How car dealers and real estate sales people do Business

Yesterday, my wife and I ventured out to replace our aging (2002) car. It still runs good and has no major dents, but with 160,000 miles on it, it is time to consider a newer model.  We don't buy new or extravagant.  Our credit score is as good as it gets for a family that is the opposite end of anal in regards to almost everything in life. But, we do seem obsessive about paying our bills.

Anyway, a local dealership was running a full page advertisement in the Sunday newspaper (dealerships are closed on Sunday in New Jersey as one of the last "blue laws") for a great price on some used cars. Within the advertisement is a monthly payment plan for those who qualify (we qualify). And, as chance would have it, right at the top of the ad, is the very model we drive. Only it is newer and with a whole lot less mileage which would be very affordable to us right now.

We should go take a look at this car, I tell my wife. She agrees. Monday the newspaper comes and there again is the advertisement. Selling houses, I know the cost of advertising and this dealer is spending big bucks to get people to come in and look buy. The automobiles advertised all have their "blue book" value printed and the BIG discount the dealership is offering. Real estate doesn't have a "blue book" for house values yet but some buyers like to use one or more of the Internet web sites to come up with a "suggested retail price". Moreover, my own trade organization (NAR) is trying to develop such a system that may make the old comparative marketing analysis that agents offer for free to both the seller and buyer clients (not customers) obsolete. Well, not to get off topic, we are very happy with our old car and replacing it with a newer model of the same brand appeals to us.

On Monday afternoon we drive to the dealer (after a few clicks of the computer mouse to find the current value of our car) to see the advertised vehicles. On the way we discuss the common tricks we may encounter at the dealership. You may know some of them and call it something different than I. But, the fact that someone could have purchased the car just moments from our arrival could be a very real situation. And, knowing that the dealer advertises that he has 32 to more of the same model car in stock would mean they would try to sell you one of the many other cars that may be similar in price and size.

BINGO! We are correct. The car is long gone and, "Would we like to see something similar?," is asked of us?  Yes, of course, we are interested buyers. We follow the young man over to a table and explain that it was the monthly payment for that style car that made us come in to shop. "No problem. Do we want to trade in the car we arrived in?," was asked. Yes we would like to rid ourselves of the other car.  And, we surrender our keys so that their mechanic can give it a once over. Next, he asks, "If he can get me a similar car will we buy it today?"  My wife and I give each other the eye and state that it would dependent upon the car and price. The salesman makes note of this and asks me to initial his note. I am stunned. He wants me to initial a hand written note that states I will buy a car if he finds one similar to the one I came into buy. That's alright. I am looking to buy and I don't intend to waste anyone's time and I kind of like the idea of him trying to work his commitment to buy on me. Every day I learn something from someone. Now the fun begins.

We go to a car similar in the advertisement (parked right in front of the door) that is a year newer and with about 6000 more miles on it. I can't believe a car newer than the one advertised is being shown to me as a replacement for the car we missed out on buying. He won't give me price but, I am thinking it must be a lot more money than the advertised car. I again state that the price is the major factor in us buying a car. But, the salesman has us get in and take the car for a test drive. Do I like it? What's not to like about a car that is one year newer than the one I was hoping to buy at a discount. So, I start thinking that maybe I am wrong in my assumption about the sales style I am about to undergo.We go back inside the showroom and sit down while they go over to see about what they can do for me as far as price. But, he will need to run my credit to be sure to give me the best terms available. He is just about doing cart wheels across the room when he sees the credit rating. Yet, we must wait some more.  A short recap is in order here. We want a newer car. We see an advertisement and go to the dealer. They take our keys to our car and run our credit. We wait.

After a long wait, the salesman comes back acting all happy. Well, no that would be wrong. He comes back and starts to tell us its "bad news" about our credit (as if I didn't see his "happy dance"). No, he is only joking. We have great credit and here on the back of the paper he is holding is the deal they want to offer us. Drum roll, please. The number is almost a hundred dollars more than what we told him we wanted as a monthly figure. I am shocked. I expected him to be about 10 to 20 dollars higher with our trade-in and them wanting a thousand dollars or so to add to the closing transaction (why waste our time if you can not sell for the advertised price?). No! That's not going to work mister salesman. Thanks, but no thanks. Let us know if you get any more deals like the one you advertised. Call me. I'll come back, I don't need to buy tonight.

Wait. Let's talk about this says the used car salesman. And off he goes to talk to his manager and asks about the other cars available for us (the ad said 32 of the same model as advertised and their web site has several used but won't give a price for any of them). He comes back with keys to a car that is newer than the one advertised but a little smaller asking about forty dollars more per month than the monthly payment that they advertised. So, I'm starting to think that the price of cars is much more than what I had gathered from the advertised deals. Maybe we can spend forty more dollars per month for some good transportation? I get in to take a test drive and I am told that this is not the car that I would be buying but similar to it since it is on their other lot. Huh?

O.K., I drive over to the other lot in a car that is not bad but not what I had wanted in size and more than I had wanted to pay in price. The color of the other car at his sister lot was not bad but the interior that was a turn off to both me and my wife. Driving back to our car at the showroom (again, they have the keys to our car) we tell the salesman it is not for us and he can call us when something else comes in. At that he pleads that we go back inside and that he will try harder to find us the best deal because "he works for us" not the dealer. However, if we don't agree to go back inside the boss will think he did something wrong and may fire him.

Inside the showroom the manager comes over and wants to make us an offer to help us with the payment for the first two years. Now, the payment plans have stretched a year longer and the payments would be lower for two years and higher from the third year into the seventh year (seven years to pay for a car but the mortgage bankers don't want to offer a 40 and fifty year mortgage loan to buy a house). No, this car and payment plan will not fit into our budget. Thanks we have got to run now. Of course, we must wait again. Because he may be able to get us a better deal if we just let him make a few telephone calls. The deal of the night? Zero down. Pay nothing for 90 days. Pay your agreed payment price for two years and then the payment jumps to almost a hundred dollars more for 63 months. Damn I wish my cell phone had an app for that!  No. We still drive a car with 160,000 miles on it.

O.K., I don't get it. How are real estate sales people like used car dealers?