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 I received a call from an old friend last week. Julia told me that her faithful Mitsubishi Expo that she had owned for the last 8 years had finally bit the dust. The transmission had quit after 200,000 miles of service. After discussion of the cost of replacement versus the value of the vehicle she made the decision to make payments on another automobile. This was not an easy decision for her since her car was paid off over 4 years ago. Julia had resigned herself to the "Great American Dream" of monthly installments to get a new car.
Julia had already been to a local Mitsubishi dealer and selected a 2003 Mitsubishi Lancer that was on the lot. She had the numbers from the Manager and the payments were within her means. She decided to talk to me before she made her final decision to purchase.
As we discussed the "Deal" that she was getting from Ed the Manager, a few red flags began popping up very quickly. She was basically at $13,000 out the door. According to her understanding, she was getting 0% financing on a new car. Her payments would have been around $243 per month for 60 months.
Julia asked me if I would accompany her to the lot the next day to make sure everything was okay before she made that dreaded payment commitment. She had the salesmen's card and she did like him, so we wanted to keep the deal with the same guy. When we pulled into the lot a very friendly young man asked if he could help us. Julia looked at me rather bewildered and pulled out the business card and showed it to him. Lo and behold, it was the same salesperson. He did not even remember his own customer that he had spent 3 hours with just the night before.
Ed, the manager was also very friendly when we sat down to review the paperwork that had been prepared. Ed did not know me from Adam. I asked Ed what was the selling price and if this was a straight purchase or a balloon type of program. "The selling price is $12,350 plus tax, tag and fees. We have already negotiated this way down and can't do any better on the price. This is a purchase, we can't do a balloon on a used car." I asked Julia if she was aware this was a used car she was buying, she said "No, I thought it was a new car."
"Ed, what is the interest rate Julia gets on this loan? I have seen Julia's credit report and she has a 750 beacon."
"She will be around 13%, let me take you into the Finance Manager so he can cover that for you."
I asked Julia if she was still okay with the car and the fact it was used instead of new. She liked to car and said it was what she wanted. She still was not comfortable with the price.
"Ed, we have a slight problem. First of all Julia thought she was getting a brand new car. Second, she was led to believe she was getting 0% financing. Third, can we do any better on the price?"
"We have already negotiated the price way down and we are selling it for what we have in it. As a matter of fact we are losing about $1,000 just to move the unit. The price is firm!"
I looked at my handy dandy Internet print out from their website. Little did Ed know I had already contacted the Internet Department to verify the price of $9300.00 plus tax and tag that was clearly posted on their site. The ISM, whom I knew, had even told me that they had picked it up at the auction for about $7,000. I told him we were coming in but Julia already had another salesperson and I did not want him to lose on commission. He agreed that it should be that way.
"Ed, We will pay $9300 plus tax and tag. I know you can do this, let's finish this up so Julia can drive her car home today."
Ed immediately stood up and offered his hand. "Thank you for coming in, it is unfortunate we can't earn your business. $12,350 is the absolute lowest price we can sell this car."
After we went into the parking lot to depart, Ed stepped out and called me back. "You have insulted me! That car is worth every penny I am asking for it! To make such a ridiculous offer is a great insult. Don't ever come back here, you will not be welcome!"
I just smiled, gave Ed the computer print out and got in the car with Julia. As we pulled away, I could see Ed's mouth drop as he looked at the printout with my notes from the ISM. Julia got what she wanted at another dealership that went to the auction to get the Lancer she so badly wanted.
They made a $2500 pop, plus all the goodies on the back end . Great Job Ed!
Just one final note. Ed, if you do ever read this article I want you to know that I am the one who was insulted, but my skin is thicker and I will get over it. What was even worse, you insulted Julia. Your salesperson insulted her by not remembering her 16 hours later. I was not there to destroy your deal, I wanted you to make money. You didn't even ask me where I came up with my number, you just outright had to let me know you were losing money. Julia did not trust you the night before and even less when we returned.
There are several things we can learn from this experience. This is a true story, only Julia's name has been changed. What happened here is no different than what goes on in every dealership in the country. Keep these things in mind when you wonder why sales seem to be a bit slow.
1. If your dealership is going to post prices on the net, the desk should be fully aware of the sale price.
2. There must be a reason a customer makes an offer on a car. If Ed would've asked how I came up with that number, I would have freely shared the print out with him. When he became so adamant that he was losing money I decided to keep it to myself.
3. Ed's focus was clearly on profit rather than the customer.
4. Trust is the major component of any relationship. If you don't establish it immediately, you never get the chance to receive it again.
5. Julia loves her car and sent in three friends this weekend to buy from that dealership. All three purchased. She made a point to tell them not to go to Ed's store.Guess how many they told?
Dennis Rushing
President, Dealer Cat Inc.
Dealer Cat is an Automotive Training and Consulting company that specializes in increasing sales and ROI through proactive, guaranteed results. To contact Dennis Rushing visit www.dealercat.com , send email to drushing@dealercat.com or call 407-532-4645. |
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