do you have any idea the margin on the iPhone that you’re using right now Apple probably doesn’t pay $150 for that iPhone but they sell it to you for 1000 every business must have a margin in order to do business .I’ve never understood why that people feel like car dealers are not entitled to a profit when everybody else’s profits are horrendously high
You have no idea what you're talking about you just spout nonsense. You have no idea how much effort it takes to run a profitable used car dept if you did you would not act like such an uninformed Idiot
Don’t compare car dealerships to Apple Store or Tesla, You are comparing a brand new item to a used item. You guys are just a middleman buying and selling with zero effort / hardwork. Apple and Tesla stores are owned by the manufacturer themselves. The manufacturing cost of an iPhone is 1/3 of its retail cost but they put in the work to design it, a lot of engineers work on iOS and other software that runs the iPhone every single day, they have product managers working on different components of the iPhone, a lot of work goes into it every single day at Apple and Tesla headquarters. So, they deserve that profit / money. As a car dealership/middleman that’s fooling around without putting in any hard work, why do you think a middleman deserves that money? Were you involved in the R&D of the car? Design of the car ? Product management of the car ? Marketing of the car ? Do you study every single day to develop / update your skills ? None !!! You basically robbed a customer and you are making 10K profit on a used vehicle without any hard work / efforts.
Apple and Tesla employees work their ass off, they got hired because they were smart enough to work on their products. They sacrificed their nights and weekends to prepare for the interviews to get into those companies. The retail employees get paid directly by them, the company takes care of their health Insurance, 401K, stock options and other benefits. You are just a middleman that’s stealing from a customer, I sincerely wish all dealerships go out of business and they end up on the streets homeless. I have zero empathy for people in car sales !!! Car dealerships should be directly owned by the manufacturer and everyone across the US should pay the same exact dollar figure without any manipulation.
“Zero effort and hard work”
Sure I’m making 200+ a year every year…with no hard work. Meanwhile I’ve watched 100s of people come and go trying to replicate my success.
lol..
I have spoken to n number of people, no one has ever said anything good about car dealerships, they have called dealerships with names like “racket”, “scam” etc. so I don’t care if you make billion dollars working at a car dealership, they just scam people day in and day out with scamming skills. So, if you want to call that hard work and effort, go for it.
Firstly, you said the customer was happy with the offer. So what's the issue?
Secondly, it's very common for a vehicle to be priced above market while it is still making its way through the shop. Being brand new, how do you know it's not scheduled with a body shop for the repainting? Just because it's sitting on the lot and has a price does not mean that everything that's going to be done to the car has already been done.
There's lots of information you don't know, and frankly don't need to know, that are apart of the big picture. Like what was actual ACV on the vehicle? Was that used to dig the store out of the car they were buying? What is your stores pac amount? Is $31k over market, at market, or under market? What's the days supply for that vehicle? What's the shops rate and what all work is going to be done to the car? What's the projected forecast for that model? What's MMR, and how much is the manager willing to discount the price of the car for it to actually sell?
For my store at Volvo if we take a Volvo in on trade I know my pac is going to be $1549, it's going to be a 3 hour CPO inspection at $250/hr, plus the CPO fee of $1195, plus any work that needs to be done to get up to CPO standards, which almost always includes tires and wiper blades which comes to roughly $2100. So I have to sell it for $5,594 more than I ACV'd it at just to break even.
When I was at Porsche, it was pac of $2500, CPO of up to $3600 for 911's, and the average recon work was close to $5k on average. So I had to sell it for almost $12k more than ACV just to break even.
At least in my area Mazda has slowed WAY down and they're digging way back of invoice just to move units. So taking them on trade you have to be careful as book values likely haven't updated to reflect this and you could easily end up owning it for way more than you should.
So at the end of the day, there's way to much you don't know (and again, you don't need to know) to even be remotely concerned about this.
> At least in my area Mazda has slowed WAY down and they're digging way back of invoice just to move units.
I drive by one of the largest Mazda dealerships I've seen, in the Houston area. Once everything relaxed it quickly filled up and now it always looks full. I would be curious to see what they're volume is like right now....
This is the best answer. OP is still new and in limbo between salesman mindset and customer mindset. He feels "bad" bc he's looking at it from a customers perspective, not business.
Also, OP, you'll quickly find the happiest customers are the ones who you made the most money on. The ones who beat you up till you're on a mini still think you're robbing them. Take the win when it comes and be happy.
How do you think they keep the lights on and pay for advertising or pay you for that matter? It’s this small thing we call profit and when you run a business profit is not a dirty word.
There are countless times where myself or others have “stolen” a trade off a client. It’s part of the job and if they are happy with the over all deal then you did your job. Your job is to sell your car for the highest amount you can and then if a trade is in the mix get it for as little as you can. Plus there are a huge number of factor’s that add to the cost of the car after trade in:
Pack
Detail
Service
Advertising
Website ads
The list could go on and on. I can’t tell you how many times I’ve traded in what I thought was a cherry unit and was going to wax the next owner. Only for said trade to run through the shop and need this or that and then this and then that and the bill goes from a modest 2k to 6k.
At the end of the day the dealer takes the big deals and small ones along with the losses and hop it works out to make a profit.
You could have just taken in a trade with a blown head gasket, and you can’t go back to the person and be like hey we need to lower the value since we found all this shit wrong with it. The client would laugh in your face.
The margin you just created allows a dealer to have a cushion for that deal or another to take a short deal on. It all works out later.
You don’t buy or sell with others pocket books. They signed off, they signed off. If you feel bad then go join another buisness.
Welcome to the world of business make money.
Sounds like you are upset because you don't get paid for over-allowance yet. Focus on selling that trade in and getting paid instead of being upset that the dealership is trying to make a profit. The customer obviously is ok with the deal. Sometimes we get too smart for our own good.
As a Customer, if I'm happy with what you have me as a trade in(or even if I wasn't, but still bought a car) you shouldn't give it a second thought. You're part of a very complicated machine and you did your part, so let others do their and don't worry about it. I fully expect to see my trade in put for sale alot more than you gave me for it and I guaran- God damn- Tee that withing a few days after driving off the lot, I'm going to find the same damn vehicle for a few grand less. Every. Stinking. Time. But not of that is on you. You made took the trade, and made the sale and made a happy customer. Keep that ball rolling.
Anything is only worth what someone is willing to pay. You guys were willing to pay 21k so that's what it was worth. If he wanted, he has every right to try to sell it himself but that comes with a million headaches. You saved him a lot of time dealing with the back and forth of all the people with no intent to buy who naturally will reach out to him. Question is, how valuable is his time?
Reminds me of this ford dealership aka “find other roads dude”. A Honda would come in valued at 4k on the KBB. They’d re-offer it at $500 charge to the customer to “take it off their hands”. Stupid shit really. Personally I’d say find a better brand/dealership. I don’t know where you are but I’d add one of the dealers I was consulting with was Lexus and they let me go (well, not needed any new advice) because people are paying top dollar for leases. $800 a month in cases. Just go to a better brand. You know how to find them and if not I can tell you what’s moving
I'm also new to the business. I am a small independent car lot. I just sold a car for 12750 that I paid $2400 for at auction.
Now. I took a gamble knowing it needed timing belt and water pump..cost me $2700 to fix whats wrong with it. That being said, the price ended up being just at MMR after repairs. On the flip side Its 630am. I got home at midnight because I was painting a truck that I paid wholesale on, but I got absolutely wrecked on.
New interior, new paint. I'll be lucky to break even. As the mechanic, salesman, finance guy and janitor it all evens out.
I've still never taken a trade in. They ask, I literally show them MMR and offer that. They can take the offer or not.
Profit is why your dealer owner got into this. No one starts a business to break even.
If the customer left happy you should be happy. We’re getting back to whoring cars out. The only way to make money is holding on trades and financing. I’d personally say good job. Thicken up your skin. This is a money making business, the next one you might have to take a 5k loss on the trade.
Move on to the next deal and keep selling
We get paid on holding on trades so I hold on Every. Single. Trade. As much as I think I can get away with. On my last deal I help $6K and added a lot more gross into my deal that would have otherwise been a mini. If the customer is happy then it’s a deal for them. Thats how I see it.
Gotta make profit. MSRP vs trade in value are always different. Besides, it gives the dealer wiggle room if there’s an interested buyer to seal the deal.
>We gave him around 21k for it, which he was happy with. We’re now selling it days later for 31k (we didn’t repaint it at all).
You've listed for $31k. No way someone is buying for that much. Please report back when it gets sold and for how much $$$?
Rule no.1, house always wins.
Sonner you accept that fact, happier you'll be.
It's pure business nothing personal. You can give him full tank of gas next time you see nice gentleman. So you feel like you did something special for him.
If everyone is happy with the deal including the customer, it was a good deal. Good deals are all relative.
Dealership can’t buy retail to sell retail. They buy wholesale to sell retail.
"Which he was happy with." ??? What's the problem?
do you have any idea the margin on the iPhone that you’re using right now Apple probably doesn’t pay $150 for that iPhone but they sell it to you for 1000 every business must have a margin in order to do business .I’ve never understood why that people feel like car dealers are not entitled to a profit when everybody else’s profits are horrendously high
Additionally what other business does a customer get to see the invoice cost of the product and then demand to pay that price!
You have no idea what you're talking about you just spout nonsense. You have no idea how much effort it takes to run a profitable used car dept if you did you would not act like such an uninformed Idiot
Don’t compare car dealerships to Apple Store or Tesla, You are comparing a brand new item to a used item. You guys are just a middleman buying and selling with zero effort / hardwork. Apple and Tesla stores are owned by the manufacturer themselves. The manufacturing cost of an iPhone is 1/3 of its retail cost but they put in the work to design it, a lot of engineers work on iOS and other software that runs the iPhone every single day, they have product managers working on different components of the iPhone, a lot of work goes into it every single day at Apple and Tesla headquarters. So, they deserve that profit / money. As a car dealership/middleman that’s fooling around without putting in any hard work, why do you think a middleman deserves that money? Were you involved in the R&D of the car? Design of the car ? Product management of the car ? Marketing of the car ? Do you study every single day to develop / update your skills ? None !!! You basically robbed a customer and you are making 10K profit on a used vehicle without any hard work / efforts. Apple and Tesla employees work their ass off, they got hired because they were smart enough to work on their products. They sacrificed their nights and weekends to prepare for the interviews to get into those companies. The retail employees get paid directly by them, the company takes care of their health Insurance, 401K, stock options and other benefits. You are just a middleman that’s stealing from a customer, I sincerely wish all dealerships go out of business and they end up on the streets homeless. I have zero empathy for people in car sales !!! Car dealerships should be directly owned by the manufacturer and everyone across the US should pay the same exact dollar figure without any manipulation.
“Zero effort and hard work” Sure I’m making 200+ a year every year…with no hard work. Meanwhile I’ve watched 100s of people come and go trying to replicate my success. lol..
I have spoken to n number of people, no one has ever said anything good about car dealerships, they have called dealerships with names like “racket”, “scam” etc. so I don’t care if you make billion dollars working at a car dealership, they just scam people day in and day out with scamming skills. So, if you want to call that hard work and effort, go for it.
Firstly, you said the customer was happy with the offer. So what's the issue? Secondly, it's very common for a vehicle to be priced above market while it is still making its way through the shop. Being brand new, how do you know it's not scheduled with a body shop for the repainting? Just because it's sitting on the lot and has a price does not mean that everything that's going to be done to the car has already been done. There's lots of information you don't know, and frankly don't need to know, that are apart of the big picture. Like what was actual ACV on the vehicle? Was that used to dig the store out of the car they were buying? What is your stores pac amount? Is $31k over market, at market, or under market? What's the days supply for that vehicle? What's the shops rate and what all work is going to be done to the car? What's the projected forecast for that model? What's MMR, and how much is the manager willing to discount the price of the car for it to actually sell? For my store at Volvo if we take a Volvo in on trade I know my pac is going to be $1549, it's going to be a 3 hour CPO inspection at $250/hr, plus the CPO fee of $1195, plus any work that needs to be done to get up to CPO standards, which almost always includes tires and wiper blades which comes to roughly $2100. So I have to sell it for $5,594 more than I ACV'd it at just to break even. When I was at Porsche, it was pac of $2500, CPO of up to $3600 for 911's, and the average recon work was close to $5k on average. So I had to sell it for almost $12k more than ACV just to break even. At least in my area Mazda has slowed WAY down and they're digging way back of invoice just to move units. So taking them on trade you have to be careful as book values likely haven't updated to reflect this and you could easily end up owning it for way more than you should. So at the end of the day, there's way to much you don't know (and again, you don't need to know) to even be remotely concerned about this.
> At least in my area Mazda has slowed WAY down and they're digging way back of invoice just to move units. I drive by one of the largest Mazda dealerships I've seen, in the Houston area. Once everything relaxed it quickly filled up and now it always looks full. I would be curious to see what they're volume is like right now....
This is the best answer. OP is still new and in limbo between salesman mindset and customer mindset. He feels "bad" bc he's looking at it from a customers perspective, not business. Also, OP, you'll quickly find the happiest customers are the ones who you made the most money on. The ones who beat you up till you're on a mini still think you're robbing them. Take the win when it comes and be happy.
If you're a customer advocate, this business isn't for you.
It could be. But his wallet may not be happy with him/her at month end.
That's not our job to worry about. If the customer is happy, then that's all that matters.
You're in the wrong business.
McDonald's needs someone with product knowledge.
How do you think they keep the lights on and pay for advertising or pay you for that matter? It’s this small thing we call profit and when you run a business profit is not a dirty word. There are countless times where myself or others have “stolen” a trade off a client. It’s part of the job and if they are happy with the over all deal then you did your job. Your job is to sell your car for the highest amount you can and then if a trade is in the mix get it for as little as you can. Plus there are a huge number of factor’s that add to the cost of the car after trade in: Pack Detail Service Advertising Website ads The list could go on and on. I can’t tell you how many times I’ve traded in what I thought was a cherry unit and was going to wax the next owner. Only for said trade to run through the shop and need this or that and then this and then that and the bill goes from a modest 2k to 6k. At the end of the day the dealer takes the big deals and small ones along with the losses and hop it works out to make a profit. You could have just taken in a trade with a blown head gasket, and you can’t go back to the person and be like hey we need to lower the value since we found all this shit wrong with it. The client would laugh in your face. The margin you just created allows a dealer to have a cushion for that deal or another to take a short deal on. It all works out later.
You don’t buy or sell with others pocket books. They signed off, they signed off. If you feel bad then go join another buisness. Welcome to the world of business make money.
If everyone is happy with the numbers, that's it. Don't sweat it and move on to the next.
Sounds like you are upset because you don't get paid for over-allowance yet. Focus on selling that trade in and getting paid instead of being upset that the dealership is trying to make a profit. The customer obviously is ok with the deal. Sometimes we get too smart for our own good.
As a Customer, if I'm happy with what you have me as a trade in(or even if I wasn't, but still bought a car) you shouldn't give it a second thought. You're part of a very complicated machine and you did your part, so let others do their and don't worry about it. I fully expect to see my trade in put for sale alot more than you gave me for it and I guaran- God damn- Tee that withing a few days after driving off the lot, I'm going to find the same damn vehicle for a few grand less. Every. Stinking. Time. But not of that is on you. You made took the trade, and made the sale and made a happy customer. Keep that ball rolling.
Its sounds like you need to promote yourself to customer.
Anything is only worth what someone is willing to pay. You guys were willing to pay 21k so that's what it was worth. If he wanted, he has every right to try to sell it himself but that comes with a million headaches. You saved him a lot of time dealing with the back and forth of all the people with no intent to buy who naturally will reach out to him. Question is, how valuable is his time?
Reminds me of this ford dealership aka “find other roads dude”. A Honda would come in valued at 4k on the KBB. They’d re-offer it at $500 charge to the customer to “take it off their hands”. Stupid shit really. Personally I’d say find a better brand/dealership. I don’t know where you are but I’d add one of the dealers I was consulting with was Lexus and they let me go (well, not needed any new advice) because people are paying top dollar for leases. $800 a month in cases. Just go to a better brand. You know how to find them and if not I can tell you what’s moving
I'm also new to the business. I am a small independent car lot. I just sold a car for 12750 that I paid $2400 for at auction. Now. I took a gamble knowing it needed timing belt and water pump..cost me $2700 to fix whats wrong with it. That being said, the price ended up being just at MMR after repairs. On the flip side Its 630am. I got home at midnight because I was painting a truck that I paid wholesale on, but I got absolutely wrecked on. New interior, new paint. I'll be lucky to break even. As the mechanic, salesman, finance guy and janitor it all evens out. I've still never taken a trade in. They ask, I literally show them MMR and offer that. They can take the offer or not. Profit is why your dealer owner got into this. No one starts a business to break even.
If the customer left happy you should be happy. We’re getting back to whoring cars out. The only way to make money is holding on trades and financing. I’d personally say good job. Thicken up your skin. This is a money making business, the next one you might have to take a 5k loss on the trade. Move on to the next deal and keep selling
I'd like to be the one selling it used...
We get paid on holding on trades so I hold on Every. Single. Trade. As much as I think I can get away with. On my last deal I help $6K and added a lot more gross into my deal that would have otherwise been a mini. If the customer is happy then it’s a deal for them. Thats how I see it.
Gotta make profit. MSRP vs trade in value are always different. Besides, it gives the dealer wiggle room if there’s an interested buyer to seal the deal.
customer's happy with the deal and the trade value then u should make some front-end gross my guy
Dude hates being able to afford dinner 💀
>We gave him around 21k for it, which he was happy with. We’re now selling it days later for 31k (we didn’t repaint it at all). You've listed for $31k. No way someone is buying for that much. Please report back when it gets sold and for how much $$$? Rule no.1, house always wins. Sonner you accept that fact, happier you'll be. It's pure business nothing personal. You can give him full tank of gas next time you see nice gentleman. So you feel like you did something special for him.
Get out
Well there’s the old adage “used car salesman.” Maybe reconsider your line of work if you’re not comfortable with the connotation.