Dealership; Used cars

[Sample00]

Am out of thanks here, but Pylon has done a bang up job explaining the industry. Well done!

[pylon]

Originally Posted by Deegee

The business in general is kind of to blame as we receive some dealership loans at my place of employment and it amazes me in general how often proof of income is outright waived for credit approvals, especially when approving 100% P/P financing on a used vehicle.

It's no surprise that people lie when the system itself often doesn't include checks.

About 30% of our approvals do not require proof of income. And it is never those people that become a problem. I cannot recall the last time someone with Tier A credit has been repo'd voluntarily or forcifully.

It is always the people who you go to bat for and beg and plead with the bank to get approved that bite you in the ass. Regardless of any of that, credit fraud is a federal crime, and because the lender does not ask for you to substantiate your income claims, it does not make it right to lie. If they repo the car and find out your loan was based on falsified info, they would absolutely forward it to the appropriate authrorities.

[Deegee]

Originally Posted by pylon

About 30% of our approvals do not require proof of income. And it is never those people that become a problem. I cannot recall the last time someone with Tier A credit has been repo'd voluntarily or forcifully.

This I agree with.

But once you start approving without proof of income, you set a poor standard, IMO.

It is always the people who you go to bat for and beg and plead with the bank to get approved that bite you in the ass. Regardless of any of that, credit fraud is a federal crime, and because the lender does not ask for you to substantiate your income claims, it does not make it right to lie. If they repo the car and find out your loan was based on falsified info, they would absolutely forward it to the appropriate authrorities.

The dealer financing contracts I've seen are no recourse financing. So you sieze the asset and your avenues of collection are realistically exhuasted.

Now on an actual promissary note the FI would probably get a judgment against the debtor.

[Camronius]

So I thought I'd come back and share my experience. I actually bought 2 cars last week from two different dealerships. All in all I dealt semi-seriously with about 5 dealerships throughout the process.

I found that one very common tactic of the dealer is to try to undervaluate your vehicle (trade-in). Each time, the salesman would low ball the price on the trade-in and then immediately move $500 when confonted about it. It was always $500 and always immediately. With a bit more discussion I was also able to move the dealer another 1000-1200 dollars. (this was on a 3-4k final trade in). This whole portion was relatively simple discussion. I found that there is always a point when negotiating where things go from friendly to uncomfortable. There is definitely more room to negotiate but it's not going to be easy and it's going to get ugly. For me, it wasn't worth it for a few extra hundred here and there. I ended up going as far as I could comfortably and then making a deal.

As for the car's you're purchasing, I found it was relatively easy to "save the gst". I found as a rule if you figure out the GST you would pay, then minus that from the original listed price you could get there relatively easily. For example if the car was listed at 30k, the GST would be 1500. In this case it's relatively easy to get the dealer down to 28.5k+ GST. So instead of the original all in price of 31500, you would end up paying 29925. Finally with a final push after negotiating there I would make an offer at a flat number. So in this case we're close at 29,925 I would make an offer at either 29 or 29.5 and the dealer would accept.

suggestions:

-Make sure to quickly state that your final price is all-in (excluding GST) and you don't want to see any fees added on at the end. Even though you agree on this, the dealer will attempt to add on fees at the end anyways. This will always be a different person then you were originally dealing with and they always claim ignorance. Make sure to review what you're signing and stand strong. In my case the manager added in a 295 security fee, and in the other case the finance guy added in a 299 document fee.

-As part of negotiations try to get other things besides money. For example in both my purchases I got 5 free oil changes. This might only cost the dealer a few bucks, but could have 100-200 dollar value to you. Dealers will often also add in remote starters, or other features that are missing from the car.

-The dealer always tries to negotiate around payments per month instead of the actual cost of the vehicle. The trick is to get you focussed on such a low payment per month that you stop thinking about the total cost. My advice is to call them on it right away. I would say, I'm not financially concerned about payments per month so lets only discuss overall cost. Once you figure out the final cost, then you can figure out payments per month.

-The dealer will try to confuse and distract you with numbers, papers, stats, multiple people. Stay focussed and stand strong. Don't get angry, be friendly. Good luck

[CaptainCrunch]

Couple of things, I am firmly against discounting on anything. I started in retail at FutureShop and was one of the top earners in that company because I sold a lot of product and a lot of warranty.

If a customer is all about asking for discounts, he plainly doesn't see value, if a salesperson at a retail level hasn't done his homeowork he can't get sticker prices.

I remember one guy was trying to hammer me to give him a discount.

Him - "is this your best price?"

Me - "Yes it is"

Him - "I think you can do better"

Me - "Your Jedi mind tricks don't work on me"

Him - "Well if your not going to discount, I'll but it somewhere else"

Me - "Thats great, I can sell it to someone else for what its worth"

Him - "Thats pretty arrogant"

Me - "Yeah, and by the time you drive all over the city trying to haggle 20 bucks off of this computer your going to have wasted your entire day for next to nothing . . . good luck with that"

By the time I was burned on by the future shop on ready to leave I took a much more brutal approach

Him - "Give me a discount or I'll look around for a better price"

ME - "Thats a pretty moronic strategy, good luck wasting your time, gas and money doing that. We have a price beat policy, I already know what everyone else is selling it for, I'll see you when you get back here"

In terms of the car thing, I bought my last car from Pylon and he did a great job of it and the whole process was very professional. I knew what I wanted, I knew the pricing was in line if not slightly better then what I had seen for similar vehicles. He still went to the used car manager and got me a bit better of a deal. He did a great job of going through the financing and vehicle history with me before I signed.

I'm willing to pay a little more for a positive sales cycle, I don't want to have to work that hard, and get all aggravated when I'm making a major purchase. I don't want to have what if thoughts all the way home.

I'm a fairly easy customer if the sales person works to build up trust in a hurry. I'm a pain in the a$$ if I don't feel comfortable.

[bizaro86]

Originally Posted by CaptainCrunch

Him - "Well if your not going to discount, I'll but it somewhere else"

Ever have someone buy something from a different salesman to get a better price? I've found that some salesemen won't negotiate a price out of principal, while some (usually the weaker sales staff) will give you the best price right away if you ask them.

[CaptainCrunch]

In the same organization?

Sure, but thats a scoop and people that scoop deals from their comrades by discounting usually never lasted long.

and I think that salespeople that discount on every single deal aren't showing a good understanding of selling value.

If your too high in the market place and losing business then you have to either understand what your bringing to the table as oppossed to your competition, or sell your organization on giving you a competitive advantage or equaliation.

I think in my time in retail, I can count on one hand deals that I've discounted, or thrown something in gratis.

I will say though, that I had seen way to many really cheesy get the deal no matter what it takes, I've watch wall street type sales man, and they usually lose more deals, or have more deals come back then is usual.

I also always found especially when I was in retail electronics that I created a good referral network where I had people sending other people to buy from me, or when boxing day or christmas deals came up I had a ready list of people that I could call who would come and see me exclusively.

[CaptainCrunch]

Huh?

[amorak]

Futureshop hires exclusively lebanese. You want a deal my friend my friend my friend?

[Sliver]

Originally Posted by CaptainCrunch

In the same organization?

Sure, but thats a scoop and people that scoop deals from their comrades by discounting usually never lasted long.

and I think that salespeople that discount on every single deal aren't showing a good understanding of selling value.

If your too high in the market place and losing business then you have to either understand what your bringing to the table as oppossed to your competition, or sell your organization on giving you a competitive advantage or equaliation.

I think in my time in retail, I can count on one hand deals that I've discounted, or thrown something in gratis.

I will say though, that I had seen way to many really cheesy get the deal no matter what it takes, I've watch wall street type sales man, and they usually lose more deals, or have more deals come back then is usual.

I also always found especially when I was in retail electronics that I created a good referral network where I had people sending other people to buy from me, or when boxing day or christmas deals came up I had a ready list of people that I could call who would come and see me exclusively.

Something is not adding up here, CC. Why would people want to deal exclusively with you if there was not some sort of incentive? I would also think a good sales guy would reward that kind of loyalty, not charge face value on things.

I think in sales there is a time and a place for discounts. If you have a guy that is running all over town to get the best price, you may as well give him a good price or he's just going to keep moving and you and your business won't get anything.

You make up a deal on other customers, as most don't even ask for a discount, or if they do you can just tell them your margins are already tight on that item and they'll accept that. When you get a guy that likes to wheel and deal, let him so long as you keep it fair for you and the company you work for, too.

[CaptainCrunch]

Originally Posted by Sliver

Something is not adding up here, CC. Why would people want to deal exclusively with you if there was not some sort of incentive? I would also think a good sales guy would reward that kind of loyalty, not charge face value on things.

Simply put, I was very good on the retail side of things, especially around qualification, finding what their needs are matching them to their wants and making sure that they understood how the cycle works. To many sales people drop their pants, try to sell the item that they want to sell and end up with disatisfied customers. The best place to set traction in terms of long term relationship building is at the start of the sales cycle, not at the end. If you do a good job of providing personal value, and hitting the mark, you pretty much never have to discount unless you screw things up. And if you act in a professional manner you get good refereals and all you have to do is ask.

Originally Posted by Sliver

I think in sales there is a time and a place for discounts. If you have a guy that is running all over town to get the best price, you may as well give him a good price or he's just going to keep moving and you and your business won't get anything.

I've never believed in the fairness of discounting because you tend to punish the people or take advantage of the people that suck at negotiation, and I've stated that a lot. At my current level of sales, the price is the price is the price. At the retail level, I had the 30 day price matching policy which got me around the discounting effect. At the end of the day, when someone asked me for a discount, I always asked if they discount their services at their job. I also learned that sales people that have discounts as their first or second quiver in their sales arsenal aren't confident or don't believe in their sales ability or in their products price fairness. When I was doing higher end IT sales I would discount a bit on larger orders to regular clients as a tactic in what was a commoditized field. But since that point, I've never done it. I believe in the value versus dollar of what I'm selling and I can convey that. I also firmly believe in the value that I'm offering, and I deserve to get paid for that.

Originally Posted by Sliver

You make up a deal on other customers, as most don't even ask for a discount, or if they do you can just tell them your margins are already tight on that item and they'll accept that. When you get a guy that likes to wheel and deal, let him so long as you keep it fair for you and the company you work for, too.

I see your point, because everyone seems to think that there's a thousand points of profit in every thing that you sell. But usually at a retail level the differences in pricing is like 10 dollars, hardly worthwhile for you to drive around town spending several hours negotiating with. Plus the really good retail sales guys, know how to bounce away from time wasters to people who basically are eager and willing to buy your product at sticker value.

[Mazrim]

Hey CaptainCrunch, how many people that work at Future Shop use the line "I have this, and I love it!" when trying to sell a product and actually have it? I've been given this line so many times that I find it hard to believe that somehow they always seem to have the product I'm looking at.

[Huntingwhale]

Originally Posted by Camronius

-Make sure to quickly state that your final price is all-in (excluding GST) and you don't want to see any fees added on at the end. Even though you agree on this, the dealer will attempt to add on fees at the end anyways. This will always be a different person then you were originally dealing with and they always claim ignorance. Make sure to review what you're signing and stand strong. In my case the manager added in a 295 security fee, and in the other case the finance guy added in a 299 document fee.

-As part of negotiations try to get other things besides money. For example in both my purchases I got 5 free oil changes. This might only cost the dealer a few bucks, but could have 100-200 dollar value to you. Dealers will often also add in remote starters, or other features that are missing from the car.

-The dealer always tries to negotiate around payments per month instead of the actual cost of the vehicle. The trick is to get you focussed on such a low payment per month that you stop thinking about the total cost. My advice is to call them on it right away. I would say, I'm not financially concerned about payments per month so lets only discuss overall cost. Once you figure out the final cost, then you can figure out payments per month.

I can say 100% that this is probably the BEST thing you can do when negotiating a price for a car. I bought my brand new car almost 3 years ago (my 1st new vehicle purchase) and l can honestly say that next time l'm buying a new car, this the 1st statement l will make. I pay just a tad over $500/month for my vehicle. When l first started negotiating the price, it was $360/month. But afterwards, the sales guy added on tax, shipping, fees, etc.

[CaptainCrunch]

I noticed that a lot of them use it now, I hate it when people use that kind of line.

Its just like when I go to buy art and some sclub tells me that he has the same painting at home.

[burn_this_city]

Originally Posted by CaptainCrunch

I noticed that a lot of them use it now, I hate it when people use that kind of line.

Its just like when I go to buy art and some sclub tells me that he has the same painting at home.

Sadly not every stripper poster can be unique.

[Table 5]

Doesn't necessarily apply to used cars, but it looks like today is the best time of the year to buy a new car.

http://www.autoblog.com/2010/11/30/r...buy-a-new-car/

[Sliver]

Originally Posted by CaptainCrunch

Simply put, I was very good on the retail side of things, especially around qualification, finding what their needs are matching them to their wants and making sure that they understood how the cycle works. To many sales people drop their pants, try to sell the item that they want to sell and end up with disatisfied customers. The best place to set traction in terms of long term relationship building is at the start of the sales cycle, not at the end. If you do a good job of providing personal value, and hitting the mark, you pretty much never have to discount unless you screw things up. And if you act in a professional manner you get good refereals and all you have to do is ask.

I totally agree, but price is a component as well.

Originally Posted by CaptainCrunch

I've never believed in the fairness of discounting because you tend to punish the people or take advantage of the people that suck at negotiation, and I've stated that a lot. At my current level of sales, the price is the price is the price. At the retail level, I had the 30 day price matching policy which got me around the discounting effect. At the end of the day, when someone asked me for a discount, I always asked if they discount their services at their job. I also learned that sales people that have discounts as their first or second quiver in their sales arsenal aren't confident or don't believe in their sales ability or in their products price fairness. When I was doing higher end IT sales I would discount a bit on larger orders to regular clients as a tactic in what was a commoditized field. But since that point, I've never done it. I believe in the value versus dollar of what I'm selling and I can convey that. I also firmly believe in the value that I'm offering, and I deserve to get paid for that.

But you're assuming the price is fair to begin with, which isn't always the case. Also, some people like a deal because it makes them feel special to get a lower rate than the guy before them or the guy after them. I don't mind catering to those guys. Plus a guy like that you can usually say - yeah you can have a discount, but I'll need you to buy in bulk or buy thing B as well as thing A to get it.

Originally Posted by CaptainCrunch

I see your point, because everyone seems to think that there's a thousand points of profit in every thing that you sell. But usually at a retail level the differences in pricing is like 10 dollars, hardly worthwhile for you to drive around town spending several hours negotiating with. Plus the really good retail sales guys, know how to bounce away from time wasters to people who basically are eager and willing to buy your product at sticker value.

Yeah, I guess it depends on the item and the margin. I told a guy to take a hike the other day that was trying to grind me down on one of our products. He was cool in that he was upfront about shopping my price around so I gave him a good deal right out of the gate. Once he agreed to my price, he turned into a doooosh and asked me to throw in a couple of other items for free. Absolutely not, I'm not a charity. One of my competitors matched my price and gave him his freebies, too. I was pretty happy with that, though. They won't be a competitor for long giving crap away.

[CaptainCrunch]

Originally Posted by Sliver

I totally agree, but price is a component as well.

Price is a component, thats why we were so thourough in knowing what the price was and how a competitor was willing to negotiate price. If you know that, then its rare that you have to reduce pricing. It also pays to know what the strengths are with your organization so you can value add.



[QUOTE=Sliver;2815401]But you're assuming the price is fair to begin with, which isn't always the case. Also, some people like a deal because it makes them feel special to get a lower rate than the guy before them or the guy after them. I don't mind catering to those guys. Plus a guy like that you can usually say - yeah you can have a discount, but I'll need you to buy in bulk or buy thing B as well as thing A to get it. [quote]

I've always thought that the biggest strength is knowledge when it comes to sales, and FS drilled it into us when I was there, and its something that I've carried on. When I was in retail I made sure I knew what competitor pricing was and drop points, I also made sure I knew how to sell based on our policies (Price Protection). I also had the personal philosophy that it was unfair to punish someone for being a poor negotiator and thats why I believed in a fair price and pricing module. It was always difficult to define bulk in electronic sales, is bult 2 computers or 3 computers, or 4 computers? 2, 5 or 10 T.V's.

I can't recall too many times that I lost deals on price. But it always came down to setting up tap roots for clients in qualification and pre qualification.

I've seen too many sales people that just rush into selling stuff without establishing value, or the relationship between what the client wants to spend and what they want to receive.

Going back in history, I went to Future Shop because I wanted to learn how to sell, and back then they taught you how to sell, and they taught you how to sell based on fair price and not needing to drop your shorts to make a deal, and it was a valuable lesson.

Have I discounted later on in life? Sure I can think of two instances that were based around selling several hundred computers with services in one instance, a another instance involving building an entire infrastructure including servers, switches computers print solutions etc.

But in the corporate world if your sales proposition comes down to strictly price, or discount or I'll shop, your dealing at the wrong level, and your not building an understanding of trigger events that have caused the client to want to buy.

Originally Posted by Sliver

, I guess it depends on the item and the margin. I told a guy to take a hike the other day that was trying to grind me down on one of our products. He was cool in that he was upfront about shopping my price around so I gave him a good deal right out of the gate. Once he agreed to my price, he turned into a doooosh and asked me to throw in a couple of other items for free. Absolutely not, I'm not a charity. One of my competitors matched my price and gave him his freebies, too. I was pretty happy with that, though. They won't be a competitor for long giving crap away.

Sure, but in consumer electronices the margins are pretty thing already, and for every dollar I lose in terms of profit, it would probably be 1/3 of a dollar in commission if I remember my retail formula properly. So if I know what I'm up against, and I've built the value proposition, and I've genuienly sold the client of the product and service and the fit to requirement, I shouldn't have to discount. Is this exactly what your looking for? Is this in the price range we talked about? Then buy it, You don't have to be pushy if you establish the rules of the game.

However I'm also of a fan of the old saying that there's nothing wrong with driving bad business to a competitor. You don't have to get every sale, you have to get the quality sales instead of the quantity.

Anyways, I don't want to derail the thread with my blathering.

[Sliver]

Originally Posted by CaptainCrunch

Buncha stuff

Okay, final word here then and we'll stop with our derail (sorry OP). I agree with everything you said, but I do think playing with price is fine, too. If a margin is thin already, though, forget about it. If a guy wants to save a few bucks and I think he'll walk if he doesn't and he's nice about it, I don't mind dealing. But yeah, I think you made a lot of really good points.

[Traditional_Ale]

Originally Posted by JustAnotherGuy

Anyway, I stood up to walk away from the deal. But of course the wife talked me out of it because she liked the van so much.

I've never purchased a vehicle from a stealership before, but having watched my Dad and Mum a few times over the years I can say in all honesty that I will never ever vehicle shop with my SO. At least three times my Dad has ended up having to purchase some complete POS just because Mum "loves it!" Its how they ended up with a PT Cruiser convertable, a 27ft trailer they've never used, and my Mum always taking my Dad's truck to drive (the only "toy" I can ever recall him buying himself other than a new computer once in a while) rather than the car she forced him to buy for her.

Maybe it's different when you're married or something, but the only vehicle I would ever shop for with my SO would be a mini-van. Anything else and she can buy it herself.