JRobUSC

Ok, I have been reading this board for a while and every once in a while I post something but usually I hold my breath since I work for a dealer. Sometimes I feel the need to speak up though, and this is one. Keep in mind I am not expecting anyone to feel compassion for salespeople or dealerships but sometimes the stuff I read on here is just stupid. I hope some of you realize they're not all trying to screw you. Are some of them? Sure. For the most part though, they're doing their job, just like you. The only difference is customers like to think they know all the ins and outs of car sales, when in reality you buy a car maybe once every three years. We sell them every day. You don't know as much as you think you do, just like we don't know how to do your jobs.

Boozehound, I hope you don't really think salesmen are making thousands of dollars off an RX-8 selling for sticker. The dealership makes $3400 (including dealer holdback) on a fully loaded, with nav, RX-8 stick. The salesman who sells that car will make somewhere between 20% and 35% of that depending on how many cars they sell for the month. So sure, he might make $1000 off that car if he had a good month other than that, but you also have to weigh in all the Proteges and other cars they sell at or near invoice where the salesman's share is maybe $50, and sometimes even $0. And by the way, selling a car at invoice doesn't make the dealer or the salesman a "tidy profit". A Protege sold at invoice nets the salesperson roughly $20 (a percentage of the 2% holdback minus floorplan cost). Try making a living doing that. Better yet, for any of you out there who work retail or own stores -- what if every person who walked in said they wanted to buy your products for the same amount YOU paid to get them into your store? That's the mentality of car buyers, everyone wants to pay invoice (or less) and everyone thinks dealers are making a fortune off them selling cars for that. I'm going to let the cat out of the bag here -- we don't. Sorry, the secret is out.

And to the person who complained the dealer makes money off tax, that's ridiculous. Sales tax makes the state money, not the dealer.

Anyway, as for RX-8s and MSRP pricing, you might be able to get something knocked off sticker if you wait a while, but it'll probably be a decently long while. That care is going to keep its value for a long time. We ran lease figures the other day and you can lease an RX-8 for $288 a month for 60 months with $1888 down. The car has a residual that is through the roof. Short supply, lots of demand, and banks know it. The prices aren't going down. Don't like it? I understand that. Don't buy one then, you'll save yourself the heartache.

Anyway, that's my rant. I'm sure I'll get flamed as an evil dealer spouting corporate lies or whatever but hey, that's life. Enjoy your RX-8s, whatever you bought them for. We have one here in our showroom right now, and I can tell you it's an awesome car, no matter what you paid for it.

beaner

I wrote this reply yesterday and then the database went down...in light of JRobs post, I will still include my original post in quotes. JROB...you are absolutely correct, but there are other factors...like volume. If you make $50 off a car and sell 10 a day, you are making a good living. It's a fine balance, if you are willing to work with me, and give me a good price, then I will come back and send others. When I go to buy my RX-8, even if it is still a hot car, my salesguy better give me a token $3-500 off MSRP. Sure, that's $100 less in his pocket, but he will make that up with the next buyer I bring in.

Another rant...if the salesguys spent more time getting to know the cars, rather than the selling process, maybe they would sell more cars. I have yet to meet a salesguy that know more stuff about the car they are selling than me. (I often feel like I am selling them the car.) Now on to my original post...

"Booze...I somewhat agree with you. At the same time, there is more at stake than just the salesguy's salary. Dealers have to pay for the land, the buildings, the electricity, etc.

On the other hand, a few hundred over invoice on a car that I already want and they don't have to do jack squat to sell is more than adequate. Plus, if they give me that price with very little hassle, then I will bring others. (Have already done that at my local Mazda dealer.)

We all like money...dealers want to make it, consumers want to save it. Root of all evil stuff...

By the way, there is a car manufacturer that tried to sell cars without dealers...name of Daewoo. Hmmm..."

Boozehound

So a salesman makes $50 on a protege, but I need to pay him 20 times more for absolutely NO effort on his part just because I'm buying a RX-8? If I'm paying your lazy *** 20 times the amount you earn on a protege, how about you earn that extra $950?

I'd certainly consider a thousand dollars dropped in my lap a heck of a windfall. I might even try to be helpful to the guy paying my rent....

Maybe I just have a hangup about car salesmen because with the exception of a very few, not many people will ever buy a car because of sales staff - it's the product we all want - and no one in sales has any real influence over that product. Its the same car at every dealership. So it's simply a group of people who have something someone else designed and built trying to make money speculating on the what the current market will bear for that commodity.

This isn't to say salesmen are worthless - good salesmen do have an intrinsic value with increased customer service at the point of contact where the consumer meets the manufacturer's product - but the arbitrary pricing and speculating for what they can "take" you for is why I would much rather buy directly from a factory run dealership where the sales force didn't handle pricing, only the interaction between company and consumer.

My 2 cents...


Oh yeah, and if you find yourself complaining too much about trying to make a living selling cars, you might want to get out the classifieds and have a look around - no one's holding you hostage at the dealership...

Kawi

Hear hear! I would certainly agree.

Boozehound

I was under the impression that JROBs quote of $1000 was just for the salesman. The overhead comes out of that other 2400 that is over what the dealership pays. I'm happy to pay small fees for things of that nature, along with titling and so on, but there's a lot of white meat there too.

Not any more - Daewoo tried several gimmicks in the last few years - selling though college students, through dealerships, and in the end, they got bought by GM and are being rebadged and sent back in (probably as Chevys). The closest thing I can think of is Saturn - and if you remember the 90s, the Saturn buying experience was and still is a pleasant thing - they just dont have the product.

RotaryStalker

That's a sad story.

You wouldn't have people negotiating price if it wasn't negotiable (see Saturn, they seem to sell a lot of cars).

The simple fact of the matter is an educated buyer will always get a better deal. When I bought my Tundra the salesman showed me the markup sticker they add to the price. So a new 4Runner for example has an additional $3k added on OVER MSRP. That means an approximate profit of @ $6800 on a fairly loaded 4Runner.

Do people pay this? They sure as hell do. My mother did it at Volvo and the guy who sold me the Tundra told me of a woman who came in for a 4Runner, had no clue what the sticker meant. Thinking that was the price of the vehicle she was pleased to learn that Toyota had a $2k factory incentive. In the end she only paid $1k over MSRP when she could have just as easily got it for under MSRP and still allow the dealership to make a nice profit. So for every savy buyer there's one who simply doesn't care (mother) or someone who is unfortunately clueless enough not to know better.

I've bought 5 new vehicles in my life. I would have bought more except I was smart enough to walk away from some of them before I was bent over and #$@*#!.

I'm not the only one who's had crappy experiences at car dealerships. Hence the cliches that are rampant about buying a new or used car.

I've also had good experiences and been dealt with fairly. Today I'm composing a letter to my local Toyota dealership that I bought the Tundra from and thanking them for a very pleasant and honest experience dealing with them. So I paid $1k under invoice and maybe the salesman only made .50 cents off of me (highly doubt it). What they get from me in return is a dedicated customer who will take my truck to them for service (where the dealership really cleans up), recommend them to my friends and therefore send more business there way.

I'm sure it's frustrating to sell cars and having to negotiate. However, It's just as frustrating for the consumer.

RotaryStalker

rotorian

Here Here, I agree with everything JRob says.
To think that any business could survive on making a few hundred dollars on a $30,000-, $40,000 item is ridiculous!

MSRP, stands for "Manufacturer Suggested Retail Price" so if they can get that for an item in high demand, more power to them!

Yes the car business has a bad rep, yes there is alot of brutal salespeople, I would suggest the problem is poor hiring practices, a lack of training, long hours and poor pay don't help either.

The comment about making $50.00 on a sale that is offset by being able to sell 10 cars a day is stupid. Seldom happens, 10 cars a month is more like it.

Yes, if you're guessing I am also "in the business"

We have lots of problems, but most people don't understand what happens on our side of the fence.

That is my rant!

Elara

Ok, I'm chiming in too- I work for a large car retailer/dealer, and some of you guys are just way off-base.

Beaner- I doubt there is a salesman in the history of the world that has EVER sold 10 cars a day (or at least very few). 10 cars a week, perhaps, but that's still doing very well. 10 cars a week x $50 isn't so much anymore, now is it?

And not all dealers are out to screw you. Yeah, there are some, but most aren't. And as long as you go into buying one prepared (it's like buying everything else- do your homework and you won't fail your test) you shouldn't have any probelm.

Boozehound

I still don't see how it should have to be up to the consumer to have to rigorously prepare so they don't get screwed. That sure sounds like, "so long as you don't know any better, we'll take you for as much as we can."

jonalan

Yes, but sadly, this is true for just about anything we buy, not just cars.

Jsuzuki

So how does the online brokers, like ones that subscribe to carsdirect.com, stay afloat? They sell regular (not hot like the RX-8) cars for couple of hundred dollars above invoice. The broker I bought a car from told me he sells on a slow day about 10 cars a day. He makes $100 on each sell. While he was completing my purchase, he started another sale. BTW, this was on New Years Day (2000) at 10am. The entire process took 30 minutes.

Obviously this only works for savvy consumers who already knows what they want.

I'm surprised GM doesn't expand on the Saturn thought. Saturn cars don't compare well mechanically to Honda and Toyota, yet Saturn sell because of the philosophy. I would buy a Saturn if they had a compelling product...

JRobUSC

Beaner, you're right, if you could sell 10 Proteges a day and make $50 on each you'd make a lot of money for the month. You'd also be selling 300 cars a month, which is about 285 more than you're actually going to sell on a good month. Unfortunately that won't work. You need a couple of big sales to offset the ones that earn you nothing (which believe it or not happens plenty).

Boozehound, I am not complaining about selling cars. I chose this profession because I like people and I like cars. It's fun to get to spend time getting to do something you enjoy. And I happen to do very well at it, thank you. I make a very good living. Why? Because I am not out trying to screw customers, I am fostering relationships that will bring in more customers through referrals and repeat business.

Some dealers and some salesman will put the hammer on people, that's the nature of the business. But not all will. And cars, just like anything else, sell for market value. Sometimes the MSRP is market value, sometimes it's more, and sometimes it's less. How much do you think bottled water would sell for at your local supermarket if the tap water in your area were suddenly poisoned?

The RX-8 is a hot car. People want them, Mazda isn't building a lot of them, and that won't change for a while. Either accept it and buy one or don't and get something else. Rather than complaining about paying MSRP or whatever market value is, let's see how many posts have been made about the salesperson or dealer who gave you a ridiculously good deal on a car. You won't find that many, and not because the deals aren't being made, but because people like to complain, and they think the dealer is always out to get them. When we sell you a car for invoice and make no money and spend hours with a customer for a delivery when we could be selling another car and making something, do the salespeople complain to you? Not if they're doing their job right. They treat you with a smile and with respect and they work just as hard no matter what. Now the shoe is on the other foot and the salesperson stands to make some money and you blame him because you were "sold" on the car without him? So what? Even if the RX-8 MSRP was $10000 less you'd still have people complaining about paying MSRP just BECAUSE it's MSRP. If it were up to me Mazda would just make the MSRP higher so people could negotiate it down and make themselves feel good (a la Chevy and Ford).

The RX-8 is what it is and it sells for what it sells for. If that's too much for you, wait to buy one or buy something else. No one is holding customers hostage at the dealerships either, Boozehound. If you want one, this is what it costs. Normally in sales it's a buyers market, the customer has all the power, and you don't hear anything about how good they have it. Suddenly it's a sellers market on one vehicle and you're up in arms. Sounds like you just don't want an RX-8, and that's fine, there's five people behind you in line that do. Dealers would rather have them as customers than you anyway.

Want to hear something funny? The people who you make the most money on are 99% of the time the happiest customers and the ones who come back to you and send friends. The ones who nickel and dime are the ones who will spend two days driving around to cut you for $50 at another dealer, and they're the ones who invariably give you the most trouble. Those are the ones you have to spend hours with just to squeak by, and they're the ones that no matter how good of a deal you gave them will shop you around again NEXT time they're buying a car. Don't talk about fostering relationships to a salesperson -- that's what we're trying to do. It's customers, like you Boozehound, who choose to either remain loyal because they are happy with the treatment they receive and their salesperson, or shop around to save $50.

Lex

A salesperson is entitled to a reasonable commission when he actually provides some valuable service to the customer.

This is why I don't think I owe barely anything to the salesperson whenever I buy a car: they do almost NO SERVICE for me. As has been posted here before, it's often the case that the customer knows more about the vehicle than the salesperson. This will certainly be the case when I walk in to buy the RX8 - hell, I've got the stats memorized!

The salesperson's only job with me will be to chaperone my test drive. I owe him more than $50 for that!? I'm not here to sustain the salesperson's livelihood in the case where he did almost nothing for me!

And if one can't make a living off this, maybe it's because that particular job is not as important these days as it was in the past (before internet, 100+ car magazines, etc). I challenge any salesperson on this message board to make a convincing argument that they are providing a service to people like me (customers who are extremely knowledgeable about the car, and who know they are definitely buying it).

As for the dealership, I'm willing to pay a reasonable amount for the handling of paperwork, logistics of shipping the vehicle in, etc.

rotorian

This is obviously a very controversial subject.....

Brokers are able to do what they do because they have established connections at various dealerships, many out of the local market etc. The broker is treated like a fleet customer and can get a price based on anticipated volume. Yes he could do 10 a day, depending on how the company is marketed, it's all done on the phone etc.

What we are talking about is the "average "car dealer. Yes, unfortunately many sales people are less informed than the customer, there isn't much of an excuse here. I believe the reasons why are that there is poor or no training from the Dealer or Manufacturer, the saleperson does not go on the Internet, alot of them are not "car guys" like some of us. Also in the case of the RX 8, there is a very limited supply, so they don't focus on it, I'm not saying it's right, just reality. If an average salesperson sells 10 Proteges and 6s per month, he might have 1 or 2 8's in his order bank. They can't get any more info than us, on the contrary, as we've seen on this Forum we have more than them.

Remember, the average sales person is just like you and I, they have a family, are involved in the community etc, they get caught up in the stigma of the car business just like a politician in politics.

I'll put another thread in about the "Saturn" comments

beaner

Actually the best salesmen I have ever had never chaperoned me. They just let me take the car and let it sell itself. (Usually I already have a good idea what I want, but I would be a fool not to test drive.)

It is really unfortunate that you only sell 15 cars a month. If that's the case, then my local dealer has about 10 too many sales staff.

The best deal would be to just give the customer the deal they want if it is close to reasonable. The deal making cuts both ways. Salesmen complain that the consumer fights them tooth and nail for $50.00, but in my experience, I go into the dealer knowing what I can pay, knowing every penny (Usually at least $300 over invoice). Then the salesguy argues with me (for 4 hours one time) trying to get it up $200. EVERY time I have ended up with the price I wanted, MINUS 4 hours of my time, and MINUS 4 hours of the salesman's time that he could have been selling other cars. Sure you will only sell 2 cars a day if you spend half the day arguing about an offer that is already reasonable.

JROB...it sounds like you are a good salesman. I hope the above scenario does not describe you. The fact that you are on this forum says a lot.

But be considerate to your customers...if they come in with a reasonable offer, don't "nickle and dime" them either. You will save a lot of time, and go on to the next customer even quicker.

Be honest, (this is the internet, I have no idea who you are or where you work, but you don't have to answer if you think someone else does of course.)

Would you sell me an RX-8 for $300.00 under MSRP? If you had an open one on the lot, it was exactly what I wanted, and I came in an plopped down the check and said I want that one?

rotorian

It would be almost impossible for GM or anyone else to do the Saturn thing. They had to build seperate plants, open up a whole new dealer network etc to get it to happen. You won't change ALL of the thousand's of dealers in a country to one way of selling one make of vehicle.

In Canada Toyota tried something called Access Toyota, they had to modify it because the government said it was price collusion.

This was a transaction price the dealers in the market voted on once a month to honour in each store with the same price on the Internet.

Boozehound

I AM buying the RX-8 in the end. I AM buying at MSRP because that's what the market will bear. I am NOT however, getting any reasonable attention from my salesman (3 unreturned calls or emails this week - no mention of the touring 8s stopping in either), oh yeah - I've also been insulted with numbers he's given me on trade-in and loan rates. And he's earning a grand for that? All things being equal, and if I could, I would take my money to another dealership for the same car/price, but as it stands, I made other arrangements too soon based on his <dealer> timetable for delivery, and I've been without a car for a month now. So if it's not soon, its not the 8.

What's sad is that you see the happiest customers as the ones who paid the most and didn't know any better. I think I'd be happier with my money (maybe take a vacation with my new car)- ignorance may be bliss, but it sure leads to poverty.

rotorian

Boozehound, boy you sound very bitter. You must have had some bad experiences, but aren't you painting everyone with the same brush?

As for selling a vehicle for $300.00 under MSRP, I'm sure the sale person would like to, but most discounting / pricing is controlled by a Manager.

RotaryStalker

Oh God that's funny.. you can actually babble a stat like that with a straight face? Show me where you get your 99%. I think it's in your imagination.

RotaryStalker

rotorian

Maybe the 99% quote is exaggerating but the concept I agree with.
I think it's all down to the expectation level. If a customer comes in, well informed, but also allows the sales peson to do their job, everyone is happy.

If a customer comes in all paranoid, looking for a fight, expecting to be taken, waives dealer cost in your face and demands you sell for $300.00 over cost what do you expect?

I ask all who read this to ask yourself what are the profit margins in your business, do your customers know all your costs and demand a miniscule mark up over that?

Boozehound

Sure I may be using broad strokes here, and I've been party to some bad experiences and great ones. When I've dealt with Lexus, the salesmen are generally very agreeable, knowledgeable, and they ALWAYS follow up, but here we are on the RX-8 forum, and this has been my experience trying to buy this car.

I've already put up with way more than I would for a typical car, but Mazda practically sold me on this car with one they built 20 years ago (but of course I'll test drive to be sure).. I'm sick and tired of my current salesman in general - and if I'm using too big a brush here, its only because of what I've told other people and heard from them is similar stories.

RotaryStalker

Almost everyone here who's bought at least 3 new cars will have at least one horror story which usually involves one or more of the following..

high pressure

flat out lying

deception

outrageous quotes for financing once you've worked a deal

changing of wheels and tires while doing paperwork and vehicle is "being prepred"

different options on the vehicle you actually agreed to buy (usually missing options of course)

attempted changing of price after deal agreed upon

general "porkage" without the use of even generic vaseline



There are plenty more but these are the ones I've experienced or friends have. Of course I'm 100% skeptical when I walk into a dealership. I'm educated, but not about pricing a car, about what to expect during the process of buying a car.

And you car salesmen sit there and wonder why people are bitter???

It just gets funnier and funnier.....

RotaryStalker

Boozehound

We bid on contracts that are awarded based on several critera, focusing primarily on cost. Wouldn't that be nice?

rotorian

We don't wonder why people are bitter, we know why.

I'll tell you my involvement, I'm a "Training Consultant" in the retail auto business. I happen to think a pretty good one too. I don't train to use any gimmicks, I train to "Think Like a Customer"
BUT, you can't imagine how fixed this business is in their ways, regular people come in to the business and sometimes end up the way many of you have described, but it "just happens" I can't change it, people like me are trying, but it's been basically the same for 100 years!
(I know that's no excuse) but I'll use my politics example again. Many good people run for office, realize that they can't change anything once there in, and get swallowed up by the process.

As a consumer, you have to seek out a dealership and salesperson you are comfortable with. When you're happy, let them know by sending referrals so others will know too.

When your not happy, exercise your rights as a consumer and contact someone. The Manager, The Dealer Principle, the Manufacturer etc.

As I said earlier this is a very controversial subject (and interesting as well) let's hope we are all learning from this, and not going too batty waiting for our cars!

beaner

The profit margins in my business are exactly the same as everyone else in my business. I compete, and if someone else give the customer a better deal for better work, then I lose. (Sometimes if they give a better deal for worse work!)

This is the name of the game in car sales...if you don't like it try and change the whole system. (Ain't going to happen.)

Rotarian...if someone waives $300 over cost, you should take it, get over it, be thankful, and get onto the next customer. Having been in sales, (not for very long,I didn't like the games), my most profitable sales were over in 10 minutes.

If someone knows what they want, what they want to pay, you make a little money for your 10 minutes, what's the big deal? I just don't get it. Sure, you want to make lots of money, we all do. But you should be able to tell very quickly whether someone is serious about buying or not. I mean if they are pushing for invoice, they won't budge, then say sorry, and nicely get them out the door so you don't waste your time.

But if their offer makes you a little money, and you can be done in 10-15 minutes, then why not just take it. You have a happy customer who got what they wanted, you didn't waste a lot of time, and still made a little money. I mean if you fight about it, then they will either still get you to give in, you will have wasted a lot of time, or they will go elsewhere. (And some other wiser salesman will make the "$50" that you gave up.)

Ok, sure, you might wait another 2 days and get someone to pay $1000 over invoice. Is it really worth it? Must be, since most salesmen I know will fight you tooth and nail. (Fortunately, I have found a good one...at least until he gets fedup with the games too.)