Leasing vs. Buying

[Andrew2382]

No, there's no limit to negotiating and no manager will tell you to piss the fuck off unless your credit rating is below 500... and even then I've gotten deals done.

Don't come in and expect to pay $100 a month on a $30,000 car with no money down. Be a little smart. Look at your budget and know what you can spend. If you can do $400 a month, come in and tell them you can only do $300 a month. No matter what monthly payment you come in and tell them you can do, they will try to raise you. Well, at least I would. I never, EVER agreed to anyone else's demands for a payment. I'm not a waitor, I don't take orders.

Go in, be professional. Tell them you want a car that can do x, y and z. Tell them what THE most important thing in a car for you is and tell them what you can afford monthly. And don't go in there and tell the salesperson "I'm just looking." I fucking hate that. A car dealership isn't a fucking museum and I'm not a fucking curator here to describe to you in great detail all about this car without making money. Car salespeople make $250 a week in salary IF THAT and only make a percentage of the markup between invoice and the final selling price. Very rarely do they get hold back. If you buy a car at invoice, the salesperson will usually make $50 on that sale. He'll spend 3 or 4 hours and make $50. That's $12.50 an hour. Would YOU work for that little? It's bullshit. The dealerships don't pay the salespeople on hold back (the price the manufacturer pays the dealer to sell the car) and the salesperson barely makes any money and everyone of these fucking customers says "No, I'm just looking." Or "What's the invoice on this car?" I've never gone to a supermarket and said "Can you tell me what you paid for this can of beans? Cause I don't want to pay a dime more." Who the fuck has the balls to say "I don't want your company to make a dime of profit off of me."

The only difference in leasing vs. buying in insurance rates is that you need full coverage in auto insurance for a lease. Honestly, you should have full coverage any way. There are no premiums, no this, no that.

Oh and if you buy a car, get gap insurance. If you drive out the lot and say within the first 90 days your car gets totaled, you still owe $25,000 on a vehicle that is worth $15,000 with no damage. If you total your vehicle, the insurance company will only give you an amount of money for what the car is worth. You'd still owe $10,000. Gap insurance covers the cost between what you owe on a car and what the car is worth in the event your car is totaled.

no, you are wrong...there is a limit where a manager will tell you to piss off. Why would the dealer make a $500 profit on you kowing that he can sell trhe car to someone else and make $1000 profit...see thats the difference between a good manager and a bad manager.

Also you are wrong...again with insurance

you still need "full coverage" when you buya car...I put full coverage in quotation marks because any insurance person will tell you there is no such thing as full coverage.

When you buy a car unless you buy it cash..you don't own the car...the bank does you are financing it...Until you have the title in your hand you need to carry Collission and Other then Collission also known as Comprehensive coverage at the deductible required by that certain bank.
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The only difference is Bodily Injury, when you lease you are required to carry limits of $100,000 per person/ $300,000 per accident. When you finance this coverage is not needed.

However, everyone should carry that limit at a minimum.


Tell the salesperson what you can afford monthly/

That is the dumbest shit I have ever heard....go to a salesmen you want to be at 300 a month and when he goes back at you on a 72 month plan at 300, will you be happy? You don't go by monthly payment you go by the price of the car.

 

[Andrew2382]

Why can your rates go up/down because of your credit?

There are 2 different type of insurance companies

standard and non standard

Non Standard are the little local companies from your state

Standard are the big companies, Geico, Allsatte, State farm etc..

Generally Non- Standard companies don't check credit, they base rates on Age, Vehicle, Territory, and Driving Record

Standard companies check your credit to help define the rate and its the most siginifcant part of the rating process.

Insurance companies state they have found a correlation between credit ratings and claim frequencies, that the lower the credit the bigger the chance they file a claim. I myself disagree however they must have numbers to back up the theory because it has been fought many times and their theory seems to be correct.

Also, there is another report with your MVR (Motor Vehcile Report) that standard companies check to give you a rate...it's called your CLUE Report

Whenever you file a claim under your own insurance company, if the company is a standard company it will list it on your clue report... It will be there for 7 years. If you are with Geico and decide to shop around and you filed a claim under Geico twice in the past 3 years...when you call Allstate they will see the CLUE report and see the 2 claims you filed.

This would make you ineligible for certain discounts to lower your rate such as no tickets/accidents and claims discount which would be significant.

Thats why you should never file a claim under your company unless you are 100% at fault or the other company is giving you problems. Even if you call your company just to tell them you had a claim and they pay 0 dollars it will still be in your CLUE report, so be careful with that.

 

[DavidS]

no, you are wrong...there is a limit where a manager will tell you to piss off. Why would the dealer make a $500 profit on you kowing that he can sell trhe car to someone else and make $1000 profit...see thats the difference between a good manager and a bad manager.

Andrew, I was an acting manager for two Ford dealerships. I worked for the #1 volume dealership in Florida. Believe me, that dealership was rolling in it. There is NO limit. We would salivate at the fact you're actually negotiating with us. It's like cocaine. Negotiate the car all the way down to invoice, ask us to throw in free paint protector, ask us to get you the lowest interest rate possible and ask us to throw in an extended warranty for a discount. We would have done it. Any major auto dealership would do it. And this was back in '02 and '03 before things were as bad as they are now. Now they don't even negotiate, they go all the way down to invoice, offer hold back and see if they can throw in a warranty for cheap. Dealerships get paid big bucks for moving lots of cars and they'd rather lose money on a car and sell it than risk paying interest on it and not get paid hold back from the manufacturer.

A manager doesn't care if the salesperson makes gross or not. A manager's first and only responsibility to sell cars - it's irrelevant what he sells them for. The managers gets a percentage of the hold back and a nice salary. In fact, out of 20 green peas (new car salespeople) you will lose about 19 of them in the first 6 months. Only the people who are really good at making gross will stay at a dealership. Turnover among new salespeople is very very common. All you need to do is put a new ad in the paper and boom, new set of green peas to train and not pay for two weeks.

So in essence, there is NO limit to how much negotiating a manager will do. Besides, if there is all of this negotiating, he's going to call in the big boss, the General Manager, and he's going to close you. We sat there, training and listening to the General Manager of our dealership close us and shut us down for 3 days. The guy was so good at selling cars and overcoming all of our objections, I would've trusted him with my newborn baby.

Also you are wrong...again with insurance you still need "full coverage" when you buya car...I put full coverage in quotation marks because any insurance person will tell you there is no such thing as full coverage.

I guess this is a state thing. In Florida, you didn't need full coverage to buy the car. You needed insurance, but not full coverage. Things may have changed in the past couple of years dunno.

That is the dumbest shit I have ever heard....go to a salesmen you want to be at 300 a month and when he goes back at you on a 72 month plan at 300, will you be happy? You don't go by monthly payment you go by the price of the car.

If you can't make your monthly payment, then it doesn't matter if I discount the car $10,000! As I said, if you can do $400 a month, tell the salesperson $300. He'll talk with his manager and hit you at $350 a month unless the salesperson is just WEAK as shit. This is what we're taught from day 1.

 

[Care4all]

Andrew, I was an acting manager for two Ford dealerships. I worked for the #1 volume dealership in Florida. Believe me, that dealership was rolling in it. There is NO limit. We would salivate at the fact you're actually negotiating with us. It's like cocaine. Negotiate the car all the way down to invoice, ask us to throw in free paint protector, ask us to get you the lowest interest rate possible and ask us to throw in an extended warranty for a discount. We would have done it. Any major auto dealership would do it. And this was back in '02 and '03 before things were as bad as they are now. Now they don't even negotiate, they go all the way down to invoice, offer hold back and see if they can throw in a warranty for cheap. Dealerships get paid big bucks for moving lots of cars and they'd rather lose money on a car and sell it than risk paying interest on it and not get paid hold back from the manufacturer.

A manager doesn't care if the salesperson makes gross or not. A manager's first and only responsibility to sell cars - it's irrelevant what he sells them for. The managers gets a percentage of the hold back and a nice salary. In fact, out of 20 green peas (new car salespeople) you will lose about 19 of them in the first 6 months. Only the people who are really good at making gross will stay at a dealership. Turnover among new salespeople is very very common. All you need to do is put a new ad in the paper and boom, new set of green peas to train and not pay for two weeks.

So in essence, there is NO limit to how much negotiating a manager will do. Besides, if there is all of this negotiating, he's going to call in the big boss, the General Manager, and he's going to close you. We sat there, training and listening to the General Manager of our dealership close us and shut us down for 3 days. The guy was so good at selling cars and overcoming all of our objections, I would've trusted him with my newborn baby.



I guess this is a state thing. In Florida, you didn't need full coverage to buy the car. You needed insurance, but not full coverage. Things may have changed in the past couple of years dunno.



If you can't make your monthly payment, then it doesn't matter if I discount the car $10,000! As I said, if you can do $400 a month, tell the salesperson $300. He'll talk with his manager and hit you at $350 a month unless the salesperson is just WEAK as shit. This is what we're taught from day 1.

my uncle owned a dealership for a few decades....

down to invoice price does not mean what it implies, which is that the dealership made no profit on the car...because their are credits and discounts they get which brings their actual cost for the car BELOW invoice.....

just want to make that clear to everyone....

that being the case, in a very competitive market, i can see negotiating down to invoice price, because there is still some room for profit, even after commission paid, imo.

care

 

[Andrew2382]

Andrew, I was an acting manager for two Ford dealerships. I worked for the #1 volume dealership in Florida. Believe me, that dealership was rolling in it. There is NO limit. We would salivate at the fact you're actually negotiating with us. It's like cocaine. Negotiate the car all the way down to invoice, ask us to throw in free paint protector, ask us to get you the lowest interest rate possible and ask us to throw in an extended warranty for a discount. We would have done it. Any major auto dealership would do it. And this was back in '02 and '03 before things were as bad as they are now. Now they don't even negotiate, they go all the way down to invoice, offer hold back and see if they can throw in a warranty for cheap. Dealerships get paid big bucks for moving lots of cars and they'd rather lose money on a car and sell it than risk paying interest on it and not get paid hold back from the manufacturer.

A manager doesn't care if the salesperson makes gross or not. A manager's first and only responsibility to sell cars - it's irrelevant what he sells them for. The managers gets a percentage of the hold back and a nice salary. In fact, out of 20 green peas (new car salespeople) you will lose about 19 of them in the first 6 months. Only the people who are really good at making gross will stay at a dealership. Turnover among new salespeople is very very common. All you need to do is put a new ad in the paper and boom, new set of green peas to train and not pay for two weeks.

My brother works for the number one BMW dealership in the nation (Vista BMW)...you are kinda right but very wrong too. Gross is king. Holdback on a BMW is about 6% then of course you have pack...thats pure profit to the dealership. With Floorplan interest rates as low as they are and manufacturers wanting dealers to buy cars holding units isn't as much of a deal now as it was 5+ years ago. Vista turns over its inventory every 60 days or so. Gross is KING...They would rather move 300 units at 3k front a copy then move 350 units at 1500 a copy. In the end managers get paid on GROSS. Very few dealerships pay on holdback at least in the high end market. Ford/GM/Toyota want units, high line stores want Gross its all a matter of where you are working and what product you are selling.

Also, what Ford dealer did you work at because I kow what the #1 Ford dealer is down here because it's a client of mine.

I guess this is a state thing. In Florida, you didn't need full coverage to buy the car. You needed insurance, but not full coverage. Things may have changed in the past couple of years dunno.



If you can't make your monthly payment, then it doesn't matter if I discount the car $10,000! As I said, if you can do $400 a month, tell the salesperson $300. He'll talk with his manager and hit you at $350 a month unless the salesperson is just WEAK as shit. This is what we're taught from day 1.

Florida is a no-fault state meaning you need to carry PIP (Personal Injury Protection and Property Damage...that is all that is required if you OWN a vehicle

If you Finance a car, technically you don't own it the Bank does and they require you carry Comp and Collission

If you lease it , the bank requires you to carry comp and collission and Bodily Injury at a limit of $100 per person/ $300,000 per accident.

Also if you go to a salesmen and say put me at 350 a month...they will put you at 250 a month on a 72 month contract to get th emost out of you...you negogiate by the price of the car not payment....you figure the payment out in the finance office.

 

[manu1959]

What are the benefits of leasing a car vs. buying a car? I would love some opinions from those who have done either, and which way I should go with my next car. Thanks!

buy a lease return....never lease and never buy new....

 

[DavidS]

my uncle owned a dealership for a few decades....

down to invoice price does not mean what it implies, which is that the dealership made no profit on the car...because their are credits and discounts they get which brings their actual cost for the car BELOW invoice.....

just want to make that clear to everyone....

that being the case, in a very competitive market, i can see negotiating down to invoice price, because there is still some room for profit, even after commission paid, imo.

care

Yes. That's hold back. Some cars it's a few hundred. Others it's a thousand or so. A salesperson is only concerned about above invoice price because that's what he gets paid on. There are a smattering of dealerships to pay their salespeople on hold back, but it's a very small percentage and it's only on the top of the line vehicles.

 

[DavidS]

My brother works for the number one BMW dealership in the nation (Vista BMW)...you are kinda right but very wrong too. Gross is king.

Bro, I'm not saying no one cares about gross. I sold a 2003 Focus SVT for $2K above sticker on a lease. SVT Focus' already have high markups on them. The car had about $3k worth of markup plus the dealership gave us $500 for every SVT we sold. Best paycheck I ever got back then. I took my parents out to Red Lobster the next night. I was the best grean pea that dealership ever saw. Then the dealership started using the 4-square sales methods to try and increase sales. Completely idiotic. I then left them for another one and got promoted to an acting manager, which is basically just a salesperson acting as a manager without any of the bells & whistles. I helped close deals. You would be surprised how many people just say yes because all you do is ask them the same thing the salesperson asks them. "So if I could get your payment down to $350, would you buy the vehcile today?" It's the old "If I could, would you" line. I use it today in my sales and it works in everything I do. It's probably the best qualifying/close line there is.

Holdback on a BMW is about 6% then of course you have pack...thats pure profit to the dealership. With Floorplan interest rates as low as they are and manufacturers wanting dealers to buy cars holding units isn't as much of a deal now as it was 5+ years ago. Vista turns over its inventory every 60 days or so. Gross is KING...They would rather move 300 units at 3k front a copy then move 350 units at 1500 a copy. In the end managers get paid on GROSS. Very few dealerships pay on holdback at least in the high end market. Ford/GM/Toyota want units, high line stores want Gross its all a matter of where you are working and what product you are selling.

God. 3K front. I just wet myself thinking of that. I sold '03 Expedition XLTs with less gross than that. Does your brother's dealership pay on the back end too? I can't remember if it was the first or second dealership I we got paid on the back end at. Managers always taught us how to help someone's beacon score get higher so they could qualify for lower interest rates and then hit them with double digit interest rates. If someone qualified for 5%, the finance team would hit them with 10 - and it worked! I don't know if you can do that anymore... but I always liked to establish a relationship between the finance guy and the customer before they closed. Let the finance guy get a feel for the customer and then the finance guy and I would always huddle and say "she's really impatient, just move the meat" or "she's happier than a pig in shit. finegle her a little." of course, floridians didn't understand yiddish so i had to explain it to them.

Also, what Ford dealer did you work at because I kow what the #1 Ford dealer is down here because it's a client of mine.

Brandon Ford. The #1 volume dealership in Florida. They had 3 parking lots full of fords and had over 500 new cars to choose from, including saleen, svt and jack roush mustangs. I sold an '03 SVT Cobra once. 300 torque/300 hp. Guy didn't believe me when I told him the Cobra kicked the GT's ass. So I took him for a spin in the GT. And then I took him for a spin in the SVT and just put the fucking gas pedal down to the street. Problem is that I passed a cop while demonstrating this to the customer and the cop pulled me over and gave me a ticket for going 60 in a 35 zone. The customer felt so terrible he bought the car from me. Never got to drive a Roush or a Saleen.

Also if you go to a salesmen and say put me at 350 a month...they will put you at 250 a month on a 72 month contract to get th emost out of you...you negogiate by the price of the car not payment....you figure the payment out in the finance office.

We never did 72 months unless we absolutely had to. I think I did 1... maybe 2 deals at 72. I don't think Ford Motor Credit liked 72 month loans at all. We always figured out the payment and got down to payments right away before the guy even took the car he wanted for a test drive. If a guy's telling me he can only do $250 a month with no money down, and he's looking at a Ford Explorer Limited which MSRP'd for $35k, he and I need to look at another car.

I miss those days. Then I moved up to NY and the Ford dealership in Long Island was run by a bunch of fucking morons. Insurance laws in NY made it nearly impossible to drive home with the car they purchased a couple hours later until April 2003. Then something changed. Instead of inspecting, cleaning and detailing a few cars ready to go that day to coincide with the new insurance laws, the dealership sat on its ass. The managers were lazy fucks and fed only one salesperson a bone from call ins. They didn't even have a finance guy working on Sundays, which in Florida, were our busiest days. Plus I had been trained to try and get as many leases out as possible and around February 2003, my first week of being back up in NY, Ford Motor Credit stopped issuing leases because they could be held liable if the person got into a car accident. Some stupid archaic new york state law that was initiated by a major lawsuit in connecituct.

Instead we had to do something called a baloon payment, where you had a lot of low monthly payments and then a huge payment due at the end. You couldn't write it off the same way you could write off a lease and it was just a disaster. I lasted only a few months there and helped my ex-girlfriend's father's friend's company launch a price comparison website and did sales for them for a year and a half until Ford finally started accepting lease payments and a Ford dealership all the way out in Riverhead was building a new show room and wanted someone to take charge of their internet sales and I was offered the position along with a demo car and gas allowance. It was a sweetheart deal, but I met an amazing woman who lived in the East Village at the time and was open to moving in with me, but wanted to live in Brooklyn. I turned down the position and stayed with the company I was with. Four and a half years later... I don't regret it. Seeing what's happened with the auto industry as of late has been a shocker for me. I loved the business when I was in it and working pretty much every day. There was nothing better than a middle aged couple on a Sunday coming back from Church wanting to buy a new car. Nicest people, best credit and they allowed you to make a little gross.

Those were the days. Those days are gone now. One of the oldest and most respected salespeople, Tex, who taught me everything I know in car sales, retired and his friend Link died of cancer. All of the managers are gone and there's only one salesperson who was there when I was there who is still there. I heard they filed for chapter 11 back in October. Would've never thought it. They were the #2 dealership in Tampa. As much as I hated Florida, I loved those guys like brothers. I miss them like hell. I loved trading war stories about the most difficult customers with people. Lowest credit score I ever saw was a 482. Highest was an 807. I always found the people with lower credit scores to be more interesting.

 

[Jon]

I took my parents out to Red Lobster the next night.

Wooo, big spender.

 

[DavidS]

I took my parents out to Red Lobster the next night.

Wooo, big spender.

Back then, that was a luxury.

 

[Jon]

If you were a magnificent car salesman as you claim you were, Red Lobster was never a luxury. I could afford to eat Red Lobster once a week when I worked part-time as a pizza delivery guy.

 

[DavidS]

If you were a magnificent car salesman as you claim you were, Red Lobster was never a luxury. I could afford to eat Red Lobster once a week when I worked part-time as a pizza delivery guy.

Magnificent car salesman in tens of thousands of dollars in debt NOT from student loans.

And that is a long, long story.