Negotiable commodity...

[BAC5.2]

Ok, I have been on the "inside" and I've seen what happens in the automotive industry.

So I am curious about something.

Why do people expect vehicles to be a negotiable commodity?

It's something I just don't understand.

People expect to pay Invoice or less for a vehicle. Why? Do people not understand the value of a vehicle? Do they not understand the value of time?

When was the last time you (in general) wen't to the grocery store, and argued the price of a bag of chips with the cashier? Never. $1.99 you either buy the chips or you don't.

What makes people think they can walk into a car dealership. See a car with a sticker of $30,000 and an invoice of $27,000, and expect to pay $26,500?

While I have never bought a brand new car, I have sold several of them. I have dealt with people who have absolutely no reguard for anyone but themselves. I have dealt with some of the most selfish people some of you will ever meet. And you'd never know it by looking at them.

The invoice of a vehicle is exactly what the dealership paid for the car. Salespeople make money based on comission of the PROFIT on the vehicle (the difference between the invoice and the sticker price).

So I don't understand the thought process of people when they walk into a car dealership.

They expect to pay for the car what the dealer paid for it (or even less in more cases than not). They spend 4 to 12 hours with a salesman, and try to negotiate a $24,000 price on a car with a $26,000 invoice. Not only does the salesman make ZERO dollars for 12 hours of work, but customers like this are NEVER satisfied with the customer service.

News Flash: Car sales is a business. The MSRP is the MSRP. It's not set by the dealer. The dealer isn't out to get you. The dealer isn't trying to scam you unless you try to scam them.

WHY DO PEOPLE THINK CARS SHOULD BE A NEGOTIABLE COMMODITY????

At the current rate of car sales in this nation, quality is going to continue to drop in an attempt for car companies to quench the insatiable thirst of consumers selfishness.

At the same time, dealerships who have internet pricing (like the company I used to work for, www.darcars.com ), are murdering their own kind. They expect to retain employees while at the same time fucking them because the higher class of people can click 10 times.

I wish cars were NOT a negotiable commodity. I think it's a stupid idea to introduce haggling in something with a fixed price.

Is it really out of the question to not allow haggling on the price? To have a fixed price on the vehicle? Would it matter if the MSRP of the car was raised, and bottom-line prices were introduced as the former MSRP?

I.E. Original MSRP is $20,000. New MSRP is $22,000. Bottom Line is $20,000.

Would that make the idea of purchasing a vehicle any better?

What REALLY gets me, is when people complain (in general) about being underpaid and under appreciated. And all the while, they are telling the salesman to pad their knees and service the customer.

I guess I don't understand it from the consumers side of the fence, as I've never been in that position. I've been in a position that 98% of the car buying population has never been in.

I wish it made more sense.

[THAWA]

Because you can get a car for invoice or less, and if that certain dealership doesnt want to sell the car for that much, guess how many other hundreds of dealerships there are in the country. Plus no one wants to see salespeople make money. Why should I pay some jerk-off to tell me about a car that I want. If I'm going to drop huge dime on a car I'm most likely going to know more about it than the person that is trying to sell me the car. So why do I need this guy taking more of my money? If it were like a grocery store I would just go there, pick the car I wanted and pay for it. Not sit there and listen to this asswipe tell me about all the features that I already know about. That's why I'd never pay more than invoice for a car.

[BAC5.2]

Reguardless, he is still spending his time with you.

If you wanted to walk in, say "I want that one in red" and pull out your credit card or check book, then yea, I wouldn't expect you to pay more than invoice for the car.

But the average car sale takes 4 hours from greeting to departure. 9 out of 10 of the cars I have sold, the customer already knew what they wanted. They still have to drive it. They still have to go through the paperwork. They still expect the salesman to bend over backwards to please them, and they offer nothing back.

If you sold a commodity, would you appreciate it if the customers didn't care that you were spending your time with them? Put yourself in the salesmans shoes. You think you want a car, and if you walked in and said "give me that one, I will give you this check" it would be fine. But look at what happens when the customer wants a car. Salesman has to find it, clean it up, take you for a test drive, do all the paperwork processing, get things moved to the next step smoothly, with as little inconvenience to you as possible. And at the end of it all, you want to shaft them?

But there is STILL time spent, and you really don't think that the salesman deserves proper compensation for their time? You sure as hell wouldn't ever be able to buy a car in ANY reasonable time if there was no salesman between you and an over worked management staff.

I challenge ANYONE to try to buy a car without the help of a salesperson. I DARE you to try it. You won't get through the doors of the dealership without wasting someones time.

Oh, and often times, there are features that customers don't know about. How do you expect to have a pleasurable experience at a dealership, if you go into it as if it's going to be pulling pubic hairs with rusty pliers?

I just don't think the general public understands how underpaid the salespeople are. When you pay straight invoice for the car, or less, the salesman makes no more than $25 (usually, at least for my company). Hmmm... 4 hours work for $25.... No wonder, the average time a person is on the floor is 2 months.

[THAWA]

No, he's wasting his time with me. He doesn't need to tell me shit about the car because I would have already researched it. I wouldn't just buy a car all willy nilly. I don't have to drive jack. As long as it's got 4 tires and an engine, I'm good to go . I don't expect the salesman to do shit for me except hand me the keys when I'm done filling out the paperwork and going through finance. I don't like customers to start with, they're idiots. So I don't care if they dont appreciate my time. I've been working FOR customers since I started working and they are the worst bosses ever. I dunno how your dealership is run, but over here the salespeople dont do shit but sit around talking and complaining. The most work I've seen them do is remove the MSRP from the window. So they dont derserve anything in my book, give the commision to the person that did some actual work. If you guys have a better setup then good on ya. If your setup is pretty much the same then bleh. I doubt I'd be incovenienced when buying a car. I understand it could take a couple days if things go real bad. I'd be prepared for that. There's no reason to talk to me while I'm waiting. Just going to get on some stupid subject I don't care for anyway. I don't think salespeople are underpaid. I think they have a poor system. It's based on how many peoples asses you can kiss and how much money you can take. Can't take the money or kiss the ass, can't get paid. Every salesperson knows that when they sign on to the job, so they should expect to not make any money for weeks at a time if it should so happen. Personally I'd take a flat rate or hourly job anyday over something like that. If there was a dealership that was setup like a bank or something where you have an application you need to fill out with all your info, the stock number of the car you want and whatever else info you need, then that would be a damn good dealership. You could have people just take the application process it, and either approve you or deny you right there. While they're doing that, send the car back for a detail and throw it up in front if you're approved. Hand you the keys when you're done. Then you're on your way. No need for someone running around like a chicken with his head chopped off trying to appease you. Yeah I know the general public doesnt know about all the features, but if they don't care enough to make the effort to find out about them, why should you tell them?

In case you can't tell, I have no tolerance for salespeople.

[Brat4by4]

Part of the percieved problem is that we don't haggle much in our culture. Go to some different countries or watch some different foreigners buy stuff... they will try to haggle everything. Its quite funny.

Saturn has a no-haggle policy. Go in buy it or don't, bottom line.

[greg donovan]

but how much of a profit does a salesperson/dealership make on the USED cars?

i think that is where the haggling for cars comes into play and it has spilled over to the new car purchase process.

what about when you throw trade-ins into the mix.

that changes your argument entirely. that is something that should be negotiated, in my opinion.

[BAC5.2]

You get fucking RAPED on used cars. But 9 out of 10 dealerships that sell used cars, have dedicated used car salesmen, and new cars stick to new cars.

Trade-ins do constitute some haggling, but not on the level that 95% of the people who walk through the door expect. Not a one of us will get more than 5 grand for our cars, but I know they are worth significantly more to us.

Hardy, you won't find a dealership like that anywhere. The salespeople still play an important role when buying a car. It would be impossible to buy a car without their help.

Things must be different when buying a car out west. Over here, dealerships DO have a little integrity and a little bit of desire to make the process as easy as possible.

If the invoice wasn't published, and the MSRP was the bottom line price (everywhere), things would be MUCH easier. Saturn, for once, has it right. Buy the car, or don't. The dealership doesn't want to waste time with douche bags trying to steal a car.

I've had assholes come in like they own the place, just wanting to pay and leave, but before that wanting me to get them coffee, take them for a test drive, and kiss their ass. Those people deserve as little respect as they give me. If you are a nice person, you can be in and out in 2 hours with your new car. If you are a dick, you had better bring a lunch. Because when your a dick, you get me in trouble, and you waste my time, so I'm going to waste yours.

And anyone that buys a car without driving it first, well, that's just dumb.

[greg donovan]

my dealership's salesmen sell both new and used. its a small dealership. maybe 10 salesmen. and 6 hoists and 8 service bays. but man do they move cars. new subies just fly off the lot. and the used ones dissapear real fast too.

when buying a used car i try to negotiate for things like new tires and a basic tune up. didnt get new tires but i did get them at cost.

i was a pleasant custome when it came to buying my used cars. it took me almost 2 years to find the one i wanted that i could afford but i now consider the guy i bought my car from and most of the staff the dealership friends. some of us have gone to rallies together.

one point to note if

the car i bought was a 95 legacy l wagon in 98 for 6500. it had 155000 hiway miles on it. i found my car buying experience to be very pleasant.

they have a dedicated finance guy. once i decided i wanted the car i was sent back to deal w/him and all the salesman did then was help finish the paper work.

[professor]

the dealer invoice on many domestic cars is a bunch of baloney. There are factory dealer incentives that can significantly lower the actual, dollar price the dealer had to pay.

And besides, we all know that a car dealer is a service industry. The profit center is the service area, not the new car sales. Any new car dealer will readily admit that the majority of profit is from service. For many new car dealers, the second profit center is used cars. it is not uncommon to see 60% of prifit from service, 25% used car sales, and 15% new car sales.

The dealer will go to low sales prices because they can. If on balance they weren't able to sell cars at that price, they wouldn't.

Think of a new car dealer as a big car-repair center, with shiny ornamental baubles parked outside to get you in the door. That is a more realistic way to look at things.

[-K-]

Well when I went in to buy my WRX I knew the dealers were screwing a lot of people because it was new and there was a big demand for them. That doesn't bother me that they make money, but I was not going to pay over MSRP and told them straight out what I was willing to pay. The reason it took 4hrs is because they pull that "we can get you this payment" crap instead of a price. I had to do the math in my head on the price based on the payments...

You don't if you sell new cars but the dealership makes most of it's money on used cars.

[BAC5.2]

Professor - Dealers do have what's called a hold back. It's money paid to the dealer by the manufacturer, for selling their product. The hold back is nearly nothing, barely enough to keep the lights on. Salespeople are paid on gross profit over invoice. While I never expected anyone to pay full sticker for the car, I would not allow someone to steal a car from me. I guess I had to much pride, or to much something, but I wasn't going to get on my knees just to sell a car. If someone walked in and said they were looking to spend $24,000 on a $33,500 2005 Maxima, I simply told them that they were wasting everyones time, and to come back if they really wanted to buy a car.

My dealership had 15 new car sales, 10 used car sales, and a 30 bay service center (each with it's own lift), and 6 master mechanics.

But this has all been thrown off track. Back on point, why do people EXPECT to be able to pay what the dealer paid for the car? Since when is it OK to expect to buy something at cost? Do people really not see value in a vehicle? What get's into peoples minds when they think a $26,000 car is only worth $20,000?

I guess I have seen it from the other side of the crack pipe, and am curious as to what is running through peoples minds.

Consider ANY trade profession. Say, carpenter. You build a book case for a customer. Would you be satisfied if they paid you JUST the cost of materials? Don't you feel like your time is worth something? Why don't people have the same respect for other professions?

[greg donovan]

maybe its because people dont have respect for salesmen. i do but a recent survey put them below lawyers.

maybe people expect to pay cost or below beacuse of all the ads the see on TV advertising rebates and being able to buy cars below cost. so they expect it all the time. on tv people always negotiate so that must be how the real world works right. is how i imagine they are thinking.

[JasonGrahn]

Thawa: Paragraphs! Learn them, love them.

[THAWA]

Paragraph this!

The reason noone wants to pay more than invoice for the car is because that's all it costs. Salespeople aren't doing shit to the car to up the cost. If they were given the materials to build the car, then built it, then went through the hassle of selling it, yes you'd get MSRP or more. From me anyway. But you and I both know that You're not doing any type of physical labor at all. Why should I pay you to stand around and do nothing? I'd rather pay the factory workers or the engineers, or the road testers, or whatever. The people that actually do the work. When I decide to buy a new car, I'm going to find whoever detailed it, and give them like 50 bucks or something and I'm only going to pay invoice. Why? Because the salesperson didn't do shit for me. He wasn't out there scrubbing the car, or welding the frame, or PDI'ing or whatever. All he was doing was talking my ear off. I wouldn't expect to pay a carpenter for just the materials. Because he was doing work. If on the other hand he just bought a complete something, and tried to mark up the price on it. I wouldn't buy it. Plain and simple. Try this on for size. Your friend just bought something with the intent of selling it. He doesn't use it, but instead tells you all this great stuff about it, you become interested and want it. He wants to charge you extra money for it. Would you buy it? I personally wouldn't. I'd find out whereever he bought it and buy it from there. Or find someone else selling it for less than what he wants for it. It's the same way with cars. Why should I pay someone more money than they paid for it just because they explained it to me? It's still the same product. Nothing changed from when you bought it to when you're selling it. So why do I need to be charged more? I just can't see the reasoning behind the silly idea of commission. Go get an hourly job if you can't take not having a stable paycheck. Who said anything about dealerships not having integrity and not wanting to appease the customer. I was just saying that in a worst case scenario it could take anywhere from a couple days to a week to get the car. 99% of the time it'll be out in a few hours max. But there's always that possibility.

[douglas vincent]

Because you can.

If you have the opportunity to save money, don't you take that option? Nobody I know goes to a sale and says "Oh, even though you have this marked down, I would like to pay you the full amount"

And I'm sorry, but if the salesman attempts to take advantage of you, by selling the car at more than it is worth, why not fair play and try to get it for less than its worth? When was the last time you saw a vehicle that was "priced right" right off the bat? Ok, maybe sometimes. But anyway, I helped my mother inlaw buy a new Suzuki Areo two years ago. They wanted $17k for a dealer driver car with 2200 miles on it. We got it for $12 and change. They literally knocked off $2000 the moment I said, "You've got to be kidding." Then they tried to fuck us for another two hours. 2200 miles on any car constitutes a USED car. You fuck me, I fuck you.

[BAC5.2]

It's business. Go to ANY clothing store, or ANY bike store, or ANY type of retail venue. The markup is anywhere from 50 to 150 percent. Go to the parts department at the dealership. There's lots of markup there. Yet, you go to the mall, pay $50 for a sweatshirt that cost $8 to make. Not a peep about that. When it comes to a car, though, all of the sudden it's not a business. There is a thing called Profit. Everything you buy has profit attached to it. Like I said, a sweatshirt, a pair of shoes, a candy bar. You REALLY think it costs $.99 to make each Mr. Goodbar? No, of course it doesn't! Compared to everything else, cars have VERY little markup, %10 at the most. But you bark at that.

If you knew the "invoice" on a sweat shirt, would you pay retail for it? Would you pay anything over "invoice" for it?

You don't seem to grasp the depth of the concept of labor. No, I didn't weld the frame, I didn't paint the car, I didn't detail it. I didn't PDI it.

What I DID do, is spend 4 hours catering to your needs so you'd be happy. I spent 4 hours processing paperwork, 4 hours dealing with managers barking, other customers, and other employees, all while getting you a cup of coffee and a danish. Not to mention dealing with you being an asshole, trying to do EVERYTHING yourself, when it's simply not possible to do that at ANY dealership. There is proceedure to make sure everything goes smoothly, trying to circumvent that causes problems for EVERYONE.

[entirelyturbo]

I understand that the concept of negotiating on a the price of a car is going by the wayside, as most people don't really know how to do it anymore.

Phil, don't take it as an insult if someone tries to dicker around with you. Many people (a lot of them older) are in the habit of doing this from years and years of doing it in the past.

I believe it's Brazil, in the markets they have there, it's considered an INSULT if you offer the full price on whatever it is you're buying, you're allowed and actually expected to negotiate with the seller. Yes I know this isn't Brazil and that we're talking about cars and not a bundle of oranges. But it's still a possibility that someone will try to dicker with you, and it's not to insult you, but just to practice good capitalistic business, which is ultimately to get as much as you can for as little as you can.

[douglas vincent]

It doesnt matter what the hell you do for them., people will always barter you down. You HAVE to make the sale. If you don't cave, someone else will. Why? Because you are in the car market.

You say people don't haggle for retail goods? I do. I mean I don't ask to get a deal on a bag of chips, but if its a decent sale for a company, I just out and out ask them if they will give me a better price. Know Harbor Freight Tools? I had to buy 60 clamps. They werent on sale but they were when I asked! Hotels that are half empty? Easy pickings.

What about those "We match any ad!" ads"? Would you leave that ad at home?

Leaving money on the table is something people seldom do.

And I KNOW the experience of getting haggled. I build furniture for a living. People want to spend $100 for stuff that takes 20 hours to build. People want me to live on $2 an hours sometimes (but I dont!).

[scottzg]

Having worked in high-end sales for many years, it's easy for me to pick out who has actually worked sales and who hasn't. Keeping a retail establishment open is expensive. Normal markup for product is 50%. The dealership norm is 10%. That is a huge discrepency. The dealership has to slash service to be competitive. There are other ways it does this, some of which have been mentioned, but the most significant for salespeople is in the commissioned based pay.

Salespeople have to spend the time to learn about all the products, all the competitors products, how pricing works, how to manipulate the financials, how to interract with strangers, how to interract with managers, and be always ready for someone to walk into the dealership... for no promise of money. In fact, for car sales people, they have to be nice as the customer tries to ensure they gain nothing for their work.

While it's unfortunate that there are those that try to rip off the unwary customer, there are just as many customers that want everything for free. It costs someone.

Please be nice to people in retail, they're not paid much for the quick thinking and mastery of obscure knowlege that is required of them.

[BAC5.2]

I would expect you to know it the best Doug.

I really wish, that cars were simply not an item to be negotiated. I wish they never were. I wish it were just another bag of chips. The price is the price. If you can't afford it, you need to re-group your priorties.

Just like you, people want to spend $20,000 on a $30,000 car. Why don't they just look at a car that's $20,000 to begin with? Then they get something within their budget.

I'm all for trying to help people out if they need it (espically if they are nice). But if you want to be a bitch about it, then fuck you. Want a Maxima for the price of a Sentra? We have plenty of Sentra's right over there.

I just don't understand why people think they can get something for nothing.

The car sales industry is a FUCKED up industry. It should have never started as publishing the invoice. It should have been, and always be, a bag-of-chips market. You want a car, you pay the price for the car. If you can't afford it, get a less expensive car. Simple.

Either that, or flat-rate pay the employee. Pay everyone a salary, the same salary, and have bonus levels for the number of cars sold. That way, you are less concerned with selling at sticker (potentially driving customers away) and more concerned with selling in general.

[BAC5.2]

Scott - MSRP seemed to be ~ 10% over Invoice for Nissan.

At my old job (retail, but unlike most, I got paid VERY well), lots of stuff was marked up around 100 to 150%.

Oakleys, for example. Those are 100+ percent markup. I got my Magnesium Switch sunglasses for $94 Shipped (cost + 10%). Retail is $225.

Bike parts are marked up 100% also for the most part. I built my downhill bike for just under $2000. Retail, including labor, it rounded down to $6700.

[THAWA]

You're completely misunderstanding what I'm saying. I'm not saying you shouldn't get paid for working. I think I can grasp the huge concept that is profit. I don't expect to ever pay for just parts of any item i buy that is already preassembled and ready to go. That just doesn't work in our society. That's where you're getting confused. I don't understand why sales people think they're better than other workers and have to get extra money. Why can't they just get an hourly wage like everyone else and be done with it? Why do they feel the need to try to make themselves feel better by making commission? It'd be like going back to your carpenter analogy. Lets say it cost him 20 bucks in materials, he charges you 50 to build and install it, then wants another 10 just for doing paperwork. Why? Why should you have to pay extra money on top of the regular price? That's bullshit. That's why I dislike the sales industry.

[douglas vincent]

I would expect you to know it the best Doug

Lost me there. I dont want to mis-interpret you on a response. Please explain. Thanks

[evolutionmovement]

You want mark up try jewelry (the most worthless shit yet devised. Some damn woman wants that for Christmas she can find another shallow uncreative person to get it for her. I'm not cheap - I'd pay for European trips and even a car if I could, but a gaudy uselss mug-me sign? F that. Sorry, but I hate jewelry almost as much as cops and golf). The retarded walk into stores all the time and hand over more money for a ring or similar in profit than a lot of dealers likely make on a car - that's gross, not percentage. Jewelry mark up is usually 400-600% and you wanna talk depreciation? Try getting rid of your ex-fiancee's engagement ring two months after you gave it to her (no that's not a personal story - it was 2 years and I let her keep it).

My sister haggles for everything like an Arab trader and gets all kinds of deals. My brother-in-law's getting a $99 gym membership for $30 this Christmas, just as a small example.

Anyway, it's disgusting the worthless shit people will gladly pay rediculous prices for while trying to cut to the bone things that actually take effort, skill, and time just because they can get a shit-made Chinese knock off at Wal Mart for a tenth the price. They don't care if it will look like garbage, is barely functional, and falls apart after a few months. The reason I don't sell my lamps is that I can't recoup labor costs. Even trying to make a measly $10/hr is too much.

Steve

[douglas vincent]

And i don't mean to say I condone haggling to rip off. I haggle and i get haggled. But I don't ever take a loss unless I screw up, and I am sure most other businesses are the same.

And the larger the corporation, the more likely they can afford to haggle. I seldom if ever haggle with small business owners/craftsmen. I will attempt to get a better deal but I dont attempt the screw. Thats just bad taste.