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The Truth behind, “I have a Friend or Family member in the Car Business, so I will enlist their Help.”

The Truth behind, “I have a friend or family member in the Car
Business so I will enlist their help with my purchase.”

While there are exceptions to every rule, and while your  family member might not ever conceive of doing this to you, one of the most
phrases in the car business is (and please forgive the vulgarity, this is merely a direct quote, not the author’s own words), “If you can’t screw your friends and family, who can you screw?” 

If a car dealer can’t “high gross” (make a lot of profit) off of a friend
or family member, because there is so much trust involved, who can they make a lot of money off of?

The sad truth of the matter is this:
Those people (clients/friends/family) from whom dealers make the most profit  is what helps to pay for the fancy houses, cars, boats and beach houses of the successful dealer.  Let’s face it, if trust is established, then prices and fees are not questioned as much as when
there is lack of trust.  Complete lack of trust, of course, equals no sale.   One reason your salesperson can be so charming and loveable in your presence (in the case of the top salespeople), is because if you become their “friend” then you are far less likely to scrutinize their dealership’s pricing and fees. The other reason a salesperson can be so charming and loveable, of course, is simply that they are charming and loveable, but tread very cautiously either way!

I worked in the Internet department for the last 8 years of my decade + in the car business before establishing Car Pal as a car buying service.  At least in the Internet department, there was a level playing field, and it was unlikely that any of my clients could be taken to the cleaners on price. 
Management knew and expected that the profit margin would be lower, at least on the purchase price.  That said, Internet departments (I have learned this from Internet department managers of every make and model vehicle, by the way) make far more money than they should, considering there are also dealer kick backs and other incentives that are added into the hefty profit already made.  

So when a car dealership’s manager cries about “no profit, losing money, etc. etc.” it is simply never the case.  Unless, that is, the management uses it as a reason not to take your offer, then it is the case that there was no profit left (or the knowledge that they could make far more on another client for the same vehicle).  If they’ve accepted the deal, they are doing so because there is some monetary benefit to the dealership.  Do make a mental note that if you have caused the “tears” I refer to above, then you have probably negotiated yourself quite an excellent deal.

Back to the issue of trust; I am in no way saying that you shouldn’t trust your friends and family. What I am saying is: buyer beware. I have witnessed first hand in the decade + of selling most makes and models of vehicles, that a HUGE profit center comes from family, friends, and repeat clients (those that trust their dealer.) I have always paid close attention to these things, because even as a car dealer, I was, at the core, a consumer advocate.

Now, if you are more than happy to see your dealer make a sizeable profit on your purchase, particularly if that car dealer is a friend or family,  then kudos to you.*   You win the selflessness prize!  I prefer to donate my “excess funds” (I chuckle as I write this since Car Pal is still in the infant start up phase of business) to needier causes, such as cancer research and homeless animals.

Best car buying wishes from Lindsay Graham and Frank

*I am not in business as a non-profit myself, but I do sleep at night knowing that Car Pal’s fees are far less than what we’ve saved our Car Pal clients.  And, unlike the typical car dealer, we never ever ever  have to be dishonest, or bordering on dishonest, or manipulative to sell our services.

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