Finance and Insurance - The Profit Center I would like to make myself clear on a few items of interest before I get too deep into the sales processes at any dealership, including: automobile, recreational vehicles, boats, motorcycle, and even furniture or other big ticket items. A business has to turn a fair profit in order to stay in business. I believe that they should make this profit and use it to pay better quality employees a premium wage in order to serve you better. The financial strengths or weaknesses of any business can definitely have a dramatic effect on your customer service and satisfaction. I do not, in any shape or form, wish to hurt a dealerships profitability, as it is essential for his survival. I merely want to advise people how to negotiate a little better in order to make the profit center more balanced. Let's get right down to this! Every dealership has a finance and insurance department. This department is a huge profit center in any dealership. In some cases, it earns more money than the sale of the automobile itself. Profits are made from many things that most buyers do not understand. You as a consumer should understand the "flow" of the sales process to understand the profit centers that are ahead of you. Most negotiating from the consumer seems to stop after the original price is negotiated and agreed upon. Let's examine just a small portion of what leads up to that point. The first thing that every consumer should understand is that when you go to a dealership several things come into play. One of the most important things that I could point out to you is that you are dealing with a business that has been trained to get the most amount of money from you as they can. They are trained and they practice these tactics everyday, day after day, week after week, month after month, and year after year. Let me point out a couple of important facts that I have said in this paragraph. First, you'll notice that I said a dealership and not a salesman and secondly, I emphasized times of day after day, week after week, etc. etc. This was done to let you know that the salesman is working very closely with the sales managers in order to make as much money as he can. Your interests are really not their objective in most cases. One tactic that is used heavily in the business is that the salesman says he is new to the business. This may be true or not, however; keep in mind that he does not work alone. He is working with store management, who gives him advice on what to say and when to say it. These guys or gals are very well trained on how to overcome every objection that you may have to buying from them. They have been trained in the psychology of the buyer and how to tell what your "hot buttons" are. They listen to things in your conversation that you may say to one another as well as to the salesman. They are trained to tell their desk managers everything that you say and then the desk manager is trained to tell the salesman exactly what and how to answer you. A seasoned salesman does not need as much advice from his desk and may negotiate a little more with you directly without going back and forth. The process of negotiation begins the moment that you walk into the front door or step foot out of your car and begin to look at vehicles. Different stores display inventory in different ways. This is done for crowd control or more commonly known as "up control". Control is the first step in negotiating with a customer. Ever who asks the questions controls the situation. Let me give you an example: A salesman walks up to you and says "Welcome to ABC motors, my name is Joe, and what is yours?" The salesman has just asked the first question- you answer "My name is George." He then asks you what you are looking for today, or; the famous "Can I help You?" As you can see, step after step, question after question, he leads you down a path that he is trained to do. Many times a well trained salesperson will not answer your questions directly. In some cases, they only respond to questions with other questions in order to avert the loss of control. An example of this could be something like you asking the salesman if he has this same car with an automatic rather than a stick shift. Two responses could come back to you. One would be yes or no, the other could very well be something along the lines of: 'don't you know how to drive a stick shift?" In the second response the salesman gained more information from you in order to close you. Closing means to overcome every objection and give your customer no way out other than where do I sign. The art of selling truly is a science of well scripted roll playing and rehearsal. We have established that the negotiating process begins with a series of questions. These questions serve as two main elements of the sales process. First and foremost is to establish rapport and control. The more information that you are willing to share with you salesman in the first few minutes gives him a greater control of the sales process. He has gathered mental notes on our ability to purchase such as whether you have a trade in or not, if you have a down payment, how much can you afford, are you the only decision maker (is there a spouse?), how is your credit, or do you have a payoff on your trade in? These are one of many pieces of information that they collect immediately. Secondly, this information is used to begin a conversation with store management about who the salesman is with, what are they looking for, and what is their ability to purchase. Generally, a sales manager then directs the sales process from his seat in the "tower". A seat that generally overlooks the sales floor or the sales lot. He is kind of like a conductor of an orchestra, seeing all, and hearing all. I cannot describe the entire sales process with you as this varies from dealer to dealer, however; the basic principals of the sale do not vary too much. Most dealerships get started after a demo or test drive. Usually a salesman gets a sheet of paper out that is called a four square. The four square is normally used to find the customer's "hot points". The four corners of the sheet have the following items addressed, not necessarily in this order. Number one is sales price, number two is trade value, number three is down payment, and number four is monthly payments. The idea here is to reduce three out of the four items and focus on YOUR hot button. Every person settles in on something different. The idea for the salesman is to get you to focus and commit to one or two of the hot buttons without even addressing the other two or three items. When you do settle in on one of the items on the four square, the process of closing you becomes much easier. One thing to keep in mind is that all four items are usually negotiable and are usually submitted to you the first time in a manner as to maximize the profit that the dealer earns on the deal. Usually the MSRP is listed unless there is a sales price that is advertised (in may cases the vehicle is advertised, but; you are not aware). The trade value is usually first submitted to you as wholesale value. Most dealers request 25-33% down payment. Most monthly payments are inflated using maximum rate. What this all boils down to is that the price is usually always negotiable, the trade in is definitely negotiable, the down payment may be what you choose, and the monthly payment and interest rates are most certainly negotiable. If you do your homework prior to a dealership visit you can go into the negotiation process better armed. You still need to keep two things in mind through this process. The first item is that you are dealing with a sales TEAM that is usually highly skilled and money motivated. The more you pay the more they earn. The second item to remember is that you may have done your homework and think that you are getting a great deal and the dealer is still making a lot of money. The latter part of this statement goes back to the fact that it is essential for a dealer to make a "fair" profit in order to serve you better. Once your negotiations are somewhat settled, you are then taken to the business or finance department to finalize your paperwork. Keep in mind that this too is another negotiating process. In fact, the finance manager is usually one of the top trained sales associates that definitely knows all the ins and outs of maximizing the dealerships profit. It is in the finance department that many dealers actually earn more than they earned by selling the car, boat, RV, or other large ticket item to you. We will break these profit centers down for you and enlighten you as to how the process usually works. Remember that finance people are more often than not a superior skilled negotiator that is still representing the dealership. It may seem that he or she has your best interests at heart, but; they are still profit centered. The real problem with finance departments are that the average consumer has just put his or her guard down. They have just negotiated hard for what is assumed to be a good deal. They have taken this deal at full faced value and assume that all negotiations are done. The average consumer doesn't even have an understanding of finances or how the finance department functions. The average consumer nearly "lays down" for anything that the finance manager says. The interest rate is one of the largest profit centers in the finance department. For example, the dealership buys the interest rate from the bank the same way that he buys the car from the manufacturer. He may only have to pay 6% to the bank for a $25,000 loan. He can then charge you 8% for that same $25,000. The dealer is paid on the difference. If this is a five year loan that amount could very well be $2,000. So the dealer makes an additional $2,000 profit on the sale when the bank funds the loan. This is called a rate spread or "reserves". In mortgages, this is disclosed at time of closing on the HUD-1 statement as Yield Spread Premium. This may also be disclosed on the Good Faith Estimate or GFE. You can see why it becomes important to understand bank rates and financing. Many finance managers use a menu to sell aftermarket products to you. This process is very similar to the four square process that I discussed in the beginning. There are usually items like gap insurance, extended service contracts, paint and fabric guard, as well as many other after market products available from this dealer. The menu again is usually stacked up to be presented to the consumer in a way that the dealer maximizes his profitability if you take the best plan available. The presentation is usually given in a manner in which the dealer wins no matter what options are chosen. With the additional items being pitched to you at closing, your mind becomes less entrenched on the rates and terms and your focus then turns to the after market products. Each aftermarket item can very well make the dealer up to 300-400% over what he pays for these items. Gap coverage for example may cost the dealer $195.00 and is sold to the consumer for $895.00. The $700.00 is pure profit to the dealer and is very rarely negotiated down during this process. The service contract may only cost a dealer $650.00 and is being sold for $2000.00. The difference in these items are pure profit to the dealer. You see, if you only paid $995.00 for the same contract, the dealer still earns $345.00 profit from you and you still have the same coverage that you would have had if you had paid the $2000.00. The same is true for the gap coverage. You are covered the same if you paid $395.00 or $895.00 if the dealers costs are only $195.00. The only difference is the amount of profit that you paid to the dealer. Another huge profit center is paint and fabric protector. In most cases the costs to apply the product are minimal (around $125.00 on average). In many cases the dealer charges you $1200-$1800 for this paint and fabric guard. As you can see, these products sold in the finance department are huge profit centers and are negotiable. I also have to recommend the value of most all products sold in a finance department. It is in your best interest to get the best coverage possible at the best price possible. Always remember this: The dealer has to make a fair profit to stay in business. It just doesn't have to be all out of your pocket.
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Siapa Budak Kecil Yang Masuk Dalam Gambar Wanita Ber’Selfie’ Tengah Malam Ni?










How to Select the Right College For Your Child, and Your Finances! It's an exciting time of year. Springtime is on its way, and most graduating seniors are receiving admissions letters from the schools to which they've applied! At this point, you have probably reviewed that list of colleges and universities where your child could be pursuing their dreams of higher education... and you are also aware that the upcoming decisions for your family are of the utmost importance! Making the choice of where to attend college is not an easy task, under the best of circumstances. This can be a weighty decision for the student, who considers such matters as academics, geographic location, future professional goals, and (of course) social situations... and it is every bit as demanding for the family, especially with the enormous effect it can have on your finances. This is one of those life situations where, working together, you and your child really need to make the right choice. There is a lot riding on this decision. Obviously, the money factor cannot be ignored in choosing a school. The anticipated cost of attendance can move a school up (or down) your list of possible schools faster than just about any other consideration! However, "cost" can be a tricky matter, as some schools which give parents an initial tuition sticker-shock may not turn out to be overwhelmingly expensive in the long run. Remember to look beyond the dollars and cents to see what each institution is actually offering to your child... both in the way of financial aid, the actual expenses for the school, and any assistance available to your child from the school. In order to assist you in analyzing these options, I am pleased to provide some specific points to consider as you review the college offers available to your child. As you focus in on each school, please be sure to go over the award letter information with a fine-toothed comb. Here are four specific areas to hone in on: For better or for worse, you're probably now on a first-name basis with your Expected Family Contribution (EFC). As you are likely aware, this is the amount that the Federal Government has dictated for you to pay the school. Bear in mind that there are two sides to this figure - your side, and the schools' side! Most people are convinced that their EFC is too high to be manageable, while most colleges (especially spendy private schools) will look at the same figure and deem it too low. This could mean that your award letters may ask for even more money than your EFC indicated! Pay very close attention to how the college has listed your EFC, and whether or not it is correct. Note that each school making an offer to your child will provide an estimate of Total Annual Expenses. These are generally quite accurate, as the school usually goes to great lengths to update these numbers annually. However, while tuition and fees are the same across the board for all students, the actual living costs can vary wildly, depending on how and where your child plans to reside during the school year! Lifestyle will be the determining factor, here. Students who plan to dine out at restaurants and live on their own (not to mention feed any shopping habits), will have considerably higher expenses than a student who choose to live and eat at home. In fact, if your child can stay at home during school, you can remove rent and food from the Total Annual Expenses. When you determine these details, calculating this figure shouldn't be a challenge. With the EFC and TAE in mind, you now need to determine how large of a financial gap you're facing - figure the difference between your EFC (Point #1) and the TAE (Point #2), and you will have arrived at your individualized financial need for that school. Note that this will probably be different for each institution! The school will probably have calculated the financial need amount for you, because they utilize this number to arrive at any financial aid package they will provide for your child. It's nice to know where the school is coming from in determining their amount of assistance. While all of the above are important figures, probably the most vital information you will find in these offer letters will be the scholarships, grants and loans available to your child! These should be spelled out in the award letter from each school, and in addition to scholarships may include special loans, grant programs, or even work/study aid. Of course, some of these are "free money," and others require repayment, so the offers are not all the same. This next bit of advice may seem like overkill, but I cannot emphasize it enough - regardless of whether or not your child has decided to attend any school, you should absolutely accept every single financial aid offer your child has received! There is a very real difference between accepting and actually committing to receive these offers, and you don't want to block your child from the possibility of any aid available down the road. You see, significant financial changes can occur between the time that your child accepts an offer and the actual start of school. Until you have to make a final decision, all sorts of things could happen: additional money could become available through family, private scholarships, or other sources... a parent might land a new job, or even discover how to arrange financial assets in a specialized manner to free up the money for a school. With even the possibility of changes like these, your best bet is to accept all financial aid offers EARLY, and then you and your child can begin focusing in on the final choices. FINALLY, IT'S TIME TO CHOOSE! "Education costs money... but then, so does ignorance." Baron Claus Moser The old adage that "money isn't everything" is especially pertinent when it comes to selecting a school. When making a college selection, money should never be the first and only thing on your mind. The inherent value in a solid education comes over the many years of your child's professional life, and can result in hundreds of thousands of dollars of earnings. I always like to urge parents to take a long-term view at the immediate investment in their child's future. Just like any other investment, however, you can only actually invest resources that you can access! Reality dictates that money will play a role in where your child attends school. With that reality in mind, grants are a terrific way to pay for school! If your child is offered grant money in an award letter, that is definitely worth highlighting, because grants do not have to be paid back. In addition, grants do not require any additional time or effort from your student, like funds available from work/study programs... and they do not require future payback, like funds available through low interest loans. Focus on the breakdown of each school's offer - the more "free money" they can provide in their offer, the more attractive that offer may soon become! For example, consider that College ABC makes an offer of $20,000 in award money, while College XYZ offers only $15,000. That's a no-brainer, right? Well, maybe not. If College XYZ is offering most of that money in grants and work-study funds, it could be a better net choice in the long run, especially if College ABC's offer consists mostly of low-interest private loans! Calculate out the length and payoff costs of any loans in a financial aid package before you decide that one offer is more generous than the rest. The logistics of college attendance are also something that must be reviewed. If your student is attending college in another part of the country, there will likely be plenty of airline tickets for summers and vacation plans. If the school is in a high-cost city, such as New York, Boston, or Los Angeles, the realities of expensive rent and other considerations will soon add to the cost of attendance. Breaking down the cost of living in each geographic area will give you a better idea of the real-world costs for your child to attend school there. You're now in the home stretch of deciding on a college with your child! We know that it can be both an exciting and a stressful time, but if you are making these decisions with solid information, it can help to smooth things out considerably. So, during this period of uncertainty, we would like to offer our expertise in the area of college funding and financial planning to assist you in clearing up any confusion regarding financial aid awards, and narrowing down your final college choice. We are experts in helping families to arrange financial assets in such as way that can provide that all-important money for college... and do so on a tax-favored basis. Of course, this plan is not designed for every family sending child to college, but under the right circumstances it could be capable of providing your child with the resources to attend a truly outstanding school that you might have thought your family could never afford! YOU'RE EITHER ALMOST THERE...OR YOUR JOURNEY IS JUST BEGINNING! If you are the parent of a graduating senior, you are probably now experiencing the excitement (and relief!) of knowing that this incredible journey of college selection is about to end. You have taken every step you can to maximize the financial aid package for your child. If your child is a junior, however, you can start right now to make the choices that will lower your EFC and help to get the cost of college for your student down to something that may be more manageable for you. In fact, you may be surprised to learn that in the eyes of colleges and universities, this is your "base year." Yes, the income your family reports this year will affect what the colleges expect you to pay towards your child's education. Your Adjusted Gross Income, plus your assets, will be used in these determinations. Usually, the lower the value of your assets when applying for financial aid, the lower your EFC turns out to be. However, some schools will use an Institutional Methodology, which includes assets such as your home, to calculate your EFC. Living in an expensive house, for example, can boost your EFC higher, even though that money is not available because it is tied up in your house! You may find that this happens a lot with private schools, especially, and they may even count any pre-paid tuition plans against your EFC. This doesn't mean that you need to avoid private schools, however - you may find that their findings can be negotiated, and they may have private aid to offer, as well. In addition, as we mentioned above, your home and other assets can sometimes be arranged to help the college funding and improve your tax situation.




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