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new car with or without saleman..

Posted on 2012-04-07
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Last Modified: 2012-11-20
when you go into a dealer to buy, if you are guided by a saleman, do you pay more because the salemans get a commission? or does is not matter, if there is a salesman or you deal with the manager directly?
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Question by:25112
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9 Comments
 
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Assisted Solution

by:Frosty555
Frosty555 earned 125 total points
ID: 37820489
It doesn't make a difference.

The dealer buys cars at a wholesale price, marks it up by a certain amount, and then attempts to sell it for as much as he/she can get. They expect prospective buyers to negotiate the price, so it is up to the salesperson to read their buyers, understand the climate of the market at the time and the demand for that particular car, and decide how much they're willing to shave off their margin to close a sale.

If the manager sells you the car or if a salesman sells you the car makes no difference - they both have the same goal of maximizing that margin on that car, which could happen by selling it to you, or it could happen by rejecting your offer and waiting for a better buyer to come along.

The manager has more authority than the salesman. He *could* authorize a sale at a lower price than the salesman would be able to go if you gave him a compelling reason to do so.

But consider this - when you talk to the manager, realize that you are talking to a veteran salesman with years of experience, who has a very personal vested interest in the big picture: the overall profits generated by his dealership, and NOT just in the commission he is going to make that month. He's going to try just as hard if not harder to close that deal at as high a price as he can get away with. Commission is just a necessary expense to the dealership to motivate the sales staff to work hard.
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by:MajorBigDeal
MajorBigDeal earned 375 total points
ID: 37820666
The basic tactic that car dealers use is to take as much of your time as possible to wear you down. Then the manager and the saleman double-team you at the end to close the deal on terms that are not favorable to you.  If at all possible, I would figure out exactly what you want including how much you want to pay before setting foot in a dealership.  Politely explain to the salesman that you will not tolerate being left alone for more than 5 minutes.  Then when they test you, walk out and go to a different dealer.  If you are tired wait for another day. Then explain to the next salesman exactly what happened at the last dealer, and try again. Repeat until you find a dealer that will be straight with you.

Also, if at all possible do not finance at the dealer, use your bank or credit union. If you must use dealer financing, download an interest rate calculator on your smart phone and use it  before signing the papers.  You will almost always find that the payment listed in the paperwork is higher than it should be.  Call them on it, don't listen to their rediculous excuses and refuse to sign until the monthly payment matches what the calculator says it should be.

Good luck!
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LVL 5

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by:25112
ID: 37823696
>>Commission is just a necessary expense to the dealership to motivate the sales staff to work hard.

that commission comes from the margin gained by the sale, right? does the  manager take the commission too? In other words, do they always pre-calculate the commission' in their sales #?
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LVL 5

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by:25112
ID: 37823702
>>Politely explain to the salesman that you will not tolerate being left alone for more than 5 minutes.

DO you mean that the salesman should not leave you to talk to the manager? what is the significance of the being left out for 5 minutes.. sorry i did not get that...
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LVL 11

Assisted Solution

by:MajorBigDeal
MajorBigDeal earned 375 total points
ID: 37824199
Yes, that is exactly what I meant.   The main tactic is to wear you down.  So they drag it out.  The first time he "needs to talk to the manager" it might only be 5 minutes.  The second time it might be 20 minutes (the manager being such a busy fellow, you see).  If you have enough patience to sit through that,  they know you are pretty much hooked.  Eventually, if you stick around long enough the manager will actually show up and then they will double-team you during the close.  

Yes, the manager does get commission too.  It is called an override, he gets a piece of all the sales from the people he is managing.  Yes, the comission increases with the margin (a lot).   They also get comission on the finance deal which is why they will pad the monthly payment, which has got to be illegal but they do it anyway. Also, the add-on's like extended warranties and other types of insurance are big commissions.
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LVL 11

Accepted Solution

by:
MajorBigDeal earned 375 total points
ID: 37826579
Also, since you are getting a new car, you can figure out exactly what you want down to the model, color, options, and price.  Print it out and show it to the salesman Also, I understand you can buy new cars on the internet now, although I've never done that myself.
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by:25112
ID: 37830849
thank you!
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LVL 11

Expert Comment

by:MajorBigDeal
ID: 37835173
Good luck on your purchase!
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