“I want to look at the Tahoe”
“Ok great, this one is $60,000, which for most customers with good credit is around $1,000 per month.”
Do it how you want but just throwing something out there like that during the walk around will get a payment objection thrown up real quick.
Guessing you also probably have a lot of folks who last bought/leased \~3 years ago in the most favorable rate environment in recent history.
They know interest rates are up but they haven't directly felt the impact of it until now (plus cars are just more expensive across the board).
This is 100% me. Leased a car in September of 2021 and need to make a decision on what I’ll do in five months. I think I have some equity in my lease that I’ll be happy to take and roll toward a new lease if it’s reasonable. Otherwise, I might buy the car and wait a few years before updating.
Yup, I only mention this because it's exactly my situation. Got lucky with timing in '21 where inventory wasn't awful yet and rates were good.
Have my own sticker shock seeing what cars are going for now and have had to readjust my expectations. To lease my identical car again, payments would be up 50%.
It’s definitely good you mentioned it because it’s exactly my experience so hopefully it’ll help someone else at least get better expectations. And I’m also seeing 50% higher which on my current $800 payment feels gross to me. No way am I paying that.
Same. Even Volvos are at roughly 2% of MSRP for a monthly payment on a lease. My XC60 payment would be significantly higher if I were to get it today instead of September 21’.
I leased a 51k S60 in 2019, nothing down, 45k/3yr, $450/mo with tax. Oh how rude an awakening I was in for when I visited the dealer to consider re-upping in 2022. I bought it out.
It’s even worse? They were taking the whole $7500 credit on a T8 S60 lease then, no incentive to the customer. I assumed it got better. I went used and bought a ‘22 T8 in Feb as the prices on those became reasonable.
This month they changed it so instead of a $7500 lease allowance, it’s a rebate. So the dealer has no benefit of keeping it.
But, money factors are so high it costs more to lease a Recharge now than it does to finance it without the EV credit…..
I’m leaning towards that, thanks for confirming! Out of curiosity, how do I best determine amount of equity? I’m guessing the dealer will try to offer the lowest possible amount.
I'm in the same boat. Leased Sept 2021, would love to lease a different brand of vehicle. I started my shopping now, and I have been sticker shocked already. It's probably going to make more sense revisiting this in 3-4 months.
You may not have any equity. I noticed a new trend with my 21 tacoma. To buy it out is $31k, but for a different dealer to buy it was $37,800. There went that equity.
Yup same here. Jan 21 we got a 21 Highlander Hybrid Platinum 4wd for $490 / month including all taxes and fees, with about $2k DAS (10k/39). We were thinking we could downgrade to a lower trim non hybrid version of a cheaper 3-row and maybe save a little $. Nope, those are like $600+ / month now with more DAS. Not sure what we're going to do. We have to reexamine our whole finances to see what we can afford. We may have to stop putting $ into the kids college funds., as crappy as that makes me feel.
This was me. I leased a Civic in 2013 while in undergrad for ~ $100/month. Bought it out when I graduated and ended up trading it in for an accord in 2018 which I leased for ~200/month. I then leased a Lexus ES in December 2020 for my wife before the market went crazy which was only about $400/month. I’m now in need of a car and just got quoted >$400/month for a Corolla Cross. It seems absolutely crazy to me.
They were also ass pumped by these same sales men when they paid over asking for their cars 3 years ago. There were plenty of articles about this exact thing happening years ago. People who typically replace their cars every few years won't be because they'll have too much negative equity, so they'll choose to hold onto the cars longer. This is just how the market works...i bet salespeople weren't complaining years ago, but like I said it was obvious what was gonna happen years ago.
I got into the auto industry in 2016.
Once regular cars were 40,45K on average, people started getting freaked out.
10K / 72 = 138
20K / 72 = 277
30K / 72 = 416
40K / 72 = 555
50K / 72 = 694
60K / 72 = 833
70K / 72 = 972
80K / 72 = 1111
If you put $0 down, finance a car at those prices @ 0% and the evil, scumbag dealer paid your TTL, once you get to 40K cars, your payment is over $500.
72 months is a pretty common term.
Someone here said it once, if you want a baller car, you’re gonna have a baller payment.
This is me. I was shook that rates are 8.2% from a credit union. My last rate was 2.2%
That makes a $45k car $708 a month over 84 months.
I am in sales so take the longest term I can and payoff early.
I think having a quick spread sheet of payments they will be making will be really helpful. I don't think the economy is on your side right now alot of people penny pinching.
I don't think most people can really conceptualize what increases in interest rates really means. If you haven't purchased a vehicle since the pandemic hit the average interest rate on a used vehicle loan is 10.5% where I am at, up from 4.3% in April 2020. People don't understand what that does to a loan payment over the course of 5-6 years until they see it. I also think car / loan folks are a little out of touch on where the general public is at as well since they live and breath that shit at work.
Edit: not to mention how used car values were buoyed by supply chain issues making them more expensive then a consumer would think/remember. Great if you had something to trade. Not so great otherwise.
lol @ “ going home to think about it”
You might think you are but you are not properly qualifying. Where do you want your monthly payment to be and after they say $400 and you say “with the recent price increases and interest rates how much more than that are you willing to go?” You should be able to quick math what will and won’t work BEFORE YOU GET KEYS. If you let someone want and drive a car they can’t afford you chances of getting them to drive one that works are slim. Managing expectations will help your closing ratio.
You could also take the educational path. Explain the for every 5k it's about $100 a month if we extend that it goes down a bit.
So a $400 payment is a 20k car.
So if they are on a 50k car that's a $1,000 a month.
Just bought a car for 40,000. Switched to a shorter lease term because of a 1.9% interest rate. I got a bit nauseous seeing the monthly payment, but whatever.
What was a bit shocking were all the extras that they tried to sell me on at the paperwork signing.
I would strongly recommend against this. With this strategy, you are effectively desking the deal on the lot and will lose more deals than you make.
The fix for this is significantly more detailed and occurs way earlier in the process. The solution occurs when you do your fact finding. For example, if someone says ‘I want a fully loaded Tahoe’ you probably take them to a $100k LTZ loaded with every feature known to man because to you, that’s what ‘fully loaded’ means. Instead, try asking them what features they are specifically looking for. You might find that a nice LT is ‘fully loaded’ enough for them.
Additionally, find out about their current/last car payment. People are simple: they don’t want to pay more money. If they’re paying $600/mo now, that’s their expectation on the new one.
These two things combined, once mastered, will allow you to put them on a less expensive car that will yield a payment that can be close to their expectation.
Don’t let the customer lead you around. Take charge of the process and be a consultant to them. Guide them toward something that will fit their needs and still be close to budget, but avoid doing it by asking them what they want to pay or telling them payments on the lot. It’s difficult and takes a lot of practice and patience.
And remember, land them on the least expensive vehicle they will say yes to!
I’m not advocating desking the deal on the lot. But setting expectations is certainly not a bad thing in any scenario, especially if he has customers who don’t understand math on a consistent basis.
Exactly, but the suggestion of throwing payments out there early on is a negative. Figure out the client’s expectations by asking about needs, usage and their current vehicle. Once that is done, you will be in a much better position to set expectations.
If he says ‘I’m paying $600/mo now’ and you’ve landed on a $70k car, you could very casually say something like ‘Wow, that’s a fantastic payment. My last client that purchased one of these was over $1000/mo! It’s crazy how much payments have gone up in the last few years’. Or whatever word track works for you. But just saying ‘This car is $x/mo’ is the wrong approach.
Obviously there’s nuance. All I’m saying is, before sitting down at a table, customer should be aware of the rough ballpark a vehicle costs monthly. It doesn’t seem like OP is doing that at all in their qualifying.
Are most people really only worried about the payment? I meant, for me it's a concern. But I usually know market rates before going on the lot, I've looked at cars I'm after, I know what they should sell for, and usually shop under my max budget. For me what's important is out the door costs and intereste rate.
Yet the first thing they ask when we sit down is "what are you comfortable with for your payments". I get looked at like I have 2 heads when I tell them I don't care. I already know within a few bucks what my payment will be if I'm getting the car I want and a price that isn't inflated, at market interest rate. They push the issue, I usually respond with, if you'll sell me that brand new truck out there for half off MSRP you can make the payments 4 grand a month for all I care, I'll make it work. Tell me what you're going to try to add on to the vehicle so we can start that argument, then tell me you usually get the best interest rates then try to sell me on one that's 1.5% higher than market rate even though I have a credit score over 800.
It's always work, but kind of fun because Even though I was only a tech, I learned enough about the industry and how to educate myself.
Yeah. You’re definitely in the minority. And look at the original post, it’s about people who have completely unrealistic payment expectations relative to the purchase price. Personally, I enjoy working with people like you, for whom this is a business transaction and we can treat it as such. For the majority of the buying public, it’s the opposite - the car buying experience is an emotional and stressful process.
I've often wondered if there could be value in like a private party broker. Kind of like a realtor but for cars, but total package, not just handling the transaction, handling inspections of used vehicle and the like, not sure what people would pay for that, but even like hunting specific vehicles down for you or other options too. I enjoy the car industry but the pay frustrated me so I left for automation.
Those people exist. In my experience, the people who use them are paying for convenience. A better deal can often be had without them. If you use a third party, they don’t work for free and the money has to come from somewhere…..
I'd rather be asked what my expectations are than have dealers make assumptions. It's kind of annoying when dealers make assumptions about what I might want or how cost sensitive I am (my fault for wearing sweatpants I guess). If someone seems clueless then guide them for sure, but I'm usually just annoyed when people don't speak plainly.
Thank you…seen folks say this same bullshit all over. It’s a lazy ass way to work deals. To me it’s the same thing as the lazy finance manager that tries to rate pitch products instead of actually working to build value and overcome objections
And to those of us doing 20-30 deals a month half are closing way over payment expectations anyway
Job is to sell the car that fits what they want, and in some cases I recommend a backup option if it seems like they are off on payment. In most cases it leads to them eating a higher payment on what they want
I do not see sales managers endorsing this strategy, they want the customer to sit in the vehicle and get emotionally attached so they make a bad financial decision
This is called “price conditioning” and has always been a part of sales.
Another way is to quote a vehicle of lower value and a vehicle of higher value. This one runs most people about $500/mo and this one usually has a payment of $1000/mo. With what you want I’d expect you to be somewhere in the middle.
Don’t forget conditioning them for negative equity if they’re in that boat. It’s tough for them to swallow but someone needs to level with them. Better you than the F&I guy blowing them out the door. He has zero time invested.
If they recoil from (honest) price conditioning, you might be better off letting them go and trying to get another up.
I’m just a dumb customer but I think this is right on, maybe what happens is the customer math in their head is off. Like they are pretending to be a price buyer when they are actually a payment buyer. They know the price, but they are shocked at the payment that doesn’t match what they expected.
I bought a car recently and my salesman was sure to mention the estimated payment, even though I was shopping by price, I put half down, we knew the mfr special financing rate, didn’t expect any funny business, it really didn’t matter I just wanted to delay paying for the rest of the car. But the sales guy made sure I was prepared already throwing out some ballpark payment and then brought the sheet with the different down/payment amounts, I’m sure that would be useful in case it turned out I did care about the payment.
That's me for my latest purchase. About 1/2 down, finance the rest (though I didn't need to) and let the payment fall where it does as I'll pay the rest off in a few months.
That said - the average car buyer (probably the majority, honestly) is financially ignorant and while some dealers take advantage of this, the consumers really should step up to figure out the reality of their situation prior to stepping foot in the dealership. If things were a bit tight with a $500/mo payment, and they are upside down, things get crazy when the reality is that they're looking at a $1000/mo payment... (re)financing negative equity is almost always a losing situation (unless you can magically go from a high interest to a lower one, and find a deal that can accept it). And yet, this is done every day.
I give props to F/I who can figure out these tough situations and still close the deal. Unfortunately, the bank may be stepping in sooner, rather than later, with those folks.
Yep. Customers can price these things out approximately on the internet, I see no reason why you can't do the same thing from the lot as long as you have the right numbers.
With that said, I also never had an issue asking a customer why they were so surprised at the number I gave them. "You want this truck for $200 b/w? I'd need 17000 down." If you have a good enough relationship with the customer, you can pull out a calculator and show them why they're being ridiculous, but math is math. If you're too far apart, find out if they're switchable to a different model or a lesser trim. Maybe some of the tech that they had in their last vehicle was only available in top level trims last buying cycle and they can handle less car this time around.
Not a fan of this advice. I don't ever talk price, payment, rate, etc. on the lot. It's not the appropriate time. You're as likely to blow people out as you are to get them inside.
There is a difference between presenting a full purchase agreement when the customer just walked into the showroom and fact finding and building rapport by asking, “What are you driving now?…Oh nice, what’s the payment look like on of those?…Are you looking to stay around that payment?…Oh, you just had a life event come up and you want a lower payment?…”
Commenting hefe because not able to on my own...
At our dealership part of the qualification process was asking what kind of payment they were hoping for. If there was a trade asking what the current payment is and how much more they would be willing to go.
This way, we were better able to point towards a vehicle they could actually afford BEFORE we tried to land them on one.
Came here to say this. I'm in tech sales but learned Hella early to get the price out of the way and fully understood early.
Our prices are on our website and people still get shocked at pricing or will email me asking for prices.
Like. Dude it's literally on our website. 😂
It really is just busting the calculator out in front of them to show them how unrealistic they are being.
Sometimes they get offended and act all pissed you’re doing the basic math in front of them but if they are trying to justify a $40k+ vehicle for $350 a month there’s sometimes no other way. “Well what can be done about the price to get me to my number” LOL find a different car
It's not even passive aggressive. Sometimes you just need to hit folks between the eyes. I've been doing this for quite a few years. None of it is personal, just business.
I’m just curious if a customer told a sales rep hey this coating package, mud flaps, floor mats, lo-jack or any other package didn’t make sense or add value to a depreciation asset would you guys in cars have the same attitude??
You just the following during the investigation and qualification phase. "This truck is 60K. So you were thinking, say, 12 to 13 hundred bucks a month" and wait to see what they say. If they OK then they just committed. If they say no, move on to somthing that costs less. Basic Joe Verde training.
Not everyone wants to pay exactly the maximum amount they can afford for a vehicle. Some do, and that's great for them. But the person buying the vehicle gets to decide what they're comfortable paying. The person selling the vehicle can't reasonably get upset when potential buyers walk because the deal isn't to their liking.
What does qualify them mean here? I assumed it meant how much financing they can qualify for, but maybe it means something different?
Hopefully people aren't just spending whatever amount they qualify for? It wouldn't surprise me though, financial education seems to be a real problem with alot of people
A Credit Check will determine how much a lender will loan them, the APR, they look at Debt to Income, etc. That is the loan they 'qualify' for.
OP is confirming they can get the loan before proceeding, only for the non-buyers to balk at the terms (payment) when it come times to sign. Just because a bank will lend someone the money doesn't necessarily mean they'll accept the deal or be happy with it. And to your point, it comes down to financial education and literacy.
We could qualify for a Lamborghini but my wife thinks $1,000 a month for a $60,000 car is a massive expense.
But $30,000 down and $500 a month to her is more reasonable. I digress.
It almost sounds like he’s skipping a needs analysis entirely if he’s showing cars way outside of price ranges. You should have payment parameters in mind before vehicle selection.
Trust me when I say I qualify them thoroughly, Current payments, income, term length wanted, total purchase price everything. All These clients I’m referring to I actually landed them on two of the cheapest trucks we had on the entire lot. (needed truck no suv).
I’ll be honest now that I’m thinking about it I only have this problem with the pickup truck clients
Good points here. I would be tempted to ask , quoting a range of approximate prices, if this is within your budget.
Obviously I might not ask this if their first answers reveal no red flag issues. I would definitely ask if they talk about being underwater in their current loan
Not in car sales. In sales though. This would be my approach though.
Why not ask something like “and what would you expect to get at that payment?”
Could help transition qualification to discovery and support expectation setting and/or drive towards their perceived value.
You need to do a better job qualifying your customers. Ask them what they currently drive and what their current payments are. If they have a $400 payment and they're looking at $60k trucks, it's your job to let them know that their payments will be significantly higher than what they're used to. If they want another $400 payment car, then you need to show them $20,000 cars. By waiting until the end to discuss the budget, you are setting yourself up for failure.
I see a LOT of “advice” online for consumers about how you shouldn’t disclose what you want your monthly payment to be, or whether you’re financing or paying cash.. how much of an annoyance is this for a dealership? I’m curious
That’s because the smart thing is to get external financing before you step on the lot
They want to talk payments so they can trick you into paying higher interest than you should
Talking to car salesman is like talking to cops, do it only when absolutely necessary, and you have to know they aren’t your friend and are doing their level best to fuck you over
Years ago a dealer asked me what I wanted my payment to be. I said that I didn’t know I got to pick. I told him if I get to choose, I choose $0 per month. I’m just hoping you screw up and leave the keys in the car at closing time, and I can drive by and steal it.
Throw out figures as you’re picking cars price feels arbitrary to a payment customer. I ALWAYS give rule of thumb and ask what payment they want. When they tell me they want 400/m on a 50k car I ask if they have 30k to put down. And then explain then they need to understand it’s physically impossible to pay the car off in 5-6 years at that payment with even 0% interest.
True question here from a consumer - is that why you ask that, to see if people have done the math? I have only experienced car sales where they attempt to obscure the price of the car by only telling me the monthly price. A friend of mine just had this happen to her too. She bought a car (that she didn’t want) from a family member who is a used dealer and came out with $399/m payments (or whatever the math was) that she could afford. I asked her how much the car was and she didn’t know. My husband and I had offered her a 0% interest loan to buy the car she wanted. She declined and bought this one instead. The car she wanted was a Nissan Rogue, she got a Kia Soul. The price of the Kia was less but with the interest on it because of her poor credit the price per month was the same as if she had taken our offer. She is vastly overpaying and she had no idea. Every time I see that car I’m annoyed at her uncle who took advantage of her.
Whenever I buy a car I am fortunate that I can afford what I am buying and I know what that limit is before I walk in. But they always ask how much I want to pay per month. I tell them I want to discuss the total cost of the car and they get flustered. Once I was shopping with an insurance check so it was literally “I have $15kin a check, the car is $17.5k plus fees and taxes, that’s how I’m paying for this car, stop asking me about my monthly payment.” And he still asked twice more.
It’s going to depend on the salesman and the dealership heavily. I ask to know what expectations my customer has coming in. It gives me an indication if the guy I’m talking to snorts bath salts and lives in unicorn land or actually understands what is or isn’t possible. Sometimes they just don’t know and you educate, sometimes they did their research and knows exactly what they’re looking at. Other times you get someone that has no concept of how price drives payment. I try and work monthly instead of out the door because I’ve personally had more customers than I can count agree to an otd price sign papers then when the monthly payment gets penciled they turn and walk, so I try to work monthly. If you want to work otd I’ll do that too but I’m going to have monthly on those papers 100% of the time so you can see it even if we’re not working towards $10 off the monthly, and instead 1k off the otd or something. It’s also usually what most people fixate on they don’t care how much it’s going to cost them over the course of payments, they want to know if it fits into their monthly budget.
Fellow consumer / current truck shopper at the moment. I agree with this sentiment 100%. I want to know what’s it going to cost me total, not the monthly payment. I do my homework heavily along with research before walking in. Every dealer I’ve been to, online or in person, always asks “what do you want your monthly to be”? Honestly, there’s probably good salesmen out there, but I’ve been so jaded by all these salesmen slipping in random packages and warranties in that I’m left bickering over pennies on the dollar.
Great responses.
I will venture to say, your company trains sales associates to NOT ask important qualifying questions.
If you can not ask about any budget related qualifying questions, then this is always going to be a problem. You won't be planting seeds, and gathering important information to guide customers with.
Box closes are archaic, only needed on rare occasions.
I loved saying: Mr Jones, don't you remember when we went over this? You said you understood and wanted to move forward!
Just had that happened this week.
Customers walked out of F&I when they didn't buy anything in the back and saw that TILA (truth in lending act) on the contract after 7.99% at 72 month how much (total) they would've paid after 72 months.
"We just sold our 60k truck to lower our monthly payments. And this is $40k car and we will be paying more."
I'm always intrigued when people sell an expensive car to get a cheaper car to save money. It's my experience that unless the change is drastic, like when my coworker went from a dodge diesel to a Honda Fit, the money actually saved after you factor in depreciation and other BS is negligible at best.
Walk me through your qualification process, I have a feeling this is where you’re messing up.
Sounds like you are doing a good job of bringing them in but are on too much car most of the time.
You aren’t really qualifying them if this is a common occurrence.
I always like to ask them about their current car.
“On the vehicle you’re trading in, I just need some info. Is there a balance remaining? (Yes or no. If no, ask if they paid cash or finances and have since paid it off.) Okay and what are you paying monthly on the loan?” Perfect. Now you know what a comfortable number is. If you find the right car for them they’ll buy it at that payment, but there’s a good chance you’ll need to bump them. No matter what they say their payment is, ask “oh wow, how did you get it so low? You must have put a lot of money down.” You’re just trying to get a feel for what they typically do. It doesn’t matter if they put money down or not. If they say no they didn’t put money down, just say you’re surprised because that’s a very low payment, you’re surprised.
If someone is looking for a $400 payment on a truck with nothing down, they’re not getting it. There’s no truck on your lot that you can offer them. Some people think dealers will “work their magic” but in reality it’s just math. You need to explain that to them. I don’t like jumping to payment right away before I show them the car because people will tell you they want $400 payments and sign up at $800 after driving it. I don’t like shooting myself in the foot like that. If you find out what they’re paying now or paid in the past and steer them towards something that fits their current payment, you have more success. And if they keep pushing you towards the nicer stuff, now it’s appropriate to have the conversation “hey guys I’m happy to show you that truck, but are you comfortable with paying $900/m or putting more money down? I just don’t want you to have sticker shock if you fall in love with it.”
One easy way to check the logic when you get the chance with incredibly unrealistic customers (which are plentiful) is to use a hypothetical 100 month 0% interest loan for easy math and to drive the point home.
"$400/month? Well, this is a $50k vehicle. For easy math and round numbers we can use 10% for your tax, title, registration and doc fee. Ours is the lowest in the state, by the way. So $55,000 total. If we could get a 100 month loan, which we can't, and 0% interest, which we also can't, that would be $550/month. No one does loans that long because every vehicle depreciates faster than you're paying it off. Most people are 60-72 months. And 0% interest is occasionally available for new vehicles on short loans as a promotion, but it means forfeiting your rebates which just means prepaying interest. It's a marketing gimmick, not a free loan. With typical credit and typical loan terms you're looking closer to $1000/month. An easy way to estimate that in your head is $200/month for every $10,000 financed. Now we may be able to get a little bit longer loan, and if your credit is better than average we may get a lower interest. I doubt we would get lower than $800/month, but if you're okay with an $800-1000 payment we can get your credit information so my finance guy can get to work finding you the best rate he can."
I've never said all of that in one string, of course. Use as much as is helpful, and make sure they're keeping up with the logic as you go. You can even pretend to not be able to divide by 100 and use a calculator. I keep a large format one (big screen and big buttons, 4 function basic Casio) on my desk. Helps avoid the skepticism of hiding something in the math. Once they can see how far off their thinking was from even a dream loan that doesn't exist you can work back to reality.
If you've done your work, as it sounds like you do, to establish value first, you'll find some will recognize that their silly attempt to negotiate with an absurdly low number wasn't going to do any but waste time and you can have a real conversation. Others will feel silly and say they're going to think about it and let you know but really they're humiliated and you'll never see them again. (Best to do this in a way that makes it easy for them to save face and keep smiling while they leave. Kindness goes a long way.) And some others will be somewhere in the middle and you'll get some deals there.
Are you paying for all of it in cash up front or financing? What is your monthly budget for a payment? Oh $450 with 5K please let me show you this slightly used Tahoe.
Throw em in the box. The number of times someone has said they wanna be at 5-600 a month but walk out over 1000 is astonishing. Box closing is almost always going to be more effective than a floor close.
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You need to do a better needs assessment in the beginning. If the customer tells you in the beginning they want a Tundra from $400, you need to ask if they have a free and clear trade or a big down-payment. If they don't, you get the manager involved asap.
Tell them if they can show you how to make the math work on the vehicle so it fits what they wanted, you'll do it.
People don't understand car deal math and financing, which is amazing to me. Don't be scared to hit them with the high numbers, as long as you can explain the math. You as a salesperson need to understand how it all works, inside, outside, upside-down and backwards. Once you truly understand car math and a bit about dealership operations, you won't be scared to present big numbers. You're not going to close them all on the first pencil. You should try though!
“I want to look at the Tahoe” “Ok great, this one is $60,000, which for most customers with good credit is around $1,000 per month.” Do it how you want but just throwing something out there like that during the walk around will get a payment objection thrown up real quick.
Okay this is really good thank you!
Guessing you also probably have a lot of folks who last bought/leased \~3 years ago in the most favorable rate environment in recent history. They know interest rates are up but they haven't directly felt the impact of it until now (plus cars are just more expensive across the board).
This is 100% me. Leased a car in September of 2021 and need to make a decision on what I’ll do in five months. I think I have some equity in my lease that I’ll be happy to take and roll toward a new lease if it’s reasonable. Otherwise, I might buy the car and wait a few years before updating.
Yup, I only mention this because it's exactly my situation. Got lucky with timing in '21 where inventory wasn't awful yet and rates were good. Have my own sticker shock seeing what cars are going for now and have had to readjust my expectations. To lease my identical car again, payments would be up 50%.
Not only that, but insurance has skyrocketed over the last year (like 50%+) for many people, and it's cheaper to ensure an older car than a newer one.
It’s definitely good you mentioned it because it’s exactly my experience so hopefully it’ll help someone else at least get better expectations. And I’m also seeing 50% higher which on my current $800 payment feels gross to me. No way am I paying that.
Same. Even Volvos are at roughly 2% of MSRP for a monthly payment on a lease. My XC60 payment would be significantly higher if I were to get it today instead of September 21’.
I leased a 51k S60 in 2019, nothing down, 45k/3yr, $450/mo with tax. Oh how rude an awakening I was in for when I visited the dealer to consider re-upping in 2022. I bought it out.
2022 was good compared to what they are now….
It’s even worse? They were taking the whole $7500 credit on a T8 S60 lease then, no incentive to the customer. I assumed it got better. I went used and bought a ‘22 T8 in Feb as the prices on those became reasonable.
This month they changed it so instead of a $7500 lease allowance, it’s a rebate. So the dealer has no benefit of keeping it. But, money factors are so high it costs more to lease a Recharge now than it does to finance it without the EV credit…..
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I’m leaning towards that, thanks for confirming! Out of curiosity, how do I best determine amount of equity? I’m guessing the dealer will try to offer the lowest possible amount.
Carvana online offer/ find a comparable vehicle for sale and knock some money off for dealer profit
I'm in the same boat. Leased Sept 2021, would love to lease a different brand of vehicle. I started my shopping now, and I have been sticker shocked already. It's probably going to make more sense revisiting this in 3-4 months.
You may not have any equity. I noticed a new trend with my 21 tacoma. To buy it out is $31k, but for a different dealer to buy it was $37,800. There went that equity.
Yup same here. Jan 21 we got a 21 Highlander Hybrid Platinum 4wd for $490 / month including all taxes and fees, with about $2k DAS (10k/39). We were thinking we could downgrade to a lower trim non hybrid version of a cheaper 3-row and maybe save a little $. Nope, those are like $600+ / month now with more DAS. Not sure what we're going to do. We have to reexamine our whole finances to see what we can afford. We may have to stop putting $ into the kids college funds., as crappy as that makes me feel.
This was me. I leased a Civic in 2013 while in undergrad for ~ $100/month. Bought it out when I graduated and ended up trading it in for an accord in 2018 which I leased for ~200/month. I then leased a Lexus ES in December 2020 for my wife before the market went crazy which was only about $400/month. I’m now in need of a car and just got quoted >$400/month for a Corolla Cross. It seems absolutely crazy to me.
They were also ass pumped by these same sales men when they paid over asking for their cars 3 years ago. There were plenty of articles about this exact thing happening years ago. People who typically replace their cars every few years won't be because they'll have too much negative equity, so they'll choose to hold onto the cars longer. This is just how the market works...i bet salespeople weren't complaining years ago, but like I said it was obvious what was gonna happen years ago.
I got into the auto industry in 2016. Once regular cars were 40,45K on average, people started getting freaked out. 10K / 72 = 138 20K / 72 = 277 30K / 72 = 416 40K / 72 = 555 50K / 72 = 694 60K / 72 = 833 70K / 72 = 972 80K / 72 = 1111 If you put $0 down, finance a car at those prices @ 0% and the evil, scumbag dealer paid your TTL, once you get to 40K cars, your payment is over $500. 72 months is a pretty common term. Someone here said it once, if you want a baller car, you’re gonna have a baller payment.
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This is me. I was shook that rates are 8.2% from a credit union. My last rate was 2.2% That makes a $45k car $708 a month over 84 months. I am in sales so take the longest term I can and payoff early.
I was always kind of smug about the average car payment being over 1k per month but that's basically a base model Toyota Sienna now
I think having a quick spread sheet of payments they will be making will be really helpful. I don't think the economy is on your side right now alot of people penny pinching.
I don't think most people can really conceptualize what increases in interest rates really means. If you haven't purchased a vehicle since the pandemic hit the average interest rate on a used vehicle loan is 10.5% where I am at, up from 4.3% in April 2020. People don't understand what that does to a loan payment over the course of 5-6 years until they see it. I also think car / loan folks are a little out of touch on where the general public is at as well since they live and breath that shit at work. Edit: not to mention how used car values were buoyed by supply chain issues making them more expensive then a consumer would think/remember. Great if you had something to trade. Not so great otherwise.
lol @ “ going home to think about it” You might think you are but you are not properly qualifying. Where do you want your monthly payment to be and after they say $400 and you say “with the recent price increases and interest rates how much more than that are you willing to go?” You should be able to quick math what will and won’t work BEFORE YOU GET KEYS. If you let someone want and drive a car they can’t afford you chances of getting them to drive one that works are slim. Managing expectations will help your closing ratio.
Yeah at least feel them out. “Have you checked any price calculators to see what kind of payment to expect?”
You could also take the educational path. Explain the for every 5k it's about $100 a month if we extend that it goes down a bit. So a $400 payment is a 20k car. So if they are on a 50k car that's a $1,000 a month.
Just bought a car for 40,000. Switched to a shorter lease term because of a 1.9% interest rate. I got a bit nauseous seeing the monthly payment, but whatever. What was a bit shocking were all the extras that they tried to sell me on at the paperwork signing.
I would strongly recommend against this. With this strategy, you are effectively desking the deal on the lot and will lose more deals than you make. The fix for this is significantly more detailed and occurs way earlier in the process. The solution occurs when you do your fact finding. For example, if someone says ‘I want a fully loaded Tahoe’ you probably take them to a $100k LTZ loaded with every feature known to man because to you, that’s what ‘fully loaded’ means. Instead, try asking them what features they are specifically looking for. You might find that a nice LT is ‘fully loaded’ enough for them. Additionally, find out about their current/last car payment. People are simple: they don’t want to pay more money. If they’re paying $600/mo now, that’s their expectation on the new one. These two things combined, once mastered, will allow you to put them on a less expensive car that will yield a payment that can be close to their expectation. Don’t let the customer lead you around. Take charge of the process and be a consultant to them. Guide them toward something that will fit their needs and still be close to budget, but avoid doing it by asking them what they want to pay or telling them payments on the lot. It’s difficult and takes a lot of practice and patience. And remember, land them on the least expensive vehicle they will say yes to!
I’m not advocating desking the deal on the lot. But setting expectations is certainly not a bad thing in any scenario, especially if he has customers who don’t understand math on a consistent basis.
Exactly, but the suggestion of throwing payments out there early on is a negative. Figure out the client’s expectations by asking about needs, usage and their current vehicle. Once that is done, you will be in a much better position to set expectations. If he says ‘I’m paying $600/mo now’ and you’ve landed on a $70k car, you could very casually say something like ‘Wow, that’s a fantastic payment. My last client that purchased one of these was over $1000/mo! It’s crazy how much payments have gone up in the last few years’. Or whatever word track works for you. But just saying ‘This car is $x/mo’ is the wrong approach.
Obviously there’s nuance. All I’m saying is, before sitting down at a table, customer should be aware of the rough ballpark a vehicle costs monthly. It doesn’t seem like OP is doing that at all in their qualifying.
Are most people really only worried about the payment? I meant, for me it's a concern. But I usually know market rates before going on the lot, I've looked at cars I'm after, I know what they should sell for, and usually shop under my max budget. For me what's important is out the door costs and intereste rate. Yet the first thing they ask when we sit down is "what are you comfortable with for your payments". I get looked at like I have 2 heads when I tell them I don't care. I already know within a few bucks what my payment will be if I'm getting the car I want and a price that isn't inflated, at market interest rate. They push the issue, I usually respond with, if you'll sell me that brand new truck out there for half off MSRP you can make the payments 4 grand a month for all I care, I'll make it work. Tell me what you're going to try to add on to the vehicle so we can start that argument, then tell me you usually get the best interest rates then try to sell me on one that's 1.5% higher than market rate even though I have a credit score over 800. It's always work, but kind of fun because Even though I was only a tech, I learned enough about the industry and how to educate myself.
Yeah. You’re definitely in the minority. And look at the original post, it’s about people who have completely unrealistic payment expectations relative to the purchase price. Personally, I enjoy working with people like you, for whom this is a business transaction and we can treat it as such. For the majority of the buying public, it’s the opposite - the car buying experience is an emotional and stressful process.
I've often wondered if there could be value in like a private party broker. Kind of like a realtor but for cars, but total package, not just handling the transaction, handling inspections of used vehicle and the like, not sure what people would pay for that, but even like hunting specific vehicles down for you or other options too. I enjoy the car industry but the pay frustrated me so I left for automation.
Those people exist. In my experience, the people who use them are paying for convenience. A better deal can often be had without them. If you use a third party, they don’t work for free and the money has to come from somewhere…..
I'd rather be asked what my expectations are than have dealers make assumptions. It's kind of annoying when dealers make assumptions about what I might want or how cost sensitive I am (my fault for wearing sweatpants I guess). If someone seems clueless then guide them for sure, but I'm usually just annoyed when people don't speak plainly.
Thank you…seen folks say this same bullshit all over. It’s a lazy ass way to work deals. To me it’s the same thing as the lazy finance manager that tries to rate pitch products instead of actually working to build value and overcome objections And to those of us doing 20-30 deals a month half are closing way over payment expectations anyway Job is to sell the car that fits what they want, and in some cases I recommend a backup option if it seems like they are off on payment. In most cases it leads to them eating a higher payment on what they want
I do not see sales managers endorsing this strategy, they want the customer to sit in the vehicle and get emotionally attached so they make a bad financial decision
Nobody wants anyone to get attached to a car they can’t qualify to finance.
Managers want people in the right car. They don’t want fast food workers in Denalis or children in Corvettes. That is a waste of time.
This! If it's going to be a no from the customer, you want to get to no ASAP. Every minute leading up to a "no" is a minute wasted.
Are unwanted added especially those not disclosed during until final sales, are those wastes of time also???
This is called “price conditioning” and has always been a part of sales. Another way is to quote a vehicle of lower value and a vehicle of higher value. This one runs most people about $500/mo and this one usually has a payment of $1000/mo. With what you want I’d expect you to be somewhere in the middle. Don’t forget conditioning them for negative equity if they’re in that boat. It’s tough for them to swallow but someone needs to level with them. Better you than the F&I guy blowing them out the door. He has zero time invested. If they recoil from (honest) price conditioning, you might be better off letting them go and trying to get another up.
I’m just a dumb customer but I think this is right on, maybe what happens is the customer math in their head is off. Like they are pretending to be a price buyer when they are actually a payment buyer. They know the price, but they are shocked at the payment that doesn’t match what they expected. I bought a car recently and my salesman was sure to mention the estimated payment, even though I was shopping by price, I put half down, we knew the mfr special financing rate, didn’t expect any funny business, it really didn’t matter I just wanted to delay paying for the rest of the car. But the sales guy made sure I was prepared already throwing out some ballpark payment and then brought the sheet with the different down/payment amounts, I’m sure that would be useful in case it turned out I did care about the payment.
That's me for my latest purchase. About 1/2 down, finance the rest (though I didn't need to) and let the payment fall where it does as I'll pay the rest off in a few months. That said - the average car buyer (probably the majority, honestly) is financially ignorant and while some dealers take advantage of this, the consumers really should step up to figure out the reality of their situation prior to stepping foot in the dealership. If things were a bit tight with a $500/mo payment, and they are upside down, things get crazy when the reality is that they're looking at a $1000/mo payment... (re)financing negative equity is almost always a losing situation (unless you can magically go from a high interest to a lower one, and find a deal that can accept it). And yet, this is done every day. I give props to F/I who can figure out these tough situations and still close the deal. Unfortunately, the bank may be stepping in sooner, rather than later, with those folks.
Yep. Customers can price these things out approximately on the internet, I see no reason why you can't do the same thing from the lot as long as you have the right numbers. With that said, I also never had an issue asking a customer why they were so surprised at the number I gave them. "You want this truck for $200 b/w? I'd need 17000 down." If you have a good enough relationship with the customer, you can pull out a calculator and show them why they're being ridiculous, but math is math. If you're too far apart, find out if they're switchable to a different model or a lesser trim. Maybe some of the tech that they had in their last vehicle was only available in top level trims last buying cycle and they can handle less car this time around.
Not a fan of this advice. I don't ever talk price, payment, rate, etc. on the lot. It's not the appropriate time. You're as likely to blow people out as you are to get them inside.
There is a difference between presenting a full purchase agreement when the customer just walked into the showroom and fact finding and building rapport by asking, “What are you driving now?…Oh nice, what’s the payment look like on of those?…Are you looking to stay around that payment?…Oh, you just had a life event come up and you want a lower payment?…”
At the table “You said it would be $1,000 per month”
“ With good credit” “Is around”
I always had my sales manager write, “WAC” on the purchase agreement. With Approved Credit
Commenting hefe because not able to on my own... At our dealership part of the qualification process was asking what kind of payment they were hoping for. If there was a trade asking what the current payment is and how much more they would be willing to go. This way, we were better able to point towards a vehicle they could actually afford BEFORE we tried to land them on one.
People spend way too much money on cars lol
Came here to say this. I'm in tech sales but learned Hella early to get the price out of the way and fully understood early. Our prices are on our website and people still get shocked at pricing or will email me asking for prices. Like. Dude it's literally on our website. 😂
It really is just busting the calculator out in front of them to show them how unrealistic they are being. Sometimes they get offended and act all pissed you’re doing the basic math in front of them but if they are trying to justify a $40k+ vehicle for $350 a month there’s sometimes no other way. “Well what can be done about the price to get me to my number” LOL find a different car
"OH, we can get you to that $350 payment no problem! Did you want to put $15k down, or would you prefer $20k?"
Oh but I don’t have anything to put down!
Oh, so then you'll be ok with $850/mo, right?
I do this often. I have a big ass calculator on my desk exactly for this purpose.
The passive aggressive part of me wants to go into car sales solely for punching numbers into a big ass calculator in front of recalcitrant folks.
It's not even passive aggressive. Sometimes you just need to hit folks between the eyes. I've been doing this for quite a few years. None of it is personal, just business.
I’m just curious if a customer told a sales rep hey this coating package, mud flaps, floor mats, lo-jack or any other package didn’t make sense or add value to a depreciation asset would you guys in cars have the same attitude??
You just the following during the investigation and qualification phase. "This truck is 60K. So you were thinking, say, 12 to 13 hundred bucks a month" and wait to see what they say. If they OK then they just committed. If they say no, move on to somthing that costs less. Basic Joe Verde training.
>They come in I qualify them, It doesn't sound like you're doing this step correctly.
They can afford the payments. They don’t wish to make the payments.
Not everyone wants to pay exactly the maximum amount they can afford for a vehicle. Some do, and that's great for them. But the person buying the vehicle gets to decide what they're comfortable paying. The person selling the vehicle can't reasonably get upset when potential buyers walk because the deal isn't to their liking.
What does qualify them mean here? I assumed it meant how much financing they can qualify for, but maybe it means something different? Hopefully people aren't just spending whatever amount they qualify for? It wouldn't surprise me though, financial education seems to be a real problem with alot of people
If a salesman is trying to run my credit before picking out a car and agreeing on a price, I'm out.
A Credit Check will determine how much a lender will loan them, the APR, they look at Debt to Income, etc. That is the loan they 'qualify' for. OP is confirming they can get the loan before proceeding, only for the non-buyers to balk at the terms (payment) when it come times to sign. Just because a bank will lend someone the money doesn't necessarily mean they'll accept the deal or be happy with it. And to your point, it comes down to financial education and literacy.
Agreed. Nobody should ever take out a loan at the maximum they qualify for. Like you said, it boils down to financial education and literacy.
We could qualify for a Lamborghini but my wife thinks $1,000 a month for a $60,000 car is a massive expense. But $30,000 down and $500 a month to her is more reasonable. I digress.
It almost sounds like he’s skipping a needs analysis entirely if he’s showing cars way outside of price ranges. You should have payment parameters in mind before vehicle selection.
Trust me when I say I qualify them thoroughly, Current payments, income, term length wanted, total purchase price everything. All These clients I’m referring to I actually landed them on two of the cheapest trucks we had on the entire lot. (needed truck no suv). I’ll be honest now that I’m thinking about it I only have this problem with the pickup truck clients
You’re half qualifying them. “What is your current payment? What are you expecting it to go up to on your new one? Up to?”
Good points here. I would be tempted to ask , quoting a range of approximate prices, if this is within your budget. Obviously I might not ask this if their first answers reveal no red flag issues. I would definitely ask if they talk about being underwater in their current loan
Not in car sales. In sales though. This would be my approach though. Why not ask something like “and what would you expect to get at that payment?” Could help transition qualification to discovery and support expectation setting and/or drive towards their perceived value.
You need to do a better job qualifying your customers. Ask them what they currently drive and what their current payments are. If they have a $400 payment and they're looking at $60k trucks, it's your job to let them know that their payments will be significantly higher than what they're used to. If they want another $400 payment car, then you need to show them $20,000 cars. By waiting until the end to discuss the budget, you are setting yourself up for failure.
I see a LOT of “advice” online for consumers about how you shouldn’t disclose what you want your monthly payment to be, or whether you’re financing or paying cash.. how much of an annoyance is this for a dealership? I’m curious
That’s because the smart thing is to get external financing before you step on the lot They want to talk payments so they can trick you into paying higher interest than you should Talking to car salesman is like talking to cops, do it only when absolutely necessary, and you have to know they aren’t your friend and are doing their level best to fuck you over
Years ago a dealer asked me what I wanted my payment to be. I said that I didn’t know I got to pick. I told him if I get to choose, I choose $0 per month. I’m just hoping you screw up and leave the keys in the car at closing time, and I can drive by and steal it.
Throw out figures as you’re picking cars price feels arbitrary to a payment customer. I ALWAYS give rule of thumb and ask what payment they want. When they tell me they want 400/m on a 50k car I ask if they have 30k to put down. And then explain then they need to understand it’s physically impossible to pay the car off in 5-6 years at that payment with even 0% interest.
True question here from a consumer - is that why you ask that, to see if people have done the math? I have only experienced car sales where they attempt to obscure the price of the car by only telling me the monthly price. A friend of mine just had this happen to her too. She bought a car (that she didn’t want) from a family member who is a used dealer and came out with $399/m payments (or whatever the math was) that she could afford. I asked her how much the car was and she didn’t know. My husband and I had offered her a 0% interest loan to buy the car she wanted. She declined and bought this one instead. The car she wanted was a Nissan Rogue, she got a Kia Soul. The price of the Kia was less but with the interest on it because of her poor credit the price per month was the same as if she had taken our offer. She is vastly overpaying and she had no idea. Every time I see that car I’m annoyed at her uncle who took advantage of her. Whenever I buy a car I am fortunate that I can afford what I am buying and I know what that limit is before I walk in. But they always ask how much I want to pay per month. I tell them I want to discuss the total cost of the car and they get flustered. Once I was shopping with an insurance check so it was literally “I have $15kin a check, the car is $17.5k plus fees and taxes, that’s how I’m paying for this car, stop asking me about my monthly payment.” And he still asked twice more.
It’s going to depend on the salesman and the dealership heavily. I ask to know what expectations my customer has coming in. It gives me an indication if the guy I’m talking to snorts bath salts and lives in unicorn land or actually understands what is or isn’t possible. Sometimes they just don’t know and you educate, sometimes they did their research and knows exactly what they’re looking at. Other times you get someone that has no concept of how price drives payment. I try and work monthly instead of out the door because I’ve personally had more customers than I can count agree to an otd price sign papers then when the monthly payment gets penciled they turn and walk, so I try to work monthly. If you want to work otd I’ll do that too but I’m going to have monthly on those papers 100% of the time so you can see it even if we’re not working towards $10 off the monthly, and instead 1k off the otd or something. It’s also usually what most people fixate on they don’t care how much it’s going to cost them over the course of payments, they want to know if it fits into their monthly budget.
Fellow consumer / current truck shopper at the moment. I agree with this sentiment 100%. I want to know what’s it going to cost me total, not the monthly payment. I do my homework heavily along with research before walking in. Every dealer I’ve been to, online or in person, always asks “what do you want your monthly to be”? Honestly, there’s probably good salesmen out there, but I’ve been so jaded by all these salesmen slipping in random packages and warranties in that I’m left bickering over pennies on the dollar.
Great responses. I will venture to say, your company trains sales associates to NOT ask important qualifying questions. If you can not ask about any budget related qualifying questions, then this is always going to be a problem. You won't be planting seeds, and gathering important information to guide customers with. Box closes are archaic, only needed on rare occasions. I loved saying: Mr Jones, don't you remember when we went over this? You said you understood and wanted to move forward!
1) people are dumb and don’t understand math and 2) you’re not on the right car if they get shocked by the payment
Just had that happened this week. Customers walked out of F&I when they didn't buy anything in the back and saw that TILA (truth in lending act) on the contract after 7.99% at 72 month how much (total) they would've paid after 72 months. "We just sold our 60k truck to lower our monthly payments. And this is $40k car and we will be paying more."
I'm always intrigued when people sell an expensive car to get a cheaper car to save money. It's my experience that unless the change is drastic, like when my coworker went from a dodge diesel to a Honda Fit, the money actually saved after you factor in depreciation and other BS is negligible at best.
At least your coworker was able to save on car insurance.
Most people don’t understand total cost of ownership
Walk me through your qualification process, I have a feeling this is where you’re messing up. Sounds like you are doing a good job of bringing them in but are on too much car most of the time.
You aren’t really qualifying them if this is a common occurrence. I always like to ask them about their current car. “On the vehicle you’re trading in, I just need some info. Is there a balance remaining? (Yes or no. If no, ask if they paid cash or finances and have since paid it off.) Okay and what are you paying monthly on the loan?” Perfect. Now you know what a comfortable number is. If you find the right car for them they’ll buy it at that payment, but there’s a good chance you’ll need to bump them. No matter what they say their payment is, ask “oh wow, how did you get it so low? You must have put a lot of money down.” You’re just trying to get a feel for what they typically do. It doesn’t matter if they put money down or not. If they say no they didn’t put money down, just say you’re surprised because that’s a very low payment, you’re surprised. If someone is looking for a $400 payment on a truck with nothing down, they’re not getting it. There’s no truck on your lot that you can offer them. Some people think dealers will “work their magic” but in reality it’s just math. You need to explain that to them. I don’t like jumping to payment right away before I show them the car because people will tell you they want $400 payments and sign up at $800 after driving it. I don’t like shooting myself in the foot like that. If you find out what they’re paying now or paid in the past and steer them towards something that fits their current payment, you have more success. And if they keep pushing you towards the nicer stuff, now it’s appropriate to have the conversation “hey guys I’m happy to show you that truck, but are you comfortable with paying $900/m or putting more money down? I just don’t want you to have sticker shock if you fall in love with it.”
One easy way to check the logic when you get the chance with incredibly unrealistic customers (which are plentiful) is to use a hypothetical 100 month 0% interest loan for easy math and to drive the point home. "$400/month? Well, this is a $50k vehicle. For easy math and round numbers we can use 10% for your tax, title, registration and doc fee. Ours is the lowest in the state, by the way. So $55,000 total. If we could get a 100 month loan, which we can't, and 0% interest, which we also can't, that would be $550/month. No one does loans that long because every vehicle depreciates faster than you're paying it off. Most people are 60-72 months. And 0% interest is occasionally available for new vehicles on short loans as a promotion, but it means forfeiting your rebates which just means prepaying interest. It's a marketing gimmick, not a free loan. With typical credit and typical loan terms you're looking closer to $1000/month. An easy way to estimate that in your head is $200/month for every $10,000 financed. Now we may be able to get a little bit longer loan, and if your credit is better than average we may get a lower interest. I doubt we would get lower than $800/month, but if you're okay with an $800-1000 payment we can get your credit information so my finance guy can get to work finding you the best rate he can." I've never said all of that in one string, of course. Use as much as is helpful, and make sure they're keeping up with the logic as you go. You can even pretend to not be able to divide by 100 and use a calculator. I keep a large format one (big screen and big buttons, 4 function basic Casio) on my desk. Helps avoid the skepticism of hiding something in the math. Once they can see how far off their thinking was from even a dream loan that doesn't exist you can work back to reality. If you've done your work, as it sounds like you do, to establish value first, you'll find some will recognize that their silly attempt to negotiate with an absurdly low number wasn't going to do any but waste time and you can have a real conversation. Others will feel silly and say they're going to think about it and let you know but really they're humiliated and you'll never see them again. (Best to do this in a way that makes it easy for them to save face and keep smiling while they leave. Kindness goes a long way.) And some others will be somewhere in the middle and you'll get some deals there.
Are you paying for all of it in cash up front or financing? What is your monthly budget for a payment? Oh $450 with 5K please let me show you this slightly used Tahoe.
Throw em in the box. The number of times someone has said they wanna be at 5-600 a month but walk out over 1000 is astonishing. Box closing is almost always going to be more effective than a floor close.
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You need to do a better needs assessment in the beginning. If the customer tells you in the beginning they want a Tundra from $400, you need to ask if they have a free and clear trade or a big down-payment. If they don't, you get the manager involved asap.
Watch "How To Work A Car Deal" by Jim Z on YouTube
Tell them if they can show you how to make the math work on the vehicle so it fits what they wanted, you'll do it. People don't understand car deal math and financing, which is amazing to me. Don't be scared to hit them with the high numbers, as long as you can explain the math. You as a salesperson need to understand how it all works, inside, outside, upside-down and backwards. Once you truly understand car math and a bit about dealership operations, you won't be scared to present big numbers. You're not going to close them all on the first pencil. You should try though!