Speaking of HHR's...a thing that I think was embarrassing to Chevy in the HHR era was that the earliest cars with big gold bowties got their bowties tarnished quite easily...literally. I had our Uplander's gold emblems, front and back, replaced twice under warranty. The final set lasted. The early ones were probably Chinese.
I see HHR's with those tarmished originals around here. If one could get them replaced for free, not sure why folks didn't! But that's me.
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An Xterra and an HHR - kind of like Mutt and Jeff in size I think.
If you simply go by overall length, I think they're close. At least, they're probably both under 180" long I'd guess? And, at that time I don't think I had actually seen an HHR except on a turntable at an auto show.
At the time, my friend was actually deciding between an Equinox and an Xterra. I went with him on the test drive, and IIRC we went to the Nissan dealer first. Then to the Chevy dealer. After he drove the Equinox, I noticed one HHR parked towards the back. I asked him to go look at it and tell me his opinion. He simply gave it sort of an "eh" and that was that. And, seeing it that close up, I noticed just how small it really was.
Now, any of these vehicles were gargantuan compared to the '98 Tracker he had.
My thinking at the time was that the Equinox might not be a bad bet because it got a bit better fuel economy, and he could probably do without the AWD and just get FWD, which would save a little money. But, at the time, I think the Nissan had a better warranty, so if he had gone with the Equinox, I would have suggested an extended warranty, which would have probably offset the cost savings of not going with AWD.
Ultimately the Xterra won out. I think he now has about 105,000 miles on it, and it's still doing well. It's had to go back twice for problems with the HVAC controls, and has also had two tire pressure sensors fail. Oh, and the CD player stopped ejecting. But, that's a pretty good record, IMO.
I doubt they'd have one in this spec, but I could care less if the Impala was taxi-plain as long as I could get a V-8. I'm not paying $39K+ for a Chevrolet. I will move up to a Buick at that price point.
I'm not paying $39K+ for a Chevrolet. I will move up to a Buick at that price point.
$39K for a Chevy does sound like a lot of money. But, with the way inflation has been taking its bite, it's not as much as it sounds like these days!
For instance, in 1999, when I bought my 2000 Intrepid, I paid $22,389 out the door. $40K today would equate to about $28,700, adjusting for inflation. In those days, if you took an Intrepid ES and put just about every single option on it, you could MSRP it up to about $30,000 without too much trouble.
Going way back, to 1957, that would equate to around $4841 according to the inflation calculator I used. I think my DeSoto Firedome had a base price of something like $3,085. But, throw on all the stuff that was optional back then...automatic, heater, power steering/brakes, whitewall tires, two-tone paint, radio, etc, and it was probably more like $3800. Simply adding air conditioning would have probably boosted it to around $4200-4300. And going full-out and getting power windows, locks, and seat might have been just enough to shove it close to $4800.
Now, $4800 sounds like Cadillac money for 1957, and indeed it was. That year, a Series 62 hardtop coupe started at around $4600 and the hardtop sedan was around $4700. I'm sure power steering/brakes and an automatic were standard on even the cheapest Caddies by then. But believe it or not, a radio and heater were still optional! A/C was also optional. And on a Series 62, power windows and seat were also optional (but standard on DeVille, which was about $450-475 more expensive.
So, I'd imagine a fully-loaded Caddy DeVille in those days could easily top $6,000.
And, one advantage of the $39K Chevy Impala...it would probably be better equipped than a $39K Buick LaCrosse.
I understand the sentiment, lemko, but I think these days there's very little (if any) luxury difference between the two. And the Impala's trunk is bigger (by a sizeable amount) than the LaCrosse.
Back to the Xterra conversation (and I know that wasn't you, lemko), I'm not sure what years I'm talking--older ones--but I thought the Xterra was one of the ugliest vehicles out there. Just had random lumps here, there, and the other place. I'm thinking that was at least one or two generations ago though.
2024 Chevrolet Corvette Stingray 2LT; 2019 Chevrolet Equinox LT; 2015 Chevrolet Cruze LS
I thought the first-gen Xterra was a bit ugly after it had a restyle. It started off with rectangular headlights and didn't look all that bad, just kind of generic I thought. But around 2002 they gave it a round headlight look, and that just didn't seem to mesh well at all IMO. And it looked a little nose-heavy at some angles.
The Xterra was totally redesigned for 2005, and came off looking a lot more rugged and substantial, IMO. A lot more crisp and squared off, and a lot less "lumpy". I think in certain colors though, the Xterra doesn't look all that great because it has plastic covering the front and rear bumpers, and the plastic wraps all the way to the wheel openings, both front and rear. In a dark color, such as the dark gray my buddy bought, it looks okay. But in a light or bright color, I think it looks clashy and a bit cheap. Especially in white or yellow.
As for substantial, is it ever! I think my buddy's Xterra weighs around 4200 lb and has a GVWR of around 5600. About the same as my old '85 Silverado!
I've heard that the Xterra, Pathfinder, and Frontier actually share the same frame and much of the same underpinnings as the full-sized Titan/Armada. They're just on shorter wheelbases, the bodies don't hang out as far over the side of the frame, and the suspension components are altered for a narrower track.
The Miata is a far-less-mainstream product. I see tons of PT's from the oldest to the latest, every day around here. I go weeks without seeing a Miata. Saleswise, there'd be no comparison between the two.
That's true here as well, although living in the south I think we probably see more Miatas and that style vehicle, overall.
Nope, not at all. For those buyers that just HAD to have a new PT Cruiser they were comfortable paying the price. Nobody held a gun to their heads it was a decision THEY made on their own"
MSRP of course means "Manufacturers suggested retail price"
Some cars sell for MSRP, some for less and a few for more.
Nobody got screwed, it was simply market forces at work.
A home in our neighborhood just sold for 50,000 more than the listing price. It turned into a bidding war.
I think paying sticker price is silly, yet over sticker, but I want to say I remember new Camaros when introduced a few years had 'Market Condition Mark up' (or something similarly ridiculous-sounding) on them at dealers around here. I most definitely remember looking at the new '84 Corvette, first new 'Vette in sixteen years, and there was a $2,000 markup on what I remember being its $24K sticker price at a Chevy dealer long-since closed by now.
This is just me, but if the manufacturer thinks there's enough profit in "MSRP", dealers adding extra show their true colors. I'd wonder about what they were charging out in the shop. But that's just me.
2024 Chevrolet Corvette Stingray 2LT; 2019 Chevrolet Equinox LT; 2015 Chevrolet Cruze LS
FWIW, I've seen a lot of dealers put those stickers on, but it doesn't mean people actually paid it. At least smarter consumers.
I bought a Miata with 26k miles for $7800 IIRC, the original owner had paid a markup so she told me it was $25,000.
Stupid. I owned the same car, drove it for more miles than she did, and still sold it for $5500. My net cost was $2300.
Her cost was $17,200. Is new car smell worth paying 7.5 times more?
We each owned it for the same amount of time, but again, I drove more miles. Cars don't go away. Find a nice used one, it'll still be there in a couple of years. I never understood the need to have it now.
I've seen some dealers (Fox Chevrolet in Laurel, MD comes to mind) put those ADM stickers on just about everything, even base level Impalas and Cavaliers! Now, this was a good 10 years or more ago...I have no idea if they still do it or not.
I remember seeing $4000 markups on Civic DX hatchbacks. Oh, and A/C was an $1800 option.
They could get those up to nose bleed prices (for the class).
Still, I doubt people paid that much. It was about making the buyer feel like they got a discount even when they paid MSRP. This was at the Honda dealer in Bethesda.
Back in late 89/early 90, I remember the then-new R129 500SL bringing 20K over sticker - the previous SL was almost 20 years old, and people had been waiting for the replacement for years.
The PT is a funny case. I remember demand being so great, that Canadian dealers were selling their stock to American dealers - conversion was easy, and with the very favorable exchange rate then, the Canadian dealers were making out like bandits.
This is just me, but if the manufacturer thinks there's enough profit in "MSRP", dealers adding extra show their true colors. I'd wonder about what they were charging out in the shop. But that's just me.
No, it's not just you at all. I feel the same way.
The Christmas before last, my daughter asked to a specific vacuum for her desired gift. I found it offered locally for $499, which I felt was a bit steep, so I looked online and found a number of places selling the exact same product for 1/2 the price, delivered. I then approached the local shop, told him I could buy it cheaper (did not say at what price or online) and asked him if he was willing to discount his original price to make a sale.
He refused, and told me if I didn't buy it from him, then I shouldn't even think about bringing it in to his shop for service. At that point, I told him I could get it for half his asking price, and that on average, by the time it needed any type of servicing, it would be a better financial decision to junk it and buy a new one, so his demand wouldn't cause me any problems at all.
Cars aren't vacuums, but the same theory holds true. You hear some dealers complain about Internet car shopping, but in a big way, they have only themselves to blame. Offer a reasonable price and demonstrate what that price gets the buyer over what the cheaper Internet pricing gets him, and a dealership can get a lot of sales. Make that price divide too steep, and lose the sale (and customer) forever.
I was reading some of the Tesla articles and the lawsuits surrounding them being able to sell directly. What's the benefit of the dealer network these days? Seems like it would be easier for manufacturers to just sell direct to the customer and bypass the dealer?
That behavior is in fashion at the closest Kia dealership near me.
But you know, it seems to work for them pretty well, as they move a lot of vehicles.
I have no idea what the actual transaction prices come in at, but I would guess the folks buying them feel good when the dealer tells them, here's a $1000 discount just for you, and that gets the sales price back to MSRP.
Well, I don't know anything about vacuums but I can tell you, at least on Hondas that the difference between invoice and MSRP continues to shrink as new competition heats up the playing field.
I remember if I sold a Honda Fit for MSRP there was about a 400-500 profit.
Some customers value service and the treatment they recieve but lately that group of customers is shrinking. It't all about PRICE!
I recently read an article about "showrooming". A business such as Best Buy spends a fortune to open a brick and mortar operation. They train their sales staff on the product and try to make a small profit.
Shoppers spend an hour learning about the different products and what will work best for them. Then they leave and shop the price to death so they can maybe save a few bucks.
Is this wrong? In the minds of many, this is "smart".
There are some benefits for the customer in a dealer network, if a dealer is willing to service the customer (and I mean "service" in a good way). A good dealer will go to bat for a good customer in the hazy areas that might not, or no longer be covered by warranty, for instance.
But you do bring up a good point, especially as more and more see vehicles as a simple commodity or appliance. Dealerships really don't bring much to the table to offer at that point. There's no physical reason at all that a manufacturer couldn't set up its own delivery and service centers, especially in the highly populated areas, and cut out dealerships entirely.
Some customers value service and the treatment they recieve but lately that group of customers is shrinking. It't all about PRICE!
I would say that depends in large part on the dealership. There have always been, and always be those that see pricing as Everything. There are 3-4 local longtime dealerships in my area that do well in sales, but they also get a lot of repeat customers because they offer great service and customer treatment.
I recently read an article about "showrooming". A business such as Best Buy spends a fortune to open a brick and mortar operation. They train their sales staff on the product and try to make a small profit.
Shoppers spend an hour learning about the different products and what will work best for them. Then they leave and shop the price to death so they can maybe save a few bucks.
To be honest, I have yet to go into ANY Best Buy and find a sales clerk that knows 1/2 of what I know about a specific product. Before I purchase, I do my homework. I may go into a Best Buy to physically touch the product, but rarely does that impact my decision to buy it. And, I know I'm not the only one that feels that way.
I've had that experience at many car dealerships, too. That gets back to the qualities of a good dealership... Have employees that know the product being sold.
Is this wrong? In the minds of many, this is "smart".
My brother was in the heavy duty earth moving and construction business for many years, and he would often talk about owners that bought $million machines and put minimum wage operators on them, and be surprised when problems arose. I think Best Buy falls into that category.
In the last month, I've read half a dozen articles on the possibility of that coming around again. Fears of it are certainly out there, and apparently increasing.
I remember the then-new R129 500SL bringing 20K over sticker
Didn't LA Law have an episode with a 500SL, and later a 600SL IIRC? The guy used a car buying service but the deal fell through, then he took the negotiator's car.
I didn't watch the show - but the cars seemed shockingly expensive back in the day, and to see a 75K SL priced at 95K was memorable. The V12 cars were more like 120K+ then, which makes the prices today not seem so bad.
The sales people are well groomed, speak English and are quite knowledgable about the stuff they sell. Still, I would be surprised if they stay in business.
Soon, we will only have WalMart, Costco and the Internet.
Every car ever made is a "Limited Edition". They only make so many.
Call it price gouging if you will but, again, nobody forced these people to buy a particular car. There are many other choices out there including cars that are deeply discounted.
A guy selling water in the desert to desperate people at outrageous prices..now THAT is price gouging!
Perhaps the tip of the iceberg. This will be very hard for the top sellers to ignore going forward if they want to protect margin in this very competitive era.
Well, I don't know anything about vacuums but I can tell you, at least on Hondas that the difference between invoice and MSRP continues to shrink
The underlying issue of course is that "invoice" doesn't really mean much of anything anymore in the car business. Holdback has always been around but now there's a bunch more bonus money out there for the dealers. So profits can be had at invoice even ignoring holdback.
Invoice is the new MSRP.
Best Buy's sales training, like a lot of big box retail (and car dealers) was mostly how to pitch extended warranties, because that was a big part of their profits. I say was because most consumers now realize it's smarter to pass.
All I know is what I read in the funny pages. USA Today in this case.
"[The] modern invoice number now is padded enough to let automakers send significant sums back to dealers in hard-to-track give-backs and bonuses that make the dealers' real (and well-hidden) wholesale cost for the vehicle well below "invoice." (link)
Remember, GTO, G8 also had $3-$4K markup when they debuted but we know how that turned out. Interesting that history made them limited editions!
Not that I would definitively know, but I do not remember this. I do remember the GTO being panned from day one for its styling. I don't remember G8's being in short supply, even at the beginning.
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Not that I would definitively know, but I do not remember this. I do remember the GTO being panned from day one for its styling. I don't remember G8's being in short supply, even at the beginning.
No idea on the GTO, but I do recall the local Pontiac dealer making the case of a short supply of G8's. Whether or not they were, I dunno.
I read about the new G8 and wanted to see on in person. When I heard on the radio in an ad that they were now available, I went in. The salesperson made the "short supply" claim to me then. I thought the car was nice enough, but I couldn't imagine a car like that being as "in demand" as, say, the latest HI-PO Camaro-type vehicle might be.
I felt it would be limited only by the number of buyers willing to fork over their cash.
It's a ploy to confuse the customer and to confound the Internet sales phenomenon, IMO.
Dealers no doubt have complained to manufacturers about the readily available costs/pricing information, so its moved into more of a "smoke and mirrors" approach.
Shortly before Suzuki pulled out of the market, several folks at the local dealership were convicted of embezzlement. They were selling cars claiming something like $69/month payments, and collecting those "manufacturer rebate-type payments" by the bucket load.
Next we'll hear that it's the only business where everyone knows your costs and the only business where people negotiate.
But you can find all kinds of cost information now, including building price estimates for home construction, and I've negotiated deals at grocery stores and Nordstrom and with my last sales realtor (saved one percent). Haven't tried at Walmart yet, but all you have to do is ask (might get a deal on an open box or a display item).
People still get car fever and lose their head in all the excitement, but if you're willing (and able) to take your time, another good deal will pop up in a day or two.
Dealers are businesspeople who have invested millions of dollars to open a store. they are often community leaders who give back tons to the community like the owners of the store I worked at did.
Greedy consumers shouldn't know what a merchant paid for the products they sell. I sure don't! For me, the item is either a good value or it is not.
A business needs to make a decent profit! Nothing evil about that!
Dealers are businesspeople who have invested millions of dollars to open a store. they are often community leaders who give back tons to the community like the owners of the store I worked at did.
That's true, but its also just as true many dealers are opportunists and have no problem screwing the customer whenever possible, just as one would find in any business segment.
And, there's good reason why many car salesman often find themselves held in such low regard by the public, especially used car salesmen.
Greedy consumers shouldn't know what a merchant paid for the products they sell.
Why? Besides, most consumers aren't greedy. They just want an honest, reasonable deal, whether its a car or a loaf of bread. And, even if I know precisely what the dealer/seller paid for the product,I can never know his true costs, which includes the building, employees, etc. ... All the things that are necessary to allow the sale of the product to the consumer. But, as in my vacuum example, if I can buy the product for 1/2 the price elsewhere, chances are someone's either bad at costs control, or they're trying to take advance of me. Same goes for cars...
I sure don't! For me, the item is either a good value or it is not.
If you don't know the relationship between cost and price, then you can't know what's a good value and what isn't, and whether what you're paying is a value, a steal, or you're getting screwed to the wall. A business needs to make a decent profit! Nothing evil about that!
Greedy consumers shouldn't know what a merchant paid for the products they sell
But what's the difference really? The dealer doesn't have to sell at a price level below whatever profit threshold they require to operate. You are also forgetting the auto dealers have a very strong lobby group and often have some powerful legislative support in the states. Truth is, generally if you shop price quotes they aren't going to usually vary all that much on a day to day basis, so you are often better off buying from the decent quality ones that have honest salespeople and service rather than wring an extra C note out of some pace that will probably make it back anyway through doc fees, service prices, etc.
I wouldn't stand in line or pay over MSRP either but some people don't mind doing this.
There are "sellers markets" and I don't blame any merchant or home seller to take advantage of this.
It works the other way too.
I don't think it's gouging, either.
Not any different than my flying on a flight where I paid $100, and the person sitting next to me could have paid $350. The market is segmented - plan early and you get a good price; if you're a walkup you pay high prices. Just like the same meal in the restaurant on "discount Tuesdays" vs. the weekends. Or the movie matinee.
Comments
I see HHR's with those tarmished originals around here. If one could get them replaced for free, not sure why folks didn't! But that's me.
If you simply go by overall length, I think they're close. At least, they're probably both under 180" long I'd guess? And, at that time I don't think I had actually seen an HHR except on a turntable at an auto show.
At the time, my friend was actually deciding between an Equinox and an Xterra. I went with him on the test drive, and IIRC we went to the Nissan dealer first. Then to the Chevy dealer. After he drove the Equinox, I noticed one HHR parked towards the back. I asked him to go look at it and tell me his opinion. He simply gave it sort of an "eh" and that was that. And, seeing it that close up, I noticed just how small it really was.
Now, any of these vehicles were gargantuan compared to the '98 Tracker he had.
My thinking at the time was that the Equinox might not be a bad bet because it got a bit better fuel economy, and he could probably do without the AWD and just get FWD, which would save a little money. But, at the time, I think the Nissan had a better warranty, so if he had gone with the Equinox, I would have suggested an extended warranty, which would have probably offset the cost savings of not going with AWD.
Ultimately the Xterra won out. I think he now has about 105,000 miles on it, and it's still doing well. It's had to go back twice for problems with the HVAC controls, and has also had two tire pressure sensors fail. Oh, and the CD player stopped ejecting. But, that's a pretty good record, IMO.
$39K for a Chevy does sound like a lot of money. But, with the way inflation has been taking its bite, it's not as much as it sounds like these days!
For instance, in 1999, when I bought my 2000 Intrepid, I paid $22,389 out the door. $40K today would equate to about $28,700, adjusting for inflation. In those days, if you took an Intrepid ES and put just about every single option on it, you could MSRP it up to about $30,000 without too much trouble.
Going way back, to 1957, that would equate to around $4841 according to the inflation calculator I used. I think my DeSoto Firedome had a base price of something like $3,085. But, throw on all the stuff that was optional back then...automatic, heater, power steering/brakes, whitewall tires, two-tone paint, radio, etc, and it was probably more like $3800. Simply adding air conditioning would have probably boosted it to around $4200-4300. And going full-out and getting power windows, locks, and seat might have been just enough to shove it close to $4800.
Now, $4800 sounds like Cadillac money for 1957, and indeed it was. That year, a Series 62 hardtop coupe started at around $4600 and the hardtop sedan was around $4700. I'm sure power steering/brakes and an automatic were standard on even the cheapest Caddies by then. But believe it or not, a radio and heater were still optional! A/C was also optional. And on a Series 62, power windows and seat were also optional (but standard on DeVille, which was about $450-475 more expensive.
So, I'd imagine a fully-loaded Caddy DeVille in those days could easily top $6,000.
And, one advantage of the $39K Chevy Impala...it would probably be better equipped than a $39K Buick LaCrosse.
Back to the Xterra conversation (and I know that wasn't you, lemko), I'm not sure what years I'm talking--older ones--but I thought the Xterra was one of the ugliest vehicles out there. Just had random lumps here, there, and the other place. I'm thinking that was at least one or two generations ago though.
The Xterra was totally redesigned for 2005, and came off looking a lot more rugged and substantial, IMO. A lot more crisp and squared off, and a lot less "lumpy". I think in certain colors though, the Xterra doesn't look all that great because it has plastic covering the front and rear bumpers, and the plastic wraps all the way to the wheel openings, both front and rear. In a dark color, such as the dark gray my buddy bought, it looks okay. But in a light or bright color, I think it looks clashy and a bit cheap. Especially in white or yellow.
As for substantial, is it ever! I think my buddy's Xterra weighs around 4200 lb and has a GVWR of around 5600. About the same as my old '85 Silverado!
I've heard that the Xterra, Pathfinder, and Frontier actually share the same frame and much of the same underpinnings as the full-sized Titan/Armada. They're just on shorter wheelbases, the bodies don't hang out as far over the side of the frame, and the suspension components are altered for a narrower track.
I haven't seen tires kicked, but truckers use "tire thumpers" as a quick way to determine if tire pressure is within range.
It looked like they put glasses on the old one. The light surrounds were not body color so they stood out, making it look like eye glasses.
That's true here as well, although living in the south I think we probably see more Miatas and that style vehicle, overall.
Nope, not at all. For those buyers that just HAD to have a new PT Cruiser they were comfortable paying the price. Nobody held a gun to their heads it was a decision THEY made on their own"
MSRP of course means "Manufacturers suggested retail price"
Some cars sell for MSRP, some for less and a few for more.
Nobody got screwed, it was simply market forces at work.
A home in our neighborhood just sold for 50,000 more than the listing price. It turned into a bidding war.
Same thing.
A matter of opinion, I guess, but I'll agree that the buyer was a willing party to whatever one wants to call it.
Frankly, whether it be cars or phones, I've never understood the overwhelming desire to "one-up the Jones'".
Gotta love a seller's market...if you're a seller.
This is just me, but if the manufacturer thinks there's enough profit in "MSRP", dealers adding extra show their true colors. I'd wonder about what they were charging out in the shop. But that's just me.
I bought a Miata with 26k miles for $7800 IIRC, the original owner had paid a markup so she told me it was $25,000.
Stupid. I owned the same car, drove it for more miles than she did, and still sold it for $5500. My net cost was $2300.
Her cost was $17,200. Is new car smell worth paying 7.5 times more?
We each owned it for the same amount of time, but again, I drove more miles. Cars don't go away. Find a nice used one, it'll still be there in a couple of years. I never understood the need to have it now.
I wouldn't stand in line or pay over MSRP either but some people don't mind doing this.
There are "sellers markets" and I don't blame any merchant or home seller to take advantage of this.
It works the other way too.
It has become such a cutthroat, miserable marketplace these days that a lot
of shoppers think stores should be non profits.
Anytime I think I miss the car business I just read some of the Prices Paid forums and that cheers me right up!
I don't have to deal with these grinders anymore!
They could get those up to nose bleed prices (for the class).
Still, I doubt people paid that much. It was about making the buyer feel like they got a discount even when they paid MSRP. This was at the Honda dealer in Bethesda.
The PT is a funny case. I remember demand being so great, that Canadian dealers were selling their stock to American dealers - conversion was easy, and with the very favorable exchange rate then, the Canadian dealers were making out like bandits.
Throw away the blue books on these!
We used to charge 1295.00 to install A/C which wasn't that bad.
No, it's not just you at all. I feel the same way.
The Christmas before last, my daughter asked to a specific vacuum for her desired gift. I found it offered locally for $499, which I felt was a bit steep, so I looked online and found a number of places selling the exact same product for 1/2 the price, delivered. I then approached the local shop, told him I could buy it cheaper (did not say at what price or online) and asked him if he was willing to discount his original price to make a sale.
He refused, and told me if I didn't buy it from him, then I shouldn't even think about bringing it in to his shop for service. At that point, I told him I could get it for half his asking price, and that on average, by the time it needed any type of servicing, it would be a better financial decision to junk it and buy a new one, so his demand wouldn't cause me any problems at all.
Cars aren't vacuums, but the same theory holds true. You hear some dealers complain about Internet car shopping, but in a big way, they have only themselves to blame. Offer a reasonable price and demonstrate what that price gets the buyer over what the cheaper Internet pricing gets him, and a dealership can get a lot of sales. Make that price divide too steep, and lose the sale (and customer) forever.
But you know, it seems to work for them pretty well, as they move a lot of vehicles.
I have no idea what the actual transaction prices come in at, but I would guess the folks buying them feel good when the dealer tells them, here's a $1000 discount just for you, and that gets the sales price back to MSRP.
There are a lot of gullible buyers, evidently...
I remember if I sold a Honda Fit for MSRP there was about a 400-500 profit.
Some customers value service and the treatment they recieve but lately that group of customers is shrinking. It't all about PRICE!
I recently read an article about "showrooming". A business such as Best Buy spends a fortune to open a brick and mortar operation. They train their sales staff on the product and try to make a small profit.
Shoppers spend an hour learning about the different products and what will work best for them. Then they leave and shop the price to death so they can maybe save a few bucks.
Is this wrong? In the minds of many, this is "smart".
Maybe I'm a dinosaur?
But you do bring up a good point, especially as more and more see vehicles as a simple commodity or appliance. Dealerships really don't bring much to the table to offer at that point. There's no physical reason at all that a manufacturer couldn't set up its own delivery and service centers, especially in the highly populated areas, and cut out dealerships entirely.
I would say that depends in large part on the dealership. There have always been, and always be those that see pricing as Everything. There are 3-4 local longtime dealerships in my area that do well in sales, but they also get a lot of repeat customers because they offer great service and customer treatment.
I recently read an article about "showrooming". A business such as Best Buy spends a fortune to open a brick and mortar operation. They train their sales staff on the product and try to make a small profit.
Shoppers spend an hour learning about the different products and what will work best for them. Then they leave and shop the price to death so they can maybe save a few bucks.
To be honest, I have yet to go into ANY Best Buy and find a sales clerk that knows 1/2 of what I know about a specific product. Before I purchase, I do my homework. I may go into a Best Buy to physically touch the product, but rarely does that impact my decision to buy it. And, I know I'm not the only one that feels that way.
I've had that experience at many car dealerships, too. That gets back to the qualities of a good dealership... Have employees that know the product being sold.
Is this wrong? In the minds of many, this is "smart".
My brother was in the heavy duty earth moving and construction business for many years, and he would often talk about owners that bought $million machines and put minimum wage operators on them, and be surprised when problems arose. I think Best Buy falls into that category.
In the last month, I've read half a dozen articles on the possibility of that coming around again. Fears of it are certainly out there, and apparently increasing.
Didn't LA Law have an episode with a 500SL, and later a 600SL IIRC? The guy used a car buying service but the deal fell through, then he took the negotiator's car.
The sales people are well groomed, speak English and are quite knowledgable about the stuff they sell. Still, I would be surprised if they stay in business.
Soon, we will only have WalMart, Costco and the Internet.
The times have changed.
Remember, GTO, G8 also had $3-$4K markup when they debuted but we know how that turned out. Interesting that history made them limited editions!
GTO - Boring. G8 - still valued.
They show their true colors religiously!
Call it price gouging if you will but, again, nobody forced these people to buy a particular car. There are many other choices out there including cars that are
deeply discounted.
A guy selling water in the desert to desperate people at outrageous prices..now THAT is price gouging!
They HAVE to have water!
The underlying issue of course is that "invoice" doesn't really mean much of anything anymore in the car business. Holdback has always been around but now there's a bunch more bonus money out there for the dealers. So profits can be had at invoice even ignoring holdback.
Invoice is the new MSRP.
Best Buy's sales training, like a lot of big box retail (and car dealers) was mostly how to pitch extended warranties, because that was a big part of their profits. I say was because most consumers now realize it's smarter to pass.
It is still used in that manner by SOME stores but not all dealers have to borrow money to buy their cars.
On Hondas, it is 2%. Hardly enough to get too excited over.
What is never considered is the tremendous overhead that it takes to open the doors every month. I know nobody cares about that nor should they.
A "bunch more bonus money"? Well, sometimes but quite often there is little reason to offer bonus money on fast selling cars. Why would they?
People like you and me would either wait until the market cools or we would buy something different.
"[The] modern invoice number now is padded enough to let automakers send significant sums back to dealers in hard-to-track give-backs and bonuses that make the dealers' real (and well-hidden) wholesale cost for the vehicle well below "invoice." (link)
Not that I would definitively know, but I do not remember this. I do remember the GTO being panned from day one for its styling. I don't remember G8's being in short supply, even at the beginning.
But that was an odd one....
Markups at launch.
Deep discounts as it aged.
Great resale value now.
So if you timed it right and got a deep discount, they hardly depreciated at all.
No idea on the GTO, but I do recall the local Pontiac dealer making the case of a short supply of G8's. Whether or not they were, I dunno.
I read about the new G8 and wanted to see on in person. When I heard on the radio in an ad that they were now available, I went in. The salesperson made the "short supply" claim to me then. I thought the car was nice enough, but I couldn't imagine a car like that being as "in demand" as, say, the latest HI-PO Camaro-type vehicle might be.
I felt it would be limited only by the number of buyers willing to fork over their cash.
It's a ploy to confuse the customer and to confound the Internet sales phenomenon, IMO.
Dealers no doubt have complained to manufacturers about the readily available costs/pricing information, so its moved into more of a "smoke and mirrors" approach.
Shortly before Suzuki pulled out of the market, several folks at the local dealership were convicted of embezzlement. They were selling cars claiming something like $69/month payments, and collecting those "manufacturer rebate-type payments" by the bucket load.
Read if you're interested...
http://www.goupstate.com/article/20080401/NEWS/651169002
I have no idea how they thought they would get away with it.
But you can find all kinds of cost information now, including building price estimates for home construction, and I've negotiated deals at grocery stores and Nordstrom and with my last sales realtor (saved one percent). Haven't tried at Walmart yet, but all you have to do is ask (might get a deal on an open box or a display item).
People still get car fever and lose their head in all the excitement, but if you're willing (and able) to take your time, another good deal will pop up in a day or two.
Dealers are businesspeople who have invested millions of dollars to open a store. they are often community leaders who give back tons to the community like the owners of the store I worked at did.
Greedy consumers shouldn't know what a merchant paid for the products they sell. I sure don't! For me, the item is either a good value or it is not.
A business needs to make a decent profit! Nothing evil about that!
That's true, but its also just as true many dealers are opportunists and have no problem screwing the customer whenever possible, just as one would find in any business segment.
And, there's good reason why many car salesman often find themselves held in such low regard by the public, especially used car salesmen.
Greedy consumers shouldn't know what a merchant paid for the products they sell.
Why? Besides, most consumers aren't greedy. They just want an honest, reasonable deal, whether its a car or a loaf of bread. And, even if I know precisely what the dealer/seller paid for the product,I can never know his true costs, which includes the building, employees, etc. ... All the things that are necessary to allow the sale of the product to the consumer. But, as in my vacuum example, if I can buy the product for 1/2 the price elsewhere, chances are someone's either bad at costs control, or they're trying to take advance of me. Same goes for cars...
I sure don't! For me, the item is either a good value or it is not.
If you don't know the relationship between cost and price, then you can't know what's a good value and what isn't, and whether what you're paying is a value, a steal, or you're getting screwed to the wall.
A business needs to make a decent profit! Nothing evil about that!
On that, I agree completely.
But what's the difference really? The dealer doesn't have to sell at a price level below whatever profit threshold they require to operate. You are also forgetting the auto dealers have a very strong lobby group and often have some powerful legislative support in the states. Truth is, generally if you shop price quotes they aren't going to usually vary all that much on a day to day basis, so you are often better off buying from the decent quality ones that have honest salespeople and service rather than wring an extra C note out of some pace that will probably make it back anyway through doc fees, service prices, etc.
There are "sellers markets" and I don't blame any merchant or home seller to take advantage of this.
It works the other way too.
I don't think it's gouging, either.
Not any different than my flying on a flight where I paid $100, and the person sitting next to me could have paid $350. The market is segmented - plan early and you get a good price; if you're a walkup you pay high prices. Just like the same meal in the restaurant on "discount Tuesdays" vs. the weekends. Or the movie matinee.