Originally Posted by pylon
Exactly my point. People do not have to be a dick to get there, however a large majority of those hagglers tend to fall in that category, and they don't realize their hard attitude is actually hurting their cause. Best price however, does not guarantee the best service or experience. Example... go stay at The Wynn in Las Vages. Get a resort suite, and get a VIP Tower suite. The rooms are virtually identical, but tell me which one provides you with a better experience. And the price difference isn't that big.
Yes and no. You have to remember if they fail to meet those targets, they are left holding a bag, and get nothing. So it is more a bonus to the dealer, not the customer, and is never factored in to the end bottom line. It is not a static number that can be used.
Although a lot of the owners are filthy rich, that money is not typically made on the new car sales side, typically service and parts, where for whatever reason people don't negotitate. The markup on some major repairs, can exceed the markup on the sale of a $50,000 car.
Yes. When we deal with the major commerical banks the reserve can be pretty good. I would say usually avergaging about what was quoted earlier. However, 90% of our financing is captive, meaning the manufacturers in house lender is used, using subvented rates, in our case VW credit. The absolute maximum I can earn on a new car deal is $100 on those no matter the amount financed, which account for virtually all of our new and used business. The only stuff that filters to the regular lenders is off make used, or people that are credit challenged. In most of those cases the reserves on those deals are still low, as we typically will use the banks lowest rates, to keep the deal as close to the subvented rates from VW. Those usually only pay a couple hundred bucks. Where my department makes its money is on warranties, loan insurance, and protection items like 3M etc. The days of making money on the money are long since gone for most dealers.
The biggest chuckle I do get though is when I get people in my office telling me how unreasonable a 4.9% closed rate on a car loan is. "I only pay 3.75% on my 35 year mortgage!!" I will promptly pull up an loan interest calculator and show them how "good" of a deal that is lol. I swear I almost had a lady faint once when she realized 84% of her $1370 mortgage payment was going straight to interest. It amazes me how little people know about the terms of their largest investment.
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