Any Questions for a Car Dealer?

lumbar · January 2004

Mine wants to know what you paid for your TSX?

bobst · January 2004

We got an RSX in October, and paid invoice + $100 for options (wheel locks and two extra master keys) + $200 mark-up + transportation + sales tax (3.1%) + $50 for tag/title. At least I think that is about how we computed the price.

We had a very nice car-buying experience. They treated us great.

explorerx4 · January 2004

is that the same room with the theater seating for the hidden miniature cameras and micrphones?
and the guy with the laser pointer?
forgot this the first time

bobst · January 2004

I am almost certain we had the hidden microphone trick played on us once. Yeah, it happens.

lumbar · January 2004

I "misremembered" from another post and thought you'd bought a TSX--wondered how it turned out. I'm about 3 mi. from the dealer and may be paying them a visit.

Sorry to go OT--no Dean stuff either.

bobst · January 2004

I read some of the comments, and people complain about the rough ride and various rattles - same complaints people have about the RSX.

On another web site, it seems like several people have blown up their RSX engines by missing a shift. Maybe they were stupid, or maybe, just maybe, the gates in the 6-sp are too close and easy to miss. Might be something to think about since the TSX has a 6-sp.

I absolutely love our RSX. I have never liked a car this much. Ours is a base 5-sp with leather.

thel · January 2004

I vote for stupidity, if that's what you want to call it. People that have been in autos for years and years, finally feel the urge to relive their youth or are cought up in the sporty-car hype and go for the "Fun" manual....only to realize that they've lost some skill and just aren't used to the newer trannys. I can see something like that happening.

driftracer · January 2004

and the saving grace for middle agers is that it's not them - it's the young guys out racing after mommy and daddy bought them a cool car for graduation.

I'm glad I'm not in mommy and daddy's shoes...junior wouldn't like it when he rode a bicycle to work to save up the money for a new engine, then we sold his cool Acura in favor of a 1984 Chevy Celebrity wagon.

bobst · January 2004

On the RSX website I visit, I thnk most of the members are young people who drive their cars very hard and shift at high revs. Sometimes they miss a shift, hit 12K rpm, and the valves go kablooey.

However, maybe the 6-sp tranny makes it a little to easy to mis-shift.

juliec2 · January 2004

Can anyone help me with this decision...I am interested in buying an AWD Pacifica. I can get a brand new one from the dealer with leather as the only option for$29m (msrp was $34m) or I can buy a used one that was a Chrysler Corportate car with 14,000 miles,it has every option available for $29m (msrp $42k). After seeing the total cost to own of a new Pac. it looks like it depreciates a whopping $9k in the first year and a normal $3k every year after. Would that mean the used one has already taken the big depreciation hit and would only continue to depreciate at $3k/year? Can anyone help me with this analysis?

thel · January 2004

it depends. If Chrysler comes out with a $7000 rebate next week on Pacificas (wouldn't put it past them) then you'd be looking at even more depreciation...

bowke28 · January 2004

that would make you the exception...playing the odds, im better off running! :-)

explorerx4...

this is also the same room that we are told:

"COFFEE IS FOR CLOSERS!"

my fellow pros will understand this one. ;-)

akangl · January 2004

Yup, probably so, although when I worked in sales I got a couple this way. Its always fun to flaunt it afterwards, both were good ones.

dealmaster · January 2004

First, I'd like to welcome myself back!!! For most of you here, I was a frequent poster a long time ago.
Now, Juliec, depreciation doesn't really work that way. The asking price of a program car (an umbrella term for several different types of used vehicles), which is the category that your Corporate Car fell under is determined by many different factors,but the main one,like every other vehicle, is dealer cost.
As for rebate affecting depreciation. This is a common misinterpretation of vehicle value. Depreciation is actually figured from the MSRP of the vehicle, regardless of any discounts or rebates. Basically, vehicles depreciate from 48 to
52 percent in the first 2 years (Japanese autos traditionally take 6 months longer but this is changing). Then they depreciate from 9 to 11 percent every year for the next 5 years. At seven years they're considered done.
Of course there are some exceptions. Popularity can keep that particular vehicle on the lower side of the percentage. Often the most popular used vehicles are the ones that sold more when new, and rebates at the time of original purchase can actually increase, not decrease used value.(The Mitsubishi Eclipse is a prime example of this).

bowke28 · January 2004

are you nuts?!?!?!

"Depreciation is actually figured from the MSRP of the vehicle, regardless of any discounts or rebates."

so you are telling me that my 2003 focus SE with 3800 miles is worth $9000 because of actual depreciation? i dont think so, pal. the fact that there is a $3000 rebate on the new 2003s takes it down $2500-$3000 lower than it would actually be.

my car's MSRP was $16375. invoice was ~$15500~. take off the rebate, and you get $12500. minus $3k for retail/wholesale, and you get $9500.

now...noone in their right mind will pay $12500 for a used 4000 mile car when a new one would be the same price. take off another $1000, and $9000 is killing it...should actually be more like $8500.

you actually think my car would be worth only $8500 if there was no rebate?!?! paleese!!!

bobst · January 2004

But I don't think Bowke does. He's the new kid around here and he ain't showing you no respect.

So are you gonna take it or are you gonna show him what an old pro can do?

I know you been gone for a long time. Let's see you hit the ground running!

lmp180psu · January 2004

"Depreciation is actually figured from the MSRP of the vehicle, regardless of any discounts or rebates."

I thought this statement applies to leases only, when figuring out what the residual value is? It doesn't makes sense for purchasing/financing because the rebates are usually applied to the less popular cars, that as a result, have lower "residual value". Maybe I am confused? Just trying to understand.

Welcome back to the fray Dealmaster

bowke28 · January 2004

if you were talking about residual values, thats true...but real-world depreciation is DIRECTLY affected by rebates and incentives.

dealmaster · January 2004

...Focus is worth less than that. If you really read my last post, you'll find that I was alluding to (look it up in Websters) the difference between long term depreciation and retail used car cost, particularly newer vehicles. The initial depreciation period, I repeat, is 2 years, and there are alot of variables within those 24 months which can often have the vehicle reach its max depreciation earlier or later within that time frame i.e: you could buy a car which is part of a huge manufacturers program (like the Focus)which Ford uses to flood its Hertz Rent-A-Car whole owned subdivision. I have picked up these vehicles (2004's) at the closed auctions with less than 5000 miles on them. As I have already said, dealer cost is the main determining factor of resale value. Over the long term of ownership, the percentage system I gave is absolutely accurate.
I also think it's cute how you backed up those numbers to validate your reasoning.
And they say we Attorney are full of it.
Oh, and Imp, you are correct, those percentages are what's used to determine residual value on leases. the residual is whats left after the real depreciation.
Yes..I know I'm disregarding mileage and condition... for now

juliec2 · January 2004

Thank you dealmaster and others for your input on Msrp and depreciation. I am still a little confused... IF I buy a new car msrp $40m but I only pay $33k after rebates, would the $7k difference be part of the depreciation hit I would take or I still take a $9k hit in addition after I drive the car off the lot? So is it better to buy < a year old with 14,000miles for under $30k or buy new for closer to $35k???

explorerx4 · January 2004

on leases, some vehicles are assigned a higher than expected residual value, to lower the cost of the lease.

prodigalsun · January 2004

I think rebates do affect depreciation. For instance, If I'm buying an 04 chevy malibu, and there's 4500 cash back, doesn't that have an immediate impact on all used 03's?

driftracer · January 2004

That was the reasoning the dealer used for hitting my PT Cruiser for an additional $1500 on trade, compared to what I was offered not too long ago - the rebate went up significantly (from $2,500 to $4,000).

And I work for a dealer part-time (just don't necessarily buy the cars we sell), so I understand how this all works.

rroyce10 · January 2004

....... The car market is like any other kind of market, it's like water, it seeks it's own level .. and your right, drop $1,500/$4,000 in *continuous* rebates and it's going to make ALL the difference in the world ...

Terry.

dealmaster · January 2004

A big problem we seem to be having here is understanding the difference between the retail value of a one or two year old unit and the "trade in" value.
The depreciation of your vehicle would be reflected in the trade,not in the resale. Of course current rebates on new units will reflect in the pricing of one or two year old used models, what I've been attempting to explain is that in about 4 years it'll all even out. With people holding on to vehicles for as much as a decade now-a-days, I believe this is signifigent.
Now.. about buying that year old "Chrysler Corporate" car: One thing that all car people are taught, for all the reasons that I've been trying to explain, is that "the worst investment a person can make is to purchase a new car". Dollar for dollar, the program car is a better "investment". However, can that compare with the feeling of driving that brand new vehicle off the lot?? Only you can answer that.

driftracer · January 2004

please realize you're talking to several 15-20 year pros here as well...so please watch the generalizations about people's knowledge.

fastdriver2 · January 2004

How come no car dealer here wants to answer my question from message 6700? Is it that controversial?

fastdriver2 Jan 22, 2004 8:04pm

fastdriver

thel · January 2004

Proabaly b/c they don't want to be put in the position of trying to explain the actions of a dealership of which they have NO knowledge.

That said, my semi-educated guess is that the doc. fee is preprinted on the form b/c it is a standard fee that the dealer charges everyone and they don't want whoever writes up the contract to forget to add it in there. If you don't want to pay it, simply have the salesman deduct the doc fee from the price of the car.

rroyce10 · January 2004

..... **fee is preprinted on the form b/c it is a standard fee that the dealer charges everyone and they don't want however writes up the contract to forget to add it in there. If you don't want to pay it, simply have the salesman deduct the doc fee from the price of the car.**

Bingo ...!

Terry.

fastdriver2 · January 2004

thel-

I don't think that salesmen forget too much!

fastdriver

thel · January 2004

huh?

fastdriver2 · January 2004

thel-

You said.."and they don't want whoever writes up the contract to forget to add it in there."

I said.."I don't think that salesmen forget too much!"

Get it now?

fastdriver

thel · January 2004

But my statement was refering to anyone who may be writing up the contract, not your particular salesman. How would I know if your salesman was forgetful or not?

dbgindy · January 2004

Ease up on the caffeine. :-) I didn't understand your meaning either....

Duncan

driftracer · January 2004

I have no need to jump in because our place doesn't do that and I can't speak for another dealer in another state.

Also, I know there are EEOC violations waiting to be sprung if they charge some people, but don't charge others.

If the doc fee is an issue, concentrate solely on the OTD price, and forget about the silly fee.

nascarfan4 · January 2004

Hello Main,

Re: Purchase of Honda CRV - 5 Speed

I am not in the car business, but I do find it fascinating. I am in the retail business and have purchased 12 new cars over the last 12 years. (6 for me - 6 for my wife)

Please consider the following as you decide what to do:

The professionals on this board, and they definitely sound like pros, are trying to give you great advice so that you don't end up taking all the joy and excitement out of owning a new car. They also are trying to help you obtain a "fair" price. (FAIR = only you can decide)

The one thing different about buying a car, compared to other consumer purchases, is everyone seems to "know someone that got a great deal"; "really took that dealer to the cleaners"; "outsmarted that car salesperson"; etc,.... How often do you find that people brag about taking the refrigerator salesman for every last nickel? Or, "Gee, I really socked to it to that lady at the "Baby Gap" store on those childrens' shoes." Or, you can fill in the blank with most other consumer goods for that matter! It just doesn't happen!! (excluding storewide sales.....you are not negotiating in those cases)

I read were you were concerned that they shouldn't make "$2,000", because you thought that was excessive. That's not for us to say! Our job is to be a responsible and "informed" buyer, understand what our limitations and comfort ranges are, and then proceed accordingly. Also, we need to understand the market dynamics for the car you want to purchase, in the geography where you live, at the time you are ready to buy. (( to buy or not buy.. that is the question?? The choice is ours and ours alone)). Those elements are constantly changing. I suppose the buying a Ford Thunderbird today would be very different than , say, 18 months ago, for example.(buy or not buy....our choice.) Supply and Demand, in my opinion, have far more to do deal with the depth of a given car deal than most of the negotiating tactics that our neighbors profess to know. (excepting the most uninformed consumers, who probably should pay more for being so willing to be uninformed....just kidding!)

Some people get hung up on the number of dollars that the deal has in it for the dealer. As a percentage of the selling price, I can't think of another consumer product that has lower gross profit percentages (GP%)than new cars. (other than gasoline in a tight market and maybe some consumer electronics)

I can guarantee you that virtually all the consumer products you buy at the supermarket, discount store, office supply store etc,...have far greater GP% than new cars. (exception might be front page sale items)

In the consumer products business we can sell you the cover items at or below cost because as you shop the store you will be filling your basket with a "mix" of items that allow us to recoup the profit on those items that you purchased on sale. (Yes!! Some customers only shop the deep sale items, but's that just part of the overall stores's mix) The key is the "mix" for almost all manufacturers and retailers alike.

If the car dealer sells you the new car at an unacceptably low profit(dollars or percentages) they have no other way to "mix" out the transaction unless you do one or more of the the following:

1.) Receive far less for your trade in than it is worth.(even by the most conservative measures) They can then "mix" out on the resale of your trade in.
2.) Offer to buy all the extra Dealer Added Options (DAO), which allows them to "mix" out the transaction. (High Profit)
3.) Purchase extended warranties that provide the dealer with virtually 100% profit because there is no cost of goods to them. (all commission I believe??)
4) Promise to use "their" service department every 1000 miles for the full "30,000 mile service" (Service Departments provide a large percentage of Dealers income in profit dollars)

I know there are other areas of profit, but these four are reasonably illustrative.

Car transactions are also low in frequency. As a retailer, I will see you in my store an average of 1 to 1.5 times per week. I have many more opportunities over time to obtain the proper mix on your transactions. The dealer may see you once every 2 or 3 years to purchase a vehicle. (unless you return to them for service etc,,,)They want you to be a return shopper, and try to earn your repeat business, but the opportunity is far less than with other consumer goods retailers.

Sorry, for the long note, but please do one thing. Whatever you decide, be comfortable with it, and please enjoy the new vehicle, if you purchase one. It's a strangely unique American phenomenon, but there just is nothing as satisfying as the time when you first drive away in your new car. (notwithstanding other things.....lol).

Please enjoy whatever you do!!!! NASCAR

jwm271 · January 2004

While I agree that concentrating on the OTD price is best, I doubt that most buyers do that. A "screamer ad" dealer here charges a $399 doc fee & it is never mentioned by anyone. If the buyer notices it at all, it's by accident while skimming through the stack of forms in the F & I office. And being preprinted, they assume normal.
When I mention this fee to friends, they realize that the price they thought was good really was not as good as other dealers without the fees.

jwm271 · January 2004

If a large dealer has 30 vehicles of the same popular model & sells them to buyers for 30 different prices, different interest rates, free oil changes, floor mats, etc, would that dealer be guilty of EEOC violations. I think not.
Why then, do the dealers posting here, think charging different doc fees is some sort of discrimination?
I doubt any dealer really believes that to be true, but it makes a good excuse for the fees.

driftracer · January 2004

Sorry for the affront, but you have absolutely no idea of what you're talking about.

"I doubt any dealer really believes that to be true, but it makes a good excuse for the fees."

The place I consult for doesn't have a doc fee, but if they did, it certainly wouldn't be my decision, it would be a dealer group owner decision.

These fees, WHEN allowed by the state, are fully spelled out and authorized by that state's attorney general, or they couldn't exist at all.

As yes, if I charged a young black man a doc fee, but waived the fee for my white neighbor, I would certainly be guilty of discrimination.

suvshopper4 · January 2004

I'm told that here in NJ the doc fee is pre-printed on the bill of sale because it is mandated by state law - waiving or lowering it for some buyers and not others would be considered discriminatory, therefore illegal.

Dunno if this is true.

[Edit: This just in - driftracer's post, above, seems to say something similar.]

prodigalsun · January 2004

Well said!

jwm271 · January 2004

When states have laws regarding doc fees, they state the MAXIMUM fee allowed to be charged to help prevent rip-off fees. I doubt that any state requires a minimum fee or that one must be
charged at all.
Read the first part of post 6742 again & tell me how any of those variables are different than doc fees in being guilty of discrimination. People simply pay different prices for the same item.

stickguy · January 2004

I think the point is that, yes, the dealer can decide what the fee is (up to a miximum if the law states one), but once it picks a number, it has to charge the same amount to all customers.

But, if you think the fee is bogus, just get them to reduce the sales price by an equivilant amount. It doesn't really matter what you label the money you pay, just what the net amount is.

driftracer · January 2004

true, maximums are named to keep control of the situation. Just because you paid more or less for a vehicle doesn't heave any bearing on discriminative practices.

If you do more research than I do on the same car, and make an offer and then negotiate for 3 hours, getting the car at $500 below invoice, that's great. If I go in and say that I'm not paying a penny over sticker, and write the check, that's my right and ability to be a stupid consumer.

The dealership hasn't discriminated against me in any way and any salesman should be shot if he said, "you know, sir, I just sold this same car with the same option package to a guy named jwm for $2500 less".

Just like if you prefer to buy your Levi 501s at the Bon Marche, paying $50 a pair for the privilege of carrying a Bon Marche bag, versus not wanting to be seen in Wal-Mart or K-Mart where you can get the same jeans for $21.99.

No discrimination, just buyer education, complicated by pride and stupidity.

bowke28 · January 2004

in this market has doc fees...some as little as $150 and some as high as $600. one dealer group has a different doc fee for each individual dealership. ($300 for saturns, $389 for hondas, $500 for caddies, $599 for lexus/BMW)

ours is $249.50, and is almost never objected to. we pre-print them more so a rogue sales/f&i/manager cant charge more to a buyer and subject the dealership to a lawsuit.

isellhondas · January 2004

We charge a flat 35.00. At 249.00, our customers would throw a fit and rightfully so!

Wow!

jwm271 · January 2004

What makes a doc fee so SACRED that any variation in it is discrimination, but no other difference in the price for parts of the total matters.
I'm not complaining about $75.00 or less, it's the $499.00 fees. When you tell a dealer like that to just reduce the vehicle price by $499., it's not likely to happen.
I think it's unlikely your OTD price will ever be lower at a dealer with giant doc fees & also my other "favorite" add- on stickers.

kyfdx · January 2004

I agree.. the add-on stickers, the doc fees, the protection packages.. Those are big red flags to me... Not that I won't shop those dealers at all, but they will definitely drop down the list.

regards,
kyfdx

bowke28 · January 2004

dont discriminate against dealers with these fees...just shop the bottom line. if most of the doc fee is profit, then the price of the car can be lower, giving the dealer the same margin as if they didnt have the fee.

exb0 · January 2004

Here in Northern VA every dealer has a preprinted doc fee of $200 - $400. When I try to question them on it I get the same nonsense: its discrimination, if we waive it for you , we have to refund it for everybody else blah, blah, blah

Here we also have a service that some companies provide as part of their benefits package called the United Buying Service. UBS basically has pre-negotiated prices with some dealers on all cars and options with no additional fees (including processing or doc fees). When I purchased my 93 Grand Prix using this service the price was $100 over invoice. The salesman just crossed out the processing fee on the contract, no questions asked. So, can someone please explain to me why is not discrimination to waive the fee for the UBS customers, but it is discrimination to waive it for anybody else?

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