| Preface: While these questions can be classified as | | | | New Car Buying "Taboo" Questions |
| "Car Buying Tips," they are really more suited for your | | | | "Do you guys negotiate part of your holdback?" |
| car buying entertainment. If you are a hard-core | | | | The answer will almost always be "no." If not, they will |
| negotiator, these questions will benefit you by putting | | | | say "sometimes" or "rarely." Either way, it is a good |
| your salesperson on-guard and off-balanced. | | | | method of setting the tone for negotiations. |
| If you prefer a less confrontational approach to car | | | | Holdback is the amount of money the dealership |
| buying, these questions can be fun, but they may | | | | receives from the manufacturer when they sell a new |
| create an atmosphere that will not be beneficial. | | | | vehicle. It is "advertising" or "overhead" or "cost of sale" |
| Either way, your salesperson will remember you as | | | | money as described, but in reality, it is a buffer of profit |
| the customer who "knew a little too much" about the | | | | that most dealerships are not willing to part with. The |
| car business. | | | | market is so competitive and the profits are going |
| General Questions for New or Used Buying | | | | down, so unless the holdback is considerable, it is often |
| "How much is your dealership's pack?" | | | | untouchable. |
| 99 out of 100 dealerships have a Pack. It is a value | | | | "Do you get a spin for selling this car?" |
| added to the cost of every vehicle that covers dealer | | | | This is an empty question, but one that will let your |
| expenses and overhead. They normally range from | | | | salesperson know that you know a little too much. |
| $500-$1,200, but some dealerships will pack their cars | | | | Many manufacturers offer "spins" to salespeople and |
| $2,000 or more. | | | | managers for selling particular new vehicles. This is |
| Please keep in mind, this amount is non-negotiable (by | | | | bonus money offered to encourage salespeople to sell |
| law in most states). It is not to be confused with dealer | | | | new vehicles instead of trying to switch their |
| "holdback" on new cars, which often is negotiable. If a | | | | customers to a higher-profit used vehicle. Depending |
| car is traded in and valued at $10,000 and the pack is | | | | on the vehicle and the manufacturer, spins are normally |
| $1,000, the vehicle cost is $11,000 plus make-ready, | | | | $50 or more and are paid directly from the |
| inspection, and reconditioning costs. | | | | manufacturer. |
| "Is this an old-aged unit?" | | | | Used Car Buying Questions that will Drive your |
| Most dealers set a cut-off point when a vehicle is | | | | Salesperson Nuts |
| considered aged. It is normally at 60, 90, or 120 days. | | | | "Can we call the previous owner or have them |
| These questions will make your salesperson wonder | | | | contact me before I decide?" |
| why you are asking and how their answer will affect | | | | On a used car, it is somewhat of a reasonable |
| your opinion of the vehicle, because answering either | | | | request. The problem is that the salesperson doesn't |
| way can be a positive or a negative. | | | | want to go through the trouble and the previous owner |
| If it is an old-aged unit the final price will probably be | | | | probably doesn't want to talk to you. Still, it gets asked |
| closer to cost with a reduced profit margin to move it. | | | | sometimes, and salespeople hate it. |
| That is good. But then again, there is a reason it has | | | | If you are able to talk to the previous owner, find out if |
| been on the lot for an extended period. A Chevy | | | | there were any recurring problems, any accidents, and |
| Tahoe at a Chevrolet lot in a big city should sell before | | | | any reasons why you shouldn't buy the car. |
| it becomes aged. A Chevy Tahoe at a Hyundai lot in a | | | | "Can we get the vehicle history report?" |
| small town might be a great vehicle that didn't have | | | | If they say no, leave, because they are either lying or |
| the right buyers looking at it. | | | | incompetent. Again, this is a minor hassle that can get |
| "How many heads have you knocked off this month?" | | | | in the way of a car deal, so salespeople usually don't |
| When a salesperson "knocks their head off," they | | | | like it. |
| have made a large commission selling a vehicle at | | | | Final Pain |
| $3,000 or higher over cost. These "high gross" deals | | | | "What's your rock-bottom dollar?" |
| put $500 or more in the salesperson's pocket. | | | | Most people ask their salesperson this question at |
| While their response is irrelevant (if you get a | | | | some point. Most salespeople can't answer the |
| response), it is interesting to watch how they handle | | | | question without their manager. It is normally |
| the question. | | | | uncomfortable for newer salespeople and annoying |
| "Do the salespeople here make spiffs or commission | | | | for seasoned ones. |
| on back-end profits?" | | | | Don't say "cash price." At most reputable dealerships, |
| Most or all of the money that a salesperson makes | | | | they make more money if you finance with them than |
| comes from their front-end commission. This is | | | | if you pay cash. There is no longer an appeal to |
| normally calculated as a percentage of the front end | | | | getting cash or check for a vehicle because lenders |
| gross profit of the vehicle. | | | | that the dealership uses pay all of the money upfront |
| Some dealerships pay a little money to the | | | | anyway, plus a little extra for using them. By saying |
| salesperson if their customer finances or purchases | | | | "cash price" you're telling the dealership that they won't |
| products on the "back end" while they are in the | | | | make money on the back end so they need to make |
| finance department. If the customer finances through | | | | as much as they can on the vehicle itself. |
| one of the dealership's lenders, buys a warranty, or | | | | Again, let me stress that most of these questions will |
| signs up for any other paid services in finance, the | | | | not help you buy a vehicle at a better price unless you |
| salesperson may or may not receive a little | | | | are a confrontational negotiator. They may help you |
| compensation for planting the seed. | | | | have a little fun buying a car, which many people |
| The best time to spring this question is if/when the | | | | classify just above "root canal" on their list of |
| salesperson asks if you plan on financing or if they | | | | least-favorite activities. |
| recommend a warranty. | | | | I hope it helps. |