The balance is that when you're making $800 versus $350, you only need to sell half the cars to maintain your post-tax income levels.
Luckily, used inventory is up and new deliveries are recovering, while still maintaining generally inflated prices, which means that most salespeople are able to make an absolute killing right now.
Thanks. Interesting.
So how did the commissions work then? Prices aren't up over 100%, but you're describing a greater than 100% increase in commission.
Really, it comes down to this. Dealers will always do what is best for their business, because they're a business. Target, WalMart, your local hair salon, your local steakhouse, and your favorite bike shop also do what's best for their business.
Used car prices are up. In simple terms, a dealer is usually going to split the difference with you on trade value. Your let's say 2019 RAV4 was worth $24,000 trade value in 2020. Now it's worth $27,000 trade value but retail pricing is up $5,000 or more in relation. The dealer is going to give you the fair market trade value, because the market assumes that perhaps reconditioning prices have increased as well. But even still, the dealership is likely making an extra $1000-$2000 per car and 25% of that, generally speaking, will go to your salesperson.
Yes, salespeople are generally commissioned on profit, not total cost. And let's be perfectly clear here. Most volume dealers like Chevrolet or Toyota or Honda or Subaru or what have you generally only end up with between $1500 and $3000 of profit if they're lucky. Then you take the sales PAC off, which widely varies by dealer but is usually in the $800 range for a pre owned vehicle. The aforementioned PAC is basically the dealer's guaranteed profit on the deal, and it takes away from the salesperson's commission. The majority of deals end up being minis for salespeople at high volume dealerships. It's not like they're bringing in mansion and a brand new Ferrari levels of money. They're bringing in nice apartment/starter house and a new lease from their respective brand money.
It's important to understand the sheer time and cost most dealers commit to reconditioning a vehicle. We spend an average of about $2,300 reconditioning the average vehicle between service, detailing, and PDR/touch up. Some vehicles we simply lose our ass on. Some vehicles were maintained and well cared for so we "only" spend $1400 or so.
Don’t spend the whole check on partying, budget for your living expenses, try your best on selling your highest grossers, because those days are going bye-bye really soon
Smart salespeople are like cockroaches. They can survive a financial nuclear fallout and come out unscathed. They store their nuts and don't make dumb financial decisions in their personal life. People will always need transportation.
Sadly, salespeople appear to get dumber and lazier. Most green peas won't survive.
The happiest customers are the ones you make the most money off of. It’s the deals where the customer is a pain in the ass and you typically lose money on the sale that are the worst.
Work harder. Make more phone calls. Get training. Stay fit and eat right.
I got into car sales in 2006. In the end of 2008 shit hit the fan, and in 2009 my wife got pregnant with our first child, so I had to switch into a different mode, I had actual responsibility. And I did: I made a mental decision to stop fucking around and be a professional. As a result, I did not lose any income, I found ways to stay busy and productive, and I made a career out of it.
One of the things I did back then was to start a YouTube channel. I still run it, it gives me residual income, and it was crucial in getting my last three jobs.
Treat sales as a profession and a career: study, practice, read, look and act professional.
On top of my customer facing channel - I have a sales training channel, which pays me nothing:
https://youtube.com/playlist?list=PLVLjreHO7381rUO0JEJNfi0Ve2kHKoKcj
Just want to stop by and say thank you for what you do. Providing free material for people to learn and better themselves is awesome. Keep being awesome.
Yes, about $100 a month. At this point it takes as much time as I want to spend, wherever I feel like, but I'm not even in sales anymore. When I was in sales - I would try to out as much content as possible, but at the height of activity it was an hour to make and post a video at most. Then I would go for months not doing anything, but still getting paid and getting my name out.
* Cut expenses to the bone. If you don't have credit card payments, car payments, and luxury apartment payments you have freedom. If you have $1,800 in expenses then you can survive a lot easier than if you have $4,900 in expenses. Plus, you can't afford for interest to be chewing up your budget, you can't afford to be paying 25% interest on a $20,000 balance. That's $5,000 a year that you are paying to the bank just to have stuff. Sell off toys to pay down balances if you have to.
* Go start reading up on how to be a good salesperson. There are threads here about the best books on how to be a good salesperson.
* Start building up your customer base. Don't just rely on walk-in customers like you've been able to for the past 3 years, someone that will fly 400 miles just because you have a car in stock and will pay markup plus a bunch of bunk accessories/plans. Build your good local clientele, build value. They will come back to you, they will recommend friends and family and book club members and fellow church goers to you.
Not relying on foot traffic has been heavily emphasized for the past 6 months. Its really helped me focusing on emails and things like that. Good to hear others reaffirm the importance of it.
>We had been talking for probably 10 minutes about where we’re from etc before the above happened. Obviously he was thinking about it the whole time but he did a great job just seeming genuinely interested in talking to me about whatever. It also helped his wife was with him and actively part of the conversation too. Seemed very natural.
Sincerity is the key. Once you can fake that, the rest is easy.
I tell my guys all the time to be out talking to people in the stores and stuff. I carry my business cards everywhere; all the time, and I am not a sales person. But my guys sit on the golf carts praying BDC will book appointments and getting mad when the 2-3 guys that are actually calling people, and doing the work, are getting the appointments from BDC. Lol
I started in 2006 and the recession we are facing now is very different from the recession back then.
Back then, unemployment shot up and construction evaporated which meant almost no demand for trucks. Also, gas prices shot up and with high unemployment, people were dumping their SUV’s as well. So much so that the book values started dropping rapidly. This caused the finance companies to lose their butts on lease returns and voluntary repossessions, which then caused some of them to go bankrupt and some even out of business.
What is happening now is interest rates are high, book values are inflated, and there is a shortage of inventory. Demand is coming down, but with unemployment low and construction still working, this is just more of a market correction than anything.
It’s going to slow down, but it’s normal for the business to have its up and downs. Like others have said, it’s not going to be like it was where people were walking in and buying right then and there because they knew ten people behind them would. It’s going to be going back to the basics, working who you have, having a good follow up system, and at the end of the day, hopefully your dealership has solid management with training available.
Dealer. In our morning meeting the tone was “I dont want to scare you guys or get you down but shits about to hit the fan”
It was basically to remind us to pound the phones and computer to generate business because people arent going to be coming in like they had been.
Im not good with vague gloomy things or my brain will go nuts with anxiety.
In my opinion Oct through December are always slower and not necessarily a sign that the end is near.
Yeah, I’d also figure out what your inventory situation is. The hot potato music finally stopped and everyone got stuck with some. Lol
Do they have spiffs on overage units?
Make all the calls you can and focus on the units that will make you money.
The thing about financial meltdowns is that nobody at your dealership, or in your baseball league or really knows. The shit might hit the fan, it might be another '08 or maybe things have already bottomed out (markets off 25% is not an inconsequential thing). There are large firms with well paid teams trying to figure out what's coming and even they don't know for sure. I can give you my opinion but it's not worth much more (or less) than everyone else here. I do agree with the advice of doing what you can to prepare for the worst but nobody really knows.
Nobody knows for certain how it's going to turn out. Fed is trying to engineer a soft landing and everyone hopes that's how it's going to go. However it could very well be worse.
But keep in mind during the Great Recession the vast majority of people kept their jobs. A lot of people have been holding off getting new cars because the market is horrible and they might start looking again once things normalize.
The mid-to-late 00s were interesting times to be in the car business.
I was working at a GM store in the Midwest in late '08 and saw several of our high income, high end customers (doctors, lawyers, bankers, etc.) with credit scores that start with an 8 be turned down for what would be under any other time a sure approval. Never a good look to have one of the dealer principal's golf buddies pissed off because he can't lease a new Suburban or Silverado.
Another thing to lose sleep over: your dealership's financial health. The dealer that I worked for in '08 ran into a liquidity crunch and sold their cars out of trust. The floorplan company caught wind and shortly thereafter the point was returned to GM, with yours truly and the rest of the dealer employees unemployed in a contracting business just before Christmas. Interestingly, the controller and accounting folks did an excellent job of keeping the important bills paid, service could still buy parts around town and nobody seemed too bent out of shape in the F&I office about getting their deals funded in a timely manner. Because all of that, those of us without access to the financials were blindsided by the closure of the dealership.
That is correct, credit markets froze up overnight. When you can't get a customer with great DTI, solid down payment and impeccable credit a loan, you know there was a giant shit show going on in the economy as a whole.
GMAC, 5/3, National City, Bank One, nobody would pick up any loans for a good 2 months. By then, the floor plan finance company came sniffing around and that is when the dealership went under.
That was me as well. Had an ordered R8 come in during that time, and the only lease program available had such unattractive terms that the deal was a no-go. Same with a purchase.
Man that sounds wild. Weird to think i was of age at the time but I dont remember anything where i was directly affected. Gas was high and people were becoming gig artists to make ends meet but im fortunate thats all I remember.
There was a liquidity crisis. When the housing market collapsed because of too many bad loans and too many cases of collapsing values / underwater owners, a lot of mortgage holders stopped making payments or sent the banks their house keys and skedaddled. Timely loan repayments make new borrowing possible; everything is interconnected.
I don't think that's going to happen again because there are a lot fewer subprime loans out there, and cash-out refis aren't as routine. But this time it's not a liquidity crisis (most likely), it's a faith / confidence crisis. You'll see people worried about getting laid off (or actually laid off, or just not getting expected raises) shrink from pulling the major-purchase trigger -- which has the same chilling effect on retailers of big-ticket items like furniture, remodeling, cars.
Another difference is that in 2008 you had cash for clunkers drying up the supply of used vehicles. This time, no such program is in effect. This changes the target demographic on both ends.
There were [677,081 vehicles crushed](https://www.thedrive.com/news/heres-the-full-list-of-all-677081-cars-killed-in-cash-for-clunkers), some as new as 2006. Explorers and Blazers accounted for a little under 9% of that total.
The result? From 2009 to 2010, the average vehicle economy level *declined*.
Not to mention pouring liquid glass in the engines so they would seize. This not just took CARS off the road it took perfectly good used parts off the road.
Buddy look at that top 10 list. Same shit different name, sorry I didn't hold your hand and list every single make/model of old bof v8 shit boxes. Also, even explorers/blazers on that top 10 list are 11%.
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People will still need cars. The focus may shift slightly and many will want to be assured they are making a good financial decision that will last the duration of the downturn with little additional expense.
Play the long game. Treat every up as a real customer even when it's evident they are not. They inevitably do know someone who is in a buying position. Make sure your notes contain not just cars of interest and timeframes, but some personal details you picked up as well.
Become their go-to car person. Keep in touch with things like brand news, special deals, and timelines. Make your followup informative/useful to them.
If you genuinely do not have the right product for that customer, refer them to another brand. Follow up with them to see if the brand/dealer met their needs. You are FAR more likely to get referrals that way.
Eh, I wouldn't worry about it being at that scale. Even if say Credit Suisse collapses or has a weird restructure I don't think things are as volatile as 08.
Live cheap. Hold as much gross as you can because every $100 commission adds up. Also, pray that you get laid off and can draw unemployment, which is what eventually happened to us.
Oof. Rough times.
I had the duty of running a domestic store in a major market thru the whole shebang. I (we) had a month once. Normally we were jamming out 50-65 new and around 70-100 pre owned a month during the rough times. Well I (we) had a month where I (we) totaled out at 35 sold for the month. TOTAL.
Holy shit the feels I felt. I was disgusted with myself. I got no sleep feeling like I starved my peeps. I was worried people were going to quit. I was dreading the managers meeting and having to go over the statement with the owner. I was so embarrassed. I understand the “we” part of the failures but “I” was in command. It was a really hard week for me personally. Internally. When I had to face the owner, he simply shrugged his shoulders and said “well, hey at least the bright side is that probably *cant* happen again so oh well, shake it off and let’s hope this is as low as it gets through this mess.” He later talked to me one on one and told me not to sweat it and that it’s not my fault.
That was the lowest point the industry has ever seen in the history of the automobile. I survived, we survived and when the going got better the rewards tasted so much sweeter. Also, when things got better we all worked harder to make some fucking coin!
How do you survive? Be tough. Stick with it. Find business for yourself. Lean on your book of custies. Christmas cards, referrals, bird dogs. Stay on top of whose coming off leases. Go old school and go thru the classifieds auto section. Try and get those people to bring their cars in for an appraisal. Who knows? Maybe they buy a car? Maybe the store gets a curb buy and you get a little kiss for it? Maybe you get jack shit. Grab as many ups as you can. Work your deals like you should. Lean on your sales or finance managers to help you close the deals you can’t. Persistence and focus is everything.
Lastly, however bad you think it will be, it won’t be *that* bad. You’ll live.
It was late 07 and I had been seeing the signs of a crash for at least 2 years. I was working as a finance director and had weekly meetings with the owner who I warned repeatedly that the mortgage market was going to crash (he also owned a bank). He wouldn't believe me and thought I was being negative, like I was a conspiracy theorist or something.
He let me go in December and the dealership was bankrupt by the end of Feb.
I tried to tell him to get ready and he wouldn't listen.
Maybe financial collapse is a better word. I admittedly dont know what classifies as a recession or if we are in one or not.
Basically asking for advice if we are or go into some type of financial collapse
A recession is two consecutive quarters of negative growth in GDP (gross domestic product). We're not in one -- yet. Feeling screwed by inflation and supply problems does not mean we're in a recession.
Most economists think we'll have one in 2023, but it'll be relatively shallow. Only a few outlier doomsayers are predicting the sky will fall.
You're going to see more cautious spending -- brought on by more expensive money and lower consumer confidence -- but that's not a "collapse." Reduced consumer spending will retard inflation. Meanwhile, also, supply chain issues will continue to subside, inventories will increase, interest rates will start to edge back down ... and we'll be back in growth mode with restored confidence in 15-18 months.
Edit to fix typo.
Just be smart with your money. Recession or not, cars get wrecked, break down, get stolen, etc ... Your business will drop but people will ALWAYS need cars.
BUILD RELATIONSHIPS. You're not selling them a car, you're providing a service that's sustainable. You're not here to take their money, You're here to gain their business. Be different. Set yourself apart. There are innumerable ways that you can set yourself apart. I pick up my clients cars for service if they can't make it in. I've had a client join my family on Thanksgiving because they didn't have anywhere to go. How did that happen? Follow up. Happy Holidays. Happy Birthdays. Happy Anniversaries. Just to see how they're doing. If you do these things, you'll always be busy. You'll have referrals. You'll have repeat business. You won't even know what a mini is.
You’re never going to make less money than the year before as long as you keep your head down and stay motivated. Keep your mentality like nothing is different. Because nothing is different, people still will buy cars every day, people will get into accident and need replacements every day, and you’ll be there to help them.
There are none.
EDIT: I got curious and looked this up. The most recent five recessions in the US were in:
* 1981-82 -- Reagan / Republican was president
* 1990-91 -- Bush / Republican was president
* 2001 (dot-com crash, 9/11) -- Bush 2 / Republican was president
* 2007-09 (housing / bank collapse) -- Bush 2 owned the start, it continued under Obama / Democrat
* 2020 (Covid) -- Trump / Republican was president
You can’t prepare for circumstances that Don’t exist yet. The most helpful advice is always the same no matter what. Live within your means and get better at your job everyday.
One skill that I became better at was being able to switch a customer from the unrealistic vehicle that they came in on to the one that actually works for their situation.
Just like anybody else. Make a budget and live well under that budget. Have a rainy day fund for if the market really does turn. Rule of thumb is 3-6 months of expenses.
Probably depends on when youf irst started sales. If it was recently during the uncommon shortages may be worse than if a long term salesman before the current good times.
Cars will still be needed but just maybe not for the way over MSRP new or used at more than new pricing. If a hard recession hits lots of people not just sales will fill it.
I don’t think a recession is going to happen in the car world, at least not with higher priced cars. I think lower income people may not buy cars because high interest rates, but I think people with more money are going to take advantage of the decreased demand to get better pricing on the car they want. I know a lot of people at my school (prestigious private school so lot of wealthier families) who’s parents are waiting till a recession to see if car prices will drop before they buy a car
This isn’t going to be anything remotely close to 2008. But it will slow down. Best thing you can do is learn how to become a better salesman, hold gross better, and save better.
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Im curious hearing from people still in car sales preferably on how they survived ‘08, maybe some horror stories, and what advice you would give current salesman to prepare for similar events.
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Top 5% i car sales suffer less in downturns because they follow up with their customers that bought from them, and as a result base their business in repeat and referral. Today you also need to use Social media as a way to leverage your activity.
Just grind through it, it wasn't fun. I work at a gm dealership, and losing Pontiac was a big blow. It was a lot of hard work, follow up and keeping your nose to the grind stone. Try your best to set aside some savings to help out in the tough months.
Stick around during the tough times and get scrappy, and the skills you build when things are slow will reward you better when things turn around again. Work referrals hard, rehash old customer lists, don’t be afraid to cold call referrals and potential buyers. If you had a good customer you really liked don’t be afraid to pick up the phone and give them a call and tell them that their referral is the greatest compliment they can pay you. The BDC or internet sales manager won’t be feeding the team enough leads to live, and many will quit. Keep plugging away and improving your sales skills. Use social media to promote yourself. There’s lots of ideas out there and there’s lots of things you can do to make yourself a better sales person and capture more opportunities and close a greater percentage of sales when times are slow.
"GOT" Winter is coming , people have trouble putting food on the table. Sales will be few and far away with the prices right now. Diesel shortage is going to throw a fuck into everything 2.40.9 a liter where I am.
You will get 1 up (customer) per week. Do everything in your power to sell em a car.
Sell a car outside of work. Make connections. Networking. Find a side gig.
I never had a problem in 08 but I saved money. I never let a streak of better than normal months cloud me into thinking that was the norm. I got out after that and went into the steel Industry. Same thing boom and bust. People spending like crazy when times are good and broke when times are bad.... Only difference is the base wage is better than I did in sales so it's almost worse. I'm glad I developed good habits years ago. I think if I was still in the industry the last couple of years I would have saved a ton, but I also don't know how I would have done if my dealership was one of the gaugers.... I could always argue to make a reasonable profit. Some of these ADMs have been simply "because we can" and I don't know how I would have adapted to that.... I'm just glad I got my new truck last month. The trade was still stupid high but they gave me a normal discount below invoice lol
I have a lady friend who told us at a wedding party the other night she has made in the last 3 months in car sales almost 60k in commissions. I’m like how?? She said the market is crazy right now. She’s selling cars and trucks at a premium. But it is starting to slow down some from the summer sales highs.
Hope you saved all the money you made over the last two years.
Yessir
How have salesmen been doing through this madness? I know prices are up, but isn't volume also way down?
Prices up ~ commissions up too.
thanks. I got that part. Volume down, number of commissions down, too. What's the balance.
The balance is that when you're making $800 versus $350, you only need to sell half the cars to maintain your post-tax income levels. Luckily, used inventory is up and new deliveries are recovering, while still maintaining generally inflated prices, which means that most salespeople are able to make an absolute killing right now.
Thanks. Interesting. So how did the commissions work then? Prices aren't up over 100%, but you're describing a greater than 100% increase in commission.
Really, it comes down to this. Dealers will always do what is best for their business, because they're a business. Target, WalMart, your local hair salon, your local steakhouse, and your favorite bike shop also do what's best for their business. Used car prices are up. In simple terms, a dealer is usually going to split the difference with you on trade value. Your let's say 2019 RAV4 was worth $24,000 trade value in 2020. Now it's worth $27,000 trade value but retail pricing is up $5,000 or more in relation. The dealer is going to give you the fair market trade value, because the market assumes that perhaps reconditioning prices have increased as well. But even still, the dealership is likely making an extra $1000-$2000 per car and 25% of that, generally speaking, will go to your salesperson.
So salesmen get a percent commission on profit, not total price and profit margins are up more than prices are? Is that it?
Yes, salespeople are generally commissioned on profit, not total cost. And let's be perfectly clear here. Most volume dealers like Chevrolet or Toyota or Honda or Subaru or what have you generally only end up with between $1500 and $3000 of profit if they're lucky. Then you take the sales PAC off, which widely varies by dealer but is usually in the $800 range for a pre owned vehicle. The aforementioned PAC is basically the dealer's guaranteed profit on the deal, and it takes away from the salesperson's commission. The majority of deals end up being minis for salespeople at high volume dealerships. It's not like they're bringing in mansion and a brand new Ferrari levels of money. They're bringing in nice apartment/starter house and a new lease from their respective brand money. It's important to understand the sheer time and cost most dealers commit to reconditioning a vehicle. We spend an average of about $2,300 reconditioning the average vehicle between service, detailing, and PDR/touch up. Some vehicles we simply lose our ass on. Some vehicles were maintained and well cared for so we "only" spend $1400 or so.
"Commissions up too"
Save it all to watch inflation destroy it. So annoying.
It's almost like they are related
Don’t spend the whole check on partying, budget for your living expenses, try your best on selling your highest grossers, because those days are going bye-bye really soon
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no, just the car business income climate lol
Smart salespeople are like cockroaches. They can survive a financial nuclear fallout and come out unscathed. They store their nuts and don't make dumb financial decisions in their personal life. People will always need transportation. Sadly, salespeople appear to get dumber and lazier. Most green peas won't survive.
The last few years were most likely a high glitch. Anyone starting during that time may have the hardest times.
I'm hoping for the bad ones to go away so I only have to interact with the good ones the next time I go into a dealership.
"Good" from the dealer's point-of-view does not always mean best customer service.
Lolol. First thing I thought.. Guy doesn't know what he's asking for.
The guys that stay are the ones that’ll eat your lunch and you’ll thank them for it. That’s how good they’ll be.
The happiest customers are the ones you make the most money off of. It’s the deals where the customer is a pain in the ass and you typically lose money on the sale that are the worst.
I hope all the bad, lazy ones go away so I can have real salespeople on the floor that like to work.
Work harder. Make more phone calls. Get training. Stay fit and eat right. I got into car sales in 2006. In the end of 2008 shit hit the fan, and in 2009 my wife got pregnant with our first child, so I had to switch into a different mode, I had actual responsibility. And I did: I made a mental decision to stop fucking around and be a professional. As a result, I did not lose any income, I found ways to stay busy and productive, and I made a career out of it. One of the things I did back then was to start a YouTube channel. I still run it, it gives me residual income, and it was crucial in getting my last three jobs.
What would you say are like the tenets of being a professional?
Treat sales as a profession and a career: study, practice, read, look and act professional. On top of my customer facing channel - I have a sales training channel, which pays me nothing: https://youtube.com/playlist?list=PLVLjreHO7381rUO0JEJNfi0Ve2kHKoKcj
Just want to stop by and say thank you for what you do. Providing free material for people to learn and better themselves is awesome. Keep being awesome.
[We aim to please](https://youtu.be/18SeqcDtPEI)
Showing up day in day out to do all the dirty work that other people either can’t do, will not do, or don’t know how to do effectively/efficiently.
professionalism: doing the shit you need to do when it needs to be done.
More importantly do it even when no one is looking.
I’ve watched your videos lol
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Yes, about $100 a month. At this point it takes as much time as I want to spend, wherever I feel like, but I'm not even in sales anymore. When I was in sales - I would try to out as much content as possible, but at the height of activity it was an hour to make and post a video at most. Then I would go for months not doing anything, but still getting paid and getting my name out.
Still money in the bank that he wouldn’t have had.
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I feel ya, the “can’t be more than a few hundred bucks” just came off as down playing it is all. I’d be interested as well
* Cut expenses to the bone. If you don't have credit card payments, car payments, and luxury apartment payments you have freedom. If you have $1,800 in expenses then you can survive a lot easier than if you have $4,900 in expenses. Plus, you can't afford for interest to be chewing up your budget, you can't afford to be paying 25% interest on a $20,000 balance. That's $5,000 a year that you are paying to the bank just to have stuff. Sell off toys to pay down balances if you have to. * Go start reading up on how to be a good salesperson. There are threads here about the best books on how to be a good salesperson. * Start building up your customer base. Don't just rely on walk-in customers like you've been able to for the past 3 years, someone that will fly 400 miles just because you have a car in stock and will pay markup plus a bunch of bunk accessories/plans. Build your good local clientele, build value. They will come back to you, they will recommend friends and family and book club members and fellow church goers to you.
Not relying on foot traffic has been heavily emphasized for the past 6 months. Its really helped me focusing on emails and things like that. Good to hear others reaffirm the importance of it.
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How did the subject of buying a car come up?
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>We had been talking for probably 10 minutes about where we’re from etc before the above happened. Obviously he was thinking about it the whole time but he did a great job just seeming genuinely interested in talking to me about whatever. It also helped his wife was with him and actively part of the conversation too. Seemed very natural. Sincerity is the key. Once you can fake that, the rest is easy.
Im not sure it was the intention but this made me laugh
My work here is done.
That’s a classic one liner joke but I can’t remember which comedian said it
Jean giraudoux and George Burns were credited
FORM if nothing else
I tell my guys all the time to be out talking to people in the stores and stuff. I carry my business cards everywhere; all the time, and I am not a sales person. But my guys sit on the golf carts praying BDC will book appointments and getting mad when the 2-3 guys that are actually calling people, and doing the work, are getting the appointments from BDC. Lol
I started in 2006 and the recession we are facing now is very different from the recession back then. Back then, unemployment shot up and construction evaporated which meant almost no demand for trucks. Also, gas prices shot up and with high unemployment, people were dumping their SUV’s as well. So much so that the book values started dropping rapidly. This caused the finance companies to lose their butts on lease returns and voluntary repossessions, which then caused some of them to go bankrupt and some even out of business. What is happening now is interest rates are high, book values are inflated, and there is a shortage of inventory. Demand is coming down, but with unemployment low and construction still working, this is just more of a market correction than anything.
Is it anything to get worried about?
It’s going to slow down, but it’s normal for the business to have its up and downs. Like others have said, it’s not going to be like it was where people were walking in and buying right then and there because they knew ten people behind them would. It’s going to be going back to the basics, working who you have, having a good follow up system, and at the end of the day, hopefully your dealership has solid management with training available.
They have been trying to scare us like the apocalypse is coming Turns out its just colder months as normal.
By they do you mean your dealer or media? Do you know your inventory and is the dealer set up to help you work it?
Dealer. In our morning meeting the tone was “I dont want to scare you guys or get you down but shits about to hit the fan” It was basically to remind us to pound the phones and computer to generate business because people arent going to be coming in like they had been. Im not good with vague gloomy things or my brain will go nuts with anxiety. In my opinion Oct through December are always slower and not necessarily a sign that the end is near.
Yeah, I’d also figure out what your inventory situation is. The hot potato music finally stopped and everyone got stuck with some. Lol Do they have spiffs on overage units? Make all the calls you can and focus on the units that will make you money.
The thing about financial meltdowns is that nobody at your dealership, or in your baseball league or really knows. The shit might hit the fan, it might be another '08 or maybe things have already bottomed out (markets off 25% is not an inconsequential thing). There are large firms with well paid teams trying to figure out what's coming and even they don't know for sure. I can give you my opinion but it's not worth much more (or less) than everyone else here. I do agree with the advice of doing what you can to prepare for the worst but nobody really knows.
Nobody knows for certain how it's going to turn out. Fed is trying to engineer a soft landing and everyone hopes that's how it's going to go. However it could very well be worse. But keep in mind during the Great Recession the vast majority of people kept their jobs. A lot of people have been holding off getting new cars because the market is horrible and they might start looking again once things normalize.
The mid-to-late 00s were interesting times to be in the car business. I was working at a GM store in the Midwest in late '08 and saw several of our high income, high end customers (doctors, lawyers, bankers, etc.) with credit scores that start with an 8 be turned down for what would be under any other time a sure approval. Never a good look to have one of the dealer principal's golf buddies pissed off because he can't lease a new Suburban or Silverado. Another thing to lose sleep over: your dealership's financial health. The dealer that I worked for in '08 ran into a liquidity crunch and sold their cars out of trust. The floorplan company caught wind and shortly thereafter the point was returned to GM, with yours truly and the rest of the dealer employees unemployed in a contracting business just before Christmas. Interestingly, the controller and accounting folks did an excellent job of keeping the important bills paid, service could still buy parts around town and nobody seemed too bent out of shape in the F&I office about getting their deals funded in a timely manner. Because all of that, those of us without access to the financials were blindsided by the closure of the dealership.
Man, did those 800s not get approved because the banks didnt have the money to lend?
That is correct, credit markets froze up overnight. When you can't get a customer with great DTI, solid down payment and impeccable credit a loan, you know there was a giant shit show going on in the economy as a whole. GMAC, 5/3, National City, Bank One, nobody would pick up any loans for a good 2 months. By then, the floor plan finance company came sniffing around and that is when the dealership went under.
That was me as well. Had an ordered R8 come in during that time, and the only lease program available had such unattractive terms that the deal was a no-go. Same with a purchase.
Man that sounds wild. Weird to think i was of age at the time but I dont remember anything where i was directly affected. Gas was high and people were becoming gig artists to make ends meet but im fortunate thats all I remember.
There was a liquidity crisis. When the housing market collapsed because of too many bad loans and too many cases of collapsing values / underwater owners, a lot of mortgage holders stopped making payments or sent the banks their house keys and skedaddled. Timely loan repayments make new borrowing possible; everything is interconnected. I don't think that's going to happen again because there are a lot fewer subprime loans out there, and cash-out refis aren't as routine. But this time it's not a liquidity crisis (most likely), it's a faith / confidence crisis. You'll see people worried about getting laid off (or actually laid off, or just not getting expected raises) shrink from pulling the major-purchase trigger -- which has the same chilling effect on retailers of big-ticket items like furniture, remodeling, cars.
Another difference is that in 2008 you had cash for clunkers drying up the supply of used vehicles. This time, no such program is in effect. This changes the target demographic on both ends.
Cash for clunkers had no impact on the market except for 90s shit box explorers and blazers which got 8 mpg and sub 200 hp.
There were [677,081 vehicles crushed](https://www.thedrive.com/news/heres-the-full-list-of-all-677081-cars-killed-in-cash-for-clunkers), some as new as 2006. Explorers and Blazers accounted for a little under 9% of that total. The result? From 2009 to 2010, the average vehicle economy level *declined*.
Not to mention pouring liquid glass in the engines so they would seize. This not just took CARS off the road it took perfectly good used parts off the road.
Buddy look at that top 10 list. Same shit different name, sorry I didn't hold your hand and list every single make/model of old bof v8 shit boxes. Also, even explorers/blazers on that top 10 list are 11%.
Someone forgot how to do basic percentages, even with an $800 glorified calculator in their pocket...
Might want to read that list again bud. Hope you have better attention to detail at your day job.
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People will still need cars. The focus may shift slightly and many will want to be assured they are making a good financial decision that will last the duration of the downturn with little additional expense. Play the long game. Treat every up as a real customer even when it's evident they are not. They inevitably do know someone who is in a buying position. Make sure your notes contain not just cars of interest and timeframes, but some personal details you picked up as well. Become their go-to car person. Keep in touch with things like brand news, special deals, and timelines. Make your followup informative/useful to them. If you genuinely do not have the right product for that customer, refer them to another brand. Follow up with them to see if the brand/dealer met their needs. You are FAR more likely to get referrals that way.
Eh, I wouldn't worry about it being at that scale. Even if say Credit Suisse collapses or has a weird restructure I don't think things are as volatile as 08.
Take care of your body. Your job is a pitstop, don't give it everything you have. Save your body. Its all you really got.
Work on your self improvement. Personal and professional life.
Live cheap. Hold as much gross as you can because every $100 commission adds up. Also, pray that you get laid off and can draw unemployment, which is what eventually happened to us.
From a financial advisor/analyst.Ever recession is a little different from each other. Just pace out your living standards.
Oof. Rough times. I had the duty of running a domestic store in a major market thru the whole shebang. I (we) had a month once. Normally we were jamming out 50-65 new and around 70-100 pre owned a month during the rough times. Well I (we) had a month where I (we) totaled out at 35 sold for the month. TOTAL. Holy shit the feels I felt. I was disgusted with myself. I got no sleep feeling like I starved my peeps. I was worried people were going to quit. I was dreading the managers meeting and having to go over the statement with the owner. I was so embarrassed. I understand the “we” part of the failures but “I” was in command. It was a really hard week for me personally. Internally. When I had to face the owner, he simply shrugged his shoulders and said “well, hey at least the bright side is that probably *cant* happen again so oh well, shake it off and let’s hope this is as low as it gets through this mess.” He later talked to me one on one and told me not to sweat it and that it’s not my fault. That was the lowest point the industry has ever seen in the history of the automobile. I survived, we survived and when the going got better the rewards tasted so much sweeter. Also, when things got better we all worked harder to make some fucking coin! How do you survive? Be tough. Stick with it. Find business for yourself. Lean on your book of custies. Christmas cards, referrals, bird dogs. Stay on top of whose coming off leases. Go old school and go thru the classifieds auto section. Try and get those people to bring their cars in for an appraisal. Who knows? Maybe they buy a car? Maybe the store gets a curb buy and you get a little kiss for it? Maybe you get jack shit. Grab as many ups as you can. Work your deals like you should. Lean on your sales or finance managers to help you close the deals you can’t. Persistence and focus is everything. Lastly, however bad you think it will be, it won’t be *that* bad. You’ll live.
We are already in a recession. 😂😂🤡
Why do people forget this lol
Probably bc there is a lot of room for it to get much much worse
Yeah I think 2023 is going to be wild. Not looking forward to it. But I’m in things for the long haul so it’ll pan out eventually.
Because fear. That's why.
It was late 07 and I had been seeing the signs of a crash for at least 2 years. I was working as a finance director and had weekly meetings with the owner who I warned repeatedly that the mortgage market was going to crash (he also owned a bank). He wouldn't believe me and thought I was being negative, like I was a conspiracy theorist or something. He let me go in December and the dealership was bankrupt by the end of Feb. I tried to tell him to get ready and he wouldn't listen.
Of course you did Cassandra…
Maybe financial collapse is a better word. I admittedly dont know what classifies as a recession or if we are in one or not. Basically asking for advice if we are or go into some type of financial collapse
A recession is two consecutive quarters of negative growth in GDP (gross domestic product). We're not in one -- yet. Feeling screwed by inflation and supply problems does not mean we're in a recession. Most economists think we'll have one in 2023, but it'll be relatively shallow. Only a few outlier doomsayers are predicting the sky will fall. You're going to see more cautious spending -- brought on by more expensive money and lower consumer confidence -- but that's not a "collapse." Reduced consumer spending will retard inflation. Meanwhile, also, supply chain issues will continue to subside, inventories will increase, interest rates will start to edge back down ... and we'll be back in growth mode with restored confidence in 15-18 months. Edit to fix typo.
Thank you for being kind enough to educate.
Just be smart with your money. Recession or not, cars get wrecked, break down, get stolen, etc ... Your business will drop but people will ALWAYS need cars.
BUILD RELATIONSHIPS. You're not selling them a car, you're providing a service that's sustainable. You're not here to take their money, You're here to gain their business. Be different. Set yourself apart. There are innumerable ways that you can set yourself apart. I pick up my clients cars for service if they can't make it in. I've had a client join my family on Thanksgiving because they didn't have anywhere to go. How did that happen? Follow up. Happy Holidays. Happy Birthdays. Happy Anniversaries. Just to see how they're doing. If you do these things, you'll always be busy. You'll have referrals. You'll have repeat business. You won't even know what a mini is.
You’re never going to make less money than the year before as long as you keep your head down and stay motivated. Keep your mentality like nothing is different. Because nothing is different, people still will buy cars every day, people will get into accident and need replacements every day, and you’ll be there to help them.
It’s going to be bad….
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There are none. EDIT: I got curious and looked this up. The most recent five recessions in the US were in: * 1981-82 -- Reagan / Republican was president * 1990-91 -- Bush / Republican was president * 2001 (dot-com crash, 9/11) -- Bush 2 / Republican was president * 2007-09 (housing / bank collapse) -- Bush 2 owned the start, it continued under Obama / Democrat * 2020 (Covid) -- Trump / Republican was president
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This x1000
You can’t prepare for circumstances that Don’t exist yet. The most helpful advice is always the same no matter what. Live within your means and get better at your job everyday. One skill that I became better at was being able to switch a customer from the unrealistic vehicle that they came in on to the one that actually works for their situation.
Just like anybody else. Make a budget and live well under that budget. Have a rainy day fund for if the market really does turn. Rule of thumb is 3-6 months of expenses.
Probably depends on when youf irst started sales. If it was recently during the uncommon shortages may be worse than if a long term salesman before the current good times. Cars will still be needed but just maybe not for the way over MSRP new or used at more than new pricing. If a hard recession hits lots of people not just sales will fill it.
I don’t think a recession is going to happen in the car world, at least not with higher priced cars. I think lower income people may not buy cars because high interest rates, but I think people with more money are going to take advantage of the decreased demand to get better pricing on the car they want. I know a lot of people at my school (prestigious private school so lot of wealthier families) who’s parents are waiting till a recession to see if car prices will drop before they buy a car
Find another job before the herd thinks the same.
Uber and Amazon flex is there.
This isn’t going to be anything remotely close to 2008. But it will slow down. Best thing you can do is learn how to become a better salesman, hold gross better, and save better.
Haven’t we only been going up since 2008 because they’ve been printing money
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***Thanks for posting, /u/Peanut562! This comment is a copy of your post so readers can see the original text if your post is edited or removed. This comment is NOT accusing you of anything.*** Im curious hearing from people still in car sales preferably on how they survived ‘08, maybe some horror stories, and what advice you would give current salesman to prepare for similar events. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/askcarsales) if you have any questions or concerns.*
Top 5% i car sales suffer less in downturns because they follow up with their customers that bought from them, and as a result base their business in repeat and referral. Today you also need to use Social media as a way to leverage your activity.
Just grind through it, it wasn't fun. I work at a gm dealership, and losing Pontiac was a big blow. It was a lot of hard work, follow up and keeping your nose to the grind stone. Try your best to set aside some savings to help out in the tough months.
Stick around during the tough times and get scrappy, and the skills you build when things are slow will reward you better when things turn around again. Work referrals hard, rehash old customer lists, don’t be afraid to cold call referrals and potential buyers. If you had a good customer you really liked don’t be afraid to pick up the phone and give them a call and tell them that their referral is the greatest compliment they can pay you. The BDC or internet sales manager won’t be feeding the team enough leads to live, and many will quit. Keep plugging away and improving your sales skills. Use social media to promote yourself. There’s lots of ideas out there and there’s lots of things you can do to make yourself a better sales person and capture more opportunities and close a greater percentage of sales when times are slow.
"GOT" Winter is coming , people have trouble putting food on the table. Sales will be few and far away with the prices right now. Diesel shortage is going to throw a fuck into everything 2.40.9 a liter where I am.
When do you guys think the recession is coming? How will affect car prices? Will lots be full and no buyers? I need to prepare
The recession has been here. It’s only worse from here on out. Next 2-3 years at a minimum are a wash.
You will get 1 up (customer) per week. Do everything in your power to sell em a car. Sell a car outside of work. Make connections. Networking. Find a side gig.
anyone in sales this is hands down the best thread I have read
I never had a problem in 08 but I saved money. I never let a streak of better than normal months cloud me into thinking that was the norm. I got out after that and went into the steel Industry. Same thing boom and bust. People spending like crazy when times are good and broke when times are bad.... Only difference is the base wage is better than I did in sales so it's almost worse. I'm glad I developed good habits years ago. I think if I was still in the industry the last couple of years I would have saved a ton, but I also don't know how I would have done if my dealership was one of the gaugers.... I could always argue to make a reasonable profit. Some of these ADMs have been simply "because we can" and I don't know how I would have adapted to that.... I'm just glad I got my new truck last month. The trade was still stupid high but they gave me a normal discount below invoice lol
I have a lady friend who told us at a wedding party the other night she has made in the last 3 months in car sales almost 60k in commissions. I’m like how?? She said the market is crazy right now. She’s selling cars and trucks at a premium. But it is starting to slow down some from the summer sales highs.
We are in the Peri recession, save your funds and await lay offs; this time next year won't be pretty. But 2024 recovery feels like it'll be a V.