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Toyota Canada Access Pricing

djcoledjcole Posts: 2
edited April 27 in Toyota
Toyota has implemented a program in the major Canadian cities such as Montreal, Toronto, and Vancouver called "Access Toyota".

Basically it's to introduce a non-negotiable pricing structure. As an example the discounted Access price for an Echo is approx $200 less than MSRP and for a Highlander is approx $400 less than MSRP.

Obviously, I want to get the best deal that I can. Does any have any experience with this program? Or does anyone have any tips on how to get a better deal than what they're offering?
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Comments

  • landru2landru2 Posts: 638
    this post for months. :^)

    A very vocal faction on this board continually decries the fact that buying a car is like a Moroccan bazaar. They want to know the price without any negotiation hassles.

    A group of posters also can't stand that someone may have paid less than they did for the same car. They think the price should be the same for everyone - just like at Walmart.

    You would think that Toyota would've hit the jackpot with this one-price strategy. Everyone pays the same, the price is posted on web, and no negotiations are required. But apparently not. Now we have people wanting to get around this system. (I'm not referring just to you djcole, I've heard others complain that they can't get a lower price with Toyota's one-price system.)

    There is just no way to please everyone.
  • masspectormasspector Posts: 509
    djcole probably would not have posted his question if the Toyota one price policy had been---Echo is approx $200 above invoice and for a Highlander is approx $400 above invoice ( with no bogus distributor fees).

    You are right, buyers would love no haggle, upfront pricing. They just do not want it at MSRP.

    Let me give you an example...recently a friend of mine was looking at suv's. He looked at a GMC Envoy. He had narrowed down to that vehicle and another one. When he asked the salesman the price, he wrote down a quote for him on his card. The quote was basically invoice plus TTL. And he said he would get a $2500 rebate on top of that. Mind you this was the dealer's first offer. My friend decided on another vehicle, but he did not shop that price and would have bought the envoy from that salesman if he had decided on it. Nice no haggle pricing and a very pleasant experience for all.
  • landru2landru2 Posts: 638
    Yes, your example shows a nice pleasant experience. This example might have had some impact if it actually resulted in a sale. I assume that the dealer that actually got the sale didn't operate like this or you would've described that experience instead.

    If a company has a one-price policy doesn't MSRP become just an arbitrary number? I don't even know why Toyota in this case even publishes it. I'm sure it is some legal requirement because it sure doesn't have any effect on the vehicle pricing. Let's say that next year, Toyota raises its MSRP's by $2000 but leaves its non-negotiable selling prices the same. Will people still complain that they're only getting $2000 off MSRP?

    If anyone thinks they are going to get one-price policies anywhere around invoice they are dreaming. In my area, Ford cars and trucks (which no one on Edmunds would pay more than invoice for, right?) sell for an average of about $1800 over invoice. The Edmunds-type buyer who buys everything around invoice is heavily subsidized by those that pay much more. Those around-invoice deals would never happen if no one was paying more to raise the average.
  • djcoledjcole Posts: 2
    Basically, guys like me who are on the cusp of this changeover feel ripped off.

    This program was introduced in Vancouver (where I live) on June 15.

    Masspector hit it on the nose when he remarked that the price is just too close to the MSRP, at which we know the dealer is getting a pretty nice return.

    The truth is, buyers like us who do all of our research into type of vehicle, dealer cost, manufacturer rebates, etc. just feel helpless when we can't get a better deal than the sticker price.
  • landru2landru2 Posts: 638
    You can have it easy or you can have it cheap but not both. I've had a few customers complain that they felt ripped-off not being able to negotiate on a Toyota. I would imagine that the pro-Walmart crowd loves it though.

    If you've decided that Toyota doesn't give you good value then I guess you'll have to buy something else. If you feel that a Toyota is still better than the other alternatives then the dealer's return doesn't really enter into it, does it?
  • masspectormasspector Posts: 509
    I asked you a question over in gey market thread. I you get a chance, can you answer it. Thanks.

    You are correct that the dealer that got the sale was a more typical grind session, but that was because the other vehicle suited his needs better and the dealer chose to operate in that manner. The point of my story was that there can be pleasant no haggle at or near invoice shopping. It is still rare though. I am sure that dealership has customers that come and buy a car from them and have just as nice an experience. The majority of dealers still practice the old school startem at MSRP and work down approach, so this is what the majority of shoppers will encounter.

    Why does every time a customer steps on a lot a sale must result? Surely sales people are not so naive to think that people do not shop and test drive different makes and models and dealers to help decide on a specific car they want. I am not in the car business and I would assume that an average shopper ( at least an Edmunds shopper)would shop at around 5 to 10 dealerships depending on how many different makes of car they are trying to decide between. Then once they have test driven and decided on a specific car, maybe 5 or more dealers to shop for the best price and trade value. My friend above ended up going to 10 different dealers to decide between 4 types of suv's he was intersted in. Once he picked one, he went to 4 of that makes dealers to negotiate price.
  • sprightspright Posts: 18
    Maybe buyers are having problems with this system because they're used to being able to negotiate on Toyotas. I'm wondering if this type of system will only work when it's instituted from the start, the way it was with Saturn (I think?) so no one has memories of being able to get the cars for much less than MSRP.
  • asawasaw Posts: 54
    Does anyone have experience negotiating with dealers who are following the Access Pricing Program in Canada?

    I like the Sienna but I'm not about to pay what the dealer is asking for. I've spoken to a few sales guys and they all said the same thing: no negotiation, company policy.

    The last I heard, Toyota Canada in March 2003 was slapped with a multi-million fine for this, and was asked to change the way it sets the price of vehicled. However this apparently hasn't changed the tactics of the dealers.

    I wonder if there's anything we as consumers can do about this. Price fixing is ILLEGAL, Toyota.
  • I am in the Montreal area where Toyota Canada Access pricing started. Last May, I tried to negociate in many different ways (even with a friend who knows the sale director of a Toyota dealer) but I could not even get an oil change. At the end I gave up and bought my sienna in Ontario.
  • landru2landru2 Posts: 638
    Toyotas are not some essential commodity that people cannot do without. Either the Sienna is worth the price the dealer wants for it or it is not. If it is, you buy it. If it is not, you buy something else. Simple. If enough people feel they are not worth the asking price then the price will drop.
  • asawasaw Posts: 54
    Can you provide the name or company of the broker. I would LOVE to get discounts off the Access price. I really think this Access pricing is just another cash grab.

    landru2 - Toyotas are good cars, but I firmly believe that cars are a commodity you can negotiate on. I just dont' believe in ILLEGAL price fixing.
  • landru2landru2 Posts: 638
    Hasn't this issue been through the legal system? What's illegal about it?

    How can you force someone to negotiate with you? If they say no that's the end of it. As a customer you don't have some innate "right" to negotiate.
  • asawasaw Posts: 54
    I don't mean to argue with you.

    Anytime that a bunch of vendors get together and determine the price, that's called price fixing, and it's illegal. That's why Toyota Canada was fined a few million bucks earlier this year. The only thing I'm surprised is that the government hasn't done more to curb this kind of behavior, because Toyota dealers are still doing it.

    http://www.corporateknights.ca/summary/gm_index.asp
    (Look for "Toyota Canada ordered to Revamp Pricing")

    Are you saying you are perfectly happy to pay $30K for the base model Sienna CE, when in the pre-Access days, you can perhaps pay $29K? Of course not, right? Well, unless you are made of money.

    As a customer, we definitely have the right to get the best price (not determined by the vendors) determined by the market.

    The Access dealers are hoping that if they say NO to enough people, regular folks will just cave in and buy the cars anyways. That's what we should not let happen.

    Definitely I'm now going to look into the broker system, to get the best price I can get. And I hope that a lot more potential Toyota customers will go this route.

    So in a way I'm agreeing with you landru2... if all of us buy from brokers, then these Access dealers might indeed start negotiating.
  • grandtotalgrandtotal Posts: 1,207
    Anytime that a bunch of vendors get together and determine the price, that's called price fixing, and it's illegal.

    So, is it illegal when every Loblaw's charges the same price for a bag of milk? Why should car dealers be any different?

    As a customer, we definitely have the right to get the best price (not determined by the vendors) determined by the market.

    I could not agree more, but the best price available to customers in Access Toyota areas is the Access price. The Access price will fall if sufficient consumers buy other brands, but while consumers buy Toyota products in large enough numbers why should the dealers reduce their price? It is simple supply and demand, that is to say the market is determining the price.

    Just for the record I am a consumer unaffiliated with Toyota or a dealership in any way.
  • asawasaw Posts: 54
    So, is it illegal when every Loblaw's charges the same price for a bag of milk? Why should car dealers be any different?

    Loblaw's prices are probably set at the headquarters. Not Access Toyota dealers. These dealers "collude" and set the price they deem fit, to make the most profit. That, my friend, is horizontal price fixing, and it's ILLEGAL.

    I totally agree with what you said about supply and demand. I just don't think we as consumers be forced to pay the high price until the dust settles. I'd rather look around and be the one who can get best deal through some broker, or some non-Access dealers.

    It's just like shopping for a house. You want the best deal because it's a LOT of money. Unless, like I said before, you are made of $$$.
  • I've seen a few posts on Access Pricing, including one suggesting that prices are set waaay higher than TMV here in the US. That leads to my questions.

    What provinces hold to the Access Pricing policy?
    At what level are the prices usually set? Is there some rule of thumb a buyer can use to know what to expect?
    How do Canadians feel about going outside their local market/province?
  • landru2landru2 Posts: 638
    Just because you say it's illegal doesn't make it so. What Toyota is doing now is clearly not illegal as determined by the Competition Bureau (as stated on your link).

    Here is a cut and paste from an Access Toyota FAQ:

    D. Who determines vehicle prices?

    Toyota Dealers — and not Toyota Canada — determine the Access prices, based on current market conditions in your area. (For further details on the pricing process, see “F”.)
     
    The Access price for each model may change as market conditions change. (vehide supply, public demand, seasonality interest rates, model yeas dear-out, etc.)

    F. By dealers collectively setting the price, are they not colluding and price fixing?

    No. The Access price is calculated through an anonymous electronic dealer polling process for a specific market area.
    Each dealer’s electronic input js taken into account, and is combined to produce the Access Price. When voting dealers consider competitive factors and variables such as inventory levels, current demand, competitor’s promotions, etc.

    G. Are consumers still free to negotiate if they wish?

    Customers still have the opportunity to negotiate, yes.
    Access Toyota simply alleviates the need to do so.

    H. Are dealers allowed to sell for less than the Access price?

    Dealers have the right to set their own retail selling prices, yes.

    I. My dealer wouldn’t discount the car below the Access Price.
    If dealers are allowed to sell for less, why wasn’t my dealer willing to negotiate?

    The actual selling price of a vehicle is up to the discretion of the dealer. Your dealer may feel that the Access Price presented on the web-site is an accurate reflection of current market conditions in your area. Just as a dealer may be willing to negotiate a better price, dealers may also feel that the current Access Price is their best price. Remember that dealers are free to set their own retail selling prices.

    J. I have visited a few dealerships and none of them are willing to negotiate and give me a better price. Why should I go to one particular Toyota dealer vs. another if the price is the same?

    With price no longer the primary issue, Toyota hopes that the consumer’s focus shifts to the actual purchase experience and relationship with the dealer. Perhaps you would prefer to go to the Toyota dealership nearest to your home, pr to the dealership that you feel most comfortable with, that gave you all of the information you requested, and valued your time.

     
     

    K. If dealers can sell for less, and consumers can negotiate a better deal than the Access price, doesn’t that mean the Access price is not the lowest price available to the consumer?

    Our research shows the vast majority of consumers prefer to purchase their Toyota on the basis of the Access Toyota price. It provides a discounted price that reflects the value of Toyota products in the marketplace, and is fair for everyone. Access Toyota also assures consumers of an all-inclusive, transparent, and competitive Drive-Away Price, allowing them to focus on other important aspects of the purchase decision (etc. Dealership services, being treated fairly, relationship with Product Advisor).
  • asawasaw Posts: 54
    I'm just curious, are you in anyway working for Toyota, directly or indirectly?

    Actually, if Toyota were to (and they still are) continue what they are doing, it's ILLEGAL:
    http://cb-bc.gc.ca/epic/internet/incb-bc.nsf/vwGeneratedInterE/ct- 02539e.html

    I've spoken to quite a few people who are actually in the market to buy cars, and they all don't seem to like Access pricing.

    I've read those paragraphs on Access pricing before, and the Access dealers I went to so far do not negotiate. Period.

    If Alberta has Toyota dealers that don't have Access pricing, I would not hesitate to buy from dealers there. (I live in BC.) Unfortunately, all in Alberta are Access.

    There's even an article I read before (could be a tv segment) that said prices in Ontario for Toyota cars are cheaper than it is in Quebec. (before taxes) Go figure!

    So is Access Price still the best price. No way!

    What I don't understand, landru2, is if you can get something for cheaper, why won't you? Instead you just pay whatever they (the dealers) tell you to ante up.
  • asawasaw Posts: 54
    http://www.newswire.ca/releases/April2002/26/c8657.html

    Do a search on "fixed selling", and it "However, Toyota dealers in the regions with fixed selling prices appeared to charge substantially more."
  • landru2landru2 Posts: 638
    No, I have no connection to Toyota. I work at a Ford dealership that does plenty of negotiating.

    http://www.theglobeandmail.com/servlet/ArticleNews/TPPrint/LAC/20- 030329/RTOYO/TPBusiness

    Actually, if you would read the link above (or the ones you posted) you would see that Toyota has made the changes necessary to avoid any charges of illegal price-fixing. They are not still doing things the same way as you suggest. The APA (the consumer group that originally brought the charges) says they are happy with the changes that Toyota has made.

    Words like "illegal price fixing" is just self-justification to complain about the price being higher than you want to pay.

    Of course, I would prefer that everything that I paid for would have a lower price. But just because I want a lower price doesn't mean I can get one.
  • This does appear to be price fixing. The sugar coating that landru posted from toyota canada's site is just that, sugar. It appears that when REAL buyers try to negotiate at REAL dealers, there is no negotiation. This happens alot here in the US, on a hot selling car, but not on every single model that the dealer carries.

    If there truly was the ability of the dealer to negotiate, do you not think that one dealer would say "Hey if I sell all of my Highlanders for $500 less and advertise that, I can get almost all of the local Highlander buyers?" That would happen in a heartbeat in the US.
  • landru2landru2 Posts: 638
    Although Canada is not the U.S., supply and demand works up here as well. Obviously, if Toyotas are priced higher than the market will pay, the price will come down. Why would Toyota sell anything if they were over-priced?

    What makes you think that Toyota dealers here are not selling every unit they can get a hold of at the Access prices? If dealers are selling every Highlander they can get at the current prices why would any dealer be fool enough to give away $500 on every sale?
  • dbgindydbgindy Posts: 351
    He does not work for Toyota so he has nothing to gain by explaining (not defending) their pricing structure in Canada. My question is if this is something that's illegal in Canada wouldn't the Canadian government or the provinces be taking Toyota to court?
    Do I think what they are doing is good for the consumer? No. Do I think they have changed some things so it's not illegal? Apparently the federal & provincial governments in Canada think so unless there are active cases going on about this.
    Just my .02
  • asawasaw Posts: 54
    that's why I really think Toyota (or it's dealers) are trying to milk as much from the consumer as possible by having this Access Price. They know that consumers are not just going to walk away just because their prices are 500 bucks higher.

    I drive a 2000 Camry and I enjoyed the negotiation process 4 years ago, and knowing that I got the best price possible at that time.

    Well I guess for the Canadian governments to do anything about it, enough people have to come forward and make a strong case against Toyota's marketing strategy.
  • I think this is very interesting. Saturn does the one price thing without the price fixing charge. . . and win a market share on the basis of 'no-haggle'. The same strategies that work with Saturns would probably work with Access Pricing.

    I'm curious about the spread between Access Pricing and TMV. If the spread is large enough, there's a huge opportunity for brokers, dealers who can do net, etc.
  • landru2landru2 Posts: 638
    no one mentions Saturn. Nobody wants a Saturn. ;^)

    IMO, this whole issue is not because the price is too high per se. (Toyota sales are booming so obviously the market has the money to buy the product.) Rather, it stems from the age-old fear that someone else might pay less for the same product. Saturn avoids this because its pricing policy is universal. Toyota should've just rolled out the Access program nation-wide right from the start. Then nobody would be worried that someone might pay less.

    Toyota is at the top of its game and people want their products. I just find it incredible when consumers start talking like a Sienna is some product, vital to daily living, that should be made affordable just for them. Isn't it obvious that if people are not walking away if the price goes up by $500 that the product must be worth that extra $500?

    To complain about a company trying to get the most it can for its products just strikes me as a fundamental misunderstanding of free enterprise. If a person feels that Toyota is abusing their power in the market that person is free to punish Toyota by buying something else. But, of course, people don't want something else. They want the Toyota. They just don't want to pay the going rate for it.
  • Some/most folks go Saturn for the no-haggle thing? That's what I think, anyhow.

    So, 'Yoda becomes Saturn-like. Yuck! With the depreciation trajectory of a rock, that leaves durability and no-haggle as 'Yoda selling points. This still sounds like a 'Yoda marketing plan designed by Honda and Ford.

    Access Price shoppers, hints: Haggle on the trade. Use the net. Find a broker.

    So, what's the Access Price on a '04 'Rolla LE auto? TMV here is invoice + $900.
  • leknlekn Posts: 78
    I just bought a Sienna in Ontario at $3,000+ *BELOW* Access Toyota Pricing. So I just can't see what landru2 is trying to defend.

    Simply put, Access Toyota removes the option of finding an alternative dealer with cheaper price within your province/area. There is no obligation for the dealers to follow Access Pricing, but the reality is that all the dealers gang up and insist on selling at the same price. If this is not price fixing, I don't know what is.

    Just compare the price you are paying in BC/QC vs Ontario, and you will know what a terrible deal Access Pricing is.

    landru2, just answer this question:
    If you were to buy a new Toyota now, would you prefer to buy it in BC or in Ontario?

    Unfortunately for most customers, buying a car from another province is not a practical option.
  • I do not feel that anyone is ganging up on landru. We are having a great infomative talk with no name calling. I respect his input as I hope he respects others input. I have always appreciated his NON US slant.

    There may not be any current litigation against toyota over access pricing, but the canadian govt has called them on the carpet about it and they have paid a settlement. That information is in one of the above links. if everything is cool, why the scrutiny and settlement?

    lekn-good post of a real world example. I find it hard to believe that the market is 3K different from on province to the next.

    This is similar to what I like to call "a monopoly by more than one company". Alot of industries have shaken down into a few companies in their market. In the US there is Home Depot and Lowes. One of the biggest pervuyers of this is the US big 7 airlines. Lets say the fare from NY to LA is $299 roundtrip. For some reason Delta goes up to $399. How long do you think it takes the other 6 to go to $399? Faster than you can click your mouse buttons. There was no reason for the other 6 to go up, they just did to jump on the money wagon. Of course this works in the opposite direction too, and I just love it. There are many places that Delta had a monopoly flying out of Atlanta and the fares were high because of that. Along comes airtran and all of the sudden delta can fly to the exact same location for a third of the cost. Whats up with that? Competition is good for the consumer and should not be stifled or smoothered like toyota is trying to do with access pricing.
  • dbgindydbgindy Posts: 351
    Difference between ganging up and beating up. :-) I just felt that landru was explaining (again not defending) Toyota's structure in Canada. He was asked if he worked for Toyota ( which regulars to this forum know is incorrect since he's a Ford man:-).
     My point again is what they are doing isn't right for the consumer but since the settlement they are still doing a variation of it which apparently not illegal. It's not good for the buyer but apparently it doesn't meet the definition of illegal price fixing in Canada. Simple solution don't buy a Toyota in Canada if you don't like their system.
    Mass on akangl that you posted on another part of Edmunds, she and her husband reconciled about 3 months ago. Miss some posts miss a lot.:-)
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