Joe's Garage has been in business since 1982 providing automotive repair and towing services as a sole proprietorship owned by Joseph. Joseph started the business with a partner renting a building for repairs, and later bought out his partner to become the sole owner. Key successes have been being his own boss and developing a good reputation through honest work, while ongoing challenges include keeping up with changing vehicle technologies.
YOU MUST BE KIDDING, RIGHTWhen Dora Marquez graduated from .docxdavezstarr61655
YOU MUST BE KIDDING, RIGHT?
When Dora Marquez graduated from college three years ago, she really wanted a fully equipped Honda Civic. Her monthly payment would be about $350 per month, about $70 more than she could afford. To help Dora meet her budget, the dealer suggested that she lease the vehicle and offered a 42-month lease option at $270 per month with a driving maximum of 12,000 miles per year. The contract had a $0.30 per mile fee at the end of the lease for any excess mileage. Now, with six more months on her lease, Dora is already 1500 miles over the 42,000 (3.5 × 12,000) mileage limit in her contract. What is Dora's best option at this point?
A. Turn back the vehicle now and pay the $450 (1500 × $0.30) for excess mileage.
B. Try to cut back on her driving to minimize her excess mileage fee, which could be higher than $2500 if she keeps driving at the same rate as she has been.
C. Stop driving the car and pay $450 for excess mileage when she turns it back at the end of the lease.
D. Continue driving the vehicle and buy it at the end of the lease by paying the residual value agreed upon when she entered into the contract.
The answer is D. None of the other options is financially practical. Dora learned a hard lesson. Leases may have a lower monthly payment but have hidden costs that often are not known until the very end of the contract!
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
Explain the first three steps in the planned buying process that occur prior to interacting with sellers.
Describe the process of comparison shopping.
Negotiate and decide effectively when making major purchases.
Use effective complaint procedures.
WHAT DO YOU RECOMMEND?
David and Lisa Cosgrove of Tacoma, Washington, are in their early 40s and have three children. They own three vehicles. Lisa drives an almost-new Toyota Camry; David uses a five-year-old Ford pickup; and Alyssa, the couple's 17-year-old daughter, drives a ten-year-old Dodge. Recently, a fire in their garage destroyed both the Dodge and the Camry. The Cosgroves received an insurance settlement of $21,900 on Lisa's car, although the loan payoff amount was $22,800. Alyssa's Dodge was not insured for fire. The couple wants to obtain replacement cars that are similar to those destroyed.
What do you recommend to David and Lisa on automobiles and other major purchases regarding:
1.How to search for two vehicles to replace those destroyed?
2.Whether to replace Lisa's vehicle with a new or used vehicle?
3.Whether to lease or buy a vehicle?
4.How to decide between a rebate and a special low APR financing opportunity if they decide to purchase a new vehicle for Lisa?
5.How to negotiate with the sellers of the vehicles?
YOUR NEXT FIVE YEARS
In the next five years, you can start achieving financial success by doing the following related to vehicle and other major purchases:
1.Check repair ratings history in the April issue of Consumer Reports magazine when planning to buy.
YOU MUST BE KIDDING, RIGHTWhen Dora Marquez graduated from .docxdavezstarr61655
YOU MUST BE KIDDING, RIGHT?
When Dora Marquez graduated from college three years ago, she really wanted a fully equipped Honda Civic. Her monthly payment would be about $350 per month, about $70 more than she could afford. To help Dora meet her budget, the dealer suggested that she lease the vehicle and offered a 42-month lease option at $270 per month with a driving maximum of 12,000 miles per year. The contract had a $0.30 per mile fee at the end of the lease for any excess mileage. Now, with six more months on her lease, Dora is already 1500 miles over the 42,000 (3.5 × 12,000) mileage limit in her contract. What is Dora's best option at this point?
A. Turn back the vehicle now and pay the $450 (1500 × $0.30) for excess mileage.
B. Try to cut back on her driving to minimize her excess mileage fee, which could be higher than $2500 if she keeps driving at the same rate as she has been.
C. Stop driving the car and pay $450 for excess mileage when she turns it back at the end of the lease.
D. Continue driving the vehicle and buy it at the end of the lease by paying the residual value agreed upon when she entered into the contract.
The answer is D. None of the other options is financially practical. Dora learned a hard lesson. Leases may have a lower monthly payment but have hidden costs that often are not known until the very end of the contract!
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
Explain the first three steps in the planned buying process that occur prior to interacting with sellers.
Describe the process of comparison shopping.
Negotiate and decide effectively when making major purchases.
Use effective complaint procedures.
WHAT DO YOU RECOMMEND?
David and Lisa Cosgrove of Tacoma, Washington, are in their early 40s and have three children. They own three vehicles. Lisa drives an almost-new Toyota Camry; David uses a five-year-old Ford pickup; and Alyssa, the couple's 17-year-old daughter, drives a ten-year-old Dodge. Recently, a fire in their garage destroyed both the Dodge and the Camry. The Cosgroves received an insurance settlement of $21,900 on Lisa's car, although the loan payoff amount was $22,800. Alyssa's Dodge was not insured for fire. The couple wants to obtain replacement cars that are similar to those destroyed.
What do you recommend to David and Lisa on automobiles and other major purchases regarding:
1.How to search for two vehicles to replace those destroyed?
2.Whether to replace Lisa's vehicle with a new or used vehicle?
3.Whether to lease or buy a vehicle?
4.How to decide between a rebate and a special low APR financing opportunity if they decide to purchase a new vehicle for Lisa?
5.How to negotiate with the sellers of the vehicles?
YOUR NEXT FIVE YEARS
In the next five years, you can start achieving financial success by doing the following related to vehicle and other major purchases:
1.Check repair ratings history in the April issue of Consumer Reports magazine when planning to buy.
AutoSuccess addresses the specific, researched needs of new car and light truck dealerships by providing entrepreneurial, cutting-edge, solution-based editorials to increase dealership profits and reduce expenses
AutoSuccess, magazine, sales, new, used, selling, salespeople, vehicle, dealer, dealership, leadership, marketing
For similar content visit http://www.autosuccesssocial.com/
5 Ways to Increase the Market Value of Your CarGlen Hunter
If you are in the market to sell your old or second hand vehicle, it could be a daunting task. Whether you decide to sell it directly to a buyer or trade it in at a dealership.
10 Critical Components You Need to Achieve Special Finance BenchmarksDealerStrong
There are 10 things you need in order to achieve, or beat, the special finance benchmarks (the averages of dealerships in your market). Greg Goebel, DealerStrong's CEO, explains what Special Finance is, how to measure it, and what you'll need to achieve the industry benchmarks.
Webcast - Creative Best Practices for Mortgage MarketingHarland Clarke
Most marketers agree that the list and the offer are integral to a winning direct marketing campaign. But some underestimate the power of creative, and that’s a mistake. Hard-working creative ensures that your communications get noticed and read. Watch the full webcast here: http://harlandclarke.com/media/webcasts/2014/05/u309/10-Creative-Best-Practices-to-Kick-Up-the-Effectiveness-of-Your-Mortgage-Marketing
GoWelMart is a decade ago mobiles distribution company that dynamically suits to all kinds of mobile dealers and we are highly committed to provide wide range of branded mobiles and accessories needs. A south India's giant B2B mobiles and accessories. We deal all mobile needs only to dealers. DM to place orders of all branded mobiles and accessories.
AutoSuccess addresses the specific, researched needs of new car and light truck dealerships by providing entrepreneurial, cutting-edge, solution-based editorials to increase dealership profits and reduce expenses
AutoSuccess, magazine, sales, new, used, selling, salespeople, vehicle, dealer, dealership, leadership, marketing
For similar content visit http://www.autosuccesssocial.com/
5 Ways to Increase the Market Value of Your CarGlen Hunter
If you are in the market to sell your old or second hand vehicle, it could be a daunting task. Whether you decide to sell it directly to a buyer or trade it in at a dealership.
10 Critical Components You Need to Achieve Special Finance BenchmarksDealerStrong
There are 10 things you need in order to achieve, or beat, the special finance benchmarks (the averages of dealerships in your market). Greg Goebel, DealerStrong's CEO, explains what Special Finance is, how to measure it, and what you'll need to achieve the industry benchmarks.
Webcast - Creative Best Practices for Mortgage MarketingHarland Clarke
Most marketers agree that the list and the offer are integral to a winning direct marketing campaign. But some underestimate the power of creative, and that’s a mistake. Hard-working creative ensures that your communications get noticed and read. Watch the full webcast here: http://harlandclarke.com/media/webcasts/2014/05/u309/10-Creative-Best-Practices-to-Kick-Up-the-Effectiveness-of-Your-Mortgage-Marketing
GoWelMart is a decade ago mobiles distribution company that dynamically suits to all kinds of mobile dealers and we are highly committed to provide wide range of branded mobiles and accessories needs. A south India's giant B2B mobiles and accessories. We deal all mobile needs only to dealers. DM to place orders of all branded mobiles and accessories.
1. Company: Joe’s Garage
How we met: He’s my father!
Reece O’Connor
Nichols College
Business & Society
MGMT-100-08
2. Joe’s Garage is a sole Joe’s Garage
proprietorship. provides automotive
Joseph chose this repair and towing.
structure because My father has been
the business itself is in business since
too small for more 1982.
than one person.
3. How he got started: Him and his partner were
looking for a place to rent as a garage or a gas
station. They found the building used today
and asked if it was available, which it was.
After getting a business license through the
town, they started asking different petroleum
companies about purchasing gasoline.
Joseph and his partner split the lease half
way, in order to finance the purchase.
They also got an oil company to give them
gasoline on consignment.
4. My father started his business because he
wanted change, he was sick of working for
someone else, and he wanted to be his own
boss.
Joseph was always around cars while growing
up, as his uncle owned a repair shop that he
hung around in throughout his childhood. He
took automotive classes in high school and
attended 1 year at Rhode Island Trade Shop in
1977.
5. WHEN IT STARTED: TODAY:
Joe sold gasoline He owns the building
He rented the building now (purchased in 1994)
More customers Less customers, but
Bought more tools higher prices
Car parts and materials
cost more
As cars evolve he has
attended more seminars
6. What have been the successes?
Being his own boss
Making up his own hours
Closing when he wants to
Flexibility to be involved in family life
Gaining a good reputation locally
Good customer loyalty
Long and friendly customer relationships
7. Joe’s most rewarding The critical success
aspect has to be the factors in the vehicle
fact that he’s repaired repair industry are;
a countless number of having good
cars in his days, his education in both
business hasn’t gone automotive and
belly-up, he has stuck business, keeping up
through tough to date tools and
times, and he is giving technology, and
people their money’s perseverance in a
worth. tough economy.
8. What have been the challenges?
Trying to stay afloat in this bad economy
Trying to keep prices low when competitors
undercut
Getting information on new vehicles or technology
from manufacturers with little to no effort
Large dealers get the information with no hassle
The most challenging aspect?
Cars are always changing – you have to keep up
with the new information and new technology
9. How has Joe Fatal flaws in this
overcome those type of business:
challenges? Getting a bad part
He learns as much as from a manufacturer
he can in an efficient and installing it
manner He has to pay for
another part
The customer often
becomes angry
Overall he loses
customer
loyalty, time, and
money
10. Who are his two How does Joe keep
closest competitors? his customers satisfied
Grafton Tire and how does he
Sam’s Auto Services build customer
loyalty?
How does he acquire
competitive Being honest
advantages? Keeping prices low
Buying tools and
becoming educated
on specific repairs
that those shops don’t
offer.
11. Joe’s strategies for marketing:
He used to advertise in the phonebook, but not
enough people use it anymore
Local advertisements like little league baseball and
charity basketball games
He has his contact information on his tow truck
A lot of his customers come from peer-to-peer
advertising
How does Joe staff?
Trick question; he doesn’t, he’s a one man crew
12. Joe plans to stay in business for as long as he
can
He would like to specialize in one type of
vehicle
13. How did he end up becoming a sole
proprietorship after starting out a partnership?
He bought out his partner because there wasn’t
enough space or profit for two people
Has it always been Joe’s Garage?
No, it was “PJ’s Auto” for a year, when he had his
partner
How did you handle different gas crises?
He would tell people he didn’t have gas, but he
would have friends come late at night to buy the gas
he had
14. What advice does Joe have for you?
Go in to a field that is secure
Take your time, don’t just jump in to business
Investigate every factor of a business you’re
interested in
It is going to be tough at first but it gets must easier
Work hard and put in a lot of hours, and you will be
rewarded
What did I learn?
I learned that being honest and hard working can
keep you afloat in a bad economy