If you make a deal, do you stand by it?

[donheff]

Good for you dm. I don't think the dealer got screwed. He was being dumb and finally realized it. Based on dm's earlier comments the dealer may have smartened up in time to keep a customer for the service department where the big bucks are.

 

[KM]

I just got back from the dealer. I signed new application for title and got a new receipt showing the correct vin. I did not pay any more.

Ive got a tee time so I have to run. But hopefully I'm done with this.

Excellent!

I can't remember, but I think dm said they were a new dealership. I know we have talked about scam/no scam a lot - but assuming "no scam", the next question is customer service and reputation. I could not imagine any dealership (especially a new one) wanting to risk a call to the BBB or hurting their reputation in the area - for $1000. And now, dm might actually go their for service or buy another car from them some day, or at a bare minimum not tell everyone how incompetent they are. He might even possibly tell people how they treated him right after they screwed up. As opposed to the alternative...... And it only cost them $1000.

I do understand their desire to try and recoup some of their loss - but it was their mistake. If they own 2 dealerships, I suspect they could absorb that loss easily. Companies do it all the time.


Our best car buying experience was our last one at a dealership that did not negotiate. The price they listed was the price you paid. Their prices were lower than anyone's within 100 miles and they were always packed. We bought 2 cars within a week from them. It was wonderful.

 

[Nords]

I just got back from the dealer. I signed new application for title and got a new receipt showing the correct vin. I did not pay any more.

Ive got a tee time so I have to run. But hopefully I'm done with this.

Apparently the dealer (or the owner) has been reading this thread...

 

[harley]

Look over the many posts about carbuying on here. There is an overiding bias against the entire process involving dealerships. Pretty much everyone thinks that dealers rip everyone off and you should expect that.

Smoke, fire?

Having worked in a dealership many years ago, and having been in a position to deal with issues like dm faces, it is my opinion that the dealer is trying to be fair. Of course, dm could play hardball and do whatever he wants, but he is driving the car. A mistake was made, and I suppose dm and most here feel the dealer should eat the mistake. However, what if the mistake was $5000, or $10,000? Is the buyer ALWAYS right if a mistake is made? Something to think about..........

I think most here think the dealer should do something. Either give him the paperwork and eat the loss or give him his money back and go away. But the dealer was jerking him around while he took his time. As far as the difference being a larger amount, the buyer would still be right. It would then be up to the dealer to determine how to react. I suspect he'd have given the money back and started over right away.

 

[easysurfer]

Thanks for the graph. I go back to my restaurant analogy about if you go and order a crab but the restaurant serves you lobster by mistake. What would you expect to happen? I'd think any respectable restaurant would say, "my mistake" and just absorb the expense. The same would go for a car dealership. Either absorb the cost for at least return back to square one and not expect to customer pay more out of his/her pocket.

 

[Westernskies]

dm,
Great outcome! This has been a great thread, right up there with Fuego's gamblin' SIL...

 

[NW-Bound]

I'll second that. The story of this thread has a nice ending. Still hoping the same for Fuego's SIL story.

 

[Bestwifeever]

DM, too bad you couldn't have heard right away not to worry. I hope you can still enjoy the new car!

And I hope you had a great golf game today too.

 

[clifp]

I just read this thread, what a fun thread. I am happy that there was good outcome for DM.

I am pretty sure I would have held out for the keeping the deal as it was original negotiated.

 

[harley]

You would be surprised to hear that many cars have $800 or less profit from MSRP to cost. Also many cars have much more profit than $4000.
Usually the more expensive the car the more room for the dealer to move on price.

I know this is a bit of a hijack, but I'd like to hear more on this. Are you saying that a lower end car, say a Toyota Corolla or a Ford Escort (if they still make those) might cost a dealer $800 less than the price on the window sticker? I find that a little hard to believe. I've never once gotten less than $1000 off on a sticker price, and I've bought some pretty cheap cars in my life. I don't see how a dealer could stay in business with those margins.

I suspect there is a lot more involved that you aren't mentioning. Incentives, dealer fees, dealer add-ons, etc. that drive up the profit margin. But I don't know, never having worked in the business. I suspect the reason car dealers get such low marks on the integrity scale (lower than politicians!) is the complete lack of transparency. I'd be interested in understanding the process better, so I can determine if my mistrust is misplaced.

BTW dm, congrats. I was pretty sure that was how it would work out, but they didn't make it easy on you, did they?

 

[73ss454]

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.

 

[harley]

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.

 

[73ss454]

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.

 

[dm]

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.

 

[Texas Proud]

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...

 

[Emeritus]

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.

 

[FinanceDude]

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.
-ERD50

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........

 

[FinanceDude]

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?

 

[Westernskies]

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'.

 

[73ss454]

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)

 

[Emeritus]

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

 

[Emeritus]

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.

 

[73ss454]

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.

 

[Emeritus]

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?

 

[FinanceDude]

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........