|One of the cars I have the pleasure of selling every day!|
1. Dealer buys car from an auction such as Manhiem for $17,000
2. Dealer puts pack on car, ranging from 350 to 750$. This is non-negotiable. It is added to cost. To you, it does not exist. Do not even bother trying to negotiate this. It will not work. What is pack? Pack is guarenteed profit that the salesman is not being paid commission on. Pack is strictly for operational cost such as rent, electric, utilities, etc. This prevents the dealer from losing money and possibly going out of business.
3. Auction cars often are not in great shape; a good dealer will make a car right. So, add in service bills, cleaning bills and transport cost if it's a far away auction. These are COSTS to make the car RIGHT for you, the customer. Sadly, it's a double edged sword. If a dealer doesn't make a car right, and we sell it with issues, we get called scammers and we supposedly sell bad cars. If we spend the money to make it right, we get called price gougers and people yell at me all day because our prices are too high. So, short answer? If the price is a bit high, but the car is great, it's because the dealer cared enough about satisfying customers to fix it before it hit the lot.
4. After all that, we are still allowed to try and make a profit. We are a business, after all. Depending on how much cost we have in the car, we'll often mark it up right the market value. Why? Well, why not? Market value is market value. Why can't we ask a decent price for our product? Car dealerships are one of the only businesses in America were negotiating a price is common tactic. And often, a feared one. People seem to think all dealerships are in it for the money and mark up cars way too high. Every price is too much when it comes to cars. While it's true; we do like money, who doesn't? Do you think BestBuy isn't in it for money? Or Wal-Mart? Or even Goodwill? Our markup of around 15-20% is NOTHING compared to the markups I've seen at Wal-Mart. I spent 3 years as a manager at Wal-Mart, and saw the sickening markup on products there. (That's for another blog.)
While I'm not saying you should swallow the markup at the dealership, don't act like we markup to rip you off. Every business is entitled to a profit, just like every customer is entitled to a discount. Don't be a jerk about it, and your salesman will bend over backwards to help you.
5. Sales Manager games. Yes, they play them. Yes, we hate it too. Nine times out of ten, we want to just cut to the chase and make a deal as fast as you do. Cut us some slack, sit back, and we'll work for you. I hate nothing more than walking up to the desk and having the manager say "Try and get a 500$ bump out of them on the down payment." Can we not just make the damn deal? The ideal day would be to greet, drive, sit down, strike a quick deal, do the mountain of paperwork, and watch you drive off, satisfied. The games are annoying, but if you just get pissy and walk out, you aren't doing anything for yourself because all dealers play them. If you go to a dealer and they don't play them? They did, and you didn't notice.
6. Commission. It's a big mystery to the customer, but really, it's easy. New cars suck. There is little room to negotiate, and we have to worry about CSR percentages, and we only make about 100$ a car on them, aka a mini. Considering the average draw is 1600$, that means 16 new cars to break even and not get wrote up. Lame. Used cars are where the money is. With used cars, we make 25% of the gross. The gross is anything above the cost of the vehicle. So if the cost is $16,000, and I sell it for $20,000, I just made $1,000. Nice for about 2 hours of work, right?
|It was owned by a little old lady.. who drove the shit out of it.|
This kind of turned into a car guy rant/information post. Truth is, we have jobs just like you. Thank god my current position is nothing like the average sales job. I do Internet Sales and deal with really cool people every day with no pressure to take ups. Inquiring over the Internet for a car is probably the least stressful way of looking at cars. Alot less pressure, and often times you can negotiate a bit over the phone or email. If you have any questions for a car guy, shoot away. I can make this a common Q and A type deal, since the car biz tends to be mysterious to most. I can even include funny stories. Trust me; I've got quite a few.
In the end, nowadays, it pays to be a good guy when it comes to selling. You don't find many of the shiesters and sharks that were common in the 80's and 90's. Many have retired or moved on, unable to adapt. The Internet and social media has made it a different ballgame. We still have to sell, and we still want to make money, but it pays to be a good guy. Get that stereotype out of your head and give your next salesman a chance. I genuinely care about my customers being satisfied; and when I make a friend, I make a friend; not for the benefit of my check book. I've come to find out most salesman have the same attitude.
So with that I wish you all a happy Buying Season! Summer is upon us and that means more and more people will want to buy cars. Take this info and use it to your advantage come your next purchase!