“I am a second-year law student doing an internship at a large Los Angeles law firm. A senior partner gave me an assignment of finding the best price on several new cars for the firm, telling me to speak with fleet sales managers at auto dealerships, as a better price can be negotiated that way.
“But when I called several dealers, asking to speak with the fleet manager, I was told they no longer have a fleet sales department, to just come in and meet with a regular salesperson. Am I getting the run-around? I do not want to look like an incompetent to my boss! You have written about these issues in the past, so what do you recommend? Thanks, ‘Terry.’ ”
Internet Sales Have Replaced Fleet Sales at Many Dealerships
I knew just the person who could help Terry and readers who are looking for the best deal possible when buying a new car: 30-year veteran of car sales — and author — Ray Lopez of Glendale, Calif.
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His book, Inside the Minds of Car Dealers, gives readers insights into car buying. Lopez says it’s like you are playing a game of cards with dealers “and suddenly realize there are rules that no one told you about. A good example is what Terry heard about there no longer being a Fleet Sales Manager.”
“Why would they all tell him that?” I asked.
“At one time almost every dealership had a fleet department for companies purchasing several vehicles at a time,” Lopez replied. “As an incentive to get the fleet buyer to purchase cars at regular intervals, spectacular prices were offered.”
Of course, I’ll bet you are thinking, “companies are still buying fleets of cars and expect discounts, so who takes care of these customers today?”
“Now most dealers have an Internet Department that has taken over fleet sales. It is rare to find a fleet sales manager today, which explains what your reader was told.”
Do Your Homework: Find 2 Dealers Selling the Same Car You Want
“Terry’s search for the best price begins by finding two dealers in his metro area selling the same car — let’s say that it is a Chevy Malibu,” Lopez says. “(Next), he visits their websites, finding vehicles in their inventory he’s interested in. He then contacts their internet department, provides the stock or VIN numbers and asks for quotes.”
And what if there is only one Chevy dealer?
“Then, Terry considers the competition — the Ford Fusion — and he does the same thing, contacting their internet department to obtain prices. It is critical that he compare apples with apples, which in this case means the trim levels of the cars he’s inquiring about. Everything must be identical.
“The internet sales manager will offer 2% or 3% over dealer cost, but Terry must ask for and obtain the actual dollar amount.
“Next, he contacts the other dealer in his metro area, does the same thing, and compares the two. If there is only one them, he goes to Ford and can compare similarly equipped Fords and Chevys. Also, Terry should consider going outside of his metro area, as coming all the way out there to purchase a vehicle can result in an extra discount.”
Dealers Don’t Like Being Shopped!
Lopez cautions Terry, “Do not let the dealers know that you are pricing each dealer against the other. If you tell a dealer that you are doing that, the internet person may not be so eager to give you an exact price. They know you will shop it at another dealership.”
And Warranty Service? Does it Matter Where You Buy the Vehicle?
While in my personal experience — and that of many of our clients — loyalty in buying from your hometown dealer often has significant benefits, especially when out-of-warranty repairs are required. A long-term relationship with your dealer can result in expensive repairs performed at no cost to the customer.
“If you buy it out of town, you can still take it to your local dealer for service,” Lopez points out, noting, service generates profit. “They can make more from maintenance and repair than from the sale, so dealers do not care where you bought the car.”
Can Individual Buyers Also Save By Using a Dealer’s Internet Department?
“Dealers love multi-car sales. They will bend more for the fleet buyer,” Lopez says, adding, “So, while individuals buying only one car may not get the same price of a multi-car sale, they can do better than by just dealing with a salesperson on the floor — where 5% over invoice is common, but the internet buyer wanting the same car may get 3%.”
Finally, remember that your salesperson and your dealer, like everyone in business, must make a reasonable profit. And you should want them to, so they are here, tomorrow.
This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.
