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