Rock Star Auto Detailing Charleston Has Released a New Promotional Video for 2023

 Newly released rockstaryourcar.com Spring 2023 Promotional Video at https://youtu.be/44r8rZfd5gM

They Call It ☆Rock Star☆ For a Reason - Actor Founds New Car Detailing Operation

Noted musician, actor, and screenwriter, Rob Liotti, has put his automotive expertise to work founding a new professional car detailing operation called, "Rock Star Auto Detailing", in South Carolina. Liotti gained international fame as a professional musician and after being cast by NBCUniversal to portray the late Australian rock legend, Bon Scott, who fronted the band, AC/DC, until his untimely death in 1980. The actor/screenwriter currently has a crime drama out for funding in which he portrays a crime boss and politician.

Appropriately titled, Liotti drew upon his considerable automotive expertise and training to develop a new business that fell within his skill-set while leveraging his reputation as a multi-talented entertainer. Liotti also owns a film and television production company that develops IP content. That company is currently seeking a second green light for a limited series written by and starring Liotti after it's original production company filed for reorganizational bankruptcy as a result of the pandemic. 

The business developer stated, "Rock Star Auto Detailing specializes in full-vehicle reconditioning, condition mitigation, paint correction, ceramic coating, and the mission is twofold - to provide dealership-level results at a value price and to increase perceived appraisal value."

He goes on to say, "In this case, I have set the standard, and that is typically higher than our client's expectations. It is a win-win. In our case, our high-level of training and the experience of buying, selling, and servicing thousands of vehicles over the years absolutely sets us apart from regular 'detail shops' and car detailers. We pride ourselves on our client's reaction - we want to have that 'wow' effect on our clients and develop a long-term, trust-based relationship. We are also looking at a possible product line as well."

"We make it as painless as possible for our clients even offering vehicle concierge services. They can continue their work-day unabated or relax at home while we service their vehicle. There is a reason we have received 100% 5-Star ratings thus far, I would speculate," he added in closing.

Further information can be found on their website at rockstaryourcar.com and on Facebook @Rockstaryourcar. 

END

Why Car Dealers Should Be Listening To This Man

By:

B. Grigsby, Special to Automotive Monthly

Photo courtesy of High Voltage Productions. Copyright 2018.

     By all accounts, Robert Liotti is not your average automotive operations expert. Liotti is an accomplished musician, actor, writer, director, artist, and business professional with some impressive credits. But, for all his success, he still makes clear that he has an affinity for the automotive business and specifically wants to help dealers thrive and become more successful. 

    Liotti has earned an impressive (18) ASE certifications through Ford Motor Co. and Northwoods University encompassing nearly 175 courses in addition to other corporate training work under his belt. Moreover, having been given access to his performance numbers over nearly two decades, it is clear that the operations specialist knows how to drive profitability.

     It is no mystery - even for the most positive in the auto business - that running a car dealership or an auto group is a tricky business. While there are dealers who are thriving, market changes in inventory, used vehicle availability, vehicle valuation bubbles, and a big change in workforce mentality are formidable challenges for dealers to overcome. The fact is that many dealers and groups do not overcome those changes, and buy-outs abound. The business is precarious at best.

     I conducted a lengthy Skype interview with Mr. Liotti to address some specific concerns within the business; some concerns were those of my own, and some were questions from dealers and corporate leaders in the business that I felt to be relevant to our discussion. A synopsis of that conversation follows:

B.G.: Mr. Liotti, I am so happy to have this opportunity to speak with you today. If possible, can you tell me what, in your opinion, is the biggest challenge for dealership success in today's market?

R.L.: My pleasure, Brian. While it may sound generic, dealerships are about two things: people and processes. Right now, dealers are allowing their General Managers to complicate the business with less-than-desirable decisions. An over-dependency upon vendors selling everything from ineffective advertising to apps to lead-generators to over-valued gimmicks are muddying the already complicated waters in search of a magic-bullet or shortcut to success. This mindset is causing irreparable damage to many dealers and groups. I constantly hear of dealers' willingness to "change", but the fact is that while the business has evolved, it hasn't really "changed" much. There is a distinction in terms here.

Put simply: if a dealer does not obtain the right people and employ the right processes, even a strong capitalized position will eventually become distressed due to the lack of driving profitability. And, for many dealers, because they are essentially hands-off in many cases, it is too late when they finally realize that they have allowed a subordinate to fail the business. This is not to say that every GM is without competence, but I am certainly asserting that incompetence is in no short supply in the business. It is simply a hard fact, and many dealers - while having the cash position to finance a dealership operation - may or may not be great businesspeople, or they want to attend to other business and be hand-off. In any case, there is a large margin-for-error in an already tricky business.

B.G.: I have followed you on a couple of public platforms over the past few months and it is apparent that your guidance and professional outlook is not often well-received. I have found this to be very surprising, as it would appear to me that dealers would welcome the advice. What are your thoughts?

R.L.: First, thanks for taking the time to follow. That is much appreciated. Look, hard facts are often met with stiff resistance. The car business is rife with resistance, if not outright refusal much of the time. This is precisely why I only answer to dealer principal's in consulting or training situations. When your name is on the building, and you are the signatory on the checks, you have no agenda. Conversely, any subordinate has a natural agenda to achieve personal success. This fact of human nature is just part of the psychology of doing business. Notwithstanding, I strive to make dealers readily cognizant of the fact that they MUST protect their interests. In my case, I am often the only accountability mechanism between a dealer the individual charged with oversight of the store point(s). That accountability trigger changes everything as it relates to making certain that business is conducted in the interest of the DP, first. I have seen many, many GM's run dealerships into the ground - often without an opportunity for recovery. By the time I get involved, it is too late.

This is where the matter of resistance is important.

Outside involvement with someone like myself is a security-blanket for a dealer, but usually a big obstacle for staff. The DP knows that he/she must initiate change, but many staff members just aren't going to cooperate. My function is to achieve buy-in... My goal is not to disrupt, but to find cohesion and build a platform where all staff members are valued, tasked, and rewarded while driving the business forward for the DP. But, let's face it, the car business is one of the only businesses of its type where employees demand thousands of dollars in compensation, but outside of the business may be lucky to land a $10/HR job. This fact highly affects mindset.

B.G.: I see your point. But, I have seen many people who are clearly supportive of your philosophy, but many others who literally attack you as being 'negative'.

R.L.: Yes, I do see that at times - especially when I make a statement that might imply jeopardy of a person's job. The truth and facts are often construed as 'negative'. That's a failing mindset and should be viewed as an elementary projection to preserve one's refusal to adapt and change if needed. I wrote an article called, "The Car Business Merry-Go-Round" that addresses the human resource challenges in the business. DP's do not insist that their dealership managers be recruiting 100% of the time. Employee retention in the auto business is dismal at best. There is a reason for that...

Vendors have perpetuated much of the negative disruption in the business, frankly, and it should be noted that most of them have never even sold a car or written a repair order. That is not a strong formula for dealer success. DP's allow millions of dollars to be wasted on useless vendors and their products annually. Profitability is equivalent to revenue flow and prudent expensing. Math doesn't lie. However, "Car Math" does.

Lack of control causes dissention. Again, my only vested interest is objective, in that, my function is to protect the interest of the DP. Honestly, everyone from the GM to the maintenance staff is important to me, but it starts from the top.

B.G.: So, if a dealer hires you to assist them, what do you do?

R.L.: Same process for me every time: evaluate, develop, plan, implement, train, and hold accountable. That simple.

B.G.: I found it very interesting that you maintain a "predictions file" that I reviewed. I was shocked with your accuracy with respect to the car business. Can you tell our readers about it?

R.L.: Sure. One thing that any DP or dealer operator values is intuition - at least they should. Basically, if I see a trend in the industry or have my eye on a particular dealership, company, or entity, I will attempt to predict its viability and health. Unfortunately, much of what you read were predictions of the impending future demise of dealerships, dealer groups, and aftermarket service facilities. I will admit that I have not been wrong in those predictions.

B.G.: Not at all, sir. To me, that is not a negative thing, though. 

R.L.: I agree. The reality is that if I say to a dealer: "your business is in trouble". It may be advisable to listen, yes. The fact is that most car dealerships in North America operate generally the same way. Thus, they have a strong commonality of problems and challenges. Honestly, it is very likely that I never even have to step into a dealership to resolve their issue. Moreover, I can keep the dealer's cost down in that way. I deliver everything the dealer needs in the most cost-effective fashion possible while garnering the best results.

B.G.: So, you are definitely accessible and available to consult with dealers?

R.L.: Absolutely. I am still involved in the business because of my passion for it. I thrive in developing staff members - from top to bottom - and get a great deal of gratification from helping a dealer turn it around or tweak it. My contention is and always has been that there is no need to excessively waste money on gimmicks. Tools are useful, yes, but the human element is not easily replaced. None of us are perfect, but it is possible to have a happy staff, profitability, and future dealership health by being attentive to the people and processes first.

     It is positive to know that professionals like Robert Liotti are out there and available and willing to help dealers succeed. Our conversation gave me a different outlook on the business, and Mr. Liotti's knowledge and insight, as well as his ability to convey his message, was enlightening. The automotive business is challenging without question, and I can, in fact, recommend that the business should definitely pay attention to Mr. Liotti's advice.

END

***Used with permission. Copyright 2018.

Is Tesla Engaging in Potentially Illegal Sales Practices in South Carolina?

Company representatives of Tesla Motors were photographed in Mount Pleasant, South Carolina this week demonstrating and displaying vehicles and possibly violating the law.

The State of South Carolina has laws in place that govern car dealer practices, including the display of vehicles and interaction with company representatives. However, it appears that the automotive manufacturer may be pushing the boundaries in lieu of building actual dealerships.

In South Carolina, a franchise dealer or manufacturer must at a minimum obtain a temporary dealer's license in order to properly and legally display vehicles. Further, company representatives are not supposed to engage in direct selling or demonstration of display vehicles offsite. Tesla brought along a vintage Airstream trailer doubling as a portable showroom along with two display vehicles. Tesla marketing materials also festooned the display area as individuals clothed in Tesla gear demonstrated vehicle features.

What is questionable is whether the electric vehicle manufacturer obtained the necessary dealer license to legally display said vehicles. There was no visible temporary dealer license visible at the offsite display, and when asked, representatives were unaware of such a requirement.

Tesla Motors representatives can clearly be seen engaging with potential customers at the offsite display and given the applicable statute, it would appear that the manufacturer could be in direct violation of the law. 

This issue is what would seem clearly problematic for a manufacturer who is now experiencing reported financial problems, some of which may be a direct result of their failure engage with actual showrooms and dealers prepared to sell the product. One could readily speculate that this questionable effort recently seen in the Charleston, SC. area suburb is not a positive indication of future success for the otherwise innovative auto manufacturer. 

Copyright 2017, Robert Liotti. All Rights Reserved.

Why Ego is Destroying The Auto Business

https://www.linkedin.com/pulse/why-ego-destroying-auto-business-robert-liotti?published=t

The Car Business Insider Show #003

Global Automotive Consulting Group Mission Statement - Why Your DEalership Should Hire This Firm

The Car Business Insider Show #001 - Employee Retention and Burnout

The Car Business Insider Show Introduction 01/10/2017

The 'Dealer Fee' Scam Revealed in South Carolina

Have you ever purchased a new or pre-owned vehicle from a dealer and were preparing to sign the purchase agreement (buyer's order) when you came across a bold section that said 'dealer fees'? If you, so are not alone. Dealer fees are not only legal in most states, but the State of South Carolina is currently considering a bill that will nullify impending lawsuits against dealers for collecting this frivolous fee.

Car dealerships are big business as we have discussed time and again. And, we here at the Car Business Insider are supporters of the automotive business, but firmly believe that dealers are lack integrity are rampant. Thus, our mission is to educated dealers and those employed in the industry as to the pitfalls of low-integrity auto business dealing and to raise the otherwise low barre that seem to persist in the industry.

Car dealerships are also big businesses for cities and states. They collect hundreds of thousands of sales tax dollars for the state and also pay fees applicable to doing business, such as: taxes, disposal fees, environmental fees, etc. So, it isn't difficult to imagine that they also have a big lobby at your statehouse. That is certainly the case in the State of South Carolina as auto dealers are scrambling to convince lawmakers - your lawmakers - to reverse the court's legal position on improperly assessed doc fees.

The following is a Notice of Class Action Settlement levied against a Hendrick Auto Group dealership in North Charleston, SC., specifically Rick Hendrick Jeep Chrysler Dodge Ram:
http://www.noticeclass.com/upload/ClosingFeeSettlement/rick-hendrick-jeep-chrysler-dodge-ram/JeepNotice2.pdf .

The result of the suit amounted to about $1.5M in settlement fees. But, the settlement was only applicable to the complainant's suit and those incidents that preceded his own. It does not account for those who paid the fees post-settlement. The Hendrick Group was hit yet again for $2.8M levied against their Hendrick Honda dealership.

Recently, in Columbia, SC., a bill that would kill some 200+ class action lawsuits against car dealers for these frivolous fees was passed out of the Senate Judiciary Committee, according to The State newspaper. See: http://www.thestate.com/news/business/article55158070.html

The bottom line is this with regards to dealer doc fees:

1) Dealer doc fees are subjectively imposed by dealerships.
2) In South Carolina, there is no cap or rules as to amount for doc fees.
3) Dealer doc fees usually range from $99 - $699.
4) Dealers typically explain the extra charge as a "processing fee" to cover "expenses".

INSIDER TIP: Let me be straight and to the point: DEALER DOC FEES ARE 100% PROFIT!!

I have been in many, many dealer meetings and it is, without dispute or confusion, accurate to infer that doc fees are profit that goes directly to the dealer's bottom line on each sale. Furthermore, and to add insult to injury, I know of NO dealer out there that actually shares a percentage of those passive earnings with his/her staff members. In other words, all doc fees go straight to the dealer.

So, if we translate a dealership that sells 200 units per month with a doc fee of $399.00, that is an additional $79,800.00 for the month's bottom line that is not commissionable and straight profit. Believe me when I tell you that if you are attending a dealership meeting and make any enquiry as to the validity of or the divvying of a doc fee, prepare to be cut off at the ankles. Dealers love their doc fees.

From a legal standpoint, the SC Legislature and the bill's sponsor are likely going to be quickly shut down by attempting to satisfy the dealer lobby. The SC Supreme Court has already ruled in favor of consumers regarding frivolous doc fees, and it is not likely (nor legal) to retroactively nullify pending suits with this type of legislative dodgeball.

More laughable was the remark by a Rick Hendrick General Manager who testified that, “Hendrick failed to offer any evidence that it calculated the costs that comprised the closing fee,” the opinion said. During the trial, Hendrick’s general manager testified he didn’t know how closing fees were computed, the opinion said. http://www.independentmail.com/news/state/sc-supreme-court-rules-against-car-dealership-charging-closing-fees-ep-1352832243-347812751.html

One thing is for certain, folks: every dealership general manager out there knows EXACTLY what the doc fee is and what it constitutes!

END

Copyright 2017, Robert Liotti, The Car Business Insider. All Rights Reserved.

Why It Is Time To Seek Out Objective Automotive Consultants and Drop The 20 Group

For some time, the automotive 20 Group has been a staple amongst many franchise and independent dealers as a source for critique and new development strategies. Definitively, a 20 Group is a group of dealers who meet with some regularity to discuss and strategize their businesses together. What I have never understood nor bought into was the belief that a competing dealer was going to tell me how to get rich and become more successful. To me, this is a  fallacy at best.

Some dealers may argue that their 20 Group members are not "competitors", but the reality is that everyone is a competitor even if allegedly outside of your geographic scope of doing business. Furthermore, while there may be some dealers out there who genuinely do not mind exchanging profitable business strategies with their fellow dealers, it is naive to think that most car dealers are that generous.

The more likely scenario is that at the very least subliminally, many, many dealers feel like the only person that will truly understand them is another dealer. Moreover, while there may be the overt intention of "sharing", the fact of the matter is that most dealers are very protective of their secrets. What draws them into this situation, however, is their inherent "need to know" what the other guy might be doing and because of the otherwise rather juvenile psychological mindset that they hate leaving their comfort zone. Thus, the 20 Group is their "warm and fuzzy", albeit an unlikely source to deliver the shot of creative adrenaline needed to fix so many broken dealerships.

What is the real incentive for one dealer to tell another how to be successful?

The fact is that 20 Groups are not particularly innovative and tend to reinforce the definition of insanity (a la Freud) because it is far more likely than not that were you and I to travel to 20 different dealerships within a 50 mile radius that the same 20-year-old bad habits prevail in the vast majority of them. That is reality.

Most car dealers are not necessarily known for ingenuity, although in all fairness, there are certainly dealers who set the trends for success. What is most important to measure, however, is whether a dealer is just covering up poor business practices with a shiny new facility or whether a dealer is using all available means to increase and grow his/her business without smoke and mirrors. One of the most effective benchmarks of dealer success, for example, is employee retention percentage. Again, all that a dealer can truly hope to obtain from a 20 Group is much of the same retread rhetoric that they've been discussing for the past decade.

So, what is the answer?

While many car dealers are so quick to acknowledge their willingness and efforts to "change", the sad fact of the matter is that their version of "change" is just recycling yet another manager who has drifted from dealership to dealership following the manager he/she replaced who has just moved into the musical chairs line for auto managers. It is tough to effect real change considering that all of the managers in town know the systems and processes of their former employers. Therefore, it is time to truly advance their thinking and to give due consideration to employing third-party consultants to help develop and implement positive change and growth.

Now, for many people in many professions, those of us who have heard people refer to themselves as consultants receive the obligatory eye-roll and dismissive kiss-off. In many cases, the position of "consultant" truly does provide an important sounding title for a person who is either unemployed or has failed at everything they've tried. But, for the moment and for purposes of this article, let us shun the cynicism and acknowledge that there are professionals in the industry who are more than happy to help a client improve their company in exchange for due compensation.

Consultants bring one thing to the table that no 20 Group can ever hope to deliver - objectivity.

Dealers would be wise to face the fact that their buddy in the next town over may very likely have no other goal than to cherry-pick any valuable piece of operational intel that will give them an operational advantage. And, it is an all-to-familiar scenario that the local car business and its inhabitants are a far more entertaining dramatic series to follow than the most popular soap opera or housewives reality show on television.

Objectivity is everything with respect to hiring a consultant who has no other mission than to retain you as a client, see you succeed, and get paid. Yes, you will have to spend money on a professional consultant, but look at the money that dealers literally piss away on ridiculous, ineffective ad campaigns, the ubiquitous weekend newspaper ad buy, fancy large LED screen televisions to show a service customer that their car is done, and over-conditioning an otherwise not very retailable unit. So, if a dealer were to track all foolish expenses or to simply redirect their expense structure in a way as to justify potential increased growth, the money is there to acquire the knowledge to help them grow their company. In fact, they really cannot afford not to do so, as they risk a long or short term bleed-out or a long term, no growth plateau.

A knowledgeable consultant comes to a dealership with open eyes. Because they have no vested interest in the dealership or any specific employee or professional social situation, a new set of eyes makes their evaluation invaluable. And, while there is always a realistic professional margin of error, an effective consultant (dependent upon their expertise) can view a situation and set of circumstances and make a non-emotional recommendation to the dealer as to a suggested strategy or adjustment. The simple technique of shadowing the staff, interviewing associates anonymously, and casual interaction is a passive approach to consulting that can reap massive rewards for the dealer.

Frankly, the biggest obstacle standing in the way of most dealers are the dealers, themselves. Will they be open-minded enough to call for outside intervention? Are they willing to admit that not only can they afford it, but, more importantly, that they cannot afford not to seek said intervention? Lastly, will their ego, affinity for staff members, and comfort zone allow them to accept the recommendations?

Socially speaking, 20 Groups are probably a nice way to maintain a congenial relationship with a group of people who have similar interests and goals. In fact, it is likely that a dealer can actually pick up useful tidbits of information and intel that will help him/her in some fashion. But, it is also important to realize that smart dealers also likely to engage in spreading disinformation that can become cancerous and obfuscate the forest for the trees. This is just reality.

Yes, change in the car business is inevitable, and you will consistently hear dealers acknowledge that fact. What you won't hear in many cases, however, is a viable strategy for repairing or growing one's dealership business. While this writer knows many dealer principles who have experienced great success in spite of themselves and their poor choices, image, or otherwise, most flailing dealers may need to give strong consideration to a fresh perspective and unemotional input that a professional consultant can bring to the party. Recognizing and acknowledging that change is inevitable is one thing; willingness to initiate change is another challenge for dealers entirely.

END

Copyright 2017, Robert Liotti, The Car Business Insider. All Rights Reserved.

Why Buy-Here-Pay-Here Operations Compromise An Already Suspect Automotive Sales Industry

I had an interesting phone call and quasi-interview this morning with a regional buy-here-pay-here automotive franchise based out of Georgia . After spending over an hour to complete an online application with this company for a ground-level sales consultant position this past holiday weekend, I was contacted by the company's HR representative who was tasked with providing details about the position for which I applied.


For those of you who are unaware, buy-here-pay-here automobile dealerships (otherwise known as "dirt lots" or "tote-the-notes") are independent dealerships that specialize in selling used vehicles and providing in-house financing for their customers. Typically, the dealership will hold one company as the dealership proper and another company as their "finance arm". Nonetheless, these dealerships are facilities that most often deal with disenfranchised buyers who lack the creditworthiness to purchase at a traditional franchise dealership.

What is problematic about BHPH operations is that they normally sell higher mileage, less mechanically sound vehicles which can be acquired by them at an advantageous price and finance them through their finance arm making the entire purchase captive to themselves.

Is there anything illegal about this practice? No.

But, cutting right to the chaise, here is how a successful BHPH operation works for the dealer:

1) Their buyer purchases higher mileage pre-owned vehicles that do not necessarily have to meet the more stringent guidelines or standards expected in a franchise dealership operation.

2) The buyer's goal is to buy vehicles that are often in a pre-determined price bracket set forth by the dealer. The buyer may be directed to pay no more than $5000 for an automobile and no more than $8000 for a truck in order that they may double the price for retail sale and require applicable down payments.

3) Dealers are in the business of acquiring cash down payments and often cover the entirety of the equity position they have in the vehicle after retail preparation. In other words, they pay $3000 for a six-year-old Toyota Camry with 89,000 miles and have a total of $3500 in the vehicle after reconditioning. Hence, you are asked for $3000 down payment to "buy" the vehicle. In this case, the dealer has only a $500 deficit in his actual cost before you ever agree to the 36% finance rate when sitting down to complete a contract.

4) BHPH dealers live off of a portfolio. In other words, the scam artist that talked this guy into becoming a "dealer" told him that "the more cars you have in the street, the more payments you have coming in and the bigger the portfolio." Most of these "dealers" have zero true automotive experience and only look at the down payment as your obligation to increase their portfolio - and wealth.

5) Clearly, BHPH dealers prey upon buyers with poor credit and those whose desire to purchase is based upon need rather than want. Furthermore, THEY own the bank, so their desire is to get as much down payment as possible and finance that vehicle for as much as possible and for as long as possible keeping their accounts receivable clerk as busy as possible.

6) BHPH dealers may or may not attempt to be congenial with buyers, but all either directly or indirectly operate under the overt threat of repossession of the buyer's vehicle. Nowadays, nearly all BHPH operations utilize GPS technology and track the vehicle and also have the ability to employ a kill switch that will disable the vehicle if timely payment is not received. Moreover, "dealers" are told that they need to maintain a certain repossession percentage based upon a risk matrix.


Here is what is also problematic about the whole BHPH mentality: franchise dealers theoretically operate under the same methodologies, but in a far less exuberant fashion. Franchise dealers seek to buy low and sell high, sell financing, and build their portfolios as well. However, as much as I can criticize many franchise dealers for not exercising integrity, BHPH operations are typically predatory and seriously compromise the reputation of an already precarious love-hate (mostly hate) relationship between car buyers and car dealerships.

So, back to my phone conversation this morning...

After reading almost 200 reviews online about this company - all of which were negative - I picked up the phone and called the HR representative who had left a message for me earlier in the day.

Now, I have been in the automotive game for over seventeen years, and while I will admittedly acknowledge that I do not know everything, I am more than familiar with the typical BHPH business model, and this conversation proved to be no different.

I was first once again amazed at the fact that someone looked over an application that would be indicative of a GM at a minimum or a corporate position, but quick to point out that "no management positions are available" and that they "were only looking for a sales consultant." She was quick to point out my extensive experience, but that "they send new hires to Georgia for a week to train them how to do things 'their way'." So, I played along.

For those of you who are simply consumers, I do not expect you to necessarily understand, but this was yet another prime example of yet another automobile group who thinks they are going to change the face of automobile sales and reinvent the business.

To the contrary, today's conversation only prompted me to take the time to sit down and warn consumers and potential automotive employees about the pitfalls of becoming involved with the vast majority of these companies as their methods, acumen, integrity level, and business practices are inherently suspect. And, in the case of the company with whom I spoke today, their very, very tainted reputation far and away precedes them, and they carry a BBB rating of "F". Not good.

I spent six months employed with one such company a few years ago while between jobs. The dealership was run by a former boat captain who had never sold an automobile in his life, had no sales or management training, and who just happened upon the job because he captained the boat of a wealthy real estate developer who got the advice to go into the BHPH business. The dealership was unpleasant, the GM was clueless, the office manager smelled like she had been rolling in an ashtray, our buyer was a good guy but had received no real training, and they had two sales consultants with a combined 45 years of automotive experience. All we could do was shake our heads daily at the level of cluelessness. A lot of the same cluelessness exists in franchise dealerships, too.

In closing, I have two very valuable pieces of advice:

1) If you need a car, take that $3500 down payment and buy a car in CASH! You would be surprised what you can find if you look. There is 0% interest and you own it free and clear.

2) If you are a potential automotive employee, you will want to heavily consider the reputation of the company in order to save yourself many, many headaches.

END


Copyright 2017, Robert Liotti, The Car Business Insider. All Rights Reserved.

Working For A "Volume Dealer" - Does It Pay?

It goes without saying that things have changed in the car business. For many of you, you may not have even noticed.

It used to be the case in the late 1990's up to the mid-2000's that sales consultants actually worked to make a commission from the gross proceeds of their sales. As a result of that mindset, it required that sales professionals follow proven steps in a process to not only optimize their earnings, but to also give their client the best experience possible. It was always my opinion that a great sales consultant optimized every sale and worked smarter rather than working harder. Then came the "volume" dealer...



For those of you who are unaware, there are many dealers out there whose existence depends almost solely on volume sales rather than optimizing gross profit. And, while there are many factors that are determinant of gross profit such as: cost, carrying charges, reconditioning, dealer pack, etc., let's keep it simple. In other words, for many of today's dealers, rather than spend adequate time training their staff to "sell", they are more inclined to employ "clerks" to corral customers, check out their website, and choose your model like choosing cereal at your grocery store. For professionals like myself, this methodology is sinful.

Why?

Many of today's dealers would rather have a "greeter" at the door, turn the customer to a "clerk", pick out your car, have the manager give it all away for the "best deal" on the first and only pencil, and have the "clerk" handle the 20 minutes of paperwork. The reason is simple: typically, the ones making the money are the managers and dealer - not you. As long as the manager sells "a unit", the F&I Manager gets an at-bat, service gets an email from a new customer for the next coupon blitz, and you get your "mini deal", the dealer is happy as can be.

Honestly, YOU shouldn't really get "paid" per se as you aren't selling; you are clerking. Selling requires rapport, listening, timing, knowledge, ability to convey value, negotiation, and closing. Are you capable? Apparently, most dealers do not believe so. In their mind, they are trying to bypass proper recruiting, effective training, skill development, turnover reduction, and accepting the fact that staff members may have their own personality and style. Good managers are capable to developing and fostering those individual personalities and strengths and harnessing their profitability. But, that requires good managers and investing in future successful employees. We know that isn't the case given the excessive turnover in the auto industry.



Dealer Principals and their anointed GM's have decided that short-cutting the process of employee development and associate individuality and putting the majority of responsibility in the hands of their managers streamlines the sales process while giving up on value-building and negotiation in lieu of extracting minimal profit margins, but moving more units. Oh, this process can definitely work, yes, and in the eyes of many dealers, the more car that cross the curb, the more profitable service business that they can capture and the more "advertising" the dealer achieves. In theory, this mindset can be true, but can come at great unseen costs, too. Furthermore, if tasked with running this type of operation, I can readily set up all of the systems and processes, hire the staff, delegate the functions, and drill down into all the mathematical benchmarks to maximize the "volume" principal. And, in all likelihood, I would do it very well. But, I have a conscience with respect to maximizing associate earnings and investing in my employees that others clearly do not.

You see, the bottom line is that volume dealers are set up to work for a minimum-challenge gross margin comprised of  dealer holdback, advertising money, lower floorplan expenses, dealer volume sales bonuses, increased back-end profit attempts, and future service revenue. Again, if the advertising and inventory are there, this system can be quite profitable. The dealer hires some tart to do the ubiquitous annoying "we are the #1 volume dealer" television ads and you sit at your desk sending emails trying to figure out why the "you can make $100,000 per year" employment ad you answered seems to be a total fallacy. Moreover, you see the same two guys at the top of the sales board every month and wonder why you always see one of them headed into an empty conference room with the senior sales manager.

Compensation plans have also changed as a result of this and other newer operational philosophies. Many companies are now offering a nominal salary of say $30,000 per year plus spiffs for this, bonuses for that, and a tongue-in-cheek statement that "if you put the time in" you should make $60,000+. Those of us who have been in the industry for a number of years have seen this happen, but chances are far better than not that you will ride that $35,000 line and either burn out from the hours and lack of real prospects that aren't friends and family members or the dealership will attrition you out for new blood. This is typically a dealership management failure, but most dealers just don't care.

The automobile business can be a career-changer for many people - especially those who don't have a degree or are in an area where the job market is tight. Yes, it can be a high-paying gig, but too many associates pick up bad habits or integrity problems that make their tenure short as they bounce from dealership to dealership. Dealers are constantly changing, and most are not changing for the better.
There is no doubt that I can sit here and give you a page full of reasons why being the volume dealer can be and is profitable, but realize that business conditions such as macro economic changes or a bad story or two in the newspaper can change everything in the blink-of-an-eye for these dealers. And, unless they have a staff that it actually prepared to earn every sale through rapport building, proper needs assessments, effective product demonstrations, and closing skills, the next thing you wont see is the goofy blonde tart with the annoying voice pitching the "#1 volume dealer" any longer because there is a new sign out front.

END

Copyright 2017, Robert Liotti, The Car Business Insider. All Rights Reserved.

Car Business Insider Launches Talk Show

The Car Business Insider has moved to launch its own supporting self-titled talk show aptly called, "The Car Business Insider". The new show will be hosted by automotive consultant, Robert Liotti.

Liotti is no stranger to either the automotive industry, nor the entertainment industry as he has spent (17) years in professional automotive operations, as well as doing double-time as an actor, musician, and writer. Liotti, who authored a book and numerous published pieces back in the late 1990's for the national horse industry also hosted a radio talk show called, Horse Talk.

Liotti said, "This is a great opportunity that has been in development for a few months. We knew that we would be kicking off in late 2016 or early 2017, and the projections have been very accurate in that regard. I'm very much looking forward to it."

"This is a unique program that will utilize my automotive operations expertise, as well as my passion and experience in entertainment. We will be tackling the issues that affect the retail automotive industry, its consumers, and those who are employed in the business. We will be delivering the program as an internet based show because it allows us to be more frank with our audience without worrying about upsetting advertisers. Some of the biggest radio groups in the country had a look at this program, but were very concerned about alienating one of their largest advertising revenue streams - car dealers," he added.

The show's producer stated that the host is "very well-qualified" and will utilize guests and expert commentary through its audio/video internet delivery to educate and compel.

Global Automotive Consulting Group Emerges as a New Innovator in Training and Consulting

While many automotive dealers seek constant change and improvement, they are also commonly guilty of failing to expense the ever-important task of training, recruiting, and strategy management. Thus, the recent merger of an otherwise conventional, albeit effective consulting firm, with a highly innovative start-up should prove to provide dealers and potential automotive professionals with a more affordable and expeditious option.

                                         

Robert Liotti of Liotti Management Consulting has merged his firm of 5+ years with a new consulting firm called, Global Automotive Consulting Group. Liotti, who has 18 years of experience in professional automotive operations with (18) ASE professional certifications through Ford Motor Company and an impressive track-record of performance, will serve as the principal consultant of the new firm based out of Charleston, SC., USA. Liotti has seen tenure with publicly-held operations such as Sonic Automotive Group, the brainchild of NASCAR royalty, Bruton Smith, and is also a published writer.

Liotti said, "Global Automotive Consulting Group is going to be a cutting-edge innovator in professional automotive consulting using more modern technological delivery methods that will convey expert analysis and resolution while markedly reducing the expense to dealers for those services."

"To those of us who have been vested in the operations end of the business for any time, intelligent dealer operators realize that ongoing training and third-party consultation are the only means of maintaining a fresh perspective. So often, dealers divest themselves of the intricacies of day-to-day operations and then find themselves operating at a serious and sometime unrecoverable deficit

when the P&L statement hits their desk that quarter. It's really no surprise as they have lost sight of the forest for the trees by not maintaining a handle on their namesake," Liotti added.

GACG has aimed its sites on two major missions: 1) Consulting for dealer operators in the forms of process development and implementation, operations management consulting, integrity audits, BDC development, fixed and variable operations compartmentalization, manager development, and employee relations to name a few. 2) Training potential associate employees for a career in the automotive industry.

"One of our primary goals is to recruit new talent and offer a training curriculum to them with which they can, first, acquire a new job, and, second, put that training to immediate use in their new position. Therefore, we are helping to train new job seekers and send them into the workforce with the tools to succeed. And, the best aspect of this function will be the candidate's ability to acquire this training at a very nominal and affordable price. Given the costs of college and technical school tuition, our training can pay substantial dividends in a very short term. Moreover, with a price tag of only $300-$400, the cost is easily recovered. Dealers may choose to provide tuition reimbursement or the candidate should recover his/her investment easily within the first bi-weekly pay period at their new job. Plus, we are there to provide a recommendation for that candidate. This could take some otherwise talented, yet unemployed candidates to something possibly life-changing," he said.

Potential clients can contact carbusinessinsider@gmail.com for more details or call GACG at 1-854-529-7995.

END

Exposing Ridiculous Auto Sales Advertising

Are you really falling for this trade vehicle baiting?

If you are like millions of potential car buyers nationwide, you have been exposed to ads from sellers that may look appealing, but the reality is that they have little to no substantive value for you as a shopper.

All too often in the car sales game, gimmicky ads purport 'savings' and extras that simply hold no real value and only present the facade of helping you to make a purchase.

Here's the reality: we have previously redefined a 'trade' as a 'vehicle that you are presenting for sale'. You aren't 'trading' anything; you are obtaining a monetary offer on your vehicle that may or may not present itself as equity against your proposed purchase.

With this in mind, ads such as the aforementioned might suggest that if you have a vehicle worth $5000, the buyer is now most graciously going to pay you an extra $750! 

Does that truly sound realistic?

Think about it: if the dealer intended upon selling 100 vehicles that month that involved 'trades', they would be willing to skew their inventory cost by $75,000? I think not...

Keep in mind (as we have previously discussed) that 'trades' are worth what they are worth. Also keep in mind that as an appraiser, I may assign my buying offer while another appraiser may think your vehicle is worth $500 (in their opinion). Car values are subjective at best.

So what about these ads, you ask? I will politely call them BS. The ads are designed to do one thing and one thing only: get you though the door and in front of a salesperson! 

Rest assured that the sales managers at Enterprise Car Sales are meeting with their salespeople in the morning giving them a copy 'the new ad' and making sure that they are aware of the 'offer'. And I can tell you with certainty that Enterprise doesn't hire the sharpest people in the business from the outset.

INSIDER TIP: stick to our formula of attempting private sale of your vehicle to maximize your return if possible. No car dealer is going to happily hand you $750 with a smile on their face. To them, $750 is gross profit, and that is how the sales department is paid. Do you honestly believe a salesman wants to part with $175 commission? Do you believe a dealer is going to gratuitously add $75,000 to their inventory cost? The answer is emphatically 'NO' on both accounts. $75,000 of 'water' usually puts a used vehicle out of a job.

END

The Car Dealership Sales Process - How To Use It To Your Advantage And Control It

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Not as if I haven't already provided you with $1000's of dollars worth of inside information at NO cost to you, but I am going even further! I am exposing the car business and all their tricks because of the overwhelming lack of integrity as it relates to car dealers and their endless greed. After nearly 20 years in the business being taken advantage of, used, and manipulated by greedy dealers, I am giving you the information that scares them to death.

You can pay us back by sharing our page on Facebook and sharing our blog!

Most companies that peddle services or wares have a process in place to sell their products. Car dealerships are organizations that typically attempt to use a sales process to their distinct advantage when it comes to selling you a new vehicle. Naturally, sales processes come in all shapes and sizes, but are only as good as the trainer who teaches them and the level of talent a person possesses to implement its use.

I have taught a structured sales process to scores of sales consultants, service advisors, and managers over the years internally or as a consultant. Sales processes do work and are designed to keep an individual organized and on track to lead you (the buyer) to a successful sale. In fairness to the process, itself, the best salespeople use one, and it makes for much happier customers. However, given the predatory nature of car dealers and their sales staff, it is vital for you to know how to understand the process and how you can ultimately control it.

Let's break down the actual sales process that I have used and taught:

1) Customer Welcome

2) Customer Needs Assessment

3) Vehicle Selection

    a) report to manager for guidance

    b) evaluate inventory and gross profit potential

4) Feature/Benefit Presentation

5) Demonstration Drive

    a) trial close

6) Trade Evaluation (if applicable)

    a) history discussion

    b) silent appraisal

    c) devaluation

    d) trial close

7) Transition To Write-up

    a) credit application

    b) down payment inquiry

8) Purchase Proposal Presentation

    a) payment or difference

    b) overcome objections

9) Close Sale

    a) F&I preparation

    b) business manager turn

10) Vehicle Delivery

Sales processes sometimes have a couple of more steps or possibly a couple less. Notwithstanding, as an expert in the business, this is the one that I have taught and the one that was very successful for me, personally.

As I always advise, don't try to over-analyze it or try to outsmart it. Many consumers have tried and failed miserably. However, if you pay close attention to how I dissect the (10) steps for you, there is no doubt, whatsoever, that you will have a MUCH better understanding of how you are being led and manipulated into ultimately saying 'yes' to a purchase.

So, let's get right to it and break this process down step-by-step while taking time to give its purpose and the psychology behind it:

__________

STEP (1) - A professional salesperson is comparable to a shark in many respects; it needs to feed. You are the source of food that the shark circles and preys upon. If he/she is top-notch, every question and statement will have a purpose and be very calculated. You can be certain that a pro is mentally notating every, single thing that you say to use to their advantage as they move you through the process.

Conversely, keep in mind that many salespeople are not professional at all. This is why we don't take any delight in car shopping, right? But, the good ones are very personable, well-dressed, articulate, and very accommodating. In either case, there is no question that both the smooth professional and the Dirt-Lot-Dan can readily take advantage of you and make a very handsome commission at your expense. The low-lifes also know how to play the car game as well. They just do it with less scruples with seemingly no regard for ethics or legal ramifications.

The goal of ALL salespeople is to draw you in, build rapport, gain your trust, and strike.

INSIDER TIP - Be polite, be aware, be guarded, and think before you speak. It will not pay to be an ass, believe me. The dealer staff will make it their mission to take as much of your money as possible. You are selling yourself, so to speak, and building rapport just like the salesperson. Intelligence and preparedness will pay off for you as well as an amiable attitude. The goal is to will not be combative.

__________

STEP (2) - As I always tell all of my trainees, the needs assessment is far and away the most important step in the process. Why? Because this is where they are going to ask some very pointed questions that will 'paint a picture' for their manager. Loaded with this essential information, they methodically choose the right vehicle to their advantage, sell out of existing inventory to their advantage, preliminarily structure a financing strategy, and maximize their profit potential.

Do keep in mind that not many managers and sales consultants are terribly sharp. They don't follow directions well, love to short-cut the process, seem to always think they know best, and simply appear untrustworthy to customers. But, they are still equipped to play the game and do damage to your wallet. Honestly, most salespeople either skip this step in the process or minimize its effectiveness by skimming through it. Furthermore, most managers didn't perform this step well as a salesman and don't often get off their ass behind the desk to ask you themselves.

What I have taught my trainees is to use a very simple needs assessment form to ask prepared questions painting me a clear picture of who you are, where you live, your demographic, vehicle needs, financial information, credit standing, former lenders, and trade status. As an expert, I can make very determinant decisions very quickly while keeping your focus forward and guiding you ahead as a means to my desired end.

INSIDER TIP - Most of these questions are actually fairly harmless. What do you currently drive? Your current payment? What payment range are you seeking? What features do you need in a new vehicle? Will you be trading a vehicle?

Answer only the basics and defer away from pay-offs, payment ranges, whether you will or will not trade, if you will be financing with the dealer, etc. Again, be polite! Don't give them any more reason to plot against you than already exists. Simply let them know that you are just trying to find the right vehicle within your budget.

They will ask what your budget is! LOL! You should already know your number. If it is $20,000, just tell them 'under $20,000' and leave it at that. The most important aspect here is that YOU know the answers to these questions for yourself.

A smart dealer like myself insists that his staff qualifies you thoroughly. Without that information, customers become lost and confused as well as frustrated costing me gross profit.

__________

STEP (3) - After a salesperson has compiled all of the necessary information from you during their needs assessment, they should have been required to touch the desk as is commonly stated. In my case, I tell salespeople that I want to receive their canvas and confer with them about structuring a strategy based upon the information that YOU provided. It is a direct accountability mechanism.

Most managers only want to deal with units that are in-stock, as selling it will reduce and turn inventory and alleviate floor-plan expense. It also allows the dealer to make more profit because they do not have to pay for extra transport and fuel to bring a vehicle from a competing dealer, as well as being able to make their dealer holdback from the factory.

Dealer holdback is only applicable to the sales of new cars and trucks. It is a set monetary amount notated on the official factory invoice that dealers are paid by the manufacturer.

Dealers seek to maximize profit rather than placate to your needs or desires.

INSIDER TIP - If you choose to buy something, buy what YOU want. If they have to get the vehicle from another dealer, so be it. Maybe the other dealer would be worth the drive for you. The dealer's floorplan expenses are not your concern, nor is their profit. Rebates still apply to dealer transfer vehicles. Expect to pay a bit more for a dealer transferred vehicle. This usually amounts to a few hundred dollars.

__________

STEP (4) - After choosing the vehicle, the salesperson should conduct a thorough feature presentation, otherwise known in the business as a walk-around. The proper demonstration of vehicle features should take 20-30 minutes dependent upon equipment. Sophisticated models can certainly take more time.

INSIDER TIP - This step in the process is certainly beneficial to you as a purchaser. Keep in mind, however, that because everything is done by design, the salesperson is continuing to attempt to build rapport and trust as well as building value in the product in order to justify asking you for more money. And while more features certainly increases MSRP, you can still negotiate, accordingly.

__________

STEP (5) - The demo drive as it is commonly known is again for your benefit. NEVER even remotely consider buying a vehicle without driving it - even a brand new one. All vehicles drive differently - even duplicates of the same year, equipment, and model.

INSIDER TIP - Resisting a drive also just brings pressure from the sales staff. Take a drive and make sure you even like the vehicle. If you don't like how it drives, everything else is mute. Also remember that driving gives you negotiating power.

__________

STEP (6) - The trade evaluation (if applicable) is a highly important part of the process that dealers, managers, and salespeople take very seriously because it directly impacts their profit.

You see, a vehicle with a clear title is the same as cash and otherwise known as trade equity. Sales staff seeth at the prospect of you having a free and clear title with little to no idea as to the value of your trade vehicle.

At some time during the process (usually during the demo drive) they will want to do a trade evaluation of your vehicle. This is completely proper, and I have instructed past trainees to obtain as much info about the trade as possible from you - which is also completely proper. Obviously, they are a buyer as well, so they are entitled to ask the same questions about buying your car.

You may then be asked to accompany the sales consultant to the vehicle, and he will conduct what is referred to as a silent appraisal. In this process, he will touch each and every imperfection from dings to cracked glass to scratches to light tire tread. The silent appraisal is designed to psychologically devalue the vehicle without offering any verbal communication acknowledging that they see the issues and you are fully aware and hoped that they would miss those issues.

INSIDER TIP: Keep in mind that your sales consultant has absolutely ZERO voice in determining the value of your trade vehicle. If she is a pro, you may believe otherwise. Trust me, their evaluation is for show and a manager will make a determination of the value. Again, they see this as equity/cash.

So, why is it considered cash?

As long as that vehicle is worth more than the current payoff with the existing lender or free and clear of any liens or encumbrances, they are elated and see dollar signs. What will ruin their day and yours, however, is if your payoff is higher than the actual cash value (ACV). Unfortunately, it is too often the case in today's automotive and truck sales market that negative equity usually persists on trade vehicles. This is mainly due to longer finance terms sought by consumers to lower payments, as well as the overwhelming propensity of most consumers to not remit substantial down payments which lower the overall amount financed.

Most important here is their attempt to hold back on your trade.

Pay CLOSE attention here as I will explain something that 99.9% of the purchasing public does not know about automotive sales methodology. This information is worth thousands of dollars to you if you read nothing else, whatsoever:

- Let's say you intend to trade a nice, clean Honda Civic worth $10,000, and you have a clear title in hand. A smart manager will have the salesperson attempt to convince you with their Jedi-mind-game during the negotiation that they will be allowing (trade allowance) $9000 for your trade. All the while, however, they actually value the trade on paper at $10,000.

I know, it sounds confusing, but, in essence, your trade vehicle is truly worth $10,000, but they are going to pay you $9000.

Thus, they just picked up another $1000 in gross profit just like that! The salesperson makes another $250.00 commission and the dealer adds another $1000 to the bottom line for the month at your expense.

STEP (7) - This is the step in the sales process whereby the sales manager wants to directly determine whether they have a bona fide buyer or not.

If the sales consultant did their job properly, please recall that they probably asked you: "Mr. Customer, on a scale of 1 - 5, how would you rate your credit?"

Then, they should have gone on to ask, "With whom was your last vehicle financed?"

Lastly, you were probably informed that, "Banks usually require 20% down on vehicle purchases. How much did you intend on investing in the purchase of your new vehicle?"

If you were asked this battery of questions - which were by design - the sales manager is directing his subordinate to  transition you to the purchase proposal. In doing so, this is the point where the typical salesperson tries to slide a credit application in front of you and nonchalantly asks you to complete it so they can "see if you qualify..."

INSIDER TIP: Before you EVER go into a dealership, you need to know what you qualify to do as a buyer. You should have researched your credit score, down payment capability, payment threshold (if you must finance), your debt to income ratio, etc. Don't leave it to the car dealer to determine your future. If you do, chances are great that you will pay the maximum profit possible in doing so.

Ironically, most dealers and salesmen will tell you that the people who pay the most are the happiest. No need to be unpleasant at all, but if you feel a little too peachy, back up and reevaluate.

STEP (8) - The purchase proposal step is where people are under the illusion that they are the most effective.

Folks, I cannot stress enough: car dealers negotiate every, single day. You don't... Please be prepared before you ever get to that stage of the game.

In a more professional dealership, it is usually the sales manager who is actually going to be presenting you with purchase figures. Many dealers have taken this out of the hands of most salespeople because the sales consultant does not know the margin of room to negotiate, age concerns, etc. Moreover, most salespeople that I have supervised are frankly not that capable when it comes to negotiating.

Notwithstanding, if the sales manager was sharp, he/she introduced themselves to you very early in the sales process by design knowing that he/she would be swooping in as the voice of reason and authority after the salesperson set you up to be closed.

INSIDER TIP: Chances are that the sales manager or general sales manager are the dealership's better or best closers - at least they believe so. If, in fact, they are, then you need to be prepared that no matter what objection that you provide, they are going to flip that objection back on you likely in the form of a question.

In other words, if they put a proposal in front of you and ask if you are agreeable to purchase the vehicle, you will either agree or not agree, right? If you do not agree on first pencil, you will probably be faced with an "if I could, would you..." scenario.

While some people love the thrill of the negotiation, I cannot stress enough that while I have seen a few customers 'win' (which is relative) nearly everyone who truly believed that they overwhelmed you and had you begging for the sale just paid a $3500.00 front-end profit before you ever made it to the F&I office.

The answer is to be researched and prepared to make a reasonable, fair offer that satisfies both you and the dealer without all the back and worth exercise. Also try to keep in mind (as I indicated previously) that coming into a dealership half-cocked never tends to work out positively for you. The dealer does have a right and obligation to make a fair profit, and you have the right to a fair deal. It is at its essence a compromise.

STEP (9) - Well, at this point in the game, either you have said yes or negotiated a yes or just said no. For purposes of discussion, let's assume you said "yes".

Continuing to stress our 'by design' theme in the sales process, the dealer is going to move you along and begin to prepare you for a visit to the finance office. At this point, it would pay great dividends to read or revisit our prior article, http://carbusinessinsider.blogspot.com/2015/11/beware-dealership-finance-office.html. This article will provide extremely intuitive insight as to the inner workings of a dealership finance office. This office is and can be a dealership's prime profit center.

INSIDER TIP: In short, I always suggest bringing a check to the dealership from your local credit union. Doing this alleviates you from what can be a costly decision or worse, a costly series of decisions that can realistically translate into thousands of dollars spent on your part.

Although it seems to be somewhat uncommon, I have always taught and instructed finance managers that before a customer ever reaches their office that they are to conduct a casual, non-intrusive interview with you. In this way, you are less guarded, more apt to answer new questions because you have already agreed to purchase, and more susceptible to cooperate. Thus, pay more profit.

Self-arranged pre-approval for financing (if you must) is by far the best money-saving option. This should be done when you have researched which vehicle you are most likely to purchase and usually before you ever put yourself into a position of having to even negotiate a car deal. It is best to have this done as a preemptive step.

Lastly, do keep in mind that one of the functions of the F&I manager is to complete your official paperwork to include registration with the DMV, titling, purchase order, affidavits, etc. Make sure you get a copy of EVERY, SINGLE document that you sign, initial, or otherwise! Legal actions against crooked car dealers are frequent - and for good reason. Record, document, and note everything that takes place to protect yourself.

STEP (10) - the good news is if you have done all the right things, you should be taking delivery of your new vehicle. Remember that buying a new car or truck is an emotional experience. We all can agree that getting a new vehicle can be a lot of fun, and most of us have fond memories of our vehicles.

The important thing is to just make sure that having that emotional experience does not negatively skew your better judgement. Vehicle purchases are definitely considered to be big ticket items. Therefore, we should not take those big ticket items lightly.

It is also imperative to realize that automobiles and trucks are depreciating assets . Certainly, the best vehicle that you can ever own is one that has a free and clear title as well as being mechanically sound. Take it from a person who has had some rather large car payments in his life: the best vehicle that you could possibly ever on is the one that is paid for!

END

Copyright 2017, Robert Liotti, The Car Business Insider. All Rights Reserved.

Why You Should NEVER Be A Payment Buyer

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Contact us: carbusinessinsider@gmail.com

Let's face it, most car buyers are worried about one thing: a payment.

I have sold hundreds and hundreds of cars in my career, and most of the prospective or actual buyers had one thing on their mind, and it involved the payment. It was almost a given. Clearly, it is no wonder why when we consider the fact that most people do not have the liquid cash to buy a vehicle outright.

Of course, it begs me to reflect upon the past, present, and ongoing advise of personal finance guru, Dave Ramsey, the developer of Financial Peace University, that no consumer should buy much of anything at all if he/she cannot pay cash - especially in the case of a depreciating asset like a car or truck. Dave has always been adamant that unless you can pay cash, then you simply cannot afford it. Moreover, when one considers the taste of today's consumer and the inflated present cost of vehicles, people's egos simply will not allow them to make a realistic decision.

In today's car market, it is certainly not unusual to see what appears to be about a $30,000 median price point on vehicles. Say that to yourself: $30,000.... Say it again: $30,000.... How many people do you know that have $30,000 of disposable income to spend on a vehicle? Do you? While some consumers have the ability to purchase big ticket items in cash, it is reality that the average American car buyer does not.

So, how is it that we see the local fast food restaurant manager driving a new $45,000 car equivalent to their base salary backed into a parking space out in left field parked away from all impending ding damage as we pass it each day on our way to work?

PAYMENT!

___________________________________________________________

Car dealers have many advantages over consumers, as we have attempted to diligently point out at The Car Business Insider. And, the one thing that every dealer preys upon (besides naivte) is the fact that you want a vehicle SO badly that you will absorb a payment that you cannot handle to satisfy your automotive ego. Sadly, this is where dealers really excel. They play upon your emotions with tricks in psychological projection causing you to envision yourself in a position that you are not, and you buy right in.

There are two ways to buy a vehicle and two ways only: cash or finance (including leases). Period.

For the astute dealer, they want everyone to finance. Why? As we discussed in my previous article, "BEWARE: The Dealership Finance Office", there is an individual laying in wait, ready to exploit every possible commissionable income stream on you! They practice every, single day and they are praying that every customer that walks in is a payment candidate.

So, you are asking why the dealership wants you to finance so badly?

Let's review: you open up multiple income streams for the dealer, including service contracts, points on interest reserve, GAP insurance proceeds, profits from protection packages, and so on.

Let me provide some examples:

EXAMPLE 1) Les has seen a car online and has pretty much decided that he wants the pre-owned sport sedan that is the color he likes and it has all the equipment that he needs. The car is also within his budget at $18,990. He has already had communication with a sales consultant and has an appointment to drive the vehicle. The sedan has been determined to be mechanically sound and all looks great. Now, Les just has to agree to a final price. They negotiate a figure of $17,695 with all fees and taxes included, and both the dealer and buyer are satisfied with a fair deal. Les has brought his checkbook and informed the sales manager that he will forego any further products and will stroke a check for the total. Deal done. Dealer made a $1570.00 front-end profit.

EXAMPLE 2) Michelle, on the other hand, does not have enough cash-on-hand for the SUV she saw online. She knows it is the right vehicle with respect to equipment and appearance, but only has $1500.00 cash-on-hand to remit as a down payment. For the sake of discussion, her prospective unit is also priced at $18,990. She, too, has made an appointment, but was asked to 'complete an online credit application' on the dealer's website so that the F&I manager could get a 'pre-approval ready' for her. She visits the dealership upon appointment, is satisfied with the soundness of the vehicle, and decides that this is the SUV she really wants.

So it begins...

Michelle has been 'approved', according to her sales consultant, who also informs her that 'the F&I manager called in some favors and got her done'. Not sure if Michelle has ever been to a Turkish prison, but she is about to be violated.

First, Michelle pays an identical profit of $1570.00 on the front end derived from the vehicle sale. Second, Michelle will pay a three-point interest rate reserve mark-up over the next (72) months amounting to another $3250.00 after all (72) payments have been remitted. Third, Mr. F&I has convinced Michelle that she definitely needs the wheel and tire protection and service contract deriving a combined $1500.00 profit between the two. Fourth, she sees real value in the GAP insurance only increasing her payment by $11 per month just in case she totals the vehicle during the life of the loan. Another $400.00 commissionable profit.

Do you see the stark contrast? Les paid a $1570.00 profit and Michelle paid $6720.00!

Chances are, Michelle is happy as a clam; she feels fully protected and got the payment she could afford at $385/mo. Oh, don't forget that she also handed the dealer $1500.00 cash.

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Good salespeople are trained to sell payments if at all possible for the stated aforementioned reasons. If they are effective, profits soar. In most cases these days, dealers have taken all negotiating authority away from salespeople and given it solely to a manager to maximize the possibility of profit - and that profit adds up quickly when you are willing to submit to a payment.

Let's take a look at our INSIDER TIPS to see how we can save ourselves from ourselves:

1) Pay cash for your vehicle!

If you can only save $9000.00 for a new vehicle, then some like Dave Ramsey would say that that is the price you can afford. I happen to agree.

2) Don't let your vehicle purchase be driven by ego!

We all love that new car smell, the new tires, the awesome dashboard, and the feeling of success, but how successful will you feel if you lose your current job already making a stretched payment that makes paying the rent five days late as it is?

3) Vehicle purchases can be financially ruinous!

It may seem repetitive to restate, but one irresponsible vehicle purchase can negatively affect your life for the next ten years. You may lose your residence, damage your credit, and be unable to provide utilities ALL because you over-estimated your buying power.

4) People view financing vehicles as a short-term proposition!

They aren't... The average finance term for a vehicle is likely 60 months - that is (5) years. That equals (60) payments. Think long and hard about your stability level before making that commitment.

5) If you must finance (which is again not advisable) visit your credit union or personal bank.

While they are in the business of making money loaning money, it is very likely that you will pay far less profit in a lender-direct financing arrangement.

6) The bigger the down payment, the better!

Again, if you must finance, the more money you put down on your purchase, the less the amount financed. This means less interest costs to you and a much quicker payoff to get that vehicle title in your hands. But, do this at the bank. Once dealers and salespeople know you have a substantial down payment, they see you as much easier prey and see commissions.

7) Keep financing arrangements aloof!

Simple. When asked by the sales consultant and then by the sales manager if you will be financing with the dealership, simply state that 'you have already arranged financing' and will be bringing certified funds upon delivery.

8) If you have to finance, only do it short term!

In today's job market, the average tenure of an employee is (24) months. As unfortunate as that may be, it is reality. You can lose your job and your income just like that. Unemployment offices are full of educated people who made great salaries and they can not longer support their lifestyle. Do not be that person because of a car. What is most common is finding out after the fact that you cannot afford the vehicle and will have to come up with $6000.00 out of your pocket to sell it due to negative equity.

Finally, remember that buying a car for the average consumer like yourself is trying in an of itself. Your prime objective is to negotiate the best price possible for the dealer's vehicle and the best selling price possible for your trade vehicle if applicable. A sales proposal should only be based upon a price or a difference price NOT a payment. The best advice (as always) is not to over-step your own expertise and stick to the basics. You will save yourself thousands of dollars in the process and a lot of unnecessary heartache.

Always remember what one of my business mentors, Bruce Williams, used to say ad nauseum in his renowned radio talk show:

'Don't ever love something that doesn't love you back...'



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