This is just a rant… maybe a discussion starter
Margins on 2nd hand and new electric cars are thin, gone are the days where you could get 25% off a new car, and thin margins mean lower commission.
Servicing costs are minimal so no kickbacks for selling the servicing plans.
People are wise to paint protection and alloy wheel cover that cost more than a refurb.
EV buyers tend to make better decisions and are more likely to be cash buyers or finance elsewhere, so no kickback for selling a finance plan.
Manufacturers still selling higher margin hybrid and ICE vehicles mean they are the real target for salespeople.
Manufacturers also want to shift their ICE inventories and new products so they are still pushing the FUD on electric, and myths like “EVs will be obsolete once Hydrogen cars come out, you may as well get an ICE car in the meantime.”
I’ve had a really bad customer experiences at Toyota, Honda and now Kia dealerships.
I know people will suggest the Tesla online sales model, but Musk is just ruining the brand to the point where I can’t buy or recommend one.
So now I’m going to do all my own research, find the exact car I want, and contact the dealer/seller directly while avoiding as much interaction as possible.
I think you need to look into how dealer pricing works, because you’re making a lot of common incorrect assumptions. The dealer’s margin on a new vehicle is, like 2%. They make a third of their revenue from accessories, a third or more from repair work, and the rest from financing finders fees.
You got 25% off a car because either it was used, or the manufacturer kicked in incentives. Not because a dealer could afford to give you 25% off.
Also, LMAO on hydrogen.
However the dealer achieved it, as a customer when I bought my car 8 years ago I ordered the spec I wanted and a price came up, I said I wanted it at a price the was 25% lower (I had found 24% discounts online) and as I was walking out the building they stopped me and agreed.
For new model cars discounts from car brokers are only around 3% on the cars I’ve looked at.
Probably because their list price was too high. Doesn’t mean they’re all that inflated.
You’re talking 25% off MSRP, or worse a locally adjusted market price which isn’t the price people should pay. It’s a suggested price. You should be paying invoice price plus a margin for dealer profit. It would really help for people to know how products sell and what the various prices are, because not knowing these things leads to mistakes like thinking you got an amazing deal by discounting MSRP or even a local market price rather than moving upward from invoice price.
One trick when buying any car is to arrange financing ahead of time.
Find the car. Negotiate a price. Get a Buyers Order. It will have all the fees and BS on it because of what happens next. Take the Buyers Order to the credit union. CU writes them a check, and they don’t have an opportunity to add more fluff, or sell you financing.
You can often get pre-approved for a car loan up to a certain amount, and the bank will provide you a check that you can fill out up to that specified amount and make payable to the dealer. Basically, you can show up to the dealer pre-financed by a third party, do the deal, drive away, no need to make an extra trip out and back.
Or is it that the bank will deposit the money in your account, then you write the check from there, and return the vehicle purchase details to the bank within a certain time frame? I know we’ve done this a couple of times, but I forget exactly how the process plays out.
I’m the ‘car and tech guy’ for my family/friends, two most recent trips were cash buys… you can see the look on the salespeople’s faces drop when they find out they won’t get any finance commission.
You can also finance and pay off the loan early as well.
I’ve taken dealer financing on a car to lock in their lower offer and then paid it off in full the next month. No interest, no bullshitting around.
Just make sure there is no penalty for paying the loan off early. Check the actual contract.
The ‘trick’ I’m getting at is to force them to give you an out-the-door price. If you walk in with a blank check, they’re going to try and max it.
You don’t tell them that you have financing already until you have a promised price on the vehicle you want.
Depends on the dealership. I went in and asked if I could get additional money off the car for using their financing. They say yes they gave a $1,000 credit.
I then asked how many payments did I need to make for them to get their full incentive for the loan. They said 6 months. I asked if I could pay it off after that, and they said sure, they’d have their kickback from the bank.
And that’s what we did. It was a pretty frank conversation with the dealer, they were cool, we were cool.
You’re more likely to get a better deal if you use their financing since they make money on that too, and they usually have competitive rates if you have good credit.
They shuffle numbers around to make it look good. They’ll pad the price so they can show you a good rate. Why do you think they ask about financing so early in the process?
They’re crooks, the lot of them. Never trust someone that can write numbers upside down.
They ask for financing early on so they don’t waste time talking to someone who can’t even buy a car. There are a lot of people who go look at cars that can’t actually buy one.
You’re right that they shuffle things around, but if you remove an entire revenue stream from the equation, you’re going to get a worse price on the car than if you could get by financing through them. They can often offer the same rate that the credit union is offering, but they make a couple grand in kick-backs from the bank. They will sometimes use that kickback to offset the price of the car.
EVs will be obsolete once Hydrogen cars come out
follow up question, and when would those come out?
Follow up comment: Even if they do come out and we’re somehow green, dealerships won’t sell them either. Oil money speaks pretty loud
Back when I was considering a Ford Lightning, I went to a local Ford dealership and the salesman came out like they do. He asked what I was looking for and I said I just wanted to see the Lightnings.
He literally said “you know we’re an oil and gas country, right?”
Even if I was fully planning on buying that day, there’s no way I would have bought from that guy.
At one point, he also said something along the lines of “they don’t give us any incentive to push these.”
Ah well that is one of the reasons why big oil has invested so much in hydrogen, the way hydrogen is made right now is by refining it from natural gas using massive amounts of electricity which oil companies can generate for themselves. This hydrogen is then sold along with the same 0.1% of hydrogen which is electrolysed from water using solar and wind power and greenwashes the remaining 99.9% masking the fact you would have been better off just refining crude oil into diesel, or burning puppies and kittens in a steam engine.
I did ask… apparently “Toyota have had some big breakthroughs and they should be out in a couple of years, with instant refuelling!”
I believe my reply was “that’s absolute bullshit”
Instant refuelling
I do not think the word means what you (the dealer) think it means.
I see Tesla Superchargers and a growing number of other charging stations popping up all over the place.
Where do I go to fuel up a hydrogen car? I don’t see hydrogen fueling stations anywhere… How long will it take to build all that out?
Well I last looked a couple of years ago and there were three in the UK, I found one source that says there are 14 but half of them are offline and in places like Universities.
An impressive 1 for every 18,736 miles of road, and a working one for every 37,471 miles.
I wonder how far you can get on a full tank?
Servicing costs are minimal so no kickbacks for selling the servicing plans.
I mean that sounds to me like all the more reason to sell service plans.
EV buyers tend to make better decisions and are more likely to be cash buyers or finance elsewhere, so no kickback for selling a finance plan.
Source for that?
they are still pushing the FUD on electric, and myths like “EVs will be obsolete
Gonna call Hanlon’s Razor on this one. These salespeople are generally just idiots who don’t even know the names of the cars on their lots.
and contact the dealer/seller directly while avoiding as much interaction as possible.
Good luck. I have a family member that got bait-and-switched just a few days ago. They will tell you whatever lies they have to to get you on the lot.
Gonna call Hanlon’s Razor on this one. These salespeople are generally just idiots who don’t even know the names of the cars on their lots.
I bought a new car a couple years ago and was really disappointed in my search to discover that I seemed to know more than the sales people at basically every dealership. The only person I talked to who seemed really knowledgeable was actually not a salesman but a manager at a Ford dealership.
Service plans are too cheap for EVs so really low commission, plus people know they don’t need any real servicing, it’s a major selling point.
If people didn’t make good decisions they’d let the salesperson talk them into a nice commission rich hybrid.
The guy who told me about Hydrogen cars taking over soon sold my dad his car 25 years earlier, so a career salesman.
I’m calling ahead and telling them the car I’m coming to see and the price I want to pay, if it’s not there or the price changes I’m never coming back.
Service plans are too cheap for EVs so really low commission
I don’t believe that for a second. Service providers are not going to lower the price of their service plans to the extent that salespeople can’t be bothered to sell them or they’re no longer profitable. That would be foolish. But please feel free to prove me wrong.
The guy who told me about Hydrogen cars taking over soon sold my dad his car 25 years earlier, so a career salesman.
What’s that supposed to mean? I find that, at best, veterans are no better than their fresher colleagues, and often are worse. At least that’s the way it is in every industry I’ve worked in.
I’m calling ahead and telling them the car I’m coming to see and the price I want to pay, if it’s not there or the price changes I’m never coming back.
You’ll run out of dealerships before you find a car to buy.
Like I said, good luck.
Service plans for EVs are less than half the price of ICE equivalents. Half the price means probably half the commission.
Even at half the price they still offer very poor value for money, simply because EV’s don’t need as much maintenance.
Why would you think they could just jack the price up to keep their sales people happy?
My whole point here is that dealerships are going severely downhill as EVs are shifting their business model to the point where they don’t even want to help EV customers, so the customer has to do all the work of researching the right car and options, and finding it themselves.
I heard that from a salesman perspective that EVs are harder to sell, because the customers tend to know less and have more questions. And there is not really an incentive for salespeople to sell more EVs.
A friend of mine who works in a Mercedes service department has a fleet of electric vehicles to loan out during repairs. Problem is, this being the US, nobody wants them. So he sits on a bunch of luxury EVs because people would rather wait for ICE cars to become available. You seriously can’t live with an electric Mercedes for a week? Maybe learn a little about it? Nope.
