When I talk about 'good pieces of used car inventory' I'm talking primarily about luxury cars w/20-30k miles on them. The customer has to feel like they're getting more for their money while getting to the payment they initially wanted. Basically any BMW, Lexus, Infiniti, or Mercedes will do the trick nicely. You should usually be able to get a customer into one of those cheaper than a loaded new toyota. This is def for the 'champaign taste, beer budget' customers. Everyone bitches about them--but if I had to list my top 20 biggest grossing deals they would probably fill at least 5 slots all by themselves.

EDIT: I'm obv talking about the guy who wants a 650$ a month car and wants to pay 450. People who are completely delusional don't really count.

When i was 18, I landed a job selling Hondas (internet sales). Sold cars for 2 years then quit to go back to school/picked up poker. Im 22 now.

A few things that have always helped me (our dealership was about a 300 cars a month ish)

-drive every new trade in around the block. I have really bad memory, and its a great way to get to know all the used cars. New cars are all the same, used cars arnt. The last thing you want to do is fidget with your used car inventory list, run around find it, just to find out that it reeks of cigarette smoke/makes weird noises/the inventory incorrect for example color etc etc etc. I did internet sales, so my gross always sucked (dealt with mostly new cars), but if i could convince a kid to buy a used accord > new civic, i always made more money.

-Dont ever look what the dealership is "in" the car for. Just be a green pea about this. I realized on some bad stretches, i would get desperate for a sale, and it really showed my gross numbers. Just be really naive about this. actually, just be really naive about everything car sales wise lol.

-dealerships in general are a very negative place with in my opinion, very negative people. Everyone finds a reason why cars arnt selling. dont fall into that trap, I found myself huddling outside with all the other salesmen/talking about why cars arnt selling. I made the most money in the first 6 months and the last 6 months of selling cars. The in between is when i got lazy/too smart/very negative about my job.

-I dont know if BoredSocial would agree with me here, but for the most part, Ive always tried to sell a customer the car the very same day. Im sure Ive lost some sales because I wouldnt take no for an answer (being nice/respectful of course). Never believe the customers "im just looking" or "ill be back", especially the 2nd. 95% of the time, they never come back, maybe because they didnt like me, or i was too aggressive



Questions for BoredSolcial-

- How often did you work the desk? If you were at the point where you knew you were getting a "mini" commission, do you find it easier to just work the desk?

-what do you drive now? how many cars have you owned/leased?

-biggest deal youve been skated out of?

First off great post. I totally agree about nailing the customer down when they come on to the lot. DO NOT LET THEM LEAVE WITHOUT THROWING EVERYTHING AT THEM. EVER.

Second I couldn't agree more about staying a green pea. Some day you won't be a green pea anymore--but that will happen naturally and will take a long time.

On to your questions:

- I was fortunate enough to work at a dealership where I legitimately trusted the desk. I mean they were ridiculously competent. When I was a salesman I worked at the #1 Jeep/Chrysler dealership in Texas... And we had like 25 guys. We would do ~380 new and ~250 used or something--and it was a strict liner closer system. By the time I quit I was closing my own deals... But for the first 6 months to a year I was fortunate enough to get to just watch someone very very good close over and over again. I learned a lot

-I drive a '99 corrolla believe it or not. After a few years of seeing cars as inventory you realize that that's all they are. I could easily afford a much, much nicer car... But for me the calculation is how to get from A to B as cheaply and reliably as possible. I've probably owned 10-15 cars in my life. I used to really like them

- I had a customer coming in to buy a minivan. You wouldn't think that this was a huge deal to get skated out of, and you'd be wrong. See this customer was coming in to trade their ancient minivan for a same model year (this was 2004... and we had some 2004 caravans that we could mark as 'like invoice') van that I could basically sell for in the same neighborhood as a new van. Someone skated me. It was a 5 pound deal... Between front and back it would have cost me ~1500. I ended up (after much fighting) getting half of the deal... but there was a full scale war between me and this salesman until he quit (At one point I told a customer who asked for him that he had died of a drug overdose). **** him. Seriously **** him.

-Dont ever look what the dealership is "in" the car for. Just be a green pea about this. I realized on some bad stretches, i would get desperate for a sale, and it really showed my gross numbers. Just be really naive about this. actually, just be really naive about everything car sales wise lol.


Why is this?

The sales managers are trying to make the most gross profit out of every vehicle. Even if it means selling a car at a loss, they're going to try and lose min obviously. It almost shouldnt matter what the dealership owns the car for, your simply trying to sell the car at the highest price. If you know how much "wiggle" room you have, you start working/semi negotiating with your sales managers so you can come to a deal, which cuts into your gross profit. Obviously a sale is better than no sale, but for the most part, sales managers (who you get the ok from as far as pricing) are going to be very aggressive about the potential sale they have in front of them.


used cars in itself is a gray area, just because the dealership took the car in for way under market value, doesnt mean thats what the cars "in" for. It just means the last sales person made profit on the trade in by "ripping" the trade. For the most part, the high gross car deals involve a trade in and/or used car. That doesnt mean you shouldnt trade in your car (it has tax break benefits, and it really is a bitch to show/sell a car if you dont have the time/patience for it)



cliffs- By being naive about the price of the car, you kinda start to believe the car your selling is worth the asking price/if not more.

Every customer who has some sense how a car dealership works will always ask if you could go lower after you give them a price. When I sell used cars I have a list in my pocket of all the prices to start them on and then the internet price which is the lowest. I never give out the internet price because as soon as I tell them the price of the car they always want lower and its not even about the price its just about them feeling that they got a good deal. On used cars too most the time we sell at internet price just because we know the F & I manager will pick up over a grand on the back on a warranty which most people always get on a used car.

Also its amazing how some people make like $500k a year and will fight for the last dollar on car. I guess thats how they have so much money and not wasting there money on 100 grand cars and instead on cars that are 25k like carmy's and rav4's and not pay cash and finance them instead.

In my experience business owners (of any kind) and salespeople (of any kind) fight the hardest for a good deal. Other kinds of high earners usually earn super high hourly's and often just want a semi rational deal so they can go home and be with their kids/enjoy the microscopic amount of free time they have. (lawyers and doctors come to mind)

so if I'm understanding this correctly you can have the same car twice, buy one for 5,000 and sell it for 7000 and the other one buy for 6500 and sell it for 7500 and the sales manager would be happier with the second sale?

He'd be happier with the salesman probably. The salesmans job is to get as much money from the customer as possible--full stop. How much the dealership has in the car is the sales managers business.

EDIT: Sales managers lie to salespeople about what they will or won't do for customers all the time. It is absolutely essential to being a successful sales person to believe these obvious lies as though they are as solid as F=MA. If you believe what they're telling you you'll be able to relay the idea that you really can't do better to the customer.

Honestly I don't think you could do anything more damaging to a dealerships bottom line than tell salespeople what they really could sell a car for. A lot of them are spineless people pleasers who just want to sell the car--and don't really seem to care much about how much money they make. Probably the single biggest factor to the raw success of the first car lot I worked at was their routine use of closers. Having a cold blooded assassin of a professional negotiator work every deal makes a HUGE $ difference per deal on the average.

For those who are in the car business currently and are wondering how this setup would work: You have 3 desk guys, the GM, the GSM, and some other random 'senior sales manager' type. Normally you have 2 guys at the desk at any time. You also have 2 closers who are just 'sales managers'. Each closer is responsible for managing and closing for a team of 10-15 guys. The salesman is responsible for meeting the customers, making them like him, finding a car they like, test driving them, bringing them in and securing the first pencil. Basically once the desk and by extention the salesmans closer have some idea what the customer is on, says they're willing to pay today, etc they send in the closer to negotiate the deal until either the customer quits or the customer signs up. Then the salesman pushes them through finance and delivers the car.

The really crucial thing about this is that it allows the most sensitive part of the whole process profit wise to be handled by someone who is the anti green pea. Also it allows the salesman to remain the 'good cop' for the entire process. Good salesmen in this kind of system learn to work with their manager as a team to work the customers. It also means that when the closer comes back to the desk and says "they will do x but not y" the desk can be assured that it's fact and not simply them getting worked by some desperate ******ed salesman.

From a referral and customer experience perspective I can't state heavily enough how great all of this is for a salesman. The sheer number of times I was told "I'll send all my friends and family to see you Matt... just promise me they won't have to talk to your boss--he's an *******." It's really hard to have any rapport left after a solid hard close... People know they're getting twisted and they rightfully dislike the person who is doing it to them. Taking that responsibility away from a salesman who probably doesn't have the skills to do it right or the spine to do it at all is a huge plus.

agree 100%. You want to give the customers the perception of "im working for you to get the best deal possible", and the bad guys are the sales managers.

I dont really know how to relate to the 2nd paragraph because my dealership management didnt have a designated closer. We only handed off our customers to the sales-managers if the deal was slipping and the customer was about to leave. I really wish we had a "closer" type of system like you mentioned at our store. I for the most part, hated doing the negotiating. Some people find it really fun/exciting, but i personally don't. After doing it over and over, I eventually got really use to it and believe i got pretty decent at it.


To be honest, selling cars was probably one of the biggest life lessons ive ever learned. Growing up i wasnt very confrontational, shy, timid, was afraid to ask for something, didnt take no for an answer very well. Selling cars totally turned that around and I now get my way more often in life (yeah i know, sounds a bit selfish)

To an extent, but rational thought is more likely to prevail than a must-win mentality when stakes are relatively high on both sides.

I took a position as a freight broker that I'm going to be starting in the middle of May. This thread went dark over two years ago, and since I have some serious time on my hands I thought I'd answer some new negotiation questions for giggles.

Round 2... Ding.

EDIT: This is me giving back for SKUL.

Sorry.

Why? The freight broker job description hits my skill set at almost a 100% match. And good freight brokers make a very nice living.

looking to buy a used car, and I saw a mazda 3 gx 2011 40k km listed for 14400 Canadian dollars (1.1 cad = 1 usd) on kijiji from an owner. figured I could get a better deal than someone at a dealer. his deal was overpriced so I asked for 12000$ then I settled at 12800$ and he said 13000$ and he will go no lower. 13000$ to me doesn't sound like a great deal, it just seems standard, what do you think? I think 12800$ is abit of a deal.

if you like the car that much its ******ed to take a stand over $200

LOL yes, some people seem to think negotiation = fighting over money. A standard deal for something you really want is a good deal. Sometimes getting a reasonable offer IS the win.

Huh? Where do you draw the line? I drew mine at 12800$.

You dont call in a spot where you're getting 4 to 1 but your equity is 5 to 1 just because it's close and you like your hand.

I'm just wondering if there is a way for me to negotiate him down 200$ less because currently he is firm and im in no rush and can def find a better deal if i put in more work

Then it's a question of how much your time is worth.

Just say (if you are not willing to just stick to your $12.8):

Look, I understand you set a bottom line of $13K, but I set my line at $12.8 and refuse to budge since I am already over. I'd hate to lose the car over such a small amount just as much as you would hate to lose a sale, so I'm willing to meet you in the middle at $12.9 to make this happen and make us both happy.

Compromise/negotiation....seems like a reasonable deal in your situation.

It's not actually true that you can guaranteed get a better deal from a private seller than from a dealer. The reality is that there is a certain % of dealership customers who decide that they do not like the valuation that the dealership is making them. Sometimes this is legit because the dealership is trying to scalp them, but if they left the dealership they are far more often people who car dealerships affectionately call 'crack smokers'.

Some people have a GREATLY exaggerated idea of what the car they are selling is worth. Some want to get retail for their car even though it's in pretty rough shape. It is what it is.

I agree with everyone saying that blowing up the deal over 200$ is silly. If your goal is to get a really good deal then there's almost no chance that 12800 is going to be ok with you. As I've said over and over in this thread you need to have a goal in mind when you go into any negotiation. You need to know what your own personal inflection points are before you even start talking. This will allow you to take the optimal line in the negotiation to achieve those objectives.

BS,

Just read through the thread and enjoyed it. Really liked the story of Cal. I am going to have to buy a car within the next year. Looking to get a low level compact car (Civic, Mazda 3, etc). This will be the first time I've ever had to buy one as I was given a car at age 16 and it has lasted me eight years. Just wanted to get your thoughts on buying new vs used, and how would you go about buying a car. What research would you do, when would you buy, and how would you buy it. I have been doing research online and would appreciate your opinion.

Grats. I've looked into this job briefly so far (I graduate in June).

Can you give a detailed run down of what you guys do and types of pay structures please? Are there websites that show supply and demand updates live and then you try and connect the parties or is it networking and building relationships before their need arises? Essentially how much is it relationship building vs. reacting to market conditions?

Will you still be actively managing your portfolio? If so, you should post stock picks again! It seemed like you were having good success with investing...why decision to return to work?

If you're not located in the US things are potentially going to be VERY different. If you're buying in the US I've actually answered all of these questions in detail throughout the thread.

Given a choice I would always buy used and I would NADA.com to try to get a ballpark idea of what a car is worth before agreeing to anything. I'd use the 'be a huge dick and bargain down until they let you leave' approach.

Thoughts on dealers/Tesla? Anything the press is missing here?