that's why you're not supposed to even mention method of payment until it's time to pony up. let them think you're financing, it's not you're problem, then when it's all set, start counting out $100's.

In normal sales deals (not scion), the trade-in should be one deal, the new car is another, financing is yet another. keep it all seperate.

Every new car I've ever bought (which has ranged from 18k to 100k) I've always refused to discuss method of payment before I've gotten all the info I wanted and I thought the price was OK. Always seemed to work for me.

If they ASSUME you're gonna finance - fine..

the other side of the coin is.. if you can qaulify for extremely low fixed rate APR's like 0, 0.1% etc - you're an idiot NOT to finance at the dealer. Paying cash in the instance COSTS you money. You could've financed the car, put nothing down, put the cash intoa short term mutual fund and in 48, 60 months... you MADE money AND had a paid for car. You used the dealers money to pay the interest.

Watch your money and it'll watch you.

 

Yes, there is less paperwork involved, but there is still less money involved. If you actually read Cliffy's satement, he is talking about a traditional purchase, not Scion. I would love it if cars were cheaper, but they aren't. The dealer does not control the cost of the cars they sell. All they can do is sell them and try to sell for more than they paid. I do not see what is wrong with a company making a profit. It is not illegal, it is not dis-honest. It is dishonest to add to the bottom line without the customer knowing, but that is not what is being discussed here. No matter what a dealer does, there will always be someone who is always going to dislike us and think we are scum. They do not need to buy from me. In fact, I would love it if that person would have the ba**s to tell me son that I am a horrible human being.

You state that you dislike us, and that is fine, but Cliffy was being completely honest with you. You still say he is not being honest. That is your problem, not the dealer's.

 

I agree, do not tell the dealer how you will pay. At my store, I teach the guys to not ask. We do not care until it is time to pay. We try to keep it separate. Some customers like to tell us everything involved before it is time, but we do not ask.

 

If I'm looking for a refrigerator and walk into Sears, or a steak and walk into A&P, or a computer and and walk into CompUSA none of them are going to tell me how much that unit cost them to buy, only what they will sell it to me for.

Why should a car dealer be different?

I've run into good dealers and bad dealers, good salesmen and bad. There used to be a salesman (Eric Anderson) whom I would follow from dealership to dealership to buy from. He was that good and that honest.

There are others whom I think should be best shot on sight...

The biggest "problem" in new car sales is those dealerships who play the customer too much.

Even when a customer walks in saying I WILL buy a car today, this is what I want, what is your best price, they can't resist putting numbers down on four sides of a piece of paper and playing silly games.

I've walked out of those dealerships with sales folks chasing me all the way to my current car, price dropping with every step.

On rare occasion a dealership will rile me so much that I will purposely play their game knowing I will not buy from them under any circumstance.

If you are a dealer or salesman, you can call me 'One Price Tom' if it makes you happy, but when I walk in to buy a car I will buy it from the first honest deal I get. Not three days or three weeks later - today. I usually come in with all my requirements written down.

As an engineer/project manager I was familiar with issuing an RFQ for what I wanted. I essentially treated buying a vehicle the same way.

I was probably a PITA as a customer, but if sales could get over their love of the game I was a simple, fast, hassle-free customer who walked in and bought a car, just like I would walk in and by a hamburger.

(It was also handy for many years to have fleet info handy and to deal with fleet sales folks. Different ballgame for some reason...)

Now if only the dealer side of this giant dance could get rid of the 'system houses' so customers could again trust, we'd all be ahead.

In some ways, Toyota is trying to do this with Scion...

 

So you're a bigot. At least you admit it.

Please bear in mind that I am talking about non-Scion trasactions. Scion is different. However, when talking about a Toyota, let me describe for you exactly what happens with an educated customer in the finance office.

Cash customers (non-biggoted version): It take 10 to 15 minutes to print and disclose all the required documents. The customer knows what the costs are and things proceed quickly. They listen politely to whatever pitch we have on extended warranties and usually decline them as it seems like a lot of extra money when they are writting the check. The finance guy make $0 on this customer and it hurts his average which means this customer can actually cost him money, depending on his pay plan.

Cash customers (bigoted): This is going to be a while. It starts off the same as above, but quickly degrades into a ____ing match. A cash customer with a chip on his shoulder who views the finance guy as less than worthy of respect, will read every friggin' line of every document and will be rude in insisting that he needs no extra protections. He protests long and loudly. Some finance guys take great offense to this and since he already knows he isn't going to make a dime off this guy, will take out his frustrations on the guy by slowing down the transaction. I'm not saying this is right, but its what happens in real life.

Finance customer (educated): This will take 15 to 20 minutes. The customer already has a good idea of what the payments are so there are no surprises. The finance guy shows different payment options (payments with and without warranty and GAP) and the customer decides. This customer may decide he wants extra protections or he may not. He is far more likely than the cash customer to take the warranty. This customer will have exactly 2 more documents to sign (3 if he takes the warranty) and will spend an extra 5 minutes beyond what the cash customer did. Even if the finance guy doesn't sell the warranty and doesn't mark up the rate, the finance guy will add $200 to the deal because that is how much the bank pays them to arrange the financing. That's $200 for an extra 5 minutes work even without selling another product.

So, if you are contating a dealership about buying a car, is it a good idea to tell them you're paying cash? You may think you're telling the dealer "you're going to save time and hassle because I'm paying cash so you should give me a better deal." What the dealership actually hears is "I'm going to limit any chance you have of making money and I may be a biggot who will make your life miserable. You may or may not get me out quickly and I may or may not treat you with the respect most humans afford to each other, but no matter what, you're not going to make any money on me beyond the sale of the car."

Ask me about trades sometime... the way various consumer sources tell you to handle it is absolutely wrong and benefits the dealer!

 

Thats not true, when my dad bought a Toyota Camry full, in cash, we waited 1 and a half hours for the paperwork to be drawn up. We even got there early 7:30am, so that we could beat the rush and not have to wait in any lines. We had no trade in to worry about, no financing, and here were no other customers there. The finance guy came out an hour and a half later telling me and my dad some BS story about why it took so long, then went on to waste our time by spending an additional hour trying to sell us extended warrenties, etc. which we politely declined. The process that should have taken a half an hour at the most now just took 3 hours.

I had the same experience when I bought my tC. I went to the dealer, no trade in, no financing, and I had to wait about an hour before even seeing a finance guy so that I could sign all of the documents and get out of there. Meanwhile, people who have come in after us are being seen right away. Its only my dad and I that are left sitting on the bench waiting for someone to help us.

See why everyone hates to buy new cars? No matter what you do, you are pretty much guarenteed to get some sort of runaround, whether it be on the price of the car, the financing of the car, the trade in of your old car, or even finding a damn person so that you can pay for your car and get out of there. From the customer viewpoint, the message I'm getting is that since I'm paying in cash and they wont make money off of me from financing, i can just wait because some other people came in after me, who are going through financing, and well be able to make some money off of them.

As the customer of a car dealership, I'm not out to hand out free money. I want to get a car at the cheapest price that possible. I dont care if it hurts his average. I highly doubt that a cash transaction will cost the finance guy money. What are you going to do, charge him when a car is paid for in cash? Any guy who is dumb enough to sign up for that deserves it. No finance guy in his right mind is going to sign up for a job where he knows he will have to pay money if he doesn't get someone to finance their car.

 

Sorry to hear about the bad experiences you've had. I know that there are still a lot of "old school" stores around. Seriously though, even in our Toyota store, no deal EVER takes 3 hours. If we get jammed on a Saturday afternoon, it might take you 30 to 40 minutes to get into the finance office, and if you have a ton of questions and we have to take a lot of effort to put togeather an acceptible finance package, it can't really take more than an hour. I know 90 minutes is too long, but that's about the max it should ever take. Average for a finance deal really does run in the 30 minute range (remember than an average also takes into account less than educated customers who tend to take a lot longer).

I also want to be clear about the flat fees I was talking about. That money does not come from the consumer. It comes from the bank that does the financing. Dealers are allowed to "hold rate" which means they can mark up the interest rates in many cases. If the dealer has a "buy rate" or "retention" of 5.25% he might be able to convience a person that 6.25% is a good deal. For some customers, it might actually be a good deal. The dealership keeps the difference in the rate as "finance reserve." If the dealership does the financing at the retention rate, the bank pays them a flat fee that ranges from $100 to $250, depending on the size of the loan. This is not money out of the customer's pocket. Dealers would rather get a flat fee than no fee at all.

All Scion deals are done at retention. We are not allowed to hold rate.

As for the finace guy's pay plan, it varies by dealer. Most dealers require the finance guy to hold an average of $600 to $800 per car worth of finance reserve and profit on warranties. If their average drops, their pay drops. Cash customers hurt the average and therefore, actually does cost them money.

I'm not defending this, I'm just trying to explain it so you know what the guy in front of you is up against.

 

When I got my car at Longo Toyota/Scion, the Scion salesperson was great. The person helping me got my paperwork through in about 35 minutes. Then comes the financing, which is being handled by Toyota and they have their own section in the building. That took alot longer, about 40 minutes of waiting and 15 minutes of explaining and selling of additionals. I'm still wondering why I waited 40 minutes before someone from the Toyota financial dept to help me when there's not many customers around but at least things went fast after I was helped. Even the Scion salesperson that helped me was wondering why I'm still waiting for the finance department after seeing me still sitting there.

There is a marked difference of service between Scion and Toyota sales.

 

Ain't that the truth!

BTW, a possible explanation for the wait could be because not all their finance guys are Scion Certified. In theory, every person involved in a Scion sale is certified, but not all the fianace guys may be certified. You may have been waiting for the one guy who could take a Scion customer.

At my dealership, I handle 90% of all Scion deals. I sell them, I manage the other salesmen, I do the financing and cash transactions, I'll install a stereo and I'll even wash them if I need to. I try to keep Scion customers out of the Toyota side completely. It just runs smoother this way.

 

wow....there been a lot covered here...just wanted to chime in..... the whole cash thing always takes people by surprise...what steve (cliffy) is saying is true we ( dealers ) would love it if you fianced with us (the dealers) because we do make more money plus we do get our money sooner, there no less paper work or man hours either way....by the way all stores are like this...dosen't Sears, and JcPenny's have thier own credit card??? what do you think that is? even Wal Mart has a credit card now......it funny to me that many people don't think twice about chargeing a purchase to a credit card or store charge card, you buy a tv at best buy you don't get to haggle you pay whatever their posted price is, you then pay cash or charge it and you pay whatever rate your card has, and that's it.....it would be so much better for all if the same was true with cars, maybe with Scion it can start....now one customer SHOULD NOT be treated differently than another just because of how they are paying, that's just wrong, but sadly it does happen in some stores, all Steve and myself can do do is see to it that it doesn't happen at our own stores...

 

From the perspective of a salesperson, I would not care how my customer payed for a car, as long as they bought one. The dealer wants the money to keep the cashflow alive. The finance dept. would like it if the person financed so they can pay thier bills and support their families. If I was a customer, I would want to buy from someone who is willing to be up front and honest, and it seems to me that I would choose a dealer that posts here over one that never posts here.

 

I got my car at Longo too, and had the same exact problem. Finding my car was a breeze. It was only when I had to talk to a financing guy that I was waiting there FOREVER even though no other customers were around.

 

Hmmm... probably an issue of finding a finance guy that is Scion Certified.

By the way... the first car deal that I was involved with was when my parents bought a 1986 Toyota pickup for me in my senior year of HS. Guess where we bought it? Longo Toyota. That truck took many trips through Malibu Canyon on my way to Pepperdine between '87 and '91.

 

LOL, I was still in diapers when you were getting your degree. Malibu canyons fun to drive especially when its completely clear at about 2 or 3 in the morning. Kanan's ok too.

 

Damn, I'm old. Thanks for the reminder.

 

Sorry, but seriously, why did you move to VA, we need more dealers like you out here in Cali. I could guarentee that if you made buying a new car a breeze as you say, then you would have people flocking from all around to get your no BS service. With so many dealers playing all of their games, I'm sure people would be willing to drive an extra hour to get better, honest service.

 

Thanks for the kind words, but I don't miss CA. Not even a little. Believe it or not, being a nice guy in the car business is not easy. Until Scion came along, it was nearly impossible. The adversarial atmosphere may have been started by dealers, but consumers sure do thier part as well. On the Toyota side, we get lied to far more often than we ever lie. We get treated like dirt for having the audacity to choose car sales as a career and customers will sell us out in a heartbeat, no matter how hard we try to actually serve the customer. I don't blame consumers for that because it was dealers who started it, but neither side can let their guard down.

Scion is changing this. Consumers still don't trust us, but they are starting to come around. Dealers are slowly but surely realizing the need to do things differently as well. The more each side figures out that they don't benefit from approaching things on the old manner, the better it gets for all. This industry still has a long way to go, but if you saw how things were at Longo back in '86 and compared it to what you went through, you'd see that evolution is happening.

 

Used to be that keys to a trade would get thrown on the roof of the building, no "Truth-in-Lending", open ended leases, etc. Salespeople made a lot of money and very few friends. Now we can make less money, but still few friends.

 

I'll have to agree with the majority (?) here so far that finding a Scion and selecting just the right one was easier than kicking the "finance" guy into actually getting his job done.

When I was called in to pick up my Scion that had just finally arrived minutes before, my first 10 minutes was spent with my salesman going over the car and having a cup of coffee, the next 1:45 was spent waiting for the finance guy to be ready for me (with well over 800 credit points, how tough is it for him to just print the damned papers out, hand them to me to sign, and try to sell me some protection and extended warranty stuff?). Total time with salesman: 15 minutes, total time waiting for and with the finance joker: 2 hours 15 minutes

Why the hour and three quarters wait for him to be 'ready for me' when I'm the only live customer in the building???

MOST of the Scion experience was reasonable and enjoyable ( the shop really does have good coffee, too). The F&I guy was almost enough to make me look for another dealer...

Are the finance guys under the mistaken impression that alienating the customer earns them points and gets them dollars??

 

I do not know why you would wait so long. At my place, we have someone witht he buyer within 10 minutes at the most. Sometimes it is longer if we are packed, but that is understandable. The finance transaction should take no more than 45 minutes once it has started. Sometimes it takes longer if a customer has a lot of questions, or wants to see multiple options and terms.