Friday, April 6, 2012

Six Things I Learned Selling Cars...

1)   Not all sales people are bad. Not all are good.
This goes for any occupation. In every workplace, there are good apples and bad apples. Sometimes it’s easy to spot the “bruised” ones right from the beginning and then other times, it takes much longer to recognize the “rotten” ones.

Either way, whether you’re walking into a car dealership or a new relationship, always keep your guard up and be careful who you give your trust. Just because someone is nice to you and seems interested in your career/family/life, it doesn’t always mean they have your best interests in mind.  

2)   Know your facts before you show up.
The customers who snag the best deals are always the ones who’ve done their research. Before showing up at a car lot, make sure you know exactly how much your trade-in is worth ( & and how much the vehicle you’re buying is worth.

The dealership I used to work for would never advertise the price of used vehicles. Why? Because they believe the buyer is oblivious. They think the customer has no concept of vehicle worth. They believe if they wait to reveal the price until after the test drive, they can make the buyer fall in love with something they can only afford via high monthly payment.

Often times, salesmen or sales managers would add $2,000-$5,000 onto the price of a used car. Again, you may ask why? Because they are brazen and know they can get away with it. All it takes is for a good salesman to build rapport, get you to fall in love with him AND the car, and then a warm, fuzzy feeling takes over and you stop questioning his sincerity & honesty. Where I worked, I witnessed salesmen high-fiving each other after “ten-pounding” a customer… meaning, they made TEN THOUSAND DOLLARS off of ONE PERSON. How? By giving them too little for their trade-in, charging them way too much for the vehicle, extending the term to 75 months, and hiking the interest rate.

This is pretty scary, isn’t it? Absolutely, but remember, not every sales person operates this way. Like I said before, there’s always a few “rotten” apples who give the rest of the bunch a bad name. Not every sales person is a greedy con artist. There are some who are genuine.

3)   Never buy out of emotion.
The easiest way for a salesman to get you to buy a vehicle is to make you fall in love with it. In my training, I learned “the feel of the wheel seals the deal.” Meaning, we get you into the driver’s seat and you automatically take mental ownership of the car. Without saying a word, you start thinking about how the vehicle will improve your life/appearance/status.  All of sudden, you NEED this car.

Sales people are trained to “investigate” you to figure out what your personal hot button is. If you are someone who nearly died in a car accident, safety is probably the most important feature to you. But if you’re the person trying to save money on gas, fuel efficiency/economy is key.

A good sales person will discover what makes you tick and they will craft their presentation to fit YOUR wants and needs. Then, once they’ve said all the right things and taken you through the process, it will be very difficult for you to say “no” to buying.

4)   “Buyers are Liars”
This is a favorite saying used by car salesmen. Very ironic because most people think they are the liars. But from my experience, I say both sides are guilty.

During my four months of wheeling and dealing, I NEVER once lied to a customer…but you can bet, I was lied to every single day.

There was this one man who looked like the Hispanic version of Captain Hook (creepy moustache). He was in his mid 40s and had his heart set on buying his wife a brand new Chevy Cruze. Of course, I gave a stellar presentation, explaining every single feature and benefit, and then took him on a test drive.

For the next hour and a half, I listened to him go on and on about how much money he makes shearing sheep all throughout Texas. He bragged about his “numerous” rental properties and how he “buys cars all the time.” As you can imagine, I was excited because I thought this was a done deal. Wrong.

We get back to the dealership, I obtain all of his information, only to find out this man has zero credit and no bank would loan him a penny. Thanks to him, I wasted an entire afternoon with someone who couldn’t even buy. AND to add insult to injury, I didn’t make a dime because without a sale, there is no income.

5)   Focus on price, not payment.
You want the best deal?  Pay more attention to the PRICE than the payment. Car salesmen are trained to get you to focus on one thing and one thing only… your monthly payment.

$300/month doesn’t seem so bad, right? Well, (without accounting for interest), a 5-year loan at $300/month would ending up costing you at least $18,000. A 6-year term at $300/month would end up costing you at least $21,600. In a year, that’s a difference of over $3,600!

Just by getting you to focus on the PAYMENT instead of the price, the term, or the interest rate, a car dealership can make THOUSANDS of dollars off of you, without you realizing it. I know this all seems like common sense, but you have no idea how many educated people get taken advantage of every single day.

With that said, know what interest rate you qualify for BEFORE arriving at the dealership. If you don’t, the dealership will give you highest one you agree upon. After all, the partnerships they have with national banks allow them to profit off of every loan they finance in-house.

By negotiating the PRICE, you will ultimately pay less. No dealership wants to lose your business over a few dollars. In fact, I’ve seen customers who have bought a vehicle at a price lower than invoice, just because they stuck to their guns.

6)   Walking away is your best bargaining tool.
When the salesman just won’t budge, remember you can always walk away. Leaving the dealership is the last thing they want you to do because they know, once you’re gone, you may never come back.  Use this to your advantage. Nine times out of ten, they will either come down on the price or offer you a better deal.

Great article on the psychology behind selling:

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