That is exactly why nice auction cars bring almost retail at auctions. Dealers already have buyers waiting for certain cars, or the dealer brings the buyer with them to the auction. The dealer buys the unit, sells it for a nickel over cost and fees, and has no cash sitting on the lot.
Darn car salespeople.....
- Thread starter JDgreen227
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That is exactly why nice auction cars bring almost retail at auctions. Dealers already have buyers waiting for certain cars, or the dealer brings the buyer with them to the auction. The dealer buys the unit, sells it for a nickel over cost and fees, and has no cash sitting on the lot.
Deere Dude
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Many times the dealer gets a great car like yours and gets a home run. Many people wouldn't have a problem trading a car in that was historically a money pit and in rough shape and let the dealer take the warranty hit with the new owner. Cars like these offset cars like yours. The $1000 must be the average between the two.
Two issues here.
Firstly, why does it tick you off? What do you care if somebody else turns a reasonable profit. If you want the higher money for your car, sell it yourself. Your related expenses will be lower than a dealer's would be for sure. So you will be pocketing even more than they would. Would you get ticked off at yourself for getting an extra $1,120 from a private sale?
Secondly, yes, it is a reasonable profit. You're talking about a 23% gross margin. GROSS margin. They've got property, improvements, maintenance, wages/salaries/commissions, taxes, insurance, marketing costs, utilities, etc, etc, etc. They have to amortize those expenses over every car sold. The exact numbers might be a bit different, but every scrap metal dealer, hay producer, egg farm, construction company, etc., all operate on the same premise.
Look, I'm no dealership apologist. The example you gave of charging bogus fees shows that plenty of them are crooked. But don't let your emotional response to that event color your understanding of how a business works. Saying that it cost them NOTHING to put your car on the lot and sell it is intentionally naive.
xtn
dodge man
Super Star Member
I never knock a dealer for making money on trades. They may have to sit on a car for months or send it to the auctions and lose money. You just never know if you got screwed or not when you trade something in.
Monster5601
Platinum Member
The biggest mistake we make is using Kelley's Blue Book and like sites to put a value on our vehicle. Kelley's and the likes do not buy vehicles. The market value of any vehicle is based on the area auction values and I don't know a way of finding that out without asking a dealer. Remember the three price rule, what you think it is worth, what the buyer will pay, and what the market value is. The bottom line, it is only worth what someone is willing to pay.
Diamondpilot
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rkeith
Silver Member
If you use NADA and take about $1,000 off the trade-in value you will be very close to the wholesale value which is what car dealerships use. They use blackbook but only dealers have access to blackbook. Blackbook gets their values from the auctions and updates them every quarter. This is just a quick rule of thumb.
Fountainhead Farms
New member
As a former car salesperson I find this thread amusing. I can tell you that I knew the data on every new vehicle I sold because I was the nerd sitting with product manuals fresh off the press. Used vehicles were a little tougher to know all the stats. 50% of my sales were to Ford A-Plan customers, which made things pretty cut and dry. Fixed price, below invoice. I also sold a lot to Delta employees which had a special deal with our dealership at 1% over invoice. And then the internet happened. People would come in with their Kelly Blue Book or Edmunds price telling me what we had into a car, how much invoice was, what the holdback was, and how they wanted the vehicle for that price or they would walk. So I told them, Have a nice day and come back if they were willing to pay me for my work. Never understood why so many people think that because they know the price to the store figured that they were owed the same price. In what other industry or business does that work? Does one go to Walmart to haggle over the price of a TV? To Waffle house to haggle over the price of hashbrowns? But with cars, everyone wants to get the lowest price possible. Well that's fine. Get it off the internet, and stop going to dealerships to deal with humans.
I can tell you after having sold well over 1000 cars, that never once did I rip someone off. Not once. Why? Because I was selling a product and they were buying a product, and in the end we both agreed to sell and buy the product. I never held a gun to anyone's head, although I did kick a few people out of the dealership. I called it firing customers. I only got paid when I made a sale, so if someone was abusive (I'm a pretty tough guy, but I'm not putting up with some butthole that treats me with disrespect, and sees me as their servant), I'd tell them that they were not the type of customer I wanted, and that they should leave. You should have seen their faces, as I turned the tables. Priceless. Suddenly the big talker was told to go walk.
RE: Talking to women about cupholders- that was maybe a new or poor salesperson. A good salesperson knows how to read a customer. I was usually quiet, and the encyclopedia of knowledge IF the customer asked a question. But to stand there spouting off stats is sort of ridiculous in my opinion. Have the knowledge available, but geesh, what are you that Dr guy from Criminal Minds?
Anyway- I've always said that a good deal is a state of mind. I've sold cars to people at below invoice and they were nothing but complaints and trouble, and I've had clients who paid sticker price that sent me every single relative and friend they had. It's often the service after the sale where one truly gets what they pay for. There are some creeps in the business. I know because I worked with some of them, and outsold them most months. There are creeps in every business. There are good plumbers and bad plumbers too.
I can tell you after having sold well over 1000 cars, that never once did I rip someone off. Not once. Why? Because I was selling a product and they were buying a product, and in the end we both agreed to sell and buy the product. I never held a gun to anyone's head, although I did kick a few people out of the dealership. I called it firing customers. I only got paid when I made a sale, so if someone was abusive (I'm a pretty tough guy, but I'm not putting up with some butthole that treats me with disrespect, and sees me as their servant), I'd tell them that they were not the type of customer I wanted, and that they should leave. You should have seen their faces, as I turned the tables. Priceless. Suddenly the big talker was told to go walk.
RE: Talking to women about cupholders- that was maybe a new or poor salesperson. A good salesperson knows how to read a customer. I was usually quiet, and the encyclopedia of knowledge IF the customer asked a question. But to stand there spouting off stats is sort of ridiculous in my opinion. Have the knowledge available, but geesh, what are you that Dr guy from Criminal Minds?
Anyway- I've always said that a good deal is a state of mind. I've sold cars to people at below invoice and they were nothing but complaints and trouble, and I've had clients who paid sticker price that sent me every single relative and friend they had. It's often the service after the sale where one truly gets what they pay for. There are some creeps in the business. I know because I worked with some of them, and outsold them most months. There are creeps in every business. There are good plumbers and bad plumbers too.
OP
JDgreen227
Super Member
Which is what I always do.
Fountainhead Farms
New member
Best sales day of my life-
This was in 1999- Sold 5 vehicles. 2 Explorers, 1 F-250, a Saturn Car with 3400 (not a typo, virtually brand new and we were a Ford truck dealership), and a 1986 Ford F-150 that was a trade in for the new F-150. Made (the dealer not my commission) 1000 each on the Explorers, 750 on the F-150, 4000 on the Saturn, and 3000 on the F-150. We only paid 500 for the F-150, and sold it before we could move it back to the Wholesale Lot to a fellow that knew about the legendary 300ci straight six in that F-150.
It was as if every customer that walked on the lot that day wanted to buy a car, and more specifically wanted to buy a car from me. The 2 explorers btw were sold after we had actually closed. I was walking out to my car in the back an saw someone looking, and they said they wanted to buy. So we went in, got the keys, they took it for a spin, came back and wrote a check. Then as the Sales manager and I were leaving again, another couple was looking at another Explorer. Said they had talked to another sales manager and this was the model they came to buy. So we did what paperwork we had to do, and let them take it. They came back the next Monday to finish up the paperwork.
15 years, and that day is as fresh as yesterday. Good day for my family and me.
This was in 1999- Sold 5 vehicles. 2 Explorers, 1 F-250, a Saturn Car with 3400 (not a typo, virtually brand new and we were a Ford truck dealership), and a 1986 Ford F-150 that was a trade in for the new F-150. Made (the dealer not my commission) 1000 each on the Explorers, 750 on the F-150, 4000 on the Saturn, and 3000 on the F-150. We only paid 500 for the F-150, and sold it before we could move it back to the Wholesale Lot to a fellow that knew about the legendary 300ci straight six in that F-150.
It was as if every customer that walked on the lot that day wanted to buy a car, and more specifically wanted to buy a car from me. The 2 explorers btw were sold after we had actually closed. I was walking out to my car in the back an saw someone looking, and they said they wanted to buy. So we went in, got the keys, they took it for a spin, came back and wrote a check. Then as the Sales manager and I were leaving again, another couple was looking at another Explorer. Said they had talked to another sales manager and this was the model they came to buy. So we did what paperwork we had to do, and let them take it. They came back the next Monday to finish up the paperwork.
15 years, and that day is as fresh as yesterday. Good day for my family and me.