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If you're lookin' to buy a new car...

Discussion in 'The Lounge' started by Wannabitawerm, Mar 4, 2005.

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  1. Wannabitawerm

    Wannabitawerm Flatulent Entreprenuer

    ...and you don't get any discounts, send me a PM. I work at Ford and we have a friends plan we can use. The GM guys can get them too. I'm sure the Chrysler guys have them as well. It only benefits us all.

    I saw an article once that described the benefits, financially, for buying a domestic auto over a foreign one. Even the foreign cars that are made generate very little income over the term of the loan back to this country.

    I believe on a $20k car (domestic) the amount of financial benefits over the course of a 60 month loan (taxes, wages, insurance, etc.) it can generate roughly ten times that amount back into the ecomomy. Whereas a foreign auto generates about 1/10 the amount because most of the money goes back to the parent company.

    I know firsthand the issues domestic cars face from consumer groups and individuals as far as quality is concerned. Domestic car makers are required to report every repair for quality reporting whereas foreign auto makers are only required to report major repairs. That makes their quality look better than it is. (Gotta love those foreign trade policies and incentives.) Don't get me wrong, foreign autos are quality, but the big three's quality has never been better and we strive for nothing less than 100% quality.

    Any opinions and knowledge on this subject would certainly be welcome as I tend to be a bit bias on this subject. What do you think?
     
  2. crankus_maximus

    crankus_maximus Crankus Baitus Maximus

    I would like to see that data, seeing as how you are biased. That's not a slam. I am biased on the other side of the ball. I own 2 foreign vehicles (foreign by title). Both are made in America by American workers with parts made in America. They consume fuel that is refined and distributed in America. They were sold in a dealership owned and operated by Americans. They were shipped to the dealerships on trucks that were most likely owned and operated by Americans. The are serviced in facilities owned and operated by Americans. I use motor oil and other car care products that are American. I buy car insurance that is provided by an American company with American employees. i drive on roads that are American and built/repaired by American tax dollars (mine among them). I could keep going.

    My point is this, I'd like to see how my "foreign" autos don't generate the same money for the economy. Can you enlighten us please with your source?

    I'm really not trying to be rude, and I know you are proud of your product - but you did ask for opinions.

    By the way, I love your Mustang! You are a lucky SOB.
     

  3. flathunter

    flathunter Mellons mentor

    I bought a new Ford Ranger last year and love it!..with that being said, I work for a company that supplies parts to Honda in Marrysville
     
  4. catlover

    catlover Banned

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    I'm kind of at the bottom of the bux chain. We do own 2 American vehichles. Both Fords and both Escorts(I've had incredible luck with them for dependablity). Truth be known, it's a Mazda with a Ford emblam.
    Also truth be known, I worked for a GM dealer in Lebanon a few years back. Before the big drop in interest rates. We couldn't give the incentives to the GM discount. In several cases it was cheaper to go in cold. The only people entitled to GM discounts were family members(including parents and siblings).
    Catz
     
  5. Orlando

    Orlando Set The Hook!

    Those emloyee discounts aren't all that great. A friend worked at the Ford Lima engine plant and offered the discount to me and I said no thanks. He couldn't believe I bought the truck cheaper than his discount. You can buy almost any vehicle at or a little under dealer cost. How? There is a 3-4 percent hold back, so if you buy it at cost they are still making 3-4 percent. Not a bad profit on a $25000.00 truck. Anyway, yes I buy American products when I can, Ford all the way. Please don't turn this into my truck brand is better than yours. Just my 2 cents.
     
  6. Fastlane

    Fastlane Fishless as usual

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    Why is it that nearly everyone thinks it's a crime for a dealer to make a profit? 3-5% is not profit. If a delaership sold every new vehicle to the public at invoice, making only the profit of the holdback, they would sink fast. Not only that, they would not be able to keep quality sales people, managers, service techs, etc. They would not be able to go the extra mile to ensure customer satisfaction.
    Compare the auto industry with just about anything that we all buy. Furniture, sometimes 100% or more markup. Electronics (excluding computers) have 30-70% markup. That Big Mac you had for lunch, well how about 1000% markup! A can of Soda has about the same markup. Infact, there is almost nothing you can buy for less than a 30-40% markup. And we pay this extremely high percentage every day many times a day. Think about it. Go to Mcdonalds and tell them they are making too much profit on that Big Mac and you are prepared to offer them a fair 3-4% profit which would equate to about $.25 total.
    But when it comes to buying a car, a dealer is extremely lucky to make 5% on average. Sure, used cars often times bring in a higher margin but average in the many new cars sold at 3-4% and it brings the average way down. Now, when you buy a car using the incentive programs, the dealership can make a fair profit since the Mfg pays the dealership back for some of the lost profit. This helps generate more income into the local economy. More income means more taxes which in theory will better the local area by putting more tax dollars to work for you. I know that this is a political sore spot but those tax dollars pay for fire and police departments, street and road repair, and all the things we take for granted.
    This only scratches the surface of what I am trying to get across here. There are many other points I could make on the subject but I will not touch on them here as I don't want to start a flame war. I merely wanted to shed some light on the subject.
    Lastly, before I get slammed with the question, yes I do work for a dealership. I am not in the sales department though. I am a finance manager for secondary finance (bad credit). But, I have worked in auto sales, retail sales, home sales, and other industries as well. I have working knowledge of profit margins in these other fields.
     
  7. catlover

    catlover Banned

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    Tell 'em.
    We all want a great selection of colors, models, options or whatever. Some people think those vehicles belong to the factory...wrong. Everyday they sit the dealership is paying interest. They have a vested interest in selling them. The one guy who can make a deal is the GM, he knows the bottom line of every unit on his lot. If you know what to shop for, everybody can be happy.
    The smartest move is "pepping" a vehicle. Low mileage, almost new. Usually a return from fleet or rental. You can pick one from anywhere in the country and buy it through your local dealer. Again here, as was said in the first post..You have to know somebody.
    Catz
     
  8. Orlando

    Orlando Set The Hook!

    You are absolutly right they pay interest on the vehicles sittin on the lots, thats why I order mine and get a better deal. I have no problem whatsoever with the dealer making 3-5 percent, what gets my blood boiling is the price they quote you until they find out you know their cost. Most times it's thousands over and above the 3-5 percent holdback.. Sorry but not me, I know a guy who made over 70,000.00 last year sitting on his butt waiting for customers to come in. I gotta bust mine every single day to make a living! When you go to buy a TV or grocerys the price is clearly marked and everyone pays the same amount. The cars sales industry has made it hard on themselves . How many people really trust a car salesman, I would say more don't than do. Sure there are some honest ones out there but as a whole the greed takes over.I not against profit but why not ahve a set price that they all sell by. I;m tired of hearing about people being taken by greedy salesmen. my elderly father in law baought a new vehicle a few years back and he was tickled with the deal. I asked him what he paid and he didn't even know. He was just glad about the monthly payment! Salesman just asked how much he could afford a month. Screwed him on the trade in but made it look good with the monthly payment. I'm done with this post as it's gotten way off subject. Probably my fault. Just my 2 cents
     
  9. catlover

    catlover Banned

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    The dealer I worked for Added $800-1500 per unit for z-bart protection. Sounds good? It was a paint shield. Cost >50 to do in the service area. I was a mandatory upgrade.
     
  10. Wannabitawerm

    Wannabitawerm Flatulent Entreprenuer

    Crankus, very good points. When I talk about the money generated, I'm not talking about the money generated after the purchase for maintenance, insurance, etc... sorry if I did not communicate that well. I meant the initial sale. I will look for the article and try to post a link.

    And, by the way, Any foreign auto dealer, however owned and operated by an american, still pays a healthy royalty to the company it represents. Marysville is not the american workers haven it says it is, at least not by the workers I have talked to and the stories I have heard.

    Again, I may be misinformed, but that is why I value everyone's input.

    I married with three and a half kids, I ain't afraid to eat crow once in a while. :D
     
  11. Wannabitawerm

    Wannabitawerm Flatulent Entreprenuer

    :eek: I found the article. It was in the Plain Dealer about 6 months ago. If I want them to dig it out, it will cost me 50 bucks per half hour to search and 10 to send me a print. Using the link to the archive would cost me everytime somebody used it. I don't want to be that right. :p

    My wife would kill me and I'm really not into the whole doghouse thing right now. I will find a way to get the article sent and them copy it if I can.
     
  12. crankus_maximus

    crankus_maximus Crankus Baitus Maximus

    Thats cool. MY point was this: There are American's employed in all different periods of a vehicle's lifecycle. They all have families that they have to feed. Buying a "foreign" vehicle is not going to take money from the average joe's pocket. That's all. I get really frosted when an implication is sent (not syaing you did) that because I bought a Honda and a Nissan that I screwed Joe-schmo out of a job. I just don't buy it.

    The Plain Dealer really has you over a barrel, don't they? The Dispatch is free to register (in Columbus), as long as you have a subscription.
     
  13. catlover

    catlover Banned

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    Here's a good one. About 20 years ago in Denver we went to the stockshow. Some clown getting sloshed in the parking lot threw his empty beer can at my friends toyota, and said buy American you commies.
    I wonder how auto-workers he kept employed with his 15 year old beater chevy?
    Catz
     
  14. shuvlhed1

    shuvlhed1 Banned

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    yes it is


    I don't believe that is true. show us the numbers


    Since you are so concerned with profit, the next time you go and buy your groceries at that store (which by the way, operates on about a 4% profit) please offer to pay more that what you are charged. And the next time you go to fill up you car with gas, please offer the station to pay 3 or 4 bucks a gallon, so they can increase their 3%-4% profit margin as well.


    Oh please. Since the average holdback is over 3%, that means that all cars are sold barely over invoice. If the deals were that good all the time, people would like car salesman, not despise them. And you just said that selling for holdback only would sink a dealer fast. Which is it?


    The dealer always makes a fair profit. If he didn't, he wouldn't sell the car. Period.


    I figured that out about 2/3 of the way through your post. No offense, but everything you say is straight out of the dealer handbook. There are so many dirty tricks and dealer slight of hand tricks out there there are entire websites devoted to them. Just look at what catlover posted. Things like that go on at almost every dealer out there. Here a fee, there a fee, everywhere a fee fee. At almost 100% profit

    If you want to buy a car, don't listen to a salesman or a finance manager, or a fleet manager, or anyone at the dealer. Listen to your gut. And do your homework.
     
  15. Orlando

    Orlando Set The Hook!

    Amen shuvlhed1 ,I thought I was all alone here. A dealership can survive on the holdback as there is a local dealership that sells cars at $70.00 over holdback, so it can be done. If salesmen weren't always trying to hit a "home run" and everyones price were the same it would be more fair for everyone. If no dealership can survive on hold back only how come they are more than happy to sell me a vehicle that way. I do it every five years and have done so for many years.
     
  16. crankus_maximus

    crankus_maximus Crankus Baitus Maximus

    3-5% is a very respectable profit margin on a large ticket item, such as a vehicle. If you sell a $25,000 vehicle and make 3-5% you are going to pocket from 750 to 1250. Now multipy that figure by how many units are sold, lets say 5 a day (very conservative average), and you pocket 3750 to 6250 a day. Then multiply times 6 business days in a week and you start to see the profit of 22,500 to 37,500 a week. Now multiply times 52 weeks and you get from 1,170,000 to 1,950,000 a year. Now, subtract some operating expense and you still have a hell of a way to put food on the table. So, I agree with Shuvlhed1. Do the math and your homework ladies and gentlemen, cause you can bet your first born those dealers won't lose anything on that deal.
     
  17. Wannabitawerm

    Wannabitawerm Flatulent Entreprenuer

    I definately agree with you guys. The dealer I worked for is the same one I do business with is very successful. (I can't help but think I myself have put somebody's kid through college! :rolleyes: ) 3 to 5% is a great return. Look at your interest rates. I would love to get a 5% return on some of my investments that quick. I'll tell you what, some of the markup on the higher end vehicles is substantial. Large $35k to $55k SUVs are cash cows. The profit on some of them after all the fees can be as much as 10 to 15%.

    By the way Crankus, that Honda wouldn't be our competition if they built crappy vehicles. If there is any thing we have learned from the foreign auto companies, it is if you're not watchin' your plate, somebody could steal your lunch! :cool:
     
  18. crankus_maximus

    crankus_maximus Crankus Baitus Maximus

    Thats a cool way to look at it. I never said that domestic was junk. Some of their stuff will never be able to be duplicated by foreign automakers. However, for the vehicles I got - they were the best at the time. The Honda can't be beat in resale value and nobody made a mid-size crew-cab truck with a 6ft bed that rode as nice as my Frontier does.

    I think domestic automakers have made up a lot of ground as far as quality is concerned, but they still have some improvements to make in service and standing behind their product (not so much the automakers as the dealerships). I NEVER got good service from a Chevy garage in the C-bus area. Thats a crying shame. When I sold my cream puff I couldn't even get close to bluebook. That won't be happening with my Honda. My Nissan is a different story. Anyhow.

    My examples would be for the average situation at an average dealership. Its still staggering.
     
  19. Speaking of cars... I'm in the market for a used 1999-2003 foreign car. I most likely will buy a HONDA (Civic or Accord low miles). I've owned several Hondas. In fact the current Honda I have has 192,000 miles and it runs well but showing definate signs of body detioration! If anyone can help me out PM me.
     
  20. crankus_maximus

    crankus_maximus Crankus Baitus Maximus

    You need to check the Used Car lot at Roush Honda in Westerville. I delaed with Tom Davis and got good deals on both of my vehicles. I have a 99' Civic EX and its been a good little car. It was the last model year with the double wishbone suspension up front. It's my wife's car and she loves the little 5spd. She prefers a stick. hehe.
     
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