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Comments
INKY
I guess I'm fortunate since they're less than a mile down the road and I know most of the people there. :-)
BTW, no I've never worked there. :-)
2002 Honda Accord 4dr Sedan 3.0 EX w/Leather in zip code 92508 as of August 12, 2002
CarsDirect.com Price
$21,700
(Incentive or rebates included in price)
MSRP
$25,760
Invoice
$23,225
Next time I go to the dealer I'll ask if it's still gonna be $316 over invoice on the 2003 Accords.
INKY
Honda Accord does seem very promising but I can't say for sure yet, since I haven't driven or even sat in one yet. Same with the Mazda 6. And since I bought my Nissan Altima 3.5 SE just last October, it'll probably be a few years b/f I buy again.
The one thing that irritates me is the fact that Nissan cut corners on my Altima and is forced to backtrack and modify the interior w/ better material just one year later. Sucks for me because they already have my money. Unless you are a potential buyer, it's actually worse that Nissan is improving the interior of the Altima. My car will depreciate that much faster.
The car rides just fine though, the suspension is not as firm as you think..especially after about 1000 miles or so.
And, I don't get your comments about the transmission. The transmission is also used in the more powerfully Ody, Pilot, TL/CL, and MDX, so I don't think durability is an issue. Having to maintain high RPMs would be more of an engine wear issue, or a non-issue in the case of a Honda powerplant...
honda has never done 0%. period. they dont have to. why do you want to buy a car with 192 ponies that weighs more, handles worse, and has less standard equipment? to save money? of course...but car buyers buy for product 10 times more often than they buy for price, and the accord has placed itself a LOOOOONG way away from the camry in the market.
you may not want to be "first on the block", but lotas of people do, and they will be.
As for the "all-new" Camry - its about the same as the "all-new" Accord, which is a comprehensive re-engineering of the existing plaform. Also, Camry actualy added content to the LE this last time around...
And notice that one of the Autoweek reviews of Altima mentions that 'average' $$$ that a buyer spent on the new Altima was over $26K (to a maximum of $29+ K), you've got to think that Accord at MSRP wouldn't sound like a bad deal.
INKY
The dealer is only doing the deal on currently allocated cars before Sept 8th when the car is officially introduced. I guess after that market conditions will bear.
I also agree that by January any Accord will be had for $500 over invoice, but I did not want to wait till them!
INKY
im just trying to impart the info. that i have at my disposal. i dont put B.S. on here, just facts that ive come across working with these cars every day. i know there are other dealers here who may have more or less info. than i do...wouldnt it be in all your best interests to listen to us? especially if you will be in the market sometime soon. get all the info. you can, because the educated buyer leaves with money in his wallet!
p.s. the buyer who is the nice guy also gets the salespeople to work just a little harder to make them happy!
Is the published "invoice" price the same price the dealer pays the manufacturer? I say NO, because it impossible to make a profit selling an automobile at $500 over invoice much less below invoice.
For any enterprise to make a profit, its gross margin should be at least 20% to 40% above cost. So, for example, if the invoice price is $10,000 and the markup is 20%, the MSRP should be $12,000.
In this scenario, the gross profit is $2,000 from which the dealer must pay your commission, advertising, utilities, and all the supporting costs of running a dealership. Therefore, it is impossible to sell a car at or below invoice and still be able to continue as a going concern.
I understand that there are other profit centers such as financing and service but they are supportive in nature and cannot be relied on to generate the bulk of the dealership's profits.
In summary, how close is the published invoice price (on Edmund's etc.) to the "real" invoice cost? Until we know that dealers will continue to rip-off customers.
The factory can an does offer incentives to dealers, sometimes cash, sometimes other things that the dealer would like to have/needs to have. Everything from remodeling help to financing their recievables to extending credit -- the 'terms' on which dealers 'buy' vehicles from the factory are very very grey for some makes.
Most folks who work at selling the vehicles do not make a fortune. The commissions are smaller than on other products of similar cost.
Dealers that do well usually have big volume and low overhead.
The service shop is NOT just "supporting" it is a huge part of the profitability. Between warranty work, maintaince and repair the bottom line on service CAN account for more than half of the PROFIT at some dealers.
Similarly the revenue and 'perks' throw off from finance can make the differenca between having a full salesstaff and being understaffed. The fees that finance generates that are returned to the dealer (either in cash or trips & other goodies) means a well run dealership can all but forget about having a transient sales force.
Don't forget the Rusty Jones/Fabric Guard/Paint Sealant/Extended Warranty/LoJack/ et cetera. ALL of those things can & do boast the PROFITABILITY of each unit WAY WAY higher than MSRP! Even the most honest, fair dealer is NOT going to ignore padding the fat deals to make up for the "razor thin" ones!
And don't overlook the Used Car side of the lot. True, volume tends to be lower there, but the mark-up rarely dips below $1000 per unit. And MANY of those cars come in with no cash outlay! The number of folks who still trade-in cream puffs is surprisingly high.
Don't misunderstand me, having a auto dealership is no sure-fire way to riches. The opportunity for fraud and huge losses is very real. Even the most profitable dealers still spend LOTS of hours away from their family & hobbies that other enjoy on evenings, holidays & weekends BUT the a smart dealer, with a firm grasp on where the cash comes in & goes out can run their business on deals at MSRP and USUALLY make enough BELOW MSRP to stay around forever.
How much below MSRP? Well, if every vehicle drove away at just $200-500, it would be darned hard, but like the airlines that can afford to sell some seats at $39 as long as significant portion are at $400, a 10:1 ratio of MSRP or more to $200-500 over is NOT unrealistic!
-Nominal invoice
-Holdback
-Dealer incentives / customer rebates.
To arrive at true dealer cost for a given car, you must take the nominal invoice and subtract both holdback and dealer incentives [if any ]. At most dealerships, all talk of invading holdback is verboten until and unless you get to year-end time [ voila, like right now ], at which time just about anything goes at typical high-volume dealerships.
At many large dealers working on fast-moving, popular import brands [esp on the West Coast], moving the new car product is more important than making lots of money on each transaction. This makes life tough for lower-tier sales people, and for competitors who can't afford to keep up. This kind of dealership makes buckets of money on used cars [often at markups from 15-30% over wholesale costs] and at the service drive.
Rarely does a car sell "below cost" - but published, nominal "invoice" is often nowhere near the actual cost floor on a given car. Between that fact, and the points in the paragraph above, you have the appearance of "selling below invoice".
What is the name of the dealer (and phone number or web site) who offers 2003 accords at 300+ over invoice?
thanks,
Jerry
jar1945@aol.com
Jerry
You cannot really compare to the phenomena of the Odyssey, Pilot and CRV to the Accord and Civic for they are newer to the Honda line and Honda knows to keep up with the Camry-is the main reason why they are dealing on 2002 Accords and getting rid of them as fast as they can-they have to have a lot of them when they are introduced to the market in early September.
greetings from sunny Miami.
SECOND, DELUXCAR, THE TERM RIP-OFF IS PRETTY LOOSELY FLUNG AROUND THESE DISCUSSIONS...LET ME ASK YOU SOMETHING...WHAT OTHER RETAIL PRODUCT ON EARTH HAS A PUBLISHED AND WIDELY KNOWN DISTRIBUTOR COST? FEEL LUCKY YOU CAN HAVE A STARTING PLACE FOR NEGOTIATIONS...BUY A HOUSE AND ASK THE REAL ESTATE AGENT THEIR SALES COST...YOU WILL LOSE AN AGENT AS FAST AS YOU ASK THE QUESTION. BOTTOM LINE, PLEASE USE THE 'RIP-OFF' TERM FOR THE DEALERS THAT REALLY DO IT. IF YOU BOUGHT A PAIR OF SHOES FOR $10 MORE THAN ANOTHER PERSON, DID THE SHOE STORE RIP YOU OFF? NO...YOU RIPPED YOURSELF OFF.
There is a reason why auto dealers were forced to place Malroney stickers on new automobiles because they were taking advantage of consumers.
Since the MSRP is usually an inflated and bloated price there was widespread apprehension as to the relationship between the "acquisition cost" to selling price. Therefore, reluctantly dealers made the so-called "invoice price" available so all could see how much of a gross profit they were making.
But there appears to a fudge factor in that invoice price, that number is deliberately inflated to make it appear that the dealer is making a modest profit.
A related situation is the case where lenders (and dealers) quoted a lower interest rate on a loan when they knew that in fact the real rate was much higher. For example, you may be quoted a rate of 7.0%, but with junk and hidden fees, the real rate or APR may be 7.9%. Thank goodness there are laws that force lenders disclose the APR to protect consumers from scammers. I just wish there was a similar law that would force dealers to disclose their net invoice, sort of "truth in buying" disclosure.