General Questions for New or Used Buying
“How much is your dealership’s pack?”
99 out of 100 dealerships have a Pack. It is a value added to the cost of every vehicle that covers dealer expenses and overhead. They normally range from $500-$1,200, but some dealerships will pack their cars $2,000 or more.
Please keep in mind, this amount is non-negotiable (by law in most states). It is not to be confused with dealer “holdback” on new cars, which often is negotiable. If a car is traded in and valued at $10,000 and the pack is $1,000, the vehicle cost is $11,000 plus make-ready, inspection, and reconditioning costs.
“Is this an old-aged unit?”
Most dealers set a cut-off point when a vehicle is considered aged. It is normally at 60, 90, or 120 days. These questions will make your salesperson wonder why you are asking and how their answer will affect your opinion of the vehicle, because answering either way can be a positive or a negative.
If it is an old-aged unit the final price will probably be closer to cost with a reduced profit margin to move it. That is good. But then again, there is a reason it has been on the lot for an extended period. A Chevy Tahoe at a Chevrolet lot in a big city should sell before it becomes aged. A Chevy Tahoe at a Hyundai lot in a small town might be a great vehicle that didn’t have the right buyers looking at it.
“How many heads have you knocked off this month?”
When a salesperson “knocks their head off,” they have made a large commission selling a vehicle at $3,000 or higher over cost. These “high gross” deals put $500 or more in the salesperson’s pocket.
While their response is irrelevant (if you get a response), it is interesting to watch how they handle the question.
“Do the salespeople here make spiffs or commission on back-end profits?”
Most or all of the money that a salesperson makes comes from their front-end commission. This is normally calculated as a percentage of the front end gross profit of the vehicle.
Some dealerships pay a little money to the salesperson if their customer finances or purchases products on the “back end” while they are in the finance department. If the customer finances through one of the dealership’s lenders, buys a warranty, or signs up for any other paid services in finance, the salesperson may or may not receive a little compensation for planting the seed.
The best time to spring this question is if/when the salesperson asks if you plan on financing or if they recommend a warranty.
New Car Buying “Taboo” Questions
“Do you guys negotiate part of your holdback?”
The answer will almost always be “no.” If not, they will say “sometimes” or “rarely.” Either way, it is a good method of setting the tone for negotiations.
Holdback is the amount of money the dealership receives from the manufacturer when they sell a new vehicle. It is “advertising” or “overhead” or “cost of sale” money as described, but in reality, it is a buffer of profit that most dealerships are not willing to part with. The market is so competitive and the profits are going down, so unless the holdback is considerable, it is often untouchable.
“Do you get a spin for selling this car?”
This is an empty question, but one that will let your salesperson know that you know a little too much. Many manufacturers offer “spins” to salespeople and managers for selling particular new vehicles. This is bonus money offered to encourage salespeople to sell new vehicles instead of trying to switch their customers to a higher-profit used vehicle. Depending on the vehicle and the manufacturer, spins are normally $50 or more and are paid directly from the manufacturer.
Used Car Buying Questions that will Drive your Salesperson Nuts
“Can we call the previous owner or have them contact me before I decide?”
On a used car, it is somewhat of a reasonable request. The problem is that the salesperson doesn’t want to go through the trouble and the previous owner probably doesn’t want to talk to you. Still, it gets asked sometimes, and salespeople hate it.
If you are able to talk to the previous owner, find out if there were any recurring problems, any accidents, and any reasons why you shouldn’t buy the car.
“Can we get the vehicle history report?”
If they say no, leave, because they are either lying or incompetent. Again, this is a minor hassle that can get in the way of a car deal, so salespeople usually don’t like it.
Final Pain
“What’s your rock-bottom dollar?”
Most people ask their salesperson this question at some point. Most salespeople can’t answer the question without their manager. It is normally uncomfortable for newer salespeople and annoying for seasoned ones.
Don’t say “cash price.” At most reputable dealerships, they make more money if you finance with them than if you pay cash. There is no longer an appeal to getting cash or check for a vehicle because lenders that the dealership uses pay all of the money upfront anyway, plus a little extra for using them. By saying “cash price” you’re telling the dealership that they won’t make money on the back end so they need to make as much as they can on the vehicle itself.
Again, let me stress that most of these questions will not help you buy a vehicle at a better price unless you are a confrontational negotiator. They may help you have a little fun buying a car, which many people classify just above “root canal” on their list of least-favorite activities.
I hope it helps.
After 14 years in and out of the car business, I have reaped the rewards and felt the pitfalls. Now, as Internet Coordinator for a 50+ year old dealership whose owner and managers hold their Christian beliefs above the bottom line, I am free to be honest and respectful to customers. It's the way car buying was meant to be.
Oklahoma City Used Cars |
Memphis Used Cars
Related Topics may Include.
How to Handle your car salesman.
What to ask at a car dealership.
How to negotiate the best terms for your car purchase.
Looking like a professional when buying a car.
How to protect your own interest at the Dealership.
