I ran across this article on Jalopnik today. Basically it's a gameplan on how to beat up your salesman and get the best deal. In actuality, it's a path to failure and making the salesman hate you.
It gives "tips" like "Don't be excited" and "Don't tell the salesperson exactly what you want".
WHY WOULD YOU DO THAT?!
You are trying to get help from me on how to buy a car. Why would you not give me all the information that I need to help you? Doesn't that sound counter-intuitive? And you're buying a car for myself, why wouldn't you be excited? We feed off of your excitement; it causes us to take you seriously.
And really, that's what it boils down to. You have to appear to be interested, otherwise we won't take you seriously. You want to be taken seriously, don't you? Then act interested. Listen to what the salesperson has to say. Hopefully you test drove your salesperson so you know that you're working with someone that you're compatible with. Once you've gotten that perfect salesperson, it's more than ok to let your guard down and tell him or her what you need.
If you want actual good advice on buying a used car, here's my used car buying guide.
J.D.
9.28.2010
Managing Money on a Commission, Part 1
One of the questions that I get asked pretty frequently is this:
"How do you manage money when you get paid commission?"
The answer? Very, very carefully (I assume, more on that later).
I have made quite a bit of money by selling cars. To give you an idea, I make about as much as someone who is 4 years into a normal entry-level job would make. You see short gains every year, as more and more customers refer their friends and family members, and as those customers start to replace the cars that they've purchased from you. From personal experience, a lot of my business comes from repeat customers and referrals. I have one young family that sticks out in my mind, as they've purchased three vehicles for themselves, and referred in their parents and one of their neighbors. One family, 5 cars. You can't ask for much more than that.
Money still doesn't come in at a constant rate, even for the best and most seasoned salesperson.
So how do you manage money that comes and goes in spurts?
In short, I don't.
You're probably thinking, "How can you write a post on managing money when you work on commission if you don't do it yourself?"
Because it's a two-part post and it's my blog.
I recently came across The Simple Dollar, a money management blog. The author, Trent Hamm, went through a self-described "financial armageddon" as he tried to sustain a lifestyle that he could not maintain without burying himself in credit card debt.
As I read his story, I began to recognize some of his destructive behaviors in my own financial life. I wrecked myself with credit cards, TWICE. I have a crapload of debt I'm trying to manage, including a metric ton of money from my time at Michigan State University. I've begun paying off my debt, but seeing someone else pull himself out of a situation similar to mine is inspiring to me.
Growing up, I had everything I needed. Both of my parents worked for the most part (my mother stayed at home when my siblings and I were small), so I always had food on the table. I had a Nintendo, then a Sega Genesis. But one thing I never quite got the grasp of was delaying gratification. My girlfriend will attest to this. I always have a new cell phone (though I recently purchased an HTC EVO 4G, so I think I'll be satisfied for a good long while). I recently bought myself a new laptop. I bought an iPad when those first came out, simply because I wanted one. Clearly, I have work to do.
So, I'm going to adopt some of his strategies for saving and frugality and apply them to my own life. After I feel like I've accomplished some things, I will do a follow-up post. Maybe watching my climb from the depths will inspire someone else to do the same.
J.D.
"How do you manage money when you get paid commission?"
The answer? Very, very carefully (I assume, more on that later).
I have made quite a bit of money by selling cars. To give you an idea, I make about as much as someone who is 4 years into a normal entry-level job would make. You see short gains every year, as more and more customers refer their friends and family members, and as those customers start to replace the cars that they've purchased from you. From personal experience, a lot of my business comes from repeat customers and referrals. I have one young family that sticks out in my mind, as they've purchased three vehicles for themselves, and referred in their parents and one of their neighbors. One family, 5 cars. You can't ask for much more than that.
Money still doesn't come in at a constant rate, even for the best and most seasoned salesperson.
So how do you manage money that comes and goes in spurts?
In short, I don't.
You're probably thinking, "How can you write a post on managing money when you work on commission if you don't do it yourself?"
Because it's a two-part post and it's my blog.
I recently came across The Simple Dollar, a money management blog. The author, Trent Hamm, went through a self-described "financial armageddon" as he tried to sustain a lifestyle that he could not maintain without burying himself in credit card debt.
As I read his story, I began to recognize some of his destructive behaviors in my own financial life. I wrecked myself with credit cards, TWICE. I have a crapload of debt I'm trying to manage, including a metric ton of money from my time at Michigan State University. I've begun paying off my debt, but seeing someone else pull himself out of a situation similar to mine is inspiring to me.
Growing up, I had everything I needed. Both of my parents worked for the most part (my mother stayed at home when my siblings and I were small), so I always had food on the table. I had a Nintendo, then a Sega Genesis. But one thing I never quite got the grasp of was delaying gratification. My girlfriend will attest to this. I always have a new cell phone (though I recently purchased an HTC EVO 4G, so I think I'll be satisfied for a good long while). I recently bought myself a new laptop. I bought an iPad when those first came out, simply because I wanted one. Clearly, I have work to do.
So, I'm going to adopt some of his strategies for saving and frugality and apply them to my own life. After I feel like I've accomplished some things, I will do a follow-up post. Maybe watching my climb from the depths will inspire someone else to do the same.
J.D.
9.21.2010
Model Year End Clearance "Deal"
"I'm looking for a 2010 Chevy Malibu." the woman says. She is the standard customer, the one you always picture when you are picturing a retail customer.
"Well, ma'am, we sold out of 2010 Malibu's in June." I say, trying valiantly to prevent my eyes from rolling. "Would you like to look at a 2011?"
"Will the 2011 have the same rebates?"
"No, the 2010 will have more rebates. But there aren't any 2010 Malibus left." I reply. I've heard this question 100,000 times over the past 4 years.
"Can you check for me? I would rather have the big rebate." she says, impatiently.
Sigh.
August and September are usually very, very frustrating months for the new car salesperson.
"Well, ma'am, we sold out of 2010 Malibu's in June." I say, trying valiantly to prevent my eyes from rolling. "Would you like to look at a 2011?"
"Will the 2011 have the same rebates?"
"No, the 2010 will have more rebates. But there aren't any 2010 Malibus left." I reply. I've heard this question 100,000 times over the past 4 years.
"Can you check for me? I would rather have the big rebate." she says, impatiently.
Sigh.
August and September are usually very, very frustrating months for the new car salesperson.
Not because of the weather, or because there aren't any customers on the lot. It's because of new model year changeover. Late summer is when we tend to get our new models. Because we might still have a ton of inventory left over from the previous model year, General Motors tends to throw extra cash on the hoods of whatever they might have tons of.
"Tons of cash, hmmm?" you might be thinking. "Might be a great time to get a great deal..."
Not so fast, there, Sparky.
Usually these great deals turn out to not be so great, after you check out the figures beyond the original purchase price. Let's dig a little deeper, beyond the upfront costs.
- You're getting a vehicle that is already a model year behind. If you're going to be keeping your car until "the wheels fall off" (I'm so tired of that statement), then this might not matter to you, but if you're anything like most customers, you're going to want to get out of that car sometime in next 3 to 4 years. When you go to trade that vehicle in, it will not be worth as much as a vehicle that is in what is now the current model year. A 2010 Chevy Impala isn't worth as much on the market as a 2011 Chevy Impala.
- Most automakers, General Motors included, include something new on the new model year cars, even if the vehicle was all new the previous year. For example, the 2010 Chevy Camaro has a 304 horsepower V6. The 2011 model has 312 horsepower, as well as the addition of heads-up display. Safe to assume, you'll want the additional features that the new model will have.
Sometimes, though, going with a leftover model can be a good idea. If a model hasn't changed very much from the previous year, saving a ton of money by going end-of-model year is probably a good thing. For example, our half-ton trucks haven't changed much from 2010 to 2011, and you can save about $1,000-$2,000 by going that route.
Just be warned, though, your selection of previous year vehicles is going to be greatly limited. You're getting the bottom of the barrel. You're getting what everyone else didn't want. We can check other dealers' lots to a certain extent, but the likelihood of a trade happening is pretty much non-existent. Go for the deal if you want, but remember, you are at the mercy of the current supply. We can't build any more 2010s!
J.D.
Sometimes, though, going with a leftover model can be a good idea. If a model hasn't changed very much from the previous year, saving a ton of money by going end-of-model year is probably a good thing. For example, our half-ton trucks haven't changed much from 2010 to 2011, and you can save about $1,000-$2,000 by going that route.
Just be warned, though, your selection of previous year vehicles is going to be greatly limited. You're getting the bottom of the barrel. You're getting what everyone else didn't want. We can check other dealers' lots to a certain extent, but the likelihood of a trade happening is pretty much non-existent. Go for the deal if you want, but remember, you are at the mercy of the current supply. We can't build any more 2010s!
J.D.
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