New / used car sales exec - ask me anything

[Timeonmyhandsfornow]

Hi,

Long time lurker, first time poster!

Been selling cars a while now, and noticed someone asking about the trade in a thread asking for AMA topic suggestions - so feel free to ask - about how it was up to a month or two ago, anyway. Who knows what we're going back to? !

I'm interested, thank you!

• Can you tell us what makes of cars you sell?
• What's the average reduction in price you can give?
• What does it depend on?
• Any hints or tips about how to get the maximum reduction?

Hi, thanks for your question.

I work at a main dealer, and whilst I'm not going to disclose which brand, it's toward the higher end of the market.

Selling ten to twelve cars per month, assuming you hit any other KPI's, will provide a good income in a higher end dealer. In a volume franchise that figure would doubtless be higher.

Discount levels vary enormously, so it's difficult to give an average figure, but there are plenty of reasonably accurate guides to the market for a particular car on various websites, and some of the online forums might be useful for you as well.

The level of discount will firstly be determined by the car you're trying to buy. If it's a fairly mainstream model there'll be less variation than on more niche models, but most dealers are prepared to be flexible on the right car. There are models where discounts would be minuscule, others where you can realistically get a deal which would be closer to a wholesale figure than a retail one!

Hints and tips?

Do your research. For example, know roughly what your PX is worth in the trade, know what rate your bank can lend money at, that kind of thing. It's so much easier for the consumer now than when I started selling cars!

I'd suggest if you're committed in your mind to buy at the right price to signal that early on in proceedings, and work with the sales executive. We only have limited discretion, and I've worked in regimes where even the traditional 'full tank of fuel' last ditch clincher had to have managerial sanction!

Approach the process with three potential outcomes in mind - your ideal price, the price you'd be prepared to take and an exit strategy. I'd also suggest being prepared to take a part exchange out of the equation as well - unless it's a model the dealer will retail a px is a bit of a hindrance to you and them, and it muddies the water. There are now many relatively stress free ways if selling cars into the trade if an ad on gumtree isn't your style!

Above all, timing and flexibility are key. Being prepared to compromise on colour and specification, to buy a physical stock car and to take delivery before the end of the month, or the quarter will bring by far the best deal for you, whether it's a new car you'd like or a used one.

HTH

Thanks. This is interesting. Hope the market picks up for you when we all go back to work again!

Thanks for the good wishes.

I think things long term will change for sure. In the short term, both dealers and manufacturers will want to jump start the market, so the bargain hunters will all be out, I suspect!

I'm nowhere near changing car at the moment, but I'd be really interested in your views on PCP
I had a PCP on a fairly expensive car. Put down a decent deposit, paid my rent for three years, and found the cost to buy it was more than the car was worth. So I ended up giving it back and came away with nothing.

Only just spotted this, back at work now so not so much time in my hands!

I've been selling PCP for years, and am firmly of the opinion that the optimum way of using it is with a minimal deposit. Unfortunately that usually means a relatively high monthly payment, but still results in a payment much lower than a traditional hire purchase agreement would require.

Paying a high deposit lessens the chance of there being any equity at the end of the term, and in an ideal world that discussion would have taken place when discussing the purchase.

Maybe you can explain something to me.

We bought a car 5 years ago on finance. The balloon payment (I believe that's what it's called) is coming up on the loan. Let's say it's about £7k. The car (supposedly) is worth about £8k in trade in.

If we wanted to swap the car for another one, how does that work? If the other car is more expensive (e.g. 15k) or around the same price (8k). Especially if we have little to nothing to put down on a deposit. I've written to the finance company to ask them and they have just ignored us. I don't especially want to go into a dealership because we'll start getting the hard sell, but I just want to know how it would work.

Also, is this ONLY possible when the balloon payment is due/the loan contract runs out, or would we be able to do it say in a year's time instead?

Using the figures you provide, it would be very simple. You sell your car, pay the final, or balloon, payment and carry the remaining £1k over to whatever you buy a deposit on that. If you use a dealer that would work seamlessly for you, they'd settle the existing agreement and arrange a replacement agreement for the new car at the same time.

If you choose not to use a dealer, the maths stay essentially the same, but you'd need to get the buyer of your current car to make the payment in two parts. One to your current finance company, the remainder to you.

The balloon payment is due, one way or the other, at the end of your contract. You can settle a car finance agreement at any time by obtaining a settlement figure, and simply paying that by means of cash or by selling / px'ing.

Hope that helps.

Thank you! For some reason I didn't see this at the time so have only just come to look for it :)

I want to buy a nearly new car. Don't need finance.
I loathe the whole process with a passion.
The last few times I've bought cars it has seemed they were keener on selling finance than cars and wouldn't budge on price for cash.
Is it true that car dealers make more money from finance commission than cars?
There are now many relatively stress free ways if selling cars into the trade if an ad on gumtree isn't your style! How please?

Do your colleagues ( or you?) find that customers by themselves don't buy cars?

I ask because of the number if times I was blatantly ignored at a number of mainstream dealers last year when I was actively looking to buy a new car.

As a widow in my late 50s I do nit have a partner and was very frustrated at how difficult it was to actually be taken seriously. And once I had attention of a salesperson I felt very patronised.

In the end I bought a pre-registered car I saw online. It was much easier!

So are customers like me usually bad news?

@Juo Car dealers wouldn't survive without profit from finance and insurance. That's the reality I'm afraid. They're almost certainly FCA regulated as well, and that means strict processes, irrespective of the means of payment the customer intends to use. It's a matter of treating the customer fairly which i would paraphrase as meaning giving you all the facts in order to let you make an informed decision. How that comes across to you will depend on how the sales exec you're engaging with approaches it, and their level of experience. I'd like to think I manage to cover all I need to cover largely conversationally, but there still comes a time when you have to deal with all the paperwork!! My advice is to do your best to grin and bear it and accept that the sales exec is doing what they need to do

We Buy Any Car and similar business will facilitate a relatively straight forward sale for you. Certainly it's a good idea to get a value from their website before going into a dealer as it would establish a realistic px value in your mind.

@BeginningBridge I'm genuinely sorry you had that experience. Unfortunately I do think lone women don't always get treated brilliantly by the trade. These days many women buy their own cars, so any sales exec who doesn't appreciate that reality really is missing a trick! In my view, anyone taking the time to walk into our showroom should be given my best attention. I'm a middle aged bloke, and try hard not to be patronising but I don't know how successfully I manage that!

The simple answer to your question is no. People like you aren't, bad news. It's a work around, but next time you have to replace your car try going in the showroom on, say, a Tuesday afternoon. It shouldn't be the case, but I'd suggest you'd stand a good chance of getting proper attention when it's quieter. Speaking for myself I'd far sooner spend time with a person physically in my showroom than spend it hunched over a phone making prospecting calls!

We had a hugely frustrating experience last year buying a 7 year old S3 with about 60,000 on it. Love the car (after some expensive repairs to bearings and discs), but we spent almost an hour explaining we didn't want some sort of repair insurance at some insane price that's only valid on cars under 7 years. A different guy tried again when we went to pick it up. Then got weeks of phone calls about it. Obviously we're never going back there, but I don't understand why sales people often seem so poor on the detail - we spotted it, but what if we hadn't. How can they even try to sell a product the customer can't use?

I'm not an expert on warranty and related products, all the cars I sell are automatically supplied inclusive of such protection, but the answer is they shouldn't be trying to sell a product that is of no use to the customer.

I doubt that dealer is FCA regulated, their conduct in your case would land them in hot water, although I believe some types of warranty cover aren't regulated products.

As an aside if I bought a 7 year old S3 I'd definitely look online for some mechanical cover. They're robust cars generally, but if, for example, the turbo goes south you'd best be sitting down when presented with the bill!

I ‘business’ lease a suv which is due to end next month, and due to Covid haven’t really been able to look about yet. Instead of handing next car back am considering is it pcp or a personal loan, but equally I do like to change car on average every 3/4 years. Budget of around £500pm but ideally no deposit. DH says lease as then you don’t have the depreciation but I hate spending all that money each month with nothing to show at the end of the 3 years. What would you suggest?

By 'business' lease, I assume you mean contract hire? Depending on your annual mileage £500 / month gives you a wide choice of cars, but unless there are tax implications if you are actually funding the car as an actual business in my opinion PCP is probably similar in terms of payment but offers greater flexibility if you wish, or need, to change your car within the term signed up for.

Ironically, your husband's comment about depreciation is both right and wrong! With contract hire, what you're effectively doing IS paying the depreciation! Happy to expand on that if you like. It's just not as 'in your face' when compared to a purchase, where the loss is very visible. If you're a private individual you'd pay VAT on contract hire payments.

Ultimately, unless you're able to pay much higher monthly payments you'll likely not actually own the car with a PCP, but you might have some equity at the end of the term to carry over into the next car.

When people are taking out PCP, hire purchase or lease, do you make them aware of the consequences of the deals if you can no longer make payments or your situation changes (ie you die or seriously ill)? This is something we are having to deal with at the moment and as a result would never touch one again.

The selling of all the extras really annoys me. It adds so much unnecessary time to the process.

We always buy our cars outright. Despite explaining this we are expected to sit through the hard sell. We managed to cut it a bit short last time by explaining that we fully understood the process as one of us had advised the head office on the tax structuring of the offering... the sad reality is that most car groups are now in reality finance houses and that is how they make much of their money.

Further to the question from Beginningbridge, I went to a main dealer with a view to spending about £14 cash on a used car last year. I am a woman in my 50s and mentioned my husband in passing when the salesperson asked what my plans were for the rest of the weekend. Later on the salesperson asked if my husband would be OK with me making such a large financial decision by myself.

Is this a routine question? I've heard that double glazing salespeople have to have agreement from partners but that's because they jointly own the house I guess. Or did I just encounter a sexist salesperson. I did complain to their car maker in the after sale survey but got no response.

The only problem I've ever had was when trying to pex my ancient SMax for a something 4wd and had in mind the overall price/outlay and the new to shaving young man on the phone said "now Miss, what you don't understand". He got a piece of my mind and a replaced receiver.

Bought a new CRV from a Honda dealer at a good price and good pex value.
Do you agree that manners and respect are everything?

@OhTheRoses Deal with the easy one first!
Do you agree that manners and respect are everything ? Not everything, no, but hugely important and free of cost to apply!

@Glitterb It's impossible to cover all potential pitfalls and circumstances that might arise during a three or four year period. Before signing a car finance document we are obliged to provide you with a SECCI, or Pre Contract document which outlines the obligations and responsibilities of the finance company, the supplier and the customer. The unfortunate situation you allude to would be covered in outline in that document. I always ask customers if they've any questions about that content before asking them to sign any documents.

I don't think you'll find too many differences between a car finance loan or any other loan or mortgage in such a situation. They're all subject to the same consumer protection legislation.

@timeonmyhandsfornow may I respectfully disagree. When one has choice and money in the bank - no dependency on budget or HP, they are absolutely everything and without them I reserve the right to walk away. I drove into that dealership in my 2010 SMax with 135k on the clock and a pristine service history. I have a feeling that if I'd driven in in DH's Gran Cabrio the little idiot would not have spoken to me as though I were meaningless and with a glint of misogyny.

Manners are everything when the client has a choice and I would venture to suggest that used car dealers look beyond the veneer.

@EasilyDelighted I certainly wouldn't phrase the question like that! But it's standard practice to ask if 'anyone else' would be involved in the final decision. Is always ask it irrespective of the sex, age or any other characteristic of the person I'm talking to. It could be a life partner, a parent or business associates.

The answer would then inform how I took it forward from there.

Most people usually would volunteer the need to involve others, having said that, overtly or in an implied manner during the conversation.