"JCAlan" (jcalan)
08/15/2016 at 10:10 • Filed to: None
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"JCAlan" (jcalan)
08/15/2016 at 10:10 • Filed to: None | 5
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A practice that we used to have at our store back in the pen-and-paper days was called “holding lines.” I have no idea whether other dealers used this terminology or not, but I assume that they had a similar practice, even if they called it something else. The thing about dealerships is that each one has a different name on the sign out front. This means that each one has its own way of doing things. Its own processes, culture, techniques, terminology, and even code of ethics. For some reason this concept escapes most people, and they think that we all do things the same way. I don’t know how many times I’ve been told by a customer that since his ex-wife’s cousin’s old roommate once spent a summer as a lot boy at a Yugo dealership in 1987 that they “know how this all works.” I guess that’s the point at which the customer expects me to perform the secret handshake with them, lower the price by half, wave the taxes, and show them to the back room where the free lap dances are. Not so. Your previous dealership experience has nothing to do with me, and gives you no insight into how this particular business is run.
Anyway, back to holding lines. In those days when the manager would appraise the trade-in, they would write on the appraisal sheet (this was before technology-aided appraisals) a figure such as $7000, and then underline it five times. The five “lines” meant that the appraisal was actually for $7500, but the salesman could present numbers at $7000 and see what the customer thought, knowing that they had $500 worth of wiggle room. You need wiggle room because most customers expect it. Now, if they did closed the deal at $7000, or “held the lines,” the extra $500 went into the total profit on the deal, on which they were paid commission. At least, that’s how it worked in theory. In practice how it worked was you would present the numbers and the customer would tear your head off because they’ve never been so insulted and the dealer in the next town over offered them double and they still walked because they wanted more and they just put two brand new tires on that car not more than six years ago and Kelley Blue Book says it’s worth more and besides their neighbor used to deliver LeCars parts to a Renault dealership in Vancouver and so they know exactly how all this works anyway, and you’d immediately give up the $500 and then some.
When I was working at our budget lot, we would trade in a great number of true clunkers. We had an unwritten rule that $500 was the least that we would offer a customer for a car, even though in reality some of these pieces were worth much less than that. I had the habit, because I am a total smart-ass, of writing the appraisal as zero dollars— and five lines. One day with a wink I told our 19 year old new guy to try to make sure he held the lines on that one. He did. He told them that the car wasn’t really worth anything, but the good news was that by trading their car and transferring the plates, we could save them the $18.50 for the temporary tag. They agreed. That’s right, they were willing to trade their car for the cost of a temporary tag. The young salesman didn’t get that I was kidding when I sent him out there with that figure. Only a rookie who hasn’t had their head torn off enough times could pull something like that off. A veteran would never even try it. By the way, when they got in the office to sign the papers, I gave them the money for the car.
But that’s nothing compared to what happened at a previous dealership. We had a practice of always starting the negotiation over the trade by having the customer tell us how much they wanted for it before we gave them a number. Naturally you might think this was so that in case the customer wanted less than it was actually worth, we could reap that sweet windfall, but no. Customers never want less for their car than it’s worth, and we really wouldn’t adjust the appraisal even if they did. A car is worth what it’s worth. The reason we insisted on this information upfront was so that if a customer wanted way more for their car than it was worth, rather than insult them with a much lower figure, we would just tell them we weren’t interested to avoid the confrontation altogether. But then there was that one guy with the Jeep.
He was trading an older Grand Cherokee for a newer Grand Cherokee. Following our process, we asked him what he wanted for it. He said that he just wanted the custom wheels off of it to put on the new one. We asked again what dollar amount he wanted for the trade, and he said, “Just leave me have my wheels.” I’ll never forget that odd phrasing. We thought there was some miscommunication and went over it and over it with him. But he understood fully what he was doing, and was just incredibly generous. I swear to you that he honestly wanted us to have that Jeep. He traded his Jeep for a set of wheels that he already owned. And wouldn’t you know it? That dude even helped swap the wheels over himself. I think he was the happiest customer that we ever had.
Nerd-Vol
> JCAlan
08/15/2016 at 10:15 |
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I love old dealer stories.
Now a days we call it “holding back”. Same concept and thought process.
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JCAlan
> Nerd-Vol
08/15/2016 at 10:20 |
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I love how each dealership has its own vernacular.
Jake - Has Bad Luck So You Don't Have To
> JCAlan
08/15/2016 at 10:20 |
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We don’t hold lines around here.
We snort them.
Brobalt SS
> JCAlan
08/15/2016 at 10:36 |
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We try to be a “one price” dealership, but if you get someone in their 50s or 60s who gives you the asshole vibe and “knows how this works” I might hold 500 to make them feel special. They will get the money regardless but some people will walk if you “CAN’T DEAL”
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JCAlan
> Brobalt SS
08/15/2016 at 10:38 |
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I know that feel.
petebmwm
> JCAlan
08/15/2016 at 12:30 |
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I love the old, kbb says it’s worth...... ok no problem, call them and tell them to mail the check here, i’ll hold the car for them...
Meatcoma
> petebmwm
08/15/2016 at 13:22 |
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Imagine that, I told almost the exact thing to a dealership once.
Salesman: kbb says it’s worth this much.
Me: Maybe they will buy it at that price then.
Needless to say, I walked away from that “deal”.