car salesmen

[dzalphakilo]

Why do car dealerships have car salesmen?

Looking for another car, usually put on about 50k a year for work, will run it in the ground. Looking for something with 50-75k on it and try to get a good price and pay cash for it.

Well, stopped at three dealers, EVERY salesmen told me they have to talk with their sales manager about getting the best price out there.

Reminds along time ago when I bought a used truck. Went to five dealers, told them to give me their best price, looked and compared, and bought the truck for what I thought was the best value. Two weeks later after I bought the truck, dealers that I didn't get it from called and asked me if I made a decision. I told them I already bought the truck. Every response was the same..."we'll, if you would of let us known, we would of worked with you". My response was the same to everyone... "I told you to give me your best price, and I assumed you did and for the price you gave me, I determined for the value of what I would of paid, was not worth it".

Now, for better or worse, I guess I'm not very good at negotiating. I ask for a good price, I expect it. Already, I had a dealer come down TWICE in price on a car I'm looking at.

Usually, looking for a used car will first go to the bank to see what they would loan me on the car I'm looking at (have to laugh, they give me three prices as far as value, and I told them I only want to know what THEY think it's worth for the amount they would loan on the car in question). Then check various sources as far as blue book value, then check out a site like auto trader to see where "the market is at" in my area on the types of vehicle I'm looking at. I realize a dealer may be higher than a private seller, but I also always have my local mechanic check out the auto before I buy it. If the seller won't let me have my mechanic check it out, I won't buy it. I also have higher expectations if I buy it from a dealer.

I get an idea of what I should pay, thats when the "fun" starts dealing with these people.

If every "salesman" has to go back to someone else for a price, why not just have "greaters" who show you the car and then you can to to the person "who makes the decision?"

I litterally (sp?) had a salesman go back three times into an office to talk to a guy and then the same salesman comes out to talk to me. I felt like telling the guy "why not just have me go into that office you're going into and talk to the same guys YOU'RE talking to and save us some time".

Venting to some extent, just don't understand the car sales industry particulalry when it comes to used cars.

[Dargo]

It sounds like those dealerships should hire my company. I have tons of surveys that say that buying a vehicle from a dealership is not a pleasant experience. Believe it or not, it does NOT have to be that way! And, it doesn't have to be like Saturn; pay full list of bug off.

You should see what fun I can have with not only a salesman, but his manager if I go into a dealership to buy a car where they don't know me. In 20 years I've seen most everything. I was a professional trainer for two large corporations for a while. That worked well right up to the point where I had a moral issue with what they wanted taught in their classes that I deemed as not exactly moral and because they didn't like me spending one full day (I say more is needed) on teaching sales managers the legal issues of selling a car.

If you want a car cheap, get an attorney ready on retainer, pay me to go with you into a dealership to buy a car (in disguise of course), and I'll help you document all of the illegal things that go on in most dealerships. You may have never heard of the Gramm-Leach-Bliley Act of 1999, but it has considerable bearing on how dealerships must now conduct business. I can tell you for a fact that most all dealerships operate in violation of current laws. It's very complicated to stay in compliance and the compliance issues are often fluid, which makes matters worse. Although it is taking a while, law enforcement agencies are starting to crack down on violations and some enterprising attorneys are seeing big income potential for going after dealerships who violate the law.

[PBinWA]

So Dargo, what do you think of places like CarMax (I think they are mostly in the South East)?

http://www.carmax.com/

I remember them from when I lived in Florida and Clark Howard was mentioning them the other day and he seemed to think they were a good concept.

I HATE buying a car from a dealership. There's a good story on one of the "car" shopping sites by a reporter that went to two different type of dealerships and got a job selling for them. The article outlines all the tactics used by the high pressure high volume dealers and then compares it to a lower volume higher end dealership. I don't have the link for it though.

[dzalphakilo]

By the way, I did try carmax. My supervisor bought a nice Mitsubishi (sp?!) from them some time ago and has close to 290k on it and still going strong (one reason why I did look at carmax).

He (supervisor) spoke highly of carmax, but he used them about five years ago.

What I've found (at least in my area) is that they seem worse than a dealer. Prices were high overall and it seems as if the salespeople really don't care what you think of the price they gave you. Perhaps people think carmax is cheaper because it's not a dealer, but not what I have found.

Perhaps as carmax has grown and become more popular, prices go up. I have seen that before with some businesses. Funny, sometimes a business forgets what got them there in sales to begin with. I don't know (not implying that price is more important than service and quality, but it does play a factor).

[Big Dog]

Pay heed to the Dargo..........he knows his stuff. See the previous thread on the purchase of my sons car. Some good pointers!

http://www.forumsforums.com/3_9/showthread.php?t=3249

[dzalphakilo]

Per Brent on the thread you posted BD...

"It is true that you most likely cannot buy a car for ACV. And, ACV is a subjective figure. Also because of demand and popularity, some vehicles will be easier to buy at a figure that is closer to ACV. For example, a vehicle in high demand right now like diesel pickups will bring several thousand over ACV. If that trend continues, the ACV will 'self correct' in the books and rise in price at the auctions. "

I could be wrong in my thinking, but that is why I'm paying cash for the purchase price, eliminates any variables such as trade in value, finance rates and all the other crap. My thought is "here's the cash, no extra paperwork, give me your best price".

One problem is that I'm looking mostly at Hondas or Toyotas due to the high mileage I will be putting on the vehicle. My expectations are to be able to put at least 120k on the car with minimal service related charges as the vehicle is used.
Seems that these two manufacturers in particular hold their resale value. Thats another factor as well though, I don't trade in a vehicle, I just run it till it drops. To some extent makes sense just to buy something new, but my wife and I feel that it wouldn't be in our best interest to spend that kind of money for a new car with cash, then put 100k on it in less than three years no problem.

[Dargo]

CarMax and AutoNation are both interesting concepts. I know considerable information about both operations and have to be careful about what I say. I will venture to say that, like many large multi-store operations, they are run with an overall similar framework. That structure, or framework, dictates the profit that each location must produce. If the sales manager is not able to get the minimum acceptable gross the pressure will be heavily applied to get the consumer to purchase after market products, which may be of value, but are at highly inflated prices and are generally only valid at select places. In other words, you may buy a very much needed warranty on a repair prone vehicle, but you'll pay double the going rate and their warranty is only good at certain places; that way they can control the coverage as well as the cost of the repairs. I highly advise against "in-house" or "dealer owned" aftermarket programs. You have no recourse if you are screwed.

I could go on and write a book on the car buying process from the customer's point of view as well as write a book on the car selling process from the salesman's point of view, the sales manager's point of view, the store general manager's point of view, as well as the store owner's point of view. The process can end up being a disaster where nobody wins and everyone is angry, or it can be a pleasant, honest, and mutually profitable venture. Hint; most customers do understand that the dealer must make some profit on what he sells, but there is no need to try to make all the profit on one customer! I don't want to get into detail, but the process I endorse and train is a full disclosure process. If the deal goes together, there are no surprises. If the deal doesn't go together, there are no ill feelings and it's just chalked up to "it didn't work out". If it doesn't work out under those circumstances, it is highly likely that the customer may very well come back and try that dealership again in the future. He may not necessarily buy then either, but he won't be offended nor hesitant to try them again. Make any sense? I'm trying to put about a 5 day training session in one paragraph. :o

[Dargo]

Originally Posted by dzalphakilo

I could be wrong in my thinking, but that is why I'm paying cash for the purchase price, eliminates any variables such as trade in value, finance rates and all the other crap. My thought is "here's the cash, no extra paperwork, give me your best price".

Bingo! It's not always possible, but I will always stand (from the customer's point of view) that the "best deal" is to buy a car straight out and with actual cash; no lien. If you are going to borrow any money, it honestly is a good idea to see what the dealership can get for you. An average sized dealership will send more bank contracts to a given bank in one month than you will ever finance at that bank in a lifetime. It often makes sense to give that dealership a break on the finance rate to get all that "paper" (what insiders call a bank contract). Many dealerships are willing to pass that savings along to the customer. Afterall, most dealerships are more interested in selling cars than playing banker. So, don't automatically discount using the dealership's financing if you are going to finance. Just be educated on what is available and be educated enough to recognize what is a good deal and what is not a good deal. If you do your financing through a credit union, it doesn't matter. All credit unions I'm aware of require the auto dealer to pass along their actual "buy rate" (what the money costs the dealer) to their members. It will not cost you more to finance with your credit union at your dealership than directly at your credit union. Besides, it saves the credit union the time and expense to do your paperwork. They often pay the dealer a flat fee to handle this paperwork for them. It won't cost you a cent more, but the dealership may make $100 for doing the paperwork for your credit union. Allowing the dealer to do that just may make them more likely to do you a favor down the road if you need one.

[dzalphakilo]

Originally Posted by Dargo

Hint; most customers do understand that the dealer must make some profit on what he sells, but there is no need to try to make all the profit on one customer!

It would be nice if the dealer would just say "look, here's the price on the vehicle, this is the lowest price we can do per a cash sale and still make money, and we feel that you won't find a better value for the price and service we can give to you. Feel free to shop around at other dealers and private sellers and see if what we're telling you is not true".

Couple months ago had an oil change done on my Toyota truck at a dealership on a Saturday. Reading the paper waiting, saw they had a special that week on their new cars. Looking at a Corrolla (sp?) new for 14k and change. Went into the sales department, and when I left I had a quote for 20k that just pissed me off.

[Gatorboy]

I bought my last 4 vehicles by emailing the dealership and going through their internet department. I bought both my Honda Element and Odyssey for $100 under invoice. IMHO, it's the best way to go.

[Eric L]

Research research research.

I'll determine what I'll pay before I even sit down in the dealership. I've walked out of plenty... sometimes they call me back to try to work it out, but I've usually made the deal somewhere else by then.

Last time my mom wanted a new SUV, we had a predetermined # that we wanted to get to. she let me handle everything except the signatures...it was kinda fun because I was emotionally detached from the vehicle and she wasn't in a bind to buy right away. Walked out of 3 dealers that day, bought the vehicle at the 4th one... when we got home there were voice mail messgs. from all of 'em ..."please come back"

Eric

[Viking]

Originally Posted by Gatorboy

I bought my last 4 vehicles by emailing the dealership and going through their internet department. I bought both my Honda Element and Odyssey for $100 under invoice. IMHO, it's the best way to go.

You drive a Honda Element???????????????

with you in it!!

[Dargo]

Originally Posted by Viking

You drive a Honda Element???????????????

with you in it!!

Why do you think he has such a sour look in his pic?!

[RoadKing]

I snuck up to take this photo. If you look to the left you can see Gatorboy doing his ironing. Nice car though.