?I haven?t bought a car before and I?m somewhat
anxious. What should I expect??
You should expect it to be fun, to be exciting (hey, you?re getting a new
car!), but sadly for most people it's a chore. This has been, and continues to
be, a very competitive industry. Many dealers resort to underhanded tactics to
sell - thus giving dealers the negative reputation they have (and deserve) -
and why car buying is not in anyone?s ?Top 10 List? of things to do. We can't
change other dealers? tactics; we can only offer an outstanding alternative. We
hire women and men who have never sold cars before, we price aggressively to
avoid the games, and we are ethical. So?.what can you expect at Planet?
You will be greeted by a friendly
professional, someone who will be sincerely interested in your want and needs.
They will help you discover the vehicle that works for your budget, meets your
needs, and allows you to feel great about your decision (we often say you need
to feel great when you walk out to your driveway each day!). There is no
denying there is a strong emotional component to buying a car - we fully
understand that.
"How
much do you make on a new car?"
After expenses, almost nothing. Really. Here's how. Nationally, including all
manufacturers, the average gross profit on a new car is a little over a $1,000
per car. We are about average. (Just a few manufacturers that limit supply,
such as Lexus, have gross profit margins up to $4,000.) Note that gross profit
is different than net profit. With that $1,000 gross profit per car, we have to
pay the salesperson, utilities, advertising---the list goes on and on. Our
total expenses per month are over $225,000. Our monthly rent alone is $24,000.
Even if we sell a lot of cars, there's not much left over after paying all
these expenses. So why do we bother to sell them at all? Our business withers
without them. We need the new car sales to get good trades and to keep our shop
busy. Also, we need Chryslers, Jeeps, and Dodges getting in fender-benders to
keep our Parts Department and Collision Center busy.
?Why can some dealers ?knock off? $1,000 or $2,000
from the prices on their pre-owned cars??
We wondered that as well and the answer is simple. A large majority of dealers
rely on what is termed ?Floor Traffic.? These are customers that walk through
the door who have generally not preformed much or any research and unknowingly
pay too much for a vehicle. They may feel they got a great deal because the
vehicle was easily "discounted." The discount was given because the
vehicle was well overpriced to begin with. We are in Franklin, a short ways off
I-495, in a relatively small area, and we rely on very aggressive internet
pricing to attract customers not local to us. We believe it is better to avoid
these tactics and price very fairly ? most often much less than others.
?Where
do your pre-owned cars come from??
Most dealers rely on trades and basic rental cars. We scour the Eastern US,
from Orlando, FL to St. Louis, MO to Pittsburg, PA to cherry pick only the
best. Often these are executive demo cars and the nicest lease returns. We are
extremely careful not to pay too much; we must be careful in order for our
sales strategy to work - aggressive pricing to attract customers from all over
New England and sometimes beyond. We do also retail some trades, however, only
the cleanest and most mechanically sound.
"Will kbb.com or Edmunds.com give me a reliable
value on my trade?"
On our website, we actually have a link called "Ballpark Your Trade"
and it connects directly to Kelly Blue Book. We chose the word
"Ballpark" very intentionally, because these consumer sites don't
even agree with each other. Further, you'll notice that none of the sites will
buy your car for the number they spit out. Determining the current market value
of a car is an art and a science. We pay only partial attention to the consumer
websites. We subscribe to auction data services that show us the prices at
which people are actually buying and selling vehicles. We also pick the brain
of our buyer, who spends most of his days at the auction---buying, selling, and
observing thousand of cars being bought and sold. And, we use our intuition.
Ever try to sell a purple truck? Let's just say it's worth less than another
color!
"Are vehicle service contracts on cars a good
idea?"
Most likely yes. They may extend the life of your car and could provide you
with a higher resale value. Also they are very affordable. For 2%-6% of the
price of a Chrysler, Jeep, or Dodge, you can cover a $30,000 car up to 7 years
or 100,000 miles. This adds very little to a monthly payment and you can choose
a plan to fit your specific needs. This also allows for easier budgeting by
eliminating unexpected vehicle repair costs. The majority of our customers
purchase a Vehicle Service Contract because they are such a good value. If you
choose to wait and add one at a later date, you need to look at these much more
carefully. Make sure you buy one of these from a reputable dealer to ensure you
have some recourse if you encounter a problem with the company. And if you
choose not to service with the dealership, make sure your mechanic will accept
the warranty you buy.
"What about Gap Insurance? What is it?"
Gap Insurance covers the "gap" if your car is totaled and you owe
more on it than it is worth. Let's say your 2006 Grand Cherokee Limited is
stolen and is never recovered. Your insurance company will pay you what it's
worth, say $23,000. But what if you owe the bank $26,000? (This is actually
quite common. When newer, your car typically depreciates faster than you pay
down the loan monthly. Unless you put money down, you typically owe more than
it's worth for a couple years until the depreciation curve flattens out and you
begin paying off the loan faster than it depreciates.) In this example, without
Gap Insurance, you have to pay the bank $3,000 just to pay off the loan. Gap
insurance would pay your deductible and the $3,000, preserving your credit
rating. Gap insurance is usually a few dollars a month on a five-year loan.
It's a good idea for people who owe more on their cars than what they are
worth. If you put several thousand dollars down when you buy your car, you
probably don't need it.
"Why are there so few women salespeople in the
car business?"
Most women don't want to work in a typical dealership with locker-room humor,
shady ethics, unbearably long hours, abusive managers, etc. Some are fearful of
being associated with the polyester, pinky-ring-wearing stereotype of a typical
car sales "guy." Some customers can be surprisingly rude and
adversarial, and many women don't want to endure this conflict. We have worked
very hard to attract women because they are consistently our top producers. We
have found that women typically bring excellent social skills needed to help
people through a big financial and emotional decision. Also, the majority of
car purchases are influenced by women, and many like to work with other women.
Currently, two of Planet?s seven Sales Guides are women (almost 1 out of 3
versus about 1 out of 50 nationally).
