Another Car Buying Story
Oh, the horror. Your car no long fits your needs or wants and it is time to trade it for one that does. Even with all the information available on the Internet a trip to the local car dealership will have to be made sooner or later.
The moment you arrive all those shark-like salespeople will appear out of nowhere and start circling pounding upon you when you least expect it. After the test drive they will shuffle you into a little cubicle and use their advanced negation skills to sell you a car. The salesman will run to the sale’s desk every time you ask a question and after showing you some outrageous trade figures will soon bring you ones that sound much better. You wonder why those figures weren’t used the first time.
Making a decision to purchase that new car and spending thousands or agreeing to high monthly payments is something you want to go home to think about but you know that’s not going to happen. Your salesman will disappear and some other guy all of a sudden is sitting across from you. Regardless his real title you know him as the “Closer.” For every objection you may have he has a solution. You know if you don’t agree to the purchase you’ll look like an idiot and you don’t ever like looking like an idiot.
Today dealerships advertise no-haggle negotiations and never a hard sale. Bull. They say they can give you a sale price, value your trade and tell you payments in just a few minutes. Again, bull. It cannot be done. Sure, they can give you some figures but by the time you get to the finance office should that happen, those figures will no longer apply.
Here is the scenario from the salesman’s point-of-view. After working with three customers today and making no sales, a new prospect drives onto the lot. He hesitates as he and the other salespeople prejudge you based on your car, clothes and the speed at which you are moving. He looks to see if you are interested in new or used cars. Out of the three sales he lost already today one customer was “just looking,” and two couldn’t borrow a cup of sugar much less the thousands to secure a finance agreement.
The salesman; let’s call him John, watches as all eyes on the sale’s floor look in the prospect’s direction and he realizes the first guy out there and throws a business card out will get credit for the sale regardless how it goes down. John rushes out the side door and slinks through the parked vehicles only to reappear as the prospect emerges from their vehicle. The other disappointed salespeople curse allowed calling John a “Lot Lizard” and head back inside the dealership to congregate with one another in their favorite cubicle that faces the lot.
John doesn’t want to appear aggressive to the prospect but if he doesn’t make a sale he doesn’t get paid. He checks his demeanor and in his most business-like manner sticks out his hand and says, “Welcome to our dealership. My name is John. And you are?” Your mind is wandering. You want to look at cars and find one that will work for you. You shake John’s hand but don’t give your name right away. John realizes you are hesitant but continues to shake your hand gripping it just a little too tight until you give up your name which he jots down in his little notebook. Most salespeople will forget your name as soon as it is offered because they too have other things on their minds.
John then asks, “What brings you here today?”
I love it when the person says with a straight face, “My car.”
Usually John gets an answer like, “Yeah, uh…I called earlier and spoke with Dave or Dan or is there a Don?”
John’s heart sinks. He tells the prospect he’ll get him and you return to the showroom to find out if Dave or Don took a phone-up from the customer. They rush pass on John without thanking him and work the deal.
Today, you tell John you are need for a sport utility vehicle to tow the camper you just bought. “Great.” John says adding, “What kind of camper did you get? How long is it? Do you know how much it weighs?”
In the meantime you have seen a nice, new and sporty vehicle that would look great towing your camper and tell John to go get the keys to this one. John knows his product well and realizes you have selected a nice SUV however it has a tow capacity of only 2000 pounds and will not tow a 30’ camper that weighs over 5,000 pounds as you relayed to him. You ask how much for it. It doesn’t matter what figure John gives because though it may meet your wants it doesn’t meet your needs. He knows you need to be looking at a larger, more expensive SUV or a nice used one that will save some money. The last thing John wants to do now is land you on the wrong vehicle.
Explaining the difference between Class II and Class IV trailer hitches and their capacities you begin to lose the prospect’s interest. John turns and walks toward the direction of a larger SUV and says, “Follow me.” There are only two things you can do at that point. Follow him or don’t follow him. You follow him. He shows you a SUV that fits your needs and you decide you would like to own it. “Great.” John says, “I’ll go get the keys and we’ll take it for a ride.”
You say, “I don’t need to drive it. Just give me your best price.”
Very rarely will someone spend thousands of dollars on something without taking it for a test drive first. Giving you a figure which John has no idea what a best price might be because that’s not his job is not only impossible it is poor salesmanship. He has to build value no matter what the price. Besides, you don’t drive it, the sales manager in larger dealerships won’t bother giving a price and the salesman gets reprimanded or even fired for not doing his job. You’ve heard it before when John says, “Sir, you wouldn’t buy a pair of shoes without trying them on would you? And here you are considering buying a new vehicle that costs a lot more than a new pair of shoes. Two of these vehicles that look identical will drive entirely different and I want you to be completely satisfied with your decision. It’ll only take a minute.”
Test drive done you are now parked in the “Sold Lane.” There is no sold lane but that’s just something John heard another salesman say and it sounded good. You look at all the bells and whistles and then take a walk around the outside of the vehicle imagining how it will look towing your new camper while John stands silently by the curb. He asks, “What do you think? Follow me and we’ll work up some figures for you to look at.” He turns and starts walking towards the building, gets to the front door and in front of the whole dealership world holds the door open for you.
The only thing you can do is follow him into the dealership where he ushers you to a small cubicle and says that is his office even though there are no photos of his family on the desk or anything personal except maybe a briefcase. Or maybe it is his office and the walls are crammed full of plaques and accolades that mean entirely nothing to you. Either way he takes his seat and pulls out a few official looking forms.
John is a pretty good salesman. Pulling out the forms is the third time he has tried to close the deal without your realization. The first was during the test drive as he listened attentively to your comments and asked if the vehicle would fit your needs and wants. The second was when he asked what you thought after the test drive and now pulling out the forms he will begin asking for pertinent information possibly including a credit application. By signing that document alone you have indicated your intent to buy.
You still haven’t gotten a price or a value on your trade and you become a little irate. John begins filling out a trade evaluation sheet and asks you a few questions on your like does it have an automatic transmission or not. You answer automatic. John says, “Too bad.” And keeps on writing. Then he says let’s go take a look at your car.
Outside you watch as John touches this scratch, that little dent from a shopping cart but doesn’t say anything. Instead he jots notes on the evaluation form. Careful not to say too much John looks at you and says, “I’ve got a customer looking for a car very much like this one. My boss will give you a great trade allowance.”
What a coincidence you think to yourself. You just happened into the one dealership in the country and got a salesman who has a customer looking for a car just like yours. Who knew? John then asks, “If I can present you with figures on the SUV that you like, on your trade and a payment schedule that we are all in agreement with, will you be willing to commit to buying while you are here today?”
The only answer to that question is yes. If you say no, you are no longer a customer…just a shopper. John will excuse himself to talk to the sales manager for advice and you now would get to meet the manager in person. Saying yes results in your return to the cubicle where John has you sit in the surprisingly uncomfortable chair across the desk from his swivel chair. He excuses himself to give the form to the used car manager and on his way out the door he asks if you’d like a soft drink or water. You decline.
You see your car driving past the front windows as John and the used car manager drive it off the lot at a high rate of speed. They seem to be gone a long time. Finally, you see John coming towards you but your car is nowhere to be seen.
John says, “I’ve got great news.” He’s taken the time to do a little research kind of what you did at home. He shows you the results of an Internet search on your make, model and year vehicle elaborating on the lower amounts where you looked up the retail values. He makes his presentation and says, “This website says your vehicle is worth $5500 and because I have a customer who wants one like it, I can allow you $6800!” Since that is fairly close to the retail value you looked up you start to get excited thinking John is a straight up guy.
With your signature he also had your permission to check your credit records and found out you have pretty good credit, own your own home and have stability in your job. His boss, who is sitting on the “Tower” which is an elevated desk that gives him a bird’s eye view of the sale’s floor, told John the figures to present. Boss told John, “No matter what, don’t let this guy leave.”
Now John has additional pressure on him to make the sale. He continues his presentation showing you a piece of paper with figures written that include the price of the SUV, less your trade value and three plus signs. You ask and John explains the plus signs mean plus tax, title and any fees. Continuing his explanation John tells you that like any other business establishment they have to add state sale’s taxes and whether you own the car outright or owe on it, producing the title assures the trade is paid in full whether the dealership has to add any amount owed to the deal to secure the document from the lien holder. And finally even today, most dealerships have a “Doc” fee which is accepted throughout the industry and ranges anywhere from $49 to $500 and more. If the dealer could sale all their cars at MSRP and give actual cash value (ACV) on trades there would be no reason to charge the doc fee. Some deals are cut so marginal that the fee is charged because even if the dealer will let the deal slip by…employees…specifically office help still have to be paid. A good dealership realizes they can make up their loss on marginal deals through warranty and service work after the sale. Because of customers’ complaints on a fabricated document fee some dealers have started advertising no doc fee but John explains they are still getting it somewhere in the deal like offering less for your trade. Dealerships have to make money after all that is why they are in business.
Now you have your figures and you like the SUV but you ask John what your payments are going to be. There is no way John can answer that question. First, he is not the finance manager and since that manager makes his living on how much financing you are willing to pay for, anything John says at this point could hurt the F&I (fiancé and insurance) manager’s chance of making a buck or two off the deal. And any manager holds rank over John which could affect his job security. Also, John doesn’t know the terms of the financing any better than you at this point. How much money you are willing to put down out of pocket and how long you are willing to pay on the loan along with other factors affect the final payment.
While reviewing the figures you realize the dealer hasn’t reduced the price of the SUV and is asking MSRP and you object. Once again, John will go to the manager and either return with new figures or with the manager in tow. They let you win this volley by telling you they can reduce the price of the new car by $500 and you smile at your keen negotiation skills. Most SUV’s hold some profit margin but very few new cars have much to work with however the dealer has other sources you aren’t aware of that he can apply the extra discount to such as “Dealer Holdback or manufacturer to dealer incentives in addition to customer rebate programs.”
You agree to the deal as John has presented it to you but you tell him you need to check with your wife/parents/sister/cousin/boss whoever and will let him know your decision the following day. John knows the minute you walk out the door you will be armed with all the information you need to go to the next dealership down the road and give them the opportunity to earn your business. You leave, John loses the sale.
John is very understanding and says, “Why don’t you take the SUV with you tonight…use our gas and show it to your wife/parents/sister/cousin/boss and also see how well it looks in your driveway and in front of your new camper? Of course John knows you will also show it to your neighbors, your friends and the guy at the mini mart down the street. After all you don’t buy a new vehicle everyday…it’s called the “Puppy Dog Close.” It is an emotional closing tool that makes you believe this is your vehicle and once all your friends and family see it they too believe you have bought this vehicle so if you don’t make the commitment you lose “face” amongst your peers. Additionally very few (though some) people will shop while in another dealership’s vehicle. (I have had the great pleasure to call a neighboring dealership to tell them to come and get their vehicle that was left on our lot after I closed “their” customer).
You decide you want to go ahead and buy the vehicle and John enthusiastically jumps up and thanks you for your business. He then completes document after document and copies your license and registration and calls your current lienholder if need be to get a ten day payoff. All paperwork is done and he excuses himself to give it to the sales manager for review who then takes it to the F&I manager who has to type it all into his computer.
This takes time and you find yourself sitting across from John talking small talk. John excuses himself once again saying things like, “I need to go put a full tank of gas in your new SUV and/or I need to take your new vehicle to get it cleaned up for delivery.” Remember, you haven’t signed anything and the deal can still fall through for John. He wants to make sure you realize you are buying a car, today!
After a half hour or so passes John returns parking the SUV right in front of the dealership. Since he isn’t the only salesman making the only deal today he says, “There’s one more person in front of us but it won’t be long.” He of course is referring to getting into the F&I manager’s office for the signing of the Bill Of Sale and other pertinent legal documents. He may even take you back to the service department to introduce you to a service writer and scheduling your first and free oil change.
Finally, you are taken into meet the F&I manager. What goes on in that office is another story altogether. John paces outside the manager’s door and doesn’t relax until he hears the contract printing. At this point he knows he has sold a car and will realize either a good commission or at least a mini deal which if nothing else may help him get a unit bonus at the end of the month.
Long story…sorry. But any dealership that says they can give you price and payment figures in a few short minutes is just plain full of it!