mpuzach

I'm not questioning or doubting your own personal experiences. I'm also in complete agreement with you that all too often it's the dealership staff who create the problems; that's why there's a universal stigma that car dealerships and everyone involved with them are sleeze bags. I get it. I can assure you, though, that I've personally experienced many cases of the scenario I described.

Believe it or not, there are a few among us who don't stoop to those charades. I had a customer yesterday (not a Corvette customer) looking to buy a $30,000 car. I showed him the invoice and with no negotiation needed told him he could buy the car for invoice less $2,000. (Holdback was around $1,200.) My motivation was simple: I provide him with the car he wants, I give him a great deal with no time or effort spent negotiating on his part, I move a car, and everyone's happy. He says he wants to think it over. No problem - buying a car is a big deal for most people and it shouldn't be done on impulse. He calls me back and tells me that he'll buy the car but only if I drop the price another $2,000 to $4,000 under invoice. (This is a brand new, current model year car.) He goes on to say that he can get that deal from another dealership. I tell him that I'll do my best to meet any other legitimate quote. Of course, as it turns out his story doesn't check out; the "other" dealer was actually offering to sell him the car for $500 more than the no-haggle number I gave him. He was merely lying to see if I'd take the bait. This was the end result of my trying to be a straight shooter from moment one. The above scenario is not an anomaly - I see it nearly every day. In the eyes of many we're all losers regardless of our efforts to do a great job for our customers.

vbdenny

When I buy a car, I know exactly the car I want before I ever go to the dealerships. I also know the maximum price I would pay. Just bought a new Highlander last week for $2K under my maximum. Having previously been in sales I can tell you sales people make about what they are capable of making. Some make a fortune, some a pittance. Not the buyers concern.

mpuzach

How do you determine the maximum price you would pay?

pickleseimer

OP, I have no idea what is 'fair and reasonable', because I have no way of knowing how much margin for the dealer is built in to any one sale. I believe that a dealer and their staff have to be compensated, no problem with that. Perhaps if you were in a position to tell us exactly what the bottom line on a sale is, you would get a better idea of what the consumer thinks is fair and reasonable. I don't believe the sales staff has any idea what the bottom line is, and further believe that dealership management doesn't want sales people to know. When I look at the size of some of these auto-malls, the amount of inventory, the spacious facilities, the large service departments and the accompanying equipment, it is just clearly obvious the dealership has to have a large cash flow. However the line you get is that they are selling 'below invoice', 'at a loss', or 'we'll beat any deal', well that just has to be disingenuous. The whole system of manufacturers selling only to exclusive dealers, financing, floor plans, incentives, holdbacks, volumes and quotas, warranties, closers, add-on equipment already on the car that I don't want and 'can't' be taken off, 4-squares, outrageous advertising and other illogical shenanigans just feeds this whole sphere of distrust. I've bought many new cars and feel I am well-informed when I walk in to the hell that is sometimes disguised as a dealership, but there is always the feeling that I had been taken advantage of. The transparency just isn't there.

My opinion is the dealer knows what he wants to sell a specific car for and no amount of haggling with the poor salesperson will change that. They are not there to be your friend, just sell a car. The hoops that the salesperson has to go through to make it look like he is 'on your side' when you can't agree is just ludicrous. Sorry you have to spend five hours haggling on some deals, but you are part of a system that encourages this.

So when I go in to buy a new car, I always shop for the best deal and don't care if it is 'fair and reasonable'. The best deal wins, because although I may not know your bottom line, I at least know what mine is. I make no promises about future business and may never have a reason to visit your dealership again for anything. The only real control any buyer has is the ability to say 'yes', or the guts to say 'no'.

BTW, recently stopped in at a volume KIA dealership nearest our home because my wife is intrigued with the Soul. What a disaster - so bad my wife and I laugh about it to this day. Had to wait 10 minutes to talk to a salesperson that was the greenest pea I've yet to experience. Knew nothing about the car, had to consult the sales brochure to answer a few questions we had, casually said that he was looking to buy a Honda while we were out on the test drive. And those were just a few of the highlights of ineptitude. I worked the conversation around to how long he had been there, how much training he got etc. Some sales supervisor met us on the way out, very pleasant guy, and asked us how our experience was - we were so wanting out of there that we just said 'he tried'. I told my wife when we walked out the door, go ten feet and then run like hell lol

twowinns

I'm one of those folks who research, research, and research the heck out of a car before I buy. I spend weeks reading forum posts, reviews, YouTube videos, KBB and True Car pricing, etc. Once I know what I want, I want to be done quickly.

I might need an hour test drive to compare different model variants, and an hour after purchase for a review of major features.

My challenge/frustration is trying to find the right dealer. I will not buy from a low volume/high profit dealer. Negotiating with them is excruciatingly painful and just makes me very angry. I look for the high volume/low profit dealer, who is willing to give a great price in exchange for more sales to reach the same profit goal.

The newest game dealers play involves the pre-installed "extras" (window tinting, mud flaps, wheel locks, body side molding, etc), with a 400% markup. When they quickly reduce the price of the car to remove this inflated price on top of MSRP, gullible, uneducated buyers feel like they're getting a great price on the car. Most of the time, they can still be paying MSRP or more.

I believe the car buying services (Costco, The Car Pro radio guy, etc) are so popular, because people hate the buying experience so much, they'll let someone else they trust do it for them - even if they could get a better deal on their own.

I igorantly paid MSRP for my first car 31 years ago. Ever since that mistake, I have refined my buying experience to maximize the lowest price for the car. My philosophy is that I will disclose my bottom line price when I start negotiation, and tell them not to waste my time if they won't sell the car for that price. I tell them some other dealer will sell it to me for that price, if they won't. I'm willing to go out of town and out of state, if necessary, but never have had to. 99% of the time, they realize I have some knowledge, and sell me the car. I assume they make-up the lost profit to me with someone else who buys at sticker price.

I actually enjoy the process, and have helped numerous friends and family get awesome deals they weren't willing to get themselves. Not that they couldn't get the same price themselves, they just weren't willing to go through the effort.

I think a good salesman is worthy of a $200 commission on my sale, if they respond to my requests and questions quickly, and make the buying process smooth and streamlined.

mpuzach

All I'm asking is how much do you feel is a fair and reasonable margin?

Thank you. This is the type of information I requested in the opening post.

twowinns

You're welcome.

BTW....From the way you've described your sales practices, I would think you're successful and provide a great experience for your customers. If I were still in WA (I was in Puyallup from 2001-2011), I would definitely come ask for you.

jimmyb

This is exactly right, IMO. In this day and age, do your homework (plenty of info at your fingertips) and go in prepared for what YOU have decided is fair to all parties. When I ordered my 2014 convertible in August 2013, we agreed to let me take the time as info became available, to come back and hash out the price. The dealer and I both knew the car wasn't going to get built for at least 4 or 5 months (he had 4 convertible allocations), so as more info became available, I did my homework and we sat down in December 2013 and I made him my "out the door" offer...which I felt was fair based on info gathered off the internet. He accepted and that was that. Could I have gotten an even better deal? Perhaps. But what I offered was done with research and I was happy with the number and clearly, so was he.

The car came, I brought him a check, and it was an incredibly painless and, heaven forbid, FUN process. At one point before I left that day, there were literally 15 dealership employees all around my car, all of us messing with various cool new goodies on the C7 (mine was the first convertible and only the 5th C7 they had gotten).

The moral is that it takes 2 to tango. The customer can screw up the buying experience just as easily as the salesperson/sales manager can.

PS. It is NONE of my business what a salesperson, or the dealer make on my car. Obviously, pricing info on the internet is NOT the WHOLE story, and that's fine. Do the deal YOU are happy with (but be realistic), and the buying experience will be good.

PSS. Ask "Mark" if he planted the glove....

mpuzach

This thread hasn't played out the way I hoped it would. I get it that in the minds of many all dealerships and sales people are scumbags. I get it that in many cases that reputation is well-earned by their behavior. I get it that many dealers will stop at nothing to gouge their customers. I have no disagreement with any of that.

I'll re-phrase my original questions: If a dealer pays, say, $50,000 for a car what do you feel is a fair and reasonable price for the customer to pay for it?

If your salesperson does a great job for you in your purchase and spends, say, three hours with you altogether, how much should he / she receive in commission? I ask this because as is evident from many of the above posts, there are a lot of buyers who couldn't care less if the salesperson who does a great job and spends quality time with them are unable to put roofs over their heads,

mpuzach

Thank you. Your comments have made my day!

mpuzach

I like the way you think.

jimmyb

^^^^
Indeed, there is a tiny portion of folks that wring their mitts over getting THE BEST deal EVER, on EVERYTHING they buy. And I find them to be miserable all the time, as a group.

JALLEN4

Not to be rude but...it is a very stupid question to begin with. The customer is in no position to know how much on each car the dealer needs to make or how much the salesman is worth on each sale. The salesman works in the business every day and one in a thousand has a reasonable idea as to the answer. Nor, should the customer care about either answer and the salesperson would be much better served spending their time on product knowledge and finding the next sale.

I know a little about the real answer having spent forty years operating and owning multiple new car dealerships. Now that I am retired, I can assure you I could care less about the answer when I buy new cars. My job is to buy the car for the lowest price I can arrange and their job is to get me to pay the most money they can!

SouthOCBoy

What should a salesman make you ask? As much as they can. How much should I save? As much as I can. We live in a free market. The price corrects itself with what people are willing to pay. The tough part is how the smaller dealers can compete with the large volume dealers. I have been saving for the last four years specifically for this car which means I need the best price I can get.

I know I don’t need to apologize, but I went with one of the big three because there was no way my local dealers could come close to the price for the vehicle I wanted. I know a salesperson needs to feed their families and this may sound harsh, but perhaps they are in the wrong line of work. Amazon is putting a lot of companies out of business. In fact, I think Sears recognizes this and is trying to join the winning team. I believe the car business is going in the same direction. More and more customers know what they want so shopping online is the way to go. The future of the car salesman is not looking good.

The issue with buying online would be actually physically seeing and driving the car to see if it is the right fit for you. If a person goes to a dealership just to see and test drive a car knowing they are not going to buy it there, then where does that leave the salesperson? And if that continues to happen then dealerships will start to disappear. But not all. People will need to service their vehicles and some will buy right on the spot. I go to the annual car shows to “try on cars”. I have no salesman breathing down my neck and if I have a question there is always a rep standing near by. They even let you test drive some of them. We couldn’t actually drive a Corvette, but were given a ride in one by Ron Fellow’s brother. (I think his name was Rob.)

Furthermore, we don’t want to feel like we were ripped off. Not that we want to make anyone unhappy, but when I hear someone saying the salesman was the greatest guy in the world, then that probably means the salesman made a lot of money off of them. Lol. When I buy from Amazon, chances are the price is the best I could have gotten; and if not, then it was really close. That’s how I want to feel when I leave a dealership. And sometimes you can get the best of both worlds like Mike from Criswell. They may not offer the best price but his reputation is second to none. He’s nice, knowledgeable, and not pushy. Dealers can offer the personal experience that Amazon can’t but what’s it worth to you?

Just by starting this thread, and reading your posts from other threads you sound like someone I would’ve bought a car from. I think more salesman should give their input and advice on this and other forums. It gives us a little insight to their character and personality. You sound like a nice guy.

On a side note: Doing/buying things online is the future. I’m a public school teacher and I am seeing this more and more in education. Certainly in college, but now high school and even in middle school some classes are offered online. Charter schools, home schooling, and kids in hospitals are making this more popular. I have visited homes of children who just got out of the hospital to collect work and give lessons. Now it can be done all online. Luckily I am nearing the end of my career and won't need to leave the classroom. But I believe that online car buying will become more and more prevalent. Rookie car salesman will have to adjust. I believe they will need to be fleet/internet salesman. In my opinion, standing on a car lot waiting for someone to show up and buy something is a tough way to make a living.

dbirdhouse1

......when they really try to add on additional profit; when you've agreed on a price/financing and then they pass you on to the person that handles the paperwork and try to add on the extended warranty, protection packages (see Bill Macy in "Fargo"), etc. That is why I've bought my last few cars by phone/online and made it clear that is all I want. Now, that is out of the hands of the salesperson but that is the dealer's last chance........

I have also, therefore bypassed the salesman entirely, though I make sure the one I first spoke to before moving on is given the credit. I was in and out of retail sales while in college/grad school and I feel for many of those poor souls...

jimmyb

^^^^
This is why you go in with an "out the door" price in hand. I don't care how the dealership manipulates the various pieces that go into the final total. I say: "I will pay $XX,XXX for the car, OUT THE DOOR." The dealer can either accept or refuse. As far as financing, plenty of sites that one can join so you have a good ballpark for monthly payment. If the finance guy comes back with something out of whack, you firmly point it out and tell him you will arrange your own financing. That will get it back on track PRONTO.

Years ago, we leased a Mazda CX7 for my wife. Everything was set from the sales side, agreed upon price, etc. I had done my homework on the lease with my bank. So the finance guy gives me a payment that's $90/month too high. I said thanks but no thanks, I'll do my own financing and come back with a check...he gets the kid/hand/candy jar look and tells me he used the wrong money factor. I nicely told him that mistakes happen but that needed to be the LAST one.

bapd77

I dont care what they make. My concern first and foremost is my bank account. Additionally, all the BS about invoice, holdback, etc. is just game. They make profit or they wouldn't be in business.

twowinns

Yes, the whole topic can bring out some tough memories and sour experiences. The whole buying/selling system for vehicles is so unique and adversarial, it will be hard for people to know what is fair and appropriate commission or payment to a sales person.

However, one thing is for certain among these passionate statements: good knowledge, honesty, no gamesmanship, and expedience will always win in the end. Your industry can tarnish your reputation in some customer minds, before they even enter your doors. Your job is to surprise them, and make them feel GREAT about the experience - at least the experience they have with YOU. I realize your dealership practices also impact this experience, which is why you should align yourself with a dealer that is likeminded.

As many have stated here, I'm not opposed to the dealer making a reasonable profit, and the salesman making a decent commission. If both make the experience easy and painless, I'll bring my business back to both and refer everyone I know.

thill444

Unfortunately it is not that easy. Dealers make money in so many other ways. There are volume incentives, there is financing incentives, there are aftermarket accessories and warranties, etc, etc. I try to do 90-100% of my negotiation online so how much time is it for the saleman/manager to negotiate a deal? MacMulkin, Kerbeck, etc have their prices posted online so it is very straightforward to negotiate an usually a deal is done in a matter of minutes to lock in the price.

I refuse to go into a dealer and haggle for hours and hours. That is an old and antiquated way to sell cars and I just don't have the time and patience anymore for that and I am sure most salesmen hate it too. But I am sure dealers typically make more money off those types of transactions.

So the answer is a complicated one. For salesmen who sell me a car have already done all the heavy lifting via email and phone so at that point it is just some basic paperwork and then letting me drive and checkout the car while they go over some of the features. I would say anywhere from $200-500 for the salesman depending on how much work he did.

GTFD2

Just my take in this. If $50,000 is what the dealer pays for the car after all hold backs, incentives, rebates and whatever else they get. I feel $55,000 would be my price and the salesperson should get $250.
You can't pay the bills giving the cars away.