sales person. As I stated, I will not provide either to the dealership and I explain the reasons why. Once I do that, there is no longer an issue.
Others have covered the difference between buying real estate and buying a car, so I will not say anymore on that subject.
I would like to point out one interesting issue. The auto industry does not have the best reputation and the car sales person has been stereotyped as one of the lowest regarded professions in the U.S. I'm not agreeing or disagreeing with these perceptions just pointing them out.
So when you state:
"Unfortunately, your word cannot go unquestioned because of the unscrupulous people that have preceded you. It's not a personal insult. It's a reality of doing business"
It brings up an interesting debate since that is exactly how many consumers feel about car sales people. Its not that they don't trust the particular person they are dealing with, it's the "unscrupulous people that have preceded you."
So, if you understand why you feel a consumer should give a deposit, then you also understand why a consumer doesn't want to.
Just something to ponder
Jackie
Jackie
Somebody who won't give a deposit will burn you "95% of the time"?
Hard to believe.
However, I have witnessed countless times when "Of course I'm serious or I wouldn't be here" has changed to "OK well I'll think about it" once a price is agreed to.
It appears that much as I'm saddled with the baggage of other's unscrupulous sales practices, you, as a reasonable buyer, are saddled with the baggage of the unscrupulous buyers.
If it wasn't the rule that the vast majority of people will leave without buying after getting their price then the issue of deposits as commitment wouldn't even exist.
Numerous times in my dealings with auto salespeople I have been asked "If my manager agrees to that price will you buy the car?" Actually, I would say the majority of times. Sometimes it followed protracted negotiations, other times a simple offer. Makes no difference how we arrived at that point, the salesman will usually ask for the sale. It's simply good salesmanship. Makes things clear. I believe that a "yes" from the customer at that point should be accepted at face value. I have never been asked for a deposit before the offer goes in for approval.
It's ironic that we're discussing the demand for a deposit in a topic called car dealer dirty secrets and tricks of the trade.
If you've never spent time selling cars I'm sure that it seems incredible to you that even when someone says "yes" they rarely follow through. Yet that's what happens when the typical customer's word is taken at face value.
You obviously do not represent the typical customer if you present your offer the way you say. If salesmen took everything that was said to them "at face value" they would never sell a car. But they'd be great information dispeners.
Oh, and yes it is ironic. Were you thinking the "Inconsiderate Buyers" forum would be more appropriate?
A deposit is an EXTREMELY SYMBOLIC gesture because it emotionally and psychologically indicates a commitment. Any decently trained and experienced sales person knows this. It's not necessarily sleazy tactics, just common human interaction.
Everybody wants to be taken at their word. But not everyone wants to take others at their words. Read that again and think about it. Do you take everyone you meet at their word? Is it reasonable to expect others to do the same? Be honest with us and yourself.
Offering a deposit is a very powerful indication to a dealer that a buyer has made the emotional commitment to make a purchase. It also motivates the dealer to close the sale as the dealer knows that the buyer could still walk out, deposit or no deposit. Any buyer who doesn't realize this and doesn't take advantage of the dealer's vulnerability is making a tactical error.
The problems with purchases begin before a customer sets foot on a car lot. If a customer has not made the emotional, psychological, and mental commitment to buy before they talk to a salesman, then they are already at a significant disadvantage.
The car salesman is 100% ready to sell.
Why aren't car buyers the same 100% ready to buy?
This is where a deal goes bad. It went bad before any deposit was asked for. It went bad because a customer wasn't 100% committed to buy. They might have thought they were, but the offering of money is the true determining factor. Most car salesmen have the desire and ability to keep a deal together and close it but sometimes it falls apart. Sometimes a desire to sell isn't strong enough to overcome the lack of desire to buy. Don't blame the car salesman for that. He's just doing his job.
I just had a $20 million deal fall apart today. I was brought into the deal last week to close it. As I got immersed in the negotiation I noticed the customer putting up more obstacles to overcome. It took me a few days to realise what was really going on. But I've been working hard to keep it together because my company really needs the business.
This afternoon the customer came back with their "take it or leave it" response to my agreement offering. They cut their committed orders and demanded additional concessions. I'll get blamed for not closing this deal (It would have iced a $15,000 bonus for me). But there's not much I can do when the customer proves that they aren't 100% committed to doing a deal.
However, some dealer 15 years ago when I was 21 gave me the run around about getting my deposit check back after I made the deal for the OTD price, it did not include taxes tags or license. (Hmm, doesn't sound OTD to me, now does it!)
So we arrived with my mom to co-sign and they are closed, of course we called and said we would be there at 6pm. We arrived at 5:45, so we kept up out end of the bargain.
So the next day I asked for my check back. They couldn't find it.
Three strikes, dealer is out. I spent the $15 to stop payment and have never gone back since.
Any dealer that asks me for a deposit before they approve of the deal gets that story. If they don't then understand why I don't trust them, they aren't really trying to work with me to sell me the car.
Earn my trust by not playing back and forth games. Show me you are committed to that price. Write me a check for my trade, show me you too are committed to the deal.
Earn my business, arrive at the price, and I'll write the check.
If the sales manager is not convinced that I'm willing to buy, then either the salesman is not conveying my intent correctly, or he should come out and talk to the buyer directly.
It is a people business, right?
So put the people who are negotiating, face to face.
FWIW,
TB
15 years ago an accountant embezzled money from me. I don't trust any accountant now.
15 years ago a plumber didn't fix my faucet properly and then charged me too much. I no longer trust any plumber.
15 years ago a teacher in a local school was charged with child abuse. How can I trust any teacher now.
15 years ago a car dealer screwed me around with a deposit check. Now I can't trust any car dealer.
Maybe those of us posting here don't walk away and honor our agreements just as you honor your agreement and return the check if the deal falls through.
That doesn't mean the rest of the world operates the same way. You want the customer to give you something to prove they are serious and honest in their intent but there doesn't seem to be anything the dealership is willing to give to prove they are serious and honest in their intent.
I liked the 15 years ago thing but maybe you forgot one?
15 years ago a customer walked away after agreeing to a price. Now I can't trust anyone buying a car
Jackie
What I'm saying is that a deposit can be a very powerful tool to help the consumer get what they want. Am I the only one here that sees this?
I should also clarify that I am talking about giving a deposit WITH an offer. I am making the assumption that people savvy enough to be on these boards have the resources at their disposal to determine a realistic offer.
I am NOT talking about, "What's your best price?" "Well, give me a deposit and we'll find out." I don't think this represents the buyers here and is a whole other discussion.
If I was to go buy a car from someone I didn't know tomorrow I would present them with a deposit check in the amount of $500 (with my offer) BEFORE I was asked for it. I know this will convince them that I am definitely a buyer and probably a quick and easy one. People like to do business with people they like and I know that car dealers like people that offer quick and easy deals.
For those using the argument that a deposit is meaningless so they shouldn't have to give one, maybe an example with you as the seller might lead you see it differently: You are selling your own car privately and you want to sell it today. You are asking $10,000 and need to get at least $9000. Two people come by and give you an offer at the same time. Mr. Green offers $9500 but says he has to go home a get the money. Mr. Red says he'll give you $9,300 and shows you a wad of 100's. Now you might accept Mr. Green's offer and hope that he comes back but you will probably take the cash from Mr. Red and give him the car.
Mr. Green seemed like a nice guy and maybe his word was good. But money talks doesn't it?
I'm with those who would not give a dealer a deposit until my offer has been accepted. Again, based on sad experience when a dealer would not refund my check and I had to stop payment on it. Never mind how many years ago that was, once was enough.
Two: The problem is...there is no hard price. As long as that is the case and one of the people in the "negotiations" gets the dollar the other one does not, it will remain an un-friendly transaction, with neither party believing the other.
If you don't concur that we are talking about a hostile transaction...just re- read the posts on this forum. LOTS of anger!
i've bought over 20 cars in my life (2 or 3 were used), and i've never run into that practice.
to be fair most of my buying experiences were good, but if a sales person insisted on a "good faith" check... i'd walk. to many reputable dealerships out there that will gladly do business in a straight up front manner.
Yes, yes, I know. Your word is good and all car dealers are bad. Nothing new there.
Do you have to take it so LITERALLY? I was just making the point that someone showing a greater willingness to buy will get the deal at a better price.
If one bad experience years ago is enough to put you off all car dealers how do you expect salespeople to react when they are faced with equivalent indignities on a daily or even hourly basis?
719b,
Your word is good too? Well, that just about makes it unanimous!
I'm saying that because of my bad experience, so you can't have it both ways.
Just because a dealership may have more experience, it really does not negate the customers prior experiences.
I don't believe every dealer is dishonest. Is it unfair that every dealer has to prove that they are worthy of my business?
Yes and no. It is too bad for you that some bad experiences have caused me to be a bit more cautious than I was 15 years ago. However, many here are professionals and understand that there are some very bad examples in the car sales profession.
For the no part of the above answer. Every professional dealers should be willing and proud of their ability to distinquish themselves in the marketplace.
Lastly, it seems the critics of what I wrote here have focused on the time aspect of what I wrote.
That is a minor detail. Those who focused solely on detail that to pick apart my argument are missing the big picture. It looks like a game to us, the buyer. We feel like we are being jerked around.
Remember what I said, it is a people business. Regardless if our fears and concerns as a buyer are rational, you must persuade me that you are not going to be that dealer 15 years ago.
Or even 15 minutes ago as some have suggested.
Time is simply a number, the experience has lasted a lifetime.
Like bianca2 said, once is enough.
FWIW
TB
I don't think all car dealers are bad, quite the contrary. My last few experiences have been very pleasant. I do find that the experiences get progressively more pleasant the more I know about the car buying process and the more I research details about the cars I'm interested in - including but not limited to price information.
As my last post said, I actually haven't been asked for a deposit the last few times I've shopped. Maybe my sincerity comes through in other ways, I don't know, but I don't seriously negotiate prices until I'm sure I want that particular car. Once I'm in that process, it hasn't taken long to come to a price and a final deal.
But that was years ago when my cash flow governed everything I did.
Most salespeople seem knowledgeable and willing to help, and are willing to reflect back at me the same attitude I go in with. As some have said here before, your attitude when you walk in the door helps determine the kind of experience you will have - just like most of the rest of life!
So, does that mean a salesperson has to make all the allowances here? So people get cold feet? A saleperson now has to cut everyone slack because buyers don't have the emotional maturity needed to make a big purchase?
Isn't this indicative of the mass majority of problems we have in this country....."I have hang up's, I've had bad experiences, I've been lied to, burned, screwed, blued, and tatooed. Now YOU DEAL WITH IT".
Jeez, get over it already! Why anyone would let events from 15 years ago affect them today is beyond my compassion. I'm sorry; call me a cold-hearted jerk. But I am not going to nor never will let the events or actions of another person have any lasting impact on my life.
And I certainly never will let what happened to others have any impact on me whatsoever. I realize a lot of people have been cheated by car salesmen. But that isn't gonna cause me to behave in an unproductive manner. There are lessons to be learned, granted, but I'll take those lessons and become better not bitter.
Car_Man
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Anyway, people have done just what you recommend. They've learned their lessons, they've become better, not bitter, and there's no reason that not giving a check to a salesman to take to the manager has to be seen as confrontational. Just play as it lays, you know?
I work at a Ford store so there is nothing I sell that doesn't have a much better interest rate than any bank. This also means that when someone comes in and says they want to pay cash for a car that offers 0% my first thought is that here is somebody with not a lot of financial smarts. And when they say "I know about the 0% but I don't want to have payments," I hear "Saving money isn't that important to me," and I will set the price of the car accordingly.
If someone tells me they have already got their financing in place it means a)they have poor credit and don't think Ford Credit will finance them, b) that they don't know that we have had 0 % on this car for the last 6 months and probably don't know anything else either, or c) that they read on an internet site that this what you should say to a salesman.
Now this is how I would interpret these things here. I'm not saying this is how the Acura, or Honda, or whatever-brand guy would think.
That's my problem with the auto industry!!!! No truth in adverstising.
Some unscrupulous dealers have tried to get away with MSRP on remaining 2001's. Run, don't walk, away from those guys.
PS. If your in Colorado this is at Don Massey Used cars on Arapahoe
My credit union has a car-buying, consumer help service, and they have a little card with the numbers of when it's better to take the low rate and when it's better to take the rebate. It's not really a cut and dried issue that one is always better than the other.
Therefore, those things I can pay cash for, I do. I realize it costs me money in the long run, but there are more important things to me than money. It's a trade off that I find acceptable
I do understand your point that giving a deposit check can help the transaction and that events from the past shouldn't always overshadow events of the present. But there is also the old saying of "fool me once, shame on me; fool me twice, shame on you." It's the fact that it happened before, it's the fact that it can happen again.
Of course, I'm a bottom line kind of girl
Jackie
Free money is the best money!
You can tell yourself you've paid for it, and you might find a few hundred in there when it is all said and done.
TB