I agree. People are definitely afraid of being screwed on new car purchases. And why shouldn't they? Any new car costs quite a chunk of change. This fear is why the people are saying they don't like shopping for new cars. It is also why they like the feel of getting a deal. They managed to run the gauntlet without getting ripped off.

I think moving in the direction of fixed pricing is the best move here. As stated, yoiu get out of the rebate/discount game while still assuring the public they are getting a fair deal. And in the end I think the confidence in a fair deal will make a world of difference to consumers.

 

I definitely agree with the comments about the nature of salespeople and the public's perception. In fact, I've often told friends it's not that I'm so good, it's that most other car salepeople are so bad. I also agree that the adversarial relationship is destructive to our future. Every dealer I've consulted has been coached about changing the way customers are dealt with. Hard to believe so many still utilize the podium concept with the manager looking down on the saleperson and client. Then the inevitable TO from the "closer". This is archaic and needs to change. Proper treatment should include actually "talking" to the prospect, getting to know them and what it is they seek. Conversation should include driving habits, frequency of trade pattern, financial considerations and then assisting in choosing the right model best suited to the customer. After a thorough presentation/demonstration, a fair price should be given and the customer should be informed that they have the option of making an offer if they are in any way uncomfortable with the quote. The object should be a transaction equitable to both parties and result in a win-win for each side.
Consider the situation of a dealer with only one or two models left in stock of a particular vehicle and more than enough takers. The dealer needs to retain the right to price that unit to what the market will bear. That differs from gouging or taking advantage of an unsavvy buyer.

 

Well, in April, I purchased a home, and (if i remember correctly) you do realestate my friend as do I. The asking price was 325k, we placed an offer... at 325k... and in our offer we asked only for a carpet allowence cause the carpet really was terrible. I think we got 2k for that...

But we payed about the asking price for the home...

Now I've purchased 3 cars, My 94 firebird, my ex-gf 02 camaro, and my 05 elantra... my Firebird was the best purchasing experiance.
At 18, I asked the price, they said 6k for cash, 7600 for financing... I went to the bank got 2k for a down payment, and signed all the paperwork in about 15 minutes, and got the keys and drove it off the lot for the first time. (I didnt test drive the LT1, nor did I even look inside or get in. I saw it said Formula V8 asked that it was a v8 and sure enough 275 hp )

both the used 02 camaro and the 05 elantra took atleast 3 hours of paperwork... a hassel I dont want to deal with, there was never a discussion though of an unfair price.

when I think of car salesmen, I think of my friend who had an 03 sierra extended cab, a 84 month loan and a payment of over 550$...
now he just got a used 04 dodge intrepeid for $10,300 with a 6 year payment of $297... thats a lot, granted his credit sucks...

but I'm 19 with a 5 year loan with a payment of $267 on my elantra, after tax and everything my loan amount was a little over 14k... and I cant help but wonder how anyone can get sooo screwed by a salesman...

I guess u just have to suck at math...

but of course I got screwed on my firebird... but i still think it was a great buy. I was in and out no problem, had to sign the same amount of paperwork, i was just in and out. it was a 30 minute thing, and most of that time was me getting money out of the bank.

Salesman can be anything, like i said previously I sell dog food, and If i can I will try to pursuade someone to get a more premium brand because they get a healthier dog and the dog eats and ****s less... less vet bills and better looking dog... a 30$ bag of 40LB dog food is usually a better value then the 9.99 50Lb bag... but most people wont stomac the idea of spending the cash.

 

Interesting stories. You're right about the overly lengthy time to do paperwork. That is an important area I stress to dealers. It seems since they have to be there all day it doesn't matter a whole lot how long the customer has to wait. Often buyers are pleasant enough on the outside, but quietly steaming inside. There are many strategies easily implemented to speed up the process. A proper delivery should be able to be done in 1- 1 1/2 hour.
Most relevant though was your story on buying a house. The offer you made was reasonable and therefore accepted. That demonstrates the way business should be done and results in happy participants. No gouging, nothing unrealistic, just two parties "making a deal".

 

This is the typical "short-term only" view that so many dealers take. Similar to inflating MSRP on a hot car, IMO. Take off the "Dealer Goggles"

I look at my relationship with my dealer as something that is a life-long thing.

Screw me now on a car I want to squeeze an extra $100 out of it from someone else, and you just lost me and my repeat business forever. So, yes, you make $100 more on that transaction.... but you just lost a 33 year old who buys/leases a new car every single year on average between my wife and myself..... not to mention the rest of my extended family.....

Doesn't sound like that smartest idea after all...

 

There is nothing wrong with mating supply and demand, nor is there anything wrong with the profit motive. If I can sell a car for X with no trouble, I will not sell it for X minus $1,000 even to my best customer, never.

 

And then your best customer drives to the other side of town, and you just lost a lifetime of future sales....

Wonderful strategy.

And you claim General Motors is short-sighted with the promotions they are offering!?!

"Hey pot, this is the kettle.... you're black!"

 

That right there is why you or anyone else with that attitude will NEVER sell me anything!

 

What if another dealer is willing to sell it to this customer for X-$1000? If he/she still wants to buy from you, I can see why you would refer to him as your "best customer." He doesn't shop around!

 

If it's worth X, no other dealer would be foolish enough to sell for X minus $1000. If they would, I would recommend my customer go get it there and I'll service it.

 

If I go buy something from another dealer cheaper, especially after having the proverbial screws put to me by another dealer, especially oone that considered me their "best customer".... I can tell you it'd be a cold day in hell before I brought that car to your dealership so you could make the money off any service work... warranty or otherwise.

Why on earth would I do that?!

 

It's like Iaccoca once said, "if you can find a better deal, take it". I once had a customer get an appraisal for a lot more from one dealer than any other he shopped at. I told him to go transact immediately before that dealer woke up, or lost their buyer for the trade. The fellow has since returned and referred friends to me. He knows I'm honest and respects the fact that I gave him straight advice.

 

Again, you bash GM for what you describe as "short term" promotions.... yet you practice the very same thing in a slightly different form.

It's the very definition of a hypocrite.

Sell out on the life time customer, to make an extra couple bucks today.... and lose thousands over the long haul.

 

Actually keeping the best interest of the enterprise is the right decision. GM's problem is short term thinking that leads to long term problems. This effort is to pacify Wall Street and make monthly numbers, not realizing the impact down the road of flawed programs and processes. Instead we need to focus on long term thinking which may lead to short term problems. We can easily cure short term problems. At GM there is way too much upper management, the proportion of accountants, lawyers, etc... is way out of whack in comparison to actual productive employees. Excess management is the wrong kind.

 

This is quite the opposite of what is happening.

GM is creating long-term BENEFITS specifically because of the large percentage of CONQUEST BUYERS from this promotion.... attracting NEW buyers into the fold.

You, by not selling that car, are doing nothing but LOSING a lifetime customer to pick up a few extra dollars in the here and now.

You are totally backwards on your reasoning.

Besides the fact that GM is bringing in NEW CUSTOMERS, how is this any different from you, as the dealerships General Manager doing LONG TERM damage to make a small profit in the SHORT TERM to "pacify" your owner?