Don't Be A Yutz*, Go Dealer Direct And Eliminate 3rd Party Lead Gen Tout-Fees
SEE ALSO: The Truth About TrueCar
Editors Note: No other retail industry is so lazy or has pissed off enough potential customers so thoroughly that they allowed, nurtured, supported, stimulated and encouraged a billion dollar third party car buying lead generator industry to grow like weeds (only temporarily until the car companies replace these interlopers and recapture the $billions).
Starting with the original, Auto-By-Tel to today's many snake-oil lead generators like Car Guru, Cars.com, TrueCar, AAA, Consumer Reports, Costco and another hundred touts out there who cost the misguided and jerked around car buyers the lead commission fees charged to dealers by today's aggrandized bird-doggers.
Can you imagine any other industry encouraging potential buyers to believe that they need a third party intermediary to protect them from getting screwed and supposedly insuring a fair transaction when they purchase?
If You Are Buying, go Dealer Direct...play nice with the dealer's salespeople and after you negotiate a "best deal" tell the manager/closer/take-over person that in order to "make the deal" she need's to charge you the negotiated price and then lower the vehicle cost by the Lead/Tout fee ($250-$500) that the dealer now won't have to pay to sell you a car.
"Cheaper prices may be available on line"...we believe that 3rd party lead-gen car buying entities should have to tell you the same thing..."cheaper prices may be available if you go directly to a local car dealer".
I believe that National Automobile Dealers Association (NADA) should mandate that their members welcome, appreciate and reward (not screw) Free To The Dealer Independent and Unencumbered Direct Buyers when they choose to buy a vehicle at their local dealership.
Don't Be A Yutz! Your Trade In Is Valuable
By Bob Gordon
The Auto Channel
Auto Central, June 2020; In today's auto marketplace your trade-in is the most valuable piece in the new car purchase transaction, so don't let anyone steal it from you. Trade-ins are where the real profit in new car sales comes from.
I'm sure you noticed that there are more and more TV commercials for national used car dealers like CarMax, Carvana, Vroom, AutoNation, Car Guru and others, all promise you that they will quickly buy your car for cash and some promise to pick it up the same day no matter where you live.
Why? Because there is meaningful profit in trade-ins, if there wasn't they wouldn't be working so hard and spending so much to convince you to sell your used car to them.
Today when buying a new car the energetic new car buyer has real leverage to lower their new car cost, by getting more for their trade.
Before you accept what your new car dealer will pay you for your trade research it's actual value by spending the time to get real buy offers from the aforementioned used car dealers...so when you buy you will actually know...be strong and have fun!
Buying A Car Now? To keep more money in your pocket and not in a third party lead gen web site's pocket (like Consumer Reports, ETC.), become an Auto Channel "DEALER DIRECT UNENCUMBERED CAR BUYER", a dealer-welcoming vehicle buyer who comes to the local dealer without "someones gotta pay" tout fees.
Dealer Direct UNENCUMBERED AUTO BUYER MANTRA:I am a Dealer Direct shopper.
I am here to consider buying a car from your dealership.
I have invested many hours of new car research.
Here is a printout of the exact model, trim level and options I will buy from you or at another dealership.
I have already received "FIRM" price quotes for this exact car from _______ (TrueCar, Edmunds, Kelly, AAA. Consumer Reports, CARS.COM, ETC), as well as other dealers who have the car I want to buy in inventory or are willing to “trade” for it.
I have come to your dealership directly and as a free agent, because I want to buy from a local organization and because I expect to pay less for my car than a buyer who has arrived here with the built-in obligation that requires your dealership to pay “commission” or a bird-dog fee to the third party tout that referred me here.
I expect that the hundreds of dollars or a meaningful portion of that amount that you would have had to pay TrueCar or another of their ilk to be deducted from the quote I received...if you won't do this to earn my business I will go to a dealer who will....have a nice day.
In the parlance of the car biz, when you commit to use a third party lead generation "tout" (to solicit patronage) site to get a new car price, you have become marked as bird-dogged and the dealer you will be "referred to" must pay a commission or bird dog fee to the tout site (from Consumer Reports; Cars.com, KBB, Autotrader, Truecar, Edmunds, ETC.) that just sent you through the door of that participating auto dealer. Then if and when you actually make a deal that dealer must pay the tout site even more...fees that another auto dealer can avoid and with the right negotiations will "pass on" to you, a "free to the dealer- direct buyer". ..how ater negotiating the "best price" have balls and demand an additional "I'm Free" discount and if they refuse to give it to you go across town to another dealer.
AUTO CENTRAL - July 25, 2016: Over the past 20 years The Auto Channel has been "Telling Not Selling" millions of car buyers who want to learn which is exactly the right car for them, and give them enough ammunition to fight for a fair price. Since there is no truthful disclaimer on car lead-gen ads or TV spots yet like there are when you call an airline directly on the phone and they honestly tell you that;Cheaper prices may be available on line, we believe lead-gen business's should let you know the same thing...cheaper prices may be available if you go unencumbered directly to a car dealer.
Unfortunately truth does not abound, and since that doesn't exist we thought that you would like to know about a formerly clandestine win-win opportunity that can save you meaningful bucks on your next new car purchase.
You Are Worth Big Bucks To Car-Lead Generation Websites
Using third-party new car lead aggregators like TrueCar (so why the bell curve, if they could really get you the best deal a single price, their price, for every model would suffice) Edmunds, KBB, Auto-by-Tel, Cars.com, AutoTrader and others may seem "free" for you...THEY ARE NOT!
Online car shoppers have been lulled into believing that even household name sites that partner with lead gen sites,including AAA, USAA, Consumer Reports and other traditionally "consumer friendly" safe havens are truly on your side to make sure that you are honestly getting the "best deal" on a new car purchase...when in fact, unless you are a lazy lousy car shopper, may actually cost you more, because the "partner dealer" you end up buying your vehicle from is contractually obligated to pay the lead-gen (TrueCar etc.) site hundreds of dollars in commission for sending you to a "partner dealer" to make a purchase from them.
Consumer Reports promoted average savings of $3101 are based on the 12 jerks in America who buy a vehicle for MSRP...everyone including you can get a discount... just ask. Remember that True Car pays Consumer Reports for your deal, why not put that money in your pocket?
Getting "The Best Deal"
First of all there is no such thing as "The Best Deal." Getting the lowest out-the-door sales price can only be won through gut wrenching hard-nosed haggling (fun for many, hated by others). A "best price" can vary from one day or even 1 hour to the next depending on variable factors (for auto buying and owning facts go to FTC.Gov - Buying A Car). It is important to remember every "deal" is different, because every transaction is different, so True Car's Bell Curve reflects a variety of "Best Deals".
To put more money in your pocket and not in the tout's pocket, GO LOCAL as a DEALER- DIRECT UNENCUMBERED CAR BUYER, an independent unfettered buyer who shows up at the dealer ready to buy without dragging the obliged third party fees with them.
Unencumbered buyers (that could be you) have a meaningful bargaining chip to negotiate that the third party fee be deducted from a "firm" lead-gen quote received from an online network dealer.
So don't be timid, lazy (and stupid), invest your time and efforts in serious new car research, like here on The Auto Channel; afterward go to the lead-gen sites and request a price for the exact vehicle model, trim level and options car you have decided to buy. You may have to put up with a plethora of telephone calls from dealers that have bought the "right to sell you a car"...but if you are strong and remain unfettered we can almost guarantee that you can buy your next car at a more competitive price directly from a dealer who doesn't have to pay anyone for the privilege of selling you a car.
As an Unencumbered Independent Car Buyer (you), when you arrive at your local dealer for a test drive and to see their "deal"...hand the salesperson a printout of the mantra below to alert the salesperson that you are a "FREE UP" which will allow the salesperson to negotiate internally for an additional discount off of the "FIRM PRICE" you received from the lead gen sites. This may not be easy for many buyers, but if money and a sense of fairness is important to you it's well worth your effort and don't worry, because no matter what, the dealer will (and should) make a "fair" profit on your transaction.
Remember you are in the drivers seat - enjoy your new car!
*Consumer Reports lead-gen disclaimer:
The Consumer Reports Build & Buy Car Buying Service (the "Service") is provided to Consumer Reports users by TrueCar.com. TrueCar operates the Service's dealer network and the Service's website. Consumer Reports collects a fee from TrueCar for vehicles purchased from a TrueCar dealer. 100% of the fees we collect goes to support our nonprofit mission. Consumer Reports has no financial relationship with any dealer.
Neither Consumers Reports nor TrueCar brokers, sells, or leases motor vehicles. Each TrueCar Certified Dealer will confirm actual vehicle availability from in-stock inventory, including options and color choices.
The Service may not be available in your particular location.
* Between 7/1/17 and 9/30/17, the average savings off MSRP presented by Participating Dealers to users of the Build & Buy Car Buying Service, based on users who configured virtual vehicles and who TrueCar identified as purchasing a new vehicle of the same make and model listed on the certificate from a Participating Dealer as of 10/31/2017, was $3,101, including applicable vehicle specific manufacturer discounts. Your actual savings may vary based on multiple factors including the vehicle you select, region, dealer, and applicable vehicle specific manufacturer incentives which are subject to change. The MSRP is determined by the manufacturer, and may not reflect the price at which vehicles are generally sold in the dealer's trade area as not all vehicles are sold at MSRP. Each dealer sets its own pricing. Neither TrueCar nor Consumer Reports brokers, sells or leases motor vehicles.
Auto Dealer Buying Jargon
Negotiations often have a vocabulary of their own. Here are some terms you may hear when you’re talking price.
•Invoice Price is the manufacturer’s initial charge to the dealer. This usually is higher than the dealer’s final cost because dealers receive rebates, allowances, discounts, and incentive awards. Generally, the invoice price should include freight (also known as destination and delivery). If you’re buying a car based on the invoice price (for example, “at invoice,” “$100 below invoice,” “two percent above invoice”) and if freight is already included, make sure freight isn’t added again to the sales contract.
•Base Price is the cost of the car without options, but includes standard equipment and factory warranty. This price is printed on the Monroney sticker.
•Monroney Sticker Price (MSRP) shows the base price, the manufacturer’s installed options with the manufacturer’s suggested retail price, the manufac-turer’s transportation charge, and the fuel economy (mileage). Affixed to the car window, this label is required by federal law, and may be removed only by the purchaser.
•Dealer Sticker Price, usually on a supplemental sticker, is the Monroney sticker price plus the suggested retail price of dealer-installed options, such as additional dealer markup (ADM) or additional dealer profit (ADP), dealer preparation, and undercoating.
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An individual that is dumb beyond comprehension. One who displays, or exhibits, idiotic behavior. Someone who makes a habit out of missing the point. The opposite of what some might call a "forward thinking".