Husband: Feel that! There's something wrong
with the... it's got a jerk! I told you, Estelle, they give you
the rotten ones first. This car don't drive right. I swear, this car's
got a jerk in it!
Wife: Maybe you ought to let the nice man drive it
first, like he said.
Salesman and Wife (in unarticulated thought;
simultaneously): The only jerk in this car is the driver.
Of all the things I've done, I look back fondly on my four years in the car
business. Now, I wasn't a salesman; I was hired by Ford as
a "district fleet leasing coordinator." I was the guy nearly at the bottom of
the lucrative corporate leasing food chain. I was lucky because
Ford placed me in a dealership which was family owned and the family actually
had genuine concern about their customers.
The "Company Car," Then and Now
During the years 1989 to 1993, when I worked for Ford, many corporations still provided a car to
employees who did a lot of traveling. Nowadays, fewer and fewer companies,
however, are doing that, due in part to the liability which attaches if your
employee finishes a three martini lunch and runs over a four year old child.
Attorneys with questionable motives, with the aid of
the American System of Jurisprudence, would take a multi-million
dollar bite out of the employer's coffers after finding that the employee hadn't
sufficient assets to cover a potential seven-figure jury award.
So back to "the good old days." Basically, Ford would sign a contract with a
company to lease them hundreds (maybe thousands) of new cars and/or trucks. The
vehicles have to get from Detroit to the assigned drivers, and the drivers' old
vehicles must be disposed of in a manner that is both efficient and financially
sound. So for my district, I was the guy who basically called up, let's say, Bob
Brown, salesman for Gigantic Humongous Pharmaceuticals, told him that his new
company car was on the way, and arranged to take possession of his old car, and
hand him the keys to the new one (and also give him a courtesy walk-around so he
knows how to operate all of the features of the car).
In the case of a municipality or state agency, I had to take delivery of the
vehicle (let's say, a Public Works truck) and when it comes off the big
rig, inspect it, sign for it, and then take it to a truck body builder (not to
be confused with the Arnold Schwarzenegger-type body builders).
The truck, which was, upon delivery, nothing more than what is called a
"cab-chassis" — the cab, a lot of steel, and the rear wheels.
The body builder puts on either a box, making it a box truck (kinda like a
moving van), or a utility body. A utility body could be anything from one of
those big affairs with myriad doors for tools and parts, to a small cherry
picker (a hydraulic crane with a bucket in it to lift workmen to power lines,
trees, etc.).
The biggest thrill was getting a truckload of State Police cars. A
Ford Crown Victoria "Police Interceptor" handles like a dream and is equipped
with an engine that, if asked to, delivers enough torque and acceleration to
mush one's face up, not unlike that of an astronaut's, when going from zero to
sixty miles per hour. Well, okay, not that much, but a lot. The vehicle,
now emblazoned with the correct lettering, accessories, light rack (the lights
you see when you're about to get a ticket) and sometimes, in the case of a truck, a snow plow, would
then be delivered by myself and a handful of drivers from the dealership to
wherever it was the customer wanted it delivered. Usually, the fellows at the
garage, knowing that there was an extended warranty on everything,
would just sign for them and let us go on our way. Every once in a while,
however, we'd get some moron in horn-rimmed glasses who'd inspect each vehicle
as assiduously as one that his own mother were going to drive, leaving us
helplessly sitting there for an hour or more.
In the case of a company car, the employee of the client would come to the
dealership with his/her old car, take all of their things out of it (if they
hadn't already done so), and tap their feet waiting for the keys to their new
vehicle. The cars turned in ran the gamut: some were as polished as the driver's
shoes, the glove compartment filled with receipts for timely (and
lease-required) routine and preventive maintenance. Others, sadly, had
probably never been touched by a mechanic, and looked as if they'd been used
as New York City taxi cabs.
A particularly disturbing experience was encountering an insurance salesman the size of a small house, who would have none of this "damages" business. He wouldn't sign and I wouldn't give him the keys to his new car. He called his boss, at home, and whined like a geek whose slide-rule's been stolen. He signed, but little did he know what was going to get back to the company. We put about a 24-pack worth of empty Budweiser cans in the trunk (where the spare tire, now missing, by the way) should have been, and took Polaroid photos of that and all around the wrinkled vehicle. The engine's head gasket was toast. The vehicle was destroyed for all intents and purposes.
Once the paperwork was done and I got the
customer to sign for the damage to the old car (a difficult task) and sign the
receipt for the new one, they drove away happy.
Moving Metal
Thanks for your patience. This is where I get down to the topic at hand,
buying a new car. The salesmen in the retail side of the dealership were
wonderful men. The Sales Manager knew everyone's name and had probably sold some
families a dozen cars. The oldest salesman there had been there for a long time,
and he, too, had walked the walk long enough that he enjoyed a steady stream of
repeat customers. So much so, that he would actually give up his turn to handle
browsing customers if he didn't like the way they looked. And believe me, he
could tell. They had a third sales position, which was constantly being filled
and re-filled with very young men in cheap suits, hoping to make their fortune
in the world of motorcars. They'd arrive at the dealership thinking that their
"demo," or company car, would be a brand-new Mustang GT. To their
disappointment, if their driving record qualified them for a demo at all, it'd
be a used Taurus, or worse. The thing they all had in common was
their initial gratitude to the two older salespeople for giving them endless
streams of would-be customers. It'd take them months before they realized that
these were not customers but just window-shoppers.
There's a big secret in the auto business. In a new car dealership, your
salesman is almost always going to make a lot more money if he sells you a used
car. That is because, for example, when I worked there, Ford paid a salesman $50
for selling an Escort, slightly more for a compact, and only $150
for a dealer-financed, loaded-with-options Crown Victoria. If
a salesman sells a used car, he takes a nice percentage of the difference
between what it cost the dealership and what it's sold for, minus any work that
had to be done on the car to make it salable.
On slow days, the intercom in my office would come alive with the voice of
Dick, the older salesman. He'd say, "I've got a twenty per cent." Those were
customers who were looking at compact or mid-sized cars loaded with options, who
looked like they were gonna buy. (The "fifty per cents" were more of a
challenge.) These percentages were the portion of his commission I'd receive for
selling the car and handing the customer to him to do the paperwork.
A twenty per cent usually went this way: the customer would be looking at a
mid-sized car with a special paint color or leather seats or steel wheels. I
knew they wanted better, but just couldn't afford it. Now, in my side of the
lot, I'd have two or three very good looking cars equipped with leather seats, a
faux convertible roof, perhaps, or chromed wire wheels. And a big engine. Now,
why would someone buy a brand new car they don't want for $18,000, when I could
get them into a 2 year old car that looks like new and is loaded with goodies
for $10,000. We'd sell them an extended warranty, so they had the same coverage
as if they'd bought a new car, and finance it right there at the dealer if they
qualified for credit. Everyone makes out well.
The customer would undoubtedly be
happy with their car, plus, the dealership would buy the car from the leasing
company for whatever the going "Kelly Blue Book" (the official arbiter of car
values) rate was, minus a percentage, minus the cost of shipping the car to a
wholesaler (who sells cars that good dealerships don't want to sell to
unscrupulous dealerships). On top of that, the salesman would get a commission
on the financing plus a fat bonus for selling the extended warranty. Many times
My good buddy Dick would make between $3,000 and $5,000 on the deal. And
depending upon the percent he and I would undoubtedly haggle over, I could make
up to a thousand dollars or more. In a day. On Saturdays, when I didn't have to
work, I'd come by the dealership and hang around, and bring in even more money.
The Car Shopper
There are people who visit gourmet food shops and don't give a whiff about
the cost of Brie. They clothes shop at top-name department stores. They dine
at a fine restaurant every Saturday night. But come time to buy a new car and
these people freeze up and immediately become the most frugal individuals on
the face of the earth.
The old adage rings true for everything: You Get What You Pay For.
The Brie you buy at the gourmet shop is going to be creamier than the poop you
buy at the Sav-A-Lot supermarket. The clothes they buy at the better department
store are going to last longer. And, should they not be satisfied, they can
return them without hassle. They have a much better time eating at a white
tablecloth restaurant with romantic atmosphere and delectable food than they
would having burgers and an ice cream cone at the local Shake Shack.
So why, then, do these people come into the dealership expecting to get a
Rolls-Royce on a Volkswagen budget. I'll tell you. Someone's told them
through the grapevine that a dealership makes thousands on every new car they
sell. Not so. Especially not now, but it was not so when I was in the thick of
things. There's a lot of overhead involved in running an auto dealership, not
the least of it incredibly large insurance policies. Their friends have lied to
them about the "great price" they got on a car (because their friends are
ashamed they paid as much for their new car as they did for their first house!)
Some "auto maven" on the talk radio station has implored them to shop around,
find the best deal, and then offer $2,000 less. That's easy for the auto maven,
because he's never had to run a car dealership.
How many times did we get the customer's information (name, address,
telephone number) and show them a couple of cars, only to find out a week later
when we called them that they'd bought an inferior or smaller car at another
dealership. It was only after 1986 (concurrent with the introduction of the
Ford Taurus, one of America's best-selling cars) that Ford really made a
commitment to building quality automobiles. They discontinued the tiny,
cheaply-made "LTD II" model and focused on a much more well-engineered line of
cars, not just at the top end, but throughout the line. All of this had a cost,
however. So we were peddling cars that were typically priced a bit higher than
the same class of vehicle made by GM and Chrysler but beat
them in customer satisfaction.
If the customer had purchased another model of car, we'd typically call them
back in a year or so and fully half of them would express dismay at their
choice. About a third of those who were dismayed with their choice came back to
us, got a good dollar for their Buick or whatever, and drove off in the new
Crown Victoria of their dreams.
The ones who eventually did buy a Ford from a competing dealer would complain
that they could never get the car serviced quickly and had to wait for an
appointment. The dealership I worked out of had plenty of business from the
fleet operations; they made it a habit of only servicing our own customers' cars
in a timely fashion. We had a file on all of them. If the vehicle they brought
in bore the nameplate of another dealer, their appointment would be made weeks
away. It sounds cruel but the truth is, if they haggled over a hundred dollars
or so when they bought the car, when you service their car they're going
to be nothing but trouble. I had the privilege of working with some of the
nicest, most well-informed service and parts personnel in the region, my
regional manager once told me. And I knew it. If I had 2 truckloads of new
Tauruses waiting for customer deliveries, the competitive dealers would be nasty
and shoddy about the dealer preparation work I farmed out to them (yes, all cars
must be checked over even after they leave Quality Control at the factory).
What to Look For
The first thing to look for when shopping for a new car is to allow yourself
a little flexibility. I understand that some people have their hearts set on a
certain make and model (even, perhaps, in a certain color). These things may end
up costing you money. If you're willing to compromise, purchase a model-year
leftover (a car that's new but that's been sitting on the dealer's lot for a
year) and save big bucks (they really, really wanna get rid of these; it costs
them financing money just to keep them around, essentially they depreciate
rapidly).
If you're willing to wait up to six months, you can order the exact model,
color and combination of options you want from a dealer. The upside to this that
people don't know is that, contrary to what unscrupulous dealers would have you
believe, it does not cost more to order a car. In fact, every car dealer
has what's called in the business a "floor plan," which is their credit
relationship with the manufacturer. A car that's been hanging around in stock
has cost them a lot in interest, because they never purchase inventory outright.
If you order the car, it gets paid for upon delivery, and won't take up space on
the lot or interest out of the dealer's pocket. However, most incentives to
buyers only apply to existing dealer stock, so plan on not having advertised
specials available to you if you order a car.
Never dismiss the purchase of a quality used car with a warranty and service
records. If a dealer tells you he/she doesn't have the service records, don't
buy the car. However, if the car was turned in by a repeat customer, they'll
have a file on the car that you'll be able to inspect. And you'll have room to
bargain. Finance your car with a bank or a home equity line of credit unless the
dealer will give you a better rate (which they will, because they buy the money
from the finance company at a much lower rate than you'll pay someone else). So
you're taking away a little of their profit, but if you've got good credit, this
is the way to go.
Now that Japanese and Korean manufacturers are decimating U.S. manufacturers'
sales, auto service has become a profitable way for dealers to enjoy growth. The
pleasure and satisfaction of dealer service has never been a better value.
They're beating the service-only organizations at their own game. And if you
bought the car from them, expect to receive monthly mailings with coupons that
make keeping your car well-maintained even less costly.
One of the best innovations in used car buying is the CARFAX website at
www.carfax.com. It's well worth paying about
$25 to find out if your car's been in a collision or not. Dealers do indeed
repair and sell cars that have been in a collision. They may come with service
records but the body shop work will not be disclosed to you.
If you're the kind of person who likes to buy a new vehicle every 2 years,
wait for the end-of-model year sales and you'll make out alright. Once you've
bought 2 vehicles from a dealer, and assuming you're happy, they'll bend over
backwards price-wise to get your business.
If, however, you plan on holding on to your vehicle longer, there are a
couple of things that you can do (especially if buying a larger car, minivan or
truck) that will extend the lifetime of your vehicle by years. Buy what's
normally known as a "trailer tow" package. If the dealer you like says he
doesn't have any, ask him to do what's called a "dealer swap." This is where he
trades a desirable car on his lot for the one you want, in the possession of
another dealer, in order to make the sale to you. Trailer tow
package typically involves a heavy duty suspension or rear end, a transmission
or transaxle with a slightly different gear ratio, and often what's called an
"oil cooler" or "transmission fluid cooler." This is built into the radiator
and circulates the transmission fluid, cooling it well below temperatures that
could prove harmful or cause the fluid to fail. It also has the effect of making
your air conditioner run much more efficiently in the summer because,
basically, the entire vehicle is running well within the conditions it was
manufactured for; not at their limit. Leather upholstery, unless you're morally
opposed to sitting on a once-living bovine, holds up over the long run much
better than does cloth, and you'd be surprised how clean it comes whether you
use the new cleaners or you have someone else clean the car for you.
About extended warranties: they're less costly if you buy them up
front. There are two important things about an extended warranty which make it
valuable. If you're going to keep your car for a long time, a long-term,
high-mileage extended warranty will essentially take the gamble out of your
cost-per-mile of driving. The more miles you put on your car, the lower the
cost-per-mile. But should a major part break down (and they do on even the
vehicles most highly rated for quality), then your cost-per-mile goes back up.
An extended warranty means "no gamble," and gives you a fixed cost-per-mile.
Additionally, if you have an extended warranty and you get your car serviced at
the dealer where you bought it, should something strange go wrong that's not
covered by your extended warranty, your dealer's service department may be able
to fudge mileage numbers and get you high-priced work done for free: as
"warranty work." You see, their service department gets paid for warranty work
by the manufacturer if it's covered by warranty. The dealer wants to make a
profit and it will increase the chances that you'll buy another car from the
dealer if the dealer doesn't make you pay for repairs that they can insinuate
into the warranty system.
Finally, something that people occasionally miss when they're buying a new
car. Look at the odometer. If there're more than 10 miles on it, move on to a
different vehicle. Especially in the case of performance or exotic cars, a few
miles on the odometer might mean that the Sales Manager or the dealer allowed a
friend or relative to drive the car. And, given that it's a performance car, you
can assume that it's been driven hard during the crucial break-in period. Don't
believe someone who tells you that there's "no such thing" as a break-in period
any more. A car should be driven with care and at varying speeds on the highway
for at the very least a thousand miles. Then the oil and filter should be
changed. If there're miles on the odometer, it's more likely than not that
damage resulting in lower compression and lower mileage may have been done to
the car. The exception to this case is a dealer swap. If that indeed is going to
take place, you have every right to ask the dealership if you can go to the
swapping dealer and pick it up yourself.
The Guys Who Give The Car Business A Bad Name
This article will not go into the myriad scams and advertising tactics used
by dealers who, for one reason or another, don't care about repeat buyers. They
just care about making the sale. Below is a list of sources that include fine
websites that'll give you valuable information and guidance about buying a new
or used vehicle. Some of it is fear-mongering, but a lot is real.
You'd be surprised, sometimes these mega-huge lots promising the best price
will actually fleece you. A small dealer who's been around for a long time will
not only be able to compete with them (they probably own their own property so
their overhead's lower). A small dealer who is committed to customer
satisfaction will be able to give you references immediately.
Buying something as significant as a car is something that takes a long time
and lots of checking. But after you've done the checking, make sure you feel
comfortable with the salesperson you're dealing with, and his sales manager if
the sales manager comes into play during the deal. The websites below offer
advice about how to keep kindly-looking yet unscrupulous dealers from making
illegal credit checks on you while you're out test-driving a car (the more
credit checks that're done in a short period of time lowers your credit score,
and therefore any leverage you have to get a lower interest loan).
Do You Want To Become A Car Salesperson?
This is the heyday of competition in the automotive industry. Quality cars
from overseas are flying out the showroom doors (and Honda and Toyota, I
know, compensate their sales reps more than do U.S. manufacturers). If you think
you can handle the rejection, the reputation that precedes you, and a lot of
boring daytime hours spent reading the newspaper, then by all means, give it a
try. But you have to commit to it; be in it for the long run. Not only do you
want to sell to your customers, you want to wait until their neighbors, friends,
and relatives need a car, and relate the wonderfully different and comfortable
experience they had with you by word of mouth. Hang around long enough
and you'll sell to their kids, and then again to them.
Don't spend the slow hours reading the paper like some of the guys. Read the
automotive section of the classified ads, or the "auto sales" give-away booklet
you find in supermarket lobbies. Look at what people are selling, on their own.
Get the Blue Book value on the car. Find a great car on your lot to put them in,
and do it as close to the payment they were making on their old car and you'll
have a sale on your hands. Then call them and you'll have the answer to their
needs. You'll be taking the old car off their hands at a price close to what
they were asking for it, and you'll put them into a car they perhaps had never
thought of owning.
If you're a social animal, car sales is a great occupation for you. The best
in the business all make one key point about making a sale: it takes time. If
you get to know a prospect before they need a car; then by all means (unless
you're a boor) they're going to go to someone they know rather than someone they
don't when making their next purchase. The best sales tool in the world is
conversation. Listen to what people have to say and, without resorting to
flattery, agree. Soon it'll be your turn to talk. Sooner than you think they'll
be sitting at your desk talking about cars. And then they'll buy one.
If you hear over beer at the corner pub that someone's been ripped off by
their repair shop or dealership, bring them in to your own service department,
no matter what make or model. If they become a repeat customer and the service
end's making money, you have every right to be there with your hand outstretched
at month's end when the bonuses are handed out. If you add to the service
manager's bottom line, he'll throw you $50 or so, especially if he's had a bad
month and you've made it better.
RESOURCES:
Car Buying Tips by Jeff Ostroff
http://www.carbuyingtips.com/?x=0lhoz_ufonxw_kqe1 (Accessed 9/1/07)
Edmunds Car Buying Tips http://www.edmunds.com/ (Accessed 9/1/07)
Smart Car Guide http://www.smartcarguide.com/ (Accessed 9/1/07)
Ford Credit Red Carpet Leasing:
http://www.fordcredit.com/redcarpetlease/ (Accessed 9/1/07)
CARFAX: http://www.carfax.com/
(Accessed 9/1/07)