...And dealers wonder why they're so hated!

Discussion in 'Shiny Things' started by Tanshanomi, Nov 25, 2013.

  1. 68deluxe

    68deluxe Long timer

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    I read a story written by a reporter who had to go "undercover" and work in the auto retail sales biz as a prerequisite for a job. There was quite a bit of great insight to what the dealers strategy was (and still is) to sell a car. They would take a sheet of paper and divide into 4 sections (payment, down payment, trade in, purchase price) and when you commit to one they change the rest to maximize their profit. Here is a link to an example, but it is not the original story I read about this.

    http://consumerist.com/2007/03/30/dealerships-rip-you-off-with-the-four-square-heres-how-to-beat-it/
    #81
  2. ImaPoser

    ImaPoser adventure imposter

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    I read about four square a long time ago. I learned the best way to save time and money is to just get up and walk out as soon as you see it. The two closest jeep dealerships both do it. I'll go on the lot to look at models and colors in person, but tell the salespukes to not even bother trying to help me as I won't be buying there. I might come across as a dick, but it saves them from wasting any time with me.
    #82
  3. fastdadio

    fastdadio Still gettin faster

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    :lol3:rofl:lol3 You are no not alone with this way of thinking. Autos are simply an appliance to me.
    #83
  4. macfad

    macfad Adventurer

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    I bought a new truck this last April, during the process the floor manager asked me if I was going to pay cash for it.
    He then said that if I was, go with Ford credit, get an extra $1,000.00 off then pay it off with the first payment. I was amazed that he even asked if I was going to pay cash for it because I certainly don't look like a person that could do that. We did take that deal.
    #84
  5. cbolling

    cbolling Here...Hold my Beer.

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    That is awesome!!!
    #85
  6. rocker59

    rocker59 diplomatico di moto

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    Yeah. Like in "pack of gypsies" awesome.

    :bluduh
    #86
  7. Mercury264

    Mercury264 Once you go Triple...

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    +1

    Funny how some people will do anything for the 'deal'
    #87
  8. Drif10

    Drif10 Accredited Jackass

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    Have you considered a career in used car sales?




    This thread comes at a good time, looking at replacing the wife's car, just started today.

    Keep the stories coming, please. :ear
    #88
  9. RocketJohn

    RocketJohn Hook em' Horns!

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    There are some "powersports" dealers that do not behave this way.

    When I bought my 2013 Super Tenere, I was in and out in 2 hrs, bought it for $1400 off sticker and I got 4 more years warranty, no haggle for another $600.

    GForce on Colfax in Denver.

    They basically told me, "There's nothing in here we sell you that actually need. So why make the process miserable for you?"
    #89
  10. AKjeff

    AKjeff Long timer

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    I've never liked the car trade in shell game. I always do my research before hand. I know what I want for my trade and what the other car is worth to me.

    I saw a used TDI with manual trans on a car lot. They were not to common in SE Alaska and I had wanted one for a while.
    My wife was driving a paid for truck at the time. When the salesman mentioned filling out the loan paperwork I told him there would be no loan, this was going to be a cash deal, the truck and a check for the balance.

    I think they offered me 18,000 for the truck and wanted 23,000 for the car.

    I offered the truck and $3,000. When they asked what I thought the truck was worth I told them they can put any value on it they wanted, their car was only worth that truck and $3,000 cash to me.

    They eventually took the deal.
    #90
  11. UngaWunga

    UngaWunga Mosquito bait

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    Last time I bought a car with my wife... :lol3
    The dealer salesguy had us in the office for a while. It was late in the day, they we're tired, the car had been on the lot for a few months already costing them interest. It was towards the end of the year... etc. They wanted it gone.

    Salesguy finally said, "so, how much do you think is fair for us to make on this deal?"

    My wife immediately said "nothing". Straight face, deadpan, etc.

    Salesguy sighed, made us an offer. We took the financing so they'd get a bonus, then paid it off next week with no fees.
    #91
  12. bassogap

    bassogap Haulin' the kids around

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    I've done exactly that. The sales/finance teams just can't quite understand what it is I'm telling them, usually. No payments, cash deal. Trade, plus $X. Call the trade $1k, call it $5k, it won't matter to the check I write.

    Here's a semi-related Q: say I negotiate a great price for a new car. The next day, it's a used car, with the expected depreciation. But how much? If I paid $1k under the sticker price, and KBB says $2k depreciation for a used car, is that from the sticker or my negotiated price?

    It has to be from the sticker, as the price a buyer paid originally has no relevance in subsequent sales. So...good negotiating leads to better retention of value, as depreciation uses the sticker as the basis for calculation.

    Also: My insurance company asks me what I paid for the car, but replacement value is always based on the sticker price. The state charges me sales tax on the actual price paid, but the registration has a value code based on the original sticker price.
    #92
  13. Garp

    Garp Long timer

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    Depreciation doesn't start from any fixed number. It's not like there is a firm calculation and the vehicle depreciates at 2.0% per month from that number. It depreciates to whatever two parties agree to on the day it's sold.

    Good negotiating leads to better retention of value because you paid less.
    #93
  14. Grreatdog

    Grreatdog Long timer

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    Yep, depreciation is whatever people will pay for your car or bike. We bought a brand new Civic in 1997. It was a beautiful, racy looking little black two door. But the air conditioner exploded the second day trashing a bunch of stuff under the hood and screwing up the interior. The car was in the shop for weeks with us in a loaner. It was never right after that so we decided to unload the POS after just the first couple of months.

    That was one we did not want to be on the hook for with a private sale. We figured it was going to be really ugly at the dealer but wanted to go that route anyway. We went to a Jeep dealer advertising $50 over invoice to blow out their Cherokees. The dealer gave us that price without even trying to upsell us on mudflaps, undercoating, floor mats, etc. That one was the easiest time we ever had buying a new car.

    But what blew me away was our salesman asked if we would consider trading our Civic after negotiating that deal before we mentioned it. He said they could flip it in a few of days at full retail and gave us nearly that in trade. We were honest about mechanical issues but he didn't care. So our car was gone at a fair price, we had our new Jeep a fair price and the dealer got to deal with our lien and paperwork.

    I am sure the dealer made some money somewhere in their dealer holdback or some other factory incentive plus a few hundred on the Civic and likely a cut of an aftermarket warranty on it. They had to. But everybody still walked away happy. Like I said before, sometimes it pays to let sales people do their thing. Which is rarely pleasant but it doesn't cost you anything but a little time to listen and it just might pay off.

    I can't believe I keep defending car and bike salesmen after all my miserable dealer experiences. But the good deals I have had still tell it is worth giving the sales staff a shot rather than writing them all off as universally bad. We wrote a letter to the Acura dealer here commending the salesman we had last year even though we decided not to an MDX.
    #94
  15. bassogap

    bassogap Haulin' the kids around

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    I know that, yes. Of course. But I was saying that book value (KBB, NADA, whatever) has nothing to do with the original sales price. It's based on year, mileage, condition, etc.
    #95
  16. rocker59

    rocker59 diplomatico di moto

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    When I worked in car sales 25-years ago, we used "the difference" and "the payment" methods. Never "the Four Square". Kind of funny to hear people trying to buy on difference and getting a clueless dealer. Difference is great, because you can move the numbers anywhere you want them to make everyone happy.
    #96
  17. Josephvman

    Josephvman I'm the Decider

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    Doesn't the dealer bashing around here ever get old? Shocking! Dealer in business to make a profit. An industry trade magazine giving tips on how to make a profit. The horror.

    Half the posts around here regarding m/c dealers bitch about how they're actually trying to make money; the other half is about how they don't have absolutely everything in stock and top-shelf employees all around. There aren't a whole lot of people who own bike dealerships who are doing much better than barely getting by.
    #97
  18. Josephvman

    Josephvman I'm the Decider

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    Here's a tip if you're trading a car. Go to Carmax (if you have one in your city) and get them to give you an outright purchase offer for your trade-in. Carmax pays borderline stupid-high prices for used cars, significantly more than whatever your dealer is likely to give you in his first offer. They can afford to pay more because they have an opportunity to fully inspect your car before buying it, and you're bringing the car to them. They don't have to buy cars at the auction, and pay $500-600 to transport them, and the inspection gives them comfort level that the typical dealer isn't going to have, so they'll pay more for good cars.

    Most dealers will meet the Carmax trade-value, though they probably won't like it. It's really up to you whether you want to negotiate the new car without the trade, and then drop it on them after you've bottom-lined what you're paying for their car, but that's typically the best strategy to save as much as you can. Dealers have a right to make money, you just don't want them to make all of it on you, so pick your battles wisely.
    #98
  19. fullmonte

    fullmonte Reformed Kneedragger

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    Well, since you're a Ferrari salesman, I'm gonna go out on a limb and guess that your clients aren't usually worried about the monthly payments.:rofl Just out of curiosity, what percentage of your buyers pay in cash? Also, how much dickering goes on when it comes to negotiating prices for 6 figure cars?:ear

    BTW, good advice on the Carmax trade value. It worked for me last spring at a Mazda dealer that lowballed my trade... before revising it and getting my cash.
    #99
  20. Tanshanomi

    Tanshanomi Your Favorite Uncle

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    I e-mailed a personal acquaintance who owns a multi-line powersports dealership and asked him to weigh in on this. He sent back this very thorough and well thought out reply. I think he gives some very valid points to ponder. Here's his point of view:

    Okay, let's get one thing straight: Negotiating helps customers. Yes, I really believe that in my heart, or I wouldn't be in this business. Think about it....If I COULD fix my prices, with no wiggle room, I'd fix them up at a level where I had a nice juicy profit and an easy deal on every sale, not a thin little barebones deal. So by opening myself up to negotiate, I am letting each customer decide what is important to them. I have no blanket terms that defines what a "good deal" is. I have customers who knowingly pay full pop because they've decided they have more money than patience, or they just really don't like confrontation, or maybe they think they'll get preferential treatment after the sale (to a certain extent they will...if you insist on a mini-deal I'll remember and you won't get that extra favor. If you're an out and out asshat to my processor I'll remember that later too.) In my experience, most of the people who complain the loudest about the buying process are the ones getting the best deals out of it. And those other guys who pay a couple of extra percent rather than take the time to call the bank, or pay way over full pop to get a hot model that's in short supply.....they are actually helping YOU. They make my bottom line healthier. They make it easier for me to do a mini-deal for you if you've done your homework and stick to your guns. And they're guaranteeing I will be around in a year or two when you need service or warranty work.

    Secondly, let me make something else clear.....no business ever deals strictly with fixed prices and stays in business. Period. EVERY kind of business, in every field, haggles with somebody. That is an absolute truth of a free market economy. Retail, wholesale, manufacturing, real estate, service...somewhere along the line, they all play hard ball with somebody. The only difference is who they haggle with. All those fixed-rpice retail stores still to squeeze somebody for a competitive edge, you just don't see it. If there's one price for everybody out front, then they're fighting with every supplier at the dock door. Talk to any of Wal-Mart's suppliers about how fair and reasonable they are to deal with. Now, on the other hand.....new vehicle dealerships don't indivually negotiate prices at the manufacturer, pushing back against those costs is pushing on a brick wall. So where's the only place can we can control the margin? On the customer side. We make "dirty" margin, meaning the public is exposed the negotiating process. But don't think that other businesses are more dignified or more honest because they hide their leveraging on the supply side. And fixed price doesn't mean fairer price, you can still regret paying too much at a retail store if you don't do your homework. Some fields, like the replacement window racket, do a really good job of convincing the customer that they're fixed price when they're not. Not by a long shot. That's where people really get ripped off. At least when they buy a new vehicle, people KNOW they need to negotiate.

    I wrote back again and asked him specifically whether he thinks the "fake phone call trick" is dishonest business. He still didn't directly answer the question, but he replied with this:

    Don't get me wrong. I'm not defending dishonest business practices. There are smart dealers and there are scumballs. Customers who truly get cheated have a right to be angry. One thing that crosses the line for me is making verbal promises you know you don't intend to keep.... saying "if it's not in writing it never happened" is a bullshit defense, even if its legally true. But t[I][COLOR=LemonChiffon][I][COLOR=LemonChiffon][I][COLOR=LemonChiffon][I][I]actics like bumping interest rates are not dishonest, just [/I][/I][/COLOR][/I][/COLOR][/I][/COLOR][COLOR=LemonChiffon][I][COLOR=LemonChiffon][I][COLOR=LemonChiffon][I][I][COLOR=LemonChiffon][I][COLOR=LemonChiffon][I][COLOR=LemonChiffon][I][I]unpopular. [/I][/I][/COLOR][/I][/COLOR][/I][/COLOR][/I][/I][/COLOR][/I][/COLOR][/I][/COLOR][/I][I][COLOR=LemonChiffon][I][COLOR=LemonChiffon][I][COLOR=LemonChiffon][I][I][COLOR=LemonChiffon][I][COLOR=LemonChiffon][I][COLOR=LemonChiffon][I][I][COLOR=LemonChiffon][I][COLOR=LemonChiffon][I][COLOR=LemonChiffon][I][I]But how far is too far? Well, how cut throat is the market? Yes, that[/I][/I][/COLOR][/I][/COLOR][/I][/COLOR][COLOR=LemonChiffon][I][COLOR=LemonChiffon][I][COLOR=LemonChiffon][I][I][COLOR=LemonChiffon][I][COLOR=LemonChiffon][I][COLOR=LemonChiffon][I][I][COLOR=LemonChiffon][I][COLOR=LemonChiffon][I][COLOR=LemonChiffon][I][I] DOES make a difference in how hard I'll push customers. [/I][/I][/COLOR][/I][/COLOR][/I][/COLOR][/I][/I][/COLOR][/I][/COLOR][/I][/COLOR][/I][/I][/COLOR][/I][/COLOR][/I][/COLOR][/I][/I][/COLOR][/I][/COLOR][/I][/COLOR][/I][/I][/COLOR][/I][/COLOR][/I][/COLOR][/I]I'd like to be thought of as "nicest" dealer in town, but if I can't stay in business, who am I helping? My customers get an honest deal and [I]99[/I]% know exactly what the terms are. They just get pissed that they swung at the pitch when they might (MIGHT) have been better off waiting for the next one. In that case they have no right to complain after the sale that they don't like the deal. To those people I say grow up and be a responsible adult.