Just what is a good deal?

fredvh

Terry,
I used the word "sleazy" ONLY because bobst used it. Personally I do not have a definition for that word. I only will say that if a dealer lies to you that that dealer would not get my business. Bobst says that ONLY price counts but you and I know that price is not the only factor in determining what is a good deal.

isellhondas

Good for you! Some people only care about PRICE and they will put up with anything just to save a lousy dollar.

If more people felt like you, the lousy stores would go out of business!

heywood1

I can think of a large Honda dealer (and racing team owner) in the southeast that was convicted of giving Rolex watches as bribes in exchange for favorable allocations of hot models. Pretty sleazy, if you ask me. The industry has a rep for a reason.

bobst

I know which dealer network you are referring to. One of their dealers is located just south of us. We bought our 95 Accord there, and would have bought our new car there if they had it in stock. We have visited there several times to look at cars, and they don't seem sleazy at all.

We took our 97 Accord there for a recall. The service rep was very nice, and they did the recall work without recommending that we have a bunch of other things done to the car.

heywood1

A flawed moral compass and a good service department aren't necessarily mutually exclusive.

This dealer's legal troubles, I believe, were prior to '95. Even if he's legit now, I wouldn't buy a car from a dealer that built his success on unethical business practices. But based on that dealer's growth since, it would seem that most buyers either don't care, or don't even remember.

audia8q

there were so many honda dealers involved in the scandal you mentioned it was almost laughable....a whole bunch of honda factory employees were sent to jail also. my point is, there is a good chance that the "other" honda dealer you select may have been invloved also.

heywood1

The fact that there were many Honda dealers involved only amplifies my point: The industry has a rep for a reason. No one should be shocked when the term 'sleazy' is used.

Kirstie_H

the name-calling. I think the point has been made that there are plenty of unethical dealers.

audia8q

There was alot more guilt from the factory than the dealers...

Essentially the factory reps would say if you give me a kickback i will make sure you get additional honda franchises and better allocation of "hot" products. This fraud went very high up in the honda system. The dealers were almost forced to participate or they would get crushed by the dealers who were willing to give bribes. Dealers were buying factory guys houses, boats, jewelry etc....This says something about the value of a honda franchise.

stroudman

"...and they did the recall work without recommending that we have a bunch of other things done to the car."

-People resent the service advisors recommending other repairs to their vehicles...almost as much as they resent their cars having a new issue or breakdown soon after having their car serviced.

heywood1

All an ethical dealer had to do was say 'no,' and then blow the whistle.

Kirstie_H

There's a difference between recommended much-needed service, like brake pads down to the remnant, and pushing very optional and/or dubious services. I don't ever mind being told that, say, my fan belt has a small tear in it and probably needs replacing. I don't like being made to feel like if I don't have my engine spit-shined, I'm incompetent to own a vehicle.

audia8q

They did..and alot of dealers paid a huge financial price. Would you be willing to lose millions of dollars to rat out your source of income without any protection?? Remember this was back in the roaring 80's....long before there was any whistleblower protection. It was essentially play by the rules or you will suffer.

I'm not defending the practice..it was sleazy and unethical but things were not as easy as your implying. Anyone who brings a lawsuit against their manufacturer will tell you there is a price to pay. Many don't want to risk everything they have to do so. They couldnt get cars from the "other" honda company. lol

ghosthoffa

What kind of deal should I expect on 2004's new? The sticker prices are 16,000 and 19,000 respectively.

stroudman

If you are being sold anything dubious, or made to feel that way, run...don't walk.

heywood1

There is no reason a dealer should have been afraid to go directly to someone high enough in Honda corporate (that wasn't involved) and blow the whistle that ends the game for everyone.

There's the old saying about the hardest part of climbing the ladder of success is getting through the crowd at the bottom. Any dealer who's legit and successful now, but got through that crowd by being dishonest, will never get my business.

isellhondas

I totally agree with you. for other people, however, PRICE is all that matters.

crkeehn

A few years back I read a book about the American Honda Motor Company and the scandal. Basically the scandal went all the way to the top. At that time, the company had some very hot cars, the second generation Civic had just come out, the Prelude was hot and the Accord was blistering.

ghosthoffa

Can some one give me some advice?

danf1

The best advice I can give is to post a little mor information. Sticker price alone doesn't tell enough. What models are you looking at?

heywood1

Well, I must admit that price is the tail that wags my dog most of the time. But I'll eliminate dealers with bad track records (that I know of) before I even begin shopping. I'm obviously in the minority, as Rick Hendrick has become wildly successful in the years since the scandal (personal setbacks aside). I guess crime does pay sometimes....

rroyce10

......... You got this thing kinda turned around .... he was doing what every other dealer was doing to get immediate inventory and to stay "on" the transport routes, the dealers were being blackmailed, cuz all of those nice Rolex's and Cigarette boats were going ALL the way up the food chain ...

This wasn't a dealer thing, this was a manufacturer thing .. there had to be 50/60+ dealers that got involved just to stay in business ....

So, what would you do if you knew you wouldn't be seeing any product for 60/90 days.? .. and any product you would see was a black 2dr handshaker without air .?!? ... plus, Toyota, BMW and Benz have tried it on their dealers at one time or another, all Mr. Hendricks was doing was just playing the cards that were dealt to him, so he got the blame ... not much difference than what happened with the Space Shuttle, except they blamed Morton Thiokol .................... ;(







Terry.

heywood1

What would I do? I would have made a call to my state's Attorney General.

Sorry, but the 'everyone-else-was-doing-it-so-what-did-you-expect-him-to-do' argument just doesn't work for me. If you see nothing wrong with it, then you're in the right business...

rroyce10

... **What would I do? I would have made a call to my state's Attorney General.**...

..l..o..l... what the heck do you think the Attorney General was going to do with Honda Corporate, make them stand in a corner.? .. you might as well called the Hershey Candy company .. we need to get you into a business so you can see how things work .......

Terry.

heywood1

What A-G offices usually do (and what U.S. Attorney Calloway did in that case after Honda tried to keep it quiet): investigate, bring indictments, and prosecute.

Sorry, I don't need a business. Already have a successful one of my own and know 'how things work.'

What kind of business do you own?

Kirstie_H

OK, this is getting a little bit personal, plus it's not on-topic regarding what is a good deal. Let's switch tracks, please.

cadillacmike

My 1968 (Cadillac) (convertible) now has a spit shined engine!

But then again I just had it overhauled and I don't take it to the dealer Because I can't get a good deal on service there (to keep things on topic).

michaellno

The name of the book is "Arrogance and Accords" and I have a copy of it on my bookshelf. Quite interesting reading ... it references some Honda dealers near where I grew up in SoCal.

Lots of reasons why the scandal happened .. little corporate oversight, greedy executives with too much power, sales and manufacturing being totally separated from one another in the corporate structure, etc, etc, etc. .... oh, and dealers who were willing to do anything to get extra Accords and Civics in the 80's and early 90's.

What is really interesting is that what started out as kickbacks from the dealers to the Honda sales executives turned into a fraud and embezzlement scheme of the highest order. These guys ended up stealing many millions of dollars from Honda in fake advertising and sales training schemes.

The book was written by a former Honda employee who was peripherally in on the action, and had a front row seat to most of the shenannigans.

heywood1

After all this discussion, I was going to buy this book. Also, I was living in the Carolinas at the time, and recall that this story was in the news for weeks. But it's nearly $140 on Amazon (because it's out of print, I assume). What's the cover price on your copy?

michaellno

I'll have to go home and look .. somewhere in the mid $20 range, I would suspect.

I can understand why it was such a big deal in your neck of the woods .. Rick Hendrick was a huge contributor to the Honda sales exec's funds. IIRC, Rick actually bought a house or two in a pricey LA neighborhood for a couple of them ... made the mortgage payments, everything. $1 million + homes we're talking about.

The most amazing thing, to me, was that these executives made "bonuses" on selling new franchises. The story at the beginning of the book outlines one such deal in Santa Paula, CA -- the dealership was originally located on a side street out of an old service station! The Honda exec made something like 6 figures on it.

crkeehn

Thank you so much. When I tried to go back and locate the book in my library system, there was no record. I must have obtained it through interlibrary loan.

utter

So on a very basic and introductory level, what are the succesful ways to get the best deal. Is it more shopping around for best prices or finding a dealer that you connect with and can negotiate a good price?

rroyce10

...... **finding a dealer that you connect with and can negotiate a good price** ...

As long as you do your homework and don't get yourself caught up in the fancy $1,700 wheels and the fancy smancy Disney packages that weren't on your list to begin with, then the above will work out just fine ...

Terry.

heywood1

It's a combination of both. Target a half-dozen dealers or so within driving distance. Immediately eliminate any that give you lip service about how popular the vehicle is and that they're doing you a favor at MSRP. Then begin negotiations with the rest, as it's not worth your valuable time to drive four hours to save one or two hundred bucks.

Of course, if we're talking about a any domestic vehicle (other than Mustang, Corvette, and XLR), make sure you start negotiations way below invoice....

dglozman

I'm trying to understand how this thing works. If MSRP let say $30,000 (price suggested by manufactory) and rebates $2,000, does it mean that the REAL manufactory suggested price is $28,000? Why then offer rebates, and not make MSRP price lower at the first place? For most of the people it is really confusing (people who don't read Edmunds ). They thinking they are getting a good deal, but at the same time they are paying current MSRP. I understand if incentives like lower APR, extra discount if you own the same model, military or college graduate discount are offered. But why give those rebates instead of just reduce MSRP?
Just saw in today paper that dealer offers a car for "discount" price which is just MSRP minus rebates. It is not a discount , it is just current MSRP.
And another thing, because of all those crazy rebates, depreciation is calculated incorrectly, since its a % of MSRP price (without factoring manufactory rebates)

lhess

and my 2 cents is not from any ultra-reputable source, but, to me, rebates are used to sell vehicles in which sales have been sluggish. Let's say the 2005 LaZermobile hits the lots in August 2004 and by end of first quarter 2005, sales are not going as well as they expected. Lowering prices is the biggest motivator for more sales. So, the 2005 LaZermobile gets a $2500 rebate and 2.9% interest for 48 months. Or, whatever they feel they must do to move them. However, as long as folks are coming in and jumping on the LaZermobile at MSRP, why lower it?

dglozman

I understand that if the car is not a good seller after certain period of time, but some manufactures almost immideatly offer rebates just after car hits the market. Example would be Chevy Cobalt which already has $1000 rebate. And its been on the market just for couple of month. It would be more logical to set MSRP lower at the first place. By definition MSRP it is price suggested by manufacturer and if there are manufacturer rebates available it means that MSRP is lower by that amount. It just confusing.

lhess

and over in the GM forums, they're discussing that very issue at some length. GM seems to be the master of overpricing and then rebating like crazy. I don't shop or buy GM, but from the standpoint of marketing it would make much more sense just to debut them with a lower price. GM rebates in the past couple of years have really disgusted me. If they can lower their prices as much as the rebates indicate, then I really got had on a few pontiac deals. I think some companies use rebates smartly and only when they have to. Who knows what GM is doing??

thenebean

a lot of companies are going to try to bring down the pricing on their vehicles to a real "transaction" price as opposed to having msrps be what they are, and rebating like crazy. but people have become so used to getting rebates that its going to be tough to ween people off of that. i know dodge/chrysler is working on lowering their msrp to be closer to the real transaction price that people are paying for their product, while also reducing the amount of rebates they are offering...

i guess we'll see how it works, but i have a feeling people aren't going to like it - i think people like getting "discounts" however that may be...

but, just my 2 cents - we'll see down the road how it all works out!

-thene :-)

dglozman

some companies do not offer manufactory rebates at all or they offer them at the end of production cycle, when updated model is about to come out (Honda, Toyota). Maybe (or most likely) it has something to do with quality of cars they produce. When you have Ford Taurus and Honda Accord priced almost the same, you MUST offer rebates on Taurus, otherwise you wont sell any (or only to rental agencies). I would say that's the problem with all domestic brands. They just do not produce quality cars that priced accordingly. People do like discounts, but at the same time they want quality which brings value (combination of quality, price and many other factors) If you start discounting cars like Chevy Cobalt just after few month on the market, I think this car wasn't even highly regarded by manufacturer itself when they designed it.

asafonov

The other reason to offer rebates is, when somebody trades in a vehicle she/he owes more for than it is worth, the dealer will increase the trade-in amount and at the same time increase the selling price of a new car. Since as I understand lenders will not loan more than a certain percentage of a MSRP (100%? 105?), having large rebates thus offers more "wiggling room" for those buried in their trades.

rroyce10

.... ** having large rebates thus offers more "wiggling room" for those buried in their trades..**

Bingo.!

Terry.

thenebean

as far as i know, the a plan is well below invoice, pretty much all of holdback too! see if they can throw in oil changes, floor mats, but as far as price, i think you've got all of it.

good luck!

-thene

ghosthoffa

I am looking at a mazda3 hatchback and a mazda MPV new or used. I have heard as much as 50% off the sticker price of the lower priced vehicle. Is this true or should I expect more/less???

mirth

...the TMV using Edmunds to find out what the cars are worth. Somehow I doubt it will be 50% off.

thenebean

its always a numbers game - if you buy the first for MSRP plus all their add ons, you may be able to get the other one at half off....

i would be careful of something like that!

-thene

manamal

usually you have two cars wih big rebates. One is cheap (e.g., chevy aveo), the other is expensive (suburban). Buy the suburban for full MSRP, get the aveo for free. The catch is the dealer eeps the rebates, and there is no discount.
So the Suburban you are paying 54000 for has a TVM of 43000.

Now the "Free aveo" is a stripped down model with MSRP of 10K and a TMV of 9K.

So, you are spending 54000 to buy cars with MSRPS for about 64000, but TMV of 53000. So a real good deal. right?

mikezoomzoom

Nobody has posted in this forum for a little while so I thought I would try to get some discussion going in regards to "Just what is a good deal?"

Sticker Price... between MSRP and invoice... invoice... under invoice???

Obviously, it depends on the vehicle and the current market situation. Rebates and incentives help dealers sell more and consumers buy more. Both sides will gladly accept more from their respected positions( more profit to the dealer VS more discount to the consumer). Where is the middle road? When can both sides be satisfied and happy?

As a consumer, the question "Just what is a good deal?" is appropriate. You've researched,shopped, test driven, then researched, shopped, and test driven again. You narrowed down what you want and maybe even made some compromises along the way. You even have an idea concerning real-world trade values and what type of APR you might qualify for, if applicable. What will it truly take to really make you feel you're getting a good deal and pull the trigger? :confuse:

The dealer side, the question "Just what is a fair deal?" is appropriate. Truly realistic offers, within reason, will usually be accepted. Concessions can possibly be made, also within reason, to try and assist the transaction. Unfortunately, these scenarios don't always come to a head. In my opinion, it seems that a large percentage of consumers in todays marketplace feel that dealerships should make only holdback... if that. Of course I'm biased to a certain degree, since it's also my livelihood, but I'm also a consumer too.

WHAT'S GOOD FOR THE CONSUMER ISN'T ALWAYS FAIR TO THE DEALER!

WHAT"S GOOD FOR THE DEALER ISN'T ALWAYS FAIR FOR THE CONSUMER!

Give and take is a two way street. Any productive thoughts and feedback on this will be greatly appreciated. -Mike

bryan

To me, buying a car is not that big of a deal. I do my research ahead of time, and know exactly what I want when I begin the purchase process. I have purchased three new cars since February '03, all from the same GM dealership, and I came away each time feeling very satisfied. I know that the dealership made money--I understand the simple concept that businesses are in business to make money! F&I was a pleasure for all three transactions--very straightforward.

More imporant to me than the deal is service. I keep my cars for at least five years, and have the extended warranties. I am very pleased with the service I have received, as one of the cars ('03 Aurora) has had several nonmechanical warranty issues that have been taken care of with no fuss, no muss. The other two cars ('04 Final 500 Alero has been absolutely defect-free so far and the '04 Bonneville GXP has had one issue, a sunroof rattle, and that was taken care of on the first try). I have yet to have this dealership give me the dreaded "could not duplicate".

In my opinion, life's entirely too short not to be happy--I try and life each day by that mantra. Now if I could just apply that philosophy when I'm surrounded by stupid, inept drivers! :P

thenebean

that is a great way to approach the process!

a lot of people dont think that the car buying process should interfere with the service process, but it does in a sense. you work out a fair deal for both sides (not just one thats fair for you...) and you'll find that dealers are SOOO much easier to work with! for those that understand business is about making money, you don't get all stressed out wondering if "they ripped you off"

everyone's deal is different - i have a friend who will just go in and pay sticker, to avoid muss and fuss - and its not because she hates confrontation (she lives for it sometimes) she knows there's a price on the car, and she pays it...done. she's very happy, doesnt worry that someone got a better deal (she knows its true, but doesnt care) and she loves her car!

so its different for everyone, but dont dwell on it so much. some of the people here work out these crazy formulas and processes, and its just not worth it (to me at least) to go through so much hassle to save a hundred bucks or two over the life of a 60 month loan...whats $5 more a month anyways?!

my two cents...

-thene