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Old 10-19-2013, 08:52 AM
 
2,928 posts, read 3,539,634 times
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Doesn't Kia and Hyundai new sales have a flat non negotiable sales price? That's probably the best thing the makers can do. Set a price at for the entire nation for each model so people don't feel cheated.
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Old 10-19-2013, 09:31 AM
 
Location: Henderson, NV
5,314 posts, read 7,767,123 times
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Quote:
Originally Posted by ddrhazy View Post
Doesn't Kia and Hyundai new sales have a flat non negotiable sales price? That's probably the best thing the makers can do. Set a price at for the entire nation for each model so people don't feel cheated.
The model hasn't worked for some reason. One would think it would. Look at Saturn. They had no negotiation. The funny thing is, they made more profit per car (percentage-wise) than many other brands. You're right, people didn't feel screwed, although they were giving the dealership more profit than on a comparable priced car that had a negotiable price. The problem was, they still couldn't sell enough to remain in business.

Like I said earlier, if everyone paid MSRP, then it would level the playing field. But the dealers starting back in the 1960s allowed negotiation, and that's when it became the job of the dealership to get as much money as possible for the car, and the consumer to try and get it for the least amount of money. A good salesperson will negotiate in a way that the consumer feels they got a good deal, and the dealership still makes a profit.

Profit has become a dirty word, for some reason, as if car dealerships, in many consumers' minds, don't deserve to make any money on their product. I can't even count how many times people would come in and ask how far below invoice we would be willing to go. But they have been conditioned to do so in this industry.

Can anyone imagine going to Smith's and asking how much they paid for their apples, and then offering 5 cents below that?
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Old 10-19-2013, 09:40 AM
 
Location: Henderson, NV
5,314 posts, read 7,767,123 times
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Quote:
Originally Posted by von949 View Post
I can't stand that. Just because I purchased a car from you 2 years ago does not mean I am ready to buy another from you again. Stop calling, e-mailing and sending notices in the mail.(not you BWNLV). The salesman at the shoe store does not call me back, the server at the restaurant does not call me back, My realtor does not call me back(just e-mails)...

With all the research out there now, cars pretty much sell themselves. Anytime I go to the dealership I already know the make-model-year range-price range of the vehicle I am looking for. With a simple phone call, I can find out exactly what a dealer has on his/her lot. What do we need the car salesman for? Test drives?
Good points, but car salesman are there for much more than test drives. The percentage is fairly high of people who come in looking for a particular model, and end up driving home with something completely different. A salesman can show the pros and cons of each particular model and help determine which would be best for your needs. Their main job should be showing the features and benefits of any particular car so you know what exactly it is your are considering. They then are responsible for all paperwork to make sure that part of the transaction goes smoothly.

Other than a house, a vehicle is normally the 2nd largest purchase a person makes. A good salesperson can make that purchase enjoyable and easy. And, remember, they are working on commission. Without follow up, what are the chances you would remember their name and recommend them to others, or even go back yourself? Salespeople who follow up with their customers have a much higher repeat and referral rate, thus making a good living for them and their families. I think that would be encouraged in an economy that is in such terrible shape. If you don't want them to call, just tell them. They will stop. Salespeople are not telemarketers who get paid by the dial. They don't want to waste their time any more than you want your time wasted.
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Old 10-19-2013, 10:28 AM
 
Location: Here and there, you decide.
12,908 posts, read 27,931,486 times
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Quote:
Originally Posted by ddrhazy View Post
Doesn't Kia and Hyundai new sales have a flat non negotiable sales price? That's probably the best thing the makers can do. Set a price at for the entire nation for each model so people don't feel cheated.
No...it's negotiable.... Only Scion. Maybe a particular dealer has a no haggle policy.
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Old 10-19-2013, 11:24 AM
 
Location: ( ͡° ͜ʖ ͡°) (╯°□°)╯︵ ┻━┻ ̡
7,112 posts, read 13,134,711 times
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Quote:
Originally Posted by Raiderman View Post
Good points, but car salesman are there for much more than test drives. The percentage is fairly high of people who come in looking for a particular model, and end up driving home with something completely different. A salesman can show the pros and cons of each particular model and help determine which would be best for your needs. Their main job should be showing the features and benefits of any particular car so you know what exactly it is your are considering. They then are responsible for all paperwork to make sure that part of the transaction goes smoothly.

Other than a house, a vehicle is normally the 2nd largest purchase a person makes. A good salesperson can make that purchase enjoyable and easy. And, remember, they are working on commission. Without follow up, what are the chances you would remember their name and recommend them to others, or even go back yourself? Salespeople who follow up with their customers have a much higher repeat and referral rate, thus making a good living for them and their families. I think that would be encouraged in an economy that is in such terrible shape. If you don't want them to call, just tell them. They will stop. Salespeople are not telemarketers who get paid by the dial. They don't want to waste their time any more than you want your time wasted.
It should be up the the dealers/salesman to make the car buying experience more enjoyable(less stressfull) for consumers. I understand that a salesman's job involves more than just test drives. Maybe understand that some customers just want to 'browse" the lot to check out the new models before actually deciding to purchase. Consumers can browes shoes stores, clothing stores and furniture before making a purchase. Seems that car salesmen do not like this at all, or so I have heard. Carmax will let you walk their lot and will leave you alone until you need them.

Also, why do car salesmen feel the need to over dress? A suit and tie in the middle of July? This can also be intimidating to buyers. How about some cargo shorts and a Hawaiian shirt? T-shirt and jeans maybe? I guess a suit and tie makes sense for selling high-end cars... But for a pick-up truck? (Carmax gets this right too. Just kaki shorts and polo shirt in the summer)

Same thing with these over dressed real estate agents in the summer months.
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Old 10-19-2013, 11:41 AM
 
15,801 posts, read 14,414,927 times
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Well for one thing, the cost of other consumer items isn't regularly published. I can find invoice pricing on a car in seconds.

Of course, this has become a game too. Invoice price isn't really what the dealership is paying any more. There's a lot of money flowing back to the dealers from the mfgrs, (or not flowing the other direction), the falls under the category of what I heard of begin call "trunk money." So the dealers are making more on the cars than it would appear. And, of course, none of this money is used in calculating the salesman's commission. They get screwed on this.

Quote:
Originally Posted by Raiderman View Post
The model hasn't worked for some reason. One would think it would. Look at Saturn. They had no negotiation. The funny thing is, they made more profit per car (percentage-wise) than many other brands. You're right, people didn't feel screwed, although they were giving the dealership more profit than on a comparable priced car that had a negotiable price. The problem was, they still couldn't sell enough to remain in business.

Like I said earlier, if everyone paid MSRP, then it would level the playing field. But the dealers starting back in the 1960s allowed negotiation, and that's when it became the job of the dealership to get as much money as possible for the car, and the consumer to try and get it for the least amount of money. A good salesperson will negotiate in a way that the consumer feels they got a good deal, and the dealership still makes a profit.

Profit has become a dirty word, for some reason, as if car dealerships, in many consumers' minds, don't deserve to make any money on their product. I can't even count how many times people would come in and ask how far below invoice we would be willing to go. But they have been conditioned to do so in this industry.

Can anyone imagine going to Smith's and asking how much they paid for their apples, and then offering 5 cents below that?
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Old 10-19-2013, 12:24 PM
 
1,966 posts, read 4,334,364 times
Reputation: 1090
Good thread, what Raiderman has said in his posts are 100% spot on.

I was in the business for a few years starting as a cashier at a Cadillac dealership in Charlotte, moved to a service advisor position then got transferred to Oldsmobile. One thing about sales people is that quite a few are the most degenerate gamblers on the planet as well as skirt-chasing drunks. A sales guy could get fired one day and be back on the floor a month later.

When I moved to Virginia, I sold Acura's for a while. My experience is that one can make a lot of money BUT as in any sales job it takes time to build a clientele where you don't have to play vulture in the lot and take "ups". It is extremely cutthroat and one has to expect getting squeezed out of a 1/2 deal with another salesperson even if you did all the work.

So yesterday, DW and I spent the morning at the new Sahara CJD at Sahara/Decatur as we are looking to replace our Trailblazer with a Durango. This dealership posts the "no haggle" price tags on the mirror but because they are new they have no 2014's, just 2013's. We drive the top of the line Citadel model which while equipped as we want, has a tan interior which is no go for DW. DW tells salesperson (who is wearing a Stetson) to find a white exterior and ebony interior as our Trailblazer, meanwhile they look at the trade value of the Trailblazer.

So Cowboy salesperson comes back with a vehicle location report that is highlighted and DW takes a look at the highlighted part which says "Tan Seating" to which she loses it and we leave. The most frustrating part is that 2 hours later, she gets a call from a dealer rep who calls her by another pname, she hung up on them
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Old 10-19-2013, 01:15 PM
 
Location: Henderson, NV
5,314 posts, read 7,767,123 times
Reputation: 3568
Quote:
Originally Posted by BBMW View Post
Well for one thing, the cost of other consumer items isn't regularly published. I can find invoice pricing on a car in seconds.

Of course, this has become a game too. Invoice price isn't really what the dealership is paying any more. There's a lot of money flowing back to the dealers from the mfgrs, (or not flowing the other direction), the falls under the category of what I heard of begin call "trunk money." So the dealers are making more on the cars than it would appear. And, of course, none of this money is used in calculating the salesman's commission. They get screwed on this.
The sad thing is, people expect a dealership to survive on selling cars at invoice, or even $500 over invoice. "trunk money" as you call it is money from the manufacturers that help dealerships be competitive. Some is volume-based, some is based on their CSI (Customer Satisfaction Index).

I was the GSM for Lexus for many years, so saw the true profit on the vehicles we sold. Salespeople know up front what their pay plan is. Holdback is used by the dealership to cover expenses for the most part. Salespeople get paid on the profit made from invoice up, not on operating income.

Yes, you can find out the cost of a car. What it comes down to is are you willing to offer the dealership a fair profit. Is a 1% profit fair on a $50,000 car? Unfortunately, most people are conditioned to think they are getting "screwed" by giving a dealership a profit. It is all culture and conditioning. Again, think back to when you bought your DW a diamond ring. On average, jewelry stores work on an 800% markup. So an $8000 ring costs them $1000. Do you offer $1100? Most people are offered 10%-20% off and think they got a great deal.

Just like Saturn's 1-price policy. They had between $2000 and $3000 markup in every single car. But nobody felt screwed paying sticker price for the car, because that was the only way to buy them. I sold or managed the sale of $35,000-$115,000 Lexus for over a decade. Every single day, people would ask to buy one at invoice. Again, not blaming the consumer, as that is how we have been conditioned. And I have been out of the business for a few years now, and will be replacing my car in a couple of months. My car buying experience is always extremely easy and stress-free. I make a phone call to a friend at whatever brand at which I'm looking, find invoice on the car, see what the market is averaging for profit on that model (varies by region), offer that price, and drive home. Do I probably pay a few hundred too much? I'm sure. But my time is too valuable to sit for hours going back and forth to save a few hundred. Plus, I realize that I am helping the local economy and enabling the salesperson to make a living. It doesn't have to be combative or unpleasant. It's just a transaction, unless the dealership is exceptional, then it will turn into a relationship and make leasing my next one even easier.
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Old 10-19-2013, 01:31 PM
 
15,801 posts, read 14,414,927 times
Reputation: 11861
^
There's a flip side to this. Yes, the overall transaction may be $X0,000, but...

The dealer isn't shelling that out. Their inventory sits on floorplan financing. They're not shelling out cash for their inventory, but the longer it sits around the more it costs them. So the issue isn't what % of the car price their getting as profit, but what % of their actual cost in the transaction their getting. That 1% of the vehicle cost is much higher % of their transaction cost. Then add back in trunk money. And of course, the get finance and add-ons, which probably make them more money than the base profit on the car.

BTW, unless you haven't figured this out, I'm a tough person to sell a car. I've gotten a few under invoice.
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Old 10-19-2013, 01:41 PM
 
Location: Henderson, NV
5,314 posts, read 7,767,123 times
Reputation: 3568
Quote:
Originally Posted by BBMW View Post
^
There's a flip side to this. Yes, the overall transaction may be $X0,000, but...

The dealer isn't shelling that out. Their inventory sits on floorplan financing. They're not shelling out cash for their inventory, but the longer it sits around the more it costs them. So the issue isn't what % of the car price their getting as profit, but what % of their actual cost in the transaction their getting. That 1% of the vehicle cost is much higher % of their transaction cost. Then add back in trunk money. And of course, the get finance and add-ons, which probably make them more money than the base profit on the car.

BTW, unless you haven't figured this out, I'm a tough person to sell a car. I've gotten a few under invoice.
The majority of the profits come from service and parts. Sales is normally in the 30-40% range of dealership profits.

F&I shouldn't be more than the profit of the car, but it is sometimes, especially if a person has questionable credit and pays a higher interest rate. F&I gets paid on the difference between buy rate and sell rate, plus services they have the opportunity to sell.

And everyone is tough to sell. That is why burnout is very prevalent in the industry. If you make it to 6 months, you're normally OK.

"Trunk money" as you call it, helps pay for SOME of the expenses of the dealership. Yes, floorplan is a large expense, but so is the building, utilities, etc. It's not cheap to run a dealership. They have to make their money somewhere.

Overall, it's the consumer that suffers. For every person that pays invoice or under, the next person has to make that up, or the business fails. That is why you see the "games" played to increase profit. If everyone gave the dealership a fair profit, it would even out the playing field. But there are those who think they deserve to pay what the dealer pays for the car. I used to say "when you buy 400 at a time, every month, then you have that right". But when you buy one every few years, why should you be able to have the same buying power as the dealership?

It is a business. A business is there to make money. When a business stops making money, the business fails, and employees lose their jobs. When people lose their jobs, the economy suffers. I have no problem letting the dealership make money on me. Because I would like them to be there to service the car and provide me with my next one.
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