You will be greeted by a friendly professional, someone who
will be sincerely interested in your want and needs. They will help you discover
the vehicle that works for your budget, meets your needs, and allows you to
feel great about your decision (we often say you need to feel great when you
walk out to your driveway each day!). There is no denying there is a strong
emotional component to buying a car - we fully understand that. “Why can some dealers “knock off”
$1,000 or $2,000 from the prices on their pre-owned cars?” "Will kbb.com or Edmunds.com give me a reliable
value on my trade?"
“I haven’t bought a car before and
I’m somewhat anxious. What should I expect?”
You should expect it to be fun, to be exciting (hey, you’re getting a
new car!), but sadly for most people it's a chore. This has been, and continues
to be, a very competitive industry. Many dealers resort to underhanded tactics
to sell - thus giving dealers the negative reputation they have (and deserve)
- and why car buying is not in anyone’s “Top 10 List” of things
to do. We can't change other dealers’ tactics; we can only offer an outstanding
alternative. We hire women and men who have never sold cars before, we price
aggressively to avoid the games, and we are ethical. So….what can you
expect at Planet?
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"How much do you make on a new car?"
After expenses, almost nothing. Really. Here's how. Nationally, including all
manufacturers, the average gross profit on a new car is a little over a $1,000
per car. We are about average. (Just a few manufacturers that limit supply,
such as Lexus, have gross profit margins up to $4,000.) Note that gross profit
is different than net profit. With that $1,000 gross profit per car, we have
to pay the salesperson, utilities, advertising---the list goes on and on. Our
total expenses per month are over $225,000. Our monthly rent alone is $24,000.
Even if we sell a lot of cars, there's not much left over after paying all these
expenses. So why do we bother to sell them at all? Our business withers without
them. We need the new car sales to get good trades and to keep our shop busy.
Also, we need Chryslers, Jeeps, and Dodges getting in fender-benders to keep
our Parts Department and Collision Center busy.
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We wondered that as well and the answer is simple. A large majority of dealers
rely on what is termed “Floor Traffic.” These are customers that
walk through the door who have generally not preformed much or any research
and unknowingly pay too much for a vehicle. They may feel they got a great deal
because the vehicle was easily "discounted." The discount was given
because the vehicle was well overpriced to begin with. We are in Franklin, a
short ways off I-495, in a relatively small area, and we rely on very aggressive
internet pricing to attract customers not local to us. We believe it is better
to avoid these tactics and price very fairly – most often much less than
others.
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“Where do your pre-owned cars come from?”
Most dealers rely on trades and basic rental cars. We scour the Eastern US,
from Orlando, FL to St. Louis, MO to Pittsburg, PA to cherry pick only the best.
Often these are executive demo cars and the nicest lease returns. We are extremely
careful not to pay too much; we must be careful in order for our sales strategy
to work - aggressive pricing to attract customers from all over New England
and sometimes beyond. We do also retail some trades, however, only the cleanest
and most mechanically sound.
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On our website, we actually have a link called "Ballpark Your Trade"
and it connects directly to Kelly Blue Book. We chose the word "Ballpark"
very intentionally, because these consumer sites don't even agree with each
other. Further, you'll notice that none of the sites will buy your car for the
number they spit out. Determining the current market value of a car is an art
and a science. We pay only partial attention to the consumer websites. We subscribe
to auction data services that show us the prices at which people are actually
buying and selling vehicles. We also pick the brain of our buyer, who spends
most of his days at the auction---buying, selling, and observing thousand of
cars being bought and sold. And, we use our intuition. Ever try to sell a purple
truck? Let's just say it's worth less than another color! (For more detail on
this topic, visit "Ballpark Your Trade")
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"Are vehicle service contracts on cars a good idea?"
Most likely yes. They may extend the life of your car and could provide you
with a higher resale value. Also they are very affordable. For 2%-6% of the
price of a Chrysler, Jeep, or Dodge, you can cover a $30,000 car up to 7 years
or 100,000 miles. This adds very little to a monthly payment and you can choose
a plan to fit your specific needs. This also allows for easier budgeting by
eliminating unexpected vehicle repair costs. The majority of our customers purchase
a Vehicle Service Contract because they are such a good value. If you choose
to wait and add one at a later date, you need to look at these much more carefully.
Make sure you buy one of these from a reputable dealer to ensure you have some
recourse if you encounter a problem with the company. And if you choose not
to service with the dealership, make sure your mechanic will accept the warranty
you buy.
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"What about Gap Insurance? What is it?"
Gap Insurance covers the "gap" if your car is totaled and you owe
more on it than it is worth. Let's say your 2006 Grand Cherokee Limited is stolen
and is never recovered. Your insurance company will pay you what it's worth,
say $23,000. But what if you owe the bank $26,000? (This is actually quite common.
When newer, your car typically depreciates faster than you pay down the loan
monthly. Unless you put money down, you typically owe more than it's worth for
a couple years until the depreciation curve flattens out and you begin paying
off the loan faster than it depreciates.) In this example, without Gap Insurance,
you have to pay the bank $3,000 just to pay off the loan. Gap insurance would
pay your deductible and the $3,000, preserving your credit rating. Gap insurance
is usually a few dollars a month on a five-year loan. It's a good idea for people
who owe more on their cars than what they are worth. If you put several thousand
dollars down when you buy your car, you probably don't need it.
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"Why are there so few women salespeople in the car business?"
Most women don't want to work in a typical dealership with locker-room humor,
shady ethics, unbearably long hours, abusive managers, etc. Some are fearful
of being associated with the polyester, pinky-ring-wearing stereotype of a typical
car sales "guy." Some customers can be surprisingly rude and adversarial,
and many women don't want to endure this conflict. We have worked very hard
to attract women because they are consistently our top producers. We have found
that women typically bring excellent social skills needed to help people through
a big financial and emotional decision. Also, the majority of car purchases
are influenced by women, and many like to work with other women. Currently,
two of Planet’s seven Sales Guides are women (almost 1 out of 3 versus
about 1 out of 50 nationally).
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