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confessions-of-a-car-salesman

If you want to know how to get a great deal on a car, you can do a lot worse than speak to someone who’s used to sitting on the other side of the dealership desk. So, we did exactly that.

Our tame salesman's&nbsp;answers to reader questions&nbsp;both educate and entertain, but because he was speaking in a personal capacity, we are respecting his wish to remain anonymous.

Once you’ve absorbed his advice, make sure you check out the latest deals available through our&nbsp; free&nbsp;<a href="https://www.whatcar.com/new-car-deals">New Car Buying service</a>. You could potentially save thousands without the hassle of haggling.

*Pictures used are for illustrative purposes only

Confessions of a car salesman

Q: What is the best way to approach a sales person and do the deal?

A: Be up front and honest with your intentions and what you want; none of that "what's your best price?" silliness. My best price at the moment is what it's up for. However, tell me what you want to pay for it and I'll see what I can do.

The sales process

Q: You sometime hear&nbsp;dealers say, "I’m not making any money on this". Why would they sell a car for no profit?

A: We sold a car not so long ago for a net £1000 loss, but it was the one unit we needed to hit a quarter target worth many multiples of that to us. Dealers all around the country do the same, squeezing last minute deals, <a href="https://www.whatcar.com/news/should-i-buy-a-pre-registered-car/n13379">pre-registering</a> and losing money on individual cars, because it's all part of a bigger scheme.

Q: If it's nearing the end of the month and you're nowhere near your sales target, do you hold back some sales to give yourself a head start for&nbsp;the following month?

A: We are individually targeted quarterly for both new and used deliveries, so if I'm not going to hit either of my targets, yes, I'll do my best to hold as many back as possible until the next quarter.

Q: How can a customer get&nbsp;the best price on their&nbsp;part-exchange?

A: Don't go straight in discussing 'best price'. This just winds a sales person up. Let them do their bit and value your car. And when they ask you what you want for it, don't say the normal dumb answer: "As much as possible". Take the service history, receipts, etc with you so you can use them&nbsp;to show its provenance.

Have a cost to change that you're happy with and tell them this, rather than concentrating on the part-exchange price. They can then work the deal to see if it's doable.

If it is? Great. If not, offer to give them your phone number, if they haven't already asked for it, and then leave. If you're only a little away on price from a deal, just keep calm and let them think they’ve lost you. And then wait for the phone call. Obviously this carries risks, as in you may not get the car, but it’s often a gamble that pays off.

Q: To what extent does a car's colour affect its trade-in value?

A: It depends. I would probably knock a few hundred quid off my offer for something like an<a href="https://www.whatcar.com/audi/a3/hatchback/review/n77"> Audi A3</a>&nbsp;if it was in the wrong colour,&nbsp;but you have to bear in mind that you still want to do business and not annoy the customer. On something like a sporty <a href="https://www.whatcar.com/ford/fiesta/hatchback/review/n106">Ford Fiesta</a>, <a href="https://www.whatcar.com/peugeot/208/hatchback/review/n30">Peugeot 208</a> or similar, a garish colour can actually be a good thing.

Q: What happens when someone tries to trade-in a car with a serious issue?

A: As a sales person, you should always ask the customer if there are any known faults with a trade-in; even if they lie, you can usually tell from their reaction if the car needs a full workshop appraisal, or if the usual car park walkaround and engine start-up (to see if any warning lights are apparent) will suffice.

If a fault is identified, we work out the cost of rectifying the fault so it can be deducted from the car’s trade value. But if it’s missed because the sales person decided a kick of the tyres was enough, they can look forward to paying for the fault, either entirely or up to a max of £500-1000.

Q: How is online car buying changing things?

A: Industry stats say that 80% of car sales are initiated online,&nbsp;but I joke that it’s more like 120%. Nobody just walks into a dealership to buy a car. It doesn’t happen.

However, you can't&nbsp;escape the fact that cars are tactile.&nbsp;I mean, I like German cars a lot, but how do you sit there and justify a £50,000 price tag without allowing people to touch, smell and experience the product for themselves? You can't:&nbsp;virtual reality isn’t good enough.

On the other hand, at the lower end of the market, for a mainstream used car&nbsp;– where it's more of a tool and the&nbsp;buyer can&nbsp;be pretty confident in what they're&nbsp;getting – the possibilities of fully digital sales are opening up.

Q: What&nbsp;has been the impact of the semiconductor chip shortage?

A: Put simply, it has meant a shortage of stock, so we aren't getting the same manufacturer incentives to chase registrations, and there's less reason&nbsp;for us&nbsp;to discount.

The interesting thing will be to see whether things return to normal once the order backlogs are cleared. Car maker's talk about finding that&nbsp;balance between having fields of unsold cars (as they used to)&nbsp;and having waiting lists stretching to six months or more (as is the case&nbsp;now), but it's easier said than done.

Q: If you sell a new car with average options, how much money does the dealership make and how much commission do you make?

A: Options have little to no bearing on the sales commission. The add-on products (<a href="https://www.whatcar.com/advice/buying/what-is-gap-insurance-and-how-much-should-you-pay-for-it/n1183">GAP insurance</a>, paint protection, etc) are what earn the good money.

Q: How much is ‘good money’?

A: Commission schemes are obviously geared towards those who 'do the numbers', but if you sell a profitable car with a number of add-ons you can reasonably expect to earn £300-500.

Questions of cash

Q: You've mentioned that manufacturers have traditionally offered dealers big incentives for hitting their sales targets. It makes you wonder, how much do the cars cost to build?&nbsp;

A: A ballpark figure would be 45% of the pre-tax list price.

Q: If a customer asks what kind of figures work best for you, rather than asking for a straight discount, do you feel more amenable to giving them a better deal?

A: Sort of, yes. I always feel inclined to help out on price as much as I can, if the people have been a genuine pleasure to deal with. It has been known for me to actually volunteer a little discount here and there, even when the customer hasn't asked for it and was quite prepared to pay the screen price. I genuinely don't mind losing a few quid from the deal for pleasant people.

Q: Do you ever negotiate on prices of used cars, or are they totally fixed?

A: On a £4000 car, for example, you would hope to start out with around £1300 gross margin. Minus the reconditioning cost, servicing, MOT, valeting, tyres, etc, then deduct VAT margin and warranty costs. Average profit per unit runs at £415 where I work, sometimes more, sometimes a lot less, even a loss occasionally.

Q: Do you still get many buyers paying in actual physical cash?

A: I try to avoid cash as much as possible; we take a deposit of a couple of hundred quid and bank transfer for the balance. Cash is just a nuisance, because it's very easy to get distracted from counting it properly. I've had sleepless nights worrying about it.

Q: Are you more likely to accept a lower offer the longer you’ve had a used car in stock? And is it really "going to the auction this weekend if you don't buy it"?

A: Unfortunately, the longer a car has been in stock, the more likely it is that it has probably been reduced heavily in price already, therefore leaving little more or no more available room for negotiation.

Most dealers will not send over-aged stock to auction, because the preparation costs have probably already been spent on it. Everything sells in the end.

Used cars

Q: Have you ever stamped-up a blank service book or parked dented&nbsp;cars near a wall so the customer doesn’t notice?

A: The service book? No, never – that's bad practice. But I think any honest salesman will admit to strategically parking a car to hide less than perfect repairs and the like. This normally happens after a car has been valeted, when defects tend to stand out more, particularly if the customer purchased the car pre-valet.

Q: Is there a requirement&nbsp;for a dealer to mention a respray prior to sale?

A: At present, there's no requirement to mention a respray or repair, but you can't lie about it if you're asked. If a car was in such a condition that it needed a full respray, we wouldn't have retailed it. In the slightly unimaginable circumstance that it slipped through in that condition, we would take it back without question.

Q: Does the positioning of cars in the dealership mean anything – for example, are the cars closest to the entrance the ones the dealership most wants rid of? Or are there any other warning signs to look out for?

A: If the dealer knows a&nbsp;car is a lemon, they’ll trade it out ASAP. There are so many consumer rights laws that it’s not worth the hassle. Generally, if a car is cheap, it’s because it has been in stock for too long and they need it gone before it falls outside the terms of the stocking loan.

Q: What should I look for in a used car?

A: I look at every car I buy the same way. It's not rocket science; you just need to be methodical.

My method is to start on the driver’s door and walk backwards around the car, going panel by panel and top to bottom doing each wheel face – but not tyre – on the way.

After that, it’s under the bonnet, engine off. Fluids, mounts, drips, leaks, visible belts, VIN plate (checked against HPI).

Then inside: boot, spare, tools, floorpan (good indicator of leaks, rust and damage), parcel shelf and hinges (can be damned expensive to fix). Back seat, under seat, hinges, check straps (good for sign of over spray/mechanical marks) driver’s seat and book pack.

Now turn the engine on: listen for rattles and check the wipers, lights, sat nav, heater and radio.

Next, drive forwards and&nbsp;backwards, testing the clutch, brakes and&nbsp;steering, and seeing if there's a smell.

Finally, park it up with the steering hard over and check the tyres.

Q: Are budget tyres at a main dealer and on an approved car a warning sign?

A: It depends on the car. I’ve made sure the correct Continental MO tyres have been put on <a href="https://www.whatcar.com/mercedes-benz/a-class/hatchback/review/n17170">Mercedes-AMG</a>s and Michelin Pilot Super Sports on <a href="https://www.whatcar.com/bmw/1-series/hatchback/review/n20208">BMW M135i</a>s, but others have had less well known brands.

If you buy a car for £5000 and sell it for £6000, according to HMRC, you've made £1000. So, that’s what you will pay VAT on. Now, if it costs you £250 to prepare it for sale and £500 for branded tyres, you've only made £250 profit. However, the tax man will still take £166 in VAT, so your profit is less than £90. If your budget tyres cost £200, you've made an extra £300.

Q: Are people in the trade still clocking cars?

A: It certainly still goes on, but I’m 99% certain that it doesn’t happen at main dealers anymore. The standard of record-keeping now required would make it almost impossible to get away with. In addition, most customers have online access to reams of data that make clocking very hard to hide. Online MOT, dealer-held service records, Cazana, HPI – it’s fairly easy to check.

Q: There are lots of low mileage cars that are less than a year old on sale. Where do they come from and what have they been used for?

A: We have a variety of sources:

<ul>
	<li dir="ltr">
	Demonstrators – all sold at six months, normally with a few thousand miles.
	</li>
	<li dir="ltr">
	Courtesy cars – sold six-12&nbsp;months, 6000-9000 miles.
	</li>
	<li dir="ltr">
	Ex-manufacturer management – used by territory managers and head office staff. Normally six-nine months old, mileages vary.
	</li>
	<li dir="ltr">
	Ex-daily rental – much maligned, but often a great source of cars. We only buy the best graded vehicles with very low mileages.
	</li>
	<li dir="ltr">
	Bodyshop courtesy cars – we supply cars to a large body repairer. Most come back immaculate with 3000-4000 miles. Some are wrecked.
	</li>
	<li dir="ltr">
	Preferential purchase schemes – our manufacturer does some astonishing discounts for certain professions. We have a few customers who change cars every six months for very little cost.
	</li>
	<li dir="ltr">
	Pre-reg hangovers – there are always some cars from a pre-registration deal that stick. Often found as courtesy cars or management vehicles.
	</li>
</ul>

Q: How often do scary test drives occur?

A: You really do risk your life with some people. I would say on one in five test drives you have a moment where you could have had an accident and one in 10 will be actually scary.

To be fair, though, it’s not just the customers. I remember a colleague taking a customer out in a <a href="https://www.whatcar.com/subaru/wrx-sti/saloon/review/n17277">Subaru Impreza STi</a>. Half way through, he uttered the immortal line, “let me show you what this thing can do", and promptly parked it in a duck pond on its roof.

The worst incidents

Q: What's the worst deal you've ever had with a part-exchange?

A: Too many to name just one. There was a <a href="https://www.whatcar.com/vauxhall/corsa/hatchback/review/n33">Vauxhall Corsa</a> with oil pump failure, not obvious on initial start-up. A BMW automatic, which spat its gearbox out two weeks after receipt; turned out the drain plug had recently been chiselled off and was full of brand new ATF [Automatic Transmission Fluid]. A Mazda with a totally rotten subframe to the point that it was just dust, but with 10 months of MOT remaining. I could go on...

Q: Have you or a colleague ever knowingly sold a car with a hidden fault?

A: A total lemon of a car, no. A nine-year-old, £2500 car with a busted air conditioning condenser or an electric mirror that won't adjust all four ways? Yes.

Q: What's the shortest time between a customer buying a car and writing it off?

A: A customer collected a brand new car. He left the forecourt, turned right and then straight into the first lamppost on the nearside. A wasp had flown into the open driver’s window and stung him in the face.

Q: Have you ever point-blank refused to sell a car to a customer?

A: Yes, and it happens more often than you would think. Some customers are just not going to be worth the business. It’s a sort of sixth sense and any salesperson will probably say the same. People who pick all kinds of stupid faults on a £2500 car, pointing out every little ding and cosmetic mark, insist on the cambelt being replaced even though it had one 12 months ago and inspect the service history and V5 and MOT history in microscopic detail.

These types you just know are never going to be happy or easy to deal with. At the first sign of a bulb blowing on their new purchase, they will be shouting CRA [Consumer Rights Act] and SOGA [Sale of Goods Act] at you and demanding that their warranty is unlimited and forever.

Q: What the silliest mistake customers make?

A: People who are looking to part-exchange their current car often fail to give it even the tiniest amount of love. I took a Citroën in recently, and it couldn't have seen a vacuum cleaner in five years. The interior&nbsp;was a biohazard, I couldn’t tell if it had alloys or wheel trims, and there was mud and bird muck all over it.

I gave the customer £900 for it, but had it been presented better, I would have quite happily paid a few hundred more. At least give your car a cursory clean.

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