Fear & Loathing The Classic Car Dealer

And not be wearing flip-flops....

 

Post #279 with the clip from "Used Cars" was the first thing I thought of when I started reading this thread.

 

Although I thought about commenting on the rest of your post, and I agree with many parts of it (and disagree on others) I decided to keep my comments on topic.
I don't feel there is any need to explain to a seller, when the dealer is buying a car, that he needs to explain the basic rules of business and the concept of buy low, sell high. Most people already know this. In fact, I think it would just sound like another tactic to grind down the price! "Gee lady, I'd like to give you more, but you know I have overhead, 6 kids to feed etc." Sounds like a come on line if I ever heard one
As for providing the information of the seller to the next buyer, that is one of the reasons that people agree to sell to a dealer is that they do not wish to be bothered by the next guy. That is why they used a dealer to sell the car and move on, knowing full well that they could have got more money by selling it themselves.
As for setting the price low and not haggling, this is completely unrealistic. We all expect to make an offer on a used car (or used furniture, electronics, or whatever). It is a normal part of our culture when dealing with used goods. Years ago I had a motorcycle for sale. I put it in Cycle News for the price I wanted, which was Very Fair, low end of the market if anything. 3 weeks, not one call. At the suggestion of an old economics teacher, I re-listed it at a considerably higher price and "Divorce forces sale" which was hilarious since I was 16 at the time. I got 12 calls right when the ad came out and sold it to the first guy that showed up who talked me down to a price that was higher than my original asking price. The phone kept ringing for weeks after the ad was pulled. The market set the price by the perceived value of those that were interested in the bike, and the guy that bought it felt good about the "deal" that he got. The price was still fair, even though it was higher than my first asking amount and we were both happy.
The truth is, no one needs to buy our classic cars and the market sets the price by those that want to participate. Unless fraud is committed by misleading or covering up known faults then the price will be set by the buyer paying what he feels is fair. If a dealer is asking more than you want to pay for the car, the simple resolution is make a lower offer or don't buy it. If emotions overtake common sense, well there is a price for that as well.
It also seems to me that in recent years the "Flippers" who work out of their house are many times much more unscrupulous than the brick and mortar dealers and I thin part of that is because they don't have a real business and fear no recourse. A friend bought a Model A from one of these types and the guy had completely made up "History", said it had a 9" when it was an 8", and the "rebuilt 350" was a clapped out 327 with vortec heads. But gee he sure seemed like a good fella just selling his own car - my friend later found out he was a well known flipper.

 

Capitalism in its purest form is ugly. Unless you're the one making all the money. "Business ethics" has no place in pure, free-market capitalism. Fuck or get fucked is the purest form of business interaction worldwide. That's why lawyers swarm the planet.

The 1987 Oliver Stone movie "Wall Street" sums it up well. Fuck or get fucked. Oliver Stone, to this day, professes to be astonished that Wall Street bankers still tell him that it was his movie that made them want to be more like the movie's hero. No, the movie's hero is not Bud Fox (Charlie Sheen), the Wall Streeter guys, even today, all want to be Gordon Gekko (Michael Douglas). Gekko did all the fucking and made millions, therefore he is the hero of the movie.

Grandmas get fucked out of their '64 Rivieras every day. Too bad, but like starving children, such things will never stop happening.

 

I'm one of the few who saw it. Ok movie with a great message.

 

No room for ethics in your world? Do you rationalize your behavior by this model? You know....it's okay to be, at least, a little idealistic.

 

And listening to some Bob.

Wow! I tried to read thru this whole thread & you sure ruffled some feathers in the 'chicken house' with this blog. When I read it the other day (and it had 3 post's on it), I thought of a 1941 Ford Convertible that a local friend of mine sold to a classic dealer locally & now the dealer is flipping the car for more than double of what he bought it for ($49,500) & the local guy bought a stock model A roadster to "have fun with".

<iframe width="425" height="349" src="http://www.youtube.com/embed/n6U-TGahwvs" frameborder="0" allowfullscreen></iframe>

 

Ryan just showed his feet.... uhg!

 

Ryan -
I hope you're going to include those geezers in this
that used to sell me cars from their junk yard when I was a kid,
charge to tow them over, after I worked on them for a while ,
charge to tow them back. Damn Capitalists.

 

I was not promoting or endorsing such behavior, just pointing out what I see as reality. I hate to read about grandma getting fucked out of her Rivi by a flipper but I am smart enough, and emotionally mature enough, to know that the world can be a really fucked-up place if you start looking around closely at things as Ryan did in his original JJ post. I too am idealistic, I really try, but you can't be blind to reality, especially where financial dealings are concerned. "Fuck or get fucked" is just reality most of the time, sadly, but when I buy sell stuff I am 100% honest--"honest to a fault" as the saying goes.

Off to see Kung Fu Panda 2 with the kids! Peace!

 

Glad you clarified, I don't know you personally and mistook your post as condoning schitty ethical behavior. Sorry. Enjoy the movie and enjoy your kids!

...and Ryan.....thanks mang.

signed;
On my guard but still idealistic

 

[
QUOTE:


That why, if I were a classic car dealer... I'd do everything in my power to come across as providing a REAL and HONEST service to my customers as well as to the people I buy from. I'd want to lose the stigmatism that dealers have and I'd want to do it with more than marketing. I'd want to create a community of people that have dealt with me and know first hand the services I offer.

At the end of the day, I just won't be a guy that makes money for the sake of making it. It's not me... Idealism or whatever you want to call it - I want to do good for the world - sincerely.[/QUOTE]


Thanks Ryan.......you just described my own personal ethics and goal as an auto dealer. At the risk of being derided for 'breaking my arm while patting myself on the back'....I had a fairly lengthy career in the automobile business. I knew the popular image of car salesmen and dealers, but I also knew that didn't define them all by a long shot and didn't have to define me specifically.

Without boring anyone with a full resume, I worked in service, parts, sales, sale mgmt and became a dealer on my own in due time. When I sold my business few years ago it employed 46 people, many long term employees and was highly regarded in the market area with lots of repeat customers. My factory CSI scores were among the highest achievable.

Did I add value to the transaction? You damn well bet I did. We stocked a lot of parts, had the latest in shop equipment and sent our techs for regular training to stay current.

If I found any salesman misrepresenting facts to sell a car, he got warned ....once.

As for profit margins........new car stores in the US average less than 3% net on total sales (all departments) after cost of goods, payroll taxes, insurance, lights, heat, yada, yada, yada. Don't belive it?.....the figures are available if you care to verify.

Further on the gross profit issue. As someone else pointed out, I think it was Hotroddon, the market pretty well sets the retail value, adjusted for variables. The gross is controlled by the cost of goods and overhead.

Occasionally in sales meetings we would point out cars (used) just received in inventory. First thing some saleman would ask is "how much we got in that?" My answer...."doesn't matter......sell it for the market value"..My point is...it had a value.....if the store owned it high or low it didn't matter, it was only worth so much. I illustrated the point by saying "if someone gave me the car should I just sell it for the normal gross we tried to make on the average deal?" Likewise, if I was buried in the car (financially) for some reason, did it make it more valuable? It might, but generally speaking, no it did not. So the the gross precentage was a function of cost. I had a buyer on staff who would "stand ankle deep in rain water during a lightening storm" to buy right at the auction after all the hotshots had their quota or stayed in the dry. That made us money, not by selling too high, but by buying wisely.

Oh, one more thing, don't confuse Gross Profit with Net Profit......they are two distinctly different things.

Ray

 

I've been bad-mouthing "hucksters" on the HAMB for a long time.
I'm glad to see Ryan feels for the most part the same about them as I do.

I don't feel too bad about the old lady selling for less than she wanted, after all, the car was dangerous to drive with those bad brakes, whether she knew it or not.

Then there's the huckster.
He KNEW the car was DANGEROUS to DRIVE and sold it that way anyway.
That's not only unethical, in my book it's criminal! yet it happens all the time. I bet he told the buyer, "Oh yea, we check the brakes on all our cars," without saying they don't fix them, just check them!

I had a guy come around and ask me if a car in my driveway was for sale and I said "everything is for sale"
So when asked how much, I told him a figure that I knew was fair for the car and he almost immediately offered me exactly half that amount.
I knew he was a "Teddie" as soon as he got out of his car, (must have been the Aqua Velva and garlic.)
I told him to get off my property and never come back.

 

Point of story? The internet does not provide an end all solution to what people need. As with an Alliance membership does not guarantee the best price even with a discount on a product either. So why do we need CCD's can be said the same as why do we need or want an Alliance membership. Simple. We choose to belong or to buy or to visit said establishments.

It appears the main question is why do we still have classic car dealers when we have places like craigslist, eBay etc out there. Well for one people may like to still deal with people and when you have an actual store front made of brick and mortar you normally assume they can't be in business if they constantly make bad deals so there is some misplaced trust involved.

So the article is full of emotion and misplaced blame. It appears Teddie is getting the blame for ruining two lives. Did Teddie write the tax code? Nope. Did Teddie cause the phantom QVC purchases? Nope. Did Teddie cause her to not get the patio or was it the contractors fault for not taking a 1k hit? I mean really what is the point of all this. She made the choice to sell it she could have stood just as firm as the contractor. And the arbitrary number of 5k doesn&#8217;t seem so arbitrary when the money is already earmarked for a patio. So Teddie got the car. The son could have put it on eBay, craigslist or taken it to a swap meet. Also what would the &#8220;old lady&#8221; do if the cost for the new patio ran over $5,000? Would that have been Teddie&#8217;s fault as well?

Now as for Scott in this story. How is he any different than Teddie? Number one he had a &#8220;harsh budget of 9k&#8221; because his wife had her own dreams. So is it Teddie&#8217;s fault that Scott&#8217;s wife had dreams? It is a given that when you buy a used anything you should expect to have to put money in it. Now back to Scott. He cooks the books to hide his overzealous behavior from his wife&#8230;.hmmm. So Scott lies to his wife with dreams of her own and this is Teddie&#8217;s fault? Lying to the wife&#8230;seems like an ok thing to do. That simply can not be any worse than misrepresenting a car. Right?

So it is Teddie&#8217;s fault that Scott cracked open a bottle of drugs and used them incorrectly and got all consumed with anger? So Scott is free from the responsibility of buying a car on an emotional high and putting aside his responsibilities to his wife and family. Scott has issues that do not involve Teddie.

Again I just simply don't see the point of this story. To much fingerpointing, blame, and a lot of BS.

 

Well reasoned and well said, CANS01........

Ray

 

have to say this about this artical, it has a lot of truth to it... but people have always tried to make money when a hobby becomes "hot". if you are in the market for a classic...do not have the time but the cash...

buy a car from a dealer with a solid rep...ask around

i did and when i found i could afford the car i wanted i decided to wait, gain the skills needed and build it myself

 

There's a point that was not lost on some, totally lost on others. It's the foundation of the whole thing. CLASSIC CAR dealer. Throwing in profit and used/new car dealers, even electronics (although I know it was to make a point) has almost nothing to do with where this came from. Define what's sold, the classic/collector car. It's personal. It's a goal. It's passion-driven for some and a good investment for others. It's something that every swingin dick in here could live a long and happy life WITHOUT. So now you've made ths choice and "WHO THE FUCK ARE YOU TO PROFIT FROM MY DREAM! I EARNED THIS!!" BZZZTTT. Wrong answer. Long ago some old fellas thought that keping old and intersting cars was a good idea. The population boomed and we all got in on it several levels of inflation later. I've wanted an L-88 Vette since I was 16 and learned about what they were. Should I offer venom and disdain for those scum-suckin dealers because they all want $250K for em? Nope. Adjusted for inflation that bitch is as out of reach as it was for me at 16. Remember I used another dirty word in our beloved game, I N V E S T M E N T. Some scoff at that like it's something a carnival barker is throwing at em. No matter, it's in there. It makes sense. Wall St "Gecko wannabes" can't take it from you. What level of pride and passion do you have for being that smart about this stuff without even knowing it? That shady bastard wants your foresight and his profit. The good guy says I'll sell it for you for "x" percentage so there's always a choice. All of these things are taken from you at the dealer but you have to be willing to give it up, buy or sell. As a buisness model all of those aesthetics are truely worthless with exception of inventory. Ryan covered inventory pretty well a few back so enough's enough. I hope it makes sense. I ain't no MBA...

 

I don't have a MBA but I've got a PHD (Post Hole Digger) big enough to bury a BS line from a Teddy type.

I don't mind them making money and I've sold a couple of cars to them so they could try their luck selling them and sometimes they win and sometimes they trade!

Fun to watch their resourcefulness in a tough sale!

But I consider myself car savvy and don't always expect the big money for my stuff but as long as I can recover some of my costs to perpetuate my build I'm happy and I'm happy with the buyer if they get what they want from my pile of junk.

 

I have a good friend who is a collector car dealer (and you know who it is) who sometimes sits patiently on a car without selling it for 1-2 years or longer. It is an investment, a hobby, and a business. Most folks want cash right now. Just watch my favorite show "Pawn Stars" and see what they do on a daily basis.

 

I agreed with you right up until pawn stars...that show sucks.

 

Ray,
It's clear from your angry response that you were a car dealer for many years. I guess I hit a nerve or the truth hurts, but the jist of my post was that I DID NOT FEEL THAT A DEALER WOULD BENEFIT ME in any way. I sold a single possession of mine, a car, I don&#8217;t think that would make me a dealer in any way. As for being a retailer I don&#8217;t think I am that either from the sale of one car. I probably didn't get retail for it and I certainly didn't turn a profit... it was just time to move on for me. I didn't have to sell, it was a choice.

See what you miss is I understood they needed to make money (and I don't feel they or anyone owes me something, that obviously comes from your bitterness from years of running your business)&#8230; I was just shopping dealers for a FAIR trade; understanding I would not get as much as I may be able to sell it privately (but for ease of sale)&#8230; but I could not even get them to be fair. So I just skipped using them.

So in the end I was addressing the issue of what service do they provide and I clearly stated that TO ME, they do not provide a needed service.

This is my opinion, take it or leave it.

When a dealer says to you and I quote&#8230; &#8220;I assure you I will pay you wholesale and you will pay retail&#8221; it&#8217;s not exactly welcoming to do business with that person. If I were the dealer I would have said let&#8217;s see what we can do and run some numbers and tried to be as FAIR as possible.

 

I have been reading this thread with great interest. Ryan, I was appalled at your story but after reading all the posts I was relieved there were about as many HAMBers who disagreed with you as agreed with you. Heck, after reading your responses I am beginning to believe you don't entirely agree with you.

The reason I was appalled is because I am a Classic Car dealer. Actually, a semi-retired CCD. I am still passionate about hot rods 51 years after getting my drivers license. My first car was a '51 Chevy HT with dual carbs and a split exhaust manifold with dual exhaust. The year was 1961. My avatar is a '33 Essex Terraplane I saw for the first time that year. When I graduated in '62 I chose not to go to college so I could join the Hot Rod culture and go to the drag races. The Super Stockers were exciting to watch and I dreamed of having one of those engines in an earlier body. By 1968 when I bought that Essex I had owned over a dozen cars. I was always finding something for sale I wanted more so I would sell what I had to buy it. Yes, I made a profit on most cars I sold but because the interest was growing in leaps and bounds I would have to pay more for what I purchased than what it was offered to me months earlier. The Essex needed a makeover and I finished it a year later, in 1969, the year I married my wife. I knew she was the right one to put up with my shenanagans.

In 1973 with a 3 year old son and a pregnant wife I made the foolish decision to try and make a living doing what I had loved for over a decade. There were few CCDs. Most flippers were back yarders like I had been. There were not many shows either....or collector car auctions....Hudson & Marshall, Kruse and B-J were it. Since then I have been a one man business (with the help of my wife) doing the buying, selling, cleanup, light mechanics, transportation, bookwork etc. I have enjoyed it all. It is my passion.

I have seen many Teddies come and go. Most did not know the cars or care anything about learning about them. They were in it strickly for the money doing anything it took to make as much as they could. But I have also made lifelong friends with other passionate CCDs and customers. It is still a great business to be in but it is tough. I have also seen many ethical dealers close up because they would not spend the numerous hours each week it takes. I have always tried to treat customers fairly and for the most part have succedded. But as the saying goes...you can't please everybody. I resolve the situation. I have never had a complaint filed with the DMV. I hope those reading this who has purchased a car from me feel like you got treated fairly. If not contact me instead of bashing me here.

What I ask for a car has nothing to do with how much I paid for it. I go by how much I will have to pay for an exact replacement. If I buy a car under market I will make a higher profit. But sometimes I buy a car I really like and hope I can find a buyer who likes it more. It is part of the passion. And, I never make an offer until I get an asking price. If it is fair I pay for it. If not, I make an offer the seller can use to shop it to others. I don't care. There are always more cars for sale than I can buy.

Ryan, I give back by taking calls from people who don't know the market. That comes with having my number in the phone book for 38 years. I will try to share with them the knowledge I have gained over the last 50 years at no cost as long as I don't have to leave my business. And I don't try to steer them my way. It is not right to take a sale away from someone else. But some pass on the car they called about and will come look at what I have.

I am 67 now and don't work the long hours anymore. I sold the Essex 2 years ago after owning it for 41 years. But I will keep on buying and selling as long as my health holds out because I know my passion will.

 

The thought of buying a car from a dealer never entered my mind. Everything i've, bought, sold or traded for came or went to private individuals. I have seen several dealers participating on eBay with less then excellent feedback ratings. I've always thought cars from dealers were being sold for more then there worth.

 

Maybe a bit off subject, maybe not.ive been a truck driver in th LA area for 15 plus years and ive always found interesting things in and around the LA area.funny but after reading and replying to this post I stumbled across these two small wherehouses in hunting park in a small alley. They had two 32 three windows a roadster and a few other cars all ranging from converts to woodies. From what I was told an seen the guys work on the cars full time restoring these cars back to there original state.they have restored over 100 cars I was told. Yes most get sold but alot are the personal collection of nick Alexander of the LA dealership who sells BMW cars. It was good to hear those guys took pride in restoring these beautiful pieces of art.they took the time to show me books just published on how to restore and gave me a few cards of people who might be able to help me with my 38zephyr.sure it takes money, time and effort to make this happen but I'm glad to see that he's got people working supporting their families and restoring these cars for people to see and enjoy.took a few pics from the catalog they gave me.all in all alot of good points were made some good some bad but that's how it goes in this lifestyle we all love.

 

Right up there with the pickers show. Pure suckage. The History Channel has really lost its way.

 

If cars can be National Treasurers, then some dealers have seen to it that they stay in their counrty of origin, to me that is a good thing. I've never had the funds to buy a collector car from a dealer, but they do get vehicles out and on the market again, and not every car gets flipped in 2-3 weeks.

 

"The Classic Car Dealer ruined two lives in the stroke of a deal."

This journal entry is dramatic.

Poor Martha, Poor Scott.....
Blame it on the car Dealer!

The truth is they all have a choice.

I'm not a dealer.

This happens in all aspects of business, retail, tree trimmers, jewelry, auto, roofers, oil, government, etc.

Is there a solution here...
Or are you just bitching?

TJJ on iPhone

 

1971BB427 has raised a significant point regarding the role of Classic Car Dealers that has been ignored by many of the people posting on this thread. Most HAMBers and those of us who religiously read Hemmings, Old Cars Weekly and any of the "dirty hands" car magazines are usually not the typical clientele of the CCD. CDD's buyer wants a collector or classic car but probably does not have the time, knowledge or inclination to chase all over the country in pursuit of his dream ride. That buyer is more comfortable with a dealer ... he can consider a number of cars in inventory that may not be common in his area, has a higher confidence level in the condition of the vehicle (warranted or not), has financing and possibly service options, and has a place to sell it back or trade when he's tired of it.

Legitimate Classic Car Dealers who survive do so for a reason: They offer vehicles, convenience and perceived value that their customers are willing to pay for. Ultimately, market forces will level out the prices.