Funny Story from When I Went to Business School..........

[FinanceDude]

I ran into an old classmate of mine from business school. He reminded me of a discussion we had with one of our old profs in a class called money and capital markets that involved him. The background on him is his grandfather started one of the paper mills in central Wisconsin, and sold out to a big outfit for huge money in the 70's, so he is a bit of a trust fund baby:

Dr. Colclough: Then there is an instrument called negotiable CD's, which are available to folks who have $100,000 or more to invest. You can negotiate the rate with the bank on a competitive basis. Yes Mike?

Mike: Can you tell me which banks are willing to do this in Wisconsin?

Dr. Colclough: Well, it doesn't matter, since none of you are in a position to take advantage of a negotiable CD.......

Mike: Dr. Colclough, with all due respect, SPEAK FOR YOURSELF!!!

Laughter and chaos ensued, the prof turned red, etc. Turns out Mike had about $500,000 back then his grandpa left him in a trust he got when he turned 18........

Who says business schools are boring??

 

[Grep]

I was once talking to a room full of students to which I was offering some informal advice about careers and life, etc. I had been describing my career as an engineer, and touched on how my first computer was one that I created from scratch by hand, and which had a whopping 1,000 bytes of memory, etc.

A student asked, "If you made your own computer by hand way back then, why aren't you a millionaire like the founders of Apple, etc?"

Me: "What makes you think I'm not?"

 

[FinanceDude]

I was once talking to a room full of students to which I was offering some informal advice about careers and life, etc. I had been describing my career as an engineer, and touched on how my first computer was one that I created from scratch by hand, and which had a whopping 1,000 bytes of memory, etc.

A student asked, "If you made your own computer by hand way back then, why aren't you a millionaire like the founders of Apple, etc?"

Me: "What makes you think I'm not?"

Now that's pretty good.........

 

[Enuff2Eat]

cool stories, thanks for sharing. i have a similar story at work. I took a "speech class" to practice my presentation skills, the instructor said that eveyone can pick their own topic. When asked "what are you going to talk about, enuff?" i said how about "getting ahead financially in your spare time" the class burst out laughing... sure enuf, i changed my topic to a complete different subject and was well received.

well, it shows to tell you that NOT too many people takes finance seriously until it's too late.

enuff

 

[Brat]

My daughter's husband took an opportunity to jump off the corporate fast track to teach at the High School level. He is a CPA who had a 4.0 in Accounting, passed the exam before getting his diploma. One of the teachers who interviewed him evidently didn't look at his CV, "You know you will need to teach personal finance." He responded, "I think I can manage that."

 

[Sheryl]

Sort of reminds me of the car dealer I spoke to recently...

Me: It's more than I want to spend on a car.
Him: What do you need the monthly payment to be?
Me: I don't care about the monthly payment
Him: Well, that's all that's important, you aren't going to pay CASH for it.
Me: Well I was, but not to you.

 

[audreyh1]

Me: I don't care about the monthly payment
Him: Well, that's all that's important, you aren't going to pay CASH for it.
Me: Well I was, but not to you.

LOL! Good one!

Audrey

 

[Mr._johngalt]

Sort of reminds me of the car dealer I spoke to recently...

Me: It's more than I want to spend on a car.
Him: What do you need the monthly payment to be?
Me: I don't care about the monthly payment
Him: Well, that's all that's important, you aren't going to pay CASH for it.
Me: Well I was, but not to you.

Yeah, it's funny but it says a lot about how the average American consumer thinks (and how they are marketed to).

JG

 

[FinanceDude]

Sort of reminds me of the car dealer I spoke to recently...

Me: It's more than I want to spend on a car.
Him: What do you need the monthly payment to be?
Me: I don't care about the monthly payment
Him: Well, that's all that's important, you aren't going to pay CASH for it.
Me: Well I was, but not to you.

Nice sales training that saleperson got...... I was a general sales manager in a metro car dealer a number of years back. I used to cringe when I heard conversations like that going on, then I would call the managers in and chew their butts.

The main reason I got out of that business is the owners in our area wouldn't commit to training their sales forces, didn't hire people with sales experience, etc. The consumer deserves better..........how is that industry going to get beyond their bad rep if stupid stuff like that keeps happening??

That salesperson clearly was NOT LISTENING. I used to do quite well with folks that paid cash, because I knew I HAD A LEGITIMATE BUYER, not some tire-kicker.......alas, 75% of salepeople don't know what a BUYER looks like...........

 

[Sheryl]

The main reason I got out of that business is the owners in our area wouldn't commit to training their sales forces, didn't hire people with sales experience, etc. The consumer deserves better..........how is that industry going to get beyond their bad rep if stupid stuff like that keeps happening??

It was fairly depressing! This was a vehicle I'd researched on line for - oh - maybe a half hour - and the salesman couldn't answer any of my questions and didn't even know what the different models and options were.

This was the Mazda CRX that I had such a lust for a few months back. But it was too expensive for my taste anyway.

 

[WanderALot]

It was fairly depressing! This was a vehicle I'd researched on line for - oh - maybe a half hour - and the salesman couldn't answer any of my questions and didn't even know what the different models and options were.

Oh man, I've helped several people shop for a car and it's absolutely incredible how insulting/stupid some of these guys are, especially to female car shoppers.

When I was car shopping with my-then girlfriend, one salesman first calls her the WRONG name TWICE (which coincidentally is the name of my EX before her!) and then mispelled her name on a form. This is a pet peeve of hers, so she corrected him. This guy then responded with: "Oh, that's an unusual way to spell your name". It wasn't! This guy just wouldn't admit to a mistake. He also spent the entire time talking to me when it was her who was buying the car.

Upon finding out that DW was a teacher, another salesman (different dealership) started talking about how the problem with education was that white kids were mixed with brown kids. DW teaches in a low-income, hispanic school district and loves it. DW just about popped a blood vessel. I think the guy thought that he was somehow going to bond with DW by complaining about "stupid brown kids". It was freaking hilarious watching this guy try and back-pedal.

I was helping my friend shop for a new Accord a few years back. The salesman asked me if we were husband/wife or boyfriend/girlfriend. We told him that we were just friends, but after the purchase was all set and done, the guy proceeds to show ME where oil dipstick is and HER where the VANITY mirror was!

 

[TromboneAl]

BTW, it can be a good idea to not let them know you are going to pay cash until you've settled on a price, since they figure they're going to make some more money on the financing.

 

[Leonidas]

BTW, it can be a good idea to not let them know you are going to pay cash until you've settled on a price, since they figure they're going to make some more money on the financing.

That's a good tactic - especially if you let them think you're going to use their finance company. They'll be drooling to get you stuck with some sky high interest rate loan.

The absolute best tactic of all is to just walking toward the door. That always gets their attention focused on you.

 

[MasterBlaster]

The absolute best tactic of all is to just walking toward the door. That always gets their attention focused on you.

For what it's worth, Some dealerships have a policy/rules that they won't give their very best price until you are actually out the door and back onto the lot headed for your car going home.

Over on one of the car forums the best purchasing tactic I have seen is to name a reasonable but lowball price. When the dealership comes back at you trying to get you to bump your price just stand your ground. Remind them of all the volume-based sales incentives that you will help them be eligible for if they can sell more units. Be polite but firm. If the dealership declines your offer in a reasonable period of time then thank them and leave. Don't agree to pay more money.

Then go to the next dealership bump your price by some delta (say $100) if they decline then thank them go on to the next deaership bump the price a delta amount. Repeat until you get a yes. Notice that this may take some time and legwork but you are guaranteed to not leave any money on the table.

This process works well in major metropolitan areas when there are dozens of dealerships within a short drive (ie: Southern California).

Besides getting a great price, you'll feel better about the process. There will be no arguing or bad feelings.

If you have another car to trade then I suggest you sell it yourself. If you absolutely have to trade it in then do the CarMax thing. They'll give you a fair trade in price on your trade and you can buy your next car wherever you want.

 

[FinanceDude]

You guys crack me up.............there are easy ways to get a good car at a fair price. I was in the business for 7 years, and know how to play the game........

No need to spend days and weeks bouncing one dealer against another........life is too short..........

 

[justin]

You guys crack me up.............there are easy ways to get a good car at a fair price. I was in the business for 7 years, and know how to play the game........

No need to spend days and weeks bouncing one dealer against another........life is too short..........

I use the internet sales dept folks for when I help others get deals on new cars. It's easy to screen the 10 or so local dealers to see who wants to make me a good deal and who wants to make themselves a good deal. Pick the 3 or 4 that are strongly motivated to cut their price and match anyone else. Let them know that the lowest price is what you are concerned with and that you are talking with a few other dealerships to secure the lowest price. That usually gets you to the price you want after a few rounds of phone calls. Get the "best price" they can give you, then ask the other places if they can beat it. When no one else budges, you're probably pretty close to the lowest you can get.

 

[Khan]

A big reason I am driving an '89 model is a total loathing of the car-buying game.

 

[MasterBlaster]

Justin:

You may get a pretty good price for a car with your method. Many dealers will quote a price with a small markup over the internet.

However, from the car forums many people get jacked around doing what you suggest. They get the low quote over the internet or by phone, then when they arive at the dealer, the car now has a stick shift or is the lower trim line. "Oh I thought that's what you wanted !!!). The other thing is that you might get a lowball offer that isn't a real offer. They have nothing to lose by quoting you a price that nobody will sell a car at. When you finally arrive at the dealership the games then start.

Finance Dude:

For some, it is a quest in life to get the very best deal around bar none. For some it is not so much the money as to be a winner at the game. There is a big difference to some as to getting a pretty good price and getting the "best" price. The method that I suggested will guaranty that there is no money left on the table. Also there is a big difference between getting the "best" deal and being deluded into thinking you got the best deal.

 

[justin]

A big reason I am driving an '89 model is a total loathing of the car-buying game.

I've found the internet sales guys to be volume-oriented sales folks instead of highest-price oriented sales folks. They'd rather get your sale since they know you're shopping them against 10 other dealers instead of the walkin-sales staff who knows most of his customers are shopping only that dealer and don't want to walk away without a car. Plus, I'm a little more assertive over the phone and don't mind asking for the impossible. Sometimes the guy on the other end of the phone says "sure" when you ask the impossible.

 

[FinanceDude]

I use the internet sales dept folks for when I help others get deals on new cars. It's easy to screen the 10 or so local dealers to see who wants to make me a good deal and who wants to make themselves a good deal. Pick the 3 or 4 that are strongly motivated to cut their price and match anyone else. Let them know that the lowest price is what you are concerned with and that you are talking with a few other dealerships to secure the lowest price. That usually gets you to the price you want after a few rounds of phone calls. Get the "best price" they can give you, then ask the other places if they can beat it. When no one else budges, you're probably pretty close to the lowest you can get.

That's a start...........may not work well if there's a trade involved..........contrary to popular belief, a dealer is not going to OVERPAY for your trade, AND sell their car into holdback, not CarMax, not mega dealer.........

I used to chuckle when a return customer whom I knew was a low-price shopper would tell me to "sharpen my pencil". My response was: "I'm sorry, we haven't been able to BUY pencils since your last deal"............

 

[justin]

Justin:

You may get a pretty good price for a car with your method. Many dealers will quote a price with a small markup over the internet.

However, from the car forums many people get jacked around doing what you suggest. They get the low quote over the internet or by phone, then when they arive at the dealer, the car now has a stick shift or is the lower trim line. "Oh I thought that's what you wanted !!!). The other thing is that you might get a lowball offer that isn't a real offer. They have nothing to lose by quoting you a price that nobody will sell a car at. When you finally arrive at the dealership the games then start.

It's definitely not a "done deal" when you agree on a car and a price over the phone. But you can usually specify the key points (automatic, LX trim, 2 WD, grey, NEW, model year, etc). If you show up and chain-jerking ensues, turn 180 degrees and exit. Go call #2 on your best price list and repeat process. I'm not saying these guys are going to give the car away, but if they can make a couple hundred in commission and some profit for the dealer, then there's going to be someone that's willing to work with you.

I think the walk-in sales staff are more focused on closing a low volume of deals every month at a maximum profit level.

 

[justin]

That's a start...........may not work well if there's a trade involved..........contrary to popular belief, a dealer is not going to OVERPAY for your trade, AND sell their car into holdback, not CarMax, not mega dealer.........

Throw the trade out. Sell it yourself or to carmax. Focus on the best price for what you are buying - the new car. If, after securing a good deal on the car you are buying, you can inquire about the trade to see if they want to offer you fair market value on it.

I look at trade-ins as simply a financing issue rather than a key term of the deal.

 

[FinanceDude]

If you are going to work through the Internet, stay with that channel. The sales guys at the dealership pretty much "hate" the Internet guys, because often they are trying to sell the customer the same car at a higher price than the Internet price, using the trade as leverage.

IMO, I have met very few good Internet guys.........a lot of times they were salespeople that were not good at negotiating with customers. How hard is it to "sell" a car at a rock bottom price?? Kind of like Saturn, how skilled does the Saturn salesperson have to be??

 

[lets-retire]

The last time I bought a new car I did the research, priced out the car on the internet found the local dealers who had the vehicle on the lot or one as close as I could get then asked for prices. The one I bought it from kept trying to put the purchase in terms of monthly payments. I told him the price I was willing to pay and left it at that. All negotiations were via e-mail. He would come back and say 600 for 72 months I would say, "No, 23000." He'd say ok how about 550 (or something I don't remember the exact numbers) for 60 months. I would say, "No, 23000." This went on until he finally relented and gave me the monthly payment for the term corresponding to the price I wanted. The price I was offering was a fair price where neither would get the short end.

 

[justin]

How hard is it to "sell" a car at a rock bottom price?? Kind of like Saturn, how skilled does the Saturn salesperson have to be??

Well, when you are competing with a dozen other dealers and their rock bottom sales staff, I guess it could be pretty hard.