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Dealers Tricks
Submitted by Dan Mazzella on Tuesday, June 29, 2004 - 2:13pm

This is a very long series of articles but it really goes into detail in the tricks that some dealers use. Find it at edmunds.com

  • Introduction
  • Part 1: Going Undercover
  • Part 2: Getting Hired
  • Part 3: Meeting, Greeting and Dealing
  • Part 4: Life on the Lot

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subject:
Part 4: Life on the Lot
author:
date:
June 29, 2004 - 2:20pm
When I took this assignment as an undercover car salesman I knew I was agreeing to join the enemy. Everyone knows that the car salesman or woman is the enemy. He or she is the person we have to do battle with if we want a new car. I had always been on the customer's side of the desk. Now I was crossing enemy lines. But I didn't feel like the enemy until the first time I greeted a customer on the lot.

Here's how it happened. I saw a young couple get out of their car and wander uncertainly toward a row of compacts. They were there to buy a car. I wanted to sell them a car. I walked toward them with the best of intentions.

As I reached the couple I gave them a cheerful, "Good afternoon!"

They turned and, in an instant, I saw the fear on their faces. Fear of me!

Let me quickly add that I'm not the type of person who normally elicits fear from the people around me. I've been called shy, reserved and quiet — all euphemisms for meek, mousy and at times practically invisible. But here I was with my white shirt and tie, my employee's badge hanging from my belt. I had become the enemy. And they were afraid of me.

What were they afraid of? The short answer is, they were afraid they would buy a car. The long answer is that they were afraid they would fall in love with one of these cars, lose their sense of reason and pay too much for it. They were afraid they would be cheated, ripped-off, pressured, hoodwinked, swindled, jacked around, suckered or fleeced. And, as they saw me approaching, all these fears showed on their faces as they blurted out, "We're only looking!"

During my short stint as a car salesman I saw this look of fear from customers many times. It ranged from a mild apprehension to abject terror. Sometimes customers would actually become hostile. I'd cheerfully say, "How can I help you?" And they would lash out with, "Can't you leave me alone for one second? I just want to look! On my own! OK? On my own!"

What the customer didn't realize was that the poor car salesman or woman was not really the enemy. The real enemy was the manager sitting in the sales tower cracking the whip. Suppose for a moment a customer told us they were "only looking," and we said, "fine, take your time," and went back into the sales tower. Now we find ourselves looking up into the steely eyes of the sales manager.

"That's your customer out there," the manager would say.

"But they said they're only looking," I would answer.

"Only looking? You're going to take that for an answer?" Foam was beginning to form at the corners of the sales manager's mouth. "What the hell kind of salesman are you? Of course they're looking! They're all only looking until they buy. You want them to go across the street and buy a car over there? Because they have real salesmen over there. Now go back out there and sell those people a car. And don't let them leave until they buy or until you turn them over to your closer."

So that's why the car salespeople stick like glue to customers. Their fear of their managers is greater than their fear of offending the customers.

Many salespeople find that humor is a good way to overcome objections. If a customer says they're "only looking," the salesperson might answer, "Last time I was only looking I wound up married." If a customer objects to being hurried into buying the car, the salesperson might say, "The only pressure on this lot is in the tires." These prepackaged lines were exchanged between car salesmen in the slow times with the feeling that the right joke at the right moment could be the ticket to a sale.

Of course, a good joke in the salesman's opinion might be considered the ultimate cornball line by the customer. In one case a veteran salesman bragged to me that he sold a car to a woman by telling her, "You know, you look great in this car. The color matches the color of your eyes." Oddly enough, that very night I was talking to a woman who told me she had once had a car salesman tell her that the car matched the color of her eyes. Her reaction to this? "Oh please!"

Car salesmen and women seem to exist in their own world. What they think is cool is viewed by the public as tacky and obvious. For example, why do they insist on wearing white shirts and silk ties? Or what about gold watches, rings and chains? Who wears that stuff anymore? Don't they realize they are turning themselves into walking cliches? The only answer I came up with was that, as a salesman, I spent all my time with other salesmen. They were my friends. Believe it or not, I tried to fit in, to belong. So I began to develop an interest in gold ties, white shirts and dress shoes. I even grew a goatee because a lot of the guys had beards. And I put gel on my hair and combed it straight back.

During the first week as a car salesman I used to come home and describe the scene at the dealership to my wife. I told her how we were instructed to follow cars as they pulled onto the lot and stand beside the car until the customer stepped out. She was incredulous.

"Do they think that's going to make people want to buy a car?" she always asked. "If it was me I'd just keep driving. I'd want time to pick the car myself. To relax and sit in the car and not be pressured." I could only answer that the system was not set up for educated people who thought for themselves, it wasn't to help customers make informed decisions. The system was designed to catch people off guard, to score a quick sale, to exploit people who were weak or uninformed. Those were our buyers.

Let me say that the dealership I worked at was notoriously high-volume, high-pressure. Even so, there were some salespeople there who were relaxed and friendly and treated customers with respect. I also know that there are many good dealerships across the country that are concerned with their long-term reputation. But as a whole, the dealership where I worked encouraged the salespeople to use pressure to speed up a deal, to get a customer to accept high payments, to get the customer to buy a car they really didn't want.

I had been working for several days by now. My manager had trained me on the basics and then told me to watch the other salespeople interacting with customers. Finally, he let me "meet and greet" customers and then turn them over to another team member. Now, it was time for me to actually start selling cars. So I went outside and began waiting for ups.

The dealership where I worked had "an open floor." This meant that any salesman could wait on any available customer. However, if there were 10 salesmen waiting for ups and one car drove in, how did we decide who would help them? In some cases, the salespeople "called" the ups. They would scan the traffic passing by the dealership. If a car turned into the lot, someone said, "Green Toyota!" And this gave him the right to wait on that customer. When you shook hands with the customer you were, in a sense, claiming your territory.

Since I was still a "green pea" the other salesmen tried to push me to wait on undesirable ups — the undesirable customers who the salesmen thought wouldn't or couldn't qualify to buy a car. My manager had, at one point, described the different races and nationalities and what they were like as customers. It would be too inflammatory to repeat what he said here. But the gist of it was that the people of such-and-such nationality were "lie downs" (people who buy without negotiating), while the people of another race were "roaches" (they had bad credit), and people from that country were "mooches" (they tried to buy the car for invoice price).

I'll repeat what Michael, my ASM, told me about Caucasians . He said white people never come into the dealership. "They're all on the Internet trying to find out what our invoice price is. We never even get a shot at them. I hate it. I mean, would they go (to a mall) and say, 'What's your invoice price on that beautiful suit?' No. So why are they doing it here?"

I was already beginning to see the impact of the Internet because of something that happened during my first few days there. I was sent to the service department to talk to customers waiting for their cars to be fixed. Salespeople feel this is a good source of leads to buy new cars. Say a customer has just gotten nailed with a $2,000 quote for a transmission. Now's the time to move in and pitch the virtues of a new car.

There were typically a dozen or more people waiting for their cars to be serviced. They would either watch TV or read while they drank coffee and Cokes from the vending machines. I handed out my business card and chatted with a few people. One young guy was killing time by goofing around with his Palm Top computer. He was outfitted in designer jeans and a T-shirt, so I wasn't surprised to hear that he had just bought the radical new SUV our dealership sold. Michael had told me these vehicles were selling for over sticker prices, so I asked Mr. Palm Top how he made out.

"I got an awesome deal," he said.

"How awesome?"

"Three hundred below invoice," he smugly answered.

I asked how he did it. He said he checked prices on the Internet. He then called the fleet manager and made the deal over the phone.

I had a schizophrenic reaction to this. Part of me admired the fact that he had outfoxed the dealer. But the car salesman side of me was angry that I never "got a shot at him." It seemed like just a matter of time before people who, in the past, walked onto our car lot, would be on the Internet making deals.

The salesmen are only vaguely aware of this developing trend. I was standing on the curb next to George and we saw one of these high-demand SUVs ready for delivery.

"Another damn Internet sale," George said. "Why don't they turn that car over to us? We'd get a grand over sticker. Instead they're selling it at invoice. Does that make sense?" As the days passed I noticed more and more cars marked "carsdirect.com." And as I approached people on the car lot they often informed me that they were here to see the fleet manager. More Internet customers.

Back to that first couple I greeted on the car lot. I don't remember much about them other than the look of fear on their faces. They didn't buy a car from me. In fact, I didn't have a real good prospect for another two days. I had plenty of people who were just looking. Or said they would be back. Or said they had a doctor's appointment. Or had to pick up their kids at school. These were typical excuses they had for escaping. But the salesmen told me to disregard all these stories that customers gave me. As they put it, "Buyers are liars."
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subject:
Part 3: Meeting, Greeting and Dealing
author:
date:
June 29, 2004 - 2:19pm
My first day on the job started with signing about 50 different forms. Most of these were for specific purposes — to show that I understood I wasn't supposed to take dealership car keys home, drive under the influence or sexually harass my co-workers. But one form was of particular interest. It showed the breakdown of the commission structure.

Commissions were based on the "payable gross" to the dealership and were applied in three tiers. If the payable gross was from $0 to $749, our commission was 20 percent of the profit, from $750 to $1249 the commission was 25 percent of the profit. Above $1250 the commission was 30 percent of the profit. In other words, the higher the profit for the dealership, the higher the commission I would earn. Obviously, this motivated salespeople to build profit into the deal so they could hit that magic mark and get into the 30 percent bracket.

When I was interviewed for the job, the dealership was vague about how I would be paid. On the one hand they promised I could make serious money through commissions — maybe four or five grand my first month. On the other hand, they alluded to an hourly wage to begin with. Now I found that I was, in fact, working on straight commission. If I sold cars I made money. If I didn't sell, I didn't make a penny. Maybe that's why there were so many salespeople working here (about 85 in new and used cars). It didn't cost the dealership extra to have a big staff.

When I was done signing forms I was turned over to Michael, my assistant sales manager (ASM). He told me I would be working with five other guys on the "A Team." They were just arriving for work — still straightening their ties, combing their hair — and he introduced me to them as they showed up. There was Oscar, a barrel-chested young guy with a gang tattoo on the back of his hand; Richard, a 6-foot-3-inch weightlifter from Hungary; Tino, who had a quiet dignity that made me think of him as a restaurant maitre d'; Jimmy, a mustachioed soccer fanatic and Juan, six months out of the U.S. Marine Corps.

These were my team members, Michael said. They would be like family, like my brothers. If I couldn't make a deal with a customer, I was to turn them over to someone on my team. Then, if that customer bought the car we'd split the commission. This practice of "turning" customers was stressed repeatedly. I was working in what is known in the business as a "turnover house."

We had a brief meeting in one of the sales cubicles and then the rest of the team went out front to look for "ups." Ups are customers who walk onto the lot. This name comes from the way customers are handled by whichever salesman or woman is "up." The salespeople are always asking, "Who's up next?" The "up system," the order in which customers are taken by the sales staff, is very serious business.

Michael began explaining how the dealership was run. We sold new cars on our side of the building, and used cars were on the other side. In each of the front corners of the building were the new and used car "towers." These glassed-in offices were restricted to employees. Inside was a raised platform where the sales managers sat. When you went into one of the towers, you found yourself behind a high counter, looking up at your bosses, like being in a courtroom or a police station. The sales managers are sometimes referred to as "the desk." Salespeople would say, "You have to clear that deal with the desk." Or, "Who's on the desk today?"

The next step in my training involved the use of the "4-square work sheet." Michael told me the 4-square was my friend, it was the salesman's tool for getting "maximum gross profit." As the name implies, the sheet is divided into four sections. When you have a prospect "in the box" (in the sales cubicle) you pull out a 4-square and go to work.

The information about the customer is written along the top together with the make, model and serial number of the car they want to buy. Then the salesman writes the sticker price of the car in large numbers in the upper right square on the worksheet. Michael stressed that the price of the car should be written in large clear numbers to give it a feeling of authority. He added that we should always write "+ fees" next to the price of the car (This includes license fees and sales tax.).

"Good penmanship is essential," he said. "This makes it harder for them to negotiate. "You're saying, 'Mr. Customer, if you want our beautiful new car, this is the price you're going to have to pay.'"

The other boxes on the 4-square are for the price of the trade-in, the amount of the customer's down payment, and the amount of the customer's monthly payment.

"When you negotiate, this sheet should be covered with numbers," Michael said. "It should be like a battleground. And I don't want to see the price dropping five hundred dollars at a pop. Come down slowly, slowly. Here I'll show you how."

The process begins by asking the customer how much they want for a monthly payment. Usually, they say, about $300. "Then, you just say, '$300... up to?' And they'll say, 'Well, $350.' Now they've just bumped themselves $50 a month. That's huge." You then fill in $350 under the monthly payment box.

Michael said you could use the "up to" trick with the down payment too. "If Mr. Customer says he wants to put down $2000, you say, "Up to?" And he'll probably bump himself up to $2500." Michael then wrote $2,500 in the down payment box of the 4-square worksheet.

I later found out this little phrase "Up to?" was a joke around the dealership. When salesmen or women passed each other in the hallways, they would say, "Up to?" and break out laughing.

The final box on the 4-square was for the trade-in. This was where the most profit could be made. Buyers are so eager to get out of their old car and into a new one, they overlook the true value of the trade-in. The dealership is well aware of this weakness and exploits it.

The opening numbers were now in place on the 4-square. At a glance, Michael said, you could see the significant numbers of this deal — purchase price of the car, trade-in, down payment and the monthly payments. As you negotiated you could move from box to box, making progress as you went. It allowed you to sell a car in different ways. For example, if the customer was determined to get full value for his trade-in, you could take extra profit elsewhere — in the purchase price or maybe even in financing.

The first numbers that go on the 4-square come from the customer. The down payment and the monthly payment are only what they would like to pay. Now, it's time to get the numbers that the dealership would like the customer to pay. These numbers are called the "first pencil" and they come from a sales manager in the tower. Michael said that the first pencil was the dealership's starting position. "You have to hit them high," Michael explained. "You have to break them inside — make them understand that if they want our beautiful new car, they're going to have to pay for it."

Here's how we were supposed to get the first pencil from the tower. After the customer test-drove the car we brought them into a sales office and offered them coffee or a Coke to relax them. Then we filled in the information about the car on the 4-square. We then picked up the phone and called the tower. Michael held his hand like a phone receiver with his thumb and little finger sticking out. "You say, 'Yes sir. I have the Jones family here with me and they have just driven a beautiful new whatever model, stock number blah blah blah.' Then you say, 'Is it still available?' Of course you know it is. But you want to create a sense of urgency. So you pause, then say to the customer, 'Great news! The car's still available!' Then the tower will give you the first pencil. Write it in each of the boxes."

I later found out that the first pencil is arrived at by the dealership in a very unscientific way. For every $10,000 that is financed, the down payment they try to get is $3,000 and the monthly payment they try for is $250. In this way, a $20,000 family sedan would require about $6,000 down and a $500 a month payment. (These payments are based on very high interest rates calculated on five-year loans. These numbers are so inflated that a manager I later worked with laughingly called them, "stupid high numbers.")

"But here's the beauty of this system," Michael said, "these numbers aren't coming from you — you're still the good guy. They're coming from someone on the other end of the phone. The enemy."

Michael returned to his scenario. "OK, so when you give these numbers to the customer you say, 'Here's a pretty good deal for you.' But Mr. Customer says, 'Oh man! Michael, I told you I can only put down $3,000.' So you cross out the $6,000 you wrote and put down $5,750. You say to the customer, 'Is that more what you had in mind?' And you nod as you say this. Try to get them agreeing with you."

This reminded Michael of something and he laughed. "Here's another thing. Never give the customer even numbers. Then it looks like you just made them up. So don't say their monthly payment is going to be $400. Say it will be $427. Or, if you want to have some fun, say it will be $427.33."

While Michael was training me, he didn't ever say, "Here's how to cheat the customer," or, "This is how we inflate the prices." In fact, he stressed that I was supposed to treat customers with respect to build a strong C.S.I. (Customer Satisfaction Index). But manipulation and overpricing was inherent in everything he said. The reason for this was simple — without overpricing we couldn't make a living. What we were selling was profit. Or, as Michael put it, "This is money for you — money for your family."

At times Michael became very excited as he thought of new things to teach me. At one point he said, "Oh! This is a good one! This is how you steal the trade-in." He looked around quickly to make sure no one overheard him. "When you're getting the numbers from the desk, they'll ask if the customer has a trade-in. Say it's a '95 Ford Taurus. And say you took it to the used car manager and he evaluated it and said he would pay four grand for it. If you can get the trade for only three, that's a grand extra in profit.

"So what you do is this," Michael pretended to pick up the phone again, "you ask the desk, 'What did we get for the last three Tauruses at auction?' Then they'll give you some figures — they'll say, $1,923, $2,197 and $1,309. You don't have to say anything to the customer. But he sees you writing this down! And he's going, 'Holy crap! I thought my trade was worth $6,000.' Now it's easy to get it for $3,000. That's a grand extra in profit. And it's front-end money too!" (I later learned that front-end money was what our commissions were based on. Back-end money was made on interest, holdbacks and other elements of the deal.)

We talked for almost two hours before Michael finally ran out of gas. He told me that for the next two days I should get to know the inventory and watch the other salespeople. Then I could learn how to "meet and greet." He invited me to check out some keys and test-drive the cars.

"Product knowledge," he said, tapping his forehead. "Very important. You need to get to know these cars inside and out."

I walked outside and surveyed the car lot. The new cars were on our side of the lot — the used cars to my right. Across the street was another dealership, also selling Japanese cars, and up and down the street were still more dealerships. Most of the manufacturers were represented here. Then, in the distance, was the freeway, a solid river of cars. Cars were everywhere.

"What were you selling before?"

I turned to find Oscar, one of my teammates. He had a broad friendly face to match his incredibly stocky build. Later, I found out he was a high school football star. I couldn't imagine trying to knock him off his feet.

"I used to sell videos," I told him.

"Like X-rated videos?" he asked eagerly.

"Naw. Training materials. Stuff for companies to train the people that work there."

"Oh yeah. We got some like that here." He popped his knuckles. I tried to read the tattoo on the back of his hand. "Michael show you around the lot?"

"No. He was explaining the 4-square."

"You never sold cars before?" he asked.

"No. This is the first time."

"It's easy, man. You'll do good. Hey, I'll show you around." He ducked into the sales office and came back with a set of car keys. "Let's take a ride."

We walked through the line of new cars, each gleaming with water droplets from being washed that morning. Oscar showed me how the lot was arranged with the high-end cars facing the street, the SUVs, minivans and trucks along one side and the mid-sized sedans near the dealership entrance. He told me there was also a back lot with more inventory and even more cars in a rear fenced parking area. As we talked, a car carrier pulled up and more cars began rolling down the ramp.

Oscar opened the door of a high-end sedan in a sport trim. It had a big V6, leather bucket seats, a sunroof and alloy wheels. The sticker showed a total price of $28,576. A second dealer's sticker showed an extra $236 for the custom wheels.

"You're walking through the lot with Mr. Customer and he's eyeballing all these cars," Oscar said. "He stops next to this one and bam! that's the one you're gonna sell him. You pull it out of the row, open the doors and ask him to see how good the seats feel. When he sits down you slam the door and take off."

"You mean, you ask him if he wants to demo the car?" I asked.

"Hell no. They never go for a demo if you ask them. 'Cause they know they're weak. If they drive it they'll buy it. The feel of the wheel will seal the deal, my friend. So you got to kidnap them, man. Just slam the door and take off. Come on, let's go."

We got into the car and he palmed the wheel, backing up, then pulling out onto the street. A block later we hit a light. When it turned green Oscar punched it and I felt the G's pressing me back into the leather.

"Whoa," I said. "Great torque."

"Strong," he agreed, checking the review mirror. We made a right, then another right into a shopping center parking lot. We got out.

"Now you got them away from the dealership, you can relax a little, show 'em how awesome this car is. What you want to do is open all the doors and windows, the hood and the trunk. Then you do your walk around. You start at the driver's door and you point stuff out as you go. 'Mr. Customer, this car's got the highest safety rating because it's got front crumple zones and breakaway engine mounts. It's got a 170-horsepower V6 with four valves per cylinder and blah, blah, blah.' See, it doesn't really matter what you say — most people don't even know what the hell you're talking about -— but the important thing is to keep talking: 'Here's the headlights, here's the gas cap. Here's the trunk. Here are the tires.' Anything! Understand?"

"Got it," I nodded.

"Good. Now you drive."

"Me?"

"Yeah. You be Mr. Customer. You get behind the wheel. See, you got to be in control on the demo. Because when you get back to the lot, you got to get them in the box and make a deal."

I slid into the driver's seat and closed the door. Oscar sat beside me, buckling up.

"Make a right here," he said. "See, the test drive route is just a bunch of right turns. If you want to go a little farther, go straight there."

"I want to go a little farther," I said, wondering if he was trying to control me. Besides, driving this car felt great. What was it Oscar said about the feel of the wheel? We came up on a railroad crossing. The tracks rumbled under my wheels, distant and muffled.

"Point out stuff on the route," Oscar said. "Like those tracks. Like this turn. Like the way it brakes. Everything. Just keep talking and building confidence in the product."

I looked over at Oscar wearing his white shirt and silk tie. He had slipped on a pair of wrap-arounds and with his black hair combed back he looked very smooth. Later I learned that he came out of a gang-infested area of the city. A job like this allowed him to drive brand-new cars, handle money deals, wear a tie and act like a big shot.

"Thanks for your help, man," I said when we got back to the lot and put the car away.

"No problem, bro." He shook my hand. "You're gonna do good here."

Over the next few days I noticed that car salesmen shook hands with each other a lot. I shook hands with each of my team members when I arrived in the morning; we shook hands before we left the dealership at night. We might shake hands with each other two or three more times during the day. If I happened to be standing on the curb and if another salesman walked up I shook hands with him. It was like we were all staying loose, practicing on each other, for that moment when we would greet Mr. Customer and needed to use a good handshake that's going to seal the deal.

At one point, during a sales seminar, I was actually taught how to shake hands. The instructor, a veteran car salesman said: "Thumb to thumb. Pump one, two, three, and out." Another vet told me to combine the handshake with a slight pulling motion. This is the beginning of your control over the customer. This would prepare the "up" to be moved into the dealership where the negotiation would begin. The car lot handshake is sometimes combined with the confident demand, "Follow me!" If you employ this method you turn and begin walking into the dealership. Do not look back to see if they are following you. Most people feel the obligation to do what they are told and they will follow you, if only to plead, "But I'm only looking!"

Besides hand shaking there's also a lot of high-fiving, fist-bumping, back-slapping and arm-squeezing going on among the salespeople. Furthermore, there's a certain amount of tie-pulling, wrestling and shadow-boxing during the slow periods.

Later that first day, I was standing on the curb outside the sales offices waiting for ups when a voice boomed over the intercom, "All new and used car salesmen report to the sales towers."

I went into the new car tower while the used car guys went into their tower. It was my first time actually going into this cramped room. There was only a small space around the perimeter of the desk where the salesmen stood, all of us looking up at the three sales managers who loomed above. On that shift, the sales staff was made up of all men. In fact, out of the 85 salespeople, there was only one woman working on the floor selling cars. There were, however, several women in the fleet department and working in the finance and insurance department.

Behind the sales manager's desk were three large white boards. The first listed the names of all the new car sales people. Beside the names was a blue box for each car they sold. Since I started near the end of the month, some of the salesmen had a long row of blue boxes showing they sold as many as 35 cars. Others had only two boxes. This board enabled everyone to see who was doing well, and who was falling behind. The next board showed the number of cars sold by the entire dealership. And the final board listed the names of the salespeople who hadn't sold any cars for three days.

"How ya doin' guys?" Ben asked, looking down at us. He was in his mid-forties with graying hair combed back. His face was thin, his nose pointed, giving him a fox-like appearance.

"Doin' good, boss," the salesmen muttered.

"You lose some weight, Ben?" one of the salesmen asked.

"A few pounds maybe," Ben said, slapping his gut.

"They didn't feed you much in prison?" the salesman said. Everyone broke up.

Ben's face got red. "Will you quit telling everyone that?"

It was an odd response. He wasn't denying that he had been in prison. So I had to assume it was true.

"OK guys. Listen up. It is slow. Slowwwww. You need to start working the phones, get some customers in here. Who's got an appointment today?"

A few hands were raised.

"Here's the deal. No appointments, no ups. You guys each have to have one shown appointment or you don't get to take any ups."

I found out that a shown appointment was one where the customer actually showed up. This prevented salesmen from putting down a fake name just to fulfill this requirement.

"No shown appointment, no ups," Ben repeated. "Is that clear?"

"It's clear, boss," a salesman mumbled.

"OK. Now here's the other thing," Ben said, looking down at the assembled masses. "The guys in used cars think we're a bunch of wimps. They're going around telling everyone they can sell more cars than us. So I bet dinner, for each guy here, that we can outsell them over the next four days. What do you say about that?"

We all cheered.

Ben looked through the glass and across the dealership at the used cars tower. All the salesmen were in there meeting with their managers, just like we were meeting with ours.

Ben picked up the phone. "Now I'm going to call used cars and we're gonna show them who we are." He dialed the extension for the used cars department. When they answered he yelled to us, "What do we think of used cars?!" He then held up the phone so we could collectively yell into it. We shouted, "Used cars sucks!"

Then Ben asked us, "Who's strong?"

We yelled, "New cars!!!"

Meanwhile, of course, we could see the guys in used cars were yelling and screaming at us, telling us we were a bunch of wimps. The receptionist, who sat between the two towers, looked like she would die of embarrassment.

"All right guys," Ben said. "Get out there and sell cars. Let's rock."

The meeting broke up. The salesmen went outside and stood around grumbling. Then, one by one, they went inside and hit the phones.

I was told I was exempt from this no appointment/no ups rule, so I stayed outside. I was left virtually alone, which was unusual. At most times, there were from four to 15 salesmen waiting for ups.

A car pulled onto the lot and a young man and woman got out. No one was there to help them. I looked around. Michael was watching me through the plate glass window. He nodded and pointed at the couple. "Go ahead," he seemed to be saying, "Take them."

"Well, here goes," I thought. "My first customer."

As I moved toward them, my mind was crowded with all I had been taught that day. The couple heard me coming and turned. I don't think I'll ever forget the look on their faces.
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subject:
Part 2: Getting Hired
author:
date:
June 29, 2004 - 2:18pm
The application they gave me at the car dealership included a "personality test," a list of about 80 questions to which I had to answer yes or no. There were no right answers, the instructions told me. The questions gave me insight to the kind of people who typically applied for jobs at car dealerships.

The first few questions were innocent enough, something like: "I enjoy relaxing and listening to music: yes or no?" But soon I noticed a trend developing. Question 7 was, "I enjoy going to bars: yes or no?" A few more innocent questions followed, then, "After going to a bar I feel good about myself: yes or no?" Questions about bars continued throughout.

Then, at about number 73, was this loaded question: "I like guns: yes or no?" I wondered how they would react if I crossed out the word "like" and put in "love." Better yet, I considered inserting the word "automatic" in front of "guns."

It was pretty obvious what they were looking for. So I recorded my answers and took the application back to the receptionist.

"Dave told me to page him when I was done with this," I said.

She stabbed a button on a phone panel and spoke into the receiver. "Dave, to the front desk. Dave, to the front desk." Her voice echoed down the hallways and boomed out onto the car lot. She turned back to me, "He'll be right with you."

I sat down and waited.

And waited. But he wasn't "right with me."

The thing about car dealers is they seem to like to keep you waiting. Later, I would find out how important it is for the salespeople to feel they are controlling the customer. If you are waiting for them they must be controlling you. This obsession with control extended to job applicants too.

As I waited I tried to look like a promising candidate for a job selling cars — whatever that looked like. I tried to look eager and hungry. These are not traits that come easily to me so I studied the other sales people around me. They stood in poses of assertion and power: legs spread, hands on hips, arms folded across chests. All the men (which were 99 percent of the sales force) wore white shirts and ties. Their hair was slicked back and they favored jewelry.

Soon, I noticed that dealership people were walking past where I sat and they were taking an unusual interest in me. A sandy-haired man strolled by several times. On the next pass he nodded and said, "Good morning."

"Good morning, how are you?" I returned. The man nodded and kept walking. I began to think the reason Dave had me waiting so long was so they could eyeball me before I was interviewed.

I wondered if Dave was testing my assertiveness, so I returned to the receptionist and asked to have him paged again. She did, and Dave immediately reappeared and led me to a sales cubicle in the back.

Sitting across from Dave I saw that he had a wandering eye. I kept trying to figure out which eye to look at. Dave reviewed my application and frowned.

"You've never sold cars before. Is that right?"

"Right."

"Why do you want to work here?"

My first inclination was to say, hey, I'm a car freak. Always have been. I could explain cars, how they work, get people excited about the performance and the different features. But then I remembered my editor's advice.

I smiled at Dave, trying to convey the feeling that the answer was obvious.

"I want to make a lot of money," I said.

The effect on Dave was amazing. He smiled and relaxed, as if I had said the password to enter an exclusive club. If this had been a cartoon, dollar signs would have appeared in his eyes accompanied by a loud "Cha-ching!"

Next, Dave asked me what the best part of my personality was, and what the weakest part of my personality was. After I was done answering, he said he didn't really care what I said, it was the fact that I replied immediately that he liked. He added, "Your answer could even be a lot of B.S. but in sales you have to always have an answer."

It was clear that Dave liked me. And I sure liked Dave. Still, I had never sold cars before. My application showed I had a background in video sales.

Suddenly, Dave extended a ballpoint pen to me, one of those 59-cent jobs made of clear plastic. "You want to be a car salesman. OK, sell me this pen."

Over the years, I've read a number of self-help books about positive thinking. It always seemed these books were written by salesmen. So I've absorbed a lot of information about selling without realizing it. Here was my chance to put all that into action.

I picked up the pen, paused dramatically and began speaking slowly and deliberately. "Dave, you've asked me to make a recommendation about a pen. You're in luck because I know a lot about pens and I'm in a good position to point out the features and benefits of this model of pen. The first thing you'll notice is the cap. This can easily be removed and stored on the other end of the pen so you don't lose it. The next thing you'll notice is how it feels in your hand. Also, you'll notice it's easy to see at a glance how much ink is left. This means you'll never run out of ink without..."

I continued in this ridiculous fashion for a few minutes. Then I set the pen back in front of Dave and stopped. I held his gaze firmly — hoping I had focused on his good eye.

He picked up his pen as he said, "Yes, well, that's very nice." He thought it over for a second and said, "I'll be right back."

But he wasn't right back. I sat there for at least 15 minutes. I had a good opportunity to look around. On the wall of the cubicle was a sign stating that in California there was no "cooling off period." It said that once you sign a contract it was binding even if you changed your mind or decided that the car cost too much money.

Another man eventually appeared around the corner of the cubicle and introduced himself. His name was Michael and he was the sandy-haired man I had exchanged greetings with earlier. He had a very pleasant manner. He didn't ask me anything about myself; instead, he talked about how the dealership worked. I would be on a team of six salesmen of which he was the assistant sales manager, or ASM. He told me that I would train for about a week, but then I would be selling cars.

"Selling cars isn't hard," Michael told me. "It's dead easy. You just got to get right up here." He tapped his forehead.

I used the same tactic I had with Dave, repeating that I wanted to make a lot of money. It seemed to be the magic word.

"Oh you can make money here," Michael assured me, smiling. Then he lowered his voice as if telling me a secret. "You could make three or four grand here your first month. It's happened. Sometimes the green peas are the best salesmen."

Green peas. That's what they called the new guys. I had heard that nickname once before from a car salesman friend. I would be hearing it a lot in the coming weeks.

Michael stood up to leave, saying that other people would be in to meet me. But then he ducked back into the cubicle and said in a low voice, "Your driving record — is it clean?" I assured him it was.

I sat there for another 15 minutes before a young woman named Rosa, from human resources, arrived. She led me to a small room where I watched a videotape about this company. It also had interviews with people that worked in car sales telling how much money they made and how they loved their jobs. They didn't read very convincingly from the teleprompter.

When the tape was over Rosa reappeared carrying the personality test that asked me how I felt about going to bars. She said the test showed I was, "dominant, competitive, and impatient."

"Impatient? Is that bad?" I asked her.

"Oh no! No!" she assured me. "It means you want results now now now," she said snapping her fingers.

She then explained how the shifts were handled. I would work from 50 to 60 hours a week, with a lot of night and weekend shifts. She also said they use an "Eight-step process" for selling cars. This probably worked well for applicants that spent a lot of time in bars.

Then she dropped a bomb on me.

"I was going to have the general manager interview you," she said. "But he listened in on your interview and he really liked you."

Listened in on me? I realized she had just confirmed a rumor about dealerships: the selling rooms are bugged. Later I learned that they aren't actually bugged, it's just that the phones have intercoms that can be used easily for listening.

I had been in the dealership for three hours and I was eager to leave. Rosa told me I would need to take a drug test and that they would then do a background check on me. She then paused and looked at me as if waiting for an answer.

"Is there anything you want me to know about?"

"About what?" I asked.

"Sometimes, when I say I'm going to do a background check, people stop me right there."

"Oh," I said, catching on. "My background's clean. No felonies."

"No DUIs?"

"No. I've been a good boy."

"You never know," she said. "I'll call you in a few days and if everything looks good we'll send you to get your sales license."

It was a relief to leave the dealership. As I drove home I reflected on what I had learned so far: To be a car salesman you needed to be able to sell pens, have a clean driving record and be drug-free.

I expected to get a call the next day and begin work immediately. But Rosa didn't call — and she didn't return my calls.

Over the next few days I continued applying for sales jobs. At one dealership, which sold high-end Japanese cars, a manager named Sid reviewed my application.

"But you don't have any experience selling cars," he said, as if I had misrepresented myself.

I went back to the formula that had worked so well.

"No, but I want to make a lot of money."

"Really?" he said. "How much do you want to make in, say, a month?"

I remembered Michael saying they made three or four grand in the first month. So I repeated this figure.

Sid burst out laughing: "I got guys out there makin' 20, 25 grand a month."

"You're kidding."

"No," Sid said, "I'm telling you, man, this is the big leagues."

Sid continued reviewing the application as if he might have missed something. "So you've got no experience selling cars?" he repeated.

No, I admitted for the second time, no experience.

Regretfully, he said he couldn't hire me until I had experience. He added that treating their customers well was more important than selling them a car. I told him that was exactly why I was here. I knew I could treat his customers well. This didn't cut any ice with him. He'd seen guys like me before, trying to fast talk their way into a job they weren't qualified for.

"I'm sorry my friend, but you have to prove it first. We need quotas. It's not enough to talk the talk. You need to walk the walk before you can work here." He handed me back the application and I left.

The next day I had a chance to interview at a dealership that sold American cars. Right away I sensed these guys were different than the salesmen at the dealerships that sold Japanese cars. There, they were slick young guys with expensive silk ties and gold watches. Here they were down-home, average Joes selling pickups and American-built cars.

I shook hands with a man named Jim who had slicked-back hair and a goatee. We sat in a selling room and he began telling me how great business was here. He said the dealership was perfectly situated on the Auto Mall, and the Auto Mall was the busiest in the area. And this area was the busiest place in the country. And America was the busiest place on the planet. So life was good and everyone was making lots and lots of money.

Jim asked me a number of questions about how I would handle situations on the car lot. He wanted to know how would I go about selling cars. I told him simply the best way to get a sale was to repeatedly ask for it. He liked this a lot. I could tell he was agreeing with all my answers so I wasn't surprised when he told me he was going to have his manager speak with me.

Several moments later (no waiting around like at the other interviews) a new guy entered named Stan. He said he had just told the sales staff, "If they sell two more cars by 6 o'clock we're all going out for pizza and beer."

I could tell that Stan couldn't figure out why I was there. I didn't make sense to him as a car salesman. But the more I talked the more he warmed to me. Finally, he said, "You play any sports?" I told him I was a big golfer. He asked me what my handicap was. I told him I was down to a 12 but I knew that if I took this job my golf game would suffer.

"Oh no. You're gonna get to play a lot of golf on this job. You have your mornings free and you'll be working evenings." He snapped the folder shut and said, "I asked you about sports because I wanted to see your competitive side."

I knew these interviews came in threes, so I wasn't surprised when Craig walked into the room. He told me that he had been a schoolteacher before he got into the car business. I could see him as a teacher — he had a warm, intelligent manner. He said that being a car salesman was hard on your life. "Truth of the matter is, you lose all your friends. Not because you're a car salesman, but because when you're around, they're not. And when they're around, you're not. You wind up making all new friends." I thought of the guys getting pizza and beer after selling two more cars. Would they be my new friends?

Craig asked me questions about myself, but mainly he was there to tell me the realities of the job. He told me that I would be successful selling only 20 percent of the time. So about 80 percent of the time I would be failing. He asked me how I took rejection. I said, "If you knew my wife, you'd know I'm an expert on handling rejection." He laughed and said, "A good sense of humor is important."

I was left alone for a few moments while the three of my interviewers held a pow wow. I overheard one of them saying, "He seems like a nice guy." The other one said, "Yes, definitely." Craig returned and told me that I would be sent for drug test and background check. If both of these were clear they could start me in about 10 days.

As I left the dealership I realized I was facing a dilemma: did I want to work with the slippery guys who first interviewed me? Or should I go with the good ole boys at the American dealership? At this point I was leaning toward the slippery guys. I knew I was going to leave in a month anyway. I wouldn't mind cutting and running from the Japanese dealership. The other American boys might shake their heads and say, "If only he'd hung in there, we could've helped him become a successful car salesman."

I called the first dealership back for about the 20th time. This time I didn't give my name, but I had Rosa paged. After a long wait, she came on the line.

"Oh yes," she answered cheerfully (no mention of why she hadn't called back). "Come down Monday morning and we'll send you off to get your car sales license. You can do that while we're finishing your background check."

Did that mean I was hired? On Monday I went to the dealership and Rosa gave me the forms to take to the DMV. But first, I had to have my fingerprints scanned. I went to a local university's security office where they had a special computer for this purpose. I waited three hours before being led into a small, hot room. A sweaty young technician rolled the pads of my fingerprints across a glass plate. He told me that my prints were being sent by modem to the Justice Department — a scary thought. I then went to the DMV where I had another long wait because the computers were down. Finally, I went to the window, paid $56 and had my picture taken. A few moments later I was handed my "Vehicle Salesperson Temporary Permit" with my photo on it. I was now a car salesman. So I decided to play the part.

Speaking through the glass, I told the DMV clerk, "I just got my sales license. You'll have to come on down to the dealership. I'll sell you a car."

"Sorry," she said. "I just bought a new Toyota."

The rejection had already begun.
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subject:
Part 1: Going Undercover
author:
date:
June 29, 2004 - 2:17pm
I had driven by the dealership a hundred times and never stopped. As I passed I would look over at the row of salesmen standing in front of the showroom windows, white shirts gleaming in the sun. This phalanx of salesmen looked so predatory it always made me think, "Who would ever stop there?"

But today, I knew I would be the one stopping there.

I turned my ancient Dodge Conquest into the dealership parking lot and immediately felt their eyes on me. As soon as I opened my car door a salesman was on me.

"Is that a Mitsubishi? Or a Dodge?" the salesman asked, seeking common ground, a way to relax me before getting down to business.

"It's a Mitsubishi imported by Dodge," I said, and quickly added, "Who do I see about applying for a job?"

His attitude changed in a heartbeat. Not only was I not going to buy a car, but I wanted to be his competition.

"See the receptionist," he muttered, and walked away.

Inside, the receptionist was fortified behind a semi-circular counter.

"I'd like to apply for a job," I told her.

"What department?" she asked, yawning.

"Sales."

"New or used?"

"New."

She whipped out an application form and slapped it on the desk. "Fill out both sides and complete this too." She slammed down another form. It looked like the SAT tests I took in high school.

I took a seat in a nearby sales cubicle. It was in a large room divided into glass-walled sales offices. In the corner was a large glassed-in office with a high counter in front of a raised platform. The salesmen in this room looked older, better dressed and had an air of power and authority. They sat behind computers and also seemed to be eyeing the salesmen out on the lot.

Looking down at the application, it blurred in front of my eyes. Could I really do this? Could I really become a — a car salesman? Me, a law abiding middle-aged American. A — gasp — college graduate (well, barely). A writer. A person sometimes described as soft spoken and reserved? Why was I applying for a job in one of the most loathed professions in our society?

Well, here's how a strange turn of events turned me into a car salesman.

About a month earlier I applied for a job at Edmunds.com, touting my experience as a How-To book writer. One book I ghost-wrote was about buying used cars, the other was about leasing cars. The books were published under the name of a guy who had once been a car salesman. I assumed the books qualified me to work for the fast-growing consumer-based Web site. As I saw it, I would sit in the comfort of an office and, from this lofty perch, dispense advice on how to buy and sell cars.

The Edmunds.com editors had other plans.

After we finished lunch one of the editors suddenly asked, "How would you feel about an undercover assignment?"

"What do you mean?" I asked, even though I suspected where this was going. His question had stirred something I had thought about for a long time.

"We would hire you here at Edmunds.com. Then you would go out and get a job as a car salesman and work for three months."

"Selling cars?" I asked unnecessarily.

"Right."

"Where would I work?"

"Wherever you can get hired. That would be up to you. We were thinking you should work at two dealerships. The first would be a high-volume, high-pressure store. Then you could quit and go to a no-haggle dealership. You could tell them you didn't like the pressure at the first place and you'd probably get a job on the spot."

The editor explained that they wanted me to write a series of articles describing the business from the inside. Of course I would learn the tricks of the trade, and that would better prepare me to write advice for Edmunds.com. But the benefits of the project would be greater than just information. I would live the life of a car salesman for three months. That would give me an insight and perspective that couldn't be gained by reading books or articles or interviewing former car salesmen.

"So what do you think?" the editor asked. "Interested?"

I have a history of acting before I think things through. I jump in with both feet and sometimes live to regret my decision. But here I was, in the middle of my life, long past the adventures of adolescence, past all the lousy summer jobs, past my early newspaper days on the police beat. It was a long time since I'd had a good adventure. But selling cars?

"Sure, I'll do it," I said. A week later, they offered me the job.

It was several weeks before I started at Edmunds.com, and then several more weeks before I was to begin the undercover project. Plenty of time to wonder what the hell I'd gotten myself into. I began clipping newspaper ads for car sales positions. Just the language in the ads made me nervous: "Aggressive sales professionals wanted!" or "Selling hot cars at MSRP. Join the #1 Team. Xlnt pay & benef. App in person." I could almost sense the pressure of the car business coming through the newspaper.

A friend of mine used to have an office surrounded by car lots. He would eat lunch with car salesmen and listen to them brag about the tricks they used to move cars. Occasionally, another man would join them, a guy they called "Speedometer Shorty." He would go from one car lot to another winding the odometers back to show fewer miles.

"What do you think they would do to me at the dealership if they found I worked for Edmunds?" I asked my friend.

"They'd kill you," he said without hesitation. Then he began laughing. "What they'd do is put your body in the trunk of a competitor's car."

He was yanking my chain, of course. But the fact that he answered so quickly gave me pause. Still, I told myself nothing like that would happen to me. I wasn't there to hurt the dealership. I wasn't there to steal anything or to hurt their business. We weren't going for dirt. But if dirt was there we would report it. Basically, we just wanted to see what was happening at ground zero in the auto business.

The date finally arrived for me to leave the Edmunds.com offices and begin looking for a job selling cars. As I prepared to leave, my editor offered me this advice: "When you're interviewing, don't tell them you know a lot about cars. They don't care. If they ask why you want to work there, just tell them you want to make a lot of money."

He then flipped open his calendar and counted off the weeks. "You're due back in the office in 10 weeks. We won't expect to see you until then. Let us hear from you every 48 hours or so with a phone call or e-mail. And good luck."

That weekend I went to the store and bought three new white shirts and a pair of black shoes with soft soles. I figured I'd be on my feet a lot. Monday morning I put together a resume. How should I present myself? Why would someone hire me to sell cars? I thought back to what my editor said, "Just tell them you want to make a lot of money." Good advice. But I needed more than that. There would be questions about who I was. Where I had worked. Requests for references maybe.

I decided that I would look over my recent past and select those things that could be viewed as being sales related. In other words, I wanted to avoid lying. For the previous three years I'd written video proposals for training films. A proposal is a form of selling — right? Maybe that would work. I called my friend and asked him to back me up in case the dealership called him. No problem, he said. I had also sold sporting goods at one time. And I had written proposals for grants for another company. I was beginning to see a biography that might work.

Monday morning rolled around and I realized that the time had arrived. It was time to get a job as a car salesman. I drove to an auto mall near my house. Acres of shining cars stretched out in front of me. One dealership had a large banner reading, "We're growing! Now hiring! Apply within."

That was when I pulled in and got the application.

"I understand you want to sell cars." The voice brought me back to the present. I looked up from the application. A man stood there smiling at me. He had carefully cut black hair. He wore a white shirt and a silk tie. As he extended his hand to shake, light flashed off a gold Rolex.

"I'm Dave. When you're done filling that out have me paged and we'll talk."

He smiled again, evaluating me. Then he disappeared.

Nice guy, I thought. Maybe this won't be so bad. I was about to begin work on the application when I looked around. I glanced toward the glassed-in office in the corner of the building. The one with the raised platform and the senior sales guys watching over the car lot. Dave was in there speaking to several of the older men in white shirts and ties. They all turned and looked at me.

It was too late to turn back now. I bent over the application and began writing.
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subject:
Introduction
author:
date:
June 29, 2004 - 2:16pm
What really goes on in the back rooms of car dealerships across America?

What does the car salesman do when he leaves you sitting in a sales office and goes to talk with his boss?

What are the tricks salespeople use to increase their profit and how can consumers protect themselves from overpaying?

These were the questions we, the editors at Edmunds.com, wanted to answer for our readers. But how could they really know that our information was accurate and up-to-date? Finally, we came up with the idea of hiring an investigative reporter to work in the industry and experience, firsthand, the life of a car salesman.

We hired Chandler Phillips, a veteran journalist, to go undercover by working at two new car dealerships in the Los Angeles area. First, he would work at a high-volume, high-pressure dealership selling Japanese cars. Then, he'd change over to a smaller car lot that sold domestic cars at "no haggle" prices.

We invite you to read the following account of Phillips' day-to-day experience on the car lots. Doing so will broaden your understanding of the dealership sales process. It will also cast a new light on the role of the car salesman. And, finally, it will help you get a better deal — and avoid hidden charges — the next time you go to buy or lease a new car.

Read, learn and enjoy.

— The editors at Edmunds.com
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