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Old 06-24-2010, 07:10 PM   #161
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OK Harley, I'll try to give you a little history lesson.

40 years ago when I got started as a salesperson things were a lot different than they are now. Car sales was a career not just a job. Today, most of the time when you get a salespersons card it has someone elses name crossed off on it and a new name written on it. Most can't make a living and in a short while they are gone and leave their cards behind. This is because in many cases the owners of these dealerships join what's know as 20 groups. Then they get together with other owners and sit and try to figure out how to screw employees out of there commissions.

In most types of cars theres a thing called hold back which is mostly 3% of the MSRP and this amount of $ goes directly to the dealer, no one usually gets paid on this money. So when they say invoice remember 3% more is going to the owner of the dealership. This money is to assist with the cost of floorplanning the cars in stock and other costs. 40 years ago when cars cost 4K the 3% hold back was a very small amount of money so the dealers had to sell the cars at over invoice, since the salespeople got paid on anything over invoice they had a chance to make a living. Today, with MSRP's being 40K or so it's OK for a dealer to sell the car at invoice and still make good money. Now, this is where the sales people get screwed. Since they only get paid over invoice there's usually very little profit because the dealer is happy with the 3%. Cars are still sold for over invoice but the profit the sales people can get paid on is much less. Next thing is that there are now programs from the manufacturers that also screw the salespeople. Here's how it works, the manufacturer tells the dealers that if they sell a certain amount of a certain model that the dealer will get an amount of $ at the end of the month. So, let's say that a dealer is told that if they sell 30 Altimas they will get an extra $1000 per vehicle at the end of the month. The sales manager is put under pressure from the dealer/owner to move the cars. So he lowers the prices to invoice or under to get the 30K in retro money. The salespeople don't get a dime of the money. Sales people get what's know as flats of usually $35 to $100 to just sell the car and the dealer lines his/her pockets. So, the retro money and the hold back money has changed the profession of selling cars.

Salespeople are usually given a bonus if they hit 20 or 30 cars for the month. Sort of like putting a rabbit out there in running a race. Everything is now based on volume to the salespeople and the dealers don't make it very easy for them.

As far as MSRP, many cars have retro or rebate money to the dealers so even though there may only be $800 profit in a car there is an incentive for the dealer to move the vehicle and the dealer will take less to get the other money. Remember the dealer doesn't have to pay anyone on this money.

On average most people are going to buy a car and then buy other items like, warranties, alarm systems, maintance programs, rustproofing and other add ons. Not the people on this forum but on average most people do and the dealers know it. So, if the dealer is going to sell a car cheap, they just average it out and most are doing OK. Maybe not all but many don't need a benefit thrown for them.
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Old 06-24-2010, 09:36 PM   #162
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Interesting. So basically, people's suspicions are correct, and the dealer crying poverty is BS. They're doing pretty well. The salespeople are also being screwed, and the only way for them to do better is to screw the customer even worse. I'm convinced. The car dealer belongs right where they are on the integrity chart. I was hoping to move them up above politicians.
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Old 06-24-2010, 09:47 PM   #163
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Don't get me wrong, in the last few years a lot of dealers took a beating. When things go bad with all the over head it goes real bad.
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Old 06-24-2010, 10:15 PM   #164
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This was not a new dealership, the first dealership was in 1966. The family currently has four. The founder recently passed away, I delt with his son. I'd like to give the son the benefit of the doubt and think that maybe he wasn't fully aware or missunderstode the situation. As far as I know the dealership does have a good reputation.
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Old 06-25-2010, 10:00 AM   #165
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Interesting. So basically, people's suspicions are correct, and the dealer crying poverty is BS. They're doing pretty well. The salespeople are also being screwed, and the only way for them to do better is to screw the customer even worse. I'm convinced. The car dealer belongs right where they are on the integrity chart. I was hoping to move them up above politicians.

I do have to admit that this was back in the 80s... but the dealership that I did tax work on made about $5 mill... profit that was taxable...

As I see on the various posts... the selling of the car seems to be like the ticket price of the movie.... they don't make much on that... but the popcorn is a huge markup... so the 'extras' that SS mentioned is where the money seems to be... and of course the shop...
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Old 06-25-2010, 10:18 AM   #166
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I do have to admit that this was back in the 80s... but the dealership that I did tax work on made about $5 mill... profit that was taxable...

As I see on the various posts... the selling of the car seems to be like the ticket price of the movie.... they don't make much on that... but the popcorn is a huge markup... so the 'extras' that SS mentioned is where the money seems to be... and of course the shop...
And oh do they get pissed when you don't want the extras. I even bought my manufacturers extended warranty from a different dealer for about half price.
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Old 06-25-2010, 10:48 AM   #167
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That may be, but geez, $1700 is the cost of doing business sometimes. Everyone makes mistakes. I think you are often better off keeping the people who made mistakes if it is clear that they learned something from it. They won't make that mistake again. Unless they aren't capable of learning, but they probably should have been let go already in that case.
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I would amazed if the guy who made the mistake is still working there. Most owners do everything they can to screw salespeople. This would be an easy way to get rid of a salesman that either doesn't sell enough or is a PITA..........have seen this very thing play out before........
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Old 06-25-2010, 10:48 AM   #168
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And oh do they get pissed when you don't want the extras. I even bought my manufacturers extended warranty from a different dealer for about half price.
So, where do you take the car for the service, the shop where you turned the warranty down?
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Old 06-25-2010, 11:28 AM   #169
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So, where do you take the car for the service, the shop where you turned the warranty down?
No problemo- he'll just conduct an investigation and initiate his own recalls whenever something needs fixin'.
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Old 06-25-2010, 11:36 AM   #170
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FD, I had a few customers buy the warranty from another dealer which they are entitled to do. The best part is when they come in for service and want the free rental car which the warranty provides for. I was able to tell them to go to the other dealer where they bought the warranty for the rental car. (heh)
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Old 06-25-2010, 11:48 AM   #171
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So, where do you take the car for the service, the shop where you turned the warranty down?
I take it to my closer dealer. I bought the car 40 mile away
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Old 06-25-2010, 11:49 AM   #172
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FD, I had a few customers buy the warranty from another dealer which they are entitled to do. The best part is when they come in for service and want the free rental car which the warranty provides for. I was able to tell them to go to the other dealer where they bought the warranty for the rental car. (heh)
my extended warranty has the same benefits at any dealer.
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Old 06-25-2010, 11:51 AM   #173
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my extended warranty has the same benefits at any dealer.
Yup, except the dealer that didn't sell it has no obligation to help you with a rental. You can find one for yourself.
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Old 06-25-2010, 12:00 PM   #174
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No problemo- he'll just conduct an investigation and initiate his own recalls whenever something needs fixin'.
I only had to do this once, on the Toyota engine controller that was ued in the Pontiac Vibe. They had recalled the toyota and I called NHTSA to extend the investigation to the Vibe. My Vibe has never otherwise been back for service
Great car, no wonder it was discontinued
And yes, my very first job as a lawyer was clerk to an administrative law judge who ordered recalls. What would you like to know about recalls?
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Old 06-25-2010, 12:06 PM   #175
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FD, I had a few customers buy the warranty from another dealer which they are entitled to do. The best part is when they come in for service and want the free rental car which the warranty provides for. I was able to tell them to go to the other dealer where they bought the warranty for the rental car. (heh)
Don't give away too many secrets........
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Old 06-25-2010, 12:08 PM   #176
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Yup, except the dealer that didn't sell it has no obligation to help you with a rental. You can find one for yourself.
That would NEVER happen!
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Old 06-25-2010, 12:45 PM   #177
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Yup, except the dealer that didn't sell it has no obligation to help you with a rental. You can find one for yourself.
Always good to know when a dealer is a jerk. since the plan pays for it, who would want to go to a dealer for repairs who gives you the finger?

Alternate Transportation: GM Protection Plan Major Guard, Value Guard and Smart Protection will pay the cost to rent a replacement vehicle or for public transportation whenever two or more manufacturer's labor time guide hours are required for a covered repair or if the vehicle must be kept overnight.
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Old 06-25-2010, 12:46 PM   #178
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That would NEVER happen!
and just how fast do you think the word spread on which dealers love to screw customers of their manufacturer?
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Old 06-25-2010, 01:09 PM   #179
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Always good to know when a dealer is a jerk. since the plan pays for it, who would want to go to a dealer for repairs who gives you the finger?

Alternate Transportation: GM Protection Plan Major Guard, Value Guard and Smart Protection will pay the cost to rent a replacement vehicle or for public transportation whenever two or more manufacturer's labor time guide hours are required for a covered repair or if the vehicle must be kept overnight.
You are entitled to it but it dosen't say who's going to give it to you.

Good, we will look forward to not seeing you.

It's OK for you to shun the dealer and buy the product somewhere else yet you consider the dealer the jerk when they don't service you. Amazing!

One of the better parts of the job was laughing at folks like you.
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Old 06-25-2010, 01:12 PM   #180
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and just how fast do you think the word spread on which dealers love to screw customers of their manufacturer?
Like lightning!

Local Car Dealer Ratings & Reviews on Edmunds

Car dealers on Yelp

What's really entertaining is watching what happens when a dealer tries stuffing the reviews.

Hints:
  • All those posts from the dealership's computers will have the same IP address.
  • Multiple identical reviews, right down to the same spelling errors are sort of obvious.
  • Posts threatening violence against other reviewers who don't like your business really help improve foot traffic. Elsewhere.
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