I think I bought a new car, maybe not - Page 2

dmcummins · 06-20-2010, 03:36 PM

For those who have worked at a dealership. Is $1,500 to $2000 really that big of a deal. Sure they may not make what they wanted on the car but would they really not honor the deal?

dmcummins · 06-20-2010, 03:47 PM

Quote:

Originally Posted by speeder

I understand what you're saying but there is a big difference IMO between little white lies that salesmen tell, ("this is the last one)", and material misrepresentations.

Isn't it more like "bait and switch"?

They showed me a piece of paper that listed the invoice price. Circled it and said this is what I could buy the car for. No one went over a option list or anything else. It was clear that I was buying the car that I test drove and was the only one there. Then they had the car washed and the salesman went over the operating features.

As I said, I think the other dealership simply sent the wrong paperwork over to this dealership. I don't know if the other car is even still there.

I bought the car because I thought the price was good for that car. I did not have to have a car that day.

I really have no reason to not think that they wont make this right. I'll know more tommorrow. I'm hoping it won't be a hassle.

pwd72s · 06-20-2010, 03:52 PM

Dealerships have to at least cover expenses...if they didn't, they wouldn't exist.

dmcummins · 06-20-2010, 04:07 PM

Quote:

Originally Posted by pwd72s

Dealerships have to at least cover expenses...if they didn't, they wouldn't exist.

While that is true, I'm sure they make more on some deals than other's. When I was in construction I would bid jobs. I always planned to make money, but if I didn't on one job I would hope that I would make it up on the other's.

speeder · 06-20-2010, 04:10 PM

Quote:

Originally Posted by dmcummins

For those who have worked at a dealership. Is $1,500 to $2000 really that big of a deal. Sure they may not make what they wanted on the car but would they really not honor the deal?

That's a good question; when times are good, $2k is not the end of the world for a decent-sized dealership. It's more the principle of the thing, also $2k is not an insignificant amount of money in any case. What I can't believe is how small the profit margins have gotten--when I sold cars 20+ years ago, a $32/34k MSRP car would have had an invoice of maybe $26k. IOW, 18-20% profit @ MSRP.

Times have changed.

speeder · 06-20-2010, 04:11 PM

Please update the thread tomorrow, I'm sucked into this story now...

fred cook · fred cook's Garage

I don't know if you heard, but Ford has announced that they are dropping the Mercury line. Since this would make your new car something of an orphan, I thought you would want to know.

dmcummins · 06-20-2010, 05:01 PM

Quote:

Originally Posted by fred cook

I don't know if you heard, but Ford has announced that they are dropping the Mercury line. Since this would make your new car something of an orphan, I thought you would want to know.

Thank's, I know. I figured thats why they were willing to deal more than the ford dealer. The car is basically the same as a ford fusion.

Steve Carlton · 06-20-2010, 05:30 PM

Quote:

Originally Posted by dmcummins

For those who have worked at a dealership. Is $1,500 to $2000 really that big of a deal. Sure they may not make what they wanted on the car but would they really not honor the deal?

It sounds like they sold you the car for the actual invoice of another, so in essence would be selling you the car you got for $1,500-2,000 below invoice. They probably have about $1,000 in holdback on a $34,000 MSRP car, I would guess. So your deal is probably $500-1,000 in the red, unless they have some other incentives on the car, which they probably do (flooring and advertising assistance, for example). If you're allowed to keep the car, they will be required to issue corrected paperwork with the right VIN.

My gut feeling is it should be your choice whether or not to keep the car. Their offer was their mistake, but it was on the car they presented to you. You dealt in good faith on the offer they made. It should be up to you if you want to give it back to them. I very well could be wrong- don't know the laws in Missouri (or even California, in this situation). You probably can find out by talking to the department of the Missouri DMV which oversees dealers.

In California, if a dealer took a car back that had been delivered, it would be a "rollback" and have to be re-sold as used. That will substantially decrease the value to the next customer, which would mean it might just make sense to take the loss with your purchase. Did you buy anything from them besides the car, trade in anything, or finance it? If you did, they could retain the profit from those aspects of the deal.

If the dealer does have the right to rollback the deal, you could try and re-negotiate for a higher price than you paid. It doesn't have to be the invoice amount of the car you got, it could be something mutually acceptable. Dealers hate rollbacks.

speeder · 06-20-2010, 07:57 PM

It would not be a "rollback" if the dealer never filled out registration paperwork for that vehicle. He just took it for a long test-drive.

Steve Carlton · 06-20-2010, 11:36 PM

Interesting point, but the dealer would have to in-effect commit fraud to sell the car again as new. At least that's how I'd think a DMV investigator would look at it. The car was delivered and operated without a dealer plate and a borrowed car agreement.

Rick Lee · Rick Lee's Garage

Wouldn't you get a better warranty if you took it as a rollback? CPO warranties are often better then new ones.

kaisen · 06-21-2010, 06:37 AM

Quote:

Originally Posted by dmcummins

For those who have worked at a dealership. Is $1,500 to $2000 really that big of a deal. Sure they may not make what they wanted on the car but would they really not honor the deal?

Yes, $1500 to $2000 is a big deal. That's way more than the average gross profit on a new car sale (all the way back including hold-back and other funny money). Right now the national average gross for Ford/Lincoln/Mercury dealers is a little under $1000. Yes, that figure is correct.

That's GROSS profit. There are so many expenses to be paid from that it would make your head spin. The 'average' dealership has about $200,000 in fixed and semi-fixed expenses each month.

Could they lose $2000 and stay in business? Sure. Most new car departments LOSE money each month, what's a little more. If it weren't for used cars and the service department, dealerships would close. Selling new cars is just a mechanism for building service business (warranty work if nothing else) and taking profitable used cars on trade.

So, enough numbers, if you think they're wrong and take a stand that's your business and your decision. They can't force you to re-sign any paperwork. You can't force them to sell you the car you're driving for that price. Neither of you have a binding deal right now. You can bring them back their car and watch them tear up the paperwork, then you can leave and never go back there.

kaisen · 06-21-2010, 06:37 AM

Quote:

Originally Posted by Steve Carlton

Interesting point, but the dealer would have to in-effect commit fraud to sell the car again as new. At least that's how I'd think a DMV investigator would look at it. The car was delivered and operated without a dealer plate and a borrowed car agreement.

Not true. Denis is correct. A mistake is not fraud.

kaisen · 06-21-2010, 06:39 AM

Quote:

Originally Posted by Rick Lee

Wouldn't you get a better warranty if you took it as a rollback? CPO warranties are often better then new ones.

Mr Cummins is in STL not Kalifornia. They just file a 'did not buy / did not sell' form and everything is reversed. California is the only state I'm aware of that has such a ridiculous roll-back policy. And why cars are generally more expensive there.

dmcummins · 06-21-2010, 08:30 AM

I called the dealership at 9:00 this morning. I informed them the the vin# did not match the paperwork and I also had emailed them the information.

They said they would look into it and call me back, it's 11:30 now.

pwd72s · 06-21-2010, 08:36 AM

Keep us posted...I'm sure you will...

dmcummins · 06-21-2010, 08:41 AM

Quote:

Originally Posted by kaisen

So, enough numbers, if you think they're wrong and take a stand that's your business and your decision. They can't force you to re-sign any paperwork. You can't force them to sell you the car you're driving for that price. Neither of you have a binding deal right now. You can bring them back their car and watch them tear up the paperwork, then you can leave and never go back there.

This is correct. I wonder if things were reversed what would happen? If I had paid the invoice amount for a different car that was in the dealers favor? I would hope that they would offer me an out.

I am the one that found the problem. I could just as easily put a few thousand miles on the car and bring it to their attention in a month, when the temp. tags expire. Or they figure it out themselves.

I just feel that when I make a deal and shake hands on it, it should be honored. If they want out, that's fine. I can buy a car somewhere else.

kaisen · 06-21-2010, 02:26 PM

So what's the scoop?

dmcummins · 06-21-2010, 03:29 PM

Quote:

Originally Posted by kaisen

So what's the scoop?

They said that I had the wrong car. That I could come and get the one that matched the paperwork. I said that was not the car that I was shown and bought. Then they said if I wanted to keep the car, I should pay them $1900. I said no, they came back and said it was a mistake on their part and would do the deal if I paid them another $1,000. They said with the holdback this would mean that they would not make any money on the deal. I understand where they are comming from, but I still feel that they made a deal on the car they presented to me, and I won't pay any extra. They said they will have to check with the owner because they cant make the decision to sell a car at a loss. There was also a $200 administration charge so if they are telling me the truth, we are actually talking about a $800 loss for them.

I still havn't heard back from them. I am prepared to take back the car and cancel the deal. I can buy the car I want somewhere else and it will probably cost me $1000 more than just giving them $1000 for this car. Paying the invoice price is not that difficult evidently. I checked around.

So if they honor the deal, I will have good things to say and recommend them to my friends. I still believe that they will come through.