How do they sleep at night? Vol 1: Car Dealers and Finance Managers

This question will become the focus of a series of posts about people who screw people, sometimes for a living. And, hopefully, lessons I’ve learned and want to pass on.

Part 1 – Car Dealers and Finance Managers

Their job is to sell you a car, and in the process get as much money out of your pocket and into theirs as possible. That is exactly the opposite job to mine – to buy a car and keep as much money in my pocket as possible. They will often tell you anything they think you want to hear to get it. They will lie, cheat and steal.

I have bought two new cars in my forty-something years. The first was right after I realized that my father did not hide new car keys in my college graduation celebration cake.

It was a cute little bright red Nissan Pulsar with a T-Roof, and it was two days before my 22nd birthday. I only went to one dealership (another mistake), and I’ll never forget my mother’s advice that day, as I balked at having to pay $235 a month for the next five years. “You’re always going to have a car payment, sweetheart,” she said. ” Get used to it.”

I didn’t realize at the time that I was getting shafted. Those heartless shysters saddled me with a 10.5% finance rate. I had settled for a car payment I could afford, not found the best interest rate. The finance manager and the salesman probably got a trip to Tahiti for giving me a rate likely 2 full points above what I was eligible for.

Rat bastards.

I was a naive consumer, but I paid that note (this is where I learned another valuable lesson that many don’t know: your payments are due on your due date. If you pay after the due date but within the grace period you don’t get a late charge, but you get charged additional interest that they tack onto the last payment on your loan! So, please make your payments on time!).

I drove that very reliable car for five payment-free years after I paid off that note, and I liked it. I surely did like it. That’s how I learned that I didn’t need a new car every few years, and that no, Mom, I won’t always have a payment.

On the 10th anniversary of the purchase of my first one I bought my second new car. I had learned a thing or twelve in that ten years. I was much better prepared this time.

I visited several dealerships, and watched as salesmen and finance managers tried to steal money out of my pocket. I had researched and comparison-shopped and waited until the time was right and even called in a favor. They laughed at my offers and lied about expenses and tried to wear me down. I wouldn’t even discuss financing until I had a price. I left more than one, more than once.

In the end I made a good deal, and they hated my guts. When I sat down with the finance manager, I had a secret he didn’t know. I had gotten pre-approved for a car loan before I even walked through the door. Still, they tried to hide unnecessary charges in the contract. They lied to me, insisting to me those charges were required when they weren’t. I remember sitting across from that guy and actually saying the words to him, “How do you sleep at night, knowing that you screw people for a living?” I wound up using their financing, as my pre-approval gave me leverage to get an even better interest rate from the dealer. Money in my pocket.

Alas, that is the last new car I’ll ever drive.

Shortly after I got married my husband decided to get a new car for himself. He’d bought several new cars, but had driven this last one for eleven years. My new brother-in-law is in the car business. He is one of the shysters and rat bastards of which I speak, and in his case I say it affectionately. Mostly.

He’s the one who explained the process to me, really pulled back the covers on this very shady business. As consumers we can get oh so much better deals by buying used. Cars depreciate so much in the first year. And he recommended that we wait until January (much to my husband’s chagrin). Why? Because after the turn of the year the car becomes a year older in just one day, and therefore you can negotiate price based on it being 2 years old instead of the one year it actually is.

Also, most people know about the Kelly Blue Book, but did you know there’s a Black Book which most dealers use as a price reference? And that the prices are much less than Kelly Blue Book? Yeah.

That’s what inspired us, with some help from said brother-in-law, to buy our 2001 our Dodge Durango in January of 2003 for just slightly more than half of what it originally sold for. I added an extended warranty that I purchased from my local credit union (never, ever buy an extended warranty from a dealership unless you want to pay an egregious markup, and always, ALWAYS buy an extended warranty on a Dodge). Also, if you have cash in hand for the whole thing – or even just for the down payment- charge as much as the dealership will allow you to, then pay the credit card company immediately. Why not get the credit card rewards?

When my husband totaled my lovely Acura (through no fault of his own), we used the same principles to buy our 2004 Hyundai Sonata. Those salesmen hated me even more than the Dodge guys. The finance manager met with me even though I paid cash – “Are you sure you don’t want to keep that money liquid in case of an emergency?” he asked. “We offer great rates to people with excellent credit like you.” Really? Really? Oh, and you want to charge me $400 for VIN etching the windows, something that my insurance company will do for free? No thanks. Enjoy looking in that mirror, fella.

Another thing I learned – when buying a used car, always buy from a dealership. If they know there’s something wrong with the car they have to tell you. A private seller does not.

Of course, that’s assuming the dealer is following the law, and since we already established they are rat bastards and shysters, I wouldn’t take their word for it. I would, however, take the word of my mechanic, who will be looking over the car before I buy it. That’s B-E-F-O-R-E, my friends.

Next year the extended warranty on the Durango expires, and we’ll likely get another vehicle to replace it. It will definitely, absolutely be a used car. And the car dealers and finance managers will hate me some more.

That’s okay. I have no problem sleeping at night.

 

Like this post? Read the other post in this series!

See the Stretch Your Dollar Page for other money-saving ideas.

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46 Responses to “How do they sleep at night? Vol 1: Car Dealers and Finance Managers”

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  5. Mary Says:

    The 10.5% interest rate on your first new car at age 22 likely was a much better deal than you now perceive it to be. If you are now 40-something, I’m guessing it was in the 1980s, when typical interest rates were all in the double-digits.

    For example, my 30-year mortgage starting in 1988 was at 10.75%. Back then, my parents’ car loan was around 12%. But it worked both ways — we also were able to get tax-free municipal bonds and CDs earning around 14%.

    By comparison, the current interest rates are extremely low.

  6. the girl Says:

    Thanks, Mary. I may not be remembering the rate accurately – it was 18 years ago. I do recall finding out from my Dad that it was 2 points higher than what I should have gotten. But your point is well taken! Thanks for visiting!

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  8. Patty Says:

    We have only had one truely new car, our Trailblazer. I am pretty sure we didn’t get as good of a deal as we could of since we bought it through AAFES, and they are the scam artists of the world. When we bought the Prius, we walked in looking and walked out with a used one. Needed the car, wanted a used one, and at that time used ones were unheard of.

  9. Bill Says:

    Don’t forget to subscribe to CarFax.com or other site to be able to get a basic car history. I think it’s worth the price when you’re shopping to possibly avoid a lemon or Katrina vehicle.

  10. the girl Says:

    Thanks, Bill. Good tip – you certainly don’t want to buy someone else’s headache. If you’re buying a used car from a dealership, though, you probably don’t need to fork out the money for a membership – they are usually members already and will print one at for you, at no cost to you.

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  13. Kevin Says:

    Just wanted to chime in my $0.02 worth. I have been selling cars for near 15 years now. I have been a salesman, a finance manager, a sales manager, a general sales manager, and am currently the general manager of a very successful Nissan dealership. Prior to selling cars I spent 10 years in the United states Marine Corps. During that 10 years I served my Country in Beirut and in Iraq during the Gukf War. I tell you that because I think it is important to know.

    I can tell you that in 15 years I have never lied to, or cheated a customer. First off, it is not who I am, and second off it is counterproductive to my success. I have no doubt that you perceived that you got a raw deal in these instances that you talk about, but I will tell you that they are the exception not the norm.

    You mention KBB. Very good source of information indeed. You can add Edmunds to that list as well. One thing to remember however, when dealing with New Cras the sources are right on target! They can inform you of the MSRP, the Dealer Invoice, and any incentives and/or rebates that the vehicle may currently have. Additionally, you can link from their site to many financial sites so that you can compare interest rates available from different sources. When it comes to used vehicles however, the same sites are sometimes thousands of dollars off. Why? Market determines used car values. Not books, not internet sites, not even used car managers. The market sets the price. Other than that flaw, the sites are very useful.

    There is nothing I appreciate more than a well informed, ready to purchase customer. It makes my life alot easier. It usually boils down to do I have the exact vehicle they want, and will I sell it to them for a price that is fair and equitable to both parties? one thing to remember is taht a car Dealership is not a non-profit organization and as such must make a fair profit on the products they sell. What is fair in my mind is not always fair in the customers mind, but 99 times out of 100 we can find common ground and come to an agreement on the price of a vehicle and the value of a trade in if there is one.

    I am no different than the customers I serve. I have a wife, two children, a dog, and a mortgage. I happen to sell cars. I often see my customers at PTA Meetings, at sports events, at the mall, etc…My goal is and always has been that my customers will see me and come and say hi and converse with me. I would never want a customer of mine to point at me and say, “there’s that jerk that ripped me off, I wonder how he sleeps at night?”

    There are bad apples in every profession. But like in everyday life, it is the 20/80 rule. 20% makes 80% look bad. I am telling you it is quite the opposite and that 80% of us are trying to meet and exceed customer’s expectations when it comes to buying a new or used vehicle.

    Come to my Dealership and you will have a totally different perspective.

    Sleeping well in Philadelphia.

  14. BeThisWay Says:

    Kevin, I appreciate your comments, and it was a cogent and thoughtful post. I agree that one bad apple don’t spoil the whole bunch (thanks, Michael Jackson).

    But.

    Can you tell me that you’ve always given your clients the lowest possible price available for the car, and the lowest possible finance rate from the best offered rates available based on the client’s credit? I don’t think so, because then profits would be low and you’d not only never have been promoted to GM, you’d likely never make it more than 60 days as a salesman.

    It’s not really your fault, though. The entire system is set up to screw people. Your only sin is in deceiving yourself that you’re actually doing people a favor. Being the most honest person in an inherently dishonest business will likely get you some awards somewhere, but not on my blog.

  15. Kevin Says:

    It is not a sin to make a profit! Tell me this, did you get the lowest possible price you could get on the refrigerator you bought? Did you get the lowest possible price on the underwear you are wearing? On the food you eat? C’mon, it is unjust to single out car dealers for making a profit. Everyone makes a profit and the first attempt is always to generate the most profit and still be fair. Have you looked at Exxon profits lately?

    My only point is that it is unfair to say that car dealers are “bad” for making a profit.

  16. BeThisWay Says:

    Kevin, I don’t think it’s bad to make a profit. I’m all for profit.

    When I purchase a refrigerator, underwear or food they don’t sell it to me for a different price than the person who walked in five minutes before me. Everyone gets the same price.

    If I walk into Victoria’s Secret and there’s a sale, everyone gets the same deal. That’s fair. They don’t charge more to the husband coming in to buy for his wife and his girlfriend, or to the shy, quiet girl venturing over from Sears’ lingerie department for the first time ever. If the sign says $12.99 they’re $12.99 to you, to me and to George Clooney (ok, perhaps some salesgirl gives him her employee discount).

    And I know that I’m not going to be sitting there for hours having to chip away at that inflated profit Victoria’s Secret is seeking while the salesgirl runs to the manager to try to get me a few more dollars off “really, truly the best price we can possibly offer! We’re making no profit at ALL!”. And then I’m not going to have to go sit with the Thong Finance Manager while she tries to sell me undercoating or embroidered initials, and then tries to make me open a credit card telling me it’s the “best rate I’ll get anywhere!”, even though I already have my own credit card which is a lower rate.

    Come on, Kevin. I’m not singling out car dealers for making a profit. I’m singling them out for the unscrupulous tactics that they use to do it. And it’s not just car dealers, but I’m only profiling one profession at a time. Don’t worry – insurance salesmen are coming next, I think. And that will be a fun one to write because I sold insurance for 13 years. I look forward to your comments on that article. 🙂

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  19. abe Says:

    i’m curious then, what would you say to someone in kevin’s place who works for a “one price” dealer? i have been selling at a dealer in Texas for 5 years that allows anyone to walk in and buy a car for the same price as anyone else regardless of who they are or who they know. good credit, bad credit, male, female…

    and like kevin, i take great pride in the job that i do. i have many customers who have bought 3 or more cars from me for themselves and their family.

    i see your argument about the profit being the same no matter who buys the product, so tell me then, do you go between mcdonalds, burger king, wendys and sonic to see who has the best deals on a soda? no, even though the mark-up on a soda is ridiculous but each place doesn’t charge the same. i realize it’s not as expensive as a car, but the food industry makes a TON of money on soda every year.

    what you have described above is true in many aspects, just like any other STEREOTYPE out there…

  20. BeThisWay Says:

    Hi Abe, thanks for your comment.

    I’ve never been to a one price dealer, but let’s assume that it truly is one price for the car (an assumption I am skeptical about).

    In that case the dealership must make their money on the extras – finance charges, undercoating, vin etching, warranties, etc. I’m sure there’s much more leeway there.

    Your argument about soda just doesn’t hold water (sorry, couldn’t resist). First, those restaurants don’t charge me anything different than they charge anyone else. (except for Seniors and employees, which is a whole other post).

    Second, if I buy the soda from them it’s because I’m willing to pay extra for the convenience of buying it there and not having to bring along my own – which is always an option. So is drinking tap water, which they provide free. Conversely, a dealership is the only place I can buy a new car, so there is no free choice involved; I can only pit dealer against dealer.

    Third, I do comparison shop for soda, sort of. There is a McDonald’s near me which charges higher prices than others in the area, so when we do opt for a McArtery Blocker Meal we do not give our business to them.

    Finally, you are correct to recognize that a soda purchase and a car purchase cannot be compared because of the dollars involved. Wasting $1 and wasting $1000 are in different universes, my friend.

    Stereotype? Definitely. Exceptions? I’m sure. Mostly accurate? Indeed.

  21. abe Says:

    i understand the skepticism, because i deal with it everyday of course, but we truly are a one price dealer. every one of our 2.5 liter Altima’s are $2,851 off of sticker for example, regardless of who is buying it, and on down the line. but here’s where we’re different too:

    “In that case the dealership must make their money on the extras – finance charges, undercoating, vin etching, warranties, etc. I’m sure there’s much more leeway there.”

    is there leeway? i’m sure, but we also charge every customer the same amount for the same accessories, warranties, etc. we don’t do “undercoating”, and we let the customer make the decision on whether they want a product or not. nobody ever had a gun put to their head and was forced to sign papers at a car dealer, especially ours.

    and yes, i realize we are the exception to the rule, and that’s because we are changing the rules!

    ps. with the price of gas, the mcdonalds that’s closest would be ok with me regardless of what they charge for a soda!

  22. Diane Says:

    I too often wonder how car salesman sleep at night, especially used car salesman. Today I was supposed to pick up a one year old vehicle from a chevy dealership. I was told by the salesman that the car had never been involved in an accident and it was traded in for a cheaper car.. they downsized. I requested the car fax report a few times and felt hesitation from him. He finally faxed it to me but I noticed some info was missing. So I did my own car fax report for 25 dollars. It was the best 25 dollars I spent. Turns out the car was a corporate car involved in two accidents and bought at an auction. Not the type of car I wanted considering I am paying 50,000. I have a family and don’t want to put my kids in a car I am not sure is safe. They also tried the tactic of telling me they would only sell if we used their financing for a high perecentage rate even though we are approved for a very low rate and have great credit history. I realize not all car dealers are this way but how can you trust any of them after dealing with sneaky liers like this.

  23. Lou Says:

    Just another opinion.

    Just to let you know that us car dealers make at least 4 to 5 times the profit on USED Car purchases than we do on New car purchases. The main reason is that you can research how much we own the new car for, but have NO way of knowing exactly how much we own the used car for.

    I would have no problem selling all of my cars at one price. The problem is that there is always some idiot that thinks he should get a lower price. He should get some ridiculous price for his trade, and he should get an absolutely insane interest rate, reguardless of if he deserves it.

    Most car dealers make about 1000 profit on each new car purchased on average. Put that against the people who make 10 to 15 thousand dollars off you on Mortgages.

    Have a deck installed on your house. You will pay them 2/3 profit and 1/3 materials.

    I absolutley HATE people who are too cheap to pay a respectable profit to a company who performs a necessary service to the customer.

    Unfortunately the poster of this script is one of those people who sit in a dealership and haggle over 100 bucks for an hour.

    Salesmen make about 100 bucks on every car they sell. That is it. People like you make it very hard for these people to earn a living.

    Do me a favor. MAKE IT EASY … research what car you want. When you find it make an offer 500 bucks over invoice and move on. When you get into finance know what your credit is and what rate you deserve and accept it.

    If you want a warrenty, and really if you buy a car without one your a fool, tell them to see the cost and pay 200 over cost for it.

    If everyone did that .. everyone would get a fair deal and the process would be easy. Instead there are cheap people like you who make it extremely difficult for people to make a living.

    I ask you.. HOW CAN YOU SLEEP AT NIGHT KNOWING THAT YOUR A CHEAP IGNORANT PERSON?

    -Car dealer who hates cheap people

  24. BeThisWay Says:

    @Lou

    Thank you so much for your considered, cogent opinion. Your point on used cars is well taken, just not something I addressed in the article. And I’d still buy a used car versus a new car any day of the week. But that’s another subject.

    To address a few of your other points:

    Yes, banks and mortgage companies make lots of money on mortgage interest. The difference is that I’m telling them how much I want to borrow, and they give me a truth in lending statement that tells me exactly how much profit they are making. It’s all out in the open, unlike with car dealers.

    Your second example involves deck builders. Again you are talking about apples and oranges because deck builders tell me how much it’s going to cost in advance, and they have to build the deck. That’s labor. Sitting in an air -conditioned showroom trying to get an extra $100 from me is NOT labor.

    Louis, it’s not about the amount of the profit. It’s about how you earn it, and how honest you are with me. If a lender or a deck builder was shady I wouldn’t deal with them, either.

    And, my dear Louis, if I were sitting in a dealership haggling over $100 I wouldn’t be doing it alone. The dealer/salesman would be haggling over $100, too. Why is the customer the “cheap” one?

    We’re all trying to earn a living, Louis. I don’t mind people earning a profit if they’re up front about it. But when there’s room to wiggle, wiggle I will. You can call me cheap. Rest assured I will not be weeping over it.

    I’ll be laughing that someone who called me ignorant doesn’t even know how to spell ‘regardless’, ‘warranty’, or ‘absolutely’, and doesn’t know the proper usage of ‘your’ and ‘you’re’.

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  26. Dealer Says:

    Clearly your mind is made up and you are going to be sitting on the con side of the table throughout this argument so I won’t take the time to try and change your mind. I will, however, make a few comments: One, people have different credit ratings which changes the offer they receive. Why should someone with a terrible credit history be given the same rate as someone who has always paid his bills? They pay more because it is more likely that they will pay poorly again. What is past is prologue.

    Second, I am sorry that you got “taken” because you paid 2 points higher than what your dad thought was the going rate. However, since you probably had little or no credit history at that point and add to that student loan debts, you are lucky you got that good of a rate.

    Third, most of us are hard working family men and women who work 55 or more hours a week and have to deal with everyone who comes in the door with the attitude that we are trying to screw them. How many hours a week do you have to work to write a stupid article blaspheming the whole process and in turn thousands of people who do this for a living?

    So, although Lou was on the rough side he was mostly right about your little article. Why don’t you come to a dealership and try to work for a week as a salesmen or a finance manager or an office manager. Hell, why don’t you just come and sit at your desk for 40 hours, I’m sure you don’t do that now so it would probably be an eye openener. People pay different prices because they have different credit histories, different trade ins and different expectations. You boldly state that people pay different prices for different cars, yet you don’t know if one got aluminum wheels or satellite radio or if they took three hours of your time compared to the guy who took a half hour to make a decision.

    Car sales is not a gravy train business, everyone has access to values and sellers, so it is a slim margin type business. Stop making it harder for people to make a living because you are unwilling to fight for a better price.

    One more thing, you are wrong about there not being a set price that everyone pays, on new cars there is, it’s called the manufacturer’s invoice price. You are welcome to pay that, just don’t complain if another consumer wants to come in and offer me less. If you have a problem with that perhaps you should move to China where I am sure everyone pays the same price for their cars, insurance, groceries, etc.

    I am sure none of this will change your mind but perhaps it will help to explain the business to your misinformed readers. Thank you.

  27. BeThisWay Says:

    @Dealer-

    I won’t try to change your mind, either. I’d just like to clarify a few points.

    First, I understand that people’s interest rate will vary based on their credit history. That’s not what I’m talking about. What I’m talking about is when dealers add points to a deal or sell the car payment and give them the highest rate to meet that instead of the lowest rate they’d be otherwise eligible for. I had many, many clients offered higher rates until we approved them at a lower rate (and the bank we worked with was very strict, so these were not giveaways). Only then did the dealer offer them a better rate. That’s smarmy.

    Second, I had no student loans, and I had credit. I just didn’t have the experience to know what I really could have paid. Of course I don’t put that all on the dealer, but dealers are notorious for exploiting the ignorance of women when it comes to buying cars.

    Third, I’m sure there are some people in the car sales industry that have integrity. I just haven’t met any. And I’m pretty sure that none of them are in South Florida; the only place I’ve shopped for cars.

    I also understand that car prices vary depending upon options. That’s not what I’m talking about, either. Then again, you illustrated my point about that when you said, “…you are wrong about there not being a set price that everyone pays, on new cars there is, it’s called the manufacturer’s invoice price. You are welcome to pay that, just don’t complain if another consumer wants to come in and offer me less.” What’s sad is that you don’t know what’s wrong with that comment. Up to that point I had hope that you were a dealer with integrity.

    I would accept your kind offer to come work in a dealership, but I’d never be hired as I’d give every person the lowest price possible, the lowest interest rate possible, and no options they don’t know about, understand and want. I won’t screw people for a living, and despite what you say it happens all the time.

    Finally, I’m not making it harder for people to earn a living, and I also can’t believe you read that article and still wrote the words, “because you are unwilling to fight for a better price”.

    Silly person. You just don’t know me at all.

  28. Dealer Says:

    Heard of capitalism and a market economy? Why don’t you go bitch about the market price of lobster.

    Yes, I read your little complaint filled rant and I can easily believe that you read my response and then wrote the words, “Second, I had no student loans…” I’m not surprised at all about that, I could tell in the tone that you address those that you feel are lesser to you in social class, such as Lou above.

    Hmmm, women are notorious for taking advantage of men by using their sexuality. Would you like to change that system too? No more skirts or the like, all women are to wear full body uniforms so that it is fair across the board. Otherwise that young lady in the skirt and high heels might just cause some men to buy her drinks, dinner, jewelry, etc. simply because they are men. That is not fair, that woman got that guy to buy her dinner just to talk to her, but that girl came over and talked to her for free. That’s terrible. And what’s with that senior citizen getting that meal for less than me, I’ll come in at 4:00, too!

    In summary, people who do not educate themselves about the costs of something may just pay a few dollars more than the person who does. Did you pay the sticker price on your house? I’m sure some people do, does that mean the whole business is in need of an overhaul? Better yet, have you ever sold a house that you had owned? Did you just say “tell you what pay off what I owe and the realtors cut and its yours”, no, you wanted every penny of the selling price and would have been delighted if there had been a bidding war to raise the price. Quit sitting and casting judgement on others for making a living. Last I checked it was a free country and if you don’t like a price, you can go somewhere else. Contrary to what you may think I am not rolling in cash and I work from 8 to 9, 5 days a week and have many, many repeat customers. Do I want to make a profit? Absolutley. Is that evil? Not in America.
    I have an idea, instead of complaining about everything why don’t you use your little website to educate people how to get better deals on things instead of just sitting there saying how an entire industry is corrupt because they mad $1000 on that person but only $750 on another. Maybe you should do an article on defense contractors, that would be legitimate griping.

  29. BeThisWay Says:

    @Dealer

    I’m not rich – I didn’t have student loans because I had scholarships. Which are earned. I grew up lower middle class in a single parent household.

    I don’t think you are lesser than me in social class. I just think…never mind.

    I could address the way women use their feminine wiles, men use their money, the crappy housing market, defense contractors and a brazilian other things. There’s lots of unfair things in this world. I’m taking them one at a time, if that’s okay with you.

    You could go for the early bird special, too. And the price is posted for all to see. As far as lobster, well, I get that once a year on my birthday. And I guarantee that the person next to me is paying the exact same price per pound that I am. You don’t seem to get the difference between apples and oranges.

    I’m not saying anyone shouldn’t have the right to make a profit. I just think it should be a fair profit, and I shouldn’t be lied to in the process.

    Every time you say, “That’s the best price I can give you,” when it’s not you’re lying. You can’t change that fact. And if you don’t think that’s lying, well, you’re lying to yourself.

    I’m glad you can sleep at night, but I’d not be able to look my son in the eye if that’s what I had to do from 8-5, 5 days a week. No matter how much money I made.

    I’m sorry you don’t like the mirror I’ve held up. I am educating people, and responses like yours are helping. So, thanks for commenting.

  30. Dealer Says:

    I was referring to you bashing lou, I don’t care about how you talk to me, I’m the heartless car dealer, remember? Besides, I have a good education and can read through your silliness. But you got me with the “think” thing, that was clever.

    Anyway, I noticed that you didn’t comment on the real estate transaction because we all know what you would do in that situation.

    Last question, have you ever heard of Robin Hood? Do you think he was wrong in his approach? Well, we are humans at the dealership and when we see a family with kids we are going to work harder to make a good deal for them than we are the smarmy guy that comes in and acts like we are subhuman because we sell cars (much like you). Fair or not that is the way it is. I sleep well and my children look me in the eye and see someone who does what he can to see that the have a better life than he did. And when my wife looks at me and tells me she doesn’t notice my balding and I say she looks just the same as before the kids, well I guess that is lying too, but please don’t pretend that you don’t do it daily. You lied to yourself when you wrote that ridiculous, narcissistic response. Perhaps that scholarship board should go back and review how you were able to fool them into granting you scholarships when it is apparent that you would buy the Brooklyn Bridge from someone. If you were smart enough to receive scholarships, how is it that you were completely unable to look over a sales order and still get taken on such a horrible finance rate?

    Nevermind that, just tell me your answer to the real estate question.

  31. Rich Says:

    Just read your article and I have to say as a Sales Manager you have no idea what you are talking about. My sales team and I are the most honest group of people and yes, we turn a profit, same reason why you go to work. But as we say in the car business, anyone who buys a Dodge can’t be to bright, you Moron!!

  32. BeThisWay Says:

    @Dealer –

    Buying houses and cars are completely different. There are millions of different style houses on lots of all different shapes and sizes in all different conditions in a myriad of neighborhoods, each with a different owner, giving each it’s own unique value.

    Not so cars. There are only x number of different model cars and only x number of dealerships. People buying cars just don’t have the same freedom to look elsewhere. If I want a new Ford or Toyota or Nissan I have to go to one of their dealership. No choice.

    I’ve not sold a house, but I have bought one. I offered less than the asking price, and my offer was taken. An asking price is just that – what they’re asking. Everyone buying or selling a house knows that. And if two people decide to bid up the price higher that’s they’re choice. They’re not being lied to.

    I never said it was bad to make a profit.

    Car dealerships don’t have asking prices. They have prices. Sticker prices. People are told that THAT’S the price.

    And you’re right, educated consumers get better deals.

    No, I don’t agree that what Robin Hood did was right.

    The bottom line is that if car dealers priced cars the same price for everyone, so that every salesperson and the dealership made the same amount of reasonable profit on each type vehicle and the same amount of money on each option and gave people the lowest finance price they’re eligible for you’d probably make the same amount of money, and you wouldn’t have to deal with customers and bloggers who look at you assuming (correctly) that you’re out to get as much money out of their pocket and into yours as possible.

    Wouldn’t that be a nicer life?

    I always find it interesting the lengths people will go to to justify their immoral choices, and the glee with which they point out how they’ve taken advantage of others.

    Congrats. You’re tops!

  33. BeThisWay Says:

    @Rich –

    You really hurt my feelings with that one. Boo. Hoo.

    As I’ve written at least four times, I have no problem with making a profit. Profit good. Lying bad.

    Get it?

    As I said previously, being the most honest person in an inherently dishonest business will likely get you some awards somewhere, but not on my blog.

  34. Dealer Says:

    Your views are very much in line with communism. Why don’t we just make it government auto sales?

    I love how you split hairs on the real estate transaction to make it different than a car sale. I assume you were buying a used house, right? Because I am confident if it had been a new house in a new development it would have had a set price that all the other had as well. Now if you went in to buy it they would say that is the price and here is why. Now if you offered less and they accepted would you call them liars for listing a new home at a set price on a brochure and then accepting less? So, you’ve basically proven yourself wrong because if you go to a dealership and look at used cars I can guarantee they say asking price and then have a print out from Kelly’s blue book or NADA, etc.

    So, new houses, cars, furniture and other big ticket items have a listed price, but that doesn’t mean that you can’t eat away at that number through bargaining. I suggest you move to China where your views will make more sense.

  35. BeThisWay Says:

    @Dealer –

    Are you still here?

    I have no issue with bargaining, G-d knows.

    But there’s a reason car dealers have the reputation they do, and it’s been interesting to see your responses and wonder at how you don’t see that they are reinforcing that reputation.

    No matter how many times we go back and forth on this we’re not going to agree. Let’s see if you can let this be the last word between us, or if the need to have the last word yourself proves too strong to resist.

  36. Frank Says:

    Why is it people think car dealers are liars and shaft you as the buyer? Tell me you never lied or withheld info to a salesman about your trade or if your buying soon etc.. How would a Dealership exist if they made no profit? That’s what you dumb*ss people expect. As far as the financing, yes we bump the points most of the time but, if you went to the same bank they would give you the same rate compared to going throgh us! That’s the Bank giving us room for profit! YOU SHOULD TOO! Complain about others like the Government or Lawers etc..

  37. BeThisWay Says:

    @Frank-

    In your first sentence you wonder why people think of car dealers as liars, and in the next sentence you defend why it’s acceptable for them to do so. You are blinded by your misguided belief that everyone lies and cheats, so therefore it’s acceptable. It’s just not so.

    No, I’ve never lied about the condition of a trade-in. Withheld info? Well, I’m sure I have. I certainly haven’t spouted off my personal financial information or whether or not I have a trade-in, as the price I pay for a car should have nothing to do with how much money I have or have access to, nor whether or not I have a trade-in.

    When I was an insurance agent I told people the truth. And I made money because people referred their friends and family to me because I told the truth. Gee, what a concept!

    As I’ve reiterated many times, I have no problem with dealers making a profit. And I don’t have a problem with dealers adding a profit margin to the wholesale rate they get from the bank. What I have a problem with is dealers making more of a profit than they should because they give unsuspecting people the highest rate they possibly can based on the car payment they’ve told the dealers they can afford. And usually even higher than that. I saw it, personally, when we starting offering car loans through our own bank. We offered lower rates than the dealers, and they only reduced their rates when confronted with our lower ones. Most of my clients took their loan through me because the dealer should have offered them the lower rate to begin with. THAT’S just one of the reasons for dealers’ bad rep.

    What is most amazing to me is that you fail to see that a comment such as yours will do nothing to increase public confidence in dealers’ integrity. It only buries you deeper.

  38. Vaughn Says:

    *Sigh* Some people from both sides need to step back and look at things more objectively. I have been a car salesman for 7 months now, and I’m good at it. Times are horrible for car sales so I’m not making much for money, but I did get top sales the last 2 months. There are some things I’d like to clear up.

    1. I am a young guy, 22, and I realize the whole car business is changing. A lot of people in the biz are holding on to the way it was in the past, and I think that’s dumb… But at the same time they’re bound to do it. We HAVE to make as much money as possible off of every car as an individual deal. If we didn’t we’d be out of business. The problem is that too many people are TOO cheap! There’s nothing wrong with wanting a good deal, buuut those people ruin it for everybody else.

    For instance, I sold a car to a nice lady yesterday. I told her straight up that we only had a few hundred dollars profit in the vehicle at MSRP, so there isn’t a ton of room to negotiate, but that we could drop it a bit to make it work for her if need be. This was a 15K car and I was being totally honest about what we make. Bottom line is that she wouldn’t buy it until it was 200 bucks BELOW our REAL cost, that includes going below holdback. We didn’t make any money off the financing, undercoatings, or anything else either. We simply lost money to sell her a car.

    THAT is why we have to try to get as much money out of every person that walks through our door. In reality when I do make a lot of money off of someone I feel bad. We made 6K off of a used car deal that I did. I felt like a dick because he was a nice guy. Problem being I still made minimum wage that month because all my other deals were $100 minimum commissions from cheapskates. Call me crazy but if we were allowed a reasonable profit by everybody I think we’d be much more likely to simply give someone a good deal instead of trying to rake them.

    2. I hate it when you people talk about how someone could have saved 1000 dollars more on a car, or 400 dollars more on a car… Just what is your idea of a fair profit anyway? You claim you have no problem with a fair profit, yet never define what amount that would be. Every time someone says that what they’re saying is “The dealer owned it for 15,000 and they paid 15,500… They could have saved 500!!!” Well yea they could have paid 500 less… But then what about the dealer? You keep saying it’s ok to make profit, but how much is “right” and “fair” in your mind? Clearly you want us to have a 1.00 markup on a car like McDonalds has on a soda! That’s not fair. I’ll be griping more about the hypocrisy momentarily.

    3. Do you know WHY we can’t have a set price??? Let me explain it very simply. First I’d like to say that I would LOVE if we could simply have a small, set profit for every vehicle we sell. It would be HEAVEN. The most stressful part of this job is trying to negotiate. The reason we can’t do that is called COMPETITION. If we were the only Chevy dealer in the Seattle Area then we could simply mark every one of our cars 500 bucks profit and DONE. It’d be awesome. People would walk in and I’d convince them to buy my car over the Ford (assuming the Ford dealer had a set price of 500 profit as well, otherwise they might think they could get a better deal on the Ford even if they like the Chevy more) and we’d do the paperwork. BAM 125 bucks. If I could do that twice a day it’d be great, which we could if we were the only Chevy dealer.

    Enter reality: There is another Chevy dealer 10 minutes up the same street we’re on. There’s also another one 10 minutes the opposite direction. If they walked in and I said “Yes sir this Cobalt only has us making 500 bucks!” he could go right up the street and they’d sell it to him for 400 profit. Then he could go to the one on the other street and they’d sell it for 300. And finally he could go to our biggest competitor 45 minutes away and get it for 1 buck over. That would leave me with nothing. No sale. No 125 bucks. Then what if the same thing happened the next day? Too many days like that in a row and all of a sudden I’d be on the street. Sooo I have to try to convince him to buy it from me somehow. If it’s someone who is THAT big of a cheapskate it comes down to showing them our real cost and asking them what they’re willing to do over it. Sometimes it’s 500 bucks, sometimes it’s 1000, sometimes it’s 200 below like my customer yesterday. The bottom line is that with something so expensive, not a soda, people are going to want to negotiate over price. There’s a reason why ALL high ticket items are negotiable. Nice furniture, cars, RVs, houses, and even things people don’t typically try to negotiate. Walk into an electronics store and offer them 200 bucks less than they have a 5,000 dollar flat panel TV listed at… They’ll take it. Even at major chains. It’s because although most people are only asking a reasonable profit for their effort, we feel inclined to lower our price so they don’t go elsewhere because IT IS worth their trouble to shop around.

    So the problem comes from both sides of the fence. If people weren’t such cheapskates we wouldn’t have to TRY to make so much money off everyone, but there would still be negotiation. In my opinion our profit margins are atrocious when you look at them compared to ANY other industry. At MSRP our profit margin is 8-10 percent on most vehicles. Yea sure, on a Corvette $5000 might seem like a lot, but that sale would be what allows us to sell the Aveo for a 400 dollar profit. We actually use a form that we show our cost to customers, and then show our markup and compare it to Costco and Wal-Mart. We ask them if they think Costco and Wal-Mart are a good deal. Of course they say yes. We show them their average markup on an item. Then we show ours, which is generally lower at this point in the negotiation. Now all of a sudden that same percentage markup is highway robbery. How the hell does that work??? I guess somehow it’s fair for us to make 1 or 2 percent profit, yet even Costco can have 10+???

    I would love to see consumers simply decide that we should be allowed a small set profit margin and there be no hassle ever again, but it will never happen. Ever. People will always negotiate, there will always be people who want something for nothing, and we will always have to try to make as much money as possible off an individual. The internet has made the starting line lower for negotiations, but it’s all the same really. We’re just starting at 1000 bucks instead of 3000.

    So, without trying to sound too harsh, you’re living in la-la land. Until there is 1 dealer per brand per area large enough that someone won’t want to bother going to the next one over, and until all dealers have a set markup on EVERY car(it would have to be a set number, not a percentage because god knows a 10 percent markup on a 50,000 dollar car is absolutely HORRIBLE), and every single solitary consumer in the world decides to stop being a cheapskate and just pay this random set price, then your dream world will never exist. Cars are too high ticket to operate like that. As I said, every expensive item is negotiable. Deal with it. I don’t like it anymore than you do, but that’s how it is.

    I’m done with my rant. I probably forgot to bitch about some stuff, but this is entirely too long as it is.

  39. Moofairy Says:

    Nice blog, I enjoyed reading that and the posts too. 🙂

    I know a used car salesman who is a distant relative (lamentably, not distant enough) and he is a shady dude with sociopathic tendancies.
    The used car trade is perfect for him.
    He winds ‘clocks’ back too, it’s atrocious. 😦

    I feel for the ‘honest’ people who sell used cars, but there are just some professions that have bad reputations… this is one.

  40. The IRS Tac Credit on New Cars May Make New Cars a Better Deal Than Used « Are You Going To Be This Way The Rest of The Time I Know You? Says:

    […] So, this won’t lessen your tax bill this year.  But  if you’re facing a large car repair it might be worth it to get a new vehicle.  I’ve been reading that used car prices are increasing because people are unwilling or unable to take the plunge with a new car.   Between cut-rate pricing, very favorable financing and the new tax break it may make more sense to buy new – something I said I’d never do again. […]

  41. Kevin Says:

    I’m a mortgage banker. The most annoying complaint I get from customers is how unjust it is for me to make 1 point (1%), on average, of the loan amount in commission. It boggles my mind. It’s as if people think it’s unfair for someone to make profits in their line of work. I have to pay rent, too! Of course, this complaint always comes from regular salaried employees who have no idea how important a salesman is to the survival of a company. The blog poster makes it sound as if a car salesman is a lazy guy who sits in an air conditioned lot all day and places a car into the ownership of a willing party. One of my good buddies is a 56-year-old retired car dealership manager. I asked him frankly the other day: “Dave, how important is a car salesman? Really.” He said they’re the single most important person in the business, that they make a sale within the first 60 seconds of contact or no sale at all. That means the salesman 1) makes the sale, on average, before he even gets the opportunity to “lie” to a customer, and 2) the salesman keeps employed the entire staff of 40-100 people at the dealership by, umm, generating revenue and profits.

    Dave also reminded me that no deal is a bad deal. Especially with the wealth of information we have today on the internet, if you walk into a dealership and agree to pay a certain price and finance at a certain interest rate then you’ve agreed that it’s fair to you–if it’s not fair then the market dictates another price. As in any business–fast food, textiles, mortgage lending, etc.–an industry sells at the highest price it can possibly sell to customers in an arms-length transaction–it’s called the equilibrium of supply and demand. As long as there is no lying–and there may be–then mark-ups, finance points, fees, etc. are absolutely legitmate. NOBODY IS FORCING ANYBODY TO BUY THE CAR!!

  42. Brian Says:

    Obviously you are a target, and an asshole one at that. I am glad you arent a customer at my family’s store (which is not in the car business). I don’t hate anyone for making a profit. I don’t want the business to pay their bills for the month on me but everyone deserves a profit. How would you like to work for a company that was targeted by simple minded fucks like yourself? How would you get paid if everyone tried to fuck you like you obviously try to do to every store you shop in.

  43. Richard Young Says:

    How did I even find this ridiculous garbage on google. You’re ranting b/c you’re cheap. Someone goes to Tahiti from you buying a car? Hahahaha, fat chance. Yes, those car sales man make sooooo much money…wrong again.

  44. Zacchaeus Says:

    Thanks for the post and for the entertaining comments. I’d like to add a perspective from across the pond.

    I’ve spent the day going around dealerships trying to get a good deal on a used car. My day’s experience with their sales tactics led me to search the net for “how do car dealers sleep at night” and here I am! Actually, though, I’ve mostly found those tactics quite amusing.

    I turned up at one dealership, having phoned ahead to check the car was still available etc (it was about 50 miles from my home). It had been advertised online at £12,000. When I arrived at the forecourt the sticker on the windscreen was £11,500. “That’s a bonus”, I thought to myself. Someone came out to say hi, ascertained that I was the guy who’d phoned earlier, and then said he’d go and get his colleague who was going to be dealing with me. While I waited I thought it was slightly odd the the man himself hadn’t come out to say hello, because it would have been very obvious that I was the person who’d phoned as I walked straight past the windows to the car in question. Anyway, we did the test drive and settled down for the obligatory session at his desk. “So, Mr Zacchaeus, let’s see what sort of deal we can get you. The price is £12,000 but we can throw in the road tax…”. I cut in: “Hmm. … windscreen .. £11,500…etc”. It was only while he then went to speak about it to his manager that it dawned on me that the whole “mistaken” price tag was a tactic, and that the reason he hadn’t come out himself was to make sure that I had time to spot it but I didn’t feel neglected because nobody appeared. After speaking to his manager, of course, he came back to say that, for today only, they’d have to give me the £500 off. It was neatly done, but no doubt it’s an old trick.

    I must say that I don’t particularly consider these sorts of shenanigans to necessarily be immoral. It can be very annoying as a customer if you allow yourself to take it personally, but it would be naive to expect them not to do it. What I am shocked about is the attitude of some of the posters on here who have accused BeThisWay of being some sort of Communist just because she’s written a post that gives a bit of insight into how a customer can get a better deal. The irony is that one of the key assumptions of healthy capitalism is that buyers and sellers have access to information about the market! It’s also astonishing to hear them venting frustration with customers who try to bargain hard when that’s what they themselves do day in day out – live by the sword, die by the sword, guys!

    I do genuinely wonder how car dealers sleep at night, though. Not because I disapprove particularly strongly about what they do (though watch me change my mind when my engine turns out to be full of sawdust!) but because I just couldn’t bring myself to do it.

    …and I didn’t buy that car, by the way. If he phones me up on Monday with the right price, though…


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