Tue Jun 24, 2014 7:43 am
Much appreciate the perspective from a Leaf salesperson. My Dad was a truck salesman many years ago when I was young and I certainly knew first-hand how much effort went into coming home with such a small paycheck each month.
Having said that, I owned a software development company that wrote software for the retail automotive sector and I can say from personal experience in working behind the scenes at dozens of dealerships that many are liars, cheaters, and thieves. This is not opinion, it is fact.
Specifically, the F&I office is one of the biggest culprits (that's the finance and insurance office, or business office); I have personal experience in being asked to develop software that would show a column of numbers on the screen and a "total" on the bottom that was not the sum of the above numbers. Also a "hotkey" that when pressed would "flash" a value in the corner of the screen so the F&I manager could see their current floor for profit.
In general, my experience is that dealerships themselves don't make much profit on the sale of a given vehicle, and the vast majority comes from gross incentives (from overall dealership sales targets), from your used car trade-in (generally more profit is made on your trade-in than on the new car you are buying), and the most profit generally comes from financing and add-ons which can include: extended warranties, insurance products, undercoating, clear coating (aka DiamondKote), cloth protection (aka scotchguard), specialty trim and protective films, etc..etc.. These are provided by 3rd party companies and pay very good margins to the dealership and it is "cream" over and above the cost of the car.
From the perspective of someone who has purchased 8 new cars in my lifetime:
1. Pontiac Fiero
2. Nissan Pathfinder #1
3. Nissan Pathfinder #2
4. Nissan Altima
5. Hyundai Santa Fe #1
6. Hyundai Santa Fe #2
7. Hyundai Santa Fe #3
and just now
8. Nissan Leaf
... the experience on pretty much every one (except the Leaf) has been a painful back-and-forth with the "Sales Dance" where you give an offer to the salesperson who "can't take it to the business manager unless you give a deposit to show you are serious", then you sit in the chair for 10 minutes while the salesman "argues your case to the sales manager" - actually they are usually leaning against the wall comparing sports teams -- remember I worked behind the scenes for a decade writing their software.. I personally have seen this time and time again.. then salesman comes out with the haggle-price that they just can't go below, and you rinse-and-repeat until you are pretty much played out and frustrated. Finally you agree on a price $$$.
This price means really nothing then.. because you wait another 1/2 hour to go into the F&I office where you get all kinds of fees added to the negotiated price (some are valid like the destination/delivery fee or freight if they did a locate, etc.), but regardless you can often end up with another $2,000 on the bill with extra fees, over and above what you "negotiated".. again, you fight until you play out, like a fish on a line.
Then comes the "rust and dust" (from when the most common add-ons were undercoating, rustproofing, and clear coat/diamondKote), but now is more commonly accessories, various insurance product add-ons, and finance charges if you are not paying cash.
Financing through a dealership can be a whole nuther nightmare.. often the conversation starts with "how much were you looking for your payments to be each month", and you hum and haw and mumble "about $300-350", so the business manager says "ok, well I'll just enter $400 to start, just to see our options", and this is where the numbers on the screen start to not add up because you are going to end up paying that $400 as a minimum... so you agree either to a purchase price with all the junk added, or the finance charges, and then you get "ok, so we add the taxes"... because all this has been tax-out... and up goes the price out-of-pocket yet again..
This plays out over and over; and I appreciate any particular dealership or salesperson or business manager may want to argue that they don't do it that way, and that is fine--some are better than others-- but 100% of the dealerships I had direct contact with had most of this going on behind those closed office doors.
So.. long post.. but back to the original post of how salespeople selling Leafs get screwed.. one of the reasons consumers like myself seem to be such a PITA is because, from our perspective, we have to go through this dog-and-pony show over and over and over and we feel like we need to take a totally defensive posture when entering a dealership.
As for this Leaf I just bought.. I asked for an internet quote, the Nissan salesman got back to me later that day with price and availability of color choice, and I went down that day and handed them a full-retail check (because the couple thousand I could have haggled out is not worth my health and stress anymore). He did a good job, although really there wasn't any pre-sale work to be done as I had done all the research; but I can appreciate there is a lot of post-sale work to do.
Just my personal experience. YMMV.
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2015 Nissan Leaf SL - Slate Grey