Ask a car salesman anything...anything at all.
Discussion
DanL said:
urely you’d price this into the deal? Appreciate that the amount they may want to pay is variable, but assuming it’s just the deposit paid on card then price for the worst case and anything less is a bonus?
This is obvious, so there’s a clearly a reason you guys don’t do this, but I’m curious what the reason is. Are you really *that* price competitive that 1-2% on a 1k deposit will lose a deal?
We actively discourage c/c payments now but will accept them on a small deposit only. This is obvious, so there’s a clearly a reason you guys don’t do this, but I’m curious what the reason is. Are you really *that* price competitive that 1-2% on a 1k deposit will lose a deal?
I've had a few where you qualify the customer is paying by BACS or debit card in advance ( I make it very clear we do not accept CC for balances) and then when you're sitting down a week later on handover they still whip out a CC like the conversation never happened. Got a car fully prepped that has been off sale for a week and what do you do? You can't charge them for it and they become adamant it's their only means of payment despite the balance payment terms being signed on the invoice.
I've had a couple wait another week or so for cleared funds, cancelled a couple of deals and let a couple go through on overage stock.
Be interested on your views guys?
(all buyers are liars strikes again)
lord trumpton said:
I have a small car (not sales) related business and have a card terminal for customer payments.
I used to accept credit cards and advise of a few if they wished to use one.
Now that option has gone then I don't accept credit cards at all...theres no way I'm taking a slice off my bottom to fund the customers luxury of paying in the tick.
It'll cost you in the long run.I used to accept credit cards and advise of a few if they wished to use one.
Now that option has gone then I don't accept credit cards at all...theres no way I'm taking a slice off my bottom to fund the customers luxury of paying in the tick.
Dan W. said:
whats fool hardy about it, it costs dealerships money to take cards so why should we swallow the costs ?
I'm assuming you've got a parts department ?If so , the cost of invoicing / credit checks and the risk of non payment after giving at least 30 day's credit far outweigh the nominal cost of card transaction fees , if you're not happy with the fees you need to shop around for a better price , like everything there's a lot of alternative options out there.
Buster73 said:
Dan W. said:
whats fool hardy about it, it costs dealerships money to take cards so why should we swallow the costs ?
I'm assuming you've got a parts department ?If so , the cost of invoicing / credit checks and the risk of non payment after giving at least 30 day's credit far outweigh the nominal cost of card transaction fees , if you're not happy with the fees you need to shop around for a better price , like everything there's a lot of alternative options out there.
I can understand your stance on paying the bulk, if not all, the sale price on a CC but for deposits up to a nominal value to hold the car (say £500) I think is reasonable. After all, all retail outlets take cards and cost of accepting cards should be considered a cost of doing business.
Dan W. said:
whats fool hardy about it, it costs dealerships money to take cards so why should we swallow the costs ?
As you’re a business and you want to appeal to customers and offering maximum flexibility in terms of payment ability, maybes??It costs money to bank full stop - card payments reduce risk and increase speed - it’s simple.
I’m a partner in a small business and taking cards is a total no-brainier esp considering the minor increase of the bottom line pricing
There's a difference between payments for car purchases and payments for other types of goods and services from both the retailers' and the customers' points of view.
Many other types of purchase, whether in a garage environment or in the wider market, are any combination of the following: frequent / low value / high margin / impulse or spontaneous. For these the effects of card charges can be minor as a percentage of profits, and the effect of saying "cash only" or similar may harm volumes.
Car purchases on the other hand are infrequent / high value / low margin / planned purchases. In these instances it can be beneficial to the retailer and of negligible cost or inconvenience to the purchaser to arrange to pay by a different method.
Of course most places will still accept a deposit by credit card because that is a ( relatively ) low value sum and possibly unplanned or spontaneous on the part of the customer. Equally how many sales people have been stood by the PDQ machine at handover with a customer angry and embarrassed because his bank have declined his 5 figure transaction on a Saturday afternoon. Much easier to do a Faster Payment bank transfer for those kind of sums.
Many other types of purchase, whether in a garage environment or in the wider market, are any combination of the following: frequent / low value / high margin / impulse or spontaneous. For these the effects of card charges can be minor as a percentage of profits, and the effect of saying "cash only" or similar may harm volumes.
Car purchases on the other hand are infrequent / high value / low margin / planned purchases. In these instances it can be beneficial to the retailer and of negligible cost or inconvenience to the purchaser to arrange to pay by a different method.
Of course most places will still accept a deposit by credit card because that is a ( relatively ) low value sum and possibly unplanned or spontaneous on the part of the customer. Equally how many sales people have been stood by the PDQ machine at handover with a customer angry and embarrassed because his bank have declined his 5 figure transaction on a Saturday afternoon. Much easier to do a Faster Payment bank transfer for those kind of sums.
Wooda80 said:
There's a difference between payments for car purchases and payments for other types of goods and services from both the retailers' and the customers' points of view.
Many other types of purchase, whether in a garage environment or in the wider market, are any combination of the following: frequent / low value / high margin / impulse or spontaneous. For these the effects of card charges can be minor as a percentage of profits, and the effect of saying "cash only" or similar may harm volumes.
Car purchases on the other hand are infrequent / high value / low margin / planned purchases. In these instances it can be beneficial to the retailer and of negligible cost or inconvenience to the purchaser to arrange to pay by a different method.
Of course most places will still accept a deposit by credit card because that is a ( relatively ) low value sum and possibly unplanned or spontaneous on the part of the customer. Equally how many sales people have been stood by the PDQ machine at handover with a customer angry and embarrassed because his bank have declined his 5 figure transaction on a Saturday afternoon. Much easier to do a Faster Payment bank transfer for those kind of sums.
This.Many other types of purchase, whether in a garage environment or in the wider market, are any combination of the following: frequent / low value / high margin / impulse or spontaneous. For these the effects of card charges can be minor as a percentage of profits, and the effect of saying "cash only" or similar may harm volumes.
Car purchases on the other hand are infrequent / high value / low margin / planned purchases. In these instances it can be beneficial to the retailer and of negligible cost or inconvenience to the purchaser to arrange to pay by a different method.
Of course most places will still accept a deposit by credit card because that is a ( relatively ) low value sum and possibly unplanned or spontaneous on the part of the customer. Equally how many sales people have been stood by the PDQ machine at handover with a customer angry and embarrassed because his bank have declined his 5 figure transaction on a Saturday afternoon. Much easier to do a Faster Payment bank transfer for those kind of sums.
I can safely say that we haven’t lost a deal in the 18 or so months since we imposed the limits due to not taking debit/credit cards for full payment (we hardly ever took credit cards for full payment anyway)
Butter Face said:
This.
I can safely say that we haven’t lost a deal in the 18 or so months since we imposed the limits due to not taking debit/credit cards for full payment (we hardly ever took credit cards for full payment anyway)
What the actual fk ? No cards for payment ? Are you insane ? I certainly wouldn’t be buying anything from you. Faster payments indeed! Remove card payments and the dealer has even less of a reason to exist (compared to the internet) and charge ridiculous margins for!I can safely say that we haven’t lost a deal in the 18 or so months since we imposed the limits due to not taking debit/credit cards for full payment (we hardly ever took credit cards for full payment anyway)
bob2146 said:
Butter Face said:
This.
I can safely say that we haven’t lost a deal in the 18 or so months since we imposed the limits due to not taking debit/credit cards for full payment (we hardly ever took credit cards for full payment anyway)
What the actual fk ? No cards for payment ? Are you insane ? I certainly wouldn’t be buying anything from you. Faster payments indeed! Remove card payments and the dealer has even less of a reason to exist (compared to the internet) and charge ridiculous margins for!I can safely say that we haven’t lost a deal in the 18 or so months since we imposed the limits due to not taking debit/credit cards for full payment (we hardly ever took credit cards for full payment anyway)
But yes, no cards for full payment, £500 max unless explicitly agreed by a director.
I dare say that for 99.9% of the (non PH company director types) general public it’s really a non issue, some write cheques and most just pay us by bank transfer, no hassle, no drama, no arguments. If someone doesn’t want to deal with us because we won’t take a debit card then, well, c’est la vie.
Edited by Butter Face on Sunday 25th March 20:08
Not taking credit cards for the full balance I understand on cost grounds, but debit cards I don’t quite get. I’ve always paid for new cars that way, and I’ve probably bought a car every other year or so (I pay for both cars in our household...). In fact I bought one 3 weeks ago by debit card.
I’d be really reluctant to send cash by bank transfer before picking up the car - we’ve all heard of businesses going bust between taking cash and delivering goods... I’m not prepared to take a £40k, £30k, £20k or even £10k risk on that... I’d be looking for another dealer! Or, just finance the car and settle shortly after. Maybe that’s what they want - finance commission
I’d be really reluctant to send cash by bank transfer before picking up the car - we’ve all heard of businesses going bust between taking cash and delivering goods... I’m not prepared to take a £40k, £30k, £20k or even £10k risk on that... I’d be looking for another dealer! Or, just finance the car and settle shortly after. Maybe that’s what they want - finance commission
PSRG said:
Maybe that’s what they want - finance commission
Not really, you settle it soon after and we get any commission taken back. I just had a case where a customer defaulted 54 months into a 60 month agreement and the finance company took back the original commission paid, but that’s a digression....Dan W. said:
whats fool hardy about it, it costs dealerships money to take cards so why should we swallow the costs ?
Do you personally use cards to pay for things like groceries and petrol? Do Tesco, Sainsbury’s et al charge for using cards? Why should a car dealer be different to pretty much every other business? It’s part of your business expenses which should be factored in to the figures behind the scenes. Butter Face said:
Not really, you settle it soon after and we get any commission taken back. I just had a case where a customer defaulted 54 months into a 60 month agreement and the finance company took back the original commission paid, but that’s a digression....
Yes, sorry, that was meant to be a tongue in cheek comment. But my original position remains; there’s no way I’d transfer large amounts of money before being in possession of the goods!
bob2146 said:
If the margins are really that thin it’s not at the end of the market I’d want to buy.
I’ve no personal experience, but I imagine people buying million pound supercars from the likes of Tom Hartley etc don’t generally just hand over their visa debit card and smash their PIN in PSRG said:
Butter Face said:
Not really, you settle it soon after and we get any commission taken back. I just had a case where a customer defaulted 54 months into a 60 month agreement and the finance company took back the original commission paid, but that’s a digression....
Yes, sorry, that was meant to be a tongue in cheek comment. But my original position remains; there’s no way I’d transfer large amounts of money before being in possession of the goods!
But you’re in a minority, most people are happy to transfer money, some before they have ever seen a car. There’s a certain amount of trust involved in buying and selling a car and I suppose it all depends on how much you trust the person you’re dealing with.
Jbradshaw said:
Do you personally use cards to pay for things like groceries and petrol? Do Tesco, Sainsbury’s et al charge for using cards? Why should a car dealer be different to pretty much every other business? It’s part of your business expenses which should be factored in to the figures behind the scenes.
I'll refer you back to my earlier post about the size of the transaction, the size of the merchant fee payable and the margin in the product.Card fees can vary between 0.3% and 1.5%, considerably more if we are talking Amex. This on a transaction where the net trading margin might only be 2 or 3%. So do you see now how you can easily wipe out a substantial amount of your profit by accepting the payment method? The grocery and even petrol retailers work on a larger trading margin and often lower merchant charges as their turnover is substantially higher.
The solutions to this could be:
1) Increase margin / reduce discount to absorb this. But how many customers will go somewhere else for 1 or 2% extra discount on a new car?
2) Pass on the costs to those customers who wish to pay this way ( now forbidden of course )
3) Have a sensible conversation with the customer to say "we can do this deal / offer you this discount but we would need payment by bank transfer please"
If you are selling 1000 new cars per year at an average profit ( before bonuses ) of £500pu but card charges are taking £200pu out of that ( say 1% of £20000 ) then can't you see the £200,000 per annum need for a solution? What would you do in your business?
The reality of a sample of 1000s ( mine and Dan's experience combined ) is that customers understand the reasons and are happy to accommodate the dealer's request.
Now that Bank Transfers are so easy to execute then really what's the problem? You'll be the one stood by the card machine on a 20 minute call to Bombay trying to answer the security questions!
Fun Bus said:
bob2146 said:
If the margins are really that thin it’s not at the end of the market I’d want to buy.
What a naive comment to make. Seriously?I’ll be taking things on a slightly different path, and also giving some insight into an earlier posters question with regards to commission on products.
I’m a salesman at a BMW (Inchcape) franchise and I’m hating the path they’ve gone down. A commission change which isn’t unusual in itself, and as always they try and paint it as a positive thing (but it’s really not). They’ve also gone to split teams I.e New and used.
Basic has gone up to 21k from 15k but we’re no longer paid on GAP, Tyre & Alloy, Smart. The only item we’re paid on is GardX (£25 each no sliding scale).
The most we can earn on a car is £100 (if you hit your target) and we’re not paid on profit, no overage, pack car incentives. Literally makes no difference whether I sell an M4 CS, 760 Li or a stock 1 series in flat white.
Needless to say earnings have cut drastically, add to that the extremely long hours, working every weekend (well every other Sunday) and I’m actually contemplating changing industry.
Has anyone else done it, is the grass greener as a recruitment consultant or estate agent lol?
P.S Do any other sales execs on here have to do an arbitrary number of citnows per day?! Used properly they can be a powerful tool, but when you have a sales manager on your back “done your citnows” and you end up just doing random ones it becomes pointless and annoying.
I’m a salesman at a BMW (Inchcape) franchise and I’m hating the path they’ve gone down. A commission change which isn’t unusual in itself, and as always they try and paint it as a positive thing (but it’s really not). They’ve also gone to split teams I.e New and used.
Basic has gone up to 21k from 15k but we’re no longer paid on GAP, Tyre & Alloy, Smart. The only item we’re paid on is GardX (£25 each no sliding scale).
The most we can earn on a car is £100 (if you hit your target) and we’re not paid on profit, no overage, pack car incentives. Literally makes no difference whether I sell an M4 CS, 760 Li or a stock 1 series in flat white.
Needless to say earnings have cut drastically, add to that the extremely long hours, working every weekend (well every other Sunday) and I’m actually contemplating changing industry.
Has anyone else done it, is the grass greener as a recruitment consultant or estate agent lol?
P.S Do any other sales execs on here have to do an arbitrary number of citnows per day?! Used properly they can be a powerful tool, but when you have a sales manager on your back “done your citnows” and you end up just doing random ones it becomes pointless and annoying.
Edited by I like Hands up deals on Sunday 25th March 21:28
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