How to Handle a "Special Finance" Customer

First of all, a definition: Special Finance: a customer with bad credit who cannot get financed through conventional methods and who has a large chance of having their next vehicle get repossessed. If they ever get approved, their interest rate is going to be sky-high and it will probably not be their dream vehicle.

OK--here are some techniques to handle this large and growing customer type.

1) Never tell them they are approved over the phone. If you do that, they usually get the attitude that they can now buy whatever they want from whomever they want.

2) If they tell you they have money to put down, ask if they really have it. For example, I had someone once tell me to "figure it with $2000 down." I turned around and asked, "Do you have $2000 to put down right now?" They said, "Uh--no, but I will in 6 weeks when I get my tax return." Your job is to sell them a car RIGHT NOW, not 6 weeks from now.

I love when a Special Finance Manager gets someone "approved" but it is not a deal that can be structured with your particular customer. "Hey--I got your guy approved but he needs $8000 down." Uh, no. That is a B.S. call--that is the banks way of saying "No." Now granted, some special finance customers can come up with that kind of money but we are talking about a small, small percentile of them. That is also like a salesperson saying, "I sold that guy a Corvette. He said he'll take it if the payment is $250 per month. I sold him--he just can't buy." Uh, no. You did not sell anyone anything. The deal has to be structured where...

a) The customer accepts it
b) Your manager accepts it
c) Your customer buys it (busting bugs, burning that all so expensive gas!)

3) If you get them approved before they come up, find out what vehicles you can sell them with the money they have down and more importantly, WITH THE PAYMENT THEY WANT! If you have a 2003 Trailblazer that is $300 and they want to be at $300, why would you try to sell them a 2005 Trailblazer at $500? Makes no sense whatsoever!

I used to work with a guy--probably the best used car salesperson that I had ever met. He told me he would get the leads online, get the people approved and have the car they could buy ready for them--all cleaned up and looking shiny. When they pulled up he would say, "This is your car and this is your payment." He also told me (and I believed every word) that he averaged around $5000 front end gross a pop and that he rarely ever made less than $15K per month. Anytime I saw the guy, he was on the phone working customers, working customers in person and working the finance guy on his customers--except the few times I saw him in the lunch room eating a lunch that he brought (I never once saw him leave for lunch.) Super hard worker--I wish I had 1/2 the work ethic that he has!

OK--now for the big thing. What if they people don't want one of the cars you have "picked out" for them? What if they want a Suburban (for some reason, people with bad credit always want the high-dollar vehicles) and you can only get them approved on a Blazer?

I like to call it the "Shot at the Doctor's Office Close."

Here's how it goes.

"Mr. Customer, I understand that you want a Suburban. I can get you worked out on a Blazer."

Customer: "The Blazer's too small. I want a Suburban."

You: "I just want you to understand that they will not approve you on a Suburban at this time. What I would recommend is getting the Blazer--they will approve you on it and it's a great opportunity for you."

Customer: "How's that?"

You: "It's kinda like going to the Doctor's office to get a shot. It hurts for a bit but in the long run, it keeps you healthy. Getting this Blazer is like getting the shot. It will hurt for a while but in the long run it will make you healthier because if you pay it perfect, you will help reestablish your credit. It's actually a great opportunity for you and quite frankly, I think it will be a mistake to look a gift horse in the mouth."

Then I like to add: "You will pay it perfect, right?" If they say "yes" then they just agreed to buy the Blazer.

This works really well if the payment is higher than they want to pay. "They higher payment is like getting a shot..." You get the picture.

Well, everyone, good luck and good night! I'm gonna hit the sack and have sweet dreams of my recent vacation to Mackinac Island and the surrounding area. Here is a nice picture with some soft colors that I took yesterday at dusk.

Earning the Right

The other day, I went to get a hair cut. I walked into a place I had never been at and the girl working at the counter said, "Welcome to hair clips" (or whatever it was called.) So far, so good--great greeting!

OK--I looked around at all the girls and saw that they all had pretty bad hair cuts. Oh oh!

The one started asking me information--phone #, address, full name and all I could think about was, "Great--gonna be stuck on a mailing list."

"Hey--how much do you charge for haircuts?"

"Eleven dollars."

"Cool!"

She sat me down and asked what I wanted and I told her. "Yeah--I usually go to my barber but we were in the neighborhood."

Then she said something that really turned me off. Before the first gray hair on my head was cut (not all gray--bits and pieces) she said, "Looks like we earned a new customer."

Hmmmm--I don't know why that statement put a bad taste in my mouth--maybe it was the fact that she assumed that she had my future business before even cutting my hair. In my opinion, she hadn't earned the right to assume that she had earned a customer until he cut my hair.

Needless to say, she hacked up my hair and chopped into the mole on the back of my neck. "Oops--I nicked your mole!" No shit!

I don't know. Maybe she was saying "We earned a new customer" because of the fact that I had never been there before. One thing for sure is that I will probably not go back in there.

OK--what the hell does this have to do with the car business?

How many times have you done a decent greeting, asked a few questions and went RIGHT TO THE PRICE? Have you earned the right to go for the close or are you jumping the gun?

I don't always follow every step the sale. I sold 2 today and only one of them test drove the car. Guess what? The one who drove nickled and dimed me to death (a nice friendly mini deal) and the other one didn't negotiate at all and actually bought a bed liner and a few back end products (about 8 mini deals-worth of $$$). I am a firm believer that when someone is ready to buy, they are ready to buy. But I always make sure they are there to do business before I jump through hoops and get the price, etc. for them.

Wow--I am rambling today. Hope I have earned the right to gain you as a loyal reader to this blog.

Marv

How to Hold Gross

I'm still sick over the new Indiana Jones movie but decided to move on and share with you some tips on making more money so you can afford to see bad movies.

Being in the car sales follow up software business I get a lot of people who ask me advice. A big question is, "How do I hold gross?" Here are some tips.

• Don't talk about price until you have earned the right to talk about it. By earned the right, I mean built rapport, asked questions, landed them on a vehicle, demo drive, trial close, etc.
• If they are adamant about price, acknowledge it and then change the subject. "Oh--that car is around twenty-one. Speaking of that, were you wanting that car or one in a different color?"
• Hit them high when you give a price and negotiate down if you have to. You can always go down but it is very hard to go up.
• Don't be afraid to ask for it (gross)--you will never get it if you don't ask for it.
• Be confident when you ask for gross. Don't ask weakly. I used to work with a dude in Tennessee and here was how he presented his price. "Uh--the price is $22,000. We have to start somewhere." Wow! We have to start somewhere? He was basically telling the customer that the price was a starting price and that he was going to discount it.
• Close customers on payments instead of price. Odds are that if they like the payment, they won't ask the price.
• Convert customers to leasing so you can show them a lower payment and therefore hold gross. By the way--you can sell a car for over sticker and leasing makes it easier.
• If someone asks for a discount, pause for a second (so you don't fall into the discount trap) and justify the price. "Mr. Customer, these are the hottest cars around and we are selling out of them. As a matter of fact, we could probably sell them for a $1000 more but we don't want to gouge our customers like the gas companies are gouging us."
• If they make you an offer that is a great deal for you--don't hook up immediately. Try to bump them a little so they don't think they left money on the table. I once had a customer make an offer and I immediately accepted it and he frowned and said, "You're making too much money on me." That will never happen again, I promise you!
• Show rebates as a discount. "This car is $16500 and we have $3000 off so you can buy it for $13500."
• Close them with an either/or. Lets say sticker is $20,000 and the car has a $2000 rebate of 2.9% financing. Present it like this: "Mr. Customer, you can buy the car for $20,000 at 2.9% or for $18,000. Which would work better for you?"
• Work them for a lot of money down. Watch how fast price doesn't matter if they negotiate money down.

Well, like I said--a few good tips--hope they help you. Please don't forget that I sell some great CRM follow up software for car salespeople! Go Red Wings/Pistons/uh--Tigers?!?!?

Marv
www.carsalesassistant.com

Trial Closes

A trial close is simply a technique that we use to see if a customer is ready to buy. You can compare it to taking their temperature to see if they are "hot" for the car or "cold."

Here are a couple of good trial closes in no particular order.

The Sold Line Trial Close: When you are pulling back into the lot after a test drive (hopefully the customer is driving) say, "Jim--it looks like we found the perfect car for you. Do me a favor and park this car in the sold line so no one else tries to sell your car."

One of two things will happen...

1) They will pull it into the sold line which means they want to buy the car or
2) They will give you an objection or excuse that you will have to overcome to sell the car.

Where is the sold line? Wherever you want it to be. I tell them to park next to our service department. It really doesn't matter as long as they think it is the sold line.

The Either/Or Trial Close: Ask an either/or question regarding their paper work like, "Do you guys want to title the car in one name or two?" They will either give you an answer which means they want to title the car (they are buying it) or an objection.

The "Do you have time to do the paperwork right now?" trial close: Very simple...head into it with an overview of the features that they wanted and then say, "Jim--sounds like we found the perfect car for you. Do you have time to do the paperwork right now?" If they say yes, get the paperwork started! If they say no say, "When do you want to do it?" They will either give you a different time or an objection.

NOTE: Your goal should be to "spot deliver" everything so if they say that they will do the paperwork but do it tomorrow, you must talk them into doing it today. Why? There's a lot of dealerships between today and tomorrow and a lot of "little birdies" like they neighbor that might say, "You're not getting a good deal...see my friend at Biff Motors--he'll get you a better one."

How do you talk them into doing it today? Use what I call the "it would help me out" close. Hopefully you have done a good job with your customer and bought them some drinks to obligate them so you have earned the right to say, "Jim--would you mind doing the paperwork right now? We're not that busy and I know we already have a lot of deliveries set up for tomorrow. It would also really help me out." Who's not going to want to help you out if you do a great job? Right--no one!

Hopefully these few tips can help you sell cars--they have helped me out. It puts people under a lot of pressure if you try to grind a "yes" out of them when asking them if they will "buy right now if terms are agreeable" (a very weak close by the way) but easier to ask them to park in the "sold line"--they both accomplish the same thing but the sold line is a lot less pressured from your end.

Good luck selling!

Marv Chomer
www.carsalesassistant.com

The "Percentage Close"

I'm going to start writing articles about individual closing techniques. I recently wrote an article about how you should always ask for the sale but that isn't really a "closing technique" in the sense that you are getting someone from saying "no" and "closing" them so they say "yes."

OK--first in this series, the "percentage close"--sometimes called the "1 to 10 close"

Here's how it works. You ask someone to buy a car and they say, "I want to think about it."

This is what you say: "Mr. Customer--let me ask you a question. From a scale from one to ten where one is that you wouldn't take the car if it were free to ten where you would take it right now, where do you stand."

If they say...

1-5: you are on the wrong car.
10: get the paperwork started! You just sold a car.
6-9: (This is what most people will say) so you ask them back, "What would it take to get you to a ten?"

If they give you an answer, then you have a roadmap to follow to sell them a car.

So--lets roll play.

"From one to ten, where do you stand?"

"One."

"You know what, Mr. Customer? I think we're on the wrong car. What don't you like about this one?"

Lets try again.

"...where do you stand?"

"Ten."

"Great! Do you want to title it in one or both names?"

One more time...

"...where do you stand?"

"Seven."

"What would it take to get you to ten?"

"Give me another $2000 for my trade. My credit union told me it's worth $10,000."

Simply overcome the objection and hopefully sell the car.

Now, I know what some of you are saying. "Now they told me that their credit union said their car is worth $2000 more than it is! Now what am I going to do?"

Uh--if you're asking that question then you'll need to read one of my previous articles on how to overcome objections... Tell you what--I'll whip one out for you.

"Mr. Customer, who at your credit union told you that it was worth $10,000?"

"My loan officer. They have a little purple book that they go by."

"Oh yeah--I've seen those books. Matter of fact, our finance guy uses the same book when he gets people loans because it's a loan value book--it really has no bearing on what a car is worth--just what they will loan for a car."

"Yeah, but they told me that I should get $10,000 for my car. I saw one just like it on another lot and they were asking $15,000 for it!"

(Drop a little feel felt found on them) "Mr. Customer, I promise--I know exactly how you feel. I once had a trade in that was worth $8000 and I felt it was worth more but you know what I found out? I found out that our used car appraiser has been doing this a lot longer than me. All he does is trade for cars between dealerships and believe me--he is usually within a few hundred dollars of what a car is worth. When we trade for a car, we also have to do a safety inspection and fix whatever is wrong with it before we can put it on the lot and sometimes it costs a couple of thousand dollars to do that. Let me do this--let me get him to re-look at your car. Maybe I can get a couple of hundred dollars more and we can get the ball rolling so you can start enjoying your new car. Fair enough?"

I know it doesn't always work that way but that little speech is almost word for word for one that I have personally used dozens of times to sell a car and would you make some assumptions with me?

1) If you use the percentage close, will you not be closer to selling a car because you'll find out if you have them on the wrong car or you will find out an objection that you can hopefully overcome?

2) Don't you think the percentage close is a nice, easy close that you can remember?

3) Isn't it non-confrontational? It sure is--it's nice and easy to put it into the conversation to get information out of a customer.

Thanks for reading this blog! Also, if you are in the need of follow up software that will help you sell more cars then please check out my website www.CarSalesAssistant.com

"I Want to Think About it"

Ah--the dreaded statement! It has made people crumble in fear--fear that they would either hear it or fear that they just heard it.

I was once a computer salesperson at Sears. It got to the point where everyone said "I want to think about it." I even told a fellow salesperson that if I heard it one more time today, I was going to quit. Of course, that was before I learned to sell. Now, I love when people say it because it gives me an opportunity to close a sale.

First off all, why do people say that they want to think about it?

I'll tell you why I say it when I'm out shopping.

1) I say it when I don't think I can afford a product or when the price is not what I want to spend.

2) I say it when I don't want to hurt a salesperson's feelings--especially if he spent a lot of time with me.

3) I say it when I have questions and am too afraid to admit that I don't know something.

4) I say it when I don't like a product.

5) I say it when I don't like the salesperson and don't want him to have my business.

You know what? Your customers pretty much say it for the same reasons. As a matter of fact, 99% of the time, you can narrow "I want to think about it" into one of three reasons (or objections if you'd rather...)

• The customer doesn't like the product (or has questions about it)
• The customer doesn't like you (or you confused them)
• The customer doesn't like the price

Your job as a salesperson is to find out which objection it is, to isolate it, rephrase it if needed and overcome it to sell a car.

OK--here's how not to handle "I want to think about it"

Customer: I want to think about it?
You: What's there to think about?
You: How much time do you need?
You: No you don't.
You: OK--here's my business card. Call me after you think about it.

Here's the correct way to handle it.

Customer: I want to think about it.
You: No problem. (Customer relaxes)
You: Let me ask you this. I've been selling cars for a long time and I've discovered that when people say they want to think about it, it's usually one of three things they want to think about. It's either the car, something I said or did or the price. Which one of those do you need to think about?
Customer: The price. It's too high. (They will say price probably 80-90% of the time)
You: (Isolate the price objection) Besides the price, is there anything else you want to think about?
Customer: No--just the price.
You: (Rephrase the objection to make it easier to handle) Is it the actual cost of the car or the payment?
Customer: The payment.
You: Well, we're at $320 and that is actually a great payment on the car. What were you expecting?
Customer: $250.
You: Well, if we could figure out a way to get the car to fit within your budget is there any other reason why you won't take it home right now?
Customer: No.

It really is that easy. Now you may be saying, "Marv--we're still $70 apart--it's not that easy!" Yes it is. How can you bump a customer $70?

Here are some tips. When you ask them what kind of payment they have set aside in their budget, stretch out your hand (palm up) and raise it up and say, "Up to..."

Customer: $250
You: Up to...?
Customer: Up to $275
You: (Raising palm again...) No more than...?
Customer: No more than $280.
You: Let me ask you this--what if we found you the perfect car--it had everything you wanted and it was just a few dollars higher than $280--you wouldn't let a few pennies a day keep you from your perfect car--would you?

Later, when you hit them at $320--you can remind them that they said a few pennies a day wouldn't keep them from their new car. $45 per month is only a little over a dollar a day--a candy bar, a pop, a bag of chips, 4 cigarettes, etc. You get the picture. Raise them!

OK--another technique.

You: Where do you want to be?
Customer: $250
You: (Suck a deep breath through your teeth.) Ooooh. I'll try but I gonna need a little help from you.

Yet another technique: The Gas Saving Close (See my earlier blog about that closing technique)

Yet another technique--work them for money down! What a concept! Try this: "Were you going to put the standard 10% down that the banks like to see?"
Customer: How much is that?
You: About $3500. (Watch their face drop but don't pause) But you can always put more down if you want to lower your payment.

Later when they try to get a lower payment, remind them that it would take money OVER the 10% down to do that--just like you told them earlier. If they balk at money down (like most people here in Michigan do...) use it as a closing opportunity. "Normally, the banks like to see the 10% down--especially with today's credit problems--but if I can work it out with no money down, will you take it right now?" Sometimes the initial money down is more important than payments down the road...most people (myself included) think very short term.

By now, you know that I like to ramble so I'll stop the rambling. Listen to salespeople around and hear how many hear "I want to think about it" and let their customers walk. How many sales are they missing? How many have you missed (hopefully none!) I missed a ton before I learned how to overcome that excuse but I never just let it fly by in the wind anymore.

All About Leases and How to Convert Buyers to Leasing

Living in Michigan, the leasing capitol of the country, I can probably say that I have a good working knowledge about leases. I'm going to share a few things I have learned over the past few years about leases and how to convert people from purchases to leases and WHY you should ever want to do such a thing.

First of all, here are some terms you should know in regards to leasing.

Residual Value: What percentage of the MSRP will the vehicle be worth at the end of the lease? If the MSRP is $10,000 and the residual is 50% then the residual value will be $5000. The customer can choose to purchase the vehicle for this price at the end of the lease (plus tax, of course.)

Rate or Money Factor: Almost like an interest rate--basically it is a lease charge for a company to fund the lease.

Cap Cost Reduction: Basically a rebate on a lease.

Start Up Fees: The minimum money required to lease a vehicle. Usually first payment, doc fee, title fees, taxes on the rebates and security deposit. NOTE: You can "roll" in the start up fees on leases--roll them into the payments but the payments will go up.

Down Payment: "Money Down" over and above the start up fees to lower payments. That's why people can advertise "only $1000 down" and hit people for $1652 when they show up.

Security Deposit: Money required for a new leasing customer--usually refunded at the end and usually the payment rounded up to the nearest $25. For example, $212 payment, the security deposit will be $225.

Mileage: How many miles a year the customer will drive. Usually 12K, 15K.

Mileage Charge: How much they get charged if they go over their miles.

GAP: On some leases, gap is included. If they have active insurance and their is a total loss, the vehicle will be paid off regardless of what is owed on it.

Residualized Item: Some things, like sunroofs can be "residualized" which means they add to the value of the vehicle and a person pretty much only pays depreciation on them. For example, if a bedliner costs $150 and you can residualize $150, it is pretty much free--or close to it.

Pre-Paid Lease: Paying the entire contract amount up front--usually, there is a break on the rate so the ultimate paid amounts will be lower than monthly payments.

Lease Pull Ahead: Sometimes the manufacturers will let a person turn in their lease early and waive a couple of months if they purchase another vehicle. Not as exciting as they used to be--I've seen them waive 10-12 payments before--man, those were the good old days! Now it is only 2.

Disposal Fee: A fee a customer pays if they turn in the vehicle at the end and don't lease/purchase another one. GMAC doesn't charge it but some others do.

Why you should lease cars instead of selling them...

• Lower payment for customers
• Low money down
• Easy to roll in a lot of negative equity
• Have a much higher chance of having a repeat customer since they will turn the vehicle back in to you and be in the market for another car
• No problems such as trade in value when they are back in the market--they turn in the vehicle and get a fresh slate
• Easy to sell aftermarket items and make you more money because you can residualize a lot of stuff

How to Convert Someone to a Lease:

• Easy one first: lower payment as opposed to financing most of the time.
• Gap is included--usually $495 on a finance contract.
• If they say, "I drive too many miles" then here's what you say. Then leasing is your best option. If you are driving 20,000 miles per year and finance for 5 years--what will your vehicle be worth when you pay it off and have 100,000 miles? Probably nothing. If you lease it for 3 years, you will have 60,000 miles on it and believe me, by then you will be ready for something new.
• If they say that they absolutely do not want to lease and they want you to figure a finance payment, write Finance: $443 (or whatever the payment is) and write Lease: $320 on the other side of the paper. When you put it in front of them say, "I told him you didn't want to lease. Don't look at that..." as you point to the lease payment. Of course, the first thing they will do is look at the lease payment and hopefully they will notice that it is a lot cheaper. Then say something like, "Are you sure you don't want to lease? Man--it could save you $123 a month!"
• If they say, "I like to own my vehicle so I'm not going to lease" say something like, Mr. Customer--when you finance a car for 5 years--who really owns it--you or the bank?
• If they say, "I like to keep my cars forever," say this: Mr. Customer--I've heard that a lot over the years. People say they will keep their cars forever and then you know what happens? I see them 3 years later and they want to trade. And you know what happens? They always owe more than their car is worth and they are stuck in it. If they would have leased, they would have had a lower payment and not had to worry about trading. Plus, if you absolutely love the car, you can purchase it at the end of the lease for a fixed price.
• "I don't want to lease because I'm afraid that the car will get damaged and I will have to pay for it." This is an easy one: If you got in an accident--wouldn't you file a claim with your insurance anyways?
• And last but not least: "I want to pay off my car and not have a car payment." Use the old "feel/felt/found" closing technique. A lot of my customers feel the same way. I actually had one the other night that felt the same way but you know what he found out? He found out that he traded every three years anyways and will always have a car payment so he was better off saving over $100 a month leasing. I think leasing will be best for you, don't you?
  

All in all, if you lease someone a car, you have probably a 75% to 90% chance of them buying from you again but if you sell them a car, it is probably 10-20%. As long as you get them enough miles, they will love you for talking them into leasing. Good luck and hope you lease everyone!

The "Outrageous Payment" Close

I saw my manager use this one today.

I was trying to sell a customer a car and the payment was around $530 per month. They told me that they wanted to be between $475 and $480 per month but they would not make a commitment today. We had the exact vehicle they wanted and they said that they wanted to "sleep on it." (usually an excuse)

I said, "Look--I've been selling cars for 12 years and usually when someone says they want to sleep on it, something is bothering them. It's usually the car, the price or something I said or did. Which one is it?"

She said, "He just started a business, I just lost my job and our house payment is $1800 per month--we just have to make sure we can afford it."

I wanted to say, "Then what are you doing here?" but instead, I tried again at a commitment to do business right now. They said they loved the vehicle and that they were pretty sure that the $475-$480 would work but that they really had to go home and do the math. I did the right thing and brought my manager over for a T-O.

He asked them, "If the payment was $450, would you take it right now?" I almost swallowed my tongue!

They answered, "No--we really have to talk about it."

He laughed and said, "Good--because I can't get there" and they all laughed. He told them to stop by in the morning and that he would try his best to make it work for them. They left on a good note and I think I have a 50/50 chance of selling them.

After they left, I asked him about the "$450 thing." He said, "I was just testing the water. I wanted to see if they would take the vehicle at any price."

"What if they would have said yes?" I asked.

"Then I would have said, So, there is a price that you would do business at today. Let's go ahead and work some numbers and get you closer to where you need to be."

Looking back, what he did was very smart. Number 1, he put an ever better price in their heads than where they want to be and I think that will increase my chances of getting them back up to the dealership and Number 2, he discovered that in their case, price wasn't the issue.

There is certain point in people's thinking where they will go from not being there to buy to crossing the line mentally to being there to buy. That is why you get a signed offer when someone makes them--the process of signing the piece of paper makes them feel, in their mind, that they are buying a vehicle. If my customers would have said yes to his $450 thing, it didn't mean that we would have to get there to sell them a car--it would just mean that they mentally got off of their having to sleep on it to actually making a decision to buy a car right now.

By the way--when closing a customer, don't say will you do business today? Today is from now until midnight--plenty of time to shop. Say, will you do business right now? You always want to "spot deliver" customers so they don't have time to second guess themselves.

By the way--I just bought my dream vehicle today. A 2003 Chevrolet Tahoe with 77K miles--just broken in for a Tahoe. My wife has been wearing me out all evening... "Did we do the right thing? Did we get a good deal (we did by the way...) Don't you think we should have gotten something cheaper? Your mom said we shouldn't have bought it." I am firmly convinced that if we wouldn't have done the paperwork this evening, she would be doing everything in her power to talk me out of getting the perfect vehicle at the perfect price. Exactly what happens to your customers if you give them time to think about it. They will always find a better deal, people will always tell them that they got a bad deal and they will always second guess themselves (maybe we should wait until we get our income tax...) Don't let it happen! Sell them on the spot.

NOTE as of 2/6/08: The people came back and bought from me today.

When to Close a Customer

According to some people, a person will never buy a car until you have built rapport, done a demo, attempted a trial close, got a commitment to do business today and until finally, they agreed on the price. I disagree!

Granted, the above stuff will increase your chances of selling a car and they might increase your gross profit but you do not always have to do all of that to sell a car. If it was that simple, we would all be millionaires. Simply follow the steps above and sell everyone.

I have personally bought a car without driving it and I paid full price (before I got in the car business.) I live near Detroit and at the time, my Mom was living about 150 miles away. I needed a car and she told me about an '87 Olds Cutlass Ciera that a dealership was selling. I drove out there and saw the car, liked it and asked the price. They guy told me $2000. My mom told me to negotiate and I probably attempted a feeble one but the salesperson said, "I have 2 other people looking at the car and if you won't pay $2000, one of them will." I hooked up immediately. What is the moral of the story? I liked the car and it was in my price range. If they guy would have tried to talk me into driving it first, I may not have bought it. He got me at the perfect time (and I fell for one of the oldest closes in the book...) I just remembered--the air conditioning didn't work on the car and I never even asked about it! If I would have driven it, I probably would have noticed! Perhaps the salesperson didn't want me to drive it? Well, young and dumb...

Today is Sunday, I over-slept, it went from snowing yesterday, to freezing rain, to pure powerful rain to day and my five year old daughter took me to the mall today and showed me EVERYTHING she wanted for Christmas. She said she wanted a Nintendo Wii and I asked her what it was--she answered that she didn't know what it was. (How's that for a great brand?) I asked her why she wanted it and it was because all of her friends have one. Needless to say, I'm tired and have had my head kicked in by my daughter all day but I'm trying to make a point.

My first point is this: THERE IS NO SET TIME TO CLOSE A SALE!

A big problem with people is over-selling. Someone pretty-much says they will take a car and the salesperson finds it hard to believe and keeps selling. Some of the times, they will talk a person right out of buying.

We were playing softball a few months ago. We had bases loaded and one of our better hitters was up. He would up drawing a walk. The Umpire said, "Ball three--take your base." They guy looked at the ump and just stood there. I yelled, "You waiting for him to change his mind? Go to first!" Same thing in the car business. Sometimes people will hook up so easily that we can't believe that they are buying a car. We start asking ourselves questions...do they have good credit? Are they crazy? Did I hear them correctly?

So--my second point is this: IF SOMEONE SAYS THEY WILL BUY A CAR--STOP EVERYTHING IMMEDIATELY, THANK THEM FOR THEIR BUSINESS, SHUT UP AND DO THEIR PAPERWORK AS FAST AS POSSIBLE!

Can you sell a car without a test-drive? I do it all the time--but I'm in Michigan where everyone leases and most go into the same car that they got out of.

Can you sell a car without following the steps of the sale? Yes--I have gone from step 1 to step 12 plenty of times. Hi--my name is Marv. Welcome to... (customer cuts me off.) I want to buy that car. Here is my credit information. Happens all the time.

Does someone have to agree to buy the car before they will take it? Nope. Matter of fact, if you ask them to buy the car, they will usually get nervous and feel like you are pressuring them. It's better to ask non-confrontational questions like, "Do you guys want a soft drink or a cup of coffee while I get your paperwork started?" If they aren't there to buy the car--the will immediately give you an objection. If they say that they want a cup of coffee then get the paperwork started--you just sold a car!

OK, managers and dealers, don't shoot me. I am not saying for a minute not to do a demo, trial close, get commitments, etc. Those are great techniques that will increase your odds of selling a car and help you hold gross. I'm just saying that they do not always have to be done.

Thanks for reading my ramblings!

P.S. Anyone have a nice, used Wii?

10 Tips on How to Handle Trade-Ins

Perhaps one of the hardest skills to learn in the car business is how to handle a customer's trade in. It is one thing that can make or break a sale so here are some thoughts and ideas I have on the subject.

1) Don't ever ask someone what they want for their trade. If you do, you'll back yourself into a corner 95% of the time when they hit you with what they owe one it, what their credit union told them to get for it or what they saw similar ones selling-for in the paper.

2) Do a walk around the trade with your customer. Ask them questions like how long they have been driving it, if it has ever been in an accident, etc. Also do what is called a "silent appraisal." Touch rust spots and dings and say, "hmmm" when you do so. Run your finger along scratches and scratch them with your finger nail. Look at the tire tread and measure it with a business card or pencil and say, "Hmmm." Put your finger in holes in the cloth. In other words, you are telling their customer subconsciously that their vehicle might not be as nice as they think it is--you are not really taking value away from it--it is really worth what it is worth. You are just lowering your customer's perception as to what they think it is worth.

3) Give your customer room to negotiate.

4) If they flip out after you tell them what their car is worth--don't jump right to If I could, would you! I saw a guy at our dealership lose a sale the other day by jumping too fast. He hit his customer at a certain price and the customer said he thought the car was worth more. The salesperson went right to, "Make me an offer." The customer responded with a low-ball offer, got mad, left, and bought at the competition.

5) Take a deep breath and justify how the figures were obtained...here are some good examples.

a) I know your credit union said it was worth $10,000 but they base their figures off of their loan value guides. Our figures are obtained from what similar vehicles have sold for--in this area--in the last 30 days. Our figures are more accurate.

b) Our used car appraiser has been doing this for 15 years and you know what I've found out? He's usually pretty exact in his figures.

c) This is called the "Feel, Felt, Found" Close: You know what? I was in the same situation a few years ago so I know how you feel. I wanted $7000 for my car and it was only worth $5000. It almost kept me from trading I felt like my car should be worth more. You know what I found out? I found out that it was really only worth $7000 because they sold it a few weeks later and only made a few hundred dollars on it.

6) If they say they'll try to sell it themselves before they can trade, offer this: Mr. Customer, it takes us an average of 60 days to sell any used car. We spend tens-of-thousands of dollars in advertising each month, have 10 banks waiting to finance our customers and make sure every car is mechanically sound before we can sell it. No offense, but what chance do you have selling your car within 60 days on your own?

7) If they have a beater--tell them to sell it themselves if you feel that you can still get them to buy today. I have never seen that work for a car that they are buried-in.

8) Try to get your customer off of their trade and onto payments. Mr. Customer--quite frankly it really doesn't matter what yours is worth as long as your new car is affordable, right?

9) If they want the dreaded payoff, tell them this: Mr. Customer, your payoff will never have a bearing on what your car is worth. You owe $10,000 and your car is worth $8000 but let me ask you this--would you want $100 if your payoff was only $100? Of course not!

10) And finally--if the trade was a bad experience for a customer (and it usually is) try to talk them into leasing so they won't have to go through it again.

I Need to Talk to my Wife/Husband

This is a very common objection that may sometimes be an excuse. I'm married and I would never buy a car without talking about it with my wife first but isn't it true that sometimes you sell a car to a husband or spouse without the other-half being there? Perhaps they had already discussed the purchase or perhaps one can make a decision without the other.

The purpose of this article is to help you determine if the person really needs to talk to his wife or if it is an excuse. The word-track below works wonders--give it a try sometime.

CUSTOMER: I need to talk to my wife first.
YOU: Jim, when you talk to your wife, are you going to talk about the car, the price or me?
CUSTOMER: The price.
YOU: What do you think she'll say about the price?
CUSTOMER: She'll probably say it's too high.
YOU: What price do you think she'll like?
CUSTOMER: $30 less a month.
YOU: (Isolate the objection): Do you think there'll be anything else that you'll talk about?
CUSTOMER: No
YOU: Sounds like she's on a budget like my wife. Jim, do you think if we fiddle around with the numbers a little and get it to fit within her budget, she'll go ahead and take the car?
CUSTOMER: Yes

You then overcome the objection as normal. Now, I'm not stupid--I have been selling cars for a while and know that most of the time, the husband will still want to talk to the wife but will you admit that this might help you sell a few more cars here and there? Also, will you admit that if the car is within the budget the husband will have a better chance of closing the wife?

Other tips to consider:

1) Offer to let the husband take the car to his wife so she can see it. Make sure you remind him that he is obligated in no way to buy the car to take the pressure off.
2) Do not ever say, "Let me call my wife and see if I can sell it to you." I know they used that line in the movie "Suckers" and I heard my boss in Tennessee use it a few times but insulting a customer NEVER WORKS!
3) I never try to pressure a person to buy without spousal support by saying things like, "Come on--you know it's easier to get forgiveness than permission." Also never works.
4) Do say something like this, "I've been selling cars for a long time and sometimes people say that they need to talk to their wife because something is bothering them like the price, the car itself or something I said I did. I just wanted to make sure--none of those things are keeping you from the car, are they?"

You can also use #4 if they say they want to go to lunch, study things, think about things, talk to their banker, talk to their priest, talk to their dog, etc.

All in all, the theme of this post is do not ever insult your customer. Hope this helps and I promise it will help you sell more cars here and there by increasing your odds across the board.

The "Gas Savings" Close

Want an easy technique that will help you sell more cars? If so, read on!

Right now, gas is about $100 a barrel which means it is $3.10 a gallon at the pump across the street. To me, the price of gas is not the shock that it was a couple of years ago when it first hit $3.00 a gallon--we've gotten pretty used to it but you know what? It is still expensive and still a concern for a lot of people. It is also a great opportunity to help close people.

By the way--remember that math you learned in 3rd grade? Remember how you asked yourself if you would ever have to use it when you grew up? Well, you will in the next few minutes.

Lets say you have a customer who is coming out of a SUV and going into a car and lets say you are $30 per month away from putting a deal together.

I've heard some people say, "You'll save money on gas." True statement but not powerful. Instead of telling the customer that they will save money on gas, show them how they will save money. When using this technique, write the math out on a scrap piece of paper using your calculator (practice it ahead of time so you don't make mistakes.) It makes it seem spontaneous and adds to the power of this close. I taught everyone at work this closing technique and one guy made a spreadsheet and plugged in the numbers but to me, that is too--well, designed and if I was a customer, I would feel that it was a technique being used against me.

OK--back to business.

Step 0: Isolate and re-phrase the objection. Besides being only $30 away from enjoying your new car, is there anything else keeping you from taking it home today? No. OK--it sounds like you're on a budget like me and everyone else. Am I right? Yes. If we can fiddle with the numbers and figure out a way to get it within your budget will that work for you? Yes. Cool!
Step 1: Ask the customer how many miles they drive a month. 1000
Step 2: How many miles per gallon do you get? (If they don't answer, provide the answer for them) 15
Step 3: Do the math in front of them. Hmmmm--let's see. 1000 divided by 15 is 66. OK. You're using 66 gallons of gas a month driving your SUV. 66 times $3.10 per gallon is $204.60. It's costing you $204.60 per month to drive your SUV.
Step 4: Do the same math for your more gas-efficient car. Our car gets 23 miles per gallon so 1000 divided by 23 is 43 gallons. 43 times $3.10 is $133.30. So, our car will only cost you $133.30 per month to drive.
Step 4: Let it sink in for about 5 seconds and do the final math. Subtract our cost from their cost. $204.60 minus $133.30 is $71.30. If you get this car, you will save $71.30 per month.
Step 5: Close them. You know what? Even after taking care of the $30 that was keeping you from getting this new car, you will now have an extra $40 to put in your pocket each month. Sounds like we got this into your budget so let's go ahead and get the paperwork started. Would you like a cold drink or a cup of coffee while I get the ball rolling?

Very powerful close. I once worked at a dealership where I overheard another salesperson (1 month in the business) who was about to let a customer walk over $30 a month. The manager had already stripped the deal and he told the salesperson to go ahead and "flush them." I said, "Hey--let me have a crack at her--I don't want half-of the deal--I just want to see if I can close them." He let me--I did the gas close and they hooked right up without having to discount another dime. The salesperson still make a $100 mini (enough to pay the cable bill after all) and was very happy to have another unit.

Don't forget--www.CarSalesAssistant.com for all your software needs--at least if you want to sell more cars!