I get instock vehicles for $500 less then ones in allocation/freight. Sometimes I quote a buyer then when they finally agree to buy the car it’s already on the lot.
Some people think I’m lying and trying to make more $. In that case I let the dealer pay me out. Some jump on the opportunity to save $500 by paying $250. I leave it up to the customer.
I understand why he’s doing it, some people hate paying us. But end of the day the all in price is what matters and if you can beat it then do so. Personally I tell people exactly that, “find a better price and I’ll beat it” if it comes out of my fee that’s fine. Bc if my deals are ever beat I go to the manager and tell them what other dealers are doing and they drop my price. Win win for everyone but the dealer.
Exactly what I do when I have a sequoia pro etc at invoice, 6k off, and advertise it at 4k off. I’m not keeping the entire 2k but it’s no one else’s business what I have to do to get the deal. It may be a grey area paying sales guys extra on the side, but sometimes that’s what it takes to even have the opportunity to get such a deal. If sales gets in trouble that’s on them but I have no problem kicking back $500 to them, I’m still profiting $1500 on a deal that if good, takes me 10 minutes to market and flip. People that get a great deal tend to refer you to everyone and anyone, that’s why I do it even though I could make more.
If someone asks me why my fee is higher than normal I tell them straight up. Smart consumers have no issues paying. If they don’t want to pay I usually have 5 others that will.
Okay, I am first going to share all text messages between us and OP, us and client, and lastly between us and dealer (pertaining to this client). Then we can start going through this fully.
Texts pertaining to this deal are outlined in red these images have been removed via moderation
Lease contract:
these images have been removed via moderation
Now let’s get into this.
As you already knew, your friends registration expired that day so the deal had to be done that day to qualify for the conquest rebate. @adomspam as a former car broker, (yes, he used to be a car broker, which he told us and the dealer himself) you would already know that there would be no reason to take a deposit from your friend on a car that they were getting the same day. Either way, why not ask about the upfront payment when your friend first received it or even paid it?
Claim 1 and Claim 2 should be melded into one claim. Lol.
What I told you was that since your friend paid the $300 upfront to us, we DEDUCTED that $300 from the cap cost (ALSO KNOWN AS THE SELLING PRICE)
Your response was that there was no cap cost reduction shown on the lease. (There can’t be any cap cost reduction on a one pay lease contract)
After that, I called you to explain to show you proof that it was deducted from the cap cost (ALSO KNOWN AS SELLING PRICE) and I texted you the link to the deal page on our website so you could see the discount shown on our website.
these images have been removed via moderation
This is how I proved it to you:
Here was the discount shown on our website for the Ioniq 5 SEL deal:
Discount was showing $18100 discount. On a 24 month lease, the lease cash in november was 14500.
18100 Discount
-14500 lease cash
= 3600 discount from MSRP
Other brokers can confirm lease cash amount, but instead of waiting for another broker to confirm, here is the november program sheet proving the lease cash amount since those with access to Rate Findr can’t look up previous months lease cash amounts.
So, $3600 discount proven to you, then and now. Let’s look at your friends lease contract.
these images have been removed via moderation
First, let’s calculate the original MSRP. If you look at arrow C in the pic above, the residual value is 32214. 10k miles residual on 13 month lease in November was 65%.
32214/0.65= 49560 MSRP
Next, let’s look at the cap cost (ALSO KNOWN AS SELLING PRICE). If you look at arrow B, the cap cost is showing 45560.
49560 MSRP
-45560 cap cost
= 4000 discount
So, you got an additional $100 discount than you should have because you paid $300 upfront to us. Meaning your discount should have been only $3900 from MSRP.
Claim 1 and 2: PROVEN TO BE TRUE
I believe claim 3 was also proven to be true by proving claim 1 and 2, but to put it over the top, if you look at the text we sent to the dealer it proves it even further.
these images have been removed via moderation
The GSM did confirm to the OP that no compensation was paid to us (because we already took the dealer fee upfront!)
Why would the dealer pay us after we already took the dealer fee upfront???
Claim 3: Proven to be true
@adomspam thank you for posting claim 4. I could say more, but honestly the proof says everything.
Tagged you all since you brought up the re-contract point and @adomspam just clearly lied in his claim 4. I will quote it again:
**Omega text messages with OP offering
re-contracting over and over and over again:** these images have been removed via moderation
Omega text messages with Dealer setting up the re-contracting, and dealer stating themselves that the OP said they did not want re-contract:
these images have been removed via moderation
Claim 4: Proven to be true. In the sense that I offered it and had set it up with the dealer.
@adomspam You are very welcome for the amazing deal we got your friend and the efficiency of which it was completed (5 hours from credit app to pick up 3:30-8:30PM) as to ensure she would qualify for the conquest rebate. I tried everything to resolve this with you (other than refunding $300 for no reason at all)
Tagged you all since you mentioned advertising and transparency.
First off, we did not charge his friend extra $300. His friend paid exactly what was agreed to.
Lastly, let me explain why we take our dealer fees upfront and how pricing with dealers work. Please help me provide a more transparent experience because after I explain this, I will show you what the advertisement could look like and how convoluted it would look. This includes you too @adomspam. Provide me a better alternative and I will change our ways.
Now let me explain to everyone else why we like to take our dealer fees upfront when dealers allow us. I already explained this to the OP previously.
When we have our dealer fee rolled into the deal where the dealer has to pay us directly, it can, depending on the dealer, take up to 200 days before receiving a check for any given deal. (3-4 months on average) We even have some deals that we are still trying to collect from almost 2 years ago from dealers. So we decided to cut out the accounts receivables turn around time and collect it directly from the client (the deal is the same for the client either way). Most dealers prefer this way, because their business office does not have to deal with it on their end either,
It actually is even more transparent because when brokers roll their dealer fee into the deal, the client will never know what the dealer is paying the broker. At least this way you know how the money is being allocated, but again, the money you are paying out of pocket in total is the same either way. And as I already have proven, clients are NOT required to pay the dealer fee upfront, if they would rather the dealer pay us directly we would have just bitten the peverbial accounts receivable nightmare of a “bullet” and roll it into the deal. If @adomspam would have brought this point up when his friend asked about it before paying it, we would have provided that option. Doing it not only after payment has been made, but even worse AFTER the contract has already been signed and car picked up is unreasonable. More so, not accepting the re-contracting when it was offered again and again is finally ridiculous.
All deals are pre-negotiated by the time we post them, but every dealer has different pricing varying to some degree by anywhere between $100-$2000. Or even higher on rare models.
For example (Hypothetical) let’s continue with Ioniq 5:
Hyundai Dealer A Ioniq 5 broker pricing: $3000 off sticker
Hyundai Dealer B Ioniq 5 broker pricing: $2500 off sticker
Hyundai Dealer C Ioniq 5 broker pricing: $2000 off sticker
Based on market trends and researched deals, advertising deals at 2k off sticker is the sweet spot that beats pricing from most brokers and dealers.
Obviously we would prefer to have all our deals go through Dealer A because we make the most money with them, but Dealer A already has 19 of our deals and they are not able to keep up the efficiency so we divert some new deals to Dealer B. Yes, we are losing $250 on our profit, but now we are better able to keep up the efficiency to ensure customers receive their cars as promptly as possible and are satisfied. BUT WAIT, as brokers, we know that Dealer A and B are not always going to be the top two best priced and dealers can be whiny babies if they don’t at least get a few deals each month or every other month. Let’s make sure to give Dealer C, D, E, and F some deals because they could be better priced next month or the month after. Again, cuts into our profit margin, but from a decade of doing business, we know this will work out for us in the long term.
(I will reiterate the example above is just an example to help you understand)
Let’s apply this to our November Ioniq 5 advertisement:
For ease, let’s work this based on the 7.75% tax rate deal.
1485+799=2284 total out of pocket
Now, let’s look at what it could be:
13/10k ONE PAY(Conquest ): 2284 (7.75% tax, fees, and Customer Broker/Dealer Broker fee included)
Hmmm well that can’t work because broker fee is not actually listed so this would really be against advertising guidelines. Also, other brokers that keep their customer fee outside of the deal advertised are showing a lower payment in their thread title so our thread will not get clicked on as much even though our deal is actually cheaper
13/10k ONE PAY(Conquest ): 485-1485 paid to dealer (7.75% tax and fees included) 1799-799 paid to Broker. No matter what, your deal is equating to 2284 all in and will depend on which dealer we send your deal to.
Hmmm well that can’t work either because a final broker fee is not actually listed so this would also be against advertising guidelines. Then Imagine seeing that ad on a thread title, most people would be like WTF??
More over, you will have those clients that will be like:
Potential client: “I want the 485 paid to dealer and $799 paid to broker deal.”
Omega: “No sir, as it states on the post, your total no matter what is 2284. What you will pay to the dealer and us will depend on which dealer we send it to.”
Potential client: “Well it could be read as though we could choose which amount we want to pay to both dealer and broker.”
Omega: “No sir, again as it states on the post, your total no matter what is 2284. What you will pay to the dealer and us will depend on which dealer we send it to.”
Potential client: “Ugh, that is so misleading. There is a huge discrepancy here. Let me bring this to LH”
Potential client: “I am still going to post this on LH”
Ugh ok, let me spend half the night screenshotting text messages, blacking out names for privacy reasons, and come up with other arguments against this clients facts so I am not needlessly roasted once again.
We simplified the version of what we have on our credit app disclosure.
Is this acceptable to the community as a whole?
If any of you have an alternative that you think will work, please post it.
Thank you. It is now 5am. I am going to sleep.
Note: I did not have the energy to proof read this entire reply. If something does not make sense, post it and I will respond once I wake up.
This right here, and the effort expended by this broker to explain the process, is why I felt this was an unfair public dragging. $300 moved around on the best deal of your friend’s life. Just take your win. I kinda hope every broker here has taken note of your name. No more incredible deals for you without the work.
Why not just keep it simple for all prospective customers and advertise a $1099 broker fee ($799 + $300)?
I’ve only read part of your detailed response. I am sure I will go through it at some point. At the end of the day, I don’t think customers care how you get paid or from which dealer partner they are picking up their car. As long as the agreed upon pricing and advertised fees are what they actually pay, then there will be no issues or misunderstanding.
@Omegaautogroup - Am I missing something here? I am not telling you how to run your business, btw.
I think this is the exact issue here. @Omegaautogroup, so you are saying you would advertise at $2k discount, but if you send the buyer to a dealer offering the $3k discount, you get to pocket the extra discount?
Edit: I think @Omegaautogroup had a typo and meant he should advertise at $3k discount. Yes, that is what should be advertised and when that dealer sells out and you need to go through dealer B or C, update the ad with the new numbers.
A million words and screenshots to prove his defense yet the crux of the allegations has actually been admitted to. He advertised a $799 broker fee and took $1,099.
But if as a prospective customer you will be saving thousands of dollars compared to your local dealer, then I see nothing wrong with the free market at play.
I agree that if you look at it from a totality standpoint, it shouldn’t matter. But in this case, the OP is actually $15 ahead of what was originally agreed upon and the end result is still a grievance resulting in a 140+ post thread. Truth is, most average consumers are going to look at a $1,099 fee for a $1,250 car and think “I am essentially paying for 2 cars”. They don’t look beyond that.
I would respectfully disagree. OP was mainly stating their experience. It was mentioned earlier, but it is interesting that the broker updated their post on November 16th with additional wording about the $300.
If the arrangement is “go find me the best deal you can and I am going to pay you a retainer fee to get it and negotiate on my behalf” I could get behind the conflict of interest there.
If the arrangement is “I have this available for this price, if you want it, let me know”, why does it matter?
The disclosure requirements may be a different conversation.
They all equal the same thing. You can argue that the broker was not transparent as to how the monies were allocated but you can’t argue that this was fraudulent. You agreed to paying $2,638 total for the deal and that’s what you paid. I understand the thought that the car was contracted for $1250 and you want to be refunded the $300 to make the total OOP $2,049. But that’s not what was agreed upon.
I’m in no way defending the broker because I hate opaque business practices. But the OP suffered zero loss here.
