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Bait & Switch and Other Bad Advertising Tactics



  • fezofezo Posts: 9,195
    Absolutely. Besides "All new Mazda cars sold at invoice." sounds pretty clear to me. If he means invoice plus whatever funny fees he wishes to invent he should say this.
  • ...negotiate from invoice, not MSRP...

    But, the MSRP (Monroney sticker) is a constant... Invoice can mean whatever the dealer wants it to mean..

    In the example above, the "Louisville assessment" is, most likely, an actual legitimate advertising fee on the factory invoice... Which is why I make all my offers in USDollars.... not on invoice +, or MSRP -

    And, above all... realize that advertising is meant to sell cars... not an honesty test... lol..

    Moderator - Prices Paid, Lease Questions, SUVs

  • jwilliams2jwilliams2 Posts: 854
    edited August 2010
    If it is a charge the dealer adds, then it is a BS fee. If it is on the actual invoice from the manufacturer, it is a legitimate charge the dealer pays and is part of his cost. Not so hard to understand. Most manufacturers show this as a regional fee, and it varies around the country in what it's called and the amount.

    The brand I sold had a $500 regional fee included on our invoices, while some other parts of the country had from $200 to $600. It is part of the actual invoice which the dealer pays if he wants the car. He has no choice. So probably nothing misleading or BS about it. It simply is money the manufacturer uses to pay for their regional advertising, which the dealer has no say in.

    People should keep in mind that as kyfdx says the MSRP is constant, while the invoice can vary around the country. And sorry, but to ask "Why so deceptive then?" simply shows a lack of understanding of how the car manufacturer's do business.

    So if a dealer advertises "cars sold at invoice", the charge should be included, as it is part of his invoice. Nothing more, nothing less.
  • fezofezo Posts: 9,195
    And sorry, but to ask "Why so deceptive then?" simply shows a lack of understanding of how the car manufacturer's do business.

    No, it shows an understanding that car manufacturers do business is a very deceptive way. That's hardly a secret.
  • jipsterjipster Posts: 5,345
    edited August 2010
    If it is a charge the dealer adds, then it is a BS fee

    Doc. fees come from the dealer, so you're saying they too are B.S fees. I'll agree with that. I'd say anything over $50 is probably bogus..
  • jwilliams2jwilliams2 Posts: 854
    edited August 2010
    No, it shows an understanding that car manufacturers do business is a very deceptive way. That's hardly a secret.

    Absolutely nothing deceptive about it from the manufacturer. Now the add on fees by the dealer (i.e. doc fees) are deceptive if the dealer hides it from the buyer and springs it in F&I. Not really deceptive if it is disclosed up front on the buyers order, although I don't like them either. I've always focused on the bottom line OTD price.
  • jwilliams2jwilliams2 Posts: 854
    Yes, especially if they are not disclosed up front. Every car I have bought I reduced the total price I offered by the amount of the doc fee. And I do recommend shoppers focus on the bottom line.
  • jipsterjipster Posts: 5,345
    Absolutely nothing deceptive about it from the manufacturer

    If it (Louisville Assesment fee) is an advertising fee... why not call it an advertising fee? I'd say it's because most people feel paying extra in advertising is just another way to squeeze money from the customer. Advertising is a normal cost associated in running a business. It should be included in the invoice price. But, right or wrong in charging the advertising fee... it is deceptive.
  • It's the dealer's invoice from the manufacturer... If they changed it from the actual invoice, then that would be shady, right? They said they are selling for invoice... Then, they show you the actual invoice... It's not their fault what is printed on it.... or, that it doesn't agree with what Edmunds reports...

    They know what (Louisville Assessment fee) means.. the document wasn't designed for the consumer.. And, they aren't charging an advertising fee... They are charging dealer invoice..

    I really don't see anything deceptive about it, at all.... They are charging invoice, and they show you the invoice... Not their fault that the consumer might have a preconcieved notion of what their invoice might be..

    Plus, if you are using the jipst method, they'll come crawling around with a cheaper price, eventually, anyway.. :surprise:

    Moderator - Prices Paid, Lease Questions, SUVs

  • fezofezo Posts: 9,195
    I suppose. It is annoying after listening to so many "but you don't haggle on the price of a refrigerator" (even though a lot of folks do) and such it strikes me that I've never paid an advertising fee on a refrigerator either. I'm sorry but advertising fees only strike me as a way to advertise one price and actually sell at another. It's not classic bait and switch but it's in the neighborhood.
  • euphoniumeuphonium Great Northwest, West of the Cascades.Posts: 3,305
    Where and how do the Holdbacks figure into the "invoice cost"?
  • Doesn't matter... the dealer pays the invoice cost, not the consumer... ;)

    Seriously... I think only Toyota actually includes the holdback as a line item on the invoice.... For all other makes, it's an "off-the-invoice" item that gets credited to the dealer.... probably in aggregate for the month..

    Moderator - Prices Paid, Lease Questions, SUVs

  • blckislandguyblckislandguy Posts: 1,150
    edited August 2010
    Whoa! This discussion is too simplistic. True dealer cost is very hard to establish. I scanned these posts about "invoice" in wonderment. It seemed that most people assumed that the dealer "invoice" was his cost. Then someone mentioned the "holdback" and the host dismissed this rebate to the dealer which can be as high as 2% of the invoice as something that "doesn't matter."

    Guys, dealer holdback matters a great deal because it reduces the dealer's cost. Knowing the "invoice" total is simply the tip of the iceburg regarding dealer cost. In addition to holdback rebates , there are factory to dealer incentives (AKA "cash in the trunk"), informal arrangements ("If you can move 5 Impalas, we'll try to help you with an allocation for a 'vette"), etc.

    Moreover, wouldn't it be very helpful to know how long the car has been in inventory? A little detective work on the inventory label might be revealing. The Nashua NH BMW dealer still has a brand new, two year old 2009 750li in stock. If I were looking for a 2009 7 Series, I'd almost rather know that rather than his "invoice". The same BMW dealership has a two wheel drive , V12 760L in stock. When I expressed amazement that they would stock such a car in New Hampshire, I was told " We didn't order it. The factory just sent it to us." in a tone of resignation. All in all, a little work can go a long way in establishing a dealer's basis.
  • jchan2jchan2 Posts: 4,956
    is always difficult to gauge. It always appears that some dealers are moving cars at steep losses. While the line that new car sales don't provide the profits that it used to may be true, I'm pretty sure a new car dealer is not going to lose his shirt selling new Accords.

    Besides invoice price, there will always be holdbacks, manufacturer incentives, volume bonuses, etc for dealers to hit. Also, a Hyundai salesman told me recently that no matter the price, Hyundai pays him $100 directly to sell a Sonata. However, I'm sure he receives a percentage of the profit the dealer makes as well.

    And just because a dealer has had a brand new car sitting on their lot for 2 years does not mean they will deal. I faced a Volvo dealer unwilling to deal on an untitled 2008 Volvo S40 a few months back.
  • jwilliams2jwilliams2 Posts: 854
    Excellent post, kyfdx. You are 100% correct in that the invoice wasn't designed for the consumer. It is a billing document between the manufacturer and the dealer.

    And to clear up any remaining misunderstanding about adv. fees, this supports the manufacturers regional ads and can vary by region depending upon the media costs in each market. That is why it is split out on the invoice, because those charges vary by market. The dealer still has to pay for their own local ads, be they print, TV, radio, direct mail, sponsorships, etc. And this cost is included in the price you pay just like other products. When you purchase other products, you do pay for the advertisement in the price. But you are not looking at the internal billing document or invoice between say GE and the retailer. You can't walk into Best Buy and see the invoice on that refrigerator.

    And yes, dealers for most brands do get holdback. It is paid to the dealer monthly, quarterly, or even annually to offset the dealers interest or floorplan expense. Otherwise, a dealer wouldn't have any incentive to stock any cars, and only order what they had actually sold. Car manufacturers could not operate that way. And dealers don't talk about it, because the money is basically already offset by this expense. Not to mention that usually the sales department doesn't get paid on it.

    And as for money paid by the manufacturer directly to the salesperson, known as spiffs, keep in mind the average salesperson sells between 10-12 cars per month, many of them at a minimum commission. Which probably averages $50-150 per car. They are not exactly getting rich, especially when you consider usually only certain models have spiffs, and for only a limited period of time.

    Rebates and incentives are almost always passed on to the consumer. Most of this information is readily available on sites such as this. If the dealership didn't, they would place themselves in an uncompetitive situation and lose sales.

    I understand some folks obsession with dealer cost. But it doesn't really matter. It is what they will sell it for that matters. And a total out the door price is the best way to comparison shop while looking for that best price.

    Car dealers are not charitable institutions. They are in business to make a profit, and have enormous expenses. They simply cannot stay in business without making a sufficient margin on their products.
  • jb_turnerjb_turner Posts: 702
    Why even be concerned about dealer cost, holdbacks, this fee, that fee... etc... What matters is the OTD price.
    We all pay an OTD price. Just shop comparing apples to apples for the best OTD price.
  • isellhondasisellhondas Issaquah WashingtonPosts: 17,349
    The average shopper doesn't care or think about overhead or other expenses nor did I want them to. They only care about PRICE and I was always amazed at how normally nice people could turn so ugly or be so cheap sometimes.

    It continued to get worse as cheap customers pitted dealer against dealer as never before. You name it, I saw it.
  • delthekingdeltheking Posts: 1,152
    edited August 2010
    Totally agree about dealer overhead expenses. Just the utility bills can be a hefty sum. And in addition to that-spanking new showrooms with all amenities like Wifi, free coffee and muffins,Flat screen TV`s even at Honda/Toyota stores- and dont flame me for this --attractive receptionists ;) --all these things cost a lot of money. :shades:

    I cant understand some folks comparing oil change prices of of some Spiffy Jube chains to the dealer`s. Like $45 vs $30. The chain has some general techs and they use general oil or cheap filters.. I would never ever go to any place other than a dealer for any maintenance or repair simply b`cos the techs there would know the most about that brand. And cant beat the ambience of the dealership or the services they have like dropping you off and picking you back. And the dealer rates are not too different than some mechanic ,,like 100 vs 65. And you get what you pay for . Cheaper,inferior parts with incompetent jobs. More so with modern cars which are highly complicated computerized machines. :P

    And the local mechanic cant invest the thousands of dollars that a dealer invests in diagnostic equipment simply b`cos he cant buy them for every brand whereas the dealer buys it only for his brand.

    The only time I would go to a non dealer shop would be to replace my tires,battery and windshields.. :D
  • isellhondasisellhondas Issaquah WashingtonPosts: 17,349
    No flame but unattractive receptionists get the same pay as the unattractive ones.
  • delthekingdeltheking Posts: 1,152
    I realize that the pay is the same and I was speaking with respect to the service customer who is waiting for his car to be serviced and then sees the attractive receptionist. Just a good feeling--human nature I guess !! ;)

    Makes waiting tolerable,easier and pleasing to the eye !! :shades:
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