When I was running car dealerships, we averaged about $3300 a car sold. That put us about $600 higher than the national average. The crazy thing is that the profit on the vehicle sold was always the same at around $1500, then we would “steal” a couple of hundred dollars off the trade making our profit $1700 to $1800 dollars. We called this “front end profit” and that part was “normal” for the car business. But where we excelled is in finance. We typically averaged $1500 PRU “per retail unit” sold. Finance profit is called “back end profit”.
Why am I telling you this? Because it’s time for us to talk about dealership financing. It’s EASILY the highest profit center in the dealership, not necessarily in total dollars, but in terms of net profit. Front end profit has several expenses associated with it including sales commissions and pack (an internal dealer fee) which are two examples and they take 35% to 50% of the profit. So, the dealership sells a car and $900 profit is instantly gone. Back end profit has chargebacks and a small amount of finance department commission so the $1500 PRU has about $300 of expenses leaving $1200 profit.
Quick tidbit for you: The old school car guys called the finance office “the box”. Short for “the hot box”. It’s interesting that we’ve been selling cars through a dealership for 80 years or so and shopping for cars has changed a bit, but the hot box still exists. There is simply too much profit at stake.
I’ve rambled a bit and I apologize. The point is this: Before starting Texas Car Concierge, we were running car dealerships. One aspect of that was training my finance managers. We trained and trained and trained on overcoming objections. We trained them to sell finance products using commitment, social proof, and authority. Each customer was different so spent at least 3 hours a week working on tactics and strategies. When you sat down in our finance offices, you were about to speak to a well trained agent capable of selling via logic or via emotion.
The finance office is a big reason why you should reach out to us when you are ready to buy a car. We know what they are going to ask you. How they will back you into a corner asking perfectly logical questions. “Do you want the best ownership experience?” is a set up question. “Would you be happy if your car is 99% perfect” is another set up question. We know their playbook because we wrote the playbook. When you hire us, you don’t deal with their pressure. You don’t have to worry about navigating the finance office. You won’t have to worry about paying for things you don’t want or need.
That’s it. That’s our “pitch”. You won’t have to worry. But we don’t stop there. We pride ourselves on making your car buying process fun and easy. We garner a great deal of satisfaction when everything is finished and you say to us, “Is that all there is?” because you were expecting some type of surprise. No surprises. Just folks working hard to be the best personal car shoppers we can be.
