Any Questions for a Car Dealer?

basscadet · January 2006

Well, we're not really talking about discouting a single dollar. No dealership should ever feel obligated to sell at anything but MSRP.

I think this is more of a case of dealers preying on consumers, inflating prices of a vehicle to make more profit. Furthermore, anybody who takes a loan on such a vehicle is going to be insanely upside-down for a protracted amount of time.

Selling at MSRP is plenty of profit for a Pontiac Solstice dealer. Not only that, it generates good will and trust. These dealers who charge over MSRP are the ones who keep salespeople like me on the "Most Hated Professions" year after year.

basscadet · January 2006

Anybody like to calculate the difference in price between a used 06 Chevy Cobalt with 6000 miles versus a demo Chevy Cobalt with 6000 miles? The difference must be at least 3-4 thousand dollars. The lower interest rates that come with an untitled demo car can't begin to breach that gap.

snakeweasel · January 2006

No reputable dealer, no matter how scarce a car is, would ever charge over sticker price for a car.

It happens all the time, a new hot car comes out and people basically bid the prices up. The Solstice would be a good candidate for that as well as the Prius. Other cars that had that happen were the PT Cruiser, the Viper and others. It will happen in the future too.

The smart money will wait a year for prices to come down.

basscadet · January 2006

You can buy a 2005 Kia Amanti (black/black leather), all options, with 11k miles for $19,998 from Carmax. They have several like that.

Just wanted to make sure you realize how much these Kia guys are jerking you around.

snakeweasel · January 2006

Well, we're not really talking about discouting a single dollar. No dealership should ever feel obligated to sell at anything but MSRP.

Just remember that the 'S' in MSRP stands for "suggested". Basically its what the market can stand. If the market says they can get $6,800 over sticker than they will sell the car. If not the car will just sit there until they lower the price.

kdhspyder · January 2006

I think this is more of a case of dealers preying on consumers, inflating prices of a vehicle to make more profit. Furthermore, anybody who takes a loan on such a vehicle is going to be insanely upside-down for a protracted amount of time.

Because our business model is based on capitalism your first phrase is just wrong. That is the basis of capitalism, pure and simple.

'preying on consumers.' ? This is just wrong. Noone was abducted off the street or out of their home and forced to buy a high-demand vehicle. It's basic capitalism that allowed that consumer to choose to buy that item at that time. Why would some pay $5000 or more for a HDTV wide screen when you can wait 3 yrs and get it for $1000 or so? You may be a much more disciplined buyer than another person.

Upside down? If both you and the must-have-it-now buyer both keep your vehicles 10 yrs neither is upside down.

Finally if it was your family who owned the store and the profit went to pay for college for your children, would you turn it down? The other independent business people in your town sure dont. Grocers, hardware stores, contractors, etc. they all make what they can when they can, why shouldnt you?

dino001 · January 2006

There is also a flip side of it. We as consumers demand low prices, rightfully so I might add. We don't care that GM has to pay UAW ridiculous benefits, we don't care if the sales guys really makes money or not. We want it cheap and will take any discount they throw at us.

We as customers are almost groomed to expect nothing higher than invoice minus holdback minus latest incentives combined (even though the disclaimer specifically says either cash or interest) and of course $3000 above the Blue Book for the trade (your recent add was saying...). Would not think twice if the guy across the desk loses his shirt. We don't need to, don't have to - not our obligation.

As they don't need to stick to "long term" "trust" strategy. If they think a quick buck is better for business, it's their choice.

snakeweasel · January 2006

My wifes daily drive was an untitled demo which we got at something like 70% of the sticker price. I mean if you totaled up the price we paid, tax, title, doc fees, interest on the car loan it still adds up to less than the sticker price of the car.

Not to mention the added bonus of someones checkbook in one of the storage pockets (Yahoo, a free trip to Vegas :P ).

martian · January 2006

Suppose you have a 5 year old Audi A4-perhaps 60K miles, and you have a blown engine (sludge). Dealer informs you that an engine rebuild will run $11,000, with no guarantee that the tranny will last. So, is it worth it? I can wellaginen that there are a lot of owners faced with such a dilemma in modern cars-the car costs more to fix than the value-so what do you do?

isellhondas · January 2006

I disagree and I know you are in the business.

I guess it's up to a dealer to decide what is "plenty of profit" and up to a customer to decide if they want the car bad enough to pay over sticker for it. This is called market forces or free enterprise.

MSRP stickers reflect what the manufacturer thinks the car should sell for more or less. Some cars are worth more and others less.

The market will always determine pricing and there is nothing wrong with that!

Not every deal has to be a mini!

british_rover · January 2006

Not every deal has to be a mini!

==========================================================

Yes ughh I am so tired of people wanting cars for free. I mean come on either way you slice it that new range is gonna cost you over 70,000 dollars there are no freebies it is not a Honda.

cars4mike · January 2006

Appreciate the info. I kinda figured there was more to be had, but no experience with demos. Will check out the Carmax to be sure. Thanks again.

bigdveedubgirl · January 2006

Okay, First did you buy the car new I assume not because its 5 years old and you are paying on it....

Okay I also would assume it was not certified either.

How much do you owe on on your 2002 Audi and I can give you an answer.

If you are the original owner call Audi and have proof of every single oil change done on the car per audi specs, you might have a case.

If you have jiffy lubed that car and were a little flakey on the maitenience then you have a problem.

If you are buried, and need a quick fix, throw some cash down and buy a product that has a whole lot of rebates or Lease something that has a whole lot of rebates. Good Luck!

bigdveedubgirl · January 2006

I don't feel as though I was preying on anyone when I sold VW Beetles in 1999 for 3000 over sticker. People were happy and loved their cars and I made sure they had a pleasant purchasing experience. It was the market. And then in 2000 It died down a bit. No more 3k over. Its a cycle. When the RS4s come out, it will "Sticker is Quicker". I am sure there are going to be some people calling everydealer for the best discount and some dealer is going to get weak and do it......sigh.

Another thing that has been said my many a jillion times here by everyone in the business. The ones who pay the most usually are the happiest and send the refferals and fruit baskets. The most miserable CSI nightmares are the ones that go 50% into holdback.....

nyer10 · January 2006

Hi,
Wondering if anyone can offer some insignt on what kind of finance rate I can expect. I'll be looking to buy a Honda Civic or Mazda 3 in the next couple of months and here's my deal:
I have about a 560 credit score, pretty good income (almost $60k in NYC), a satisfied tax lien, no bankruptcies and employment and residency at the same place for the past five years. There's no outstanding debt at this time.
I figure the car should cost me at least 18k+ out the door so I plan on putting down at least 7-9 grand.
What kind of interest rate do you think it would be realistic for me to expect given all those factors?
Also, just wanted to know what range to expect for DMV fees.
Thanks much in advance.

prosa · January 2006

My guess is that you'll end up with an interest rate somewhere between 12% and 16%, sorry I can't be more precise. But keep in mind that with the sort of loan amount you'll be getting the difference in monthly payments for each percentage point in interest won't be much. And you should be able to refinance in the future as your scores rise.
As for DMV fees, I paid something like $250 when I bought my Subaru a few months ago in Suffolk, that was with new plates. And don't forget sales tax.

nyer10 · January 2006

Thanks for the response. I was hoping for a little lower, but I got myself into this mess, so I'll get myself out -- and, as you said, I can refinance after making my payments on time for a while. Yep, remembered tax -- 8.375 percent, I believe. And from what I remember, in New York, the document fee can't be any higher than $50 so that's cool. Thanks again.

raybear · February 2006

Apply for a loan right here on Edmunds using the links provided....you'll get a rate quote and can present it to the dealer to see if they can match it.

qbrozen · February 2006

good info. thanks.

martian · February 2006

Charge what the traffic will bear? sure, that is the first rule of marketing. But just be aware that many "early adopters" also feel that their loyalty has been abused. I (for one) would never pay over sticker-it offends my basic philiosophy. Its like that smarmy little tactic that the TV shopping channels use-"you better buy now, we won't have this item for long"-till you tune in a month later, and they haveb a warehouse full of 'em! Just out of curiosity-once the initail market (for the New Beetle) was satisfied, did you wind up discounting them?

kdhspyder · February 2006

There is one other side to this 'over-market price' issue on hard to get vehicles. Take the Solstice just as an example. It has great lines and appears to have a lot of buyers lining up. Initially the supply is limited as production gets into full swing.

When a dealer gets one, often flocks of people come to see it immediately. Almost certainly there will be one real buyer who will take it home that day. What about the next day? The 2nd and 3rd and 4th group of buyers come to see it and 'Well we sold it yesterday and we don't know when we'll get another one. We'll call you when one comes in.' That's a turnoff ( cf. lots of potential Prius buyers over the last 2 yrs ).

By putting an addendum on the sticker, sometimes a ridiculous amount, it ensures that the vehicle will stay on the floor for a while anyway for the general public to see. Now if a buyer comes in and says 'Screw it, I want it. I'll pay whatever you are asking.' There is no injustice being done, it's all above board. I won't pay it but there is someone who will.

Can you imagine some people are actually bidding against each other in the hundreds of thousands of dollar range at Barrett-Jackson for vehicles which originally sold for less than $5000. I won't do this either but someone will.

graphicguy · February 2006

q.....at least you got a couple of nice sleds to take the "Z"s place. I've rented an LS a couple of times, and was impressed with them. Can't speak for the Pacifica, though.

Haven't been over to CCBA recently. I'm toying with a lot of different cars. I had a bead on a "demo" '05 Acura TL. Terry says I'm better off with a new '06, though given the 1 model year depreciation and that the '06 won't cost much more than the '05 given Acura's less than normal depreciation. I actually like those cars. They're quite different than the Mustang, though.

Neighbor is getting a divorce. He bought a new '05 'vette coupe, then found out his wife was trading him in for a unit with fewer miles. So, he's dumping his cars, his house, his wife, everything....! He's too strong in his asking price, though.

Long and short of it, I'm not in any hurry to buy something right now. If I had to choose today, I'd probably be leaning towards the TL, ....nice performer, comfy, loaded, good resale (which both you and I need given our car afflictions).

I see that 'vette every day, though. It's, at best, a 6-9 month driver in my neck of the woods. I'm trying to wrap my arms around that fact (like I had to do with the Mustang and the RX8).

I'll probably wait and see what Uncle Sam is going to "ding" me for this year's tax bill.....unless I find a deal that knocks me over.

Hell, I may wait for a long while and see if Chrysler is really going to make that Challenger (which I suspect they will).

As it stands, I've got one vehicle at the moment for the first time in a very long time....a 4 Runner. While not flashy, it gets the job done with no muss, no fuss.

mazda6iguy · February 2006

Your explanation is the one that makes the most sense.

prosa · February 2006

Neighbor is getting a divorce. He bought a new '05 'vette coupe, then found out his wife was trading him in for a unit with fewer miles. So, he's dumping his cars, his house, his wife, everything....! He's too strong in his asking price, though.

The 'vette might be too expensive, but you probably could get an excellent deal on the wife :P

bcb1 · February 2006

>>Not every deal has to be a mini!

==========================================================

Yes ughh I am so tired of people wanting cars for free. I mean come on either way you slice it that new range is gonna cost you over 70,000 dollars there are no freebies it is not a Honda.

I wonder...how often does the car buying public (and the dealers and manufacturers) think about what a ridiculous cat and mouse game that car buying has become?

You know...

Dealer: what will it take to sell you this car TODAY?

Buyer: I dunno...what'll you accept for it?

Dealer: Well...I'm not really sure, but gimme and offer and I'll take it to my manager.

Buyer: Hmmm...

Repeat the above cycle X4 at least.

Seriously, doesn't anyone else think it's really an asinine process? Wouldn't it be something if every dealer went did the Saturn or Carmax route? Everyone pays the exact same price, no matter what. 5-day or 300 mile return policy. Everyone's trade-in gets actual wholesale value, no under-allowances or over-allowances.

I know, I know. It'll never happen. But it sure would make life easier for everyone, both dealers and car buyers alike.

kdhspyder · February 2006

Scion ... and it works.

qbrozen · February 2006

Oh, that's right. I remember the TL talk.
I tried one with a stick when they first came out. I REALLY wanted that car. I couldn't afford it at the time, though (not that I can now).

Now that the Accord sedan comes with a 6-speed ... I'm not sure I'd pay the premium for the TL anymore. Wait till September and you'll be able to get an '06 Accord 6-spd with Navigation for $28k, easy. Probably even less.

arrg. Here we go off topic, though. LOL. Ain't that always the way?

volvomax · February 2006

It will never happen because it doesn't work.

There are people who don't want to pay what everyone else does. There are people who believe their POS is worth retail book.
One price has too many drawbacks.
Car dealers are the ultimate path of least resistance people.
If one price worked, we would all be doing it.

jb_turner · February 2006

I can not understand the frustration/hang up paying MSRP or more for an automobile.
Why not just wait until it is less than MSRP and purchase it? and not complain now?

xkiddx13 · February 2006

i dont know i was in a worse finacial mess, and i still got 10.6

bcb1 · February 2006

>>If one price worked, we would all be doing it.

That would be the thing...ALL DEALERS would have to do the one-price strategy, ala Carmax and Saturn. If half the Saturn dealers sold their vehicles the "standard" way, and the other half did the one-price strategy, it wouldn't work.

I was talking more of a Manufacturer-required price strategy. They would have to be the ones to require a one-price plan. I'm just thinking that if they did that, it would probably be better for all involved. No more "mini deals" for salesmen to scream about. No more customers feeling that they were ripped off after talking to a neighbor that got a better deal. Less turnover for salespeople - you wouldn't have a few good ol' boys making lots of money, and a bunch of green newbies making peanuts. No more fake CSI's. Salesmen would get paid a salary + bonus based on customer satisfaction, not based on how much profit the deal had.

Like I say, I realize it won't ever happen. But on the other hand, who would've thought 15 years ago that GM and Ford would be in the kind of horrible financial condition that they are in right now, struggling to survive?

isellhondas · February 2006

Price Fixing?

I don't have a problem with this but it'll never happen. Some stores have tried this only to revert back.

Saturn sells a lackluster product to people who appreciate not having to haggle. They pay MSRP and are happy to do so. They pay again when it's time to trade these in because of dismal resale value.

But, they are happy and that's what matters.

basscadet · February 2006

But just be aware that many "early adopters" also feel that their loyalty has been abused.

And that is exactly the point I was trying to make.

Even if you and the customer agree ahead of time that this "scarcity tax" put on cars is just the market, he/she is still going to feel like they were taken for a ride by the dealer. Especially later in the year when they hear what prices other people paid for similar product.

I'll just have to agree to disagree with the other gentlemen/women here.

jlawrence01 · February 2006

Seems to me that people who don't like to haggle can ALWAYS go into ANY dealership and offer to buy a vehicle at MSRP. I would say that on about 95% of vehicles, they can buy the car without a haggle.

xkiddx13 · February 2006

your right but it might be more like 85% of vehicles, specially with the new ones, if you wanted to pay MSRP on lets say a 2006 honda accord hybrid, good luck on finding a dealership that will sell it to you for that...

basscadet · February 2006

It's an illusion.

Saturn customers think they're getting a good deal. Therefore, they are happy with the purchase...and more importantly, the car. (And how anybody can be happy driving one of those is beyond me)

I'm currently working at Carmax but I have worked in a "traditional" dealership before so I know very well how creating an illusion of a good deal is everything.

xkiddx13 · February 2006

your very right it is all about the good deal, i never understood that ppl always want to say taht they paid so little for there car but then they tell ppl they paid way more on there house.. lol, funny world we live in..

by the way if you work at car max, waht kinda of price would you give me on a nissan xterra 2002 6 cyl power every thing with tow package

stefs · February 2006

Hello all,

I appreciate this forum a lot, I've learned so much just in the nick of time! I am probably going to buy a new car from a dealer some distance (3.5h) away from where I live. He gave me by far the best price. Anyway, I have a buyer for my current car and was hoping to do a courtesy trade-in to save $500 in taxes. However, I don't think the buyer of my current car will want to drive 3.5h with me to complete the paperwork! Has anyone ever done a courtesy trade in with the 3rd party not present? Can anyone think of a way it could be done? I'm probably dreaming, but I'd like to save the $ if possible. BTW, my local dealers are coming in $1,300 higher than the one far away so it's still worth it to travel.

Thanks!
Stephanie

graphicguy · February 2006

The 'vette might be too expensive, but you probably could get an excellent deal on the wife

LOL! I just spoke to the guy last night....he'd gladly PAY to make the wife go away. He wants $42K for the '05 'vette (all loaded up). I can travel a little bit to Kerbeck in Atlantic City and buy a brand new '06 'vette for low-mid 40s.

q....those TLs are nice pieces. I'm not neccessarily an Accord kind of person, but the lineage between the TL and the Accord is there. For a few grand more for a TL over the Accord, you get better materials, better warranty, better design (in my eyes), the allegedly better Acura customer service, and probably a little better performance (not so certain about that last part).

I don't HAVE TO HAVE any car right now. Wanting one is a little strong at this point, too. I kind of got used to having two vehicles at my disposal, based on my mood, however.

But you're right....we're straying here.

Back on topic, do any dealers have any info stating whether SUVs have picked up sales-wise since Katrina? With gas prices leveling off (still artificially inflated, though), seems like SUVs would start to pick up again.

I've noticed that dealers around me are offering deals in the newspaper on premium SUVs.....like Rovers, Infiniti FXs and Lexus RX/GX units. Hummer sales seem to have fallen off a cliff, though. I just don't see as many of those around this year as I saw last year.

isellhondas · February 2006

Why would they feel "abused" when it was their decision to pay a premimum price for a car they just HAD to have?

I'm sure they are aware that prices will fall later.

xkiddx13 · February 2006

you would be supprised, i was dealing with this young lady the other day, and she was outragged that, the 05 honda accord she bought january last year, that she paid just pennies over msrp for. so she got a good deal on the vehicle at the time of purchase. well she was complaining that she is moving to hawaii and wants to sell the car and had no idea she could not get exactly what she paid for it.

so there are ppl out there, that are not aware. but it is there own faulght.

stickguy · February 2006

a wise man once said, "stupid is as stupid does"

xkiddx13 · February 2006

and never pay full price for late pizza

kdhspyder · February 2006

Back on topic, do any dealers have any info stating whether SUVs have picked up sales-wise since Katrina? With gas prices leveling off (still artificially inflated, though), seems like SUVs would start to pick up again.

I'd have to say they have picked up very marginally at our Toyota store. There has been some interest lately where there was none in Sep/Oct.
Toyota just announced Jan sales:
except for the RAV4 which is brand new and is in fact car-based..
Highlander -1% compared to Jan '05
4Runner.... -2%
Sequoia.. -24%
Land Cruiser -38%
Lexus SUV .. -15%

By comparison:
Toyota autos .. +12%
Lexus autos ... +37%
The market speaks

However regarding gas prices I am afraid that 'artificially high' is a hope at best. IMO the price of fuel is certainly on the low side here as opposed to the rest of the west where it is artifically high due to extreme taxation. However, with the surge of consumerism in what used to be the 3rd world, India & China especially, the price of raw materials is just at the beginning of a long steep climb up.

We will pay whatever price China and India want to pay for oil. Disregarding disruptions like Iran or Katrina if China and India bid up the price of oil to $100 a barrel because their growth demands it... then we will also pay $100 a barrel and gas will move with it. Btw, China just became the 2nd largest auto market in the world after the US... and most people still ride bikes or walk... and their population is 5 times bigger than ours.

Here's an interesting situation: When oil peaked last summer at $70 a barrel gasoline climbed to $3.00+/gal. Katrina did have an effect for sure but now with oil at $68/barrel gas is 'only' $2.30/gal.

prosa · February 2006

Can you imagine some people are actually bidding against each other in the hundreds of thousands of dollar range at Barrett-Jackson for vehicles which originally sold for less than $5000. I won't do this either but someone will.

Hardly a fair comparison. People who pay high prices for scarce classics are making inverstments, hoping that the vehicles will rise in value as they become older and more scarce. In contrast, the buyer who just paid $5,000 over sticker for a new Solstice knows full well that he's essentially throwing money away just for bragging rights, as the vehicle's price will decline as availability increases.

boomchek · February 2006

Find out if the dealer is willing to do that first.

mazda6iguy · February 2006

The only reason I originally mentioned it, is because they just wrote "Lack of Availability Charge" in handwriting on the addendum sticker, rather matter of factly, and not tried to 'sugar coat' the charge by calling it something else not as obvious.

xkiddx13 · February 2006

lol and stil got away with it.. ppl need to educate them selvs b-4 buying things.

mazda6iguy · February 2006

God help us when the Saturn Sky hits the showrooms.

graphicguy · February 2006

Thanks, kdh......It seems like a year ago, I didn't see such "deals" on SUVs....of all stripes. Now, I'm seeing newspaper ads, TV ads, etc crawling all over the place for SUV "deals".....particularly for luxury SUVs.

Off topic, but regarding oil prices, there is some "hinkiness" going on with pricing as you point out. OPEC stated not so long ago (12-18 months ago) that they felt that $35/bbl was all the pricing they could charge before the world economy went into a recession and that's where they wanted to hold the price. Now that it's clear that the "world economy" (read U.S. oil biz) will indeed support $60/bbl, they're talking about cutting back production, again (to let prices rise to $70/bbl again?). OPEC even said that U.S. price per gallon was probably 30% higher based on no other reason than "speculation" by U.S. refineries (not really supply and demand).

Refiners aren't totally blameless. When congress was putting U.S. oil refiners feet to the fire several weeks ago, the price per gallon dropped like a brick in water. Now, that nothing became of that inquiry and the heat is off, prices are rising again with no real reason (plenty of false reasons, though).

For all the reasons for gas prices, no one is really willing to peel back the onion to see why those prices are being manipulated (hint.....follow the money). Look at the unheard of profits that the BPs, Citgos, Dutch Petro, etc are posting and you'll get a good idea of who is controlling the pricing. Look no further than the political campaign contributions these companies make (and to whom) to get an idea of who supports these rises.

Off my soapbox....carry on.......

BTW....since I know you're a Toyota dealer, my 4 Runner (v6-4X4) gets 18-19 MPG in town and 22-23 MPG on the highway. Not too shabby.

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