Are car dealerships immune to economic conditions?

[88GT]

I went to look at a vehicle today on the spur of the moment. No real intention to buy, but mostly because I didn't think I'd like it or that they'd have what I would like.

As it turns out, we sat down with the salescon to discuss terms. We couldn't agree to terms, but the take-home point is that we were a mere $2500 apart and they refused to come down. It bears noting that when the math is done, we were still operating off of their starting sticker price as a baseline. So after deducting the trade-in value, the down payment, and what we were willing to finance, they wouldn't come off the sticker a measly $2500.

Are the days of negotiation gone? I remember my mom knocking $4K off a price back in the late 80s.

On a funny note: they tried the ol' "someone else is interested in the vehicle" trick by having another salesperson ask where the keys to the black 350 were.

Their loss. We kept our money and they don't have a sale.

 

[Fletch]

I have come to believe that all salespeople, but particularly car salespeople and realtors, are surrounded by their very own Jobs-esque reality distortion field.

 

[CTC B4Z]

Good. You checking out trucks or what?

 

[88GT]

I have come to believe that all salespeople, but particularly car salespeople and realtors, are surrounded by there very own Jobs-esque reality distortion field.

Stop it, or I'll go whine to the mods about the Realtor bashing.

Good. You checking out trucks or what?

Yup. Looking for a F250. THey had a 350, 450 dually and ****load of 150s, but no 250s. So the 350 went out for a spin. She's crying now because she couldn't come home and be a grocery-getter and drool-catcher. But I told her somebody else would love her just as much. I don't think she believed me.

 

[littletommy]

Yup. Looking for a F250. THey had a 350, 450 dually and ****load of 150s, but no 250s. So the 350 went out for a spin. She's crying now because she couldn't come home and be a grocery-getter and drool-catcher. But I told her somebody else would love her just as much. I don't think she believed me.

I've gotten the bug a few times over the last several years to buy an F-250, and, like you said, each time I have gone to look at them, the dealer never has any. Plenty of everything else, just no 250s.

 

[ReSSurrected]

I can tell you first hand that there isn't nearly the markup in a new vehicle that there was 20 years ago. Case in point, when I was a "salescon" (I like that actually) for Dodge/Jeep, a $17,000 Jeep Wrangler had about $300-400 in invoice profit in it. I've only seen $4-5K markups on trucks priced over $40K.

That said, there are many other things that influence the "difference figure", which is simply the dollar amount you agree (or disagree) to pay. If you're proud of your trade and think it's worth more than it really is, the dealer will use invoice markup dollars to inflate your trade in value. In other words, if your trade in is your selling point, the dealer may decide to offer you a grand more than it's actually worth, but that's a grand he's not gonna drop off the price of the new truck. Another dealer may hold at ACV (Actual Cash Value) on your trade, but drop the price of the new vehicle by a grand (or whatever, you get it).

In the end, you're still at the same difference figure. In some cases, people will be so stubborn on their trade, they end up paying more because they think they're getting more for their trade when they're really not. One dealer may hold at ACV but knocks two grand off, and the other puts another grand into the trade and doesn't discount the new vehicle. The shopper goes with offer #2 "because I'm getting more for my trade". I've seen it hundreds of times.

Something else to keep in mind is that, on a percentage basis, there's more markup in a Snickers bar than the average new vehicle.

 

[buford t justice]

I'd try another dealer.

The fact that this dealer would not deal may be the fact that their they are a financially sound business and don't have to bend over backwards to make a sale.

I used to work at a combined chevy and ford dealership in indiana and one reason I am in colorado is because the dealer was in such bad financial shape he was taking the money out of our pockets.

you find a dealer like that and he will come down more than 2500

 

[hotfarmboy1]

I can tell you first hand that there isn't nearly the markup in a new vehicle that there was 20 years ago. Case in point, when I was a "salescon" (I like that actually) for Dodge/Jeep, a $17,000 Jeep Wrangler had about $300-400 in invoice profit in it. I've only seen $4-5K markups on trucks priced over $40K.

That said, there are many other things that influence the "difference figure", which is simply the dollar amount you agree (or disagree) to pay. If you're proud of your trade and think it's worth more than it really is, the dealer will use invoice markup dollars to inflate your trade in value. In other words, if your trade in is your selling point, the dealer may decide to offer you a grand more than it's actually worth, but that's a grand he's not gonna drop off the price of the new truck. Another dealer may hold at ACV (Actual Cash Value) on your trade, but drop the price of the new vehicle by a grand (or whatever, you get it).

In the end, you're still at the same difference figure. In some cases, people will be so stubborn on their trade, they end up paying more because they think they're getting more for their trade when they're really not. One dealer may hold at ACV but knocks two grand off, and the other puts another grand into the trade and doesn't discount the new vehicle. The shopper goes with offer #2 "because I'm getting more for my trade". I've seen it hundreds of times.

Something else to keep in mind is that, on a percentage basis, there's more markup in a Snickers bar than the average new vehicle.

He's got it pretty dang close to right here. I know when I was a tech at a Ford dealer I was told many times by the owner that his profit was made in the used vehicles. He almost didn't want to mess with the new vehicles anymore. There's actually very little markup in most new vehicles compared to what the dealer pays for them. Now your used cars on the otherhand are different. It may be only a little, but its likely alot more markup on used and normally more room to work them down.

 

[04DarkShadowGT]

Not really enough info to determine imo. A measly $2,500 may be the difference between making any money and losing money. The dealer has a break point, just like the buyer does.

How much was the truck, what did they offer off sticker, what did they give you for trade, etc. It all plays in and without that info no one has any idea on what kind of a deal you were getting.

Chances are likely that if you do not recieve a call within the next couple days, the deal really was about as low as they could go.

 

[sbcman]

Why mess with a dealer? Indivdual sales are almost always much cheaper and you don't have to endure the cheesy sales pitches and general irritation of a salesman.

 

[88GT]

How much was the truck, what did they offer off sticker, what did they give you for trade, etc. It all plays in and without that info no one has any idea on what kind of a deal you were getting.

.

I'm not looking to justify my choices or have them validated by anybody. But I did state that when the cash down, trade-in value, and amount I was willing to take in loan was added up, it was $2500 less than they STARTED at. And that includes taking their trade-in offer as is (which incidentally was $2k less than they offered for it two months ago and $2200 less than KBB trade-in value FAIR condition). We hadn't even negotiated at this point.

The bottom line is that they didn't come of sticker at all. And, no, they didn't jack up the trade-in value to compensate.

There was no negotiation. That's the whole point of my post.

 

[Clay]

ive found in the last few years if you want to buy a car at a dealer you have to start low, and stay low, then give them your number and leave.

If they are serious they will call you back.

 

[joslar15]

ive found in the last few years if you want to buy a car at a dealer you have to start low, and stay low, then give them your number and leave.

If they are serious they will call you back.

This, plus I noticed that going toward the end of the month seemed to motivate them.

 

[jfed85]

Craigslist.org

^^Best car dealer Ive ever used^^

 

[spec4]

You may want to try edmunds.com. You can pick out your new truck and ask for various quotes. Of course they will need to see your trade to finalize a deal. With my last two cars, I knew the price before going to the showroom. Last time I negotiated in the show room, years ago, I got up to leave twice before they got serious and gave me the number I wanted. After I ordered the car and left, they told my cousin (mechanic there, different last name) that I was a real a%# hole. Last Chrysler I ever bought, but thats for another thread.

 

[Knife Lady]

I ahte trying to buy a new or old new car. I hate having to wheel and deal to get a good buy. It is sometimes hard to get them to budge on their price or even give you a fair trade in value. Yep it is best sometimes to just walk away and let them know you are not a push over nor are you stupid. If they want to make the sale then they will compromise.

 

[mrjarrell]

Why mess with a dealer? Indivdual sales are almost always much cheaper and you don't have to endure the cheesy sales pitches and general irritation of a salesman.

How many individuals have a new vehicle to sell you?

 

[rjstew317]

I refuse turn buy new, it's the worst financial decision you can make. You can save thousands buying slightly used. The last truck I purchased only had 15,000 on it and I paid half of original sticker.

 

[88GT]

A couple of points:

1. (and perhaps most important) I wasn't actually trying to buy a vehicle. We were looking for fun because at some point in the future I WILL be buying.

2. It just so happens that our "for fun" look-see yielded a truck that actually met all of our criteria, so we thought we'd see if we could make it work. If it didn't work on our terms, it wasn't going to happen.

3. We picked a dealership because we didn't have to make an appointment with an individual. And it was a spur-of-the-moment decision. As I said above, we were not looking to buy, just looking.

4. I'm not looking for "new" truck. I, too, recognize the financial foolishness of paying premium retail for an item that will lose value as soon as I drive it off the lot.

5. One additional detail that was discovered last night: the salescon LIED about the sticker price and told us it was greater than it was. And if he didn't lie, then the internet advertising is wrong. So we were really only $1500 apart.

 

[ReSSurrected]

1. (and perhaps most important) I wasn't actually trying to buy a vehicle. We were looking for fun because at some point in the future I WILL be buying.

If the salesman picked up on this, then I'd be willing to bet this is why they weren't more willing to deal for a couple of reasons. First, if you're not actively looking to make a purchase, his job of selling you on the terms and conditions you must agree to in order to drive off in that vehicle that you absolutely must have is much, much more difficult. When dealing with "passive buyers", some salespeople- and their managers- won't go all out to make a deal because most of the time it's not gonna happen anyway. These buyers typically walk 90% of the time no matter how good a deal they get offered. They're just not ready to commit, no matter the circumstances. Second, The more time a salesperson spends on a "passive buyer", the less time they get catching people actively looking to buy. I know that doesn't sound good, but when your paycheck is 100% commission, you gotta get 'em out the door if you want to eat that month.

5. One additional detail that was discovered last night: the salescon LIED about the sticker price and told us it was greater than it was. And if he didn't lie, then the internet advertising is wrong. So we were really only $1500 apart.

Just curious... how did you arrive at that? Did you look the vehicle up by VIN, or some other way?