Why We Hate Salespeople,"Working To A Close"

more sidenotes about blue book values and what you need to know going

Published on April 8, 2004 By Sean Conners aka SConn1 In Consumer Issues

Salespeople are told by their management that they have 1 job generally. That job is to close sales. While some dealerships may have specialists who "close" the customer "in the box," it is the salesperson's primary job responsibility to cause cashflow. Their job is not to show cars, be a center of information, be a liason between the customer and service or any other tak that they routinely do. Salespeople may do these tasks, but it always to achieve an ultimate goal of creating a closing opportunity.

That is a major reason that playing along is so important rather than create an adversarial relationship from the 1st moment. The other big thing that one should do when going through the sales process is remain unemotional. To the salesperson and his manager, it is your emotion that can make the difference between a no and a yes. When they evaluated your trade, and the numbers are thousands below what Kelley's said your car should be valued at, they explained some reasoning most likely of the discrepency. One of the things that a dealer will tell you is that they don't rely on Kelley's Blue Book to value cars, they may even point out that their used cars are priced below the Blue Book value. And allof that is pretty much true. But it's not all as one sided as they are presenting it.

It is true that the majority of used car managers or whomever is responsible for buying used cars don't use Kelley's as a reference primarily. They us e auction sheets. Sometimes gathered into a collection referred to as the "black book." The black book is the actual purchase prices of similar cars (year, miles , options and sometimes overall condition) at dealer auto auctions.

A dealer auto auction is different from the ones you and I can just show up to. Almost universally, one must be a registered "dealer" with a business license that authorizes them to buy and sell cars for profit. They usually have to pay a fee just to participate. This is a far cry from the auctions that are advertised for you and I to just come out and "get a wholesale deal" on a car.

The cars available at the auction tend to be of better quality too. Many of these auctions are off lease and program cars and the auctions are quick easy ways to dispose and write off the vehicle rather than the time consuming and tedious process of reselling it. Other auctions of these types of "low mile" and recent year vehicles are handled by the manufacturers themselves, often online. We will get more into these types of cars and the pros and cons of them, but for now, the point is they do have a multitude of options to purchase a car just like yours for less than what Kelley's claims is the going rate.

In Kelley's numbers, which were created and used primarily by banks, is all the baggage of the car business. It is based off of previous sales, yes, but the majority of those sales were financed.In those financing contracts are all the "roll over" numbers from negative equity in previous cars. Therefore, to a bank, for example, it would show the following.

Let's say the new car was 20,000. Let's say the traded car was valued at 5000 dollars. Then the traded car has a loan on it for 8,000. What the dealer will often be forced to do is report the trade value @ 8000 and the sale went for 23000. Many states will not allow the car to show that negative equity. They require all "loose ends" to be tied up witht he completion of this transaction. You are not allowed to continue paying on the negative balance on a seperate contract concerning the traded car, therefore, all must be made right with this purchase.

When you punch in the car data at their website, you don't see any of that. All you see is that a particular car is supposedly worth 8,000. You take that print out and shove it in the dealer's face demanding 8 grand for your car. That demand was met with total resistance and now you are convinced they are "just ripping you off."

Of course you aren't saying anything about the car that you are buying being listed thousands below Kelley's numbers. Kelley's said the car you want is worth 23K and they are only charging 20K. That's their dumb fault you figure, and you are entitled to that price AND the trade in value listed by Kelley. Guess what,,,it isn't going to happen.

Yes, in some freak occurence it may. You will have your best shot at that happening at the end of the month when just the sale will either earn a bonus level or save someone's job, but in the normal course of business, The dealer knows exactly what he can and cannot afford to do. And the rules that inhibit him, will inhibit every comparable dealer as they all have the same rules to work with. Information may be presented differently, but the rules behind the scenes remain constant.

But in all of this you should have realized a fact that will work to your advantage. It is true, whatever car you have, most likely, there are thousands if not millions of similar ones out there. The dealer can go get one for the trade value presented in most cases if he actually wanted the car. And even tho you can't get into the dealer auctions he can, there are thousands or millions of the car you are looking to buy as well.

If you are looking at a midsize car, like a Taurus, Camry or Accord, keep in mind that each of those manufacturers make well over a million of them every year. All minivans and SUV's are in production as much as possible. Except for rare cars like Corvettes, Vipers and other cars that have very limited production runs, most every other car should be findable by you using traditional consumer resources. Every year, they have leftovers on their lot after the next models are released, which actually begins in July in many cases, not October or November like many dealers will try to tell you. Most of the time, the new model year cars are sitting on the off site storage lot I referred to earlier while the company is pushing the old car on you for a minimal discount.

Last year on a Chrysler group lot, a "Five Star Dealer" which Chrysler claims is their most honest and best performing dealers, I can tell you 1st hand that Intrepids and other models were hidden on the storage lot for months before they were advertised. I believe they started coming in around May. They weren't put out on the lot until September. All the while, the dealership was pushing demos, one of which had been wrecked and repaired by the body shop and put out as a new product. By the way, this was all done on the side so no carfax report would pick it up.

We will cover more on the real world sleazy tricks dealers pull behind the scenes in the future. For now, just know that just like your trade isn't a rarity, most likely, neither is the car you are looking at.

So when you sit down at the closing table, most likely, in a box, you should have done the following.

You should have remained unemotional. Even if you absolutely love the car, keeping in mind that many other dealers could provide that car or one very similar to it, will help in not "falling in love." And when I say unemotional, I mean it with a polite edge. You will gather more flies with honey than with vinegar.

Also, you should have a good idea of where the market is at. If you are really ambitious, publications like "Automotive News" which is publicly available can give you sales figures for every car made for whatever period you want. That way you will know if the car you are looking at is a hot seller that may require a jump to a commitment or is the car lagging in sales, and the fact that there are 5 blue ones in stock of that model just on 1 lot should tell you the salesperson is b.s.'ing you when he tries to convince you they are selling like hotcakes. If you see big inventories, especially ones that don't change, take that as a sign that your car will likely be there next week depite what the salesperson, manager or whomever is doing the closing is saying.

And use the numbers you have in a smart way. Don't use them to falsely convince yourself that you are the 1 person who "put one over on the dealer" cause you aren't putting anything over on anybody. Don't just forget the retail number of the new car (or used car) since the asking price is below the number Kelly's gave you. Do some math. If the trade number seems low, figure in the value of the new purchase. If the numbers are out of whack, like ther trade is 5000 low, but the asking price for the purchasable car is only 500 of of Kelley's, you may have some negotiating room. But if the numbers add up, get the car if it is the right one. At the very least, if you have decided the car is right for your needs, and the math makes sense, go in at the end of the month, see what you can hammer out of the dealer in concessions and then buy the car.

One warning, this strategy could backfire on you. For example, let's say you came on the lot to look at a car that had been there for over 90 days, for whatever reason. For now, we'll assume it's just because of circumstance with nothing really negative about that car. You go in, get greeted, ask and answer some questions, look at the car and drive the car. You like the car and figure it will meet your needs. You sit down to negotiate.

The salesperson hits you with some "list price" type numbers, of which you quickly reject and ask to speak withthe manager. The salesperson leaves and comes back with some better numbers, but you still feel you can do better. After all, these guys are crooks in your mind, and it's just a matter of showing em how smart you are. You send the salesperson away and when he comes back, he has another person with him. He introduces his manager, and if he is a professional salesperson, he then shuts his mouth.

The manager comes in and goes thru a little chit chat. He will ask if you drove it, you will respond yes. He will then in the near future say something that every single car person is almost "programmmed" to say. It will be something like "Pretty nice car, isn't it?"

In all my years of being in the car business. I never heard 1 person ever comment negatively on any car that a customer was looking at. You will see this line repeated anytime you speak with another person from the dealer. If you are waiting to sign papers, standing around the lot, and a salesperson approaches you, you can get the same line without ever trying. They sill ask if you need help, in whatever way they do, when you proclaim that you already bought and are waiting to sign, they will come back with "what did you buy?" if you did'nt already reveal it. When he learns what you bought, he will say, without even thinking about it "nice car" or something along those lines.

If you return for service and when you pull up, you are accosted by a salesperson, you will get that "nice car" line after you have established you aren't looking for anything to purchase. No car that a customer looks at or owns is ever anything but a nice car. Except when it comes to evaluating trades. Those cars are all a dime a dozen and available without effort.

Getting back to our sample negotiation, the used car manager or closer, knowing he needs to lose this car and turn over the cash may offer you a great deal, possibly below his cost. Probably not at 1st, closers are geared to sell as high as they can get away with. but the reality of needing to turn over the cash may get a great offer. If you walk on that offer, the "end of the month" thing could backfire. The reason is that once that price was given to you, it will become known in the dealership that this is a great deal. ANyone else who shows the car will offer that price. Anyone who has recently shown the car will follow up and offer the price or a similar one. And in my experience, once that slippery slope is hit, the car goes away quickly because now it is known and a priority to get rid of it. It also looks bad to the owner every day that old inventory sits. So they will lose it ASAP. When you come back at the end of the nmonth, it could be gone, and because it was a unique case of aged inventory, the yaren't selling you one of the ones that just got here for that below cost price. So you end up without a car that you wanted that was offered at a great price.

The last thing you should know when going into the box, is that no one is really looking to be your friend. Despite the salesperson's friendliness and the balloons everywhere, this is an exercize in pure capatalism. Remember that you are the catalyst for any of that to happen, and you have the ultimate power of saying no.

If you say no, they have nothing. All the glitzy advertisements, all the free giveaways for test drives, all the questions courteously answered and the free sodas are really just window dressing. All window dressing to get you to say yes.

One side note about friendliness. I feel I should clarify that over my years in sales, on rare occasions, I did make friends. Just like in every other social aspect of our lives, in meeting, literally thousands of people, every so often, I would meet one that would actually progress into a friendly relationship. This would be because of a commonality usually that would be revealed during the process. This would also be obviously different from the usual friendliness that salespeople are trained to be. I don't want to offend any of my friends that i've made as a salesperson or manager over the years, so let me share this difference. In the people I became friends with, I voluntarily gave them my home number. No one, with one exception, which I will go into later in a section of salesperson "do's and dont's" ever got my home number. Even the gals who wore their "car buying " clothes (usually a very revealing outfit) were just a sale like everyone else. Important to building my income, but no more important than an old person way past their prime in the looks department. In fact, those revealing clothes, that some women feel will get tehm a better price just told every salesperson that she is a lousy negotiator who has nothing but large breasts to offer. The old person probably has better credit and tend to close easier, as most old people don't want hassles that come with shopping around endlessly. For now, know that if you aren't getting the home number of the salesperson, you probably aren't really making a friend.

By the way, most of my friendships with past customers stemmed from my musical interests. I am a musician, so, if it would come up, many times it would lead to future jams and such. On another occasion, I sold a Saturn to a young couple who had just relocated and had no friends. We were very similar people, and my wife and I became friends with them and spent several holidays together.

But 99.9% of the time, my friendliness was because of my job. Not that I wouldn't have been friendly had I met them outside of work, that's just common courtesy. But in my normal course of my job, it was far more common for me to feel frustrated or angry at a customer's belief's, attitudes or whatever than it was to actually make a friend. But a professional salesperson knows that being ppolite and friendly are the only paths to success. Being rude will not sell cars or anything else. Sometimes a salesperson must be frank or blunt to make a point, but never rude or nasty about it. You should approach it the same way, and excercize that ultimate power to your advantage.

Now you have a ton of ammunition to take into the box. Now, you don't have to be an ace negotiatior to get a good deal. Using information commonly available along with the behind the scenes knowledge you now have, yoiu can logically determine when the best time for you to sign is.

As far as the salesperson and the closer goes, and they may be one or several people, they are going to try to convince you that the following is true.

They will want you to believe that they are offering the best price available on that car. They want you to believe that the car you are trading in (if applicable) is the fair price for it. They want you to believe that if you are financing, they have gotten you the best rate available. They want you to believe that they are the best service center for your car should you ever need such service. Therefore, it would make sense to buy the car from the same place and begin a great "relationship" where they can provide you with your transportation needs for life. They want to construct a viewpoint that you would actually be stupid not to buy right now.

When we discussed the interview portion of the sales process, I stated that it is smart to tell the rep of the dealeership what you were looking for, even if very general. Now let me tell you that general is better. Don't allow in the interview process to get pinned down to things that you don't really care about. If you like blue cars, but can live with just about any color, don't tell him it has to be blue, or even that you want blue. If you do have to have a blue car, tell them so.

By being straight up about the fundamental wants and needs and keeping anything else as general as possible, you will have an advantage in the box. If you would have told them that you needed a certain color and you really didn't, the closer will be using this info against you. He may be able to show on a computer that this is the only blue one in the state, or at least the dealership. This will lead him to further make your very common car purchase as something rare that must be acted on or face possible loss and dissappointment.

The same goes for options and anything else. Make specific only the things that are actually needed. For example, if you need a full size 3.4 ton truck, don't be general and end up wating time negotiating over 1/2 tons and mid size trucks. If you really could care less if the truck has a bedliner, which can just as easily be added after the sale from an independent shop, don't insist on it. When you come to closing, you can use the expense of any option you don't want as a potential discount.

Sales managers will unwittingly work themselves into a corner in the close. Most people don't know how to pin them on it tho. Remember, he's trying to make the car you are looking at as rare as possible. You want to show him that it isn't. If you can break down that guise of rarity, you are now in a position to get the deal youwant, or the best deal available.

But you don't walk into a dealer and proclaim your expertise knowledge and proceed to tell everyone what they are going to do to satisfy you. You will find yourself getting quoted high numbers and being blown out of showrooms because you just went in and announced essentially that you are a total pain in the ass, know it all, who will be a pain in the ass every day after the contract is signed. You are the guy most organizations would just as soon send down the road to be someone else's problem. If you've ever been one of those people who yell and scream at people, yet rarely actually get what you want, now you know why. You are seen as an expense, not a profit. The dealer sees dollar signs down the road when you come in demanding free rental cars, free service and free whatever you want. All of that hurts his bottom line, and threatens his job seccurity in a way much bigger than your 1 sale will ever possibly profit. People like that also don't refer business according to their studies. People like that are seen as unsatisfyable by any retail organization. They would rather pass your business along to another than potentially cost themselves money and business when you come in complaining, which is inevitable.

No, what you need to do is what poker players do, and what the dealer is doing. "Breast your cards" as much as possible. Be polite, friendly even. Make them work themselves into a corner. And above all, be honest. You don't have to be honest to the point of volunteering all your secrets and desires, but be honest to the point of answering questions.

At some point, they will ask, "are you buying today?" Again, it may be phrased slightly differently, but the question will be asked, at least once. Some people will say yes, some will say "i have to go home and think about it." The latter answer comes from ingrained defenses against salespeople, as a means to leave. Customers who answer the latter will also volunteer that even tho they aren't buying right there, they do need all the information to be provided. This will be pounced on by any professional salesperson. Just like any other lie. If the reason is a spouse or another decision maker, salespeople will go to great lengths to get the info to them now as I described in earlier chapters. If it is monies being waited on, like an insurance check, tax refund or whatever, almost all dealerships will work with a "hold check" or some other means of putting a down payment down before you get the money in hand. And in just about every case, a professional will break this down. If there is still resistance from you, the dealer will most likely back off giving you any real deals. They will demand you bring the decision maker to them, as they now know you have no say, or are just lying to them.

A better way to approach this closing question would be to again, be honest. Just tell them that it is unlikely that you will buy today, but you are prepared to if the right deal came along. Tell them also, that , although you like the salesperson (flattering goes a long way here like everywhere else) that you will need some other sources to convince you that you are getting the best deal possible. You have now left the door open to get good numbers and leave. All without lying or having to come up with excuses.

And the salesperson, once he walks in, looking for the manager in his office to get numbers is going to be asked this question 1st. "Are they looking to buy the car today?" To which, a salesperson would most likely answer, yes. As he wants to appear strong for his manager and avoid being called a weak link who can't sell.

In different dealerships, they will approach the close from this point different ways. We'll continue this in the next segment...

in the meantime, if you would like to catch up on this series, check out my "Why We Hate Salespeople" series to learn more about the behind the scenes world of sales and how you can get better deals from the knowledge...

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