By on November 3, 2008

Everybody who knows me knows I’m a tightfisted son of a bitch. I may own Benzes for their profits, but gas sippers are my daily drivers.  My wife’s daily driver has been an old Volvo wagon (which she loves). And like many of you, I’m nearly OCD when it comes to buying quality on the cheap. When Robert asked me to find him a $5000 car, I found a $4000 car. Why? Because $4000 is the new $5000. For those of you contemplating a new ride and have the cash, now’s a good time to buy. The Manufacturers’ Suggested Retail Price (MSRP) is dead.

Reality check. At the moment, there are only two types of car companies: the living and the dying. Brands such as Toyota, Honda, VW, Porsche, Mercedes, BMW, Audi, MINI and Nissan still have healthy balance sheets and great products. As long as they stay true to their core talents, today’s recession will lead to long-term global progression. But even though these brands offer quality vehicles, the money to support the demand has disappeared. That’s bad for some customers. Good for everyone else.

Most credit-driven customers have been cut off. Many of the banks that were ‘helped’ by the recent bailout are also among the largest auto finance lenders in the U.S.: Capital One, Citibank and Bank of America. The bank’s balance sheets are looking better– in the same that clothes can hide leprosy. Unfortunately for the ‘fleeced’ taxpayer, and the political ‘yes’ men, the banks are hoarding their new found, taxpayer-funded wealth.

This net drop in the amount of money truly available has resulted in a cliff-face 20 to 40 percent drop in new car sales for even the “good” brands. Although these manufacturers aren’t selling vehicles at Buick levels, the previous customer dealer paradigm has rolled-over and died. To say it’s a buyer’s market would be like saying a jailhouse crack dealer has sway over an incarcerated junkie.

The consumer strategy required to make the best of a bad situation (for the dealer) is simple enough. When you visit that big fishbowl called the dealership just say no to whatever’s on offer and wait. Or leave. There’s no ‘take it or leave it’ or ‘you really need to buy today’ when the inventory is stacked to the roof and the customers are none deep. If you want to squeeze the best deal, all you have to do is say ‘No!’ for a week and enjoy what amounts to a Chinese auction.

Sticker? What sticker? Brand new 2008 Mercedes GLs are going– or not– for $14k off sticker. The same vehicle can be had for a three-year lease for $5k down, $800 a month. Did I say $800? How about $700? $600? I’ve never seen anything like it. Pay no attention to Edmunds or anyone else. Published deals have nothing to do with anything anymore. Desperate doesn’t even begin to cover it.

The same reality applies to the used car markets. Last night I saw a 2003 Mercedes SL500 go for a mere $20 grand, a 2006 Scion Xb sell for $9200, and a loaded 2008 Hyundai Santa Fe Limited with less than a thousand miles no sale at $17k. All of these cars were in strong demand when they were first released. Now they’re just casualties of a credit-driven economy and a repo-saturated car market. In a recession, used car vehicles pick up some of the slack. But not today. Even the market leaders of not too long ago are in a depreciation death spiral.

Then we have the ‘patients.’ GM, Ford and Chrysler are fighting for their survival. Many of their models will not be replaced (through Ch11 or otherwise), and virtually all have record levels of supply. From a 200+ day supply of Corvettes to fields of near-new rental crapmobiles (e.g. Pontiac Grand Prix and Chrysler Sebring), there’s nothing but metal to be moved. Buickman is sending brand new Chevy Silverados our the door at $10k. Again, just say no and reap the rewards. Stupid deals are smart. Don’t be what William Shatner calls timid negotiatiors these days: “mamby-pamby.”

The situation is even more ridiculous at small dead brands such as HUMMER, Saab and Volvo. Their dealers face the morbid task of selling cars that with virtually no marketing dollars behind them. A 2008 Volvo S80 may theoretically compete with the Lexus LS and Mercedes E-Class, but no one knows or cares. A non-competitive product with no market presence will eventually go out the door for a price that is closer to the lower car class.

RF and I are still debating the ‘when’ of car buying during this current carmaggedon. I believe now’s a great time to buy. Robert points at the sheer volume of unsold inventory at the new and used car level, and the lack of consumer confidence (tied to the housing market). Whatever the scenario, however long it lasts, however MORE desperate things become (fancy buying a C11 Malibu for under $5k?), MSRP for all but the most exclusive vehicles is RIP. Go get ‘em tiger!

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49 Comments on “Editorial: MSRP RIP...”


  • avatar
    schadenfred

    So I was Honda/Mazda shopping this weekend. Honda still has second stickers on the cars (add $4000 to a Civic SI sedan MSRP), Mazda 6i no second sticker, they offered invoice. Still, no sale for me, I knew there were still better deals to be had, and that the market has not hit bottom yet. Actually, used is looking better and better (I like the Volvo idea). However I have neither the time nor the OCD to ferret out the best cars used. I admire those of you who do.

  • avatar
    Steve Green

    Since my wife has forbidden me from owning a second two-seater (I ripped the backseat out of my Wrangler for extra cargo room), I was thinking of picking up a used MB C300 for cheap in 18-24 months. That’s when we’re planning on having another kid, and I’ll need four seat for sure.

    But can I get a new one now for what the used price will be in 2010?

  • avatar
    Ed

    Be careful with those used Volvos. I’ve got a 99 V70 and I’m anticipating a couple grand worth of repairs coming my way in the coming year.

    Luckilly I may be able to engage in SOME DIY, but I’m still nervous about it.

    But at the same time, I’m not sure whether it’s time to replace it yet, since I still owe on it.

    Ugh.

    C’mon $5k Mazda3!!!

  • avatar
    jkross22

    Gotta wonder whether the usual roles of timing still apply, like buying at the end of the month or end of year. Or for the Det3, anytime this week.

  • avatar
    ajla

    For the most part, the next car I’d like to buy (new or used) comes from one of the “patients”.

    Everything I’ve been reading about C7 and C11 has me thinking I’m just going to wait and see which company survives before I write the check. I really don’t mind buying a vehicle from a bankrupt automaker, but I would hate to buy something right now and find out in a few months that I over-paid by 20%-40% after someone files.

  • avatar
    Point Given

    When I was a salesperson at Nissan the most effective strategy was to go to one of the 4 dealers in town, then the next then the next and then at the last one you should be into the dealers holdback as they all fight tooth and nail to get a deal done just to make a couple of bucks.

    For domestic vehicles they’ve got so many bloody programs on now it’s hard to tell what’s a fair price is anymore. My autoquote program shows miliatry discounts, GM Card maximums, rebates, financing cash, etc etc. It’s truely a mess.

    Edit: Oh and I’ve been seeing ads calling it “Reference Price” instead of MSRP

  • avatar
    miked

    @Steve Green – the obvious solution to your problem is to put the seat back into the Wrangler.

  • avatar
    Steve Green

    Miked –

    The garage at the old house was too small to hold the backseat, so out it went with the trash. I still owned another four-seater at the time, so it seemed like a safe move…

    Oops.

    Besides, who wants to put a new back seat in a ’97 TJ if you can get a great price on an ’08 C-class? Hmm?

  • avatar
    200k-min

    I’ve been shopping, at the request of my wife, for a used Acura TL for quite some time and haven’t found any “deals” to be had. The requests are no older than 2005, no more than 30k miles and under $20k. Std transmission preferred, but willing to negotiate if the deal is right. We thought that with the new TL coming out we’d start to see some deals – nada, nothing. Once in a while someone is willing to dip below $20k in price but only on ones that look the most beat up/driven hard. For grins we cross shopped the Accord for the same model years and didn’t see any “deals” there either.

    Now if I wanted a 2005-08 Suburban I’m sure there’s plenty of deals to be had. Can almost buy a used pickup cheaper than the one hour rental rate for the Home Depot truck…almost.

  • avatar
    50merc

    Thanks, Steven, for another interesting and useful article.

    I wonder how the fixed-price outlets like CarMax are doing. You said a 2006 Xb wholesaled for $9,200. A quick check of CarMax shows ’06 slushbox Xb’s listed for $14K to $16K. So is CarMax getting 60% gross profit margins, or–contrary to their ads–do they negotiate with market-savvy buyers? It sounds as if a shopper could be better off bargaining with the sweaty guy in a plaid sport coat who is desperately trying to move some metal out of a D3 dealership.

    “Buickman is sending brand new Chevy Silverados out the door at $10k.” Yikes! How in the world do Grand Marquis’s, 300′s and Lucernes fetch more than twice as much?

  • avatar
    heaven_on_mars

    Point Given is on the right track. During my time in the dealership business the word “shop” was like saying s**t, because they knew they had to work quickly on the price when someone said, “I need to shop around.”. As most people know, dealers fear customers walking off the lot.

    If you want to save all the hassle of going dealer to dealer to get prices, just pick a dealer for the brand you want and keep saying your going to shop around. Thanks to this site, you should know roughly what profits dealers have to work with.

    If you want to drive the price down even quicker, say they do not have the color you like or a feature you want that other dealerships have. Dealers can trade among each other, but it costs money. If you ask what colors they have in stock and then ask the color they do not have, they will often say if you take one of these other colors will knock $500 off. During my time in the biz, I have seen that happen time and time again.

    Dealers have to make money to stay open, but from what I have seen, there are enough people not doing their homework that profits are still rolling in even if those who have done their homework get their cars for cost. When I discovered what some sales people have been making over the last few years, it made my stomach turn. I knew they could make a good living, but six figures was mind blowing.

    Bottom line, do your homework at sites like this and dig in. You can score some amazing deals right now. I have seen Japanese brand vehicles going for 10k under invoice.

  • avatar
    romanjetfighter

    The GL550 is result of year-end clearance… MB does this every year on most of their models.

    E-class was 12k off, ML was 10k off, S was 20k off, C 5k.

    March this year, all Z4 coupes were 13k off sticker.

    MSRP is just a super inflated price meant to be heavily discounted to make it seem like a good deal. That’s part of what ruined GM. They set MRSP way high and then depended on huge rebates to move stuff off the lots.

  • avatar
    Casual Observer

    Good lesson: the increased availability of credit drives up the prices of goods for everyone else.

    Signed,
    Housing Market

  • avatar
    NickR

    Timing? Well, if you don’t mind performing without a net (a warranty) the day after Chrysler goes C11 or is parted out you should be able to strike a killer deal. Better have cojones though.

  • avatar
    volvo

    They aren’t desperate enough for me yet. For 2009 models I am willing to leave them their holdback but I want invoice, – dealer incentives, and any customer cash the manufacturer may be offering. For 2008 models the remaining color trim combos are not to my taste. Have been looking at RAV4, Outback, CRV. Want the color and trim of my choice (I have to live with cars 10-15 years). Sales departments I have dealt with all want invoice + couple hundred. I’ll give it a few months and then try again. I probably could get an Escape as a great deal but I couldn’t live with the Fisher-Price interior for a decade.

  • avatar
    no_slushbox

    The sticker price has been a joke on anything domestic for years. They get suckers that want really specific options or fall for the “undercoating”, but if someone is willing to take what’s on the lot then these are the prices they can get:

    http://www.golfmillford.com/cnt/ads.aspx

    Back in the day the teaser car had vinyl, manual locks and windows, and no AC, but those things are standard now except for the manufacturer’s cheapest car and maybe the pickups. There is not a single option that I would ad to the 2009 $16,491 Mustang listed above. It has AC, power locks, power windows, power mirrors, cloth, a decent stereo and side air-bags.

    They only car they’re listing that might not come with an acceptable level of equipment is the $10,991 Focus.

    The Foreign companies have traditionally avoided the race to the bottom by punishing dealers that advertize prices in the newspaper, but anyone paying full price for an import now is a mark.

    50merc: CarMax sucks. They have the highest asking prices and the lowest trade in offers, and they do not negotiate. I’ve never used them, but the only time I would use them is if I wanted to dump a used car really fast with no hassle and didn’t mind getting a bad price (in the past you could give the car away to charity and write it off at a very inflated value, but that loophole was closed). I would never buy a used car from CarMax.

  • avatar
    netrun

    Wait until mid-December. By then dealers that were expecting to sell most of their losers will be truly desperate to dump/sell everything at ridiculous fire-sale prices. Why? Because every vehicle on their lot as of midnight Dec 31st gets recorded as inventory and dealers pay taxes on the vehicles.

    That means if a dealer is on the brink and isn’t sure he has enough cash to make it through the slow January-March season – he’ll get very desperate to avoid paying taxes on as many losers (vehicles) as possible.

    So if you’re interested, wait a little bit longer and reap the rewards!

  • avatar
    AG

    How much can I get a new RS4 for?

  • avatar
    Robstar

    I so wish I had a place to park another vehicle right now……

  • avatar
    galaxygreymx5

    Just helped a friend buy an Accord EXL this weekend. $3120 off the MSRP with $1050 worth of Honda accessories for $400. Financed for 3.9/60.

    There are deals to be had, even on popular models.

  • avatar
    Morea

    @netrun
    So is the week between Xmas and New Years the best?

  • avatar
    Durask

    You know, I don’t believe this editorial.

    We are looking for a third car, preferably an SUV. Went shopping last weekend expecting to find the incredible deals.

    Import dealerships – no one even wanted to give invoice pricing. Domestic – a bit better but once again no “deals” to speak of. And that’s with us saying “hey, you give me the car for the right price, I pay you cash right now on the spot”.

    Maybe Boston area is different, I don’t know. But my experience has certainly been different from what’s described in this editorial.

  • avatar
    Martin Schwoerer

    Excellent article! I have been meaning to write a similar piece for some time (procrastination, procrastination…) Title: the Death of List. Point being: why do manufacturers even quote a recommended price anymore? Cars are a commodity to be sold on a spot market — the internet fixed that.

    Second point: why do car testers even bother to mention the totally meaningless list price? Comparing a Chevy with a Honda is apples vs oranges if the Chevy is (realistically) half the price.

    Over here in Germany, for example, online datebases such as Mobile.de or Autoscout24.de make it easy to get a quick, detailed, precise quote for just about any car on the market. New or used. So you see that you can get a quite satisfactory people carrier (Citroen Xsara Picasso) for the price of an excellent subcompact (VW Polo). It’s mind-bending. It’s never been like this. It will never go back to the old way.

  • avatar
    Airhen

    I financed a 2009 Civic Coupe through my credit union about three weeks ago. Financing was available just fine, but the Civic took five weeks to arrive. :)

    I do wish I needed a new SUV (like a Grand Cherokee), but I bought the Civic as I’m building up my Jeep Wrangler next year (lift, tires, lockers, etc.), so I wanted something economical (won’t rob my Jeep fund) and it’s hard to beat a Civic in that class. And wow, is this car nice! Five speed manual transmission and it’s fun to drive! Rather zippy!

  • avatar
    no_slushbox

    Durask:

    You have two things going against you:

    1) You don’t have a trade in for them to screw you on (this could help or hurt you).

    2) Dealers don’t want cash at all. They usually make more money on financing than on the actual sale (this is definitely making them less willing to negotiate with you).

    If I were you I would pretend that I want to finance the car until the price is settled, and then say “You know what, I would actually like to pay cash.”

  • avatar

    I suspect the Boston market is also a bit better off than some others.

  • avatar
    Areitu

    Durask : Have you tried approaching the fleet department?

  • avatar
    bumpy

    “There’s no ‘take it or leave it’ or ‘you really need to buy today’ when the inventory is stacked to the roof…”

    I’m going to take issue with this. I ventured out into the fringes of civilization the other day and was amazed at how empty the lots of the GM dealers were. I’d swear that the GMC/Pontiac/etc. dealer and the Chevy dealer in the next county were literally half-empty. The Ford and Dodge dealers weren’t so bad off, maybe 1/4 or 1/3 bare asphalt. Toyota and Carmax were maybe a bit light, but nothing to get excited about.

  • avatar
    ctoan

    I have to wonder how much this is going to affect the second-tier imports, especially when at least one of the 2.5 goes bankrupt and prices hit rock bottom. I could easily see Suzuki and Mitsubishi leaving the American market, and even Subaru hitting trouble.

  • avatar
    ohiomax

    A friend was looking at the M45 Infiniti last week 10/27, sticker $52K+, dealer says lets start at 42K, gives her max on trade-in 16K on 2004 infiniti(shocked), financing is 0.9% for 60 months but then dealer mentions we now have cash pricing available!? If you pay cash, we will take upto another 8K off financing price. You have 5 days until the end of the month to decide. ($52-10-16-8 = $18K). This could explain the rash of Infiniti (mostly G35 though) with temp tags I have seen in October.

  • avatar
    rodster205

    Carmax is exactly that.. MAX price. Always has been.

    I would LOVE to go buy a new car right now, and could, except for the trade. I could probably find someone to make it happen but I’m just not going to take a bath that large on my SUV trade. I’m not bad at math, even a $4K loss buys a LOT of gas for it. If I thought any dealer could find a way to “give” $16K for my Commander I would do it. However, those deals would put the “purchase” over the factory sticker, and what bank is going to finance more than sticker right now? NONE.

  • avatar
    pleiter

    So……….what did you find for $4k? $5k sounds about like my budget; I was hoping for a 7yo/70k Protege or something.

  • avatar
    Steven Lang

    Well, I guess it’s better late than never…

    pleiter: Got a 2000 Jeep Grand Cherokee Laredo with Leather, Sunroof, pretty much all the options. Less the $500 fee, it was $3500 and that price included a detail, the auction buyer’s fee, and a new radiator for the 1000 mile drive.

    rodster: That may be true… but fear and uncertainty (along with bad negotiating skills) are big factors for a substantial portion of the population.

    ohiomax: Nissan is getting very aggressive on several fronts. I wouldn’t be surprised if they end up with the lowest ‘days of inventory’ in a few months.

    ctoan: I worry for Subaru. Suzuki may suffer. But they discount like hell. Mitsubishi is experiencing Isuzucide as we speak.

    bumpy: Empty pavement means nothing. Really. There’s a Ford dealer near me that’s teetering on C11 whose inventory is thinner than Calista Flockhart. Some folks in my business even rent out nearby ‘back lots’ to give the illusion of movement.

    Holzman: The Boston market sucks. Low levels of disposable income and a lot of people who could simply care less about what they drive. It was always one of my worst markets when I traveled the country.

    no_slushbox: If a dealer has the choice of making a slim profit or holding on to dead metal in this economy, they’re taking the money.

    Airhen: Just bought a Civic hybrid today. It got me over 53 mpg in 75% highway / 25% city driving. All I can say is, “Congrats!”

    Schworer: I have similar feelings about 0-60 times.

    Durask: With the declines taking place in monthly sales and the scarcity of credit, I would be very surprised. Right now I have dealers tossing low mileage vehicles to the auctions because they can’t afford them anymore on their balance sheets.

    Morea: No. The best day to buy is the day when they’re closing the place down. In all seriousness, the last week of the month is often the busiest time of the month.

    AG: Bought one last year for $66k. I doubt they cost much more at this point.

    I’ll respond to everyone else tomorrow… unless I don’t get responses in which case you’re on your own :)

  • avatar
    dwford

    Where I work, we offer a below invoice price on all the internet leads just to be competitive with those shoppers. With walk-in, we start at sticker and go from there, but rarely do we end up keeping sticker. On most new cars, salesmen make a flat minimum commission of $75-150. They make it up selling accessories, Simoniz, etc. A lot of a car salesman’s income comes from manufacturer spiffs for selling new cars, not from gouging on commissions. We also make more on used cars than new.

    It’s true, car dealers could care less about you paying cash. We immediately lose interest the second you say cash. We will get you the best rate, but yes we make a commission on selling you the financing.

    I want an easy sale just as much as you do. Do your homework, know what the car costs me, know what your car is worth, come in and make an offer. “sell the the car for x, give my y for my trade. can you do that?” makes things so much easier for both of us. I will happily negotiate with someone who took the time to research before they come in. I hate negotiating with uninformed idiots.

    Oh, and if your credit it sucks (under 650 now), don’t waltz in looking to refinance $5k negative equity with $0 down. It’s not going to happen anymore. Just stay home and pay off your bad decision.

  • avatar
    chris724

    “It’s true, car dealers could care less about you paying cash. We immediately lose interest the second you say cash.”

    I love this attitude from car salesmen. Yeah, my cash is no good with you I guess. But I’m sure I’ll find someone who will take it. “What’s the monthly payment?” is the kind of question asked by a truely “uninformed idiot”. Financing is for suckers. Do you think maybe this monthly payment focused attitude has something to do with the current state of our economy? Buy now pay later! I’d think a cash buyer would be a useful thing during a credit crunch. Well, good luck with those car sales! Hope all your marks have high FICO scores!

  • avatar
    Honda_Lover

    Never did financing, always cash on the hood. That’s the way we do it in the old country.

  • avatar
    Gary Numan

    Read this web article and learn about buyers, brands and household income then think about recent brand sales rates and how Detroit manages to compare to the others:

    http://www.iqpc.com/News.aspx?id=122707476&IQ=automotive

  • avatar
    rudiger

    The inability to advertise a true bottom line is an extreme deterent to purchase. I mean, look in the newspaper ads and, apparently, there isn’t much of a discount on even moribund models. On top of an exceptionally bad market, it’s like the final nail in the coffin to keep potential customers out of the showroom. I like finding a great, legitimate deal in the paper (with no qualifiers), walking into the dealership with it, buying the vehicle without all the tap-dancing and haggling, then leaving. Incredibly, with the domestic market on its deathbed, that doesn’t seem possible anymore.

  • avatar
    Steven Lang

    rudiger, it’s called Saturn.

    The problem (and opportunity) is that the overwhelming majority of folks like to ‘get the better deal’. Haggling is all over the place and in recessions it even gets to areas of retailing that usually have static prices.

    Everything is negotiable :)

  • avatar
    rudiger

    Steven Lang: “it’s called Saturn.”It was called Saturn. Years ago, Saturn was badly compromised when they got saddled with the mediocre Opel Vectra-based L-series and essentially became just another typical GM division (with the same sales and marketing packaging) from that point on.

    It’s a shame because if Saturn had been given the attention and backing it deserved on small cars (the original mission), it might now be the one shining star out of GM’s pool of losers.

  • avatar
    dwford

    chris724:

    I’m sure you’re the guy that comes in wanting to buy the car for $2k below invoice. In that case, no, your money is no good, keep shopping.

  • avatar
    Honda_Lover

    dwford:

    I guess you don’t want to move the dead metal.

  • avatar
    Steven Lang

    rudiger, I agree, but you were talking about the car buying process.

    Saturn was essentially a ‘one car company’ for the entire 1990′s. It really wasn’t until the dreaded L-Series came out that Saturn truly became an also-ran despite the lack of models.

    What should have gone to Saturn went to Oldsmobile. I still believe that the Alero, Intrigue, Aurora, and even the downright generic Bravada and Silhouette would have all been far more successful as Saturns.

    But alas, long-term foresight has never been a strong point for GM. At least not the fellows who have ran the proverbial show into the proverbial ground.

  • avatar
    dwford

    What’s the point of selling something if you are selling it at a loss?

    Every car buyer wants a great deal, but is it really good for anyone long term if each car the dealer sells brings it one step closer to bankruptcy? At my dealer, if we can’t at least break even on the deal, we don’t take the sale.

    Think about it this way: buyers are in the driver’s seat right now, but with the coming C11 of Chrysler and GM, you will see 10,000 dealers close up. Where do you think prices will go once those dealers go and the economy improves?? The remaining dealers will be stronger than ever with much less incentive to discount.

  • avatar
    BuzzDog

    @dwford: “What’s the point of selling something if you are selling it at a loss?”

    Obviously a dealer can’t sell EVERY vehicle at a loss, but in this economy the point of selling some at a loss is that it frees the dealer from the costs associated with carrying it in inventory. There’s also some hope of profits in future service and sales, IF the dealer is willing to treat the customer in a manner that builds loyalty.

    Unfortunately the dealer system in the United States is terribly bloated, to the point that vehicles are being dumped into a market that can’t afford to buy them. So instead of focusing on doing the right things, ALL dealers are now focused on “moving the metal” in order to survive, customer service be damned.

    But the main issue here is that the entire way that new vehicles are sold is entirely out-of-date, to the point of being laughable. However, things won’t improve until we get rid of the games…hopefully this will happen through competition, and not through legislation.

  • avatar
    dwford

    “But the main issue here is that the entire way that new vehicles are sold is entirely out-of-date, to the point of being laughable. However, things won’t improve until we get rid of the games…hopefully this will happen through competition, and not through legislation.”

    It’s ironic that the most loyal and happiest customers are the ones that pay the highest prices. The chislers that grind for every dime will be back to do it again, but you won’t earn any loyalty from them. Miss the price by $50 and their gone.

    I don’t play games in the selling process, though a lot of my customers are still finding the nonsense out there. I expect to be able to make a commissionable gross on a used vehicle, and know that regardless of selling price I am only making a mini on a new vehicle. I really don’t care on a new vehicle whether I sell it for full sticker or give it away, my commission will be the same. I just need the CSI score to get my Hyundai money.

    In this market, most dealers are only making money on new vehicles with the manufacturer’s “stair step” programs which give the dealers kickbacks for meeting sales goals. That’s how you can buy “below invoice.” The dealer is getting a few hundred $$ if sales targets are met.

  • avatar
    dwford

    “..but in this economy the point of selling some at a loss is that it frees the dealer from the costs associated with carrying it in inventory.”

    This is becoming less of an issue now that all manufacturers have been cutting back on production. That’s why you see those 1/2 empty lots out there – especially at the domestic lots.

    “There’s also some hope of profits in future service and sales, IF the dealer is willing to treat the customer in a manner that builds loyalty.”

    The internet has destroyed the concept of customer loyalty to one dealer. More and more customers are soliciting price quotes from multiple dealers and going to the lowest price store. Usually that ends up to be the sleazy dealer that won’t honor the price, and either the customer will cave and buy anyway or walk and go to the next highest price store. I have people tell me all the time that my prices quotes are $1000 too high, only to have them show up anyway when the other dealer turns out to be a dirtbag.

  • avatar
    Voice of Sweden

    Martin Schwoerer> I love mobile.de too. But when you sort the cars for lowest price first I allways get a little bit suspicious about say the 5 cheapest ones. They allways seems to have a worn interior and “adjusted” km-counter. They are also sold at “smaller” “family” used car dealerships. If you add 10 to 15% to the cheapest prices you usally find nice cars at brand dealerships.

    Am I overly suspcious or am I right in saving money by paying somewhat more initially?

  • avatar
    ra_pro

    dwford:

    There is a saying in my country that “the stupid are the happiest people”. And why not they don’t know any better. I think that explains your happy customers.

  • avatar
    dwford

    “There is a saying in my country that “the stupid are the happiest people”. And why not they don’t know any better. I think that explains your happy customers.”

    My 8th grade english teacher used used to say: “If ignorance is bliss, you must be the happiest students in the school!”


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