I agree on all points. There are definitely sleazy dealers and sales people out there, I just hate the generalizations so when I defend sales people I know the good ones are a minority and those are the folks I'm sticking up for.

BTW, the Gangsta avatar, it's a joke, the guy with the neck tie throwing up gang signs just cracks me up. Personally, I'm not that gansta (despite being a ghetto dweller) so please don't...uh... pop a cap in my ass.

 

I was makin no reference to the avatar or to you personally, that is simply coincidence.

An avatar does not represent who you are in reality, or how you behave in the real world. Some people have difficulty differentiating the two.

My reference is to the ganster behavior that has infiltrated society and to my dismay, has become acceptable behavior in public and professional venues.

Just yesterday I had a small toddler approach me in a resturant and while making a handgun gesture with his hand, he looked up at me at said 'pop, pop!' while gesturing to shoot me. His parents (or the 'adults' whose care he was under) laughed and reinforced this behavior with no apology to me or the other resturant patrons.

 

That's why I don't use an avatar and never will...avatars and signatures are the "gold chains" of the internet, and they also make your internet viewing slower by having to load all the graphics.

I'm glad there are techs here, but you can't beleive anything a car salesman says, good or not, as the only reason they're here is to cultivate leads.

Thank goodness for the internet, you can get quotes from your desk or home after the test drives are done. There are enough dealers in Metro Boston to enable anyone to get a good deal on just about any car, if they do their homework.

 

I know you won't believe me, but I'm not here to cultivate leads. I'm here because I dig Acuras and Hondas. I have access to a lot of information and am happy to share it with other enthusiasts. If you look at my previous posts on other theads, I'm just helping folks out with their cars and in many cases keeping them from spending money at the dealer service department.

I'm a car geek in general. Before I started selling Acuras I worked in the commercial fishing industry before that as a heavy machine operator and before that I worked for the Department of Mental Retardation. Selling cars is just a job, being a car geek is a lifestyle.

 

I have to agree with you here. While I also agree that it wouldn't be realistic to expect the best price when you're "just looking", I do think it could've been handled differently.

There have been a few times where I've "just asked" what the numbers might be. In just about every case I was given just that, a number, followed by, "I'm sure there's some room in that if you become serious".

To me that's fair. I don't expect the best price, just give me a ball park, and I'm OK with them throwing out the teaser that there's room for negotiation.

But to throw out a ridiculous price, and then to make it look like you would be taking a hit on that price is just insulting.

... and in an indirect response to CL6, I do have a long memory.

Let me bore you with a story.

My first Acura was a '93 Vigor. If you recall, when the 2nd gen TLs came out (1999), there was a 3-month waiting list and they were going for MSRP. It made the buying process pretty straightforward. Despite the fact that there wasn't any movement on the TL, I started casually shopping. At the time KBB quoted me $8,500 for my car based on condition and mileage. Now I understood $8,500 was a stretch, but that was my starting point. The first dealer complimented me on the condition of my car and quoted me $7,800, but hinted that there might be a little more room if I was truly interested.

Fair enough.

Just for the heck of it, I went and cross-shopped a Lexus ES300. Again I was complimented on the condition of my car. The Salesguy even went so far as to say that unless you looked at the odometer (over 80K) miles, you couldn't tell the car was driven that much. I think his price was closer to $7,500, but I was also told that there was room. In this case, both on the trade and the new car.

I then went to Pauly Acura in Highland Park, IL. Notice how I will repeat for all to read that it was Pauly Acura in Highland Park, IL.

They looked at me car and also complimented me. He then shocked me by saying he would give me $5K on my trade. Shocked, I asked why so low when I've been getting quotes between $7,500 and $8,000?

The following conversation ensued:

SM: On what car?
Me: What to you mean what car? My car?
SM: No, what car that you're looking to buy?
Me: [getting really ticked now] WHat do you mean, you know I'm here for a TL?
SM: THere's no way I can give you that kind of money on a TL purchase
SM: I'll tell you what, if the other dealers are willing to give you that, I'll give it to you if they're willing to buy it from me?
Me: [quite pissed now] Why in the hell would I do business with you when I could do business with dealers who were upfront with me from the beginning.

I walked out with such a bad taste in my mouth vowing to never to business with that dealer again and making sure that everyone knew what kind of sales tactics were being used by Pauly Acura in Highland Park, IL.

It was obvious that instead of taking a premium on to the MSRP, they were doing it by lowballing trades.

I ended up waiting another year before I pulled the trigger on the TL, and the dealership that got my business was the first dealer that offered me a reasonable offer that prior year and didn't insult my intelligence. That dealer was Acura of Libertyville.

That dealer religously serviced my TL and I developed a great relationship with the service manager and also got to know the owner who by the way was the one who initially gave me the quote on my trade. They were also the dealer who sold me my RL and serviced it until I moved to Michigan.

I have also referred several people to that dealership that has resulted in a couple of sales.

So yes, while there may not always be a deal that is imminent, some good business sense now could pay dividends down the road.

Oh did I mention that I would never set foot again in Pauly Acura in Highland Park, IL?

 

So Hawks, I am having a little trouble why you don't really care for Pauly Acura in Highland Park, IL. Perhaps you can explain it to me?

Actually that nearly identical scenario happend to me when I bought my 05TL with the two dealerships here in Tampa Bay. The one I settled with has built a very good relationship with me in service and sales.

When I stopped by last Friday to console them on the 09 RL, smiles dropped, skin tone paled and eyes watered. Salesreps have feelings too!

 

I need to be more straightforward and direct with my thoughts.

 

Oh like I have ever been accused of being short & concise? I'll try to use shorter sentences with monosyllabic words (and fewer typos!).

Vent, Hawks...vent. We are here for ya buddy.... *clutching beer bottle*.

TGIF!

 

You're right, I don't believe you.

 

Hawks,

I am the same way you are. If I'm not looking to buy then but ask for a ball park figure, with it clearly stated that the price has room to move or things may change, and the ball park figure is reasonable, I'll go back to that dealer when I'm ready to buy. No matter how long in the past I went, whether it's 6 months, 1 year, etc..

I got a story similar to yours. My parents walked into a Toyota dealership in 10/89 to look at a Cressida. We were greeted by the sales manager and we asked how much the 89 Cressida would go for, with a list price of $25.5K. He immediately gave us $7,000 off and said if we could find the car cheaper somewhere else, we should buy it at that cheaper dealer. Turns out it was way under invoice. So my parents bought the car that night.

Roll forward to 2004. I was in another Toyota dealership. Saw the sales manager from that dealership we dealt with in 1989, working as a salesman. That's right, 16 years later. I recognized him right away. Talked to him for a few minutes. Told him that I'd come to see him if I decided on a Toyota Sienna. Unfortunately for him, the 05 Odyssey came out and I liked the Odyssey more.. So he didn't get the sale since we went for an 06 Odyssey.

Point is, if you make a good impression, I won't forget you. I'm like an elephant.. Long term memory. Tick me off once, you're on my black list forever. I don't care how much to try to butter me up.

 

As I've said in the past...you want to make money on some other sucker, go for it....just don't expect us all to roll over. [/QUOTE]
I don't put it as eloquently as you, but yeah that's my job. If I have an opportunity to make a nice profit on a deal I do, if I have an opportunity to make a deal that doesn't lose too much money, well I'll do that too. That's what sales is all about, just because 1 person comes in and negotiates a low price on a car doesn't mean that we just give that price up to every one when they walk in. Profit is not a dirty word, the point of having a business is to make money.

It's a delicate balance and you should be glad that there are people who "roll over". The people who pay more are the ones who make it possible for you to pay less. You can't give them all away just like you can't sell them all at MSRP.[/QUOTE]

I agree with you. Every business has to make money. Hell, that's what being in business is all about.

However, instead of making a lot on some folks, and then making just a little with others, why not just make it a straight X dollars on everyone, with X dollars being somewhere between the high profit and the low profit number? That would make the buying experience so much nicer and everyone wins, without a bad taste in the customer's mouth, ala Saturn?

I'm sure someone is going to say, welcome to Capitalism......

 

I'm sure someone is going to say, welcome to Capitalism...... [/QUOTE]


Well, welcome to Capitalism, sorry, I couldn't resist.

 

This is exactly why I keep going back to my 'auto broker' who buys off lease cars. He deals in volume, moving 150 - 200 cars a month with lower profit per car that your typical dealership, but he doesn't have the overhead either. Makes more money faster. Plus he gave me a ball park right over the phone, knowing I've bought cars from him in the past, he knew what to expect from me as a buyer.


BTW, my wife talked me out of pulling the trigger... she says she wants another kid and new baby, plus new car payment doesn't seem like a good idea . So back to the drawingboard for my ass...

 

HA! Funny!

 

You know, some people even think they can beat the odds in Las Vegas. Usually, they are the ones that lose the most money. The same goes for car buying. What you think is/was a good deal usually isn't/wasn't. You can't beat car dealers at their own game, but good luck trying.

 

This is the type of mentality that creates sour customers and bad experiences on both sides.

 

Maybe, but the lack of transparency on the part of the dealers creates the sour mentality as well. It's a pipe dream, but if the dealers were open about their cost and profit structure, customers wouldn't have to feel like they were getting screwed. Everyone knows that dealers need to be profitable to stay in business, but the variability in pricing leads many customers to try to claw for every dollar in the sales process. It's all just too opaque - sticker prices, invoice prices, factory to dealer incentives, holdbacks, etc. - and it's the industry that created this model, not the customers. You can't blame the customers for working it to their advantage.

If the dealer sat down with a customer with a real set of numbers - costs, overhead, incentives, final profit, etc. - most people would be OK with it. There is profit built into everything that we buy as consumers. I have no problem with a dealer making a good profit on a car, as long as I am aware of how it was calculated. The current system leads to distrust on both sides and perpetuates the hard feelings.

 

It would be nice to have more fixed pricing and less haggling. But I find there is enough info available for new car buys to get a pretty good idea what the negotiated deal should be. As long as the buyer is hapy with the price and the dealer is happy, tha is a good deal. I find it unecessary to worry if I could have gotten 500 bucks better at another dealership if I am happy with the dealer and price negotiated. I do not appreciate high pressure sales and hocus pocus hand off between the sales ranks. Still I feel I do not have a right to dictate what a commisioned sales rep's earning should be. Which is why I would not work under such a compensation structure.

I think used cars are the real mystery in price negotiations. And that is where dealers can get the greatest profit margins, if not more difficult to sell. I hate dealing a used car, and aside from the CarMax baseline I have used in the past, I have to accept the trade deal as a losing proposition since I am buying conveniance in the deal.

If you buy new cars frequently, you are likely a savvy consumer in the process. If not, you liley have cash to burn and an agressive deal is not a priority. But for the 2-5 year cycle I have been buying cars, I can usually get the deal I will buy within 45 minutes. That said, I have still walked from dealers sprewing colorful metaphors for the simple fact the dealer was just not a hard bargainer, but simply an neanderthal.

Now if you want to get me really spitting bullets, lets find a forum about airline tickets! I know of no business where you pay for a product, well in advance, they have and use your money, and they have no binding contract to deliver what you purchased. The price of the product varies by the SECOND. That to me is criminal.

Car dealing? A cakewalk for me.

 

The problem with doing that though is that most people aren't ok with the dealer making money. Not even a few hundred bucks. I show invoice pricing to people all the time. The problem with that is that they expect to get everything for nothing. They see no value in the car and are only after the deal. They want to get the car and have the dealer make zero profit on their car deal because they think we are going to rape the next customer to make up the difference. This just isn't true.

 

Well, congrats on the future kid, they're awesome.

But this just proves the point that several of us have been trying to make. What are the chances that someone trying to get numbers will come back to that salesman and buy in 6 months or more? Sure, you get the one or two every now and then that truly are doing their homework for a distant future purpose, but for the most part, they will never be seen from again.

 

I suspect that if you start off with a reasonable number, then that will make an impression, a good one at that. So with that positive start, I'd imagine that the percentage of people coming back to you will increase.

As the saying goes, you get only one chance to make a first impression.

Of course, there will be people who will dicker over $50 over a $10K (or more) purchase (which to me is kind of silly considering it's such a small amount of money when compared to the total amount spent) or not come back regardless.

 

Yes it is, and if you sell a car for invoice you are STILL making a profit via holdback.

Don't insult our intelligence.

 

Most people aren't OK with it today because of the opaque nature of the whole process. They would be OK with it if the books were open and they knew the next customer would get basically the same deal. This is what the industry and the dealers have wrought - they set up the system but they want to blame the customers for using it to their advantage. We've covered this here before but the internet has changed the game. Previously the dealers monopolized the information but no longer. The system is set up to do nothing but breed mistrust and hard feelings on both sides. I would respect a dealer who showed me the true costs involved and their actual profit margin on the car. A dealer doesn't lose money on any car they sell. If they did they wouldn't be in business long. On any other type of product I have an idea of what the profit margins are - I can look at a public company's income statement and filings and understand their margins.

I agree with Tampa that the dealers have moved on to used cars and trades as the profit center. They still monopolize the information there through the wholesale auctions. That will likely change at some point too, but until then it's not exactly accurate to blame the customer for the adversarial nature of the car buying process.

 

I'm not insulting your intelligence. Do you honestly think a dealership can stay open and profitable by depending on holdback only? I doubt it would pay utilities.

 

Well this salesman will never see me again, that's for sure. The broker I work with buys his cars from the Manhiem auction in Florida, and sells them for between 1k and 3k over what was paid for the vehicle. I'd much rather deal with this guy that I've bought 2 cars from personally, and been there for 2 others (1 for my mother, and 1 for my brother). I've known this guy for about 5 years and I keep going back. Most recently I had to track him down through his old job. To me, getting a good deal is worth that effort.

 

LOL, Not my problem. Make all the profit you want.....just not on me.

 

Yes, it's amazing so many people know so little about the car business. They do not take into account a new car dealer must invest/borrow many millions of dollars just to open the door. To stay in business a car dealer must make as much money as possible to pay all his/her employees and have a little left over as profit for himself/herself. My wife's cousin has over 90 employees making on average $50K, plus the monthly floor plan, taxes, interest, etc., etc. Do the math.

 

There's something else that car dealer's do besides sell cars.. Service cars and sell parts. Don't forget that's where dealers make the most money, not in the actual sale of the car but the service. So even if they're making just some money on the sale of the vehicle, they make it up in the service.

 

For the most part service is where they make all the money. The vast majority of new car departments aren't profitable, they are there to provide a pipeline of cars that will need parts and service. The used car department is slightly profitable, but between retail profit and wholesale losses, you'd be amazed at how little they make.

The main reason that "one price" pricing doesn't work is the customers won't let it. There are alway going to be guys like Lumpulus who have to feel like they got the best deal any one got (I think they call it Hubris). He'll come in and say he's not paying the same "one price" price, we can't make a profit on him, if any one discounts the car, he just screwed up the whole system and it's no longer the "fair" system you all thought it would be. One price pricing is just like communism, they both look great on paper, they just don't work in the real world, human nature and the ego make them fall apart.

 

When I got my RL for a more reasonable price, I'm sure it was taken into account that I've serviced my Acuras exclusively at the dealership, including all but one of my mods. Any discount they gave me on the car would soon be made up by service calls.

 

Where would there would be "wholesale losses"? On left over vehicles from the year before or parts/accessories?

If that's the case, sorry but that is the fault of the dealer expecting unreasonable prices. I experienced it on 2 occassions just in the past month, with demo vehicles. One dealer was asking $42.9K for a 2007 Tech, with 3000 miles on it, with a repainted front bumper and another dealer asking for something in the $43K range on a 2007 Tech, with 10K miles on it, with the A-spec rims, rear spoiler lip, and upgraded steering wheel.

In light of the fact that the 09's are coming out, with 08's are on the lot, and the poor sales figure's, that's pretty outrageous. If they asked a reasonable price, like something in the mid to high 30K range, I would have probably bought one of them. So instead, they lost a sale on me and have to hold onto it longer and pay interest on the cars.

Parts have a high mark up, shown by the ability of dealers with parts departments which sell parts/accessories at a 25% discount..

I understand dealer's have to make a profit, that's what they're in the car business for, to make money.

If someone comes in and demands a price that the dealer would make no money on, the dealer can say sorry but I can't sell it to you, end of story. If the potential profit loss walks out the door, so be it. That is one sale the dealership would have preferred not make.

If any one dealer discounts then they screwed themselves. I think the car manufacturer could make it as part of the franchise agreement that if the make has a no haggle price, the manufacturer should receive a copy of every car sales transaction, to ensure that no one dealer is discounting.

 

Wholesale losses are on the used car department side, you don't sell new cars wholesale nor do you wholesale left overs from the previous year. If you have a left over 08 when the 09's are here, you just have to try to sell it and make the price so attractive that some one takes it over the new model (that's essentially the point of a dealer cash incentive)

A whole sale loss occurs when you take a car in trade and end up losing money liquidating it at the auction. Maybe it's an old 97 Prelude with 155K (like mine), I trade it in and they give me $1000 for it. They aren't going to sell it at their dealership and they do have cash tied up in it so they run it at auction and only get $800 for it plus it cost at least $100 (usually more) to run it at the auction and you pay a transport company $50 to $150 (depending on the distance to the auction)to get it there. They paid 1000 for it and recovered 800 and they paid $200 to get it there and run it, a wholesale loss of $400 over all.

Dealers really make there money on parts and service. I've seen the numbers it's astounding.

The new car dept has a monthly loss in the very low 5 figure range. The used car department has a monthly profit in the very low 5 figure range. The service department has a monthly profit in the low to mid 6 figure range and the parts department has a monthly profit in the mid to high 5 figure range.

 

Are the profit's gross or net?

If the bottom line is so tight at all dealer's then they all should cut out the perks, such as cars for the sales managers, etc.

It's like GM saying that they're losing billions and still handing out 6 or 7 figure bonuses to executives and management. Sorry but that just doesn't cut it for me. If the company is losing money year after year, cut the fat, not screw the working person on the floor.

Hell, I'd love to be in a position where they pay me bonuses of the amounts reported for having the company lose money and if they let me go, give me enough money to equal the salary of a few people (or a few hundred people)...

Of course, we all hear the costs of the pensions, health care, etc at the big 3 for the UAW members/retiree's are allegedly outrageous and the cause of the predicament the big 3 are in but that's another story...

 

Keep in mind, a lot of the parts and service gets charged back to Acura for warranty work. The few warraty repairs I have had for very minor issues all were charged back to Acura.

When I traded my TL, I tallied the warranty repairs for buzzes, rattles, vibrations issues, etc., it was over $4K, none of which I paid, but was charged back to Acura. There were parts replaced I did not request, which hints to me they used my repair call to get a few more bucks from Acura.

The service calls I have made for routine oild changes etc, while more pricey than local mechanic, are not so sky high to scare me away. Add in I get a loaner, great service, a car was and a relationship with a tech and SM, it is worth it to me.

 

Yep, so that isn't costing the dealer a penny....

I just suspect that if margins were that thin, there would be no incentive for anyone to be in the car dealership business...

 

One more thing too. I bet the dealership service depts. charge Acura and their customer's what the service manual says the time it will take to do every individual job. Hence, even though every mechanic is working say 8 hours a day, they may charge 10, 11, 12, or more hours in labor total per day, even they only work the 8 hrs.

Happened to my father and my wife (girlfriend at the time).

-For my father, a Toyota dealer charged something like 3 hours of work when they only spent 1.5 hours or 2 hours on the car. Their explanation was that they charged the hours that Toyota said it would take.. Well, the service advisor changed it to actual time spent on the car, ie. from the time they pulled the car into the bay, till the time we were ready to pay the bill.

-My wife, a Honda dealer charged her for a tire rotation, even though they were doing a brake job at all 4 corners of her car. I called and asked them why did they charge for a tire rotation even though all 4 tires were off the car already.. They said it was an oversight... Yeah right......

 

I hope you other people aren't buying this..The "one price" system like Saturn uses\used has one benefactor...the dealer. All dealers would LOVE this because they could save boatloads of cash as they could pay mimimum wage or close to it because they don't need to pay a commision, and the "salepersons" would just be paper pushers.

As to the hubris comment....I'm your worst nightmare. LOL

Think of how money us new car buyers could save if the dealer system was gone abd we bought directly from the factory on the internet!

 

Another good example of this is changing brake pads....on my old RSX I could do it myself on all four corners in 45 minutes, and I suspect most Hondas\Acuras are the same.... I remember the one time I had it done at the dealer they charged 1.5 hours for just the front.

 

The dealer system is protected by Congress. I think the automakers are prevented from selling direct to consumers. It's one reason why it's so hard for the manufacturers to fix bad dealerships. I read the other day that Chrysler wants to prune its dealer network, and have the remaining dealerships all sell Chrysler, Dodge, and Jeep vehicles (with no overlap between the Chrysler and Dodge product lines to save costs). Chrysler estimates it will take at least 10 years (!!) to do so due to having to negotiate buyouts with individual dealers who are protected by these arcane laws. Free market capitalism my @ss.

It's not hard to imagine a future where the dealers are nothing more than locations to deliver new cars ordered directly from the manufacturers by the consumers, appraise trades, and service cars. If the profitability of the new cars and used cars cancels out, then why are the dealers even in that business?

 

You mean protected by special interests groups...