New Car Sales is a Different World

[Jeffrey Schronce]

In a perfect world, you would be correct, but sales or "victims" are very unpredictable. Sometimes what you may think will be a quiet day due to weather or whatever, is the day that the dealership will have a lot of walk-in's and tire kickers. Like I said earlier, it's the type of job where if you snooze, you lose. Never "assume" anything in sales, and when you think about it, if you take the word "assume" and break it up, it spells out making an "ass" out of "u" and "me"
Another thing is to never judge a book by it's cover. I've seen days where another salesperson had an up, and they would see this "welfare dressed" person in the yard looking at our most expensive model in the yard. I would say "Hey Joe, you're up, there's a guy in the yard looking a car" (he should have been watching the yard himself, instead of chatting with the girl from accounts payable in the coffee lounge) He'd look over, and "assume" the guy was just a tire kicker and couldn't afford that kind of car, and told me to go for it if I wanted to waste my time. I did just that, went out and gave the guy the same treatment as I would any potential, and ended up selling a $45,000 car, "CASH" and had him in the box within the hour. The other salesman had the audacity to try to claim half of my commission. The manager didn't see it that way. I can tell you, Joe didn't give up anymore "welfare looking" tire kickers after that.

I had the EXACT same situtation. Guy gets off the bus carrying brown paper bag. Looks really rough around the corners. Walks to a $40,000 Infinity I30. Everyone refuses to go out there, so I go out. Guy wants a test drive, I walk back in for the keys and everyone is laughing at me. During the test drive the guys says he will take it. I'm thinking, ya right you're credit score is probably 420, but never treat him that way. Go into the box, ask him to complete the credit app and he tells me he will be paying cash. He proceeds to open the brown paper bag which contains not $40,000 but $50,000 in $10,000 bands. Don't know what the IRS response to this was, but I was a happy camper. And I held a HUGE margin on the sale, cause I treated him nice and he really wanted the car.

[Raymonator]

Other salespeople use to think that I was so "lucky" for having so many sold units on the board. Without gloating, I can tell you, that although there is a certain percentage of luck in any sale, to be consistent, luck has very little to do with it. One of the things I use to do on quiet days (or evenings especially) was this. Our dealership offered government emmission tests for any brand of car. I would go to the service department, ask for the list of people who had been in that week for their emmission test. I would then call these people up, my reason being to see if there were satisfied with the way our service department treated them etc. If I got a positive reaction, I would say to them, I appreciate your honesty John or Jane, by the way, what's the mileage on your 2001 Buick ? They'd answer the question (which really didn't mean anything to me) and I'd say something like, "Listen, would you be interested in selling your car because, I have this client who is looking for a car just like yours with that kind of mileage. Believe it or not, 80% of the time, the client would always say, if he or she got their price for it, they'd really consider it. Once I knew that, I would then ask them, if I could sell their car for them at "their" price, would they consider buying the brand I was selling. If I got a potential positive response, I'd ask them to bring their car in for us to evaluate. By this time I know how much they needed to get for their car, and the rest was just finding a new car that they could see themselves driving within their budget. Sold a lot of cars using this technique, yet some other salespeople couldn't believe how "lucky" I was.
There is a CD/DVD course given by Joe Verde, from the U.S. I believe. That man changed my life in how I do sales to this day (even if I'm not in the auto business anymore) The best thing about it is, what he teaches you is to be sharp, organized and honest. You don't have to be a crook to be successful in sales, just a little sharper than your competition or the skaters you work with. Sounding positive about your product, and always having an intelligent answer will definitely give you browny points. Always try to answer a question by answering one back. For e.g. Yes Bill, this car will give you 38 mpg, and didn't you say you commute 60 miles a day to get to and from work ? Imagine the savings you'll get compared to your gas guzzler we'll be buying from you on trade. There is still something said about "earning your clients trust" and giving them the old fashion meet and greet and a great walk-a-round presentation, which way too many salespeople overlook. The car buyer today is much better informed about the product they may purchase, and in some cases know more about the product than the salesperson. With that said, they still like to be "sold" or convinced that they are making the right choice and from the right dealership. Anyway, sorry for giving a sales 101 class. I just get carried away when it comes to sells sometimes.

[just4funsies]

Ray and Jeff, I know that "welfare guy" story well. When I was much younger, I used to play chess with an old guy that my dad knew, while Dad worked to appraise his stamp collection. The old guy worked in his garden, because he loved his flowers, and was usually dressed in overalls or some such. But he was rich, and I mean REALLY RICH, owning tens of thousands of acres of prime FL real estate (even had a Renoir hanging in his enormous house). But he was also plain-talking and ordinary-looking, and drove a beat-up old Maverick. His wife had the furs, jewelry and drove the caddy, but he could really care less about himself. He did love the heck out of her, though, and decided to buy her a fancy new Lincoln for her birthday. Long story short, he was treated jokingly by the sales staff at the local dealer, with a lot of laughing and derision, and comments about his scruffy looks and his beloved Maverick, whereupon he retreated to his office, and within one week had closed a deal to buy the dealership, and promptly fired the whole sales staff! This sounds like an old CW song I once heard ("Frilly Shirt", or something like that) but I can bear witness to its absolute truthfulness, and I use the memory to this day to keep me from underestimating any adversary.

[Raymonator]

Ray and Jeff, I know that "welfare guy" story well. When I was much younger, I used to play chess with an old guy that my dad knew, while Dad worked to appraise his stamp collection. The old guy worked in his garden, because he loved his flowers, and was usually dressed in overalls or some such. But he was rich, and I mean REALLY RICH, owning tens of thousands of acres of prime FL real estate (even had a Renoir hanging in his enormous house). But he was also plain-talking and ordinary-looking, and drove a beat-up old Maverick. His wife had the furs, jewelry and drove the caddy, but he could really care less about himself. He did love the heck out of her, though, and decided to buy her a fancy new Lincoln for her birthday. Long story short, he was treated jokingly by the sales staff at the local dealer, with a lot of laughing and derision, and comments about his scruffy looks and his beloved Maverick, whereupon he retreated to his office, and within one week had closed a deal to buy the dealership, and promptly fired the whole sales staff! This sounds like an old CW song I once heard ("Frilly Shirt", or something like that) but I can bear witness to its absolute truthfulness, and I use the memory to this day to keep me from underestimating any adversary.

Yep, I witnessed similar incidences and have heard hundreds. Some salespeople just shouldn't be doing sales for a living. By learning not to judge potential clients on their looks etc, it also has taught me a valuable lesson in life. Things are not always as they appear.

[scorrpio]

I mean no offense to you guys here, but do most people really still buy cars that way? Go into a dealership, get put in a box and (this is buyers perspective) get bamboozled into paying several grand more than they should?

My way of buying a car:
1. Research on the internet.
2. Go into the nearest dealership, ask for a test drive.
3. When test drive is over and salesman tries to get me into a 'box', give him a funny look and leave.
4. If I liked the test drive, pull up the list of dealerships in the area, and send in quote requests. The bids I get are all at or below invoice.
5. Arrange the deal over the email/phone.
6. Go to that dealership. See the expressions on salesmen faces go sour when I ask for 'internet sales department'.
7. My last car, I bought for cash, but if I were considering financing, I'd secure a loan and insurance before going to the dealership.
8. No, I don't want ANY stupid warranties, rust proofing, or other snake oil.
9. No, I am not trading in. I can sell my current car for 2x as much via craigslist.

Really, what do you think about byers like me? Am I an oddity, or my style is getting more and more commonplace?

[Raymonator]

I mean no offense to you guys here, but do most people really still buy cars that way? Go into a dealership, get put in a box and (this is buyers perspective) get bamboozled into paying several grand more than they should?

My way of buying a car:
1. Research on the internet.
2. Go into the nearest dealership, ask for a test drive.
3. When test drive is over and salesman tries to get me into a 'box', give him a funny look and leave.
4. If I liked the test drive, pull up the list of dealerships in the area, and send in quote requests. The bids I get are all at or below invoice.
5. Arrange the deal over the email/phone.
6. Go to that dealership. See the expressions on salesmen faces go sour when I ask for 'internet sales department'.
7. My last car, I bought for cash, but if I were considering financing, I'd secure a loan and insurance before going to the dealership.
8. No, I don't want ANY stupid warranties, rust proofing, or other snake oil.
9. No, I am not trading in. I can sell my current car for 2x as much via craigslist.

Really, what do you think about byers like me? Am I an oddity, or my style is getting more and more commonplace?

With all due respect, most car sales guys hate clients like you, and probably won't give you time of day once they realize you're onto them. Personally I think your way of buying a car is bang on, but to be honest 95% of the people don't take the time to educate and enquire before buying a car like you or I do. Most younger couples today both work, and all they want to know is how much for their trade, and how much per month the new car will cost them, which is sad.

[scorrpio]

95% of the people don't take the time to educate and enquire before buying a car like you or I do. Most couples today both work, and all they want to know is how much for my trade, and how much a month will the new car cost us, which is sad.

That is what, in fact, amazes me. All they need to do to get a far better deal is about an hour of web surfing from the comfort of their home.

[Raymonator]

That is what, in fact, amazes me. All they need to do to get a far better deal is about an hour of web surfing from the comfort of their home.

It amazes me too, but, that's just the way it is. So the bottom line is, people haven't been screwed enough I guess, because it happens everyday in North America. What gets me, is that these rapid buyers, are the same that blame the dealership or salesperson for shafting them. Can you really blame a salesperson for doing his/her job if you really haven't done your homework ? I think not. With today's Internet provisions etc, you the consumer, should know better and be better informed about purchasing anything. If you don't take the time to do that, then you can't really blame a hungry salesperson for trying to make the most out of your ignorance (although I admit it's not right) but, this sadly is the real world we live in. I remember a sales manager telling me when I first started working in the car business. He said, "good guys finish last" and you know what ? He was bang on right. Another thing that is unfortunate between consumer and retailer is that there is no more loyalty. The word loyalty used to mean something, but now, nobody seems to know the meaning of the word (both consumer and retailer) so, everybody feels, let's get what we can now, and we'll see what we can get next time, elsewhere if need be. It's a double sided sword.

[Jeffrey Schronce]

Most younger couples today both work, and all they want to know is how much for their trade, and how much per month the new car will cost them, which is sad.

Wow. Most of my customers didn't even care about that. Monthly payment was king (and also the best way to sell a car, worst way to buy!).

Your way of buying is definately the way to go. Much easier than the old way, which can still yield a great deal. Just keep walking out the door and let them chase you down the road. Even back in the early 90's when I was in college and selling cars we hated highly educated consumers. Especially Consumer Reports spewing people. I DID however like the people who bought cars through Sams Club and some of the other buyers programs out there. There was a lot of margin still left in the deal and all I had to do was tell them about their great deal and put the keys in their hands.
Funny thing about loyalty. Loyalty costs you money as a consumer. When you buy a car and take it back to the same dealership for service, inspections, oil changes, etc and always buy your cars there because they are "good people", I can assure you that you are getting hosed. Like Ray said, no salesman like to foster relationships with people they can't make money off of.
BTW, warrenties are a huge rip off unless you take the offer price and half it (which is the approximate margin). Remember warrenties are not insurance, so pricing is not regulated by any entity. They can charge 1 person $5000 and the next person $500 for the same warrenty. Also, look at what the manufact is offering as far as standard warrenty. My mother and father in law bought a 4 year bumper to bumper for over $1000. The new car had a 3 year bumper to bumper and 5 year powertrain warrenty, so they basically paid $1000 for 1 year of extra coverage above the powertrain warrenty.
Life and disability policies, while regulated by State Depts of Insurance, are grossly overpriced. Besides, don't buy a life or disability policy to protect one item. Buy a policy to cover your total needs. Also remember Disability is much, much more likely than death. Having something happen to you without disability insurance is often called a living death.

[Raymonator]

Wow. Most of my customers didn't even care about that. Monthly payment was king (and also the best way to sell a car, worst way to buy!).

Your way of buying is definately the way to go. Much easier than the old way, which can still yield a great deal. Just keep walking out the door and let them chase you down the road. Even back in the early 90's when I was in college and selling cars we hated highly educated consumers. Especially Consumer Reports spewing people. I DID however like the people who bought cars through Sams Club and some of the other buyers programs out there. There was a lot of margin still left in the deal and all I had to do was tell them about their great deal and put the keys in their hands.
Funny thing about loyalty. Loyalty costs you money as a consumer. When you buy a car and take it back to the same dealership for service, inspections, oil changes, etc and always buy your cars there because they are "good people", I can assure you that you are getting hosed. Like Ray said, no salesman like to foster relationships with people they can't make money off of.
BTW, warrenties are a huge rip off unless you take the offer price and half it (which is the approximate margin). Remember warrenties are not insurance, so pricing is not regulated by any entity. They can charge 1 person $5000 and the next person $500 for the same warrenty. Also, look at what the manufact is offering as far as standard warrenty. My mother and father in law bought a 4 year bumper to bumper for over $1000. The new car had a 3 year bumper to bumper and 5 year powertrain warrenty, so they basically paid $1000 for 1 year of extra coverage above the powertrain warrenty.
Life and disability policies, while regulated by State Depts of Insurance, are grossly overpriced. Besides, don't buy a life or disability policy to protect one item. Buy a policy to cover your total needs. Also remember Disability is much, much more likely than death. Having something happen to you without disability insurance is often called a living death.

Couldn't agree with you more. Rust proofing is another major rip off. Most new cars have a hidden rust warranty that will cover the first 5 years if rust occurs. An extended rust proofing will cover 7 BUT, the rust must start from the underside of the car. In other words, if you get a stone chip or scratch on the exterior, and it starts to rust, their defence will be that the the warranty doesn't cover "surface rust" which we all know major rust starts from the underside of the car. These extended rust protections can cost a consumer up to $2000.00. I can get my car painted completely for less than that should my warranty be over and the car starts to show signs of rust. They also know that the average consumer will trade the car before it is 7 years old, so the chance of someone actually making a claim are rare. That said, when you buy a new car, they try to sell you the idea that you will enjoy this car for many years (10 or more) Truly stay away from the F & I people when buying a new or used car. Just don't tell the salesperson you won't be interested in those extended whatevers until you've settled on a price, in fact, lead them to believe you will probably take everything under the sun. Then once you get into the box (after the agreed price has been put on paper) tell them you're not interested in anything but just purchasing the car.

[just4funsies]

I don't even waste my time with the dealers any more. I know they are on a mission to seperate me from my wallet, and that's to be expected. So I don't waste their time or mine. I go to an auction specialist that I trust, and he shows me the listings, takes me right to the car if I'm interested, goes over it with a fine-tooth comb (including a paint thickness gauge) and tells me of anything he doesn't like the looks of. Then he runs a CarFax if I want him to, and either bids on my behalf, negotiates directly with the listing dealer if he knows them (he usually does) or we do it again next week. I pay him his share of the auction fees if we win, plus a couple of hundred bucks for his trouble. It's a great headache-saver **IF** you find somebody you can trust, who will not bullshit you.

[scorrpio]

Another item: accessories. Just out of curiosity, I asked for the accessory price list when bying my last car. The prices were roughly quadruple over what I could get over internet to install myself.
I myself installed: fog lights, roof rack, security system, cargo net, wheel locks, front mud guards and I think a couple other things - and total price came out to what I'd pay for the fog lights alone at the dealer. The item that impressed me most was cargo net. Price: $25, installation involves snapping four plastic clips over the loops in the cargo area. Dealership install price: $90. Ouch.

Far as loyalty goes, it meant something when businesses were small and cared for individual customer retention. Big businesses are no longer loyal to the customer, and many customers have wised up to respond likewise.

[430752]

last time I bought...

Last time I bought (3 mos ago) I had the first really good experience of my (young) life. We had rec'vd an internet quote for a Honda Pilot from Planet Honda (a local biggie) which was at edmunds invoice. I know abotu holdback and advertising and etc., but figured invoice was as good as I would get. Went to the dealer, admittidly w/o "appointment", and the salesman was tied up. Not a scam, but tied up. He was nice enough, but couldn't help. Waited an hour thinking he'd put someone onto us, but nothing. He wouldn't release us to somone else. So we walked, he didn't follow. Maybe the quote was a teaser. Anyway, I was gonna go home and return on a dead day, but my wife suggested a dealer in nearby madison. I thought now way, but we approached it honestly and got a good guy. We told him we had a great quote, that we understood it was an internet buy and that he might not be able to match it, didn't want to waste his time, etc. He saw the quote, choked, and gave it the run by to the manager. We actually got it without hassle, without trying to tease it up, without any bs. I guess they saw it as an opp'ty to steal a customer? Well, whatever, it was great since it was done wihtout a hastle once he qualified us in terms of if we match it will you buy it. We did.

Also had a decent experience the time before last, where I also got an internet buy. I used ford's online inventory review system and found a manual tranny focus loaded (what I wanted) in a location that wouldn't sell focii, wouldn't sell manual tranny's, and wouldn't sell em loaded if they did. Got an internet price at $100 over invoice, picked up car next day. Allowed dealer to write the paper once they agreed to match the rate I walked in with from my credit union.

These are a lot different than previous 2 or 3 prior times buying. Usually got the run around, the "box", the switcheroo, etc. Two times ago I actually went into the box with my own four square (or whatever they call it) and tried to use it on them. I enjoyed it at first, until I realized that all I did was piss off the salesman, who brought in a "closer", wasted at least two hours, and I walked out. My little attempt to turn the tables just ended up costing me a few hours' time. So I went to another dealer and played dumb, got a decent price, but I realized to buy I couldn't beat them at their own game.

now, internet only for me! But I've heard that they almost expect the caucasian college types to do that up here in NJ, and only sell at close to sticker or similar high prices to minorities who might not be as savvy or to working class who may have credit problems. Well, whatever. It still sucks when I can recite the differences in the trim lines on a particular model better than the salesperson.

curt j.

[Cody.h]

Compared with all of the other jobs I've had this one is a different world all together! So far the bosses have made it a point to tell us "green peas" to "stay stupid" and a lot of time is passed standing around talking with sales guys and bosses waiting on "ups". Once an "up" is greeted you have to get them in the "box". It is supposed to take about 20 "ups" to get one in the "box" but once in the "box" 80% of the time you will get a "close". Hours are 8:30 am to 6 pm and 12 noon to 9 pm every other day, 6 days a week. If I don't die from sore feet it will be from boredom I've never worked a job where they said to stay stupid and mean it Seems the less you know about selling cars the better you do They expect us to sell at least 8 vehicles a month with perks for selling more. Perks like days off! They turned my group loose on thursday and each of us has sold at least 2 cars with one getting 3. I've learned that the salesman doesn't really make much from the car sale (maybe $300 average) but makes a fair amount if you sell more cars, bumping you up into a higher percentage per car.
More cars= more money= days off.
Needless to say shop time has grinded to a halt. My feet were too sore to get out there today :-(

As a Service Advisor in a Lincoln/Mercury dealership I just gotta comment on this thread!

Sales dept. hours is main reason I don't sell cars..they bascially work 8:00 to 8:00 6 days a week. I work 7:00 to 6:00 and 8:00 to 12:00 every other Sat. I'm off today but sales is there all day. I still work long hours but am usually pretty busy..I'd die from boredom selling cars.

Most car salesman I've met didn't have a problem with the stay stupid part...it just came naturally!!

Originally Posted by just4funsies
Ray and Jeff, I know that "welfare guy" story well. When I was much younger, I used to play chess with an old guy that my dad knew, while Dad worked to appraise his stamp collection. The old guy worked in his garden, because he loved his flowers, and was usually dressed in overalls or some such. But he was rich, and I mean REALLY RICH, owning tens of thousands of acres of prime FL real estate (even had a Renoir hanging in his enormous house). But he was also plain-talking and ordinary-looking, and drove a beat-up old Maverick. His wife had the furs, jewelry and drove the caddy, but he could really care less about himself. He did love the heck out of her, though, and decided to buy her a fancy new Lincoln for her birthday. Long story short, he was treated jokingly by the sales staff at the local dealer, with a lot of laughing and derision, and comments about his scruffy looks and his beloved Maverick, whereupon he retreated to his office, and within one week had closed a deal to buy the dealership, and promptly fired the whole sales staff! This sounds like an old CW song I once heard ("Frilly Shirt", or something like that) but I can bear witness to its absolute truthfulness, and I use the memory to this day to keep me from underestimating any adversary.

Seen this kinda thing happen and sales managers lose jobs over it. Here in cotton country you never know by looking at a person or the car they're drving. I had one of my favorite customers buy a new TownCar finally..they had a great year cotton farming and came in one afternoon in the old 97 TownCar. It was covered with mud...he's dressed in coveralls and a John Deere hat...she's in jeans and sneakers. The car is squeaking in the front and running rough...it only had 137,000 on it. Needed ball joints and tie rod ends(no grease fittings..so stupid...but thats another story) and plugs and wires...everything still original. I go to tell them whats wrong but they told me its our car now...bought a new TCar off the showroom floor. I always tell people that the service dept is not next to the showroom floor by accident!! The salesman told me later they paid cash and thet the couple owned like 3 sections!! that they farmed..would never know by looking at them.

The Town Car they bought was all dressed up..Full top, stainlees steel wheel well mouldings and panels and chromed wheels..talk about high gross! The profit margin on accesories is like 400% on the little add on sticker...they usually sell for about 200%.

[Cody.h]

Originally Posted by Jeffrey Schronce
Wow. Most of my customers didn't even care about that. Monthly payment was king (and also the best way to sell a car, worst way to buy!).

Your way of buying is definately the way to go. Much easier than the old way, which can still yield a great deal. Just keep walking out the door and let them chase you down the road. Even back in the early 90's when I was in college and selling cars we hated highly educated consumers. Especially Consumer Reports spewing people. I DID however like the people who bought cars through Sams Club and some of the other buyers programs out there. There was a lot of margin still left in the deal and all I had to do was tell them about their great deal and put the keys in their hands.
Funny thing about loyalty. Loyalty costs you money as a consumer. When you buy a car and take it back to the same dealership for service, inspections, oil changes, etc and always buy your cars there because they are "good people", I can assure you that you are getting hosed. Like Ray said, no salesman like to foster relationships with people they can't make money off of.

Being a stand alone Lincoln/Mercury dealership is much different then most dealerships. TownCars and Grand Marquis are our bread and butter so obviously we have a older customer base. Ford is trying to change that but the results haven't been too promising yet. Its a tough business... SUV sales are bascially nothing now with gas prices so high..we haven't sold a Navigator this month...how'd you like to be paying 9% floor plan interest on a lot full of cars that you can' t give away!!

Buying on payment price is how used cars are sold for sure at our dealership but not so much on new cars. I saw a demographic report a couple of years ago that the average Ford dealership had 13% of customers pay cash...ours was 38% and sales tells me the balance is on 3 year notes mostly.Also 60% of TownCar owners don't even consider another car when they replace a vehicle. When Ford was running the 0% interest sales would try to convince people to take the 0% and keep they're money in the bank but most customers didn't...they hadn't had a car payment in 20 years and were not gonna start again.

I have to disagree completely with the loyality statements though. You eventually have to buy a car and it will need to be serviced so why would you not take back to where you bought it? People have this notion that the dealership is higher priced then the aftermarket but at least here in Lubbock all the car dealerships are competively priced with the aftermarket. We get 75.00/hr labor and the Firestone's here in town charge 79.00. You can bring your car to us in the AM and we'll take you to work...call you when we find the problem or its ready and pick you up when its convient for you to get your car. If it has to stay overnight for a repair we usually loan customers a car if they need it. Try getting that kinda service at Midas.

I know that our dealership is an exception anymore...but I know we treat our customers very well. I've personally went out and boosted off customers cars after hours or stopped by they're house on the way home to program a garage door opener.Sure I make my living off of them if you wanna look at it like that but I look at it like I'm helping them with the 2nd biggest investment they have. I work hard at keeping my customers and am proud that when my Wife and I see them out in town that I can walk up to them shake they're hand and call them by name. I know I've never ripped them off or sold them something they didn't need...makes it real easy to go to sleep at night!!