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Electric automaker Tesla Motors has collected more than 400,000 deposits from customers for its 2018 Model 3 sedan, despite having little more than rough renderings of the car to show prospects. This is a remarkable achievement that speaks to its groundbreaking products and the cult-like following of Tesla CEO Elon Musk.
People standing in line to put down deposits and then be willing to wait for a hot car is not without precedent. I sold Honda automobiles during the 1980s and the similarities to today’s Teslamania is striking.
Memo to Musk: If you can indeed increase your production five-fold in two years, I am sure you will move 400,000 Model 3s, but most of them won’t go to today’s deposit holders.
Allow me to explain. The scene was Benson Honda in San Antonio. The year was 1984 … Read More >
A record 31 percent of all new vehicles sold this year in the U.S. are leased. I spent a good part of my career studying why some people refuse to lease. Much of their resistance stems from bad buzz. Some say it’s because of the stories they heard about ’80s-era open-end leases where owners were responsible for paying the car’s residual value at lease end. (These are the same customers who will not buy a Hyundai today because they produced crappy cars in the ’80s.) Others oppose leasing because they heard about a guy whose cousin’s neighbor had to pay $5,000 in wear and tear or excess mileage charges at lease end. And there are those of you who will brag comment below about how you always pay cash for your cars and don’t understand why other people won’t follow your lead.
This article is not designed to convert such non-believers to leasing. This advice, drawn from my years in the auto finance business, is for buyers who know the basics and benefits of leasing, want some timely tips on how to get the lowest possible payments, and want to pay less money on lease-end charges.
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After climbing to a five-year high in 2013, sales at Fiat Chrysler Automobiles’ Dodge brand fell 4 percent in calendar year 2014 and a further 10 percent in 2015.
So when TTAC columnist Bark M. tweeted a Dodge marketing tagline — “Fastest Growing American Performance Brand” — my confusion, doubt and skepticism were kindled.
Bark heard the tagline in a radio ad, which unfortunately isn’t Googleable. However, he swiftly supplied a link to this 2016 Dodge brochure in which the following claim is made: “The Dodge brand may have started from humble beginnings, but it is now the fastest-growing performance brand.*”
Seriously? Let’s look into it. Read More >
I worked at a Ford dealer in Silicon Valley from 1994 to 1999. It was a transitional time in the car business; a time when old-school car guys told war stories about back-lot portables stocked with sales incentives, while young consumers arrived with astonishingly accurate invoice and holdback information. We packed payments, sold $79 undercoat for $1,500, and occasionally found customers smarter than us.
By 1999, more than 40 percent of Americans were online and the Internet was democratizing information everywhere. If someone asked me then if the retail auto environment would be different 17 years hence, I would have emphatically responded yes.
I would have been wrong.
The car business and the customer experience are all but identical. The biggest change is perhaps the relocation of the smoking area.
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There’s not a more uncomfortable phone call for a car dealership’s finance manager to make then asking a customer to come back to have their finance or lease contract rewritten. This is typically caused by sales managers — the people most despised by finance departments — who spot deliver a vehicle based on their wrong guess about the rate or term a lender would approve the deal. Needless to say, the vast majority of these rewrites result in a higher monthly payment for the customer.
A couple of years ago, a finance manager at a Los Angeles Mercedes-Benz dealer told me and a Mercedes-Benz Financial colleague of mine about the day he picked up the phone to fix the opposite situation: the dealership had miscalculated the taxes on a client’s lease on a black ML350 Bluetec SUV and they needed the client to return and sign a new lease agreement reflecting payments of $14 per month lower than the original contract.
He called the customer with the good news only to hear, “No no no! Payment good. Payment good. We OK!”
After he hung up, he thought, “We just got snookered. That ML is probably on a slow boat to China and the factory is going to kill us.” Read More >
As I’ve mentioned before, I spent about four years as a “deal spotter” for Bring A Trailer. Much of that work consisted of browsing eBay, Craigslist, and various marque-specific forums looking for interesting deals on classics. Of course, I have a day job as well, so I try and minimize the time I actually spend looking at cars while simultaneously looking like I’m actually working. The eBay app for my Android helps in this matter, so I can work on my side job while indisposed.
So, I spend nearly an hour or two every day trying to quickly assess every car by the lead photo before moving on. I can quickly spot deals or find those auctions that won’t sell. It’s like automotive Tinder – swipe left for the rotted F-body, swipe right for the longhood 911.
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It’s not often a car company, or any group of people for the matter, will admit mistakes – particularly billion dollar mistakes. That’s why the launch of the all-new Tata GenX Nano is refreshing. Based on former CEO Ratan Tata’s dream of moving Indians who transport their entire families on scooters and motorcycles into safer – albeit, basic – four wheeled automobiles, the very fact the original 2009 Nano was the least expensive car on sale anywhere in the world proved to be an albatross around the Nano’s tiny neck. Even Indians aspiring to the middle class of a developing country, it turns out, aspire to be seen in something other than the cheapest car in the world. They’d rather buy a used Maruti Suzuki Alto 800, the hatchback that more or less defines India’s entry level car segment. In recognition of that reality, the new GenX Nano will now be positioned as an entry level hatchback to more directly compete with the Alto 800, Hyundai Eon and the newly announced Renault Kwid. Read More >
After I purchased my S2000 and was about to drive off the lot, my salesperson regaled me with stories about the Honda’s previous owners – an elderly couple who loved the sports car, called it their “baby,” but traded it for a Mercedes-Benz E350 Coupe because they wanted more room. None of this history was noted in their website or internet ads for the S2000, but why wasn’t it?
It turns out that most franchised dealer’s new and pre-owned vehicle ads on AutoTrader and cars.com as well as their own websites do not tell such stories because they are composed by automated services. The fun part is that dealers sometimes never proofread them, like in the example above showcasing the ultimate in Additional Dealer Markup. Even better is when dealers try to write the ads themselves. Let’s take a look.
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If you have any kind of tribal affiliation, you probably have the experience of spotting signs of others who might have the same affiliation. Deadheads will spot a dancing bear decal on a VW bus and car enthusiasts, no different, will note a track decal on a coworker’s bumper. That’s how I found out about Jerry Gordon’s car kippah. Read More >
I felt like a spy within my own company. It was a hot summer day in 2003 and I was at the DaimlerChrysler proving grounds in Laredo, Texas to attend a focus group on the upcoming 2006 Mercedes-Benz R-Class minivan/crossover/sport touring wagon. My dozen or so fellow attendees were all wealthy owners of high-end Mercedes-Benz cars. I was here because the Mercedes-Benz USA focus group invite filter did not recognize my net worth nor the fact that I worked for Mercedes-Benz Financial Services. And I was not about to tell anyone that…
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