All right, pups, we are going to run through things that car dealers, salespeople, sales managers, finance managers ask you when you're going through the process of buying a car. And then we are going to demonstrate the way that you should respond. The reason we're doing this is because if I'm not mistaken, when you were a sales manager, you did a lot of training with your salespeople.
Here are what you guys call them word tracks, right? Yeah, that's what they're called. That's what they're called. Here are the word tracks.
Here are the things we say so that we can put the customer in a position where we can either get them to close, you know, move them along in the deal. This is when customers hear those word tracks. Here are your word tracks that you wrote for us and Kimberly Klein, the F&I goddess herself back at CarEdge.com.
She wrote on these cheat sheets. You ready to go? Yep.
I will mention these cheat sheets are 100% free. Just go to CarEdge.com, click the link down below to get access to them. Here we go.
Yes. I'm the salesperson. I believe so, yeah. All right, customer. Yes.
Do you have a monthly budget in mind? Um, you know, I just have a total out-the-door price in mind. So if it's okay with you, Zach, I would just like to concentrate. on what the out-the-door numbers are going to be. And let's run that back now if I'm a normal customer who's not educated about what they're going into.
Hey, Ray, do you have a monthly budget in mind? Yeah, yeah. Of course I do.
And what is it? Oh, well, you know, I don't want my payment to be more than, I don't know, say $700 a month. Boom.
What happens when, as a customer, I say I don't want my payment to be more than $700 a month? Well, they know how they can approach the deal. They're just going to talk. talk to you about monthly payments the whole time.
And a good salesperson is going to say to you, $700 up to, and you're going to go, I don't know, as long as it's not more than $775. So for every $25 you push yourself, that's like another $1,000. You're just sinking yourself into a hole versus asking the question or saying back to them, well, I'm really just focused on the out-the-door price.
Yes. All right, let's go to the next one, Dan. OK. I'm the salesperson and you're the customer.
Yeah. Well, Ray, how much cash do you plan on putting down? You know, I really haven't decided that yet. And I won't until we establish what an acceptable out the door number is.
So, Zach, I'm telling you, we really have to work on the out the door number. And then we can start worrying about the other aspects. All right. Let's pause here. Why as a salesperson do I care about how much cash down is going if, especially if, I just got the customer to tell me they want their monthly payment to be no more than $775?
Yeah, I mean, between cash normally equates to profit. The more cash you have in a deal, the greater the likelihood that the profit's going to be bigger. Because if ultimately you end up having to, as a salesperson or a sales manager, have to work on a payment, well, typically it means you have to discount the car in order to get to that payment. The other way to discount, the other way to lower the monthly payment... Is to get cash from the customer, and you don't really have to discount the car as much.
So the dealership's always going to want you to focus on what the monthly payment is. You're always going to want to focus on what the out-the-door number is. And you want to establish that before you start getting into any type of conversation about your monthly payment.
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They'll automatically apply to checkout now through September 4th only. So let's run it back. So you, as the customer, you told me you want your monthly payment to be no more than $775,000. And then I come in here and I say, Ray, $775,000, I think we might be able to make that work.
I understand. But how much cash were you planning on putting down? You know, the bank requires that customers put down a lot of money to really show that they're invested in the vehicle.
What were you thinking? Well, I'm going to teach you a better way to say that. The banks today typically are looking for 20% to 25% cash down.
On this $50,000 car you're looking at, that would normally be about somewhere around $10,000. Were you planning on putting that or more down? That way...
The bank's asking for the money. You're not. As a customer, then, you're going to say, well, the bank wants $10,000.
Well, maybe I can put $7,500 down. And now they know you want a payment less than $775. You're willing to put $7,500 down. We have absolutely no clue what the price of the car is. Absolutely no clue.
But the dealer has all the information they need to make sure that they can get you in a $775 payment. Yes. And you're happy.
Yes, because you're a payment buyer. Again, these are the ways to respond to these things. Don't just.
Answer in the typical way. One more on the sales side, Dad, and then we'll move on. What about, okay, so I'm the salesperson.
Yes. Ray, what are you going to do with that car you drove here? You planning on trading that in? You know, I haven't really decided what I'm going to do with it yet.
What I'd really like to concentrate on, Zach, is that out-the-door number. Once we established an out-the-door number, then we can have a conversation about whether I'm going to trade a vehicle or whether I'm just going to sell the vehicle privately to someone else. All right, exactly two separate transactions We just did another video talking about how you have to treat these as two separate transactions another plug For our incredible trade-in guide that you have to go check out. Yes Okay, so those were three examples from the sales side getting the the asking price the out-the-door price Focusing on the trade in a little bit now dad.
Let's say we've gotten past that now. I'm talking to the finance manager You're gonna hear some things like this. I'm the finance manager.
You're the customer. Yes. Well Ray I assume you've given some thought to your monthly payment. I know you work the deal with Joe out on the showroom and everything makes sense.
Do you have a sense for where you want that loan term to be and what you're comfortable with? I have indeed given it quite a bit of thought and I've gotten a pre-approval from my credit union down the street. So I really have a complete understanding as to A, where my payment should fall and B, what my term should be in order to keep my payment where I'd like to have it.
That is a perfect way to respond. You're taking control with saying, hey, I actually am informed. I know what I got approved for versus, well, I haven't really thought about the loan term. Actually, could you make my payment go even lower? Sure.
Yeah. Sure, I could make your payment go even lower, but maybe it's going to extend the term. All right.
So then maybe as a finance manager, I say something like this. So, Ray, that's good. That's great. I'm glad you have your pre-approval.
Pre-approval, would you consider financing through us? The possibility exists, but I would need you to. to get me a better rate than what I can get at my current credit union. And if you can do that and save me enough on the rate and the payment comes down commensurately, then I would consider it.
So if I beat your rate, you'll finance with us? Boom. Like that's a good one-two punch instead of, like I was saying before, you just walk in there, you don't really have a sense for what your credit worthiness is, and next thing you know, your payment may have gone down from $775 to $675. Or maybe $770.
$770, yeah. But it's only because the term has been stretched out. All right. What about to add some of those other products like extended warranties and things like that? The finance manager will typically pull out a menu.
We have all sorts of examples. of this. Kimberly has done an incredible job. We've got fake menus, faux menus. So, Dad, what do you do when the finance manager brings out that menu and puts it in front of you either digitally or physically, and it shows all your various options for how you can protect this brand new car?
It's only going to increase your monthly payment $10 a month, $50 a month, whatever the heck it is. How do you respond to that? Can I see a breakdown of what each one of these items is costing me? I'm not as concerned about the monthly payment per se as I am at what the actual charge for this item is. Yeah.
Yeah, and you need to also ask for things like your base payment. So remind me, hey, what was that actual payment that I was at without any of these products added on? And then please, everyone, recognize that when you add those products on and you finance them, you are financing them. You're paying interest. Oh, absolutely, yes.
That's why it's good to ask for what's the actual price because then it helps you rationalize what you're spending your money on. And it helps you rationalize whether or not the price is equal to or greater than its value. MARK BLYTH, JR.: Exactly.
All right, one final kind of, let's say, what to say, but more, ask for prepayment penalties on this finance loan that you're getting through the dealership, or on this finance and the loan that you're getting through the dealership. Ask if there are prepayment penalties, because that's when you don't want to be caught. You end up paying the loan off early. You go to refinance it.
That's one thing. Don't expect the finance manager to bring that up. MARK BLYTH, JR.: No, they'll never bring it up.
But ask if there is a prepayment penalty, and in most cases there's not. So that would lead you to believe that if you do the deal through the finance department there and you can actually get a better rate somewhere else, you can. can just automatically go out and refinance it and pay off the existing loan. All right.
So there you go. The cheat sheets are back at caredge.com. They are 100% free. And these are sayings that people get hit with all the time. The word tracks, the salespeople, the sales managers, the F&I managers use.
And here are ways that you can respond back to them. So please, when you go into the dealership, print one of these out. Take it with you.
Absolutely. Thank you, Pops. Thank you, Hanson.