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Marc, didn't Saturn do it that way, back in the day? They are long gone because the cars were not that exciting, but I think many people liked the sales process.
Here is what happened.......it's possible it might be different if all cars were sold flat rate but not likely......
Car A: It's sold on a negotiated basis.
Invoice: $25,000
MSRP: $27,350
Cash value of trade: $13,000.
The dealer shows the customer $14,000 for their trade. (giving up $1000 of the profit)
Car b: Flat rate sale.....
Invoice: $25,000
One price: $26,350
They show the customer $13,000 as a trade. The customer walks as the first dealer was going to give them $14,000.
Getting people to understand that the trade difference was the most important aspect, not the actual numbers.
I always hated when we would have a car advertised at $24,000 and I would show a customer $13,500 trade for a $10,500 difference but the customer would argue that the other dealer was giving them $14,000 but their actual trade difference was $13,500 the same as mine but they started at $24,500.
I even had customers get upset when their actual difference on the same car was more but on paper they were getting more for their trade.
This is where experience, patience and understanding came in. I understood that this is something I did every day but this might be the customers first new car or they only bought a new car every 10 years. It was important to be patient and get the customer to understand......no, not all did.
You are showing exactly why the industry is corrupt. The very fact that there is a secret "holdback" is evidence of the corrupt structure. That is why the auto dealership business is hated and despised. Lots of secrets. Lots of hustle. Lots of con.
The term "holdback" is poetic irony. Because that is what auto dealers are great at: "Holding back" on honesty, transparency, and the cost of their product.
If I received a fantasy statement such as this, I would be quite happy:
Cost of car: $40,000 all-in
Dealer-added items at cost: $2,000
Dealer profit: $5,567
My cost: $47,567
Now I can shop and if the industry standard profit is about 13% of the cost of the vehicle, and that is what they all get plus or minus based on their cost structure, and I am not able to drive any dealer down below that, then I know I am getting an honest deal, the dealer is getting an honest profit, and we can move on.
No secrets, no hidden MTD incentives, no upsells, no holdbacks, no F&I thugs making clerical errors, no con merchant salesmen playing good cop bad cop to rip off some stupid plumber or bank teller who doesn't know any better, no nonsense.
I HAVE NO PROBLEM WITH AN HONEST PROFIT, NO MATTER HOW HIGH. I EXPECT CAR DEALERS TO MAKE A NICE PROFIT ON PROVIDING AN HONEST SERVICE.
I want the ability to operate in a free and transparent market. As it stands, we have the opposite of that, with most car dealerships operating as quasi-corrupt organizations.
I am one of those people that liked the sales process.... Pretty much like going to a retail store without the back and forth. I for one wouldn't mind more dealers offering that experience.
I do also......even though it's been years since I sold cars I enjoy the process and will buy from a salesperson that enjoys it back.
We bought a king size mattress not long ago......a couple places said the price is.......and that was that. A couple places offered something or another.....free delivery.......
We went to one place and the guy said that we would not leave without the absolute best deal around......We negotiated until the lights went dim...lol....I didnt realize how long we had been there. He noted that they were on a timer.....he had stayed past closing time negotiating with me. When I realized that, I shook hands and the deal was done.
If I had a business that operated on sales, I would have tried to hire him away.
You are showing exactly why the industry is corrupt. The very fact that there is a secret "holdback" is evidence of the corrupt structure. That is why the auto dealership business is hated and despised. Lots of secrets. Lots of hustle. Lots of con.
If it was secret you wouldn't know about it would you?
Quote:
The term "holdback" is poetic irony. Because that is what auto dealers are great at: "Holding back" on honesty, transparency, and the cost of their product.
They do not get this money until well after the car is sold and it was put there to help them floor plan an inventory. It's very expensive to do that.
Quote:
If I received a fantasy statement such as this, I would be quite happy:
Cost of car: $40,000 all-in
Dealer-added items at cost: $2,000
Dealer profit: $5,567
My cost: $47,567
I believe you but few would. Most would still say......I'll give you $38,000.....
Quote:
Now I can shop and if the industry standard profit is about 13% of the cost of the vehicle, and that is what they all get plus or minus based on their cost structure, and I am not able to drive any dealer down below that, then I know I am getting an honest deal, the dealer is getting an honest profit, and we can move on.
Very few times is it 13%. Dealers would love this. They would be happy as all get out if they could make 13% a sale. They would probably even buy you dinner and drinks afterwards.
Quote:
No secrets, no hidden MTD incentives, no upsells, no holdbacks, no F&I thugs making clerical errors, no con merchant salesmen playing good cop bad cop to rip off some stupid plumber or bank teller who doesn't know any better, no nonsense.
I HAVE NO PROBLEM WITH AN HONEST PROFIT, NO MATTER HOW HIGH. I EXPECT CAR DEALERS TO MAKE A NICE PROFIT ON PROVIDING AN HONEST SERVICE.
I want the ability to operate in a free and transparent market. As it stands, we have the opposite of that, with most car dealerships operating as quasi-corrupt organizations.
It can never truly be this way when you are talking about an industry that takes trade ins. There is no way to set a single price to cover a trade in. Two 5 year old cars equipped the same with the same miles are many times still going to be worth a different figure. So a guy with a very nice trade in may still get a better deal than you.
You are showing exactly why the industry is corrupt. The very fact that there is a secret "holdback" is evidence of the corrupt structure. That is why the auto dealership business is hated and despised. Lots of secrets. Lots of hustle. Lots of con.
The term "holdback" is poetic irony. Because that is what auto dealers are great at: "Holding back" on honesty, transparency, and the cost of their product.
If I received a fantasy statement such as this, I would be quite happy:
Cost of car: $40,000 all-in
Dealer-added items at cost: $2,000
Dealer profit: $5,567
My cost: $47,567
Now I can shop and if the industry standard profit is about 13% of the cost of the vehicle, and that is what they all get plus or minus based on their cost structure, and I am not able to drive any dealer down below that, then I know I am getting an honest deal, the dealer is getting an honest profit, and we can move on.
No secrets, no hidden MTD incentives, no upsells, no holdbacks, no F&I thugs making clerical errors, no con merchant salesmen playing good cop bad cop to rip off some stupid plumber or bank teller who doesn't know any better, no nonsense.
I HAVE NO PROBLEM WITH AN HONEST PROFIT, NO MATTER HOW HIGH. I EXPECT CAR DEALERS TO MAKE A NICE PROFIT ON PROVIDING AN HONEST SERVICE.
I want the ability to operate in a free and transparent market. As it stands, we have the opposite of that, with most car dealerships operating as quasi-corrupt organizations.
Are you aware that most manufacturers have some form of "holdback". It isn't just the car industry.
The holdback is really there to help pay for things that you are not aware of when it comes to selling that vehicle. It wasn't put in as a super secret profit to dupe customers. Did you know that dealers pay interest if they have it floorplanned? They're paying juice on their inventory so you have product to look at and choose from. If that new truck has sat on their lot for 120 days before they sell it, they have incurred expenses that the average car buyer would have zero knowledge of.
The car industry is the most transparent industry that I can think of. No retailer shows you invoice and "holdback". I'm guessing you have a TV or two in your home. Do you know what invoice was on that TV you purchased? How about on the computer you're using now to type on this forum? What was the invoice on that? That new suit and tie you purchased at Nordstrom's has a markup on it that would make you puke. Ask them to see invoice and refuse to pay their price. I cannot think of one other industry where I can spend a few minutes and do a simple internet search to find out invoice pricing on a particular vehicle.
I look at the boating industry. A decent boat costs as much or more than the truck that is used to pull it to the lake. The expectation isn't there for the boat dealer to just whip out the invoice and show the customer his cost and holdback as a starting point for negotiation. Why is it just the automotive industry that should be opening their books and allowing the world to see what their costs and margins are?
Years ago it could help land a better deal, but not anymore. The dealerships would much rather finance than do cash deals. At times you can negotiate a slightly better deal on the sale price of the vehicle when financing. I get a kick out of car buyers who puff up and say I'm an all cash buyer like they're special and will get a much better deal. At the end of the day it is all the same to the dealership no matter if you are counting out stacks of green or the finance company is cutting them a check. It all ends up in the bank.
I always got a kick out of a customer that claimed to be a cash buyer when what they actually meant they had been pre-approved for a loan already. It's why I simply dismissed the claim in my head. Of course I would say "that is great, one less thing to worry about" but I can't tell you how many times the dealer was actually able to provide the customer a lower rate than they had been approved for, both saving the customer money and making the dealer a little extra.
I went to a Chevy dealer to look at a truck on their lot. I was scouting out my next truck and was a real customer looking to deal, they sent three guys to look at my trade, I had already found the truck I wanted on their lot. The salesman came in and I asked, "So, what number are you putting on my truck ?"....his response, "What is your payoff ?"....I told him "I know my payoff, but want to know the number they put on my truck"....he refused to tell me....got me peed off....he even had the owner introduce himself and said " Tell us what your payoff is, and we'll tell you what your trade is worth....that's the way we work around here"....so I told him how much, got up from my chair and walked to my truck leaving my Wife stunned sitting at the desk.....she told him ?" You had to push....I gotta go, he's leaving". I went down the street 10 miles to the next Chevy dealer and bought a truck that same trip. They called later, and I told them, "you lose, I already bought a new truck". I don't care for the pressure sales.
Quote:
Originally Posted by Yakscsd
What a tough guy! Look out! lol
Nice way to treat your woman too.
I told her when they left to get the owner, if they keep pushing, I'm leaving.....guess she didn't believe me....she was just as peed as I was. Bought / Leased many vehicles before, never had this happen.
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