November 18th, 2015: The Future of Car Buying

OK, you're hanging out with friends, the gathering breaks up, but you have to piss like a racist. Coming back from the loo to find everyone's gone, and there you are without a ride home. No problem, just wander over to the car vending machine, drop in a coin, and your new car will be down in a jiffy...
...if you're near Nashville.



Because you're smart enough to know it can't be that simple, you say, "What?". There's a couple of details, there are a number of similar looking, usually bigger, car storage buildings, but this is the only coin operated car vending one in the world. Another detail is payment, and insurance, which the government and banks get a little picky about.
In truth, it's a gimmick, something car dealers are famous for. The old saw, first you gotta get there attention, is well heeded in any business.

So now the finance manager has to call me personally to wish me a happy birthday on the phone I don't take calls on?

Huh?

I was trying to bait LJ... his sales manager called me yesterday to wish me a happy birthday. (Although I don't take calls I don't recognize.) I feel it's going overboard for a dealership, but then we never really know what works do we? If it's an extra two grand for your vehicle, but the dealership has a bunch of touchy-feely things that make you feel good about it all,...

You're not saying you paid 2 grand too much for your Roge are you?

No that's the original post, pointing out that the cost of doing business "the old way" with a showroom and salesdukes, is an additional $1500-2000 per vehicle

...but under that plan there is still a finance person... there will always be a finance person...

They better have one helluva change machine.

Quote:

Originally Posted by Undertoad I was trying to bait LJ... his sales manager called me yesterday to wish me a happy birthday. (Although I don't take calls I don't recognize.)

It's happened at House Gravdigr (the fake IRS investigation) at least a dozen times this year.

We don't have caller id on the landline, but, we rarely answer the phone during the day, unless the answering machine proves its someone we know. These fuckers always leave a message.

The leadups to elections are the worst, that's when all the politicians call me like I'm their oldest and dearest friend.

Oh, I've discovered when I buy things online and they require a phone number, if I enter the wrong number, the sales calls drop off dramatically. Can't be a totally bullshit number, they usually flag the wrong area code, so something close.

A lady at work got that same call yesterday, Bruce.

I don't know how well that gimmick would work for car sales... Many people enjoy negotiating a deal, and still want to even after they are given rock bottom pricing from true car or zag. We make our money in the Finance office and the service department.

Our average new car profit is (200)... That's negative 200. Average back end is 500 ish.

Used cars average front is 1100, 1500 in the back. Overall, we average 300-400 front and 800 back.

Front end means profit on the price of the car... Back is finance reserve, warranty, gap, tire, key, dent, lojack, etc. It is crucial that you have good finance people that can both ensure compliance, and generate profit. It's a lot of pressure, and the boss pays close attention to us, but we are the highest compensated managers in the place. The Finance managers touch every deal, interact with every customer, and are the last line of defense in protecting the dealer from exposure to litigation for unfair business practices, liability, and contract funding issues. The CFPB is getting more and more powerful, and they generate lots of money for the government. Honda recently got soaked for charging minorities more interest.

You have to be very careful to begin negotiations in the same place for every customer. You have to self audit and have policy in place to ensure that it is being adhered to. At present, the CFPB has pervue over lenders. The FCC has hand over dealers. The grip is tightening.

I'm not allowed to pad payment quotes, or discount interest rates in exchange for product sales.

My buddy has bought several dodge pickups over 8 or so years, not sure what dealership. They've been telling him all along they sell the trucks at cost, because Dodge pays them $500 per truck to put them on the lot, regardless of how long it takes to sell. Sounds like bullshit to me, unless the dealer's paying for them all up front without financing, I don't see how that's possible.

Cost may mean invoice. Dealers get hold back, which is typically 3% of msrp before shipping. Ostensibly, hold back is to cover floor plan interest for 3 months in inventory.... So yeah.

Quote:

Originally Posted by lumberjim At present, the CFPB has pervue over lenders.

no spell check on my phone.... Purr View.... What your cat sees

Hah!

Quote:

Originally Posted by Gravdigr Post #11 was an interesting one.

I know he gives us the business pretty regularly.