The Insider

© 2007 William Kelbaugh. All rights reserved.

No part of this book may be reproduced, stored in a retrieval system, or transmitted by any means without the written permission of the author.

First published by AuthorHouse 4/12/2007

ISBN: 1-4208-2114-8 (sc)

ISBN: 1-4208-2115-6 (hc)

ISBN: 978-1-4634-7078-4 (ebk)

Library of Congress Control Number: 2005903499

Printed in the United States of America

Bloomington, Indiana

Cover design by William Kelbaugh and Justin Rancourt.

You can contact the Author at:

www.Theinsiderbook.com

e-mail: [email protected]

Contents

Chapter 1

Car Salesmen & Customers – Water & Oil?

Chapter 2

What Type of Buyer Are You?

Chapter 3

Buying Basics - Become A Better Buyer

Chapter 4

Credit

Chapter 5

Financing – Dealer F&I Depts

Chapter 6

Car Salesmen vs. Real Estate Agents

Chapter 7

M.S.R.P – The Vital Sticker, Vital Info.

Chapter 8

Advertising

Chapter 9

Tent Sales

Chapter 10

Steps to a Sale

Chapter 11

When to Buy – Is Later Better?

Chapter 12

Previous Owners? Why Ask?

Chapter 13

My Favorite Customer

Chapter 14

Would You Believe?

Chapter 15

The Numbers Game

Chapter 16

Selling Systems – Tools & Traps

Chapter 17

Paperwork, Paperwork, Paperwork!

Chapter 18

I’ll Be-Back!

Chapter 19

Inside – A Week With a Salesman

Preface

Buying a new car or truck is, for most people, the second biggest purchase they’ll make, second only to the purchase of a new home. Even so, you may only buy one or two or maybe three homes.

But far more people buy vehicles, whether they rent or buy their residence. And some may even own several vehicles. However, all these buyers will purchase more than one car in their lifetime. Perhaps as many as ten to twenty over the years.

Yet, whether you’re young or old, or whether you’ve bought one car or twenty, you struggle with it. You frown at the thought of it. You don’t like it. You definitely don’t look forward to it.

It. Buying a car. Well – Buy this book. Read this book, page by page, cover to cover. Use what I teach you. Follow what I tell you and not only will it be easier, you’ll save time from shopping and save hundreds or even thousands of dollars and……

…………ENJOY IT.

Acknowledgment

I’ve been lucky enough to survive long term as a salesman/manager in this business. As a result I have met, learned from, and worked with what I consider to be some of the finest, most talented and professional men in the field. Of course, you have to make good initially on your first job in order to have any chance of meeting these kind of people later. I almost didn’t.

If it had not been for Mr. Al Biasella, not only wouldn’t I be writing this book, in all likelihood I would never even have sold a single car! I was, without a doubt, the worst rookie salesman in the history of the auto industry!

However, for some reason Al kept me around and worked, personally at times, with me. He jokingly referred to me as Western Union, a nickname I earned from having to make so many trips from my desk to his during negotiations with my customers. But his patience, good sense of humor and an immense amount of talent got me through.

I was just getting the hang of it when Al accepted a job offer from another dealer, who by luck sold the same make cars. So you can imagine how glad it made me when he hired me to work with him again.

It was there I met another of the few really outstanding men in the business, Mr. Harry Hanna. He was the other manager with Al, and perhaps the best closer I’ve ever seen in all these years. To this day, I couldn’t say one was better than the other.

I owe these men more than I can express and I want to thank them both, alot.

An awful lot!

But sometimes ability and talent alone aren’t enough. There were times of illness. Surgery. Recovery. There were recessions and gas lines. And through it all, time and again, they were there. Mildred and Warren Gonnsen, my mother and step-father. Two very fine people with hearts bigger than the outdoors.

Sadly, Warren will not be here to see my book get published or read it. He died October 29, 2002.

I can’t tell you how disappointed and heartbroken this makes me. I can tell you and share with you my words at his service.

"First, I’d like to thank everyone for honoring Warren with their presence here today. You know, for 25 years I’ve been talking to people I’d never met before, complete strangers, and sometimes they’d spend thousands of dollars with me. But I didn’t know what hard was until today. Who’da thought - a car salesman at a loss for words.

The man did so much for me, even if I knew the right words they wouldn’t be enough. And when you’d give someone everything you have and that still wouldn’t be enough, it tells you something words can’t.

He took care of family. A business. And even our country. The Bronze Star, a Purple Heart. And if I could trade him my heart for that heart so he could be here today, I would.

But anyone who knew The Boss, knows it wouldn’t have worked. You see, my heart’s not big enough to carry the weight on his shoulders.

And damn, he carried it well.

So, today he rests. And I have the honor to carry him."

Hopefully, through this book, I’ll be able to do for them what they’ve done for me.

Introduction

Hello! Glad to see you’re interested in the real world of car salesmen and buyers. It will be informative, provocative and true. Straightforward, honest, in-depth and exposing, from both sides of the desk. You won’t be disappointed!

The Insider is a book based on my twenty-seven years experience with customers, salesmen, managers and dealers. You will learn the tactics and systems of salesmen as well as the defenses of buyers and even though it’s commonly referred to as a game, believe me, it’s no game.

It will tell you how cars are sold, how the salesmen are trained, how to buy cars, how to understand the buying and selling process, how to negotiate, what not to do or say, financing and insurance, and what customers do to salesmen – that’s right, not only will buyers learn about salesmen, they learn about you.

There are many myths and misconceptions that misguide buyers and make it hard to reach them. Inside the business it is said between salesmen and managers, The customer is not always right – he’s rarely right. While this may not endear me with buyers, it is, however, true.

And truth isn’t a color, nor is it politically correct, and I’m not going to paint a picture of salesmen or customers that’s either colorful or politically correct. What do a domestic engineer, a sanitary engineer and an electrical engineer all have in common? Nothing! So let’s shelve political correctness for the rest of this book and refer to transportation consultants as car salesmen. I’m not politically correct. Don’t believe in it. If I wanted this book to be politically correct, it would probably read like the following ads and nobody would understand it.

HELP WANTED

Abbreviated writing specialist with multi digital dexterity on specialized key punch machine.

Oh – a secretary versed in shorthand and typing!!

Or

HELP WANTED

Transportation specialist, able to mis-communicate with already hostile customers and persuade them to spend more money on our product than the competition’s. Must be willing to work long hours, holidays, attend daily meetings, study product knowledge on constantly changing vehicles, know all about multiple other competitor’s products, willing to accept and deal with failure 7 out of 10 times, work without a salary up to 60 hours a week, possibly without getting paid. Will train anyone. Advance to management with more headaches and more hours possible...for the right person.

Oh – you mean a car salesman.

So much for politically correct.

If you’re new to selling cars or considering a job selling cars, you’ll learn about different methods of selling, types of buyers, kinds of systems and what buyers do, say and why.

I wish there had been a book like this in ’76 when I started. You see, in those days you were basically thrown to the wolves with little or no training. They gave you brochures and technical data and were told to study, then grab an up and the rest is on the job training. A lot of guys didn’t make it either.

So, unless your skin’s too thin - - -

LET’S GET STARTED!

Chapter 1

  Car Salesmen & Customers – Water & Oil?

Establishes some important ground rules (sometimes needed on both sides), towards understanding this relationship and the products’ influence on both. You may find water and oil do mix - given the chance! Price and its’ effect on you and the deal is

addressed and it holds a surprise for most of you! Everybody’s favorite person and product constitutes the main part of this chapter- used car salesmen and used cars!! You’ll feel a lot better buying your next used car.

L. L. MOTORS

"You have the right to

remain silent. Anything you

say can and will be used...."

It’s time. Every five or six years. Always too soon and always too expensive. A necessary evil, a love/hate process. Yet your want is nearly as great as your need. A matter of great pride and, often, statue. Why isn’t it more enjoyable and fun with the excitement that should accompany the occasion? Now you have to go and ‘deal’ with it…

…It’s late afternoon when you arrived but there was no shortage of available help. Like vultures on a limb, they were lined up along the large glass panels comprising the store front, eyes rigidly affixed on your every step, every face with a hungry smile. You knew they’d soon swoop down, talons extended, wanting your name, address, phone number, and the number of kids you have. As if on cue, amidst a flutter of arms and legs, they didn’t disappoint. The limb was bare and the doors were pushed open wide inviting you into their world. It was always the same.

Minutes turned to hours as he took you through the process – the steps to a sale. Now not only was it dark but it was closer to bed time. No wonder they advertise business hours ‘till midnight! It takes them that long to wear you down, er, I mean, negotiate a bottom line price. Who in their right mind wants to negotiate deals worth thousands of dollars at midnight? The dealer!...Sound familiar?

Speaking of dealing, negotiating, or, as some refer to it, ‘playing the game’, just how did you learn to deal? Duke’in it out through trial and error? Probably. Most do. The problem is salesmen are trained and they learn. Practicing and gaining experience everyday, a thousand times over five years compared to your once. What chance do you have? How do you level the playing field?

Yes, it’s their world. Bump labels, buyers guides, o.a.’s, a.c.v.’s, puppy dog closes (the most successful close), rust and dust, dealer fees, beacon scores, Marooney labels, and more. If only you knew what they knew.

NOW YOU CAN. Imagine knowing everything he knows. How to closely figure payments, mentally, in seconds (later you’ll see how this can save you thousands), understand numbers comprising the deal (trade-ins, pay offs, rebates, taxes, and more), financing, credit, advertising, etc. There’s a lot more to this than you suspect or know, and, unfortunately, much of what you believe is myth or misconception which causes a considerable amount of trouble buying cars. But between the covers of The Insider lies the truth. Lies the truth? Now that’s a car salesman for you! Well, yes, I am.

We’re going to begin with the one thing you’ll positively, absolutely have to deal with. Misunderstood by most, feared by some, distrusted by all. The salesman. It’s important to know what they’re doing and why. This will relieve the tension, fear, or anxiety which often accompanies dealing from a disadvantage. You’ll learn more about him in chapters six and ten and throughout the book. That reminds me, read the whole book, otherwise you’ll end up doing one thing right (when you find the one thing you wanted) and fifteen others wrong! I spent an obscene amount of time purposely putting information in places you’d least expect to find it.

One of the more popular monikers associated with car salesmen is ‘sharp’, and it’s not an envious reference to intelligence either! It’s my personal favorite. Never in my life was I considered ‘sharp’ until the professional name tag ‘car salesman’ was hung around my neck, then, instant genius!! Sharp!! Contrary to popular belief he’s not always a well dressed, fast talking, high I.Q. Einstein. This isn’t to say they aren’t smart, but it seems their endless ability to over come any objection you throw at him makes ‘sharp’ appropriate. How does he do it? It’s not hard, you taught him! SELLING IS THE ABILITY TO OVERCOME OBJECTIONS, and all the objections he gets come from, who else, you! You’d be surprised how many people use the same objections (a reason not to buy, but not the REAL reason). So, he’s heard it all before and is more than ready. Hence, sharp! New objections are shared with the manager who, in turn, passes them on to the others and they learn.

But what do customers think and say about car salesmen?

Car salesmen are the lowest form of life on earth!

My three least favorite people are dentists, lawyers and car salesmen. And not necessarily in that order!

Car Salesmen and politicians. Don’t say what they mean and don’t mean what they say!

Boy, do they ever rip you off! There. Feel better? Sure, we know, and you inadvertently tell us.

It’s funny what people will say about car salesmen before they learn you’re one! Liars, wheeler-dealers (no pun intended!), con artists, fast talkers. Just a sec, let me get a dictionary, I know there are more listed under ‘car salesmen.’ Ah, here we go, sharpies, slick, thieves, double-talkers, distrustful….well, that’s enough. Besides, we all know car salesmen are below lawyers and politicians in the popularity polls, which almost puts them in negative numbers!

Salesmen have a couple options when it comes to dealing with their reputations outside of work. One, to say we’re in sales or transportation. The other, to say (admit!) we’re a car salesman. The first gives us answers, the second, questions. Let me explain. Car salesmen work in an environment unlike any other sales field. First, customers don’t like you even before they meet you! Then there’s deception, at the least, to theft, forgery, fraud, car theft and more. I could sight you case and point on all manners of crime against dealers and how they’re attempted, but to disclose that would not only be irresponsible, it would surely promote it.

Yes, these are the extreme, the exceptions, not the rule. However, many people employ varied strategies they feel are necessary to deal with us, or at least feel like they beat us. Since it’s difficult to get the real reasons why customers say or do some things, we found it much easier to get the inside track simply by talking about salesmen with them. So, if we want to keep abreast of the latest, we change professions! Of course, we hear about our colorful reputations, but we are really more interested in catch phrases, tactics and ploys. So, we go along, and contribute to the car salesmen bashing and laugh with our unwitting accomplice. Then, at an appropriate time we calmly pronounce our true profession, and sometimes the look on their face is like Mastercard, priceless! They regain their composure with the usual defense, Sorry, but you know already what people think of salesmen.

The other option is to admit we’re a car salesman. This elicits an entirely different response. I’ve known hundreds of salesmen over the years and they all have said the same thing. Whenever they meet people outside of work, at restaurants, clubs, a bowling alley or a wedding, the topic of conversation inevitably turns to car sales when they learn its your business. They will grill you tirelessly about your job, what its like, and the ins and outs of dealing. In short, they want to know everything from, did they get a good deal on their last car? (which they brought from somebody else!), to the secrets of negotiating and tricks of the trade. We always thought it was funny, you’d believe us then, but not at the dealership! And even stranger are the number of times people actually seem disappointed if they learn there are no dark, hidden secrets, backroom dealings or tricks up our sleeves.

There is a recurring theme to most opinions, however. Besides the obvious fact you just don’t like or trust car salesmen, seems you plain don’t believe much of what we say, either! And this is, without a doubt, the biggest complaint, and pre-conceived profile of salesmen, people have. They lie. It’s in their DNA. Surgically repaired forked tongues! So, if this opinion is so widely shared, it must be true. Like putting aluminum foil in a microwave will blow it up. (Oops, that’s not true!). So, what are they lying about? What can they lie about? And, is it really all of them? When this arises in social conversations we like to ask, What did he lie about? It’s a question that must catch people off guard because most start their hesitant answers like Well, you know… or I think… or I believe he… or I wanted them to give me… or He probably…. Anyway, you get the idea. Most of the time they’re not even sure they were lied to at all!

Are all salesmen the biggest fibbers since Pinocchio? Is it in their genes? No, of course not. And it’s not part of their training, either! Believe it or not, (Oh, boy. Here we go, believe me? A car salesman!), most salesmen never lie. Just for the record, for reasons that will become clear later, we’re talking new cars here.

Any profession has its bad apples, and the car business is no exception. I’ve heard some things said that were so outrageous I’d be embarrassed just trying to repeat them with a straight face! There are even some salesmen that couldn’t walk a straight line sober and will say darn near anything that pops into their head, true or not. And it’s usually because they don’t know the real answer. These salesmen have shorten careers. They dig themselves into so many holes eventually they get buried. Too many customer complaints and fires to put out, it’s a previous salesman – the manager – who gives them their walking papers. But, yes, the damage is done. Bad news does travel further than good. And, when’s the last time you heard somebody say they know a really honest salesman? It’s a shame so few ruin it for so many. I suppose, though, if I’d been the victim of such a salesman, I too, would be promoting their reputation.

If salesmen are lying, what are they lying about? Technically, I guess anything! But, without the customer knowing? Without getting caught? Sure, we could do the he said, she said thing, but when you get right down to it, there’s little he can lie about, even if you don’t know much about the car, because everything is on the window sticker. Can’t lie about the condition, its new. Can’t lie about the equipment, its listed on the window. Can’t lie about the price, it too, is on the sticker (M.S.R.P.). Can’t lie about your trade, there’s books for that and you negotiate its’ value. Can’t lie about gas mileage, it is on the sticker. It all sounds good, too good, too easy to be true, doesn’t it? And believable? Well, almost.

Most problems lie (no pun intended!) in three areas. Price, payment and trade. Payment and trade aren’t really areas where salesmen can get around the truth. Simple math can get you close on payment, and trade-ins have book values and you can negotiate it like salesmen do their car. But even though the very nature of the business seems based in conflict, its’ price that creates opportunities for problems and the dislike of negotiations. Yet, even here, he can’t lie about price – if you’re buying. It’s price shopping that affords salesmen the open door to low balling or lying about price. When you want a price to shop, there’s no price he can quote that can’t be matched or beat. So, giving you a price that isn’t legitimate, to keep you from buying elsewhere, is an unfortunate but often used tactic which has repercussions for the next dealer, you, and the original salesman. This one act, this major faux pas, does more to perpetuate dealers’ reputations than anything else. This is the lie that kills deals, creates the bad reputation, runs customers ragged, and, is the source of more contention than anything else related to car buying.

But let’s not be too hasty to lay all the blame on salesmen. Customers have their own ways of generating price discrepancies, too! And so it goes. Round and round. Back and forth. Dealer to dealer. Salesman to salesman. They want as much as they can get for the car, and you want to pay as little as possible.

In case you’re still not convinced that price, and price alone, is the real culprit in the relationship between car salesmen and customers, the biggest contributing factor of bad deals and bad salesmen, and the real object deserving of a bad reputation, consider then, car salesmen and their relationship with buyers the one place price isn’t an issue – Saturn.

Saturn is like any other dealer, in most ways. The cars have factory window stickers. They take trade-ins. They have finance departments. They advertise. And they have salesmen. Car salesmen. Like other dealers. In fact, some are from other dealers! But Saturn, a division of General Motors, employs a unique selling feature. They don’t discount any car they sell. There is no negotiating. There is nothing to negotiate. Everyone pays M.S.R.P., window sticker price! Price shopping, the nemesis of both the customer and salesman, isn’t possible. With price pre-determined and out of the way, the degree of difficulty, established by the customer, when it comes to agreeing on cost, is reduced to zero! Don’t gasp! Yes, I said, it’s the customer who establishes the length and difficulty of negotiations, by the introduction of their offers. If you just paid sticker, like at Saturn, no problem. If you asked for a $100.00 discount, no problem. If you wanted $200.00 off, no problem. If you said Give me $300.00 off sticker and I’ll buy it, no problem. It’s the unreasonable, way out of line, usually below cost, first offer that initiates the long, tough and distasteful negotiation. So, if the Saturn pricing strategy were to be universally adopted, would buying a Ford, Dodge, Toyota, Nissan or Cadillac be as simple as with Saturn? Of course. Neither party would have an opportunity to manipulate the other. But since it’s not, (thankfully), I think you’ll find enough help here to significantly improve your buying experience.

Used car salesmen! Say it again. It doesn’t even sound good, does it?! Used car salesmen are definitely a breed of their own. Blue collar salesmen. Let’s have a close look at these guys, what they do, and why.

First of all, not anyone can make a good used car salesman, and, there are different kinds of salesmen, as determined by where and for whom they work. It can be so demanding, a lot of new car men won’t even consider working in used car departments. And some used car men transfer into the new car side!

I suppose if I’m going to render my opinion in this area and expect you to believe it, you should know if I have any first hand qualifications and what they are. And, as important, can I be un-biased and fair? I agree, and I wouldn’t take any pride in this book if I didn’t relate things without a slant towards either buyer or seller.

In the early 70’s, before I got into the auto industry, I met Mr. Paige. His son, Tom, and I worked together. Butterball Paige. To this day I don’t know his real first name. He just said, Call me, Butterball! And he was a fine man of Southern persuasion with a long drawing accent. He introduced me to his lovely wife, and white lightning! Yep, moonshine. A nice brick rancher, a boat in the driveway alongside an ever changing free new car, and a clear, cold liquid in the freezer you could either light or drink! Needless to say, I was impressed. He was a used car salesman for a large dealer outside Baltimore on a road known as chrome highway, in reference to the numerous new car dealers lining both sides. I had no pre-conceived ideas about used car salesmen, or new, for that matter. All I knew was he had a nice home, boat and car. I wanted to know more about this car business. Twenty-seven years later, I hung up the keys. Eight years in new, fifteen in used, four years managing. Fourteen Salesman of the Month awards and Used car Salesman of the Year in 1988. Yes, I’ve known a few salesmen, talked to a few customers, and sold a few cars. I think Butterball" would have been proud.

OK, back to work. Used car salesmen are undeniably tethered to two things. And its this tether which is, unfortunately, their downfall, regardless of the individual. They are, product and reputations. It’s hard to separate and talk about one without the other. I think its best to begin with some general statements about them and their job. Besides, I really don’t have much choice. I’ve tried approaching this at least six different ways already! Needless to say, I’ve learned something from this book. It’s easier to sell cars than to write about it. I guess my peers will tell me if I did it justice and sales will tell if me I’m successful.

1. Where about the only thing new car salesmen can really lie about is price, used car salesmen can lie about anything, including price!

2. Price is to new as product is to used.

3. Used car salesmen know, and need to know, much more when it comes to cars and financing. With over six hundred different models made each year, over an eight year period, that’s a possible forty-eight hundred models a used car salesman could encounter, have to learn, and sell! While a new car salesman working for, let’s say, Chevrolet, only deals with one make and one year at a time. And, he has window stickers and brochures to read and follow while selling them. And financing? Used car financing rates and terms vary from car to car according to its year, mileage, and loan value. So, financing five thousand dollars on a four year old car and financing five thousand on a six year old car will produce two different payments. And this along with buying power, is something else salesmen must learn and be able to do, even mentally, while talking to you about cars on his lot.

4. There is plenty of room for honest errors selling used cars which are often mis-construed as deliberate deceit.

5. Salesmen don’t have a crystal ball, and have no way of knowing how well a car will perform over time. You might be surprised to learn most people have few problems, while others seem to have more than their share. And its usually from either lack of maintenance or abuse. Salesmen can often anticipate who’s more likely to encounter problems by: age (older people drive better and better driving habits result in better reliability), their trade-in condition, the test drive (flooring it to see how it runs! and power braking etc.) and brake riders, just to mention a few. And they can’t run the risk of correcting anything for fear of alienating the buyer and losing a sale. So, if you buy a used car and drive from here to Hawaii, somewhere along the way, you can expect a water leak!

6. Where you buy used cars has as much to do with the quality of the salesman as it does the quality of the car. And the quality of the car, and reliability, is in direct relationship to the year (age) and miles. There are new car dealers with used car lots, there are independent used car businesses, there are family owned used car lots and, there are sand lots or buy-here, pay-here businesses. The better salesmen work where the product is better. And dealers won’t hire just anybody. The responsibilities and liabilities are different. So, as you move down the food chain of used cars, the quality of the salesman often goes down. And while this won’t endear me with the independents of the world, it is, nonetheless, more often true than not.

7. Used cars often need something you find, repaired. All too often a promise* made by the salesman is a lie in disguise.

8. When used car salesmen say everything works, it may or may not be true. Especially in States that don’t have mandatory state mechanical inspections. Always check things with him before you drive off.

9. Used car salesmen inherit lies, but aren’t inherent liars. The lies they inherit are trade-ins! Another tie to product that can adversely reflect on the salesman but is generated by the previous owner who traded the car. Let me explain. When you trade-in a car, salesmen fill out an appraisal form for the manager. He asks you questions about your car and the equipment. Questions like:

a) Has it ever been in an accident?

b) How are the brakes?

c) Do you know of anything wrong with the car?

d) Is the mileage correct?

etc.

…..And a lot of you know the answers we get!

It’s been a good car.

Nothing’s wrong, all you have to do to it is clean it and sell it.

As far as I know, everything works.

…..And you tell us this, knowing what problems exist, so you get more money for it.

….So, what do you suppose would happen if dealers wanted to give your trade-in to a mechanic for inspection before they appraised it? And, you had to wait two or three hours while it could be done, only to learn they said they found a lot of repairs and your value was low. You’d leave and go somewhere they’d take your word for it’s condition, took ten minutes to look at it, and gave you more for it!

But the real problem is some things go undetected, as we’ll learn later, until a salesman either shows the car or after its’ sold. So, who’s really to blame, the salesman or the person who denied it had any defects when they traded it in? Perhaps that’s why we hear people say they don’t want to buy someone elses problems. I know what a lot of you are saying, "The dealer is supposed to have it checked out before he sells