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Confessions of a car salesman
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The Toronto Star- Six years ago I was a car salesman for one of the biggest dealerships in Ontario.
I still remember the thrill of selling my first car, a Dodge Durango, to a family who had no idea what they were doing. They paid $41,500 for an SUV with options that they really didn’t need and I ended up making $850 on the deal. It felt great when I received my first commission cheque, but in the back of my mind I felt guilty. I knew this family of four could have saved thousands had they negotiated a little bit harder.
I sold cars for another three months after that, but the stress of working 12 hour days got to me and I had to get out. I was lucky enough to enter the business during the peak season and before the whispers of a recession came to fruition, so I ended up clearing just over $17,000 in those three months. Since then I’ve been helping friends and family become smarter car buyers.
The basics of car buying are simple: be an informed consumer, know what your needs are, set a budget based on research, refuse to fall for sales pitches, never buy on emotion, bring a support team if needed and timing is everything. Another important thing to keep in mind is that “Employee Pricing” is in effect pretty much all year, no matter what the commercials tell you; in most cases all you have to do is ask.
Here are some tips that might help you save thousands on the purchase of your next new vehicle.
1) Do your research: Know what you want before ever setting foot on a car lot. Buying a car is not as easy as buying a shirt. Of course, there’s the make, model and colour – Ford or Toyota; black, white or red – but there is so much more to consider. What’s the fuel consumption, seating capacity, horsepower and available options? How does consumer reports rate it? Be sure to read reviews from current owners of said vehicle. The more you know about the car, the less you’ll be influenced by the sales pitch.
2) Find the biggest dealership: A car lot filled with an army of sparkling new vehicles as far as the eye can see can seem intimidating. But it’s the perfect setting to find the best deal on a new ride. Big lots pay a fortune to stock inventory and the longer one of their cars sits there, the greater their investment. These monster dealerships make a lot of money because they turn over a lot of cars. To boost your negotiating power, ask the salesman how long the car you want has been sitting on the lot because they will slash prices drastically on cars that have been on the lot longer than 60-90 days.
3) Here’s when to buy: The last day of the month, a few hours before closing is the best time to buy. In most cases rent is paid to the landlord if the dealership doesn’t own the land outright and in all cases insurance for each vehicle is due the first day of the month, so their goal is to reduce inventory because the longer a car sits the less profit they make. In addition, the salesman has either made his quota or wants to. Either way he is desperate to make a sale and will sacrifice some of his commission. At the end of the work day, the dealership is in a hurry to put their sales numbers into the system. Selling cars is a numbers game so they will do anything to make a last minute sale even if it means only making $1 on the deal.
4) Be patient: The salesman’s goal is to get you into his office, so just roam the lot and he will come to you. The salesman will rush to get you inside but don’t take the bait. Instead, keep asking questions and take a couple of cars for a test drive before you go inside. The last thing a salesman wants is to invest his valuable time into a non-sale so the more of his time you occupy the hungrier he gets to make a deal.
5) Don’t hand over your licence: Negotiating is a dance. The salesman will give you a price, you counter-offer and he goes to his manager for approval. If you’re playing the game correctly, this should go on for a few rounds. At some point he will ask for your credit card and driver’s licence. Don’t oblige. He’ll say this shows you’re a serious buyer but in reality this ensures you don’t flee the scene.
The longer you negotiate, the more commission the salesman loses. Once negotiations have stalled ask for the sales manager. He’s the only one who can set the final price. Once he’s in front of you and gives you a price, you can be sure that it’s the lowest price you’ll get.
Don’t feel guilty that the salesman only made the minimum $250 commission, or that the dealership only made $1 on the deal. Rest assured that they will make thousands on the next person that walks through those dealership doors.
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