Just Bought A Car - A New Low In Slimy Salemanship

The Coffee Shop
1

I bought a new car on the weekend and went in with my eyes wide open expecting the usual sales pitch and half truths. The first sales person I dealt with was actually pretty decent. No pressure tactics and I felt gave fairly honest answers to my questions. I knew roughly what I could get for my trade-in, and so the negotiations went pretty smooth and at the end of the day we settled on a price that I felt was reasonable.

The manufacturer was running a 15% off promotion and the dealer was offering another deep discount to clear inventory, and so the car ended up being close to 25% off.

We did a handshake on the final price and I was then told to wait to speak with the finance guy and talk about the extended warranty. In hindsight, I should have said not to bother - paying cash and don’t care about extended warranty, rust protection, upholstery protection or anything else.

Here are the highlights of that meeting:
The Bill of Sale included a $299 fee for theft protection. I asked what that was and the explanation made no sense so I said I wasn’t interested. He tried to tell me that it was mandatory but reluctantly removed it after quite a bit of back and forth.The Bill of Sale also included a $399 administration fee. I pointed out that the initial salesman confirmed that there were no additional costs other than taxes and licensing. He explained that the fee was to cover the cost of the “girls” upstairs that run the show and that he had absolutely no power to waive it. Luckily I had the car listing on my phone and showed him the fine print which said that the price included all costs and administration fees. Even with that proof it was still like pulling teeth, but he finally did remove it. Yes, the fee that he told me moments ago couldn’t be waived. He then tried to convince me that it made more sense financially to take the manufacturer’s loan at 5.9% rather that use my secured line of credit a 2.9%.After what seemed like an hour of torture I signed the bill of sale and I asked for a copy. For some odd reason he didn’t want me to have a copy and first told me that his scanner was broken but that I would get a copy when I picked up the car. I said a photocopy would be fine and then he told me the copier also wasn’t working right now. Really, the photocopier that I just saw you use to copy my driver’s license! Oh yeah, he used the work “fuck” at least three times during our conversation.
I expect the dealership to try to get the best price they can, but don’t insult your customer’s intelligence.

2

I hate the car buying process, it shouldn’t have to be as difficult as they make it. I had a similar experience to you where we had the dealer’s website up and showed the sales manager something about a fee that he initially refused to waive and he tried to brush it off by saying “You can get any kind of crazy information from the internet”, to which we replied “This is from your website!” Unbelievable.

3

The Bill of Sale included a $299 fee for theft protection. I asked what that was and the explanation made no sense so I said I wasn’t interested. He tried to tell me that it was mandatory but reluctantly removed it after quite a bit of back and forth.
Had a sales guy try and pull this when I bought my current car… we agreed on a price, showed up the next day to complete the sale and he had added some $300 fee into the sale to “record your VIN in a dealer network database in case it ever gets stolen”. Uh, yeah… like my insurance company, the DMV and me won’t already have the VIN recorded. He seemed genuinely shocked that I didn’t want it.

4

This American Life did a podcast on the inner workings of a car dealership’s sales force at the end of a month. It was fascinating and eye opening.

https://www.thisamericanlife.org/513/129-cars

5

I hate buying cars.

I was stupidly suckered into buying an extended warranty, but before I signed I was promised it could easily be cancelled for a full refund if I changed my mind.

I changed my mind a couple of days later after researching it.

It took me months to cancel. Form after form after form. Everyone acting is if I were doing this really bizarre, unusual thing that no one had ever done before. Constant contradictory information. I really didn’t start getting movement until after a couple months when I gave up on phone/email and started showing up in person. Eventually got it, though.

6

sounds like most conversations with “the finance guy”

It’s amazing how sleazy even the new car buying process is, let alone a used car.

A friend recently hired a broker to do all the searching and negotiations for the car he knew he wanted. Paid about $500 and saved thousands and a lot of agro. The broker used to be a dealer so knew all the ins and outs of what was negotiable and by how much. will use the same guy next time I want a car.

7

Any time you have someone tell you their copier/scanner is broken but they’ll get the contract to you later, just take out your phone and say no problem, I’ll just take a picture of it. I had someone try to pull that maneuver on me (not with a car, but with a service contract for something work related) and it was very gratifying to watch them squirm when they realized they couldn’t bullshit their way around that.

8

This American Life did a podcast on the inner workings of a car dealership’s sales force at the end of a month. It was fascinating and eye opening.

https://www.thisamericanlife.org/513/129-cars

That’s funny, I bought on March 31st and the first salesman told me that I had the leverage because it was month end and they were 5 cars short of their quota. I thought he was feeding me a line to make me think i got a deal.

9

This American Life did a podcast on the inner workings of a car dealership’s sales force at the end of a month. It was fascinating and eye opening.

https://www.thisamericanlife.org/513/129-cars

That’s funny, I bought on March 31st and the first salesman told me that I had the leverage because it was month end and they were 5 cars short of their quota. I thought he was feeding me a line to make me think i got a deal.

Nope, absolute truth if you are buying a new car. Dealerships actually don’t make that much $$ on the sale of a new car. Where they do make $$ is if they hit the volume incentives from the manufacturers. Depending on the brand/volume, in some cases that final 2-3 sales in a month can = $100k in incentives, so yeah they’ll do anything to get a deal done. Most dealerships don’t have that kind of $$ at stake, but the big ones do.

10

Re Admin or Doc fees—this is a state by state issue. Some states let dealers charge whatever they want. Others they HAVE to charge a specific amount, and can’t waive it. Usually an Admin fee is simply dealer profit, but Document fees can really be anything, including sometimes $$ the state mandates.

11

I bank with USAA and they have this amazing service where you type in the car you want to buy new and they tell you where to go buy it and at what price. That price is, as best as I can tell, a significant discount from anything you can negotiate yourself.

You print out the quote, walk into the designated dealership, present it to them and watch the blood drain from the salesman’s face. I wouldn’t have enjoyed it as much as I did (everyone’s got to eat) had I not spent a few weeks having my arm twisted by every dealership I walked in to.

12

How much was the key?

13

Re Admin or Doc fees—this is a state by state issue. Some states let dealers charge whatever they want. Others they HAVE to charge a specific amount, and can’t waive it. Usually an Admin fee is simply dealer profit, but Document fees can really be anything, including sometimes $$ the state mandates.

The three MI dealerships I was at, the doc fee was $99. There are some dealerships in OH that are apparently charging up to $800 for their version of the doc fee. I can’t believe any buyer would pay that, but I guess those dealers are getting it or they wouldn’t be charging for it. I just now got back from a public auto auction to see if I could score a few cheap units for the ‘B’ lot in which I have a financial interest. They charge a $75 doc fee for members of the public (dealers don’t pay those charges). We do a lot better at Copart, Adessa and Manheim, though. But all the auctions are tacking on more in fees than ever before.

That “administrative fee” the finance manager was trying to tack on sounds like he was trying to fatten his pay plan. Same for the anti-theft protection, whatever the hell that is.

For a customer, about the most valuable “add on” from a dealer is the tire/wheel protection. Those can, and often do, pay for themselves within the first couple years. Four-ways and three-ways (Vesco paint/fab, etc.) are just cash cows for dealers (salesmen make from $50 to $200 extra in whip-out for selling those, and $100 whip-outs for the tire/wheel protection). GAP protection can be worthwhile for some folks in the credit rat tiers. Extended warranties are usually only sold by the finance folks, at least where I was at. If sales folks sell them, they can make an additional $25 to $100 whip, usually. It depends on the dealership and the price of the extended warranty. Sometimes, if the finance bubbas sign the customers rather than the sales force, they keep all those whip-outs.

For used cars, you can make a few bucks selling the certified pre-owned packages (two of the dealers I was at charged $400 or $800 for the CPO package but quickly gave up the charge if doing so meant getting that car over the curb, and the other dealer only charged $200 but would offer to pay for it, as a sales sweetener).

Folks are right about new car stores working to hit the manufacturer sales incentive numbers, because that’s where they can make some fat cash when they do. If all they sell is the minimum, though, they’ll quickly start getting heat from the manufacturer’s regional sales managers. That can get ugly, and they can lose allocation on the factory’s most popular models. Do that long enough and all you’re getting from the factory are the ho-hum models. The minimum in hot-selling SUVs and CUVs and a lot of low-profit-margin mid-size and compact sedans. :wink:

14

I recently bought a used vehicle from a dealership. They tried to add on a $899 doc fee. When I losty shit over it, they tried to act like I was the only person on Earth to ever question it. “Really, sir? That’s pretty standard around here…”

15

I have bought a lot of cars and I have had good and bad experiences.

The worst: signed a deal and came back the next day to get the car. The sales manager said he didn’t sign the deal, only I did. So, it was invalid and he wouldn’t agree to the price we agreed on the day before!

The best: finance guy was happy I bought a BMW, because he owned one too. After signing the deal, he let me drive his 2 year old BMW M3. I don’t baby it either- Good times!

16

**sounds like most conversations with “the finance guy” **

This. By far, the biggest hit I see to most dealer’s CSI comes from the Finance department - Dealer profitability has taken a huge hit over time, for various reasons that I won’t get into, so the dealers turn to ‘the box’ for additional $$… when you combine that with a commission-based role that churns often and a product set that is mostly fear based (wear care, GAP insurance, replacement value, D&D, extended warranty, blah, blah…) there’s alot of pressure and not so scrupulous behaviour…

You’d be surprised how thin the margins are for car dealers…

17

My first job was installing ignition kill switches on new cars directly a dealership. Cut the ignition wire, connect both ends to a 5 prong terminal, stick a key in the terminal to recomplete the circuit. The device cost a couple bucks and I got paid a couple of bucks to install one. The business owner charged the dealer $24 per install. The dealer would then sell the key as theft system for $250. If you didn’t want it… it was free. Because dealers didn’t want to pay us to uninstall.

18

My father in law just bought a new Chrysler Pacific van for us to use and got a great deal. But then they sold him a lifetime warranty, told him it was absolutely transferable, cost over $4k. He told me about it and I said I had never heard of a lifetime warranty, especially one that follows the car and not the original owner. He was sure.

So I got the contract and it took me about 30 minutes to find the two passages that said it does not transfer, and is only in force as long as the original purchaser is alive. I got him to get a refund, no questions before 60 days. I think they rely on their outright lies in the sales pitch, and the fact that most people dont read fine print. Since the manufacture warranty would be in effect for 3 to 5 years anyway, by the time you figured out you had been had, that guy who sold it to you would be long gone, and you would just see hands up at the dealership…

19

Buying a car in Japan is 10x worse because the buyers are not expected to ask or question fees or paperwork. Its considered rude if they want things waived and the salesman has little power to waive anything. Besides, all he has to do is walk away, go talk to the boss, and the answer is always ‘no’. In fact, many people are happy to pay for things like ‘theft protection’ or ‘registration fees’ because they view it as ‘good service’ and they don’t want to be labeled as trouble customer because most people have to return to their dealership to get ‘shaken’ (Insurance) later on.

Getting ‘shaken’ (vehicle insurance) in Japan is also a huge ripoff. Every 2 years you must insure your vehicle in Japan and that means you also have to have your car mechanically inspected to make sure its road worthy and safe. Its not like you can just walk into your insurance agency and get insurance, you also need an inspection. The inspection costs about $500 bucks, even if there is nothing wrong with your car, but of course, expect them to find something and overcharge you for it.

20

Buying a car in Japan is 10x worse because the buyers are not expected to ask or question fees or paperwork. Its considered rude if they want things waived and the salesman has little power to waive anything. Besides, all he has to do is walk away, go talk to the boss, and the answer is always ‘no’. In fact, many people are happy to pay for things like ‘theft protection’ or ‘registration fees’ because they view it as ‘good service’ and they don’t want to be labeled as trouble customer because most people have to return to their dealership to get ‘shaken’ (Insurance) later on.

Getting ‘shaken’ (vehicle insurance) in Japan is also a huge ripoff. Every 2 years you must insure your vehicle in Japan and that means you also have to have your car mechanically inspected to make sure its road worthy and safe. Its not like you can just walk into your insurance agency and get insurance, you also need an inspection. The inspection costs about $500 bucks, even if there is nothing wrong with your car, but of course, expect them to find something and overcharge you for it.

I don’t know if it is still the case, but you used to be able to buy used Japanese auto engines with maybe 20K miles on them in the states. They had been pulled from cars in Japan following one of these “inspections”. They were about the same cost as rebuilding, with of course a huge labor savings. I installed one in a Tercel and it saved me a lot of money and time.

A friend of mine built an aircraft and put a used Subaru engine in it. It cracked me up that an engine that was no good for a car in Japan was perfectly good for a plane in the US.

I didn’t know the insurance was called ‘shaken’. More like “shaken down”!