A friend of mine is not so subtly nudging me to get busy with my car-buying related blog.
But he asked some questions, and thats what I wanted, so I will answer them to the best of my ability. He asked:
What is the salesperson really doing when he leaves to go “talk to the manager.”
There is no way to answer this conclusively, because there are way too many x factors involved. That said, I’ll wade in. Depending upon the type of system used at that dealership, and, the skill of your salesperson, most of the time he or she is really going to talk to the “desk-man.” (a sales manager that oversees the deal from afar) They are going to report to the desk, tell them where they are with you, and get advice. A good salesperson has brought the desk something to work with…perhaps you are really proud of your trade. He might know that you left another dealership because you felt insulted by the amount they offered for it. The desk, then, will structure an offer that “allows” more for your trade.
Sigh. I better elaborate a bit. When you trade a car, it has two values. Trade allowance, and what is known as ACV. (actual cash value) If you trade based on allowance, rather than ACV, you are hurting yourself. For instance, when I appraise a car, I put a number on it, and most of the time I have factored in the following: Condition, retail sale value, wholesale value, reconditioning costs, and s few market considerations. (If I was appraising a Hummer in today’s market, I would deduct several thousand dollars from book value because they are market-soft) So, I put a figure on your car. However, because you don’t know how much profit is built into our price, I can show you more for your trade than it’s actual worth. Many many buyers get sucked in by this tactic.
Perhaps the salesperson had to pry you away from the car you test drove for three hours. I’m pretty sure he will tell the desk that you absolutely LOVE this car. The desk will then write up a deal offer that will see your salesperson eating at Ruth Chris that weekend.
In short, your salesperson is usually reporting to someone. Sometimes, though, they are just killing time to wear you down. I have seen salespeople actually leave the lot to go eat while their customers sat and waited for word from “on high.” (not that I ever did that)
Of course, there are other, legitimate reasons for their absence…perhaps they really are trying to get a better offer on your trade. Perhaps you have credit issues, and they are trying to find a car that will work for you.
In the end, a good rule of thumb is if he or she has left repeatedly, and upon returning, not much has changed, you are being held hostage. Leave your number and move on.
What additional “charges” should we look for?
There are so many, I don’t know where to start…lets cover an easy one, and I will try to cover more in another post. When looking at NEW cars, there is a sticker that lists the features and options on the car…and the price. It is required by law to be there. Some unscrupulous dealers will add their own as well. I’ve seen it called so many things; “market adjustment”, paint protection, undercoating, etc. All of it is bullshit. This is merely a ploy used by the dealer to start the negotiation at an inflated figure. There are exceptions, of course, but they are rare. (The dealer may have added custom wheels, for instance, and those do cost the dealer money, so he has to recoup at least that much).
How much is a fair “doc fee”?
I LOATHE this practice. Again, I’ve seen this called many things, but it is simply added profit. I try to never pay it. If I have picked up a car I know is way under-valued, I may pay it so that I don’t miss the deal.
I’ve seen “doc fees” as high as $599.00 here in Nashville. Pay that, and I can’t help ya.
So, there is no such thing as a fair doc fee. In this market, anything less than $200. is about the best you can do. There is one dealer in the Rivergate area that charges no doc fee.
If you are in the market for a car, feel free to contact me with questions, at freespeech43 (yahoo)