GM brings back employee pricing to sell remaining 2008 models

[Intrepidation]

It is no secret that the automotive industry is hurting for sales to close out 2008. Over the past few months incentives have been thrown out left and right to draw in more buyers. The deals have not done enough to bring folks into the showroom, though. With all the media talk of bleeding Detroit, consumers know that the domestic manufacturers have been holding out on their best offers. Perhaps the memory of 2005's employee pricing incentives has kept many waiting on the fence. With 2009 models heading to dealerships as we speak, General Motors is hoping to end the stalemate. It will be testing the waters of employee pricing yet again beginning Wednesday, August 20th and running through September 2nd.

The employee discount program will apply across all 8 GM brands. Buick, Pontiac and GMC dealers will mark down 91 percent of their inventory on all 2008 models, along with the 2009 Pontiac Vibe and G5, Chevy Cobalt and HHR and, surprisingly, the Cadillac CTS. Chevrolet dealers can unload 90 percent of their 2008 inventory with all 2008 models eligible for the employee price. Cadillac, Saturn, SAAB, Hummer will each have their own stipulations as well, but it is certain that the discount will be widespread. The price reduction varies from vehicle to vehicle, but is typically on order of a few thousand dollars. Additional incentives will also still be offered on some slower selling items, such as, you guessed it, trucks and SUVs. So the question is, will employee pricing get you off the fence and into a dealership?

Souce: Autoblog

[toesuf94]

I will try to buy a Tahoe LTZ off of the dealer this week. We shall see. My lease on my Tahoe is up in February. Will keep you all posted.

[GMTruckGuy74]

I hate to say this, but I hope they offer this deal next year when my AURA lease expires. We were lucky to take advantage of it last time (August, 2005), as my wife's Rendezvous was 5 months away from lease-end and GM gave us a pull-ahead offer with the Employee Pricing deal. It gave me a fully loaded Envoy SLT 4WD for a sweet deal. Of course with leasing going away, I'm facing the fact I will have to purchase my next ride and if the incentives are good enough, maybe it will help me to get "more vehicle" for my money (of course a year from now can be a whole different picture).

[daves87rs]

I've seen even more Impys and Malibus lately....

[Northstar]

This is so dumb to have on the '09 models. Why would anyone buy an '08 CTS, G5, Cobalt, or HHR now, if the '09 is going to have more or less the same deal? I wish they would put it on the '09 G8, then my dad might buy one.

And to have it on the CTS, Cobalt, and HHR is dumb in the first place. The CTS is selling well without any incentives, and the Cobalt and HHR are out of stock everywhere, it is clear they don't need incentives... gas is $3.75/gal, why discount the most fuel-efficient cars? Just dumb...

[Oracle of Delphi]

This is so dumb to have on the '09 models. Why would anyone buy an '08 CTS, G5, Cobalt, or HHR now, if the '09 is going to have more or less the same deal? I wish they would put it on the '09 G8, then my dad might buy one.

And to have it on the CTS, Cobalt, and HHR is dumb in the first place. The CTS is selling well without any incentives, and the Cobalt and HHR are out of stock everywhere, it is clear they don't need incentives... gas is $3.75/gal, why discount the most fuel-efficient cars? Just dumb...

The only 09 it's on is the Pontiac Vibe, at least that's my understanding.

[pow]

Nice. That's more than $5K off MSRP on a CTS 3.6 DI.

Or $8K off a $30K Sierra 1500 2WD SLE.

Edited August 20, 2008 by empowah

[Newbiewar]

This is so dumb to have on the '09 models. Why would anyone buy an '08 CTS, G5, Cobalt, or HHR now, if the '09 is going to have more or less the same deal? I wish they would put it on the '09 G8, then my dad might buy one.

And to have it on the CTS, Cobalt, and HHR is dumb in the first place. The CTS is selling well without any incentives, and the Cobalt and HHR are out of stock everywhere, it is clear they don't need incentives... gas is $3.75/gal, why discount the most fuel-efficient cars? Just dumb...

well gm said there would be a pretty considerable price hike for 2009, so it wouldnt really matter.. and employee discount doesnt hurt GM's pocket, it hurts dealers pocket books... but in actuality the dealers like the promo because it brings a huge flux of customers, and it will fill showrooms and move used vehicles...

employee discount removes all profit from the dealership and gives it to the customer, the philosophy is, if GM isnt making money, why should its dealers, because someday, GM cannot last through the losses...

the employee discount this time around is more valueable because it will bring a large portion of customers that havent looked for a car for 3 years, and will notice a difference in GM's products... and besides, it is a good time frame since the last employee discount...

I honnestly think this is good news, and a good deal for GM... although it hurts resale, i doubt resale will be affected, we are about to experiance massive inflation, and the price of used vehicles is about to climb rather then fall... so it really doesnt matter.

I'm certain GM has only applied GME discount on vehicles with a certain surplus, days in inventory... this will help 3rd quarter reduction in inventory, as well as bolster consumer confidence, and increase factory production aka revenue.

CTS is probably included to shuffle consumers to cadillacs door step... likely they have already sold out and are just delivering fresh faces to the dealership to flip onto another vehicle... pretty standard in the industry...

[ocnblu]

There's a sharp gray '09 G5 GT at a local PG dealership...

[zabolots]

The CTS is selling well without any incentives

If this were true then I don't think it would be offered as part of the program. Obviously sales must have slowed quite a bit.

Even with the discount, the new CTS (in the form I'd want) is still too pricey for me unfortunately

[CARBIZ]

well gm said there would be a pretty considerable price hike for 2009, so it wouldnt really matter.. and employee discount doesnt hurt GM's pocket, it hurts dealers pocket books... but in actuality the dealers like the promo because it brings a huge flux of customers, and it will fill showrooms and move used vehicles...

employee discount removes all profit from the dealership and gives it to the customer, the philosophy is, if GM isnt making money, why should its dealers, because someday, GM cannot last through the losses...

the employee discount this time around is more valueable because it will bring a large portion of customers that havent looked for a car for 3 years, and will notice a difference in GM's products... and besides, it is a good time frame since the last employee discount...

I honnestly think this is good news, and a good deal for GM... although it hurts resale, i doubt resale will be affected, we are about to experiance massive inflation, and the price of used vehicles is about to climb rather then fall... so it really doesnt matter.

I'm certain GM has only applied GME discount on vehicles with a certain surplus, days in inventory... this will help 3rd quarter reduction in inventory, as well as bolster consumer confidence, and increase factory production aka revenue.

CTS is probably included to shuffle consumers to cadillacs door step... likely they have already sold out and are just delivering fresh faces to the dealership to flip onto another vehicle... pretty standard in the industry...

Employee Pricing is a marketing campaign wrapped around a catchy slogan: nothing more, nothing less. Chrysler has been advertising 'family' and employee pricing around here for months. Judging by some of the nasty counter-ads Chrysler dealers are taking out in the papers against each other ("our dealership believes sales should be for everybody!" ran one ad in the Sun recently), I would say the entire program is flopping for them.

July/August '05 were two the best months I ever had in this business, both from a volume and total gross point of view. My former dealer had the best month they had had in years - and made a ton of money. Traffic spiked up considerably in the beginning, as people flocked to dealers, thinking they were going to save $5k on a Cobalt. When they realized there aren't those kinds of margins (the difference between MSRP and 'invoice price' is shockingly less than most people think), out the door many of them went.

50% off sales at Sears and Walgreens confuse people. To me, it is the great irony of our modern times that the mark-up on food, clothing and furniture - 3 important staples that we need to survive, is more than 100%; yet, on luxury items, like electronics and autos, the margins are less than 10%.

I know that sales in the U.S. are sluggish. Canada has fared a little better, but most dealers are carrying half the inventory they normally would for this time of year so there will be no fire sales this summer. Then again, for us, since the $C has been virtually at par for more than a year, our prices are down substantially from where they have traditionally been.

When I think that a Cavalier, automatic, air and cassette LEASED for $330 a month with $900 due on delivery back in '01 and now a Cobalt Team Canada edition (leather steering wheel, power sunroof, 155 hp ecotec, automatic, power group, auto headlights, OnStar, side airbags and ABS) SELLS for $330 a month with ZERO down - well, I say bring on the Canadian dollar!!

[The O.C.]

well gm said there would be a pretty considerable price hike for 2009, so it wouldnt really matter.. and employee discount doesnt hurt GM's pocket, it hurts dealers pocket books... but in actuality the dealers like the promo because it brings a huge flux of customers, and it will fill showrooms and move used vehicles...

employee discount removes all profit from the dealership and gives it to the customer, the philosophy is, if GM isnt making money, why should its dealers, because someday, GM cannot last through the losses...

the employee discount this time around is more valueable because it will bring a large portion of customers that havent looked for a car for 3 years, and will notice a difference in GM's products... and besides, it is a good time frame since the last employee discount...

I honnestly think this is good news, and a good deal for GM... although it hurts resale, i doubt resale will be affected, we are about to experiance massive inflation, and the price of used vehicles is about to climb rather then fall... so it really doesnt matter.

I'm certain GM has only applied GME discount on vehicles with a certain surplus, days in inventory... this will help 3rd quarter reduction in inventory, as well as bolster consumer confidence, and increase factory production aka revenue.

CTS is probably included to shuffle consumers to cadillacs door step... likely they have already sold out and are just delivering fresh faces to the dealership to flip onto another vehicle... pretty standard in the industry...

I, on the other hand, think this is a horrible promotion.

GM is so boneheaded at times, it really pisses me off.

Why?

Let me tell you........

* Great....we have "GM Employee Pricing." That means that IF we take advantage of that, we HAVE TO adhere to that for EVERY new car we sell.....not just "aged" units. Guess what our dealership makes from doing a GMS deal? About $400. That's it. But GM says we get the "memo" amount.....(which is around $2,200 for a loaded CTS.) BUT what GM ALWAYS forgets is that after dealership "packs" (which are held aside to pay salespeople and cover other assorted costs, etc., etc) we are left with only around $400.

* Guess what else they did? ALL zero-percent financing WENT AWAY.

* Also, our customer cash on Escalade and DTS was reduced by around $1,000 each.

* AND you can guess what happened to lease rates? Our buy-rate on a GMAC CTS lease went up TWO percentage points from July to August.....and effective with this promotion, the buy-rate goes up ANOTHER 1.8 percentage points.....effectively taking Cadillac OUT of the leasing market (even with a low GMS price to work with....payments are now way too high.) This huge increase in rates was across the board as well....DTS, Escalade, you name it.

* All these people coming off lease and wanting another car back when GM last did employee pricing are finding out that, due to the $h!ty incentives we have now, they can't afford to get into another car (unless they want a payment $300-$400 more a month now.) Last time GM did employee pricing, they had much more aggressive incentives (and really not just incentives, it was the way more aggressive finance and lease rates) to combine with the employee pricing.

So I want SOMEONE....ANYONE tell me why this promotion (synchronized with the loss of 0%, customer cash reductions, and dramatic increases in finance and lease rates) even remotely positive?

ONE thing I will say positively.....it WILL drive alot of traffic.

AND, as an Internet Director, I will capitalize on that. But I bet what you'll see is a HUGE increase in pre-owned business at dealerships due to the increase in traffic and not nearly as much uptick in new car sales as what GM is hoping.

[The O.C.]

AND another thing.....while I'm blowing off steam.......

What ever happened to incentives that help build VALUE in the product?

I thought GM was supposed to get away from this "...let's drop-our-pants on the price because our cars will never sell unless they have a huge discount..." mentality....!

The 0% (or 1.9%, 2.9%....whatever....) financing was GREAT because what the customer saw was a HUGE savings in interest fees........allowing us to still build and sell the value in the product without having to resort to huge discounts to get the consumers into the cars.

Or what about more trunk money? You know.....dealer cash that allows the dealer to offer a larger discount on the car.....without it seeming like (in the customer's eyes anyway?) A large dealer cash incentive helps the dealer also build value in the car.....and is far less damaging than a "consumer rebate" because the customer doesn't see the dealer cash as such.....they just see it as a dealer-led discount on the car. Whereas a "rebate" is the company, GM, saying "we need to give you money to buy our car."

Anyways.....

[gm4life]

Great if it helps sell cars who cares. These are the prices GM should just put on the cars to begin with. If a dealer makes more than $500 on me than they are making to much. Yeah somebody will tell me there in buisness to make money, and I am out to save myself my money. Plus I come back and pay for the overpriced service. This is good for dealers even if they bitch about the profit and for GM because the market right now is REALLY slow. Hell I can get a new DTS V8 stripped for 35K that is tempting.

[The O.C.]

Great if it helps sell cars who cares. These are the prices GM should just put on the cars to begin with. If a dealer makes more than $500 on me than they are making to much. Yeah somebody will tell me there in buisness to make money, and I am out to save myself my money. Plus I come back and pay for the overpriced service. This is good for dealers even if they bitch about the profit and for GM because the market right now is REALLY slow. Hell I can get a new DTS V8 stripped for 35K that is tempting.

$500....? Absurd....and spoken like someone that knows nothing about the dealer side of the car business. (Do you know what "overhead" is?)

GM could have taken another route.....which would have sparked traffic....AND allow the dealers to make money. As so many people have said, the dealers need to be just as successful as GM itself if GM is going to survive.

[gm4life]

Trust me O.C. I know plenty about dealers, they make money on service and over-pricing parts. If I can't get a good deal on a car then forget them. If they make more than $500 on me they are making too much money. Sure some pig dealers want to and do make more, but when I buy a car I don't want to get screwed. Wonder why I ended up with a purple Torrent because it was a deal. When you sell a car you sell your service and take the car back there. Once again if a dealer needs to make more than that on a car then they can stick it and not "get another customer to screw on service" then that is there problem. Then again I am old school. One salesmen only made $50 bucks off me but they got a customer and I got "screwed on service" so they made it up trust me. Then again if you work for a dealer $500 for only two hours of a sales persons time seems like good money to me. Oh and I understand overhead, don't sell me the typical poor car dealer line I got that run-around when I got my Bonneville. You think dealers make alot off of me when I buy? Hell no but I am loyal and bring my cars back for service that is when they make there money back. If you can't make money on service then your obviously doing something else wrong. Ultimately your hurting yourself and losing my buisness I have had dealers treat me like that and I DON'T buy there. If you work at one that is like that I wouldn't do buisness with them. Sorry. I am a hard-ass. And an even tighter one.

Edited August 20, 2008 by gm4life

[Newbiewar]

$500....? Absurd....and spoken like someone that knows nothing about the dealer side of the car business. (Do you know what "overhead" is?)

GM could have taken another route.....which would have sparked traffic....AND allow the dealers to make money. As so many people have said, the dealers need to be just as successful as GM itself if GM is going to survive.

do you honnestly think GM cares about the dealers? they want to reduce them, so why not take away their means for business, their profit...

i got in the dealership in august, after the inventories were all blown out of 05... we still had the truck and suv market cournered with more vehicles then anyone..

let me give you the run down,

when business is slow, i mean less then 100 cars per weekend... dealers will focus on per unit profit... making sure to make 'pounders' with every sale...

when the ecconomy is bad, consumers need the products, and the manufactures, need the consumers to afford the product.

you are bitching about this years GME being less incentive then previously... well thats because GM is still cutting back on incentives...

GM must do what it takes to survive. and selling in volume, has been GM's cheif advantage for the last 70+ years... ignoring that would be foolish, as market share shrinks...

[smk4565]

I don't like this because it kills resale values. It is good at clearing out inventory, especially on stuff like Impala, G6, Trailbalzers, but it is bad to do on CTS, Malibu, etc. They need better products that they can sell without deep discounts if they want to recover.

[daves87rs]

I fail to see how it is going to help sales....repos are getting close to a all time high.

More and more consumers can't afford to pay credit card payments...

GM has been cutting more and more " bad" credit customers out.....

So tell me again why I should rush out and buy a new car?

[enzl]

They simply have no choice....although inventories aren't bad, the current economic climate means most dealers have ordered significantly less 09's than GM had planned to produce.

You've got to clear the lots of 08's to force dealer's hands---most dealers I know have hunkered down, cut inventories by 25% or more and emphasized their used operations & service departments in an attempt to keep things afloat. Layoffs have begun at the dealer level, big time.

IIRC, a majority of Domestic showrooms and almost half of the Imports dealers lost money in 07. Can't imagine 08 being better. Dealers are still the gateway to product, so keeping them starving isn't a great long/short term plan for any manufacturer.

[CARBIZ]

Trust me O.C. I know plenty about dealers, they make money on service and over-pricing parts. If I can't get a good deal on a car then forget them. If they make more than $500 on me they are making too much money. Sure some pig dealers want to and do make more, but when I buy a car I don't want to get screwed. Wonder why I ended up with a purple Torrent because it was a deal. When you sell a car you sell your service and take the car back there. Once again if a dealer needs to make more than that on a car then they can stick it and not "get another customer to screw on service" then that is there problem. Then again I am old school. One salesmen only made $50 bucks off me but they got a customer and I got "screwed on service" so they made it up trust me. Then again if you work for a dealer $500 for only two hours of a sales persons time seems like good money to me. Oh and I understand overhead, don't sell me the typical poor car dealer line I got that run-around when I got my Bonneville. You think dealers make alot off of me when I buy? Hell no but I am loyal and bring my cars back for service that is when they make there money back. If you can't make money on service then your obviously doing something else wrong. Ultimately your hurting yourself and losing my buisness I have had dealers treat me like that and I DON'T buy there. If you work at one that is like that I wouldn't do buisness with them. Sorry. I am a hard-ass. And an even tighter one.

But in the end you still expect 'loaner vehicles', free coffee and a nice lounge to sit in while your car is being fixed, right?

I'll bet your the same kind of person who bitches and whines that the sales staff don't know what they're talking about or anything about their product. Guess what, bub - that costs money, too. Would you work 60 hour weeks, every Saturday, and many holidays for $30k a year? Didn't think so.

You want professional service and professionals to work with, you gotta pay for it.

Most dealers do lose money in their new car show rooms. The reason why so many sales people don't know what they're talking about is because they've only been there 3 weeks. They are 'free' to the dealer and expendable. The senior guys won't deal with the a-holes, or they're by appointment only (although those days are somewhat diminished.)

The consumer seems to want it both ways. The same guy who bitches at Wal-Mart that his $20 blender busted instead of buying the $60 one at Sears.

Back on topic: although they haven't introduced employee pricing here (and I doubt they will because nobody has any 2008 products left anyway), it won't matter to me either way. It's the PERCEPTION of the deal that counts, and Employee Pricing gives the IMPRESSION that the customer is getting the best deal EVER.

Besides, most people wouldn't know a good deal if it bit them on the giggly parts.

[haypops]

The consumer seems to want it both ways. The same guy who bitches at Wal-Mart that his $20 blender busted instead of buying the $60 one at Sears.

Well Sears was bought by K-mart a long time ago and I doubt that it is necessarily any better.

The employee pricing thing is going to be very common in these economic times, We are having some renovations done to our home and a neighbor is getting us "friends and family" pricing on some laminate flooring from a major brand name manufacturer.

[daves87rs]

Well Sears was bought by K-mart a long time ago and I doubt that it is necessarily any better.

The employee pricing thing is going to be very common in these economic times, We are having some renovations done to our home and a neighbor is getting us "friends and family" pricing on some laminate flooring from a major brand name manufacturer.

People still go to Sears and K mart?

[gm4life]

But in the end you still expect 'loaner vehicles', free coffee and a nice lounge to sit in while your car is being fixed, right?

I'll bet your the same kind of person who bitches and whines that the sales staff don't know what they're talking about or anything about their product. Guess what, bub - that costs money, too. Would you work 60 hour weeks, every Saturday, and many holidays for $30k a year? Didn't think so.

You want professional service and professionals to work with, you gotta pay for it.

Most dealers do lose money in their new car show rooms. The reason why so many sales people don't know what they're talking about is because they've only been there 3 weeks. They are 'free' to the dealer and expendable. The senior guys won't deal with the a-holes, or they're by appointment only (although those days are somewhat diminished.)

The consumer seems to want it both ways. The same guy who bitches at Wal-Mart that his $20 blender busted instead of buying the $60 one at Sears.

Back on topic: although they haven't introduced employee pricing here (and I doubt they will because nobody has any 2008 products left anyway), it won't matter to me either way. It's the PERCEPTION of the deal that counts, and Employee Pricing gives the IMPRESSION that the customer is getting the best deal EVER.

Besides, most people wouldn't know a good deal if it bit them on the giggly parts.

No I am not someone who bitches about the lounge area, and don't need freebies. It is a two way street. If they have a chair to sit on and a knowledgeable sales staff (may not know as much as me) but still know the product I don't care. I understand you get what you pay for and trust me I get a good deal on a car and take it in the pants on the service.

[enzl]

No I am not someone who bitches about the lounge area, and don't need freebies. It is a two way street. If they have a chair to sit on and a knowledgeable sales staff (may not know as much as me) but still know the product I don't care. I understand you get what you pay for and trust me I get a good deal on a car and take it in the pants on the service.

So, it offends you to dole out an extra $1 on the sale, but they can rip you off to their hearts content on the service end?

That simply makes no sense.

If a dealer can't make a decent buck, you simply won't have that dealer around, eventually. $500 won't cover the finance charge on the floorplan cost of the average GM vehicle (based on age of inventory and dealer cost), never mind paying the employees or keeping the lights on.

I'll be sure to stop by your job and see if some fat can be trimmed over there by cutting your wages--how does 1/2 a paycheck sound?

[97regalGS]

No I am not someone who bitches about the lounge area, and don't need freebies. It is a two way street. If they have a chair to sit on and a knowledgeable sales staff (may not know as much as me) but still know the product I don't care. I understand you get what you pay for and trust me I get a good deal on a car and take it in the pants on the service.

if you were my client, i'd give you a 1983 Pony for free, and charge you $800/week for parts and service. and the best part is, all you'd talk about to your friends is how you got a great deal on a car!!!

[CARBIZ]

People still go to Sears and K mart?

Not around here: K-Mart was bought out by Wal-Mart a long time ago.

[97regalGS]

Not around here: K-Mart was bought out by Wal-Mart a long time ago.

you sure about that? Wal-Mart bought Woolco to get a foothold in the Cdn market.....

according to wiki Zellers bought K-Mart in '98

[toesuf94]

Getting back to the Employee Pricing...was strolling the lots here last night (no vultures) and noticed three new Impala's on the lot - they were '09 units. The Impala LT is a great deal for what they ask for it. Most important thing to note was the standard Bluetooth on the LT1 units and up.

[gm4life]

So, it offends you to dole out an extra $1 on the sale, but they can rip you off to their hearts content on the service end?

That simply makes no sense.

If a dealer can't make a decent buck, you simply won't have that dealer around, eventually. $500 won't cover the finance charge on the floorplan cost of the average GM vehicle (based on age of inventory and dealer cost), never mind paying the employees or keeping the lights on.

I'll be sure to stop by your job and see if some fat can be trimmed over there by cutting your wages--how does 1/2 a paycheck sound?

I mean I always take in the pants on service. Because I can go to an indepentant garage and save a ton, I still opt to go to a GM dealer. I still don't understand why making $500 on a car is not enough and never will. Oh trust me there isn't an extra 500 to shave from my paycheck. That is why I get great deals.

[enzl]

I mean I always take in the pants on service. Because I can go to an indepentant garage and save a ton, I still opt to go to a GM dealer. I still don't understand why making $500 on a car is not enough and never will. Oh trust me there isn't an extra 500 to shave from my paycheck. That is why I get great deals.

I was just checking that you understood what you're saying...I guess you do.

$500 doesn't cover more than a few months of interest payments on floorplanned inventory. That's without paying a salesman, manager & the receptionist. Electric, heat & rent aren't peanuts either, my friend.

That's why lots o' dealers are "retiring"

[daves87rs]

I was just checking that you understood what you're saying...I guess you do.

$500 doesn't cover more than a few months of interest payments on floorplanned inventory. That's without paying a salesman, manager & the receptionist. Electric, heat & rent aren't peanuts either, my friend.

That's why lots o' dealers are "retiring"

Pretty soon you will be buying a car online and picking it up on a lot...no joke.

Almost all the auto companies are working on that in some shape or form...

And unlike most online retailers..I don't think the comsumer will get a choice in this change either...

Though I'm sure there will be some "service centers" for test driving and service.....

[CARBIZ]

Pretty soon you will be buying a car online and picking it up on a lot...no joke.

Almost all the auto companies are working on that in some shape or form...

And unlike most online retailers..I don't think the comsumer will get a choice in this change either...

Though I'm sure there will be some "service centers" for test driving and service.....

I don't understand your irrational hatred of dealers. It's one thing to buy a sweater or hockey cards online, quite another to spend 4 years salary. Would you buy your house online, without even seeing it?

Maybe mommy didn't breast feed you, but I suspect that as soon as you walk on the lot, salesman scatter. Your attitude betrays you. If you treat the sales staff like $h!, they will just dish it right back.

It's a truism in this business that price whores are not worth the time or money. I wish you luck at buying your next car online. We've heard this story for 10 years. Someone still has to show you the car (because you may think you know everything, I'd wager you do NOT), explain the differences you may not be aware of and then, of course, you'll want to drive it.

If you don't think that is worth paying for, then I guess you're the kind of guy who prefers to stay at home because internet porn is so much better than actually having to relate with real human beings.

Edited August 26, 2008 by CARBIZ

[The O.C.]

Online sales are growing at a fast pace for vehicle purchases.

Last month was my first full month here at Caddy and I sold 16.5 cars in one month......all from online business (I don't take floor ups or phone pops....unless they are internet-driven.) I was top salesperson here at the store too. Not bragging.....just trying to make a point about the potential for online business (and this was in a down market right now too.)

I've got 11 out this month and working a bunch that I hope to close by Saturday.

People do SO much research online now, that a vast majority of the work is done over the computer and phone. SURE they still have to end up coming here to seal the deal and take delivery, but by the time they get here, they are somewhat committed, have started to build a relationship with me, and feel like the time spent purchasing the car was much less than if they just walked in off the street (even if it's really not much less time.)

Back again to Employee Pricing......those of you in GM stores, have you seen a great increase in new-car business as a result? We haven't at all.....in fact our new-car business is off dramatically this month......used is still strong though. (I've got 8 used but only 3 new out.)

A prime example I'm dealing with is a customer coming out of an '05 CTS lease.....trying to get her into a comparable '08.....with the lease rates now.....and EVEN WITH GMS pricing.....her payment doubles.....DOUBLES. I have no where to go with her. She'll have to either move into a pre-owned CTS on a purchase, or go lease something much less expensive to replace it.

[Robert Hall]

I don't understand your irrational hatred of dealers. It's one thing to buy a sweater or hockey cards online, quite another to spend 4 years salary. Would you buy your house online, without even seeing it?

'4 years salary'??? Someone's paying waaay too much for a car... i.e. someone making $25k/year buying an $100k car? I don't think so!

I couldn't imagine buying a car that was much more than 1/3 of my yearly salary...

Edited August 26, 2008 by moltar

[frogger]

'4 years salary'??? Someone's paying waaay too much for a car... i.e. someone making $25k/year buying an $100k car? I don't think so!

I couldn't imagine buying a car that was much more than 1/3 of my yearly salary...

Yeah I'm thinking he meant 4 months... Thats about my cap as well, every 5-6 years.

[gm4life]

I was just checking that you understood what you're saying...I guess you do.

$500 doesn't cover more than a few months of interest payments on floorplanned inventory. That's without paying a salesman, manager & the receptionist. Electric, heat & rent aren't peanuts either, my friend.

That's why lots o' dealers are "retiring"

No Enzl thank you for being polite. I am just a deal hunter, wonder my Impala has only two options tape deck and cruise? Because I could get the sucker for a song!

[daves87rs]

I don't understand your irrational hatred of dealers. It's one thing to buy a sweater or hockey cards online, quite another to spend 4 years salary. Would you buy your house online, without even seeing it?

Maybe mommy didn't breast feed you, but I suspect that as soon as you walk on the lot, salesman scatter. Your attitude betrays you. If you treat the sales staff like $h!, they will just dish it right back.

It's a truism in this business that price whores are not worth the time or money. I wish you luck at buying your next car online. We've heard this story for 10 years. Someone still has to show you the car (because you may think you know everything, I'd wager you do NOT), explain the differences you may not be aware of and then, of course, you'll want to drive it.

If you don't think that is worth paying for, then I guess you're the kind of guy who prefers to stay at home because internet porn is so much better than actually having to relate with real human beings.

What???? What makes you think I hate Dealers?

That's a low blow Carbiz.....

I actually like going to the dealership...not only to buy a car, but sometimes getting it servced there. I like walking around the lots looking for the new cars. I like to test a few cars ( or even trims levels) to see what I will like. I like talking to a real person, which is important when you are making a purchase like this.

The problem is that many people do not think like me...at least, not anymore.

Many people (including a friend of mine) did a little research, and Bam!-bought their car online. My buddy even had all his finacing done online.

To some people. it is no different than buying a pair of jeans online. Sad, but very true.

The reason I say that is because it is out there, and sooner or later-it is going to happen.

And not only do I know quite a bit about it, but I've already worked on one of these projects.

Now if the comsumer base as a whole continues to demand many choices (and not just be told what they need), it is going to make it harder for companies to do it...

Times are changing my friend. I'm hoping to be able to see the best of both worlds...

[Robert Hall]

Yeah I'm thinking he meant 4 months... Thats about my cap as well, every 5-6 years.

Could be...10yr/100k miles is my current cycle...

[A Horse With No Name]

Actually buying a car I figure what they are selling for (real world fair market value) make things fair and make an up front offer.

I find the words "I think this is fair, I'm ready to buy right now, my beacon score is 820, and I can be done in 15 minutes if you can write that fast"usually closes a sale pretty quickly.

I don't like to screw around once I've decided on the car I'm going to buy.

But I have found every car I've bought in the last 10 years Via the internet.

Chris

[CARBIZ]

'4 years salary'??? Someone's paying waaay too much for a car... i.e. someone making $25k/year buying an $100k car? I don't think so!

I couldn't imagine buying a car that was much more than 1/3 of my yearly salary...

My bad. I was thinking the general rule of not spending more than a person's annual salary, since most people pay them off over 4 years....

[A Horse With No Name]

My bad. I was thinking the general rule of not spending more than a person's annual salary, since most people pay them off over 4 years....

How do you figure out what a person can really afford? Our household annual Salary right now is at about $70,000 or $75,000, and I don't really feel comfortable spending more than about 15k for a car, maybe 20k in a few years if I save up some good down payment or have extra tucked away in case of a rainy day.

...and I have very minimal (in the high hundreds) credit card debt...and no other real debt other than a mortgage that is less by a fair chunk than what I qualify for.

I was told that I could buy anything that took the payment to about $650 or $700 easily, but that is wayyy more than I am confortable with.

So how should someone really decide how much of a payment they can take on?

Chris

[CARBIZ]

We do internet quotes all the time. They are a huge waste of time. 90% never even have the courtesy of getting back to us. I especially love the ones from 4-500 miles away: clearly they are just keeping their local dealer honest.

I think it can be argued that this type of shopping is not going away, but the dealer body is going to have to come to terms with it. These deals tend to be very low 'gross' deals. I've seen my commissions drop in half this past year. Since the dealers are often protected by the manufacturer (there are all kinds of kickbacks that the dealer gets that we aren't supposed to know about), it is really only the sales staff that are getting screwed, since we are paid on 'gross' only.

The Corvette deals are the worst. It takes a very long time to properly 'deliver' a Corvette. Initiating OnStar, showing them how to use the Nav system, going over the owners manual, making sure the car is flawless, checking up on the PDI guys, chasing the insurance companies, the paperwork is from hell - and all that for $200? I'd rather sell an Aveo, thanks. These Corvette guys get all puffed up like they are buying the Hope Diamond, but the reality to the sales staff is - who cares? When I would make a $3,500 commission on a $75k car, damned right I'd do cartwheels and fetch coffee, but for $200? Get your own damned coffee! It is harder and harder to put that smile on and eat the $h! these Corvette guys spew.

The amount of training that we have to do, compared to 10 years ago, is incredible. The paperwork and processes for delivering a vehicle are unbelievable. It usually takes 2 hours to sell a car, then another 2 to properly deliver it - and that assumes we have it in stock! The hours we put in suck. When people were making $80k a year, we would put up with a lot of crap, but those days are gone. If $200 is going to be an 'average' commission, the dealers are going to have to figure out a different pay plan very soon, or the well-trained staff will just go elsewhere. Then your dealer experience is going to be like a trip to Future Shop where you'll get a bunch of pimply-faced kids who don't know their ass from a hole in the ground and whose eyes glaze over the moment you tell them you are 'just looking.'

The new reality in Canada is dealers selling 50-60 new cars a month and 6-8 salespeople fighting over those scarce customers. Customer loyalty is at an all-time low. Guys I know who were selling 20 cars a month 5 years ago, are now selling 8 or 9.

And don't think it's just GM. One of my best customers (he has bought 4 vehicles from me) got 'outsourced' from his well paying insurance job, so took a package and went to work as a business manager at a Mazda dealer in a highly Asian area of the city. He quit after 3 months. He hated the atmosphere, hated the amount of sleeze - and they weren't selling any cars there! I guess he was surprised that he had to actually work for half the money he was used to making!

[CARBIZ]

How do you figure out what a person can really afford? Our household annual Salary right now is at about $70,000 or $75,000, and I don't really feel comfortable spending more than about 15k for a car, maybe 20k in a few years if I save up some good down payment or have extra tucked away in case of a rainy day.

...and I have very minimal (in the high hundreds) credit card debt...and no other real debt other than a mortgage that is less by a fair chunk than what I qualify for.

I was told that I could buy anything that took the payment to about $650 or $700 easily, but that is wayyy more than I am confortable with.

So how should someone really decide how much of a payment they can take on?

Chris

As much as your banker will allow.

If you make $60k a year, then a $60k car could be affordable. I wouldn't go higher than that. So much depends on what your other debts are. I know many people who pay their home off, kick the kids out and then treat themselves to an expensive toy. However, with kids and a mortgage, 25% of your annual salary might be too high.

[A Horse With No Name]

He quit after 3 months. He hated the atmosphere, hated the amount of sleeze - and they weren't selling any cars there! I guess he was surprised that he had to actually work for half the money he was used to making!

I think the decline in buisiness ethics is a big part of the decline of western commerce. Just my two cents, but....

Chris

[CARBIZ]

I think the decline in buisiness ethics is a big part of the decline of western commerce. Just my two cents, but....

Chris

This is a tough business to keep one's integrity in, believe me!

Case in point: a young woman (she was pretty hot - even I'd do her!) came in on Thursday. She wanted a Malibu. She'd already been somewhere else, driven one and knew what she wanted. We worked the numbers, she was happy and wanted to do the deal. I told her I needed her driver's license, insurance information, a $500 deposit and then she would go see the business manager who would do the paperwork. Oh, she says, I don't have my debit card or visa on me. Okay, I replied, let's just do the paperwork and you can bring me the deposit later. She agreed, but when I came back with some paperwork after my boss had checked things over, she suddenly had to get her kid from daycare and would be back 'in a half hour' with $500 cash. Fine.

Three hours passed. I left a message on her cell, warning her we were closing in an hour. No reply. It's a truism in this business that when a client claims to not have money or credit for the deposit that there is a big problem. Saturday morning, I left a second message, still keeping my tone polite and calm, even though I wanted to rip her face off through the phone. At 5 pm Saturday, she called me, wondering why I hadn't called her. It turns out she had given me her work #. Oh. She wanted to come in right then but she was on the other side of the city and we closed in less than an hour. She agreed to come in at 10:30 on Monday.

I worked 12 hours on Monday because I came in at 10:00 for her and she never showed. She has not returned any of my subsequent calls either.

So I've been 'had.' I can live with that, except that I came in 4 hours early for my shift and wasted my entire day.

Yesterday, one of the guys spent 3 hours with a younger guy (he was a bit of a freak) who 'bought' an Aveo, then it turns out his credit is horrible. No deposit from him either. I suspected this punk had already been turned down by Kia, which is where he'd already been. The salesman was pissed. Do these idiots not realize that we all use the same credit bureau?

So next time you get a bitchy salesman, give him a break. You don't know what kind of people he has already put up with that day. It is a two way street.

[A Horse With No Name]

I just don't know how anyone stays sane in the car buisiness. Thanks for your response!

Chris

[The O.C.]

We do internet quotes all the time. They are a huge waste of time. 90% never even have the courtesy of getting back to us. I especially love the ones from 4-500 miles away: clearly they are just keeping their local dealer honest.

I think it can be argued that this type of shopping is not going away, but the dealer body is going to have to come to terms with it. These deals tend to be very low 'gross' deals.

No offense, but I think your "can't do" attitude is what is souring your impression of internet deals.

The reason I'm doing this at Caddy is because our GM offered the internet department to ANY salesperson that wanted it....and no one took it.

Last month, I had the second HIGHEST gross in the dealership from the highest number of units. I also made the second HIGHEST commission for the month. AND the guy that beat me in gross and commission was lucky to have a few HUGE pounders during the month.....so even though he beat me, he didn't beat me by much.

THIS month, I'm second highest in unit count (one unit behind the leader) and also second highest in gross....and in commissions.

All I do is internet deals....no floor ups.

So clearly......there is gross and profit to be made in the internet. The difference is.....I believe in it.....and I work it.....and I know how to get people in and still hold profit.

It's all in attitude.

(Edit: The VAST majority of my internet customers, maybe 85%, don't even work numbers with me UNTIL they get here to the store. Maybe only 15% of my customers actually negotiate numbers over the phone/email. Most internet customers are internet researchers.....not internet buyers, per se.)

(A good internet manager/salesperson knows that the biggest importance is to get these people into your store before you work numbers. If you do that, you kill the chances of them shopping you. I truly believe that's what has helped me be successful with it.)

Edited August 29, 2008 by The O.C.

[daves87rs]

No offense, but I think your "can't do" attitude is what is souring your impression of internet deals.

The reason I'm doing this at Caddy is because our GM offered the internet department to ANY salesperson that wanted it....and no one took it.

Last month, I had the second HIGHEST gross in the dealership from the highest number of units. I also made the second HIGHEST commission for the month. AND the guy that beat me in gross and commission was lucky to have a few HUGE pounders during the month.....so even though he beat me, he didn't beat me by much.

THIS month, I'm second highest in unit count (one unit behind the leader) and also second highest in gross....and in commissions.

All I do is internet deals....no floor ups.

So clearly......there is gross and profit to be made in the internet. The difference is.....I believe in it.....and I work it.....and I know how to get people in and still hold profit.

It's all in attitude.

(Edit: The VAST majority of my internet customers, maybe 85%, don't even work numbers with me UNTIL they get here to the store. Maybe only 15% of my customers actually negotiate numbers over the phone/email. Most internet customers are internet researchers.....not internet buyers, per se.)

(A good internet manager/salesperson knows that the biggest importance is to get these people into your store before you work numbers. If you do that, you kill the chances of them shopping you. I truly believe that's what has helped me be successful with it.)

QFT.

I think the O.C understands me.... And I would have to agree with him....

The internet is going to play a big part in sales...no matter which way you look at it.

[daves87rs]

This is a tough business to keep one's integrity in, believe me!

Case in point: a young woman (she was pretty hot - even I'd do her!) came in on Thursday. She wanted a Malibu. She'd already been somewhere else, driven one and knew what she wanted. We worked the numbers, she was happy and wanted to do the deal. I told her I needed her driver's license, insurance information, a $500 deposit and then she would go see the business manager who would do the paperwork. Oh, she says, I don't have my debit card or visa on me. Okay, I replied, let's just do the paperwork and you can bring me the deposit later. She agreed, but when I came back with some paperwork after my boss had checked things over, she suddenly had to get her kid from daycare and would be back 'in a half hour' with $500 cash. Fine.

Three hours passed. I left a message on her cell, warning her we were closing in an hour. No reply. It's a truism in this business that when a client claims to not have money or credit for the deposit that there is a big problem. Saturday morning, I left a second message, still keeping my tone polite and calm, even though I wanted to rip her face off through the phone. At 5 pm Saturday, she called me, wondering why I hadn't called her. It turns out she had given me her work #. Oh. She wanted to come in right then but she was on the other side of the city and we closed in less than an hour. She agreed to come in at 10:30 on Monday.

I worked 12 hours on Monday because I came in at 10:00 for her and she never showed. She has not returned any of my subsequent calls either.

So I've been 'had.' I can live with that, except that I came in 4 hours early for my shift and wasted my entire day.

Yesterday, one of the guys spent 3 hours with a younger guy (he was a bit of a freak) who 'bought' an Aveo, then it turns out his credit is horrible. No deposit from him either. I suspected this punk had already been turned down by Kia, which is where he'd already been. The salesman was pissed. Do these idiots not realize that we all use the same credit bureau?

So next time you get a bitchy salesman, give him a break. You don't know what kind of people he has already put up with that day. It is a two way street.

That reminds me of the story my salesguy told me a few weeks ago...One of his sales was involved in a pretty big accident during a test drive, and he had just come back from the hospital (just a few bruises), sat down in his chair, and then a customer ripped him a good one for not talking to him.

He told me the owner told the guy the the last customer nearly killed him, so you might want to be nicer....

At least the guy bought a truck......