Too Good To Be True and other Dirty Tricks

Hey everybody!  It's me, Dave!

There are things that some dealerships do to get people into the door that I don't like.  Let me be clear, they aren't necessarily breaking any laws, nor are they inherently bad people.  Unfortunately these things often work, I just don't like or respect these things.

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The Advertised Price
Fair warning everyone; If a deal is too good to be true....it's because it isn't true.  I'm not saying that they are lying.  However, the deal being advertised is only applicable to a very, very select group of people.  For example, let's say someone is looking at one of my larger crossovers.  The sticker price is about $33,000, and so at my dealership we advertise $33,000.  A competing dealership (maybe in a bigger town) advertises the same new vehicle at $31,000!  That's less expensive and you should definitely go buy it there, right?

Well, maybe...

If you scroll down to the bottom of their advertised price for that vehicle, there will be an "*".  Next to said asterisk, it will say something akin to the following:

"Price includes ALL manufacturers rebates and incentives.  All rebates are in lieu of special financing. Subject to approval, blah blah blah...."

Ok, I made up the blah blah blah, but the rest is there.  So how do they get to that sale price?

Upon Further Examination:
$33,000     MSRP
$   -500     Owner loyalty
$   -500     Military discount
$ -1,000    Trade in bonus when trading in a specific vehicle(s).
$31,000     The advertised price!!!

So my customer goes down there, and asks for the advertised price.  The other salesperson says, "No problem.  Please let me see your current registration showing you own a car the same make as the one you are buying for the Owner Loyalty.  I will also need to see your Military ID and LES (Leave and Earnings Statement) for the Military Discount.  Finally let me go evaluate your trade that is one of the specific ones for which I can give you the bonus."

IF, they have all of that, they get the price.  If not, then the conversation goes like this...

"I'm sorry Mr. Customer, I cannot give you the owner loyalty discount since you don't currently own one of our vehicles. And since you are not in the military, I cannot give your that discount.  Oh, and since your trade is either non-existent or not the right model from a certain set of years, I cannot give your the trade in bonus.  The price of the vehicle is $33,000.

Wait, what?!?  That's right, they advertised a price that most people won't be able to qualify for.  Oh and I've spoken about dealer fees in previous blogs, well it turns out that their dealer fee is $300 more than mine.  Soooo, you Mr. Customer just traveled a few hours to pay more money.  To be fair I did warn you.  Oh, and if they do qualify for those rebates and bonuses at that dealership, then they qualify for them at mine.  So, they still traveled a few hours to pay more money.  Again, I warned you.

Why do they do this?  Well, as I said, unfortunately it works.  They also aren't worried about upsetting someone.  They disclosed all of this on the website, you just didn't read carefully enough.  Or you were hoping so badly for the "too good to be true" to be true, that some part of your brain blocked it out.  Some people will then pay more since they drove all that way, or don't want to be embarrassed by coming back to me and admitting they didn't get the deal they were expecting.  But don't be embarrassed.  Come back, the deal is still good here.  I'm happy to sell it to you.

The Big Sale!
This idea is that there are times of the year when dealerships have the absolute lowest sale prices EVER!  Have you noticed that it seems to happen every month?  Every. Single. Month.  Yeah....

What is really happening here?  It could be that they have a few old models leftover that they are truly blowing out.  But it will only be on those few specific cars.  If you want a different color or trim level, well back to full price for you.  Perhaps they've gotten a little extra money from the manufacturer that they can pass on to you the customer, so...SALE!  Or perhaps, they've had that money all month anyway, but they want to get a few more sales at the beginning or end of a month, or quarter, or the year.  So...SALE!  Can this work to your benefit?  Of course, but depending on what you're looking for, a deal in December isn't necessarily any better than one in March.  Especially since they'll have some sort of deal next month, and the month after that.  I'm not saying that next months deal will be better, or worse, or exactly the same.  But, don't let that influence when you buy.  Trust me, you can get the deal of a lifetime at any point.  (see http://mazdaintally.blogspot.com/2014/05/buying-carfrom-me.html )

If you let balloons, hot dogs, or a giant inflatable gorilla make your buying decisions, you're in trouble.  Find a Salesperson you can trust, do your research, and make the right decision for you.  A good salesperson will not only respect that, they will help you along the way.

Lower prices because of selling Volume!
This one always kills me.  "They can lose money to sell me a car because they sell in volume."  Work that through.  Can you buy apples from the orchard for $1, and then sell them for 75 cents but make money because you sell more of the $1 apples at 75 cents? NO!  You're still losing 25 cents per apple.  But somehow in car sales it makes sense?

Yes, that was the hyperbolic version of the story, however that doesn't make it untrue.  No, dealers don't sell cars at a loss to every customer.  Yes, they can get some money from the manufacturer if they sell a certain amount of cars.  But what makes you think you're the one that is getting it over on the volume dealership?  That's like going to Vegas and thinking you're the one that will beat the casino.  The house wins...always.  And they should.  It's a for profit business.  If they don't make a profit, they won't stay in business.  Inevitably, the response is, "Fine, let them make money off the next sucker, but not me!"  To which I say, "Sorry, we lost money on the last customer, you'll have to make up for that."  Full disclosure...I don't say that.

Here's the scoop.  Every dealer of a particular brand pays the same amount for the cars as any other dealer for that same brand does.  Being in a bigger market, or a bigger dealer doesn't mean the bigger dealer buys the cars from the manufacturer cheaper, and so can sell them cheaper.  Doesn't happen.  If a dealer is losing money on a deal, it's because they've determined it's something they are will to do on that one deal.  It's not an ongoing policy.

"That's ok, Dave, we'll show up at the end of the month when they are trying to hit that number!"  Well, how will you know whether they've hit their number or not?  Maybe they haven't and you get lucky.  Or maybe they had a good month already and have no incentive to lose money on you at this point.  Again, we're back to the other blog post of how to buy a car from me (see link above).  This relates back to the first part of the blog with those "too good to be true" prices from other dealers.  Say it with me, "If it's too good to be true, that's because it isn't true".

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So, is any of this illegal?  No.  Is it unethical?  Maybe?  I'm not going to go that far.  Do I think these are poor methods of dealing with potential customers?  Yes.  That's why I don't do that.  Find a Salesperson you can trust.  Develop a relationship.  Everyone can win that way.

Soul Red!

When did I become a guy that drives a red car?  I've never had a red car.  The closest I've ever had was a maroon Toyota pickup.  It was a 1985 regular cab, with no A/C, and a sliding opening in the back window (which I could and did occasionally break into when I had locked my keys in the car).

But now...

I call him Carlos Danger Rohe.  He was made in Mexico, and Danger is his middle name!

That is my brand new 2015 Mazda3 iSport with dark grey alloys, tint, and added Navigation.  And it's RED!!!  Well, Soul Red with Sand cloth interior to be exact.  And I'll probably put leather in it eventually.  Manual transmission of course (anyone that knows me would simply say, "well,duh").  I'd wonder if it was a mid-life crisis, except it's too soon for that (hopefully), and wouldn't my 1994 Miata M-Edition be more mid-life crisis-y?  No sir, this beauty is actually practical! It's rated at 29 city/41 highway/33 Combined, and that's less than the 30/41/34 the automatic gets [June 2015 UPDATE - I'm getting 35 Combined!].  So, since I've gone to the trouble of buying a new car just to be informative to you, dear reader, I thought it would be a good topic for supplementing the previous SkyActiv blogs.

The SkyActiv Part
What is SkyActiv?  We've had them on the lot since 2012, and we still get asked that everyday.  Rather than go into detail here, I'll direct you to my previous post "It's SkyActiv...Wait, What?"

http://mazdaintally.blogspot.com/2013/03/its-skyactiv-waitwhat.html

So what is different from before?  Well the 2012-2013 smiley-faced, SkyActiv Mazda3's only had the new engine and transmission.  That put the MPG ratings at 28/40  The new 2014 and newer have the entire suite of SkyActiv goodness.  Engine, transmission, body, chassis, suspension, etc.  Plus the new Kodo "Soul of Motion" design is more aerodynamic.  They used more high tensile steel in the frame.  They made an already efficient transmission more efficient.  The result is the increase in fuel economy.  As for how it is to row through the gears?  They based the shifter throw and shifter gates on the current 3rd Generation Mazda MX-5 Miata.  That's simply crazy!

You want specs? Mine has a 2.0L 4cylinder with 155 hp and 150 #ft of torque.  So is it fast?  No, but it is quick.  It's very Miata like in that respect.  Not particularly fast, but feels faster than it is, and it is fun to drive. [Note: Mazda also makes a 2.5L engine with 184 hp and 185 #ft of torque].  It has a 6-speed manual (or more often an automatic) transmission that will rev plenty high, though if you do some of those gas savings go out the window.  Remember the high tensile steel I mentioned?  That helps get the curb weight to 2,854 lbs.  Pretty light for a sedan.  Plus it uses regular 87 grade gasoline.

"87 grade gasoline" you say, "So what?"  Well....
A few years ago, all the car companies were shooting for the magical 40 mpg mark in their compact cars.  Some dumped some ballast (i.e. got rid of their spare tires), some used high profile tires (say goodbye to your handling), or put in a turbo-charged engine.  Now there is nothing wrong with a turbo, and they can be fuel efficient depending on how you drive them.  Get into the boost too often, and those gas savings will start to disappear.  There are even some turbos that don't require premium fuel, but they work better if you do.  Mazda was able to get the good mpg's with out sacrificing or compromising, and used none of those other little cheats to get to the numbers.  Speaking of cheating, there were two companies that actually fudged the numbers...twice.  I won't name names, but they rhyme with Tia and Blondai.

The Driving part
I've had it a few weeks now, and most of the time, I'm playing with getting better gas mileage.  That's a new phenomenon for me.  But, often enough my inner driver screams at me to have a bit more fun (within the legal limits, of course).  What I found is there isn't a big difference between my Miata and the Mazda3 when shifting.  It's a 6-speed versus a 5-speed, and reverse is in a different spot, but it's still crisp and quick.  This car actually has quite a few more horses than the Miata, though it is also heavier.  Off the line, the Miata is quicker, but the Mazda3 is faster.  Being a FWD vehicle is also a bit of an adjustment, but the car corners very well (with or without the traction control on).  The word that came to mind was composed.  I can take the Miata to the edge much easier than the Mazda3 (well, duh).  However, the Mazda3 is still a Mazda.  It has Zoom Zoom, and is a blast to drive.

The Techie Part
The new Mazda Connect system, and the Commander Control Switch are fantastic.  The 7-inch screen is nicely (and safely) placed atop a small recess on top of the dash (a bit BMW-ish).  The Bluetooth connectivity allows you to stream your music from your phone, access Pandora, Aha, and Stitcher radio.  The optional Navigation is by MapQuest and is easy, intuitive, and nice to look at.  You can voice command just about anything to do with the Mazda Connect system, but I usually find myself using the Commander Control Switch.  With dedicated Home, Music and Nav buttons, as well as Favorites and Back buttons, it is very easy to navigate.  Favorites...that's the new thing to get used to in this car.  No preset radio stations.  You have favorites for stations, favorites for contacts, and favorites for Nav destinations.  Much more computer or app-like than typical car stereo systems.  Mine doesn't have the backup camera or Blind Spot Monitoring, but those are very nice if equipped.

  

The You Buying One part
So despite all of the above, I'm a car salesman.  Why should you listen to me?  Well, you can go read why here http://mazdaintally.blogspot.com/2014/05/buying-carfrom-me.html, or you can realize that I decided to pay my own money for one, or you can NOT take my word for it and look at what everyone else is saying about this car.

Here is a list of Awards this car has already garnered:

• Road & Track "Best of Everything" - Best Economy Car
• A Car and Driver 2014 "10Best"
• IIHS Top Safety Pick+ (With available Smart City Brake Support. Models built after Oct 2013)
• 2014 ALG Residual Value Award - Compact Car segment
• 2015 ALG Residual Value Award - Compact Car segment
• One of the "2014 Most Popular on Edmunds.com" Compact Cars
• A 2014 Edmunds.com "Top Rated Sedan/Hatchback"
• A 2014 AUTOMOBILE Magazine All-Star
• #1 on KBB.com's "10 Coolest New Cars Under $18,000" list for 2014
• #1 on KBB.com's "10 Coolest New Cars Under $18,000" list for 2015
• #1 on U.S. News & World Report's annual list of "Best Cars for Families"
• #1 on U.S. News & World Report's annual list of "Best Cars for the Money" Compact Car
• "Best Compact Car" in MotorWeek's "Drivers Choice Awards"
• Kiplingers 2014 Best New Car under $20,000
• On Ward's "10 Best Interiors" List
• On AutoTraders "Must Test Drive" List
• 2014 World Car of the Year Finalist
• 2014 World Car Design of the Year Finalist

And I probably forgot some!

So, why not come buy one?  I did!

Buying a car...from Me!!!

Tips on buying a Mazda from me  

Or a used vehicle for that matter...

Well of course from me! I'm not here to get you to buy a car from someone else!  Though I suppose other salespeople may appreciate it as well.  Plenty of what follows may seem to be self-serving and to a certain extent it is, but I promise that it will help you, the customer, as well.

1. Take the day off of work and come see me on Tuesday, Wednesday, or Thursday.

There are many reasons for this tip.  

• Friday and Saturday are obviously our busy days, so if you really want me to take my time to help you as much as I possibly can, don't show up when everyone else is showing up.  
• Why not Monday then?  Monday is the day that we are often finishing deals up from the weekend.  We probably have deliveries scheduled and again, I can devote more time to you on the other days.  
• Why should you take off of work?  Because buying a car is a process.  It is nearly impossible to do in the time between when you get out of your 9 to 5 job, make it over here, and when we close at 7pm.  Will I stay late?  Of course, but just as I plan to take my time with you and give you all the respect you deserve, it's easier for me to do that if I'm not missing my very late dinner and time with my family.  Even car salespeople deserve respect, despite what you read online.
• The service department will be open.  That means I can properly introduce you to the people you will be dealing with months down the road.  I'm very fortunate that my service department has an excellent staff and reputation, and I want to be the one to introduce you to them.
• Will I sell you a car on Monday, Friday or Saturday?  Well, of course.  Don't be silly.

2. Don't come in with an UNHEALTHY and UNPRODUCTIVE attitude.

• I joke that the first part of my job is to make people stop acting like they've just stepped into the ring with Clubber Lang (that's a Rocky 3 reference for the younger people...look it up).  I don't want to fight with you.  I want to sell you a car, and more importantly, I want you to feel you had the best car buying experience of your life.  Why?  Because if you do, you're more likely to buy another vehicle from me down the road.  You'll be more inclined to recommend me to your friends and family as the guy who made the process easy.  That means I make more money.  It has the added benefit of me feeling good about my profession.
• What is your natural reaction to a person that is standoff-ish, or even antagonizing?  Do you want to help them?  Will you go the extra mile for a person that is not treating you with respect?  No.  And I don't want to either.  The Golden Rule doesn't stop when you step on to a car lot.
• I understand the the car business has quite the bad reputation.  Heck, there are still plenty of dealerships that I would consider to be shady.  But, I don't work at those dealerships.  I'm about to celebrate my 3 year anniversary (update: over 4 years now - Editor Dave) here at Gem Mazda.  That's a long time for a salesperson to be at one dealership.  I've told many customers (some that bought and others that didn't) that I work here for a reason.  I like the way we do business.  I never have to feel bad about what we do here.  And I hear stories, about other dealerships, which is why I'm staying right where I am.
• If you feel that we shouldn't make any money on a deal, how are we supposed to stay in business, so that we can continue to sell YOU cars over the years.  The attitude of "just make it up on the next guy" doesn't work.  Why?  Well what if you're the next guy?  Do I get to say that we sold the last guy at full sticker, so you we can lose money on?  Even better, do I get to tell you that the last guy didn't let us make any money, so sorry you'll have to pay extra?  Of course not.  It's an antagonistic and unproductive way of dealing with anyone.

3. I don't have supernatural powers to make you buy a car.

• Tell me your name.  Answer my questions.  Come inside.  All of the things I say or do, are to help you figure out which vehicle will work best for you.  Here's the dirty little secret no one believes.  I can't make you do anything you don't want to do!  If I could, my job would be SOOOO much easier. By giving me information, you're allowing me to help you more effectively.  That's it.  
• Hopefully you're on my lot to buy a car (even if it's not that day).  I have to be here all day, but you don't, so don't make it more difficult.  Help me to help you.  I need to know what it is you want to accomplish, so that I can help make that happen, assuming it is even remotely possible.  

4. What I need to know and why:

• What car do you want/need/desire?  Are you looking for new or used? Sedan, hatchback, SUV, truck or convertible?  4, 6 or 8 cylinder?  Blue, silver or chartreuse? Is the car for you, your significant other, your child, your dog?  Who?  I need to know this so we can maximize your time in finding the correct vehicle.
• Do you have a tag to transfer or need a new tag? In Florida there is about a $250 difference between the two.  That affects your bottom line.  And it is State regulated, meaning I can't make money off your taxes, tag, title or registration. 
• If you're financing, I need to know what your credit is like.  This affects the rate you're financing at, which in turn affects your payment.  Additionally the lender may only approve you with money down.  But I won't know that until we take a look.
• I need to know that you what you're looking to spend.  Otherwise we may be looking at the wrong vehicle.  If you have expectations of a $200 payment on a fully loaded Mazda6, we need to reassess your mental condition or at least your math skills, because that isn't going to happen (unless you have whatever down payment would be necessary to get you to that payment).  If I know your budget I can help find a car in the correct price range for that payment.  But speaking of money down...
• I need to know if you're planning on putting money down.  Here's another secret.  I don't care if you put money down or not.  I know many of us can't afford to do so.  However, let me know since it will change the payments I show you.  Not because you'll get a better or worse deal, but because of math.  Of course, you may not have a choice if the lender requires money down from you.  
• If need to know if you're financing, or paying cash.  I need to know that, because we often have different incentives based on which way you are wanting to buy.  Note: the days of "Cash is King" are over.  In the old days, it took a long time to get the money from the banks.  Now we have electronic funds transfers, so it doesn't take any longer that depositing your check.  Actually we usually make more money if you finance!
• I need to know if you are trading in your current car and what you are expecting to get for it.  There is a school of thought that says to hold your trade out of the deal.  The idea is to work me to death on the one you are buying, and then let me know about the trade, and ask for the top dollar on your trade.  That just creates friction.  Here's why.  If I sell you a car at wholesale, I'm not giving you retail for your trade.  Dealerships are in the business to make money (see the last bullet point under #2).  If you want retail for your trade, then I want retail on my sale.  If you want to buy at invoice, then I need to show you wholesale for your trade.  Sounds reasonable, doesn't it? 
• Do you owe any money on your trade?  If you do, guess what?  We have to pay off the lien holder before any remaining equity can be applied to your deal.  Conversely, if you have negative equity (owe more than it is worth), that still has to happen, which means your new purchase goes up the exact amount your are "upside-down" in your current loan.
• When are you planning on making a purchase?  If it is anytime later than the end of whatever month we are in...the numbers I will give you won't be any good.  Incentives from the manufacturer change monthly.  Your trade value also changes all the time.  I'm not opposed to helping a customer that isn't buying for another 3 months, but let me know that.  If it is today, let me know that as well.

In conclusion

I'm certain I've forgotten some stuff.  I'm sure I'll get negative feedback from the people who hate sales people, and car sales people in particular.  But, hopefully this can help you when you go to buy a car.  I can't guarantee that your salesperson works the same way I do.  I can't say that they aren't at one of the shady dealerships.  But if they are...maybe you should just come buy a car from me.  I've already told you how to do it!