What Car Dealers don't want you to know

**MadMaxR44** · 09-17-2005, 01:20 PM

Came across this site with some information the dealers keep top secret. Check it out.
AOL Autos: Article

Think about this next time You pay anything over dealer invoice.

**done** · 09-17-2005, 02:07 PM

Originally Posted by MadMaxR44

Came across this site with some information the dealers keep top secret. Check it out.
AOL Autos: Article

Think about this next time You pay anything over dealer invoice.

Then your point is that dealers should only make 3% on the sale, regardless of any other factors?

**Fred** · 09-17-2005, 03:05 PM

Oh boy... this is close to the GSM mod kit discussion about pricing... Well I suppose microsoft is only entitled to $10 for Windows 2003 Enterprise Server because the CD's and books are only about $5 total in material...

Even if you don't want to pay over invoice, they know there's other suckers that will pay the higher price... If a general manager is greedy and won't settle for less comission, you're not getting your car... keep in mind that some dealers may not give comission for sales under msrp (I know it would suck working there but it's really just an example)

**boggart** · 09-17-2005, 03:45 PM

Done obviously used to sell cars.

What on earth is wrong with consumers arming themselves with the most information possible and getting the best deals possible? Should this privilege be reserved only for the dealers?

I know dealers are there to make money, and have no problems with that. But, if I went to Wal-Mart and the price of a gallon of milk was different for each of 50 customers, I'd be hacked. Why are car dealers different? If MSRP is a good price why aren't cars sold at that price? If invoice was a good price for a car, why aren't cars always sold for invoice? Why does the dealer ALWAYS keep all of the customer incentives that go along with the new car purchase?

No, dealers can make money, but they don't have to TRY to rape everyone who walks in their door to buy a car either....

As far as it being like the GSM discussion. What is wrong with a group of guys sitting around and discussing whether or not they think any product is worth what it is going for? I've pronounced my take on a certain single exhaust system numerous times. I don't harbor hard feelings for the company, think they make a fine product, but think that the price should be less. I didn't ask them to lower the price, but I did explain why I thought their price was out of line. If they want to lower it fine (they did too, at least on the GB), if not I don't have to buy it.

It's not wrong to have a discussion. After all, this is a "discussion board", right?

**done** · 09-17-2005, 05:19 PM

Originally Posted by MagnumSXT

Done obviously used to sell cars.

In point of fact, yes I did. For a while in 64/65 and then again in 78/82. The process was the same then. It has not changed. It doesn't change because, in general, the car buying public does not want it to change. The dealers are in business and have a reasonble expectation of that business being profitable. If flat rate pricing was what the public wanted, then that is what all dealers would do.

I worked in a flat rate store for a while and dealt with a lot of unhappy customers when they found out what their trades were really worth. At the last store I worked at, each senior salesmane could make any deal he could, with a known minimum. However, I spent far more time trying to get people financed than I ever did selling the deal and squeezing for the last nickle.

So what is right? Are all dealers fair and honest 100% of the time? Nope. Are all cutomers fair and honest 100% of the time. Nope.

So that is the system we have. You are not going to change it, so learn to work it. As the article said, you are not going to get the holdback, so the information is not very useful. By the way, they get even more incentives for the "leftovers" when the new models come out.

All that being said, I buy my cars at invoice, less any factory incentives. I try to get the deal there quickly so as not to waste my time or anyone elses. I don't mind that the dealer makes money. I for darn sure make money on the stuff I sell.

**Currently Cruzin** · 09-17-2005, 05:45 PM

I have to agree with "Done". I have been in sales all of my adult life. Being a salesman is not an easy job. Its the same with any big ticket item whether its a car, big screen T.V. or any other expensive item. There is always room for bargaining and there will always be dealers that are ready to take advantage of someone just as there are other dealers that will treat you and there salesman fairly.

**Dilliam** · 09-17-2005, 06:45 PM

It is really simple. Offer what you think is fair, and if the dealer can't make a dime on it, he can say no. There seems to be a small pity party in this thread for dealers. No one is forcing them to accept an offer

**DrVali** · 09-18-2005, 06:11 PM

www.fightingchance.com

Best way to buy a car.

**MCaesar** · 09-18-2005, 06:18 PM

Originally Posted by done

In point of fact, yes I did. For a while in 64/65 and then again in 78/82. The process was the same then. It has not changed. It doesn't change because, in general, the car buying public does not want it to change. The dealers are in business and have a reasonble expectation of that business being profitable. If flat rate pricing was what the public wanted, then that is what all dealers would do.

I worked in a flat rate store for a while and dealt with a lot of unhappy customers when they found out what their trades were really worth. At the last store I worked at, each senior salesmane could make any deal he could, with a known minimum. However, I spent far more time trying to get people financed than I ever did selling the deal and squeezing for the last nickle.

So what is right? Are all dealers fair and honest 100% of the time? Nope. Are all cutomers fair and honest 100% of the time. Nope.

So that is the system we have. You are not going to change it, so learn to work it. As the article said, you are not going to get the holdback, so the information is not very useful. By the way, they get even more incentives for the "leftovers" when the new models come out.

All that being said, I buy my cars at invoice, less any factory incentives. I try to get the deal there quickly so as not to waste my time or anyone elses. I don't mind that the dealer makes money. I for darn sure make money on the stuff I sell.

I agree with Done - the system works. Are we capitalists or not?

If you don't like the practice of one dealer then you can always go to another.

And 1 price is not all its cracked up to be anyway. They can steal your trade, switch customers to a lease, give a higher rate, etc. 1 price is for lazy people who don't want to take the time to find the true selling price of a model and the true worth of their trade.

**MadMaxR44** · 09-18-2005, 07:35 PM

Wow, Here I try to give you guys some interesting information and people go putting words in my mouth. No, I'm not saying the dealer should only make 3% on the deal. What I am trying to do is arm buyers with info to help them haggle the best price and not fall for dealers telling you their only making 1500 on a car if they let it go for 1500 over invoice, and let's be serious here, how many of you have even paid less than MSRP on your LX's. You know some dealers have told me that they pay the MSRP price that's on the window sticker so they only profit they make is what they sell it for above that price. That's lying. But apparantly i'm the bad guy for giving away their secrets.

**done** · 09-18-2005, 07:57 PM

Originally Posted by MadMaxR44

Wow, Here I try to give you guys some interesting information and people go putting words in my mouth. No, I'm not saying the dealer should only make 3% on the deal. What I am trying to do is arm buyers with info to help them haggle the best price and not fall for dealers telling you their only making 1500 on a car if they let it go for 1500 over invoice, and let's be serious here, how many of you have even paid less than MSRP on your LX's. You know some dealers have told me that they pay the MSRP price that's on the window sticker so they only profit they make is what they sell it for above that price. That's lying. But apparantly i'm the bad guy for giving away their secrets.

No, your not a bad guy. You started an interesting discussion. I thought I could add to it from my experience. By the way, the holdback does have some conditions attatched to it, but most dealers do always get it. Oh, I paid invoice for my LX.

**CoolVanilla** · 09-18-2005, 08:15 PM

I see what done, CC and others are saying. The dealer has every right in the world to make as much money as possible. They also have the right to refuse to sell if the profit margin isn't high enough.

What I don't understand is why the same approach isn't tolerated in other industries or with other consumer goods? I can't think of anything else I buy where its expected I'm going to be taken advantage of and its my job to limit its extent.

Also, and I ask this as innocently as possible, if this is what I really want as a consumer, why have the employee / no haggle pricing programs of late been so successful?

Please do help me understand. I, for one, have given up on dealerships and now hire a broker; by far a superior buying experience. But I still think this is something I shouldn't *need* in order to assure I don't miss some minor detail after 5 hours of haggling that ends up screwing me out of hundreds.

**MCaesar** · 09-18-2005, 09:35 PM

Originally Posted by CoolVanilla

I see what done, CC and others are saying. The dealer has every right in the world to make as much money as possible. They also have the right to refuse to sell if the profit margin isn't high enough.

What I don't understand is why the same approach isn't tolerated in other industries or with other consumer goods? I can't think of anything else I buy where its expected I'm going to be taken advantage of and its my job to limit its extent.

Also, and I ask this as innocently as possible, if this is what I really want as a consumer, why have the employee / no haggle pricing programs of late been so successful?

Please do help me understand. I, for one, have given up on dealerships and now hire a broker; by far a superior buying experience. But I still think this is something I shouldn't *need* in order to assure I don't miss some minor detail after 5 hours of haggling that ends up screwing me out of hundreds.

I can't think of anything else I buy where its expected I'm going to be taken advantage of and its my job to limit its extent.

real estate

Also, and I ask this as innocently as possible, if this is what I really want as a consumer, why have the employee / no haggle pricing programs of late been so successful?

Have they been successful? Sure, they help in market share but they don't help nearly as much in profitability. You sure don't see Toyota, Honda, or Lexus doing it do you? Last I checked Toyota was eating Detroit's lunch and dinner.

They are nothing better than rebates to move bad cars that no one wants. Make good cars and you don't need gimmicks. Try getting employee pricing on a hemi.

They work in increasing market share of bad cars because there is a huge percentage of the population that likes "a deal" and will not buy without one. Many years ago I sold Hondas and at that time we didn't discount at all. So to make some customers happy we would put marked up accessories on the cars just to be able to show them a discount.

To me, something is only worth what someone will pay for it. All else is noise. Call it employee pricing or Lee Iaccoca rebate it doesn't matter. All sales come down to what is the owner willing to let it go for.

**CoolVanilla** · 09-18-2005, 10:37 PM

Originally Posted by MCaesar

I can't think of anything else I buy where its expected I'm going to be taken advantage of and its my job to limit its extent.

real estate

LOL I was thinking this might be true. But, having a couple of family members in both the selling and financing side of residential real estate, I've come to learn its still quite a bit different. I don't want to derail the thread so I'll just try to summarize: with real estate, you may be paying a ton for nothing, but at least you're completely aware of every charge before signing via a good faith estimate and escro. My last lease (before the Mag) was reworked after I had had the car a month and there was nothing I could do about it (my mo went down $10 a month but the residual went up $3k!). With real estate, if anyone tried anything that sniffed of this kind of thing, even if the deal was completely invalid from the get go, heads would roll, licenses would be lost and I would still have the deal I agreed too. There are no such repercussions for auto sales / financial guys (that I'm aware of).

You sure don't see Toyota, Honda, or Lexus doing it do you? Last I checked Toyota was eating Detroit's lunch and dinner.
They are nothing better than rebates to move bad cars that no one wants. Make good cars and you don't need gimmicks. Try getting employee pricing on a hemi.

Fair enough.

To me, something is only worth what someone will pay for it. All else is noise. Call it employee pricing or Lee Iaccoca rebate it doesn't matter. All sales come down to what is the owner willing to let it go for.

True, true.

Ah well. I guess thats just the way it is. I think I've found a way that works for me (broker) so that's what I'll be doing from here on out.