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Dealer costs

  1. #1
    I pick things up.... mzdagrl's Avatar
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    I was just reading the thread about how much $$ to get off on a GSXR when buying from a dealer, and one thing kept recurring that, frankly, pissed me off, probably because it hit so close to home. Why do people think it is okay to pay less or the same as what the dealerships paid for a bike/car/whatever. You wouldn't go in to Walmart and haggle price and they have a 120% markup (on average), why haggle over 5% or 15%? Why is it so goddam unreasonable for a dealership to make money? Or a salesman to be able to put food on their table? Many work on straight commission. Every dollar that comes off the markup is money out of their pocket. Why do people think it is okay to make people starve just so they can save a few bucks? I know cars and bikes are very expensive items, but I know for a fact there isnt as much markup in import cars as everyone likes to think there is. When working at the dealership I had people walk out because I couldn't let them pay less than invoice. A couple times I got fed up, so I asked the customer if I could buy THEIR product (one was log homes) for less than it cost them. He laughed and said, "Hell no" Then why the F should I sell you mine for that? Where do people get the notion that dealerships pay less than invoice? That is total bullshit, unless the manufacturer happens to be running a blowout (last year's models or something). A brand new bike/car alway costs the dealerships invoice cost AND FREIGHT. Not their fault the truck company charges so much. Sue the truck company. You won't get far.

    All I'm trying to say is people ave this preconceived notion that dealerships are trying to rip you off. Sometimes, I agree, but I haven't been to one where that is the case. Just be honest with them and they'll be honest with you, and try and be nice and give them a little something for their time and effort. Would you work for free? Would you deal with yourself buying a vehicle and not expect any sort of reward? Talk to them about throwing in accessories, but pay the freaking asking price. It isn't highway robbery, it is A COMPANY, A BUSINESS, trying to PAY ITS BILLS and FEED ITS EMPLOYEES. It's Walmart on a bigger, better scale. Oh, and for a side note: I paid full MSRP for my bike, didn't even haggle, but I got a jacket thrown in for free. I understand the concept of helping out my fellow Americans.

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  2. #2
    medium pimpin' slaps76's Avatar
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    The problem is because dealerships have always been willing to haggle, they put themselves into the buying/selling model that goes on. Wal-Mart is a retail franchise that doesn't have a dedicated sales team trying to "close" customers for business, therefore, no negotiating.

    People don't usually KNOW what the bottom line price is they can get, so they lowball as part of negotiating. Obviously a consumer looking for the best price is going to negotiate! If someone is being completely unreasonable, then they probably don't want your product to begin with, and are hoping for a "too good to be true" deal.

    I worked at a dealership too, so I know what you're saying. But no way in hell am I paying sticker/list price for a vehicle when I know there's wiggle room, just so the salesman can make a good commission!

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    Just Registered ChrisNoF4i's Avatar
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    Wow. You remind me of one of those whiney bitches at a restaurant who insists on tipping 30% (regardless of what the level of service received was) because they used to be "in the biz".

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  4. #4
    Lifer richw's Avatar
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    Gee I wish I lived on her planet

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  5. #5
    Kosher Assassin Stoneman's Avatar
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    Originally posted by ChrisNoF4i
    Wow. You remind me of one of those whiney bitches at a restaurant who insists on tipping 30% (regardless of what the level of service received was) because they used to be "in the biz".

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  6. #6
    Kosher Assassin Stoneman's Avatar
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    This is why you subscribe to Consumer Reports: so you KNOW what the invoice is...

    A good salesperson can cut the sweet deals because his volume should be higher, thus even though his per unit commission will be less, his overall commission will be higher...

    I think we've all been there in some way or another...

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  7. #7
    Lifer
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    Sales people are the most shady muther fuckers i can think of. I'd trust a politician with a 14 year old girl, a ferrari, and a bottle of jack before I'd trust a salesman's fair price.

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  8. #8
    I pick things up.... mzdagrl's Avatar
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    All I'm saying is, it is completely unreasonable to make it so a business can't stay afloat. And don't start in with the shit about volume, because if every bike is sold with only a $100 profit, that still barely pays the lighting bills, salaries of the techs and staff, maintenance costs, all that shit, especially considering with base commissions, it probably barely covers that. Motorcycles and cars are expensive to make - you aren't going to leave spending $10,000 on a quality new car, I don't care how much haggling you do, or $4,000 for a brand spanky new GSXR. I understand negotiation, and I know that I would do it if necessary, and I know where, when and how to do it. But in the spring on a high in demand bike, there isnt going to be a ton of wiggle room. By all means if you get consumer reports and know that there is a $4,000 markup, talk them down. That is just stupid to pay. But don't expect to walk out of there with a bike for $500 under what the dealership pays. No matter how good a salesman is, if they do that consistently, they wont be there very long. It doesnt help the business to cost them money.

    I suppose I should have put this in controversial topics....or at least put on my flame suit.

    It's not that I am on a different planet than you, and I don't reward poor service. I let a different saleman do all the legwork when buying my new bike, and didn't buy from him because he was an asshole. I have a problem with being treated as a chest instead of a person. But the person I ended up buying from I had a great experience with, and I wanted to reward him for that. To make it a little easier to understand, I have left 30% tips, though I have never worked in a restaurant. I have also left NO TIP whatsoever for shitty service. Maybe I have a different take on things than everyone else on the planet, but I think good service deserves a reward, no matter what field it is. Those who have never been in a service field really have no idea how hard it is to put on a happy face day in and day out dealing with shithead who feel that they can "teach you a lesson" by being rude and unreasonable.

    So, go on and keep calling me a whiny bitch before you meet me. Assume that I am some alien who doesn't have a clue how the world works. Maybe I'm jaded from being in customer service so long, but when I hear other people spreading lies (i.e. "Dealerships pay below invoice, so they have no right to charge you more than that"), it bugs the shit out of me.

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  9. #9
    IWOK Prez. bigred875's Avatar
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    Dealer costs

    Originally posted by hessogood
    Sales people are the most shady muther fuckers i can think of. I'd trust a politician with a 14 year old girl, a ferrari, and a bottle of jack before I'd trust a salesman's fair price.

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  10. #10
    Everybody to the limit!
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    There are auto sales companies out there, I remember them down in virginia, where the sticker price on the vehicle (used and new) is the price you pay. No pressure, no haggling. From what I remember they did pretty well that way, people felt more at ease and less confrontational.

    But a salesman at a traditional dealer is not out to help you, they're out to make as much money from you as possible. To this end they mark up their stickers above market value, employ pressure sales techniques, skewer you on financing whenever possible, and basically do anything to pad their own commissions. That's their game, they set up the rules, and I don't have any qualms about trying to beat them at it. Though personally I prefer not to play at all, and buy a well maintained used vehicle from a private party who I trust.

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  11. #11
    Lifer
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    There are too many people selling cars & bikes who are totally willing to sell at/near invoice to make money off volume to not play this game.

    You said you had a bad experience selling cars right? How many brands & places did you work?

    I know there are people making wads of money selling stuff cheap, my brother tells me the score in his "game" every time I see him! They have a big meeting 2 saturdays a month where the managers tell everyone which cars they want flying out the door for that period. There is a list of cars which are set up to go for invoice... if you walk in and are smart enough to haggle on the right car you get the car cheap!

    Given that this kind of thing is a fact of life in the business why on earth shouldn't customer do their best to get a good deal on a car or bike.

    I can't see why a dealership wouldn't sell bikes cheap even more agressively then cars! Bikes don't accumulate a lot of miles but the service is highway robbery, if half the customers come back for service a few times they make more money then if they hold a hard line on the out the door sales prices! The spread on sportbikes between invoice & MSRP is like $1000-1200 AFAIK, they can easily make that up and more in accessories, service, parts, getting people to buy the extended warranty, etc, etc..

    I have yet to pay MSRP for a bike and I don't see any reason why I should. If I decide I want a hot squid bike I'll wait till all the squids have one so I can negotiate the price.

    I am certainly one of those customers they are making money on... even though I am trying hard to do as much of my service as possible I have no problem paying for work that will take me a very long time to do myself, my time is worth enough and I can afford to pay their rates. My bike is in today getting new fork oil & the shock swapped out. I'm going to have to go in for a valve check later this summer. I am on the fence about letting them do the chain & sprockets for me even though I can do that myself, same thing with the tires. They'll make enough on my service appointments just this summer to cover the discount they gave me on the bike.

    So the typical squid doesn't put 50k miles on his bike and bring it back for every service appointment but what kind of profit margin do you think there is in putting a slip-on exhaust onto a bike with a side exhaust? It's gotta be huge!

    This gets worse and worse the more expensive the product gets of course, look how much goes into buying and selling houses... the product I work on could sell for anywhere from $1 million to $10 million, you better believe there is massive haggling going on for that sale! The haggling doesn't even stop after the customer buys the product, someone keeps hounding them to get them to buy their next upgrade! Imagine if your car saleman called you once/month for the whole time you owned your car telling you what you should buy next!

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  12. #12
    medium pimpin' slaps76's Avatar
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    Originally posted by Honclfibr
    There are auto sales companies out there, I remember them down in virginia, where the sticker price on the vehicle (used and new) is the price you pay. No pressure, no haggling. From what I remember they did pretty well that way, people felt more at ease and less confrontational.

    But a salesman at a traditional dealer is not out to help you, they're out to make as much money from you as possible. To this end they mark up their stickers above market value, employ pressure sales techniques, skewer you on financing whenever possible, and basically do anything to pad their own commissions. That's their game, they set up the rules, and I don't have any qualms about trying to beat them at it. Though personally I prefer not to play at all, and buy a well maintained used vehicle from a private party who I trust.
    Carmax is one of those companies, and there's a dealer group in NH, AutoFair that I believe does the same, one-price shopping.

    Profit margin on new car sales has shrunk so much over the years, dealers have to make up the difference in other areas. The finance department is generally the most profitable dept. in the dealership, making money on rate markups and aftermarket sales(warranties, insurance, ect.). They also make a ton off the service departments. So making a good living selling new cars is very tough now, and the hours suck...people generally make a lot more selling used cars.

    As far as only buying from private parties, I still wouldn't resort to only that. You can still get a used car at a very good price from a dealer. I've found a lot of people trying to sell their own cars price them ridiculously high, because they think book value is a solid indication of price, which is usually a joke.

    And yes, there are a lot of scumbag salespeople, but there are good ones too. And I can tell you first hand customers can be lying bastards too. People suck in general, whether you're the buyer or the seller.

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  13. #13
    Kosher Assassin Stoneman's Avatar
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    Personal story that happened to me a few weeks ago when exploring the possibility of upgrading my 2001 Outback. I'll try to make it short...

    This is why I don't trust 'em when they show you their 'invoice': Salesman & I go back & forth a bit about what I want, what I wanna get for mine, blah-blah-blah. We find one with the options I want (color matters not to me, it's strictly for commuting), and we go look at it. He tells me he'll be right back. I go check the sticker and go to meet him in the showroom so we can have a sit-down. First thing I say is that if we don't get it 'below sticker', no need to waste anybody's time...

    First he wants to show me 'their invoice' and explain the markup process and how & why it 'needs' to be a certain amount over 'their invoice'. Okay, sounds interesting and I always appreciate insight...

    So he goes through his schpiel and explains it all out. So we take 'their invoice', add on what they 'need' to make and he gives me the price. I double check to make sure it's the EXACT car we were looking at and he assures me twice that it is. Only problem is, the STICKER price was $1200 LESS than *THEIR* ALLEGED invoice...

    Pretty much at that point, I just told him they'd no hafta gimme an EXTRA $3K in trade for mine. I told him to chaulk it up to lying and trying to screw me...

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  14. #14
    Posting Freak rjh200's Avatar
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    Originally posted by mzdagrl
    All I'm saying is, it is completely unreasonable to make it so a business can't stay afloat. And don't start in with the shit about volume, because if every bike is sold with only a $100 profit, that still barely pays the lighting bills, salaries of the techs and staff, maintenance costs, all that shit, especially considering with base commissions, it probably barely covers that.
    If a dealership sold every car at $100 profit (above invoice) they still make plenty of money. The only reason the dealers don't make it easy to buy at these prices is there are still suckers out there that will pay just below or at MSRP for a new vehicle.

    Every car manufacturer has Dealer holdback/Kickbacks usually between 2%-5%. As well as sales incentives for volume sales which could add another $50 - $500 per vehicle. That, as well as Financing, warrenties, accessories, service plans and the service department is where the dealership makes their money. They must be doing pretty well for themselves because they all keep Renovating their million dollar showrooms.

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  15. #15
    Lifer
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    don't get me started on service departments. KB fixes or helps me fix my truck most of the time. Last time after he fixed it for$50 (including fluids) he called the service department to see what they would charge to do it, $850. I can see how dealerships are struggling to pay the bills.

    BTW my father has been in the business all my life and I've been there too, washing cars on the lots since I was 9.

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    It's all water under the bridge, and we do enter the next round-robin. Am I wrong?

  16. #16
    Lifer richw's Avatar
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    Noobie Pump and Dump...
    Maybe this reactionary from a pump and dump
    Higher a kid as a salesman
    They bring in their freinds and relatives...
    Life is good for 2 to 3 months
    Gee we are surprised it just isn't working out.

    Higher a noobie kid.......etc. etc etc.

    You can't possibly imagine what is always really going

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  17. #17
    Lifer
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    You want the best case for giving someone the bike @ invoice....

    RandyO.

    Whoever he bought his SV from should just give him another one free.

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  18. #18
    I pick things up.... mzdagrl's Avatar
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    Originally posted by benVFR

    You said you had a bad experience selling cars right? How many brands & places did you work?
    I think you misundertood me. I loved selling cars. I hated the fact that the particular company I worked for hired me for the sole purpose of laying me off. You don't just wake up and decide to lay off an entire group of people, especially when it has nothing to do with performance, but a change in pay plan that you were planning for the whole 6 weeks I worked there. But, that is neither here nor there.

    I think I've said all I need to about the dealerships....I apparently have a different view than most of you, and that's fine. I was just hoping to spread a little awareness and it got turned into a rag on mzdagrl moment. I'm sorry that some of you have had bad experiences in the past, and I can only hope that it just makes you more educated, not bitter. Don't take it out on your Yamaha dealer for what your Chevy dealer did 5 years ago.

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  19. #19
    I pick things up.... mzdagrl's Avatar
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    Originally posted by slaps76
    And yes, there are a lot of scumbag salespeople, but there are good ones too. And I can tell you first hand customers can be lying bastards too. People suck in general, whether you're the buyer or the seller.
    Thank you.

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  20. #20
    Super Moderator TheIglu's Avatar
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    I work hard for my money. If a dealer doesn't want my business or can't make money from my offer, DON'T TAKE MY OFFER. Easy as that.

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  21. #21
    Lifer
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    We're bitter?

    Sorry hired-to-laid off in 6 weeks is a bad experience. You'd have to convince most people otherwise!

    But this is the US, not France, I'm sure you could have found someone else to rehire you...

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  22. #22
    Just Registered bump909's Avatar
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    i sold cars and for the most part dealerships and sales people suck. what's so hard to understand?

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  23. #23
    Just Registered bump909's Avatar
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    Originally posted by TheIglu
    I work hard for my money.
    so hard for it, honey.

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  24. #24
    Kosher Assassin Stoneman's Avatar
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    Originally posted by mzdagrl
    ...the whole 6 weeks I worked there...
    Ahhhh....now I see why you're soooooo knowledgable about dealerships & markups & profit margins...

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  25. #25
    Lifer
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    Originally posted by bump909
    so hard for it, honey.
    so you better treat him right! doo-doot doo-doo


    Clayton works hard for his money. He drinks beer and practices making shanks out of broken bottles. I do the same job after some whiskey at the local pub.

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    It's all water under the bridge, and we do enter the next round-robin. Am I wrong?

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