Is It A Good Deal ?

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Ask the Sales Consultant: Experts who advise car dealers on how to boost sales offer their car buying advice.

Three decades ago, renowned sales trainer Zig Ziglar walked into a Dallas car dealership to buy a Cadillac Sedan deVille. He was greeted by master car salesman Chuck Bellows. The occasion may represent one of the greatest selling matchups of all time.

As he recalled in his best-selling book, ‘Zig Ziglar’s Secrets of Closing the Sale,’ the pair sparred at length over the value of Ziglar’s trade-in and what he would have pay to get his new car. In the end, Ziglar got the price he wanted, but not before dissecting and savoring each of Bellows’ perfectly executed selling and closing techniques. Years later, he devoted an entire chapter of his book to his encounter at the car dealership.

Although consumers now have access to pricing and rebate data that no buyer had in the 1970s, few car shoppers have Ziglar’s knowledge of the selling process. There is hope, however, for the mere mortals on the buying side of the great sales divide. High-powered sales consultants to new and used car dealers naturally know a great deal about the transactions’ flip side. And they can be persuaded to share their insights.

Their advice: Choose a good car dealership. Use your information on invoice pricing as effectively as possible. And pay close attention to the “back end” of the deal where the real money is riding today. Sales consultants recommend, in particular, that buyers shop just as hard for the car dealership as they would for the car or truck. That’s what they would be doing when making a purchase if they didn’t already know many new and used car dealers first-hand due to their work.

“I think there are some alternatives that most consumers aren’t using,” says Mark Rikess, CEO of The Rikess Group, a consulting and training firm in Burbank, Calif. “I would probably check the blogosphere a lot more than most consumers are doing today. There is more and more blogging on dealerships.” Many Web searches will find much more than car dealership advertising, he says. “I would see if someone has complained about it or has said it is a great place to do business.”

In this early research phase, Rikess also recommends contacting three nearby car dealerships to “see who responds quickly and who is going to be the greatest help. This isn’t necessarily about the best price. I would be looking for someone who furnishes me with all the information I want in a timely manner.”

Once buyers identify a potential car dealer, Rikess says they should “take control of the process. If consumers have a pretty good idea of what their trade-in is worth and what they should be paying for a vehicle, they should leverage that homework, that research, upfront in the process. I might say, ‘Tell me, at a minimum, what the ball park is for this vehicle before we go any further.’ And if the car dealership isn’t amenable to that, I would probably move on.”

Presuming the consumer eventually finds the right new or used car dealer, the deal could play out the way car dealership training and vehicle financing expert Alan Algan bought his BMW Z in 2004. He paid $1,000 below invoice after researching prices and rebates. “The dealership had a couple of vehicles that had been sitting there for six or seven months, and the staff said they would just love to get rid of them,” says Algan, who is CEO of the Automotive Dealership Institute in Scottsdale, Ariz.

In this era of low vehicle profit margins, Algan has been able to buy a number of cars for $500 above invoice after he found out that the vehicles enjoyed hefty rebates and had been languishing on dealers’ lots. It’s true that the wide availability of pricing information has strengthened the buyer’s bargaining position. The right car dealership program can shave hundreds or thousands of dollars off the invoice.

But consultants point to the large sums still on the table after the parties agree on a price for the vehicle. It may well represent the only potential profit the car dealership sees in the deal. As a result, it will be especially determined to get some of it. The money will stay on the table until they hammer out the value of any trade-in as well as financing, insurance or warranty details.

“There’s been a profit shift from the front end to the back end,” Algan says. Customers can take precautions so they won’t lose ground after their pricing deal. One suggestion is not to venture into the “back end” in the first place.

“If I were going to advise a relative, and I were looking at this strictly from a consumer’s point of view, I would say don’t finance it at the dealer. Do get a low rate. Don’t buy anything from the finance office unless you definitely need it for some good personal reason,” says Jeff Bennett, a former Toyota dealer who teaches automotive marketing at Northwood University in Midland, Mich.

He adds, “Sell your car yourself, and sell it before you buy a new car, if possible.” But Algan notes that even the best deal can quickly evaporate if the car dealership doesn’t have some way of making money. If he were to walk into a car dealership and insist on invoice pricing for a $20,000 car, Algan says, “The sales staff will spend hours and hours trying to get me to move up to maybe $21,000 or $22,000.”

If he holds out, the sales manager might give him a chance to buy the car for $20,000, if and only if he agrees to have the car dealership arrange financing. “If I say, ‘I have my checkbook with me, and I’d like to write you a check for the whole amount,’ he’ll say ‘I don’t think so. Good luck to you.’ And he will let me go.”

In some situations, automakers are also helping new and used car dealers make money at the back end, Algan says. The alarm system is one example. Vehicles are manufactured with the wiring for an alarm system already installed, he says. But automakers sell the alarm itself separately, for as much as $1,200, and the price is added to the cost of the new vehicle.

If buyers say they are tempted to buy a $300 alarm at a big-box electronics store, the car dealership’s staff might gravely warn them that its installation could void the vehicle’s warranty if it damaged the on-board computer. Then comes the counter-proposal. If they buy the manufacturer’s alarm, its price could be rolled into the financing and cost just an extra $12 or so a month.

“This is legitimate,” Algan says. “It’s a good product, it’s built specifically for the vehicle, it’s covered under the warranty, and the dealer makes another $800 or $900 on the alarm system.”

Bennett stresses that car dealerships need be profitable, and not just so they can prosper. They need good cash flow to provide good service. Firms operating on a shoestring have a tough time doing that, he notes.

The bottom line for the customer: A single mechanical breakdown far from civilization could easily wipe out the gains from even the most exquisitely negotiated deal. That’s another good reason for finding a good car dealership in the first place.

By GARY HOFFMAN, AOL AUTOS Source

Tampa, Florida — If you’re in the market for a used car there are many precautions you need to take.

Jayson Rosenberg says he learned the hard way. He bought a Jaguar at Jaguar of Tampa. He says he thought he got a good deal, until someone looked under the hood.

“They thought it was a rebuilt car, when I was getting my oiled changed.” Jayson says.

Jayson said he was unhappy with the car he bought so he returned to Jaguar of Tampa to try and get a different car. And he says when he asked about the damage he was told it was never in an accident. He says they told him they painted the front of the car to get the love bug damage off.

That’s when Jayson called 10 News and we wanted to find out what, if anything, was wrong with the car.

“There is existing damage on this vehicle, potential problems for the owner.” says the manager of Caladesi auto shop, a collision specialists certified by triple A.

We asked them to go through the car inch by inch.

They told us, “there definately was an accident, multiple panels have been affected, something has been impacted into the hood. Everyone of these bolts has been tooled, meaning this fender and hood have been off.”

We asked Jaguar of Tampa about what Caladesi discovered. Rob Elder, the owner of the dealership told me on the phone he had no knowledge of any major damage from an accident.

However, 10 News has uncovered police reports and repair invoices showing the Jaguar in one accident in July 2003 in Bradenton where damage estimate was $2000.

There was another accident in California. This one more serious — 15 to 20 thousand dollars worth of damage.

Jaguar of Tampa gave this car a 140 point inspection and certified the vehicle was in good working condition.

According to state prosecutors, “It is not a crime to not disclose previous damage to a car,” but buyers who have been sold damaged vehicles can go through civil court to seek restitution.

Again, Mr. Elder denied knowing about the damage. He also denied our requests for an on camera interview, but he did send us a written response saying when Jayson brought the car back to the dealer “There was disagreement about the condition of the car.” He also said his dealership is consistently recognized for its quality customer service.

Carfax also gave this vehicle a clean title, meaning no accidents. But that’s no guarantee. In fact Carfax representatives say “There is no way for us to know about every accident that may have occurred in a cars past.”

Meanwhile Jayson says he wants everyone to learn from his experience. He says, “One thing I’d like to see happen is for people to be aware and get it checked out.”

Source:Reginald Roundtree, Tampa Bay’s 10News

Faulty Air Bag Replacements Put Consumer Lives At Risk

CENTREVILLE, Va.–(BUSINESS WIRE)–Industry experts estimate that as many as one out of 25 previously damaged vehicles may have non-functional air bags. Con men purposely replace deployed air bags with anything from packing peanuts to stolen units. This growing scam is threatening the lives of used car buyers everywhere. To help consumers protect themselves, Carfax now makes the air bag deployment information in its database available for free.

“No question, air bags are a lifesaver,” said Larry Gamache, communications director at Carfax. “To best protect yourself, follow these two important steps: Use the free Carfax air bag check and always have your mechanic test the air bag system to ensure it’s functioning properly before you buy. Do not assume your car’s air bags will deploy when you need them, because most victims of this scam may never know until it’s too late.”

According to the National Highway Transportation Safety Administration, nearly 20,000 lives have been saved by air bags deploying in an accident. As the height of used car buying season quickly approaches, consumers need to be on the lookout for scams like air bag fraud that can threaten their safety.

“While we don’t know about every air bag deployment, we want consumers to have access to what we do know,” added Gamache. “We also encourage all of our customers who have information about a previous air bag deployment not currently in our database to tell us so we can further help consumers steer clear of this scam.”

Consumers can log on to www.carfax.com/airbag to access the free Carfax air bag check and can report air bag deployment information using the “Tell Us What You Know” link on all consumer-purchased Carfax Vehicle History Reports.

We’ve all heard the term “factory invoice,” but what does it really mean? Car dealers would love for you to think that the “factory invoice” price is the price they paid the manufacturer for the car they’re trying to sell you. In reality, that’s probably not the case. From Bankrate.com:

The invoice that most dealers are happy to show you represents a theoretical price the manufacturer would charge the dealer if the dealership sold just that one vehicle. Of course most dealers sell hundreds or thousands of vehicles a year and manufacturers offer all manner of incentives to encourage dealers to sell even more.

There’s no way to know what the dealer incentives are, so how will you know if you got a good deal?

It depends on the vehicle — cars and trucks that are in demand will always carry a lot of dealer profit, while slow-selling vehicles usually come with deep factory discounts and dealer incentives. But as a general rule, you’ve gotten a good deal if you’re final number is within $250 or so of the publicly available invoice price.

Somehow, we just knew they weren’t selling those cars at a loss.

Source: Consumerist.Com

An auto safety advocacy group is objecting to the proposed settlement of a class-action lawsuit against Carfax Inc. that claimed the company’s title searches for used cars were misleading.

Public Citizen argues the settlement doesn’t go far enough to reimburse customers who got faulty searches and that a lot of people won’t benefit at all from the deal because of its time limits.

Virginia-based Carfax Inc., a unit of Southfield, Mich.-based R.L. Polk & Co., is a privately held auto information and marketing company that conducts millions of title searches yearly using a vehicle’s 17-character Vehicle Identification Number.Customers pay $25 for the searches before they buy a used car so they can find out a vehicle’s history, including previous serious accidents or major insurance claims. The information can provide evidence of past severe damage that could signal lingering mechanical and other problems.

Some Carfax customers sued the company in 2004 after discovering Carfax wasn’t searching the complete police accident records from 22 states and the District of Columbia. The lawsuit claimed Carfax started misleading customers in 1998, after the company lost access to accident records from all 50 states through the National Crime Insurance Bureau database. Without that data, Carfax reports weren’t showing some serious crashes, the lawsuit said.

Under the settlement tentatively approved in October by Judge Andrew D. Logan of Trumbull County Common Pleas Court in Warren, Ohio, people who used Carfax before Oct. 27, 2006, would get $20 off an inspection of their vehicle; a voucher for two free Carfax Vehicle History Reports within one year of final approval of the settlement; one free report within two years of the settlement; and a voucher for 50 percent off car reports within three years of the settlement.

More than 10 million consumers are affected, said Carfax spokesman Larry Gamache, who said notice of the settlement has been e-mailed to 1.8 million people who used the service in the past year.

Gamache said the company takes Public Citizen’s objections seriously and will review them. He acknowledged that the database doesn’t contain every accident.

Among Public Citizen’s objections to the settlement:

The time limits on benefits. For people not planning to use Carfax services within three years of the settlement’s approval, the deal “would be essentially worthless,” said Deepak Gupta, a lawyer for Public Citizen.

Inadequate compensation. Affected Carfax customers would get free or discounted title searches — depending on when they used them — or could get $20 off a vehicle inspection. But Public Citizen notes inspections cost about $100.

No letters sent to former customers detailing the settlement. Instead, notice of the settlement appeared once in USA Today and once in Investor’s Business Daily. Also, Carfax sent e-mails only to customers from the previous year, and the e-mail sender was shown as settlement@tgcgi.com” — not Carfax — so some people may have assumed it was junk mail.

A court hearing on Public Citizens’ objections and final approval of the settlement is set for May 11. For information and a claim form, go to the website westcarsettlement.com.

Source: Boston Globe

Source: Richmond Times-Dispatch

It was love at first sight when Dr. Roxanne Jeffries spotted a Jaguar convertible at an upscale dealership. But wanting to be a smart consumer, she kept her head and asked the salesman: “Can you run a CarFax for me?”

Jeffries was delighted when the CarFax vehicle history he handed over minutes later indicated there had been no reports of accidents, flood or frame damage involving the car.

Three weeks later, the Jag overheated and more problems followed. Jeffries’ husband did some research and discovered the 2001 Jaguar had been in a head-on crash less than a year before Jeffries bought it. With $16,000 estimated in damage, the dealership that then owned the car filed for insurance and sold the Jaguar for salvage, according to Raymond Ingalsbe, the couple’s attorney.

Millions of used-car buyers every year turn to CarFax, a source for used car history research based in Fairfax, Va. More than 29,000 dealers have CarFax accounts and can instantly produce vehicle history printouts.

But auto-fraud attorneys and car-safety advocates say the reports are not foolproof, and even CarFax officials acknowledge they are not always complete. CarFax has limited access to insurance and accident reports, and no way to verify the accuracy of its information, they say.

In Jeffries’ case, the police officer investigating the Jaguar’s crash wrote down the wrong vehicle identification number, so CarFax didn’t pick it up.

“I’ve found CarFaxes to be accurate less than 60 percent of the time,” said Tim Blake, a Miami attorney specializing in auto fraud. That’s why advocates urge consumers have a mechanic or a collision specialist inspect a used car before buying.

Questions about CarFax reports are gaining renewed scrutiny as a result of a nationwide class-action lawsuit that charged the reports were not as complete as the company led its customers to believe. CarFax this year reached a settlement of the lawsuit. Under the settlement terms, millions of people who purchased a CarFax vehicle history report before Oct. 27, 2006, are eligible.

Those interested must file a claim form, available at www.westcarsettlement.com, by May 27.

But instead of receiving cash from CarFax, consumers who file claims will get free or discounted CarFax reports — the same documents the consumers’ attorneys said were incomplete. The other option is a 20 percent discount on an inspection, expected to run about $100, of any vehicle that buyers researched using CarFax.

If consumers don’t opt out of the settlement in writing by March 13, they lose the right to sue CarFax if they are injured because of defects in a previously damaged car that CarFax claimed was clean.

Jeffries already has filed suit against Palm Beach Motor Cars, which sold her the Jaguar. The dealership declined to comment on the case.

CarFax spokesman Larry Gamache said the company never implied that a report was the only tool a car buyer needs. “We’ve always encouraged people to get an inspection by a mechanic”

Source: ABC News

Services such as CARFAX and AutoCheck can be good tools for savvy consumers to use before buying a used car. But CARFAX seems to have backfired for one Bay Area woman.

CarFax is a potentially good information source. The company provides the vehicle history of any used car you might buy, but mistakes are made. As one Bay Area woman found out, information can be dangerous if you know only half the story.

Gina Huggins of Livermore bought a 2000 model Honda Civic back in 2004. Before she bought it she purchased a CarFax report indicating the car had not been in an accident. Now fast forward two years later to when Gina put the car up for sale.

Gina Huggins: “A potential buyer pulled the new CarFax report. There was an accident indicator on the report that actually was dated a year-and-a-half prior to the time that I bought the car.”

Sure enough, Gina called up the CarFax report on her car, and there it was, an accident indicator. The accident happened 18 months before Gina bought the car.

In an e-mail to Gina, CarFax told her it “continuously adds new data sources to enhance records in our data base… any given report may change on a day to day basis.”

That’s good to know if you’re buying the car, but for Gina, it meant the value of her car had suddenly dropped. She says that was only half her problem.

Gina Huggins: “Well, I’ve gotten some people that have been interested and the minute they find out the accident indicator is on there they say they’re not interested.”

Gina asked CarFax for more information about the car’s history, that way she could pass on to potential buyers just what happened. CarFax was only able to confirm that the car had been taken to an auto body shop and that the damage was to the front end.

She then called 7 On Your Side for help. Using public records, we tracked down the previous owner who had recently moved from Dublin to Oregon. She told us the car had been damaged from flying debris on the freeway. The car was never in an accident.

With that new information, Gina tells us she was able to sell the car last month.

The bottom line — you need to know that CarFax reports don’t always have the latest information. They can be updated at any time, sometimes affecting your bottom line.

CarFax recently settled a class action suit.
Link To Source

The National Insurance Crime Bureau (NICB®) has compiled a list of the 10 vehicles most frequently reported stolen in the U.S. in 2005.

1. 1991 Honda Accord
2. 1995 Honda Civic
3. 1989 Toyota Camry
4. 1994 Dodge Caravan
5. 1994 Nissan Sentra
6. 1997 Ford F150 Series
7. 1990 Acura Integra
8. 1986 Toyota Pickup
9. 1993 Saturn SL
10. 2004 Dodge Ram Pickup

A lawsuit has been filed on behalf of five Chevrolet models: Avalanche, Silverado, Suburban, Tahoe and Trailblazer; four GMC models: Denali, Envoy, Sierra and Trailblazer; and the Cadillac Escalade. The lawsuit claims 2003-2007 GM trucks and sport utility vehicles(SUV) have faulty speedometers reflecting in most cases a higher speed than you are actually traveling. A federal lawsuit was filed in U.S. District Court in Seattle last week seeking damages on behalf of possibly thousands of GM vehicle owners. Along with that lawsuit another lawsuit was filed in the State of Oregon, together they are going to try to seek class-action status.

The lawsuit alleges that GM knew about the defective speedometers since 2003 and has failed to perform a recall. If you’d like more info on this lawsuit feel free to e-mail us at the Free Advice link above.