By on February 5, 2009

A reader writes:

Several weeks ago, I took my 18-year-old daughter to Pennsylvania to find her a used car (I don’t believe in buying a new car for a kid). We found a Honda dealership that had a nice, clean 1998 Civic for about $4000. My daughter had $3000 saved up from working at the mall. We gave the salesman the cash and I asked if I could get a loan for the balance. “No loans”, he replied. “We had a guy in here this morning that had an 800 credit score that had to walk away from the car because he couldn’t get approved.” I then agreed to give the salesman a personal check from my account and we were able to buy the car (which, by the way, has been a real gem). The Honda dealership is right across the road from a Cadillac store. “I sold more Hondas myself in December than all the salesman over at Cadillac combined,” he told me. I think this experience is a good indicator of what’s happening in car sales in the USA right now. It’s a bloodbath.

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84 Comments on “On the Other Hand… “It’s a Bloodbath”...”


  • avatar
    ScottMcG

    My wife and I were out at dealerships last weekend, comparing various models. The one thing I noticed compared to previous times was the lack of salesperson interest in dealing with us. In the past, you could barely drive into the parking lot before being accosted by somebody ready to sell you anything they could.

    Last weekend, we had trouble even finding a sales person to talk to. I walked into a GM showroom and was the only customer in the building, but nobody could be bothered to get up from a desk and come greet me. A guy at the VW dealer actually walked about half-way across the showroom towards us before deciding he had something better to do.

    My wife and I are both middle-aged, were reasonably well-dressed, and drove a nice car while we went shopping. Usually, we’ve had the sales reps tripping over themselves to help us.

    It just looks like they’ve given up. It’s got to suck to be in car sales right now, and that’s showing in the attitudes at the dealerships. I don’t blame them, just thought it was interesting.

  • avatar
    Jerome10

    $4000 for an 11 year old Civic?!

  • avatar
    carlisimo

    Is financing dependent on the dealership’s payment history? Not that I’ve seen many loans for 10-year old cars, ever. Even during the good times you might only get used car loans if the car’s less than 4 years old.

    And I know it’s cool to show off that you don’t buy your kids new cars, but isn’t that only relevant if you’re paying for it? It sounds like the intent in this case was for the daughter to buy it herself, even if that’s not what happened in the end.

  • avatar
    Spitfire

    I agree, I had a similar experience recently. I walked into the dealership, where there were 4 guys in their twenties dressed up and ready to do nothing but sit all day texting away on their phones or whatever. It was kind of sad but there was zero effort. I asked if they had any Rubicons and the one guy just pointed to the back end of the lot. wow…

  • avatar
    dwford

    It is hard to work up the motivation to say hi to a customer – especially one that looks like they have good credit, when you know you are going to get treated like shit by the customer and earn a minimum commission on the deal. Sometimes it’s not worth the $100 or less commission for the sale. Better to find a stiff, beat them up for a co-signer, and stuff them into some used car you can make a gross on.

    I actually had a customer tell me I ought to be “begging” for his business. Sorry, but no. I’d rather starve.

    And BTW, most banks won’t finance less than $5-7k on a car loan.

  • avatar
    John R

    Precisely why I get financing first. The world is your oyster when you have a check.

  • avatar
    jpcavanaugh

    Bloodier for some than for others. My first thought after reading this was “wow, $4000 for an 11 year old Civic.” My mind began to wander. If the statement had been $4k for a 98 Escort, Neon or Cavalier, everybody would know that this was a joke and not a real story. The used car market shines the harsh light of truth on a car. A Civic can command this kind of price because everybody knows that an old Civic, reasonably well cared for, will run for a long, long time without too much fuss. The domestic competition? More like a beer can – throw away when empty.
    There is only one road back for the domestics. Make it durable, put it together well, make it reasonably appealing and price it reasonably. This is hard, unglamorous work, and will never succeed so long as management mantra is “we are going to cut another 10% out of our costs this year.” Only Ford (under new management) seems to get it. I say “seems to”, as it is too early to really tell. GM thinks that this is what it is doing, but really isnt. Chrysler, well I don’t think it has hit all 4 categories since the 30s.

  • avatar
    revhigh

    dwford :
    February 5th, 2009 at 12:54 pm

    It is hard to work up the motivation to say hi to a customer – especially one that looks like they have good credit, when you know you are going to get treated like shit by the customer and earn a minimum commission on the deal. Sometimes it’s not worth the $100 or less commission for the sale. Better to find a stiff, beat them up for a co-signer, and stuff them into some used car you can make a gross on.

    I actually had a customer tell me I ought to be “begging” for his business. Sorry, but no. I’d rather starve.

    ***********************************************************************************

    AND STARVE YOU WILL … thank you for an absolutely perfect scenario indicating that the American Auto Industry is truly ROTTEN TO THE CORE.

  • avatar
    toadroller

    Why not flash the $3000 and get it for that price? Here’s cash…

  • avatar
    MikeInCanada

    I can understand the sales staff ignoring any sales opportunity that smells of minimum commission, but where are the sales managers and for that matter the owners? Dealerships are mostly small/medium size business – where is the boss? Close by I would think.

    I would think that they’d at least be flogging every employee on a daily basis until moral improves.

    A sale is a sale.

  • avatar
    toxicroach

    Honda’s really do retain their value that well. The NADA on that Civic (w/ 132000 miles) is 5000 bucks, so 4000 is probably close to the real price for it.

  • avatar
    mpvue

    A bank isn’t going to finance a grand. It’s isn’t worth it. It isn’t worth the time for the dealer to do all the paerwork either. Better would have been for your daughter to keep $2500, put $500 down and finance the rest in her own name. She would have built some credit for herself, and could have paid off most of the loan when the 1st bill comes due.

  • avatar
    GoHuskers

    revhigh- you are so right.

    dwford – You should realize that any “sales” person exists to “sell” the product. If that person is too lazy to work for the sale, then he/she deserves to starve. Or find a real job. Of course dealer management is to blame on that issue. Did anyone tell you why you occupy a chair in the dealership?? Not just to keep it warm! I wonder if you will be so “nose in the air” in the unemployment line?

    However, indifference as well as laziness is not exclusive to American brands. A local BMW dealer -where I have purchased 2 new Bimmers in years gone by – is just as indifferent/lazy as any American dealer.

    One would think they are pushing customers out the door for lack of product.

    None of these idiots “get it”. Still.

  • avatar
    no_slushbox

    dwford:

    $100 for doing nothing is pretty good. You’re lucky, at most stores people can go right past the putz salesperson and straight to the checkout counter.

    Although I do with the Detroit automaker CEOs were willing to adopt your “I’d rather starve than beg” attitude.

  • avatar
    MikeInCanada

    Re – Spitfire :

    I’ve had the same experience too. Sales staff just sitting around on their hands, no one cares. Car sales have always been the ditch digging of the sales world, and seems to have just gotten that much worse recently.

    I’m just waiting for some dealer to fire everyone and put the entire inventory online at minimal markup. Keep a lot boy around to supervise test drives and a F & I guy to take the checks.

    With marginal overhead,(no dealership on the highway, rather a warehouse and parking lot down by the rail yards – that kind of low overhead)this might be a tough model to beat (and don’t say Saturn, because they were high overhead cost).

  • avatar
    OldandSlow

    $4000 for an 11 year old Civic?!

    A nurse that I know found a 99 Civic 2 dr on Craigslist – with 110 K for $3,500 last month and was happy to find it. As a recent divorcee, she would have qualified to buy a new car with credit problems and a $3500 down payment in 07 – but in 09 that’s a different story.

  • avatar
    NulloModo

    Wow, some harsh criticism here. I think I got more of the essence of what dw was trying to say…

    No salesperson would turn down an easy mini. The problem is that the industry has been in the tank for so long now that a lot of salespeople are getting shook. After the endless parade of asshats with 460 beacons, two recent repos and an open foreclosure, the people who want to beat you to death on price just for the sake of doing it, the people who are so buried in their trades that there is no way out, and shoppers that will take hours and hours of your time and knowledge only to buy the vehicle down the street because the other dealer undercut your price by $100, it is easy to see why the prospect of walking out into the cold for another round of the same isn’t promising.

    The problem with a buyers market is that a lot of the buyers suddenly turn into assholes. Because an automaker or dealership is on tough times doesn’t mean it can suddenly afford to sell the vehicles at huge losses. We’ve recently had two customers walk on deals that would have lost of the dealership over $3,000 a piece after holdback, pac, etc, just to get the cars off the lot, but the buyers still think they can somehow get them cheaper.

    And yes, anyone who ever tells me I should be begging him to buy a car from me is not going to get a positive response. Just being able to purchase a vehicle doesn’t entitle you to be an asshole to the professional who is trying to help you find the best one to fit your needs.

  • avatar

    It is hard to work up the motivation to say hi to a customer

    Then don’t work sales.

    John

  • avatar
    dwford

    Ouch, the flames, the flames!

    My dealership is plenty busy and I sell plenty of cars, so if I want to stick my nose in the air, I will.

    A sale is like a marriage. If I sell an asshole a car, I am stuck with them for years. Every little thing will have this jerk calling me. Not worth it. The only way to divorce them is to quit my job.

    Besides, with thousands of dealerships closing, the vehicle population aging and the economy improving (eventually), the shoe will soon be on the other foot. Enjoy it while it lasts, buyers..

  • avatar
    dejalma

    Matt Burne Honda in Scranton?

    They have a Honda + Caddy Dealerships diagonally
    from each other.

  • avatar
    LDMAN1

    I had a 98′ Civic. Some of my buddies did, too. These cars were absolutely bulletproof. All you had to do was basic (expensive, though) maintenance.
    Nothing went wrong. One of the guys around here kept it for 10 years, then sold it. The paint and trim still looked new. Scary. It is shame they do not make them like that anymore.

  • avatar
    Ryan Knuckles

    Sounds like an idea situation to me. If they have the asking price on the car and leave the car open, where I can check out the interior and exterior unimpeded, I can find out 90% of what I need to know without ever having to bother a salesman.
    I cross-shopped foreign and domestic brand dealerships, used car dealer, the internet.. everything. Most domestic dealers were pushy and tried to up sell me – severely. Honda was the best dealer in the area, but out of my target price range. One rule of thumb I have learned.. If the price isn’t on the car, don’t bother talking to the salesman. They will be pushy and will not try to meet your needs.
    Nothing that I wanted was reasonably priced locally (late model, low mileage, compact sedan), so I ended up on Carmax’s website. You couldn’t ask for an easier way to buy a car, even including the trip to Chicago I had to make to get it.

  • avatar
    dwford

    “$100 for doing nothing is pretty good” – if you consider 3-4 hours of test drives, tours, negotiation, cleaning, gassing, financing, calling insurance, doing a thorough delivery walk around, etc.. “doing nothing.”

    Even if a customer comes in and drops cash on the desk and says “I’ll take that one,” the process is going to take at least 1 1/2 hours. $100 seems like a lot until you consider that most salesmen sell only 1-3 cars per week.

  • avatar
    petergottlieb

    My wife and I spent three days car shopping in January. Of the six or seven dealerships we visited, the salespeople were friendly and helpful at all but two of them. At one of those two, they were friendly, but just slow in actually serving us.

    Bargaining in this environment was interesting. It is hard to tell what is a “good” price in a market as depressed as this one is. We ended up buying a new 2008 at a bit more than 25 percent off of MSRP with only a little bit of back and forth about what we would be willing to pay. We’re happy with the purchase. Who knows, we might have been able to get it cheaper, but then again, it was already a lot cheaper than it would have been if we had bought it before the market tanked.

  • avatar

    I mentioned this before, but I took my girlfriend to Honda in Valley Stream, NY and had her buy a fully loaded Accord with Nav, Moonroof, heated leather front seats, Sentry alarm system, push button start.

    Her credit was in the high 700’s but she had never purchased a car before. The dealer was afraid he’d have trouble clearing a loan but, it went through fine and she got it for $31,800 with like $6000 down I think.

    Hasn’t it occured to anyone that the Big 3 don’t suck, but the problem is that we are in a credit crunch? I hear the news pundits spreading lies and bullshit about American cars…but the truth is, People would buy them if they could afford them.

    $20,000 Malibu vs. a $15,000 Scion TC?

    Gee that’s a tough one…

  • avatar
    dejalma

    “dwford – You should realize that any “sales” person exists to “sell” the product. If that person is too lazy to work for the sale, then he/she deserves to starve. Or find a real job. Of course dealer management is to blame on that issue. Did anyone tell you why you occupy a chair in the dealership?? Not just to keep it warm! I wonder if you will be so “nose in the air” in the unemployment line?”

    My sister worked for years part-time setting up store displays for Microsoft (making sure that a promo for mice and keyboards were in fact out on the floor), Direct TV, Stanley Tools, 7 foot cardboard SpongeBob Squarepants displays in movie theater lobbies, Best Buy making sure that DVDS and CDs that were on sale were and re-arranging the CD + DVDS in alphabetic + category order because a shopper put them back in the wrong spot and BB employees don’t/didn’t care, etc.

    Manufactuers have products that they want to push and when they have promos they hire 3rd companies to go into stores (and theaters) to set up the displays.

    The store management and workers have absolutely no interest in displaying something properly
    in order to generate sales.

  • avatar
    Brydog

    For all people that can’t stand us automotive sales people, I say, “hang in there!” Soon, all the poorly performing dealers and all the poorly performing chumps trying to sell cars will be out of a job. This recession we’re in will weed out the bad dealers and salespeople. It won’t be long and all that will be left standing is the cream of the crop in the automotive industry. This goes for manufacturers, too. Only the best customer friendly and profitable dealers/salespeople/manufacturers will be left standing in 18 to 24 months.

    Then, all you “salespeople haters” can come and negotiate with the pros that survive… I’m looking forward to meeting you!

    I, nor my sales staff, will ever “beg’ you for your business, but we will service you with a smile and firm handshake.

  • avatar
    dwford

    “Her credit was in the high 700’s but she had never purchased a car before. The dealer was afraid he’d have trouble clearing a loan but, it went through fine and she got it for $31,800 with like $6000 down I think.”

    Money down cures all. Even a 550 credit score can get bought with $4-6k down. Last week we got a loan approved for a 19 year old with very low income and minimal prior credit history on a new Elantra. The only reason it worked was her $4k down. Banks want the loan to have positive equity.

  • avatar
    dwford

    Lets clear up a misconception about bringing cash to get a better deal on a car. Dealers often MAKE MORE by having you finance through them than they do on the car itself. A dealer has no motivation to give away a car at an extremely low price knowing that he can’t at least make some profit on the financing.

    By all means get yourself pre approved at your bank for a great rate, then give the dealer the opportunity to beat that rate. The F&I guy does negotiate for better rates with the banks he uses, and he will beat your bank’s rate to earn your business.

  • avatar
    revhigh

    NulloModo :
    February 5th, 2009 at 1:39 pm

    The problem is that the industry has been in the tank for so long now that a lot of salespeople are getting shook. After the endless parade of asshats with 460 beacons, two recent repos and an open foreclosure, the people who want to beat you to death on price just for the sake of doing it, the people who are so buried in their trades that there is no way out, and shoppers that will take hours and hours of your time and knowledge only to buy the vehicle down the street because the other dealer undercut your price by $100, it is easy to see why the prospect of walking out into the cold for another round of the same isn’t promising.
    *************************************************
    I’d say you need a new profession if this is the attitude you’ve garnered from previous auto sales
    *************************************************
    *************************************************
    The problem with a buyers market is that a lot of the buyers suddenly turn into assholes.
    *************************************************
    You mean kind of like the way many auto sales people were, when times were good, right ???

  • avatar
    ScottMcG

    I wasn’t complaining in my earlier post, just observing. Honestly, I prefer not to be bothered at all until I have questions or want to make a deal. That’s partly out of respect for the sales person as well – if I’m not a serious customer, I don’t want to waste anybody’s time. I’m not out shopping to kick a dealer while he’s down, I’m out because I’m starting the process of buying a car and want to get as much info as possible. I don’t even ask for a test drive unless I’m down to the final few possibilities…I don’t like people wasting my time, so I don’t do it to others.

    I do think the financing is a big part of it. In the “good ol’ days” the guy with the low beacon and only half-way through the lease on his previous mistake could still qualify for some form of financing. If you’re reasonably good at sales, you stood a good chance of making some money.

    Without the easy financing, the pool of people who can actually buy the car is a lot smaller. And if the ones who do come in are assholes, it’s hard to be excited about your job. But I’ll bet the guy who makes at least some effort will still do better than the one avoiding customers at all.

  • avatar
    revhigh

    dwford :
    February 5th, 2009 at 2:00 pm

    My dealership is plenty busy and I sell plenty of cars, so if I want to stick my nose in the air, I will.
    *************************************************

    Yeah, that’s what we’re all hearing … car sales are booming !! LOL.

  • avatar
    Spitfire

    MikeInCanada-

    Yea I certainly think that the whole dealership model is messed up. The constant haggling while fun at times really isn’t. Carmax addressed this to some degree. Saturn was a joke, the whole no pressure was just the opposite in my experience. With manufacturers websites what they are I don’t see the need for 90 percent of the sales staff dealers have currently. Although dealerships should probably still be located in more high traffic and for the buys perception “safe” areas.

    dmford-

    The way you have just described selling a vehicle to a person with more ambition then credit “Better to find a stiff, beat them up for a co-signer, and stuff them into some used car you can make a gross on.” is exactly why no one dreams of becoming a car salesman as a kid.

    True salesman provide total service not just some high pressure Always Be Closing crap.

    I sympathize with loosing sales over .5 percent of the total vale of a vehicle but I think the most honest question you have to ask your buyer is “What will it take for me to earn your business?”. You shouldn’t have to beg but when times are tough you should absolutely have to work hard for a sale.

  • avatar
    John Horner

    “Banks want the loan to have positive equity.”

    Harumph, about time!

  • avatar
    Airhen

    Plus who wants to repo an 11 year old car?

    I bought a 2009 Honda last October… My Credit Union approved me over the phone. Then at the dealer, the finance manager made an excuse to see my loan agreement. Ten minutes later he offered me a slightly better rate, which I didn’t bother taking.

  • avatar
    fincar1

    Dejalma, that’s a whole category of jobs I didn’t know much about. Of course I’ve seen the bread guys and the beer guys arranging the shelves at supermarkets, but didn’t realize that this was a broad-spectrum phenomenon.

  • avatar
    Brydog

    Airhen,

    That’s called “negotiating”. They offered you a better rate than your credit union – and you turned it down… So, you are going to pay more on your loan because of “principle”? Smart move!

    The problem with the buying public is that they are unwilling to negotiate. Actually, I should say “uneducated” about negotiating.

  • avatar
    dwford

    Hate to break it to you, Spitfire. For all the complaining, customers don’t want “good” service. They want rock bottom price, and will screw over the salesmen that educated them and convinced them that a particular model is the best fit over $50 or a free oil change.

    I recently spend hours and hours with one lady. She wanted a white suv with a 3rd row. I took the time to compare the Veracruz and the Santa Fe, find vehicles that met her budget needs, took several test drives over multiple days. I wrote the deal up and proceeded to get the locate done, since we didn’t have what she wanted in stock. She calls me up all happy to tell me she picked up a Santa Fe at another dealer.

    You can chalk that up to “you win some, you lose some,” but my time could have been better spent on working other deals. She fell for the free tires and batteries for life scam at another dealer.

    So I spend a good 10 hours on her, then she waltzed into another dealer, and the salesman that upped her got a quick and easy deal for no work.

  • avatar
    jeevesw

    Good choice for your daughter. My daily driver is a 1998 Honda Civic DX with 120,000 miles. It runs great and except for routine maintenance has never had a hiccup. It does seem to eat muffler’s quickly, but maybe I’m buying the cheap ones. As to your purchase price: $4,000 for a used one from a dealer is right in line with the prices I see where I live (North Carolina), and I watch prices constantly.

  • avatar
    Dave M.

    That’s called “negotiating”. They offered you a better rate than your credit union – and you turned it down… So, you are going to pay more on your loan because of “principle”?

    I’d call it loyalty. That’s the kind of person I am. In 25 years of interactions, I trust my CU before any dealer.

    The dealer should have led with a kiss-ass offer before they even knew the CU’s.

  • avatar
    TEW

    I am one of those people who would not have a problem driving 150 miles to find a good deal. With many dealers bleeding you can pit the salesmen against each other. It is nice how you can use the internet and find out the prices then force the price down from there. I know what I want so why do I need a sales man to “help me out.”

  • avatar
    godflesh

    dwford- re: the Santa Fe lady, conceptually wouldn’t you also get incoming folks doing the same thing to the other dealers?

    I am not in the sales profession, but why would you put effort into something you are not going to potentially get a return on? You must, at some point, believe that a shopper might buy a car from you. And then they might not. But if you don’t try to make a sale it would never happen.

    I have yet to find a job where I sit at home, do nothing, and get a check.

  • avatar
    no_slushbox

    By the time the economy recovers(?) China and India will be able to make cars that can pass US crash tests. Don’t worry about running out and buying a car now, the prices will last.

    The credit crunch is a lie. An 800 credit score is nothing if the debt-to-income-ratio or down payment aren’t enough. Nobody has perfect credit, even an 850, if actually possible, isn’t perfect. Nobody has zero default risk. Nobody but payday lenders and loan sharks (I guess that’s redundant) deal in $1000 loans.

    The salesperson would have taken the $3K in cash for the Civic (or less).

    Obviously saying things like “you should be begging for my business” is just stupid. If the other party already knows something then insulting them by reminding him of it will just make him refuse to deal.

    Be polite, give the car a thorough examination and test drive, get the Carfax or similar, politely let the sales person know what you will pay, and politely leave. He will call you back.

  • avatar
    Airhen

    Brydog :
    February 5th, 2009 at 2:59 pm

    Airhen,

    That’s called “negotiating”. They offered you a better rate than your credit union – and you turned it down… So, you are going to pay more on your loan because of “principle”? Smart move!

    The problem with the buying public is that they are unwilling to negotiate. Actually, I should say “uneducated” about negotiating.

    It was minor… like 5.05% vs. 5.2%. First I’m loyal to my credit union as I’d hate to see a world without credit unions as banks and finance companies suck. And second, he was an ass and tried to up-sell me on stupid stuff, first by telling me not to take a tire and wheel package like he was on my side (lol). Plus I doubt he would have offered me that rate if it wasn’t for my CU.

    Of all the new vehicles I have purchased, only one guy I’ve worked with I felt was honest with me. And I do negotiate. That is why the finance managers seem to feel like they have to get me back.

    (wink wink)

  • avatar
    Brydog

    TEW-

    You need a salesperson to “help you out” because the car industry is still a person to person business.

    Computers can’t test drive a car for you, or negotiate your trade. Or, give you their demo for the day if your car is in the shop for an unexpected repair.

    Computers do not hold insurance policies, nor are they notaries, nor can they call a loan officer at a bank and plead for an approval on your behalf.

    There is no computer to call when you have an issue with your car, or question about your deal after it’s done…

  • avatar
    dwford

    godflesh: in the grand scheme of things, yes I would pick up a few deals the same way. That’s one of those things thats impossible to know, though.

    I have no problem working for my money. For those of you who have never worked in sales, you just don’t get a paycheck every week regardless of how hard you work – like a salaried job. If I don’t deliver a car, I don’t get paid. So that stressor makes me unhappy when a customer bails on me after hours of effort. I sell enough cars to pay my bills and live the life I want, but every week I am creating next weeks check, simple as that. Negotiating takes a personal turn when it’s MY money I am negotiating away.

  • avatar
    Robstar

    Brydog>

    I test drive the car myself, way before I have any intention of buying. I don’t trade in, and I know pretty much know that I’d have no reason to want a demo for a day.

    I have my own insurance, don’t need a notary nor do I need a salesperson to be my loan officer (I’ll find my own or pay cash, thanks).

    I’ve bought 3 vehicles, and never had a question after the deal. I make sure I read through everything in writing, have my own backup financing & know my own credit score before going in.

    I think of the 2 places I bought new, I only return to 1 for any maintenance at all and mostly cheap stuff.

    Why do I need a salesperson again?

  • avatar
    Spitfire

    dwford-

    And in that case you lost, and again in that case I sympathize with you since that was true service. I’d say the free tires and battery for life is a deal. I’d be interested to here the inside story on how that turns into a scam later though. If you really are 50 bucks or a free oil change away from a deal why wouldn’t you also make that concession?

    A dealer here provides 2 years of free “maintenance” and oil changes, stated on the back of every business card. Seems like a nice deal sweetener to me.

    Do you think the dealer network is inflated right now? I mean since you are so easily screwed over.

    Can you blame anyone for wanting the best deal possible? As a consumer you would be crazy to not spend the extra time shopping around. Especially with the economy and job uncertainty out there. Dealers are lucky to sell anything in this environment.

  • avatar
    Brydog

    Robstar-

    Apparantly, you don’t. You are an extraordinary exception to the rule.

    In 20 years, thousands of customers and deals, I can think of only one other buyer like you.

    Congratulations! Due to your resourcefullness, you can call the factory for your next unbreakable car. Oh, wait, you can’t buy a car factory direct. I guess you’ll have to go to the lot and deal with a salesperson…

  • avatar
    BDB

    Internet sales are the future.

  • avatar
    Brydog

    “free tires and battery for life is a deal”
    “A dealer here provides 2 years of free “maintenance” and oil changes”

    – People, people, people! Where have you all been the last 20-30 years! Don’t you all know by now NOTHING is free…Especially at your local dealership. Especially in the car business! You pay for it somewhere. Knowingly or not, you are paying for it.

    A local dealer in my area requires you to come in every 3K for an oil change and maintain your car ONLY at their dealership to qualify for the “tires for life” program. Get an oil change at Jiffy Lube, and you’re out of the program! Period! And I’m quite sure their oil change isn’t $20 bucks, either.

    There’s a “catch”, people. There is always a “catch”. By the time your car needs tires, or inspection, or whatever, you have paid enough in general maintenance, or in the initial purchase to cover the cost of them. And I can assure you, they’re not putting a nice set of Michelins on…

  • avatar
    Brydog

    BDB :
    February 5th, 2009 at 4:04 pm

    Internet sales are the future.

    I heard the very same words in 1990! Nope, still need dealers and salespeople…

  • avatar
    dwford

    The free tires and batteries is a scam because they require you to do every manufacturer recommended maintenance at that dealer. They lock you into their labor rates. Miss a recommended service, or have it done somewhere else and you lose the freebies.

    Considering how long most people keep their cars, the dealer rarely has to give out any tires or batteries.

  • avatar
    creamy

    “They want rock bottom price, and will screw over the salesmen that educated them and convinced them that a particular model is the best fit over $50 or a free oil change.”

    the reason we concentrate so much on price is because we don’t know what you actually paid for it – sticker, msrp, incentives, cash back, discounts, employee pricing, $100,000 incentive if you sell just one more subie outback by the end of the month (and yes, i expect a better deal if that’s the case) and the dozen or so other things i have no idea about.

    sure we have forums and edmunds and nada and kbb and other online tools at our disposal, but i pretty much guaran-gosh-darned-tee that they don’t list what a car actually costs you.

    you say you don’t make money on new cars and fumble around with trade-ins, financing, new car pricing and whatever that other square in the four-square process is (even if you don’t actually use the four-square piece of paper) and then expect us to just assume your giving us a good price when you keep knocking off a hundred here or a thousand there? seriously?

    we don’t trust you. you may be a nice person, a great parent, a wonderful friend, but you are trying to maximize your profit on a deal (and good for you, this being america and all) where you hold almost all of the cards.

    you don’t share your information on cost with us, that’s fine, but don’t expect us to like you much for it while feeling we’re being taken advantage of even if you’re actually “cutting your own throat” over the amazing deal you are trying to give away.

  • avatar
    BDB

    “I heard the very same words in 1990!”

    ..and they’re becoming true now that people have personal computers with internet access, and dealers have websites, unlike 1990.

    You’re a sucker if you don’t check the dealer website first.

    There will still be salesman but fewer and their role is going to be substantially smaller in the process.

  • avatar
    John Williams

    My dealership is plenty busy and I sell plenty of cars, so if I want to stick my nose in the air, I will.

    Sounds like the type of dealership to avoid. And eventually, that’s the type of dealership that’ll find itself selling zero cars.

  • avatar
    Brydog

    BDB-

    People didn’t have PCs in 1990..? Maybe not as many as today. How about in 1995, 2000, 2005, or even today? Granted, you may research your purchase through the internet, but you don’t click on a button to buy it. Well, maybe if you’re meeting the “buy it now” price listed on e-bay. But that would be paying the “asking” price, wouldn’t it?

    You’re right about one thing. There will be considerably less salespeople to deal with in the very near future. The chumps, the lazy, and the stupid slugs trying to make a fast buck will all find another field to work in. All that will be left are the pros… Looking forward to meeting you someday, too.

  • avatar
    NulloModo

    BDB – While I am sure that internet sales will continue to grow, there will always be a place for personal service at the dealership. For every person who goes in knowing exactly what they want, which model at which trim level in which color with which options, there are half a dozen who just know they need a vehicle of a general size or capability and nothing beyond that.

    TTAC and every other auto forum/site is populated primarily by car enthusiasts, so of course you know what you want, and could likely make a purchase entirely over the internet if it came down to that. The majority of buyers aren’t enthusiasts though, they are just people in need of transportation. They need someone who knows the exact difference between each trim level, each model, and what would best suit the needs they have, even if it isn’t what they originally had in mind.

    We get a fair number of elderly customers at the dealership looking for efficient and inexpensive cars. Some have had their children or grandchildren get on the internet and do some research, some have done it themselves, but the first thing they usually ask to see is the Focus. Now, the Focus isn’t a bad car, but for an older customer coming out of a Grand Marquis, a Sable, or even a Buick or Oldsmobile, you give up a good bit. The Focus has no power seat option, the ride is much firmer, and it is overall noisier than any modern day land yacht. While I am always happy to show those customers the Focus, I know that a Fusion or a Milan will better suit their needs and keep them happier in the long term, and after they have had a chance to check out both, they usually agree and go with the larger car.

    Some of the stereotypes about car salesmen may have been true in the past, and some may still have their merits in certain places, but we aren’t shysters, crooks, or snake-oil salesmen. We have to know every detail from towing capability to dimensions to what the seat stuffing is made out of for our own models, the majority of the details of the competition, plus have a good idea of what all current ads and promotions for all of the industry at any given time. It amazes me that real estate agents can be looked at with respect and no one has any problem paying them a 3% comission on the price of a house, but car salesmen are overall looked on with derision when we make a good bit less than that for every deal.

  • avatar
    TEW

    Brydog what I said was that I don’t need a salesman to help me pick a car. You are right in that you need someone to processes the purchase. The dealers will not care if you buy a car from another dealer when you bring you vehicle in for service. When you have 5 or more dealers for each brand in each city then why not use that against them. I hate it when the sharks try to up sell to me.

  • avatar
    BDB

    @NulloModo–

    Good point about most buyers not being car buffs. Whenever my non-enthusiast friends are looking for buying a car and talk to me about it, its a big reminder to me who little most people know about cars.

    The closet I’ve ever come to “click the button and buy” type of internet deal was when I got a used Miata directly from someone on Craigslist, and paid for it with a check.

  • avatar
    Brydog

    Most real estate agents are working on a 6% commission. You would have to, dare I day the dirty word, “negotiate” them down to a 3% commission.

    My house buying experience was an insightful experience dealing with real estate agents…I wish I could make deals knowing so little! I wouldn’t hire a salesperson to work on my floor with that little amount of knowledge and drive.

  • avatar
    Spitfire

    Brydog-

    And so Robstart will continue to exactly what he is doing and what everyone should always do.

    I count myself among those who do that as it seems TEW does as well. This is the information age, what do you expect? People, product info, brands, buyers and sellers can all connect with each other far more frequently and easily.

    You can’t possibly be arguing that a majority of salesman actually know what the heck they are talking about? There are sections on forums dedicated to “best line form a salesman” “dumbest things ever heard from the dealer”. Plenty of gems.

    Nullomodo-

    The difference between real estate sales and car sales other then a lot less hair gel is you actually have to be licensed and abide by a term known as “fiduciary responsibility”.

    For any salesman that thinks memorizing car features is work…go sell dishwashers or something. At least then people won’t haggle you as much.

    Creamy:

    I completely agree. Which is why so many of us avoid the dealer at all costs since we know it’s going to be in our best interest to not work with them.

  • avatar
    lewissalem

    I just wanted to mention that it is difficult getting financing on any car older than 6-7 years old. When I was seeking a loan for my car I was told this from a lender. Perhaps that’s an issue as well.

  • avatar
    NulloModo

    Spitfire –

    The difficulty of obtaining a real estate license falls somewhere in between being ordained as a minister of an internet church and getting a GED, which is to say, any adult a pulse and without a major substance abuse problem should be able to handle it. Also, I think the hair gel is a bit outdated. I can’t remember the last time I saw a car salesman wearing the stereotypical tight pants, gel, and gold chains and watch.

    And you don’t think that product knowledge should play an important part in the sales process? Memorizing details is only a part of it. Being able to talk to your customer, find out what is important to them, and then sharing the features that hit on those points in the skill, but you have to know the cars inside and out first to make sure you can do that. I know that whenever I go to buy something I would prefer to work with someone who knows the product vs. some minimum wage yahoo whose job it is just to ring up whatever I point at.

  • avatar
    readingthetape

    Car salesmen are licensed, at least in Colorado. The exam is rather difficult. And no one with a criminal record need apply.

  • avatar
    Geotpf

    dwford :
    February 5th, 2009 at 2:12 pm

    “$100 for doing nothing is pretty good” – if you consider 3-4 hours of test drives, tours, negotiation, cleaning, gassing, financing, calling insurance, doing a thorough delivery walk around, etc.. “doing nothing.”

    Even if a customer comes in and drops cash on the desk and says “I’ll take that one,” the process is going to take at least 1 1/2 hours. $100 seems like a lot until you consider that most salesmen sell only 1-3 cars per week.

    Um…why don’t you go work at McDonald’s then? If you aren’t willing to sell people cars, why are you a car salesman?

  • avatar
    Brydog

    As a sales pro, I do expect customers today to have already done their internet homework, and assume they have already been shopping. Most likely, they already have a few quotes and appraisals…Even though they will look you in the face and lie about it (this is usually the first of many before they leave). Tact, tenacity, and experience will prevail, though. If I lose a deal, it isn’t to another dealer selling the same product.

    Spitfire-
    No, I am not saying the majority of sales people in the car business know what they’re talking about. It’s really sad actually. It pisses me off – the chumps, and the bums. It gives guys that are on top a bad name. There are some very sharp salespeople in the car business. Unfortunately, it is a small percentage. Like I mentioned earlier, these will get weeded out in this recession. They will not be able to make it financially. Customers will not put up with it today. It’s a tough market with alternative choices around every corner. The guys left standing (dealers and sales people) in a few years will only be the best.

    However, every dealer usually has one pro on it’s staff. If you don’t want the rookie, or the bum, call the dealer prior to visiting. Ask the receptionist to get you the top salesperson in the showroom to talk to. You’ll know in the first minute of listening to him/her whether or not they know what they’re talking about. Go in cold, and you’ll probably get the rookie. Pros don’t wait on “ups” – They work off appointments and referrals.

  • avatar
    Spitfire

    Nullomodo-

    Who said anything about any of the previously mentioned jobs being hard to break into…missing the point. Licensed meaning that it has some oversight. And there is much more oversight in real estate then car sales.

    3 of the 4 lazy salesman I was speaking of did in fact have high levels of hair gel. Shame the gold chains and tight pants went out of style.

    The quip about selling dishwashers is that I can’t imagine putting up with said difficulties without at least enjoying the ins and outs of the product. It is important to understand your product. Many salesman do not.

    No criminal record?? Really? wow…

  • avatar
    Spitfire

    Brydog

    Agreed.

  • avatar
    revhigh

    dwford :
    February 5th, 2009 at 3:00 pm

    I recently spend hours and hours with one lady. She wanted a white suv with a 3rd row. I took the time to compare the Veracruz and the Santa Fe, find vehicles that met her budget needs, took several test drives over multiple days. I wrote the deal up and proceeded to get the locate done, since we didn’t have what she wanted in stock. She calls me up all happy to tell me she picked up a Santa Fe at another dealer.

    *************************************************

    Wow ! It was might decent of you to take the time to compare models. Considering you’re in sales, that’s cetainly going above and beyond the job description.

    Sounds like you need a little more experience closing if you ask me. I thought you said you ‘wrote up the deal’. Filling out some papers without them being signed does not make a deal, as you well found out. Why in the world would SHE call YOU to tell you she bought the car elsewhere. Makes no sense, unless you really pissed her off, and she was just rubbing it in your face. Most people in that situation would avoid YOUR calls, and certainly would not call YOU.

  • avatar
    threeer

    I think most of us are missing the point of the article. The days of subpar credit loans are over, thank goodness. This little “adjustment” of loan practices is, in my mind, a good thing. Make people wait to buy major purchases when they can, oh…maybe actually truly afford it? What a novel concept. I’m not sure I would have given my child the extra $1000 (much less offered to help her finance…that kind of mentality helped get us in the situation we’re in to begin with), but I suppose that’s better than trying to finance anything. The whole “let’s go into debt to raise our credit score” is backwards logic, and one of the many reasons we’re so screwed up now. Save your money, buy in cash and forget about the credit crunch.

  • avatar
    Spitfire

    The comments illustrate the level of frustration aimed at dealers which are part of that problem you’ve described.

  • avatar
    johnny ro

    threeer

    Thanks for the “back on track”. Some flaming going on here.

    Bloodbath of lost sales to people who can’t afford the cars. Thats a good bloodbath. Lets stay out of bubbles going forward.

    Nothing wrong with car sales scene when you have civilized, educated staff and customers. But the proportion is not so high on either side.

    Personally I like the idea of the professional sales guy making enough money to live decent life and put kids through college. Also I don’t care plus/minus one percent of price. The way to move the price in a meaningful way is to buy the right car. Stay away from RS6 and drive base A4 if you want to get it for low 30s… or drop down to Mazda3 with 16k to spend. Leave a little on the table. Sure, keep an eye on what they advertise.

    So I know a Mazda dealer and an Audi dealer where I know they are not uncivilized. Nice people. Thats the only 2 I am gonna talk to anywhere around Boston and I will get a good price.

    The extended warranty, well I haven’t figured that out yet, except CPO is good at Audi. They don’t chase you away with a chainsaw.

  • avatar
    Dangerous Dave

    I love cars , but I hate to buy them. I recently bought a used Ranger and the ordeal was exhausting. They low balled (and I mean really low ball) me on my trade, and their offers slowly climbed upward but were still way off of blue book. Then I got pissed and layed it on the line. “I am willing to pay your asking price, and you will pay me blue book trade in value for my trade or I’m out of here.” The salesman went back to the “sales manager” with my deal and came back with a trade price $1,000 off the blue book price. I told the salesman “the internet works for you and against you, I know the blue book, see ya later. By the time I made it to the door he was running after me to give me the deal I should have had once I showed an intrest in the truck. Over an hours worth of bullshit to get what I consider a fair deal. If it wasn’t for expeierences like this I would probablly buy a lot more cars.

  • avatar

    I find that smaller dealers are better. I bought a Jeep at my local store. Fair deal with the normal bit of dickering. The car was pretty reliable.

    The next car was a SAAB, also purchased at a small local dealer. Sadly he sold out to the local mega dealer, who was not the same. (read: sucked out loud). It remained a SAAB shop, became briefly BMW, closed for good. The salesman I bought the SAAB from later ended up with the BMW dealer. I was sad I didn’t buy the x5 from him, but the BMW was too expensive for the content and I went Acura.

    My local BMW dealer, also a small shop, is a pleasure to deal with.

    I only got raped once, by Ramsey Auto Group, a NJ mega dealer. In my opinion, AVOID.

    Stay with the small shop, where they still care. Hopefully a few of them will survive the shakeout.

  • avatar
    dwford

    revhigh:

    Normally in the sales process, once the customer agrees to a price, fills out the credit application, signs the purchase order and leaves a deposit, they buy the vehicle from you. Especially when you have taken the time to establish a rapport (or so you think), help them decide on the correct vehicle for their needs, find that vehicle out of state etc.

    If you non-salemen out there think the sales guy does all that out of the kindness of his heart, just to help you out. You are mistaken.

    I am just pissed that I lost the deal to the free tires and batteries scam.

  • avatar
    dwford

    As for that Honda, if a new car dealer is willing to retail an 11 year old car, it must be a gem.

  • avatar
    Michal

    Many people hold car salesmen (especially for used vehicles) in such contempt that can only be beaten by lawyers and maybe Wall Street bankers.

    Who here hasn’t had a terrible experience with a car salesman? I really got sick and tired of the pushy rogues, the “buy it now as the exchange is going up/down/sideways, which means a higher price tomorrow!” They even tried that right before the import tax fell on vehicles and the exchange rate moved favourably.

    What is a fair profit margin for the dealer and dealership? Who knows? There are so many special offers, rebates, various taxes and levies, factory offers and cash backs floating around that it’s genuinely hard to tell if I’m paying $1000 too much or not. I appreciate that salespeople do not get paid much commission, but when I see 2 year old cars with a sticker price 10% below a brand new vehicle I have my doubts.

    The nicest car salesman I ever dealt with was at a Mercedes-Benz dealership. He was professional, not pushy, answered all questions and didn’t lie to get the deal done. I made a point of telling him how satisfied I was with his service. Pity the car started falling apart soon afterwards (yeah, 1997-2004 era Benz) and I couldn’t pay him a return visit.

  • avatar
    Bridge2far

    No doubt that many lies and deceit are exhibited at the new car dealer. And 90% of them come from the customer!

  • avatar
    ronin

    …”Even if a customer comes in and drops cash on the desk and says “I’ll take that one,” the process is going to take at least 1 1/2 hours. $100 seems like a lot until you consider that most salesmen sell only 1-3 cars per week.

    The process is also taking the customer at least 1-1/2 hours, and the customer is not getting paid for it.

    The reason it takes so long is that you will be thinking how much the ‘document fee’ or other add-ons should be. You will be trying to upsell them on this or that protection pack. The reason it takes so long is F&I will be trying to sell extended this-and-that.

    In short, if you do not like that extended time, you need to look at your whole process of doing a deal to see how to streamline it. If your store thinks you should be pushing metal your whole process will be quicker. If instead your store thinks there is more margin in add-on upsell, the time will take longer. But that time is not the customer’s fault.

  • avatar
    Kurt.

    Monday, I walked into my bank and took out a $10,000 car loan at 8%. Walked out cash in hand in less than 15 minutes, and that included flirting with the girl at the desk.

    They offered me an additional “pre-approved” new car loan up to $50k and they would give it to me right then.

    I think it was said elsewhere, the salesman just didn’t want to do the paperwork for $1000 and knew you’d pony up the extra cash for your little gems (both your daughter and the car) – and he was right. You should have taken her to a bank and co-signed a loan (either a signature or used car).

  • avatar
    SupaMan

    dwford

    Don’t mean to bash you, but it sounds like you’re not very motivated to sell cars and with the economy being the way it is, I can see why.

    However, it is your JOB to greet people in such a way that will make them feel comfortable right away and they’ll feel they can do business with you. Believe me, get short with the wrong people and you know how the “tell 1 customer, that one tells 2, those two tell 3…” goes. Sure people want to get the lowest price they can and it’s obvious why. I’m car shopping right now and trying to get my hands on a Mazdaspeed3. The dealer has it listed for $16937 and I met him at $16000 flat out the door (I have my own tags) and he simply refused. Why is that?

    Anyway, maybe you need to find some other work if that’s the attitude you’re gonna have with customers. I’m not saying you shouldn’t have bad days, but shit…doesn’t mean every customer should be treated like crap because “a few aren’t worth it”.

  • avatar
    Bridge2far

    “The dealer has it listed for $16937 and I met him at $16000 flat out the door (I have my own tags) and he simply refused. Why is that?”

    Maybe, just maybe, the dealer feels he/she is entitled to make a profit. And they decided to decline your offer. You have the choice of either upping your offer or simply walking away. You can keep trying other Mazda dealers as well. If your offer is continuously rejected, you can probably deduce that it is not a realistic proposal.

    “Monday, I walked into my bank and took out a $10,000 car loan at 8%”
    I am sure that a dealer could have done you better than 8%. Unless the collateral is an older vehicle.

  • avatar
    revhigh

    dwford :
    February 5th, 2009 at 8:56 pm

    revhigh:

    Normally in the sales process, once the customer agrees to a price, fills out the credit application, signs the purchase order and leaves a deposit, they buy the vehicle from you. Especially when you have taken the time to establish a rapport (or so you think), help them decide on the correct vehicle for their needs, find that vehicle out of state etc.

    If you non-salemen out there think the sales guy does all that out of the kindness of his heart, just to help you out. You are mistaken.

    I am just pissed that I lost the deal to the free tires and batteries scam.

    *************************************************

    Hey DW,

    Enough with the bashing. What I’m trying to say is that ANY salesman has to be professional in GOOD times and BAD times. It seems to the buying public that when times are GOOD, the salesmen are cocky and arrogant, and during BAD times, the salesmen are whiny obnoxious crybabies who don’t want to work. You see it in real estate too … when times are good, every housewife on the planet is a realtor, when times go bad, 80% of the ‘professional realtors’ disappear and work at Walmart. I’m not saying YOU are, since it seems you’re doing OK even with the bad times, and I’m glad for that.

    I realize that you can sometimes go above and beyond the call and lose the deal, but that’s sales. There’s no telling why customers do that. I know this because I was in sales myself for many years, and the truth of the matter is that sales is a damn tough profession. If you have a personality that doesn’t take rejection and disappointment well, it’s very easy to develop a ‘customers suck’ attitude. Clearly this attitued is not conducive to further sales activities. When I felt that attitude developing, I got out of sales.

    I can understand being pissed about losing the deal to the tires and batteries scam. Did you ever find out why the lady called you back to tell you about buying the car elsewhere ?? Was she so clueless that she didn’t realize that it was a tasteless thing to do ??

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