November 18th, 2015: The Future of Car Buying

lumberjim · 11-18-2015, 09:06 PM

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.

xoxoxoBruce · 11-18-2015, 10:27 PM

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.

Gravdigr · 11-19-2015, 04:44 PM

Quote:

Originally Posted by lumberjim

At present, the CFPB has pervue over lenders.

Purview. Just sayin'.

Post #11 was an interesting one.

xoxoxoBruce · 11-19-2015, 05:46 PM

Quote:

Originally Posted by Gravdigr

Post #11 was an interesting one.

Jim knows the business inside out, and always gives us the real shit.

11-18-2015, 10:27 PM	#2
xoxoxoBruce The future is unwritten Join Date: Oct 2002 Posts: 71,105	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. __________________ The descent of man ~ Nixon, Friedman, Reagan, Trump.

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11-18-2015, 09:06 PM	#1
lumberjim I can hear my ears Join Date: Oct 2003 Posts: 25,571	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. __________________ This body holding me reminds me of my own mortality Embrace this moment, remember We are eternal, all this pain is an illusion ~MJKeenan

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