The Center for Public Integrity's feature on auto dealer scams drew a wealth of in-depth comments from several people who work in the industry, pro and con, all of which are worth reading. Baby Beater Benz gave a detailed account of why he got out:
I sold new cars, Fords, while in college, attempting to make enough to finish school. I was a gear-headed business major...finance was my game. This was perfect.
No...no it wasn't.
I can do amortizations in my head, have been able to since before this job. Not to the penny, but to within $10, typically, on a monthly payment. I don't actually do the calcs, I just know what it's going to be, looking at the numbers.
Now, I can't tell you minute differences in different loans, but most things I can "see" when they change. It jumps out at me when term, rate, amount financed changes.
"But the monthly payment went down!!!" Yeah...because you're now at 6 years of payments instead of five, and BTW, the interest rate went up 75 points.
It was depressing, watching people get raped on trades then driving off in a car they think they got a deal on, knowing full well they were being murdered on both interest rate and length of term.
"What? Can't afford $490-$510 a month? Let me see what my manager can do..."
five minutes later...
"Well, I got him down to $485-$500...can you come up a little on your number? I've gotta show him you're trying hard to make it work."
Two hours later, you've moved them from $300/mo, which they can afford, to $463.80/mo, on an Aerostar van with a six year note (this was 1991 or so). You've taken their old, but paid-for and not a total heap-o-shit trade, and they'll likely default on this new car note within 18 months, if that.
People forget, new cars typically cost more to insure. Sure, repairs are covered, but not many folks put $400/mo of repairs into their beast...at least not for long.
I could not do this to people, lasted about 3.5 months, and I was doing well at it. While there is ignorance surrounding financial dealings, some of this shit is downright criminal, or at least made me not able to sleep at night (not literally, but you get it).
People... Don't go car shopping until you have your financing in place from whomever, trade-ins is what craigslist is for, and finally, do not hesitate to walk out the door.
Finally, most nowadays can't truly "afford" a new car. Go to CL, find a $5K future beater-car, drive it for a few years, sell for $2,500, repeat.
Let's say you keep it three years, 50% depreciation, that's a $70 per month car payment.
My apologies for the rant, but this topic gets under my skin, badly. I'm still trying to clean the "car salesman" off me, 20 years later.