I've already made every imaginable mistake so that you don't have to.
What Is A Car Salesperson's Job?
Photo Credit: pexels.com Brett Jordan
Car Shopping > Salesperson's Job >
A car dealership employs a number of people in range of titles. This web page will focus on the roles of people that you either interact with or that are in the chain of command of the people that you interact with.
A be back is an up who has left the dealership without purchasing a vehicle. In industry jargon the term be back is intended to ironically indicate that just like your father who never returned from that last time going out to buy cigarettes, neither will a be back.
You may have interacted with a car dealership's business development center but did not know the name. The role of a car dealership's business development center is to take incoming phone calls and internet leads from "ups" and convince the "ups" to make appointments with car salespeople. If an "up" shows up for an appointment then the business development employee may receive a payment from the dealership in addition to his or her hourly rate. In theory a business development center employee might be hired under the premise that if he or she is successful he or she will be promoted to internet sales or sales on the dealership's floor. In reality, if a business development center employee is successful in getting potential customers to show up for appointments then the dealership may view the employee as being too valuable in his or her role to promote. A given dealership may or may not have a business development center.
In some cases, the role of the internet team could be to go from initial intake as a lead through signing the paperwork for a given car. In a great many other cases, despite the title their job is really business development center. In that case their job is to funnel you to the actual sales team.
During the car buying process, a salesperson will be the intermediary between the customer and a sales manager. A car salesperson may use phrases such as "What price do you need in order for you to buy today?" From the perspective of the customer, the discussion must NOT revolve around payments. The more prepared you are, the easier it will be for you to either get to competitive pricing or determine that a given dealership does not offer competitive pricing.
Often abbreviated as F&I for Finance and Insurance. At any given dealership, the role of the finance manager can range anywhere from: Go over the terms of the deal you had discussed with the sales person and upsell you on additional products and services such as warranties. Ignore whatever terms that you and the salesperson discussed by presenting you with completely different paperwork.
33 ⅓: While working under the supervision of a sales manager,
33 ⅓: sell cars to ups,
33 ⅓: at the highest possible gross profit.
Add up your points. Your score is the total number of points you answered correctly on a scale of zero to one hundred. Is there any chance of grading the exercise on a curve? NO. If anything, the exercise is far too lenient as is. Consider that the typical customer only engages in a real life exercise once every few years but dealership staff get to practice every working day. Please Google the phrase "statistics minimum sample size". When I tried doing so, the first values that came up were 30 and 100. A salesperson for a mass-market brand in a populated market should expect to target 100 or more ups in a year. A typical consumer should not expect to enter into 30 car purchase negotiations in a lifetime. In the automotive sales industry, selling a vehicle at the highest possible gross profit is called holding the gross. I have no issue with a salesperson's need to hold the gross, but I would prefer that they do it with someone else.
Exercise 2: Salesperson's Techniques
What are some techniques that a car salesperson might use to accomplish what was stated in the solution for exercise 1?
The customer may want to feel like he or she has "won" something in the negotiation. The salesperson - sales manager team may try to "give in" to make a customer feel like he or she is "winning" while actually conceding nothing.
Payment If the customer is concerned with payments, the customer may be presented with a loan that finances the vehicle over the longest time possible. I can already hear some customers siding with the dealership by saying "as long as the payments are what I want I do not care about the price." I am not completely sure how to respond to that. If you have enough to pay for a vehicle with cash, you should care about the price. If you need to finance a vehicle, you should care more about the price, not less.
Trade-in If the customer is fixated on the value of his or her trade-in, the dealer may add to the value of the trade-in while also adding to the price of the vehicle to be purchased.
New Car Price If the customer seems primarily concerned with the price of the new car, the dealership may make a low offer for the trade-in while offering a discount on the new car.
Exercise 3: Customer's Responsibilities To Him Or Herself
What should you the customer do to prepare for what was stated in the solution to exercise 3?
You the customer should perform the following BEFORE talking to a new car dealership:
Financing See what pre-approval opportunities your bank or credit union has.
Trade-in Get estimates from places such as Carmax for what they would pay for your car.
New Car Price Search the internet for pricing on new vehicles.
Without that information, you are at the mercy of the dealership. Spoiler Alert Car dealerships are NOT known for having mercy.
The Covid-19 lockdown may have been extremely lucrative for many car dealerships.
A dealership may have received Payroll Protection Plan loans that were later forgiven.
A dealership may have been able to refinance real estate backed and other loans at lower interest rates.
A dealership may have sold fewer cars in 2020 than in 2019, but those it did sell were sold at higher prices.
In contrast, many of us customers are still rebuilding our finances after furloughs and layoffs. For those of us that fail to prepare, that rebuilding will be that much harder.
