Inside the Mind of a Car Salesman
It's no secret. In terms of sheer comfort, shopping for a new car ranks right up there with passing a kidney stone, root canals and anything involving your proctologist. But it doesn't have to be that way.
A lot of the tension in car buying comes from customers' fears of being taken advantage of combined with a dealership's desire to eke as much profit out of a sale as possible. It's finding that happy medium where both sides often experience, uh, slight discomfort.
Chris Fenton, a Detroit-born car lover grew up going to auto shows before eventually getting his M.B.A. in finance from Michigan State -- a rarity for car salesmen. Now he's a Sales Consultant at Keyes European in Los Angeles, Calif.
Recently, we sat down where he shed light on the salesman's perspective in hopes to bring two classically opposing forces -- salesman and client -- just a wee bit closer.
Inside the Mind of a Car Salesman
- How many cars do you sell a month on average?
- Chris: Every month varies. Also, economic conditions are very sensitive. There's times when the stock market has a good week and it gets busier in the dealership ... April, tax season, is fairly slow ... people are spending money on taxes, the last thing they want to do is buy a $50K car. But a typical month on average, I'll be between 16-22 cars.
- The more you like someone, the more apt you are to do a deal with them, no?
- Chris: Absolutely, 100%. If there's someone I enjoy working with ... I'll give them the best deal I can. If I have a good rapport with him, I'm going to get his friends, his family and I'm going to get referrals. If some guy treats me with disrespect ... there's no advantage to go to work for him.
- Finish this sentence: The one major thing customers don't know about dealerships is __________.
- Chris: One thing a customer doesn't know about a dealership is that this is a business. It's about profit and loss. It's no different than the business that the customer works for ... Some customers think cars are a commodity that can be sold for $10K less than cost. It doesn't work that way ... If you're a dentist, are you going to clean people's teeth and lose $200 every time you do X-rays? No, you're not going to do that. So, why should I sell a car and lose money every time? It doesn't make any sense ... You have to come in with realistic expectations otherwise you're going to be disappointed and walk out with the same car that you came in with.
- A car salesman trying to coax me into a deal once said, "Ah, do it for me." Interesting tactic, no?
- Chris: Interesting tactic. Not a tactic that I like to use. I like to make the whole car buying process about the customer. I want the customer to think, feel and act. That's what I'm paid to do. They have to do it because they want to ... To me, that's a high-pressure tactic. I'm not a high-pressure guy. In my opinion, I think high pressure turns people off. I think it shoos people away rather than reels them in. So I will never use that tactic or anything like that. I think it's unprofessional and classless.
- What's the worst mistake a car buyer can make during a negotiation?
- Chris: I wouldn't say there are so many mistakes, but I think it's just how you approach the negotiation ... for me, again, I think it's about having realistic expectations. It makes it easier for myself and it makes it easier for the customer. Most people come in with a trade-in. Do some research on your trade-in before you come in. I'm going to hit you with a number on your trade-in that pays for your car. It might be what you want; it might not be what you want. But have a realistic expectation of what you think your vehicle's worth going in there.
- What's the worst mistake a car buyer can make during a negotiation? (cont'd)
- Chris: ...Understanding that when you trade a car into a dealer, it will always be a little less than the Kelley Blue Book value. For instance, we have a lot of expenses at the dealership. We buy your car. We pay cash for the car. We finance the car. That costs us money. And then the car sits on the lot for 60 days -- that costs us money. We advertise the car. No car comes in in perfect condition. There's dings, dents, scratches, brakes, tires, oil change ... The average car we take in on trade needs anywhere from $1-2K worth of work. So for me to take that car in on trade, I can't give you Kelley Blue Book value, put $2K into the car and expect to sell your car and make any money.
- What's the secret to making a transaction go smoothly?
- Chris: The best thing to do is be honest. Honesty. Don't lie to me. Car salesmen have a reputation to be liars, cheaters, stealers and rightfully so. A lot of them are unethical and dishonest. I try to operate differently. I'm always straightforward and honest and I expect that from my customer as well. Don't come in here telling me that you got this price that never existed. I get that all the time ... If I know that you're dishonest and unethical, it's not going to work out well for you in the end.
- Can you give me an example of a situation relating to one person and what they did wrong?
- Chris: I just spoke about honesty and how important it is. A customer told me once that he can't go over $400 a month on his car payment, that's all he can afford and he pays $400 a month now for his Mercedes ... 'That's my budget, I can't pay more than $400' ... Of course, on his credit comes up Mercedes Benz Financial, but his monthly payment is $525 ... When someone is just going to blatantly lie to me, I'm not going to go to bat for them.
- I was once told to negotiate the sale price of the car first ... is there a smarter way to do it or does it really matter?
- Chris: I think what you said is fairly accurate. It really depends on where you're doing business and how ethical the place is you're doing business at. For instance, there's always a way for dealerships to play with numbers. For instance, a guy can give you a $5K discount, but he'll do something in the back to raise the monthly ... so if this person is just focused on selling price, they [the dealership] have the ability to change the monthly to make it to dealership's advantage. My goal is to be as transparent, open and honest as possible.
- Is the end of the month the best time to buy a car?
- Chris: Every month is going to be different ... but for the most part, about 90% of the time, yes, it's to your advantage to buy at the end of the month.