Car buying and a few hours with Mike

Mike sells cars and I had a chance to meet him and learn from him this past Saturday morning.  Mike was born in Russia and possesses the exaggerated but authentically pure accent I grew up watching actors fake on television.  As I was speaking with Mike, it dawned on me that Russian may be the easiest accent to credibly fake and get away with.

I learned three interesting things from him.

First, Mike just completed his Masters at Babson College in International Finance.  When he decided to pursue that degree, his logic was that an ability to speak multiple languages, coupled with some experience working in global markets and an advanced degree would align him well with a future moving toward an increasingly global business arena.  But it’s the economy thing now, and so Mike is selling cars.

Second, Mike told me all about the inner workings of the car business.  How cars and sold and how salespeople are compensated.  As I listened, I couldn’t help but think that I’m glad I don’t sell cars.  Obviously, salespeople are motivated and incentivized to sell a car with the highest possible mark-up intact.  It’s good for the manufacturer, good for the dealer, good for the salesperson.  But Mike isn’t wired that way.  He put the invoice price on the table and gave me “the bottom line that they will let me to sell this for”… in that heavy Russian voice.  Because I had done my homework (http://www.edmunds.com/), I knew he was  being honest.  Mike may be highly trained in global finance, but I wonder if he’s properly wired for selling cars.

And here’s the most interesting thing of all.  Because I’m trading a car in, Mike asked me up front how many miles are on it.  A few hours later, we walked out to the car together and he looked at the odometer.  He congratulated and thanked me for giving him an honest number earlier.  Mike said many people, most people even, mention the mileage on their trade-ins and estimate low.  Sometimes really, really low.  Mike assumes that’s because people figure they will get more for their used cars if they understate the mileage.  He wonders if people forget that the dealership will eventually verify the actual mileage.  According to Mike, the people who give accurate estimates are always the nicest people to work with and who usually walk home with the best deals (including thrown in accessories, free service visits, etc.).  The people who intentionally misestimate, Mike believes, “pay for it in the end.”

Mike can’t wait to get a job more in line with his aspirations.  He’s working hard to put his MBA to good use and to move on from this temporary gig.  As I departed, Mike mentioned that his numbers are low and margins too thin.  He’s not sure he’s going to make it selling cars… and I was happy to have made his acquaintance.