Car shopping 101 according to Aaron Young …. Topic of the Day: Pricing
I can’t blame anyone for being defensive about car shopping. On one hand you have the typical car salespeople who will manipulate numbers, throw out gimmicks, sell you junk product and outright lie to you.
On the other you have the internet which you had hoped to use as a resource, but you soon find that it’s full of lots of bad information and data. *SIGH* Now what would it be like to have someone in the industry that’s on YOUR side?! That’s me!
Funny thing is, I hate car salespeople. Let me explain, I hate the stereotypical image they have, the gimmicks, the one liners, the tactics, the b.s. (and that doesn’t stand for “bad suits” because most car salespeople don’t even wear suits anymore). I could have been hired anywhere to sell cars and I chose Runde’s for a reason, because they truly want to sell cars in an honest and ethical way … unlike most dealers out there. I thought if I could go into this business and just be honest with people, be fair and treat them with respect that I’d be successful at it. And while that’s been true for the most part, surprisingly enough a few people still want to “play the game” either because they’ve been duped so many times or because they were taught by their parents/grandparents that you have to play the game and dance the dance. I really have no intention of dancing with my customers, so let me give you some truth to buying a car, new or used.
The one key thing you need to focus on is the bottom number, it’s that simple. A huge mistake with many people is focusing on their trade value. For example, say you are shopping for a new truck and dealer “M” tells you your trade is worth $12,000. You go price the exact same truck at dealer “R” and they say your trade is $10,200. Who has the better deal for you? If you’re one of the many who automatically think it’s dealer “M”, then you would be wrong. Remember, it’s all about the bottom number, the cost to trade and here’s the skinny behind it all.
The fact is dealer “M” is not giving you $12,000 for your car, they are giving you much less than you think, in fact…less than $10,200. What dealer “M” did was give you a full retail quote, that is a quote based off the full MSRP of the vehicle. Let’s say this truck has a sticker of $41,000 which minus your trade they quoted you of $12,000 leaves a remainder of $29,000. What you’re not seeing is that the truck has $3,700 of markup in it, which they are taking out and plopping it right down on the hard cash value of your trade to inflate it and make it look like a nice big number. So if we take the markup out of the equation it drops the price of the truck down to $37,300 and also shows you the hard cash value they assigned to your trade, a whopping $8,300. That is now a wholesale/no-markup quote, but it’s also an honest one.
So look back to dealer “R” who you thought was shooting a low trade number on the same truck. What I didn’t say was that they were giving you a quote with the markup already deducted from the MSRP. So $37,300 for the truck minus your trade of $10,200 means $27,200 to trade….a considerably better deal! Do you see how focusing on trade figures can be deceiving? This can be difficult for some people to understand because they’re wanting to see that big number, they cite trade-in values and see how far off this hard cash value is…..and sometimes we have to switch back to the retail quote to help them understand this. Here’s how each looks…
$37,300 on the truck – $10,200 on the trade = $27,100 (that’s the wholesale, no-fluff quote)
$41,000 MSRP on truck- $13,900 on the trade = $27,100 (that’s the retail quote)
In the end, the number is the same. Now if you look at our website, www.rundeautogroup.com you’re going to see all our vehicles without the markup in them, both new and used. So when we give you a quote based on any of those prices, there’s no bloat in it; you’re getting a very honest and hard cash value. It’s the same way with used, some dealers are throwing everything on their lot at full book price to be able to use that markup to manipulate a trade or to come down thousands of dollars and make you feel like you got a good deal. Again, look at our site, we clearly state the book value and what our asking price is. Big difference.Also be very aware of that bottom number and what it includes or doesn’t include. Most every dealer has fees they charge, doc fees, service fees, prep fees…..these are fees used to increase their profit even more and can range from $100 to over $500! Another bonus to Rundes…we have none of these fees of any kind. What we charge for tax, title, license is the same as the courthouse charges, not a cent more. It’s one of the many reasons why we have customers from 3-4 hours and beyond away come back here, they’re tired of the runaround, the gimmicks and it’s one of the many reasons why I’ll continue to work for Rundes!Aaron Young is from Delhi, IA and works at the Runde Ford-Chrysler-Dodge-Ram-Jeep store in Manchester, IA. If you’re in the market for a vehicle, give Aaron a call at (866) 580-9767. He won’t steer you wrong (pun totally intended).