Ask Bark: Ordering Vs. Buying Off The Lot?

Dave writes:

Should we get a better deal on a special order car vs taking one off the lot? The dealer wants MSRP and won’t budge giving us some story about special orders affecting his allocation. We can’t go to another dealer because the other Lexus dealer in town has the same owner.

We’re looking at an IS 300. The reason for special order is my wife wants an exterior/interior color combo (from the standard colors) that the dealer can’t find in any U.S. or inbound inventory searches.

She’s flexible on other options, just has to have her color combo and is willing to wait for approx 90 days to get it.

Thanks,

Dave

Dave, you seem like a sensible guy, and not a dope fiend at all. So let me drop some knowledge on you about how dealer allocation and special ordering works.

First of all, the dealer’s “story” about special orders affecting his allocation likely isn’t a story at all. While I’m not familiar with the specifics of how Lexus dealers do orders, it wouldn’t be uncommon in the automotive dealership world at large for a special order to affect allocation, especially for a car that’s on the relatively rare side like the IS. While Lexus is obviously a mainstream, volume make, it’s still not Ford or Toyota, and production levels aren’t as high as you might think. There are 675 new IS 300s showing on Cars.com right now. That’s fewer than three per store considering the brand’s approximately 235 dealers in the U.S. Compare that to the 5,200+ ES 350s in stock, and you can start to see why a dealer isn’t super excited about ordering an IS 300.

Why? Because many, many, many special orders end up not being picked up by buyers. I, myself, ordered a BMW 135i in 2008 that I ended up not taking delivery of because the interior color was wrong when it showed up. It’s also how I got my Focus RS — it was a customer order that got canceled. So if you and the Mrs. flake out on your IS, it becomes a bit of a floorplan anchor for your dealer if it’s an unusual color combo that nobody else wants. (Lexus customers aren’t known for being adventurous.)

Now, if you’re a smart person (and you are, because you sent me an email), you’re probably thinking to yourself the dealer won’t have to pay any floorplan interest on the car so they should be happy, right?

Eh, Lexus stores don’t think that way.

Most Lexus stores are part of a larger group, and they’re mostly extremely profitable because Lexus customers aren’t known for driving hard bargains for their cars, and they’re historically willing to pay more for things like “ambience” and “ownership experience.” In fact, Lexus has taken the remarkable step of limiting the number of franchise stores that a dealer group can own to eight. No other manufacturer does this. Lexus is concerned that Sonic, Hendrick, AutoNation, etc., would buy all of the Lexus stores if they allowed it, because they’re among the most valuable franchises available.

The long and the short of it is this: why shouldn’t the dealer ask MSRP? You’re probably willing to pay it, eventually, and the dealer knows it. And for every deal like yours they have to work for, there are a million ES and RX customers behind you willing to pay full pop.

So, I have three recommendations for you:

1. Don’t assume that you can’t go to the other dealer just because they have the same owner. They probably have different general managers and they don’t necessarily operate the same. But, even if they do …
2. There are the aforementioned 235 dealers in the United States, and you’re special ordering a car and buying it essentially sight unseen. What difference does it make if you’re buying it close to home or on the other side of the country? Stretch your fingers out and get to emailing, son. Maybe there’s a Lexus store in Kentucky that really needs a sale this month.
3. Suck it up, pay your MSRP, and enjoy your car. If it’s what she wants, and a similar 328i/C300/A4 won’t make her equally happy, then pay your money and take your chances.

Bark nearly died of bronchitis last week, but he’s back and he’s taking your emails. Send them to barkm302@gmail.com and/or use the social media platform of your choice to slide into his DMs.