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Thread: Is this a typical 'strategy' for Dealerships?

  1. #41
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    Originally posted by redbaron303
    Just my 2 cents - having worked in the industry for many years, like a realtor or any other commissioned based sales person gross profit is how the dealer and sales people make their living.

    It's amazing and frankly offensive how many people EXPECT that a dealer should sell for below their cost, bend over and take it with sandpaper.

    Do you go to Walmart, Holt Renfrew, Safeway, IGA, whatever and demand they sell you product X below their cost or at dead cost? There's a cost to doing business... pay the price! It's no different than when someone comes to do business with you and your firm... if you're a marginalized employee you probably don't give two shits, but if you own the firm or have any stake in it you will understand what I mean.

    That said, as a consumer I expect a fair deal. With vehicles being the highest depreciating asset we will purchase I almost feel preowned is the best way to go to alleviate some of our initial loss.

    I feel that this tactic originally discussed, is pushy, arrogant, and below the consumer - "if you buy I'll tell you the price" - EFF that.

    I find it equally offensive for the salesperson to try and back the consumer into a corner and "force" them to buy "now" or the deal vanishes. Unfortunately we all know as sales people if we give you our best deal without commitment, you will take the numbers and go shopping to see if it can be beat ... Additional to this the advent of the internet and consumers doing their due diligence has allowed them to know more than they should - now expecting to pay less.

    There's two sides to a coin - be fair to your sales person, if they've done a good job and have met your expectations remember this is how they make their living and feed their families - don't fuck them (besides screw the sales people and it translates into word of mouth about their experience with you as a customer and that word goes through all departments pretty quick). This is no different than the sales person being fair to their client and how if they're not (or hopefully if they are = referrals) word of mouth will carry about their experience.



    Sorry - long rant, and a bit of info. Take it for what it's worth... but we the consumer always have an option as does the dealer - there's always another customer just like there's always another product for us.

    PS - average dealer margin is 6% on most import vehicles over their cost so giving cost plus 3% is them splitting the profit with you and is more than a fair deal ------- IF they are selling off actual invoice and not MSRP window sticker. With my fleet account for Dodge and BMW I've seen a lot of invoices and the margins in a lot of cases aren't great.





    ** Just on a side for those car shopping at dealers - my suggestion is to go the manufacturer website and build/price your vehicle with the options you want, it's pretty accurate for MSRP. However, most cases this doesn't include freight/pdi/dealer fees/amvic fees/additional options/etc. But a dealer that has the original window sticker in the window isn't likely to FUCK you terribly. A dealer that hides or takes away the OEM window sticker (which is illegal according to AMVIC) is likely going to do so and try to get way more out of you than you should pay! I've seen it done so many time especially on the "East Side" .... I've also seen modified window stickers that look like manufacturer ones with "regional adjustments" or other things on them where a dealer will add $5,000 to msrp and when it comes time to evaluate trades or give you a deal they have more room to work with - for the uneducated client.


    Whatever. Dealers will screw anyone they can without a second thought, why should a customer not try and save every penny they can. A car purchase is 90% of the time over $30,000, and haggling can save THOUSANDS!

    Dealers get incentives and rebates from the factory for selling X number of vehicles a week, a month, a cycle, whatever, so don't try and peddle that they are only going to get paid by the customer.

    At Walmart, etc, if you manage to haggle, you are going to save a couple bucks, maybe $50 on a bigger ticket item, where if you can at a dealer, the savings can be insane.

    And remember, the dealer isn't going to sell it if they are not going to make money, so don't try peddling the "taking food from my kids mouth" bit. If they were not making a living selling cars, they would switch jobs pretty quick.
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    @ spikerS

    Saving a few bucks every time you go out because you're a cheap-wad and haggling at Walmart can save you thousands in the long run. No different than buying a car. It's about minimizing markup and margin so you pay less in either case. The purchase is totally irrelevant it's the end result that every consumer wants on whatever they purchase.

    What consumer wants to pay more?

    I'm not saying that a client shouldn't negotiate - in fact you should - if you don't you're a moron. But asking the dealer and/or sales person to work for free regardless of industry is insulting and asinine IMO. I'm saying respect a good deal when it's given to you and realize that we all work for a living regardless of which side of the table you're on.

    If the margin is 6% profit, is a dealer not giving you a fair deal at 3% --- you're paying 3% over cost and they're losing 3% of potential profit. You are also entitled to save on any interest rates or rebates that the dealer may give you over and above that.... would you really want to be "that guy" who is a total asshole and barter for the remaining 3% ????

    spikerS - what do you do for a living? I'm curious - you have a strong tone... I'm curious to know your profession of choice is...
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    .
    Last edited by Cos; 12-28-2016 at 08:50 PM.
    Originally posted by adam c

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    Originally posted by redbaron303
    @ spikerS

    Saving a few bucks every time you go out because you're a cheap-wad and haggling at Walmart can save you thousands in the long run. No different than buying a car. It's about minimizing markup and margin so you pay less in either case. The purchase is totally irrelevant it's the end result that every consumer wants on whatever they purchase.

    What consumer wants to pay more?

    I'm not saying that a client shouldn't negotiate - in fact you should - if you don't you're a moron. But asking the dealer and/or sales person to work for free regardless of industry is insulting and asinine IMO. I'm saying respect a good deal when it's given to you and realize that we all work for a living regardless of which side of the table you're on.

    If the margin is 6% profit, is a dealer not giving you a fair deal at 3% --- you're paying 3% over cost and they're losing 3% of potential profit. You are also entitled to save on any interest rates or rebates that the dealer may give you over and above that.... would you really want to be "that guy" who is a total asshole and barter for the remaining 3% ????

    spikerS - what do you do for a living? I'm curious - you have a strong tone... I'm curious to know your profession of choice is...
    I will start from the end and work backwards.

    I am part of the Network Operations for a Telco.

    What you are saying is that a customer should not try and keep money in their pocket, and just give it up because the dealer says it is a "fair deal"

    It is not being a cheap ass tight wad. It is being smart with your money. Yes, if you haggle for a dollar on every purchase, you will save $3000 over the course of 3000 purchases. But I can tell you, that MANY times, a dealer has come to me and said this in the final and lowest price, only to haggle off another 2 or 3k before buying. And I saved that in ONE purchase. Guess what. The dealer STILL made money, and no kids starved.

    A good friend of mine recently bought a new truck, and purchased it below cost. Want to know how? The dealer needed to sell a couple more trucks to meet their weekly quota to get the rebate incentive from the factory. Sure they may have lost $3k on the truck, but they made back $10k for selling X number of trucks. Was my friend wrong, or being cheap for working out that deal?

    Plain and simple, NO.

    Every person works hard for their money, and every business, charity, scammer, whatever works equally as hard to get it out of your pocket. If you don't care, you money is gone more quickly. Or, you can be smart, and find ways to make it last longer or get more for the dollar.

    I mean, if you're crazy rich and $3k is nothing to you, then yeah, throw it up in the air and walk away, but I am still going to tease you over how I bought the exact same vehicle for $3k less than you from my all inclusive resort in mexico.
    Boosted life tip #329
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    Make the smart choice.

    Originally posted by Mibz
    Always a fucking awful experience seeing spikers. Extra awful when he laps me.

  5. #45
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    Originally posted by Cos



    The best good sales guys I've dealt with deal with selling a car like they are selling a 2x4 at home depot. Dont nickle and dime. Just 'this is the price' take it or not because I KNOW they can't do better. I've checked.
    This is the best way for us to do business. Again a customer like you respects a good deal when it's brought to them. I like to ask what it will take to earn someones business on the product I'm selling - if their expectation is reasonable and realistic I'll acknowledge that, if not I'll tell them so. I really like when a customer is direct and knows what they want and how much they want to pay for it. That can help set the tone and allow me to know if they're realistic or a little overboard.... "I want the top model for the advertised price of the base model after rebates" - over board...

    And the comparison can be made - for a safeway or walmart or whatever. I've asked for discounts on the stupidest things and have received them - so I may have bought my banana for less than you at some point in time. Also what about sales - it's a cost savings to the consumer and a fluctuation in the asking price promoted by the store itself - the bay is notorious for this with their sales and bay days and stuff they've bred a type of consumer that "will wait for the sale" if it's not the price they want now. It's all relative but the result is the same - consumer paying less and the mentality that there is a perceived deal in play.
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    I think the main question is what has made society feel there is a need to negotiate and demand lower prices on select products, but not all products.

    If one were to travel to another country, the ability to barter for the purchase price of a banana is normal, yet when we walk into Safeway we just pay the posted price. Does this mean there is more or less profit associated with each item? I know for a fact that some grocery items carry a profit margin over 30%

    The auto industry has not changed in over 80 years, yet when a company tries to move away from the barter model, their success is limited - Toyota tried this about 10 years ago with "Access Pricing". Then in contrast Tesla has been very successful with having an online buying experience and no sales staff, only advisors or consultants.

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    If the car industry was honest and didn't actively try to screw their customers as part of normal business operations, it would probably be different.

    Instead, a lot of salesmen rely on people's inability to think in high stress situations and intentionally mislead and confuse them by tossing stacks and stacks of numbers at them, then lying and saying that you need a decision NOW.

    I'd love to be able to buy a car online. I can educate myself on any vehicle better than a dealership employee can, I'll pay less because there is very limited overhead and I don't have to get the hard sell by 4 different people (all of which will lie to me in some form).
    Last edited by FraserB; 05-13-2014 at 10:39 AM.
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    ...
    Last edited by Sugarphreak; 08-01-2019 at 02:02 PM.

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    :-)
    Last edited by redbaron303; 05-13-2014 at 10:51 AM.
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    What would be the effects of having set prices on cars? Of course there are options and add ons but those also have their price tags. More people would feel like they are getting a deal and the whole purchasing experience would be improved. It just seems so odd that 2 people can pay a different amount for the same car...

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    Sugarphreak --- thanks, I ramble too much. Apologies about that, but yes I think you said what I want in 20 words or less..... mostly. :-)
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    I have very little sympathy for dealers, after sitting through dozens of extremely shady tactics, as their "lowest possible" price drops another 5 times over the course of wasting everyone's time for 2 hours. Don't even get me started on the protection packages they chomp at the bit to sell to uninformed customers. $350 "admin" fees are common as well. With dealer kickbacks and everything else, they won't sell you a car if they aren't making money on it, so I see nothing wrong with trying to get the lowest possible price.

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    Originally posted by Mitsu3000gt
    I have very little sympathy for dealers, after sitting through dozens of extremely shady tactics, as their "lowest possible" price drops another 5 times over the course of wasting everyone's time for 2 hours. Don't even get me started on the protection packages they chomp at the bit to sell to uninformed customers. $350 "admin" fees are common as well. With dealer kickbacks and everything else, they won't sell you a car if they aren't making money on it, so I see nothing wrong with trying to get the lowest possible price.

    So why don't you try to do the same thing when you pick up your next case of beer.

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    made some mistakes mentioned in this thread.

    i wasnt firm on my price, i gave in too quickly and i basically "lost" the negotiations in my mind.

    however, with that expensive first lesson, im more confident going forward on how to approach buying a car and basically sticking to my plan, which i didnt do the first time around.

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    Originally posted by yellowGTS



    So why don't you try to do the same thing when you pick up your next case of beer.
    Because the two scenarios aren't even remotely comparable, and the liquor store owner isn't trying to bend me over every chance he gets.

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    Originally posted by Mitsu3000gt


    Because the two scenarios aren't even remotely comparable, and the liquor store owner isn't trying to bend me over every chance he gets.
    Do you know that? Or think it because margins and costs on cars are so readily available?

    I'm assuming you get great deals on gasoline....

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    Last edited by Sugarphreak; 08-01-2019 at 02:02 PM.

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    Best advice from faiz999 - have a plan and stick to it! Also Know your budget and stick to it.

    If you get caught up in the moment, the excitement and such - it all goes out the window. Take a step back, breathe and re-evaluate what you have in front of you. If you need a day to make a decision - take a day. If you need to discuss with your mom, dad, wife, husband, dog ... do it and then make the decision (in fact bring them with you so you're not wasting your time nor the salespersons twice by having to bring them the second time).


    Ok so something that hasn't been mentioned unless I haven't read it here or misread it.

    Trade in Value - remember searching kijiji and canada trader to see what a car is listed for doesn't mean that's what you're getting. At the dealer level they have to recondition the car and prep it for sale and inspect it (if they're amvic licensed) - and the condition of your car will devalue itself - bald tires, cracked windows, scratches, damage, bad car proof claim, etc -- no dealer in their right mind will give you an upfront trade value before finding you a car to replace yours with. They will then do trade and sale of the new car as part of the deal and show you an out the door price/payment as requested. So be prepared to put some effort into negotiating trade value too but make sure you understand how much you're getting for the trade, if it's inflated with the rebate and discounts given on the new car and they're showing msrp for the sale price (new car insurance prefers this) or if they're giving you wholesale for your trade and discounting the new car on paper - the end number should work out the same.

    Do a bit of homework, check resale places and see what the same year, make and model with similar options and KM are selling for. Check Canadian black book online and it will give you an idea of what the dealer will be looking at and what you should be expecting.

    Know your buyout on the loan if you have one to the dollar and the per Diem, know the history of your trade, know that if you just had it in for service and it looks flawless but needs a 4 wheel drive transfer case - the appraiser knows that as he's talked to the service department if the salesman has done his job.... and make sure your trade is CLEAN!!! You're only getting top dollar if you present it to the dealership in the best condition! The less work they perceive needs to be done, the more you get.

    *The dealer doesn't always WANT your trade, sometimes you have an oddity or high mileage ride that will sit on their lot for days or they have to send to a wholesaler so they will low ball you with an offer simply because they don't want your car but are forced to work with it. US and out of country cars usually fall into this category too!


    Even as a salesperson, this frustrated me the most because of unrealistic client expectations and some trade value issues that I couldn't overcome :-(
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    Originally posted by redbaron303
    Best advice from faiz999 - have a plan and stick to it! Also Know your budget and stick to it.

    If you get caught up in the moment, the excitement and such - it all goes out the window. Take a step back, breathe and re-evaluate what you have in front of you. If you need a day to make a decision - take a day. If you need to discuss with your mom, dad, wife, husband, dog ... do it and then make the decision (in fact bring them with you so you're not wasting your time nor the salespersons twice by having to bring them the second time).


    Ok so something that hasn't been mentioned unless I haven't read it here or misread it.

    Trade in Value - remember searching kijiji and canada trader to see what a car is listed for doesn't mean that's what you're getting. At the dealer level they have to recondition the car and prep it for sale and inspect it (if they're amvic licensed) - and the condition of your car will devalue itself - bald tires, cracked windows, scratches, damage, bad car proof claim, etc -- no dealer in their right mind will give you an upfront trade value before finding you a car to replace yours with. They will then do trade and sale of the new car as part of the deal and show you an out the door price/payment as requested. So be prepared to put some effort into negotiating trade value too but make sure you understand how much you're getting for the trade, if it's inflated with the rebate and discounts given on the new car and they're showing msrp for the sale price (new car insurance prefers this) or if they're giving you wholesale for your trade and discounting the new car on paper - the end number should work out the same.

    Do a bit of homework, check resale places and see what the same year, make and model with similar options and KM are selling for. Check Canadian black book online and it will give you an idea of what the dealer will be looking at and what you should be expecting.

    Know your buyout on the loan if you have one to the dollar and the per Diem, know the history of your trade, know that if you just had it in for service and it looks flawless but needs a 4 wheel drive transfer case - the appraiser knows that as he's talked to the service department if the salesman has done his job.... and make sure your trade is CLEAN!!! You're only getting top dollar if you present it to the dealership in the best condition! The less work they perceive needs to be done, the more you get.

    *The dealer doesn't always WANT your trade, sometimes you have an oddity or high mileage ride that will sit on their lot for days or they have to send to a wholesaler so they will low ball you with an offer simply because they don't want your car but are forced to work with it. US and out of country cars usually fall into this category too!


    Even as a salesperson, this frustrated me the most because of unrealistic client expectations and some trade value issues that I couldn't overcome :-(

    +1

    Trade value is not the same as retail value

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    Also sometime the dealership really does want your trade. Last time I bought new, I specifically said Iw as keepign the car, not trading it in. Worked out a great deal and only asked about the trade in as an afterthought. Not only did they offer me MORE than i could sell for privately, but they increased that offer before I hended over the keys the next week. Apparently that was a very in-demand car, even with some body trim loose and a windsheild that was cracked.

    That was proabbly not typical, but it was helpful for sure.
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