The following excerpts have been provided to give you an insight into the contents of our automotive guide.

Introduction

The customer should decide on the vehicle they intend to buy before they go to an automotive dealership. There are means to check-out a vehicle of interest in a low pressure setting. The customer can rent the particular model they have an interest. The customer can attend an auto show where their vehicle of interest is being exhibited. The customer can search to determine if perhaps a friend or relative own the make of vehicle they have an interest in buying. If the customer goes to a dealership to test drive the vehicle they have an interest in, then let the salesperson know up front that they do not intend to buy the vehicle that day. ....

Chapter One

One of the greatest fears a dealer has is that a customer will take their price quote and compare it with another dealer’s price quote. Yet, this is a good strategy for the buyer of a new vehicle. This is more difficult to do with a used vehicle, because no two used vehicles are the same. ...

Chapter Two

In recent years, US automotive manufacturers began offering manufacturer rebates and below prevailing market interest rates on auto loans as a means to entice the public into buying their automobiles. Sometimes the rebates go to the dealer. The dealer may decide to pass the rebate money on to their customer. Sometimes the rebate goes directly to the customer. These incentives represent a means to lower these vehicles' prices to customers. The buyer should not be mislead by the dealer to think that the rebate or low interest rates are a discount from the dealership. ...

Chapter Three

The major reconditioning items on a trade-in vehicle include: body, brakes, engine, tires, or transmission servicing. The dealer takes the point of view that they have to resell the trade-in. The person who is buying the trade-in from the dealer negotiates the price they pay for it based on the condition of the vehicle. The buyer trading in the vehicle has the point of view they want top dollar for their vehicle to make it worthwhile to buy the dealer's vehicle. If the vehicle is very old or in poor condition, the dealer will likely sell it "as is" (with no reconditioning or warranty to the subsequent buyer). The dealer may sell it wholesale to a wholesaler who sells it on their used vehicle lot or to another used vehicle dealer. ...

Chapter Five

In a lease agreement, the selling price is referred to as a capitalization cost. Dealers promote leases because they hope to sell the lease customer on lower payments versus a purchase and in doing so divert the customer from negotiating a discount of the vehicle’s selling price. In other words, the dealer hopes to receive the highest possible profit margin when calculating the lease payment. An astute customer will negotiate on the selling price of the vehicle and then use the lower price when calculating a lease payment. This results in lower lease payments. ...

Chapter Seven

The dealer's retail automotive Finance and Insurance Department is an important source of profit to the dealership. The Finance and Insurance Manager (F&I Manager) is sometimes referred to as the “Business Manager”. The title Business Manager is used to make the buyer unaware this person intends to persuade them to use the dealer’s financing sources. ...

Chapter Eight

The Finance Manager’s job is to persuade the customer to use the dealer's source of lending even though in most instances the advantages are stacked against the customer’s best interests. One of the products the Finance Manager sells to the buyer is credit life and disability insurance coverage on the automotive loan. The premiums on this type of insurance rank as some of the most costly insurance when comparing the premiums paid-in to payments paid-out on claims. ...

Chapter Twelve

A sales promotion that is a favorite among dealerships is mailing an invitation to automotive owners within their market before a planned sale. The invitation presents the reader with the impression that they are one of the chosen few to receive this privileged information. Sale prices are offered on the dealer’s inventory. The dealer hopes that if the customer traffic during this sale is great enough then it will create an atmosphere that many of the customers indeed are taking advantage of the promoted price reductions. The purpose of this type of sale is to generate a mood of enthusiasm within the customer’s thought process. The customers may feel a sense of urgency to make their purchase for fear of losing this opportunity to receive such a good deal on their vehicle of interest. ...

Chapter Fifteen

It was always interesting to hear through the grapevine what sales tactics were being employed by competing dealerships. An automotive contract is very lengthy and intimidating to read. The Finance Manager must disclose to the buyer the term (number of months)of the loan, the annual percentage interest rate charged on the loan, the total dollar amount financed, and the payment amount. The Finance Manager at another dealership, submitted to the lender a loan with greater number of payments than what they told the customer. When the customer received their payment booklet in the mail they questioned the Finance Manager as to why the number of monthly payments were greater than the number they had originally been told. This particular Finance Manager told the customer that it was a mistake on the part of the lender. The Finance Manager pretended to telephone the lender and straighten this matter-out. To assure the customer, he took the customer’s payment booklet and tore-out the number of payment coupons that were greater than the amount he had originally quoted. This obviously did not solve the customer’s problem, but only postponed it ...

Closing

The author sought to answer questions about the many nuisances of the retail automotive dealership business practices. Perhaps, the reader has been in the presence of dealership employees who spoke a word or phrase to one another that they were unable to interpret. Automotive dealership jargon was included in the program where the author thought it appropriate to inform the reader of the underlying meaning to such terminology. ...

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