Toyota Canada Access Pricing
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?
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
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.
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.
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.
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.
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?
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.
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.
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.
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.
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.
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.
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 $$$.
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?
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).
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.
Do a search on "fixed selling", and it "However, Toyota dealers in the regions with fixed selling prices appeared to charge substantially more."
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.
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.
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?
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
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'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.
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.
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.
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.
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.
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.:-)
I think everyone is kinda getting off on a tangent here .. it's really all about a "price being higher than you want to pay." -or- a price you feel you "should" pay ..
With all this info on web sites about rebates, incentives, cost, etc, etc, I feel that "some" folks are starting to think they should pay invoice and/or less for any vehicle .. I think what they are forgetting is, the manufacturers and the dealers are 2 total separate entities .. one is the builder of the product and one is the seller of the product .. if the market changes then it's the *manufacturer* who decides it needs X amount of vehicles to move by X date to carry their production runs, the dealer uses the rebate, incentive to move the *standing* inventory even faster ..
The bottom line is, the dealer has invested His money, time, property, employee's, overhead (which is Huge) to make it work .. every dealers overhead is different, this one might be $20,000 a month and the guy down the street might be $45,000 a month, then add a little local advertising (above the factories) and it could very easily hit $75,000+ a month and thats before payroll .. Amazing, huh .?
At the end of the month the dealer looks at his books and the inventory and decides whether or not there has been a profit made and profits are Not made on selling 50 Corolla's at $200 over invoice or 25 Sienna's at $312.57 over cost .. they know, they have studied it (or, they would be out of business by now .l.o.l.) .. dealers take the total amount of the sales and average them out, this is guy that paid $175 over invoice on the Corolla and the guy that paid $2,150 over on the 4 Runner, then they come to a figure and that figure remains a *fixed* figure (or, they go out of business) .. some months may be better than others, but that fixed # has to remain the same, that's why it so easy for Saturn ( of course it took 11 years for them to make a profit
Are the dealers price fixing ..? It's just based on what it takes to remain in business and still make a profit, you just can't purchase every vehicle for $200 over, period.! .. I guess what makes this particular topic amusing is, that the furniture business is off 30% and there is BUNCHES of rebates coming from the manufacturers and we don't see them advertised, there is Kazillions in rebates coming from the Boat industry and I haven't seen any ad's rolling around from Searay, I wonder why that is .l.o.l.
Have a nice day ...
Terry
IMO, your argument about what you paid holds no water. So what if you paid $3000 less than a customer in B.C. For all you know, you may have paid $3000 less than the guy down your street. He bought under the same system you did. Congratulations to you? To bad for him? Is your point that Toyotas should only sell for whatever the lowest amount paid is? Ontario's system is apparently fair for you but I wonder how your neighbor feels about it?
mass,
The scrutiny and settlement were justified because Toyota WAS contravening competition laws by FORCING dealers to comply with Access pricing by inflicting penalties against dealers that did not comply. To the satisfaction of the courts and the consumer group that brought the charges, Toyota dealers no longer have to fear penalties from Toyota and are free to negotiate IF THEY WISH.
Access Toyota dealers have now had a couple years experience and are selling more than ever. If the Access system were abolished tomorrow why would dealers suddenly lower their prices? How can you make someone negotiate with you?
landru, why doesn't buying for $3000 less hold any water? I think he got a great deal. Maybe we are speaking from different perspectives (you being a sales guy, while we are "foolish" buyers)
As far as ganging up on landru, I doubt we are doing that here. We just have different opinions: I think we should pay as little as possible, he wants us to pay full price. Just different perspective, I guess.
The fact is, even after the $2.3 million settlement, the Access dealers in BC are still not willing to negotiate. True, we cannot make these people negotiate, but we can buy from someone else, like a broker. I'm not trading in my camry, so I can't haggle there.
I have no problem at all with someone wanting to pay as little as possible. I do have a problem with people expecting the government to make that happen for them. And I do have a problem with someone that feels that a Toyota is some essential product they can't be denied.
It really strikes me as funny that even though some people might feel Toyota is diabolical for setting up Access Toyota and is "milking" their customers, that people still want to reward them by buying the products.
No pressure for the dealer to hold to the Access Price? Yeah, right. 'Yoda Canada may not be able to take overt steps to force compliance; but options for covert pressure abound, and then there's the pressure the dealer organization can exert. Just imagine how difficult it would be for a 'negotiating dealer' to trade inventory with Access Pricers, to get expeditious delivery on stock from 'Yoda Canada, to provide warranty coverage to customers, etc.
The dealer coalition holds together well enough to maintain an Access Price? What does that tell you? It tells me that there's plenty enough cohesion to maintain ethical standards - if the dealers want ethical standards as much as they want the Access Price.
Price competition as an incentive for efficient dealership operation? LOL, that's gone.
All of the above is theoretical or 'macro'. At the practical level . . .
I think Landru is right; a major option for the buyer is to walk to another brand. Honda, Ford, et al have gotta be loving Access Pricing. A major competitor supporting an inflated price is win-win for them. The buyer still takes in the shorts to some degree, however, since 'the other brand' has less price competition.
Alternatives for the individual buyer -
Work the trade-in angle. Don't own a car to trade? Buy a $500 ragged out beater, and see if a dealer eager for a sale at the end of the month will allow you $3K for it on trade.
Get outside the Access Price market. Use the net to buy a car and the price spread to finance the trip to go get it. Sell your trade at home; since the local market is price fixed, there'll be plenty of demand.
Use the force of depreciation to your advantage. Look at Saturn, for example; not a great value new, IMO, but a 3-4 year old Saturn has taken such a large depreciation hit that it makes for a great buy.
"There are no problems, only opportunities."
Which market will have higher used Toyota prices? An Access market or a non-Access market? Remember, if the whole concept is inherently unfair it shouldn't be to anyone's benefit. Right?
Would I think some people have a problem because they really like Mercedes, and cannot do without it? No, absolutely not. They'll buy whatever they want, but I'm sure they'll like to get the best deal possible. Unless, of course, if you are made of money.
It's not the cars that are diabolical, it's the company that sells them. To circumvent that, I guess we'll have to do what rivertown suggested. We can always get good deals, if we look and try hard enough, and not take any manufacturer suggested prices at face value. That's the point I'm trying to make to potential Toyota customers out there.
The day I pay full price is the day I have $50 billion bucks in my portfolio.
When I bought a home entertainment system recently, and is able to shave off more than 500 bucks, it SURE feels really good. Why? Because if I didn't persist in my tactic, I surely would have paid full price, like what landru would have liked. Note that there's only a certain brand and model of television that I liked, and if I couldn't get it at Store A, I would certainly have gone to Store B, but for the same brand and model.
It's just that for Toyota, I don't have the luxury to shop around, unless I go through other means, like a broker.
THANK YOU!
Why would he do it?
1) He can afford to.
2) To make a volumn bonus.
3) To make a more attractive deal without running afoul of the Access Price process. LOL, his books show the new car was sold at the Access Price, even if he's willing to shave his profit margin.
There's always competition, whether it's restrained or not.
So, the buyer does best buying outside the Access Price market and selling in it. Simple as that.
Yes, I agree. But I thought the Access market was not good for consumers?
asaw,
"The government is responsible for the well being of its citizens."
So making sure you don't pay too much for a new Sienna is a government responsibility? At least I see where you are coming from now.
The government watches out for its people by making sure that monopoly does not have a detrimental effect. I'm sure your Econ 101 taught you that?
Monopoly? You mean you have no alternative but to buy a Toyota?
A) Ford Taurus at $25K (non-negotiable hypothetical Ford Access price)
Let's focus on the best price you (a consumer, as opposed to a salesman) can get, as opposed to all those mumbo jumbo that was posted.
I'd rather pay $300 than the $700 that a Sony Receiver will cost me.
I also would rather pay half the income tax I pay now.
So, yes, I'd rather pay $23K than $25K for a Taurus. But why stop at $23K. I would way rather pay only $20K for that Taurus.
Of course, wishing for something doesn't make it so.
Now let me ask you a question. Do you see Saturn's price policy as "illegal" like Toyota's? And if so, why do you think it has been around for over 10 years?
Saturn implements a nation wide pricing (set by the manufacturer). Toyota's Access Pricing is set by individual dealers. (collusion)
So you'd be OK with it if Toyota set the price nation-wide? How would that help you get a cheaper price on a Sienna?
Either I would then:
1) Buy through internet or broker
2) Buy another brand.
So it's not the fact that the price is being fixed that is the problem. You just need it to be fixed the same for everyone. I wrote in an earlier post that the fact that Toyota didn't just roll out the program nation-wide was the problem. The fear that someone else just might pay less is a strong motivator.
And all this rhetoric about "collusion" and "illegal price fixing" is just a smokescreen for the fact you just don't like the price you have to pay. After all, it sounds a little contradictory to expect the government to ride to the rescue when this same government has declared the policy to be legal.
landru I now know the problem. You personally need to fix your government now. :-)
Terry as usual YOU ROCK!