Two of America’s biggest carmakers have a message for their dealers: Stop ripping off customers.
Ford and General Motors are warning money-hungry dealers to stop exploiting supply issues — and shortages — by charging more than the sticker price for vehicles.
As someone who sold cars for decades, getting away with this is rare for one reason. There are almost always two customers, the people driving off the lot with a happy tag in the back, and the lender who actually pays the dealer. The "owner" is buying the vehicle one month at a time. The only way a dealer is getting inflated price is either a large down payment or a second side loan. Both are rare. The lender knows what the vehicle costs and isn't going too far out on a limb to finance the customer.
In the end, most transactions come down to bore and stroke as in, "How much cash do I have to up with up front and how much cash do I have to come up with monthly". All the car buying research consumers do, and they should do research, goes away at the end.
As a sales "weasel" I loved informed and educated customers. Time is money and the sale takes far less time. Oh, think I didn't know how to let the customer believe I wasn't as smart as them? My biggest weapon was, "No". We had what they wanted and we didn't desperately need to sell it under their terms.
I save up and paid cash for vehicles, or else got the loan from a credit union. One dealer tried to convince me that it was better to take out a loan from them instead of paying 100% up front. We did end up buying a vehicle, but not from that dealership. Frank
I certainly do not condone price gouging when it comes to items that people have to purchase to live and work, but no one is holding a gun to any car buyer's head. If the buyer and seller cannot come to a mutual agreement regarding the sales price, the buyer can simply walk out the door. If you pay an exorbitant price for a vehicle the only person responsible is yourself.
Many years ago I sold motorcycles, Harleys, and the situation was the dealership markup on the bikes themselves were minimal. It was the interest of the loan, the add o sales for the bike and of course everything else that was purchased during the sale. Financing things like helmets, leather jackets, riding boots, and so on the 5 year bike note were a huge boost to the bottom line of the dealership and our commission. JD
Who OWNS the car? Manufacturers or Dealers? If the dealer Owns the Car, isn't it his to sell? The manufacturer is making money, or they wouldn't sell it to the dealer. If the consumer is willing to pay, whose business is it? Funny thing about changing situations. When the top people are winning, it's all good. But when it is not the right people winning, it's gotta be stopped. I'm old enough to remember a time when the government created a situation that put oil companies in a great position and they screwed them with a made up tax,,they called it a Windfall Profit And You can LOSE your ass,and there is no reward. But somehow you wake up and see the government has done Stewpid shit and suddenly You are in a very profitable position, well, they gonna hafta tax your sudden profitability.
Re: "Who OWNS the car? Manufacturers or Dealers? If the dealer Owns the Car, isn't it his to sell?"
You'd think so, right? But as long as the dealer has an affiliation as a franchisee with the parent auto company, the manufacturer has some say and leverage in price determination. I'm not an expert by any means, but I bet that's where the friction is coming from.
I don't know what's so special about right now. Maybe the manufacturers are hurting more than they are letting on. I've seen dealers, in this example, Ford dealers, charging way over sticker/MSRP for highly-sought-after models, such as the hottest Shelby Mustangs, Cobras, etc. but that was a decade or more ago.
My son and I was looking at a used mustang at a Ford dealership south of Knoxville. It was a 6 hour trip one way. He and I liked the car and went inside to talk about it. I saw a new mustang on the showroom floor and out of curiosity looked at the sticker. The dealership had added a couple of thousand (don't remember the exact amount) to the sticker. I told my son the decision has been made. I told him why and we started our 6 hour trip back empty handed.
The first place I saw this was in California when the 3rd generation Camaros came out next to the factory window sticker, there was an added sticker which more or less said "Final cost: MSRP + $1200 ADP" I figured that must mean "Additional Dealer Profit".
Cerritos Nissan in SoCal charges MSRP plus $6,500 for their Pathfinders. They admit it right on the website. Other dealers are not so open, but their “deals” are the same. Sellers market and they take full advantage. New car dealers.
The GM of any car dealership is the biggest scumbag salesman so of course they're going to act scummy. Reminds me of a conversation I overheard at a place I worked.
Newby new car salesman: Mr GM, I can't fuck them, they're my friends. GM: Buddy, if you can't fuck your friends, who can you fuck?
I thought MSRP stood for Manufactureres SUGGESTED Retail Price.... Most people paying too much are doing so without financing....most lenders won't lend more than the MSRP....and they are doing so because they have decided they simply must have that specific car right effing now.
A drunk totalled my brand new Ranger several weeks ago. Insurance paid the old one off, and I went looking for a new one. I had to look around to find one, most dealerships were adding to the sticker, or jacking up the price of GAP etc. Finally found a dealership that would sell one at sticker, but there are no more incentives from Ford, but people are buying them as soon as they become available. The salesman told me that they had a Bronco with all the options that you can get, a fellow paid 30K over sticker for it, and was happy as a clam.
I have been looking at the Ford Maverick, and noticed several dealers in the Atlanta Area are tacking 10,000 dollars onto the MSRP, just because they have it on the yard. Ive ordered one, but through Ford with a local dealership, and am looking at appx a 90 day delay until I get it. I am paying MSRP, so it's looking like a good deal for me.
As someone who sold cars for decades, getting away with this is rare for one reason. There are almost always two customers, the people driving off the lot with a happy tag in the back, and the lender who actually pays the dealer. The "owner" is buying the vehicle one month at a time. The only way a dealer is getting inflated price is either a large down payment or a second side loan. Both are rare. The lender knows what the vehicle costs and isn't going too far out on a limb to finance the customer.
ReplyDeleteIn the end, most transactions come down to bore and stroke as in, "How much cash do I have to up with up front and how much cash do I have to come up with monthly". All the car buying research consumers do, and they should do research, goes away at the end.
As a sales "weasel" I loved informed and educated customers. Time is money and the sale takes far less time. Oh, think I didn't know how to let the customer believe I wasn't as smart as them? My biggest weapon was, "No". We had what they wanted and we didn't desperately need to sell it under their terms.
I save up and paid cash for vehicles, or else got the loan from a credit union.
DeleteOne dealer tried to convince me that it was better to take out a loan from them instead of paying 100% up front.
We did end up buying a vehicle, but not from that dealership.
Frank
I certainly do not condone price gouging when it comes to items that people have to purchase to live and work, but no one is holding a gun to any car buyer's head. If the buyer and seller cannot come to a mutual agreement regarding the sales price, the buyer can simply walk out the door. If you pay an exorbitant price for a vehicle the only person responsible is yourself.
ReplyDelete"...but no one is holding a gun to any car buyer's head."
DeleteNo, that happens in the service department.
Many years ago I sold motorcycles, Harleys, and the situation was the dealership markup on the bikes themselves were minimal. It was the interest of the loan, the add o sales for the bike and of course everything else that was purchased during the sale. Financing things like helmets, leather jackets, riding boots, and so on the 5 year bike note were a huge boost to the bottom line of the dealership and our commission.
ReplyDeleteJD
Who OWNS the car? Manufacturers or Dealers? If the dealer Owns the Car, isn't it his to sell? The manufacturer is making money, or they wouldn't sell it to the dealer. If the consumer is willing to pay, whose business is it?
ReplyDeleteFunny thing about changing situations. When the top people are winning, it's all good. But when it is not the right people winning, it's gotta be stopped. I'm old enough to remember a time when the government created a situation that put oil companies in a great position and they screwed them with a made up tax,,they called it a
Windfall Profit
And You can LOSE your ass,and there is no reward.
But somehow you wake up and see the government has done Stewpid shit and suddenly You are in a very profitable position, well, they gonna hafta tax your sudden profitability.
@ Justin_O_Guy
DeleteRe: "Who OWNS the car? Manufacturers or Dealers? If the dealer Owns the Car, isn't it his to sell?"
You'd think so, right? But as long as the dealer has an affiliation as a franchisee with the parent auto company, the manufacturer has some say and leverage in price determination. I'm not an expert by any means, but I bet that's where the friction is coming from.
I don't know what's so special about right now. Maybe the manufacturers are hurting more than they are letting on. I've seen dealers, in this example, Ford dealers, charging way over sticker/MSRP for highly-sought-after models, such as the hottest Shelby Mustangs, Cobras, etc. but that was a decade or more ago.
Excellent points.
DeleteSeems like less and less stuff works like it just seems like it otta.
This is part of the reason that cars dealers are thought of so badly. Right after lawyers.
ReplyDeleteJoe is telling his financiers to help him pretend inflation is not as bad as it is by not letting cars get to expensive.
ReplyDeleteMy son and I was looking at a used mustang at a Ford dealership south of Knoxville. It was a 6 hour trip one way. He and I liked the car and went inside to talk about it. I saw a new mustang on the showroom floor and out of curiosity looked at the sticker. The dealership had added a couple of thousand (don't remember the exact amount) to the sticker. I told my son the decision has been made. I told him why and we started our 6 hour trip back empty handed.
ReplyDeleteThe first place I saw this was in California when the 3rd generation Camaros came out next to the factory window sticker, there was an added sticker which more or less said "Final cost: MSRP + $1200 ADP"
DeleteI figured that must mean "Additional Dealer Profit".
Cerritos Nissan in SoCal charges MSRP plus $6,500 for their Pathfinders. They admit it right on the website. Other dealers are not so open, but their “deals” are the same. Sellers market and they take full advantage. New car dealers.
DeleteThe GM of any car dealership is the biggest scumbag salesman so of course they're going to act scummy.
ReplyDeleteReminds me of a conversation I overheard at a place I worked.
Newby new car salesman: Mr GM, I can't fuck them, they're my friends.
GM: Buddy, if you can't fuck your friends, who can you fuck?
With limited supply, dealers have to cover their future in order to keep the doors open. I suppose we'll soon be ordering our cars from Amazon.
ReplyDeleteMore like wish.com
DeleteI thought MSRP stood for Manufactureres SUGGESTED Retail Price.... Most people paying too much are doing so without financing....most lenders won't lend more than the MSRP....and they are doing so because they have decided they simply must have that specific car right effing now.
ReplyDeleteA drunk totalled my brand new Ranger several weeks ago.
ReplyDeleteInsurance paid the old one off, and I went looking for a new one.
I had to look around to find one, most dealerships were adding to the sticker, or jacking up the price of GAP etc.
Finally found a dealership that would sell one at sticker, but there are no more incentives from Ford, but people are buying them as soon as they become available.
The salesman told me that they had a Bronco with all the options that you can get, a fellow paid 30K over sticker for it, and was happy as a clam.
I have been looking at the Ford Maverick, and noticed several dealers in the Atlanta Area are tacking 10,000 dollars onto the MSRP, just because they have it on the yard. Ive ordered one, but through Ford with a local dealership, and am looking at appx a 90 day delay until I get it. I am paying MSRP, so it's looking like a good deal for me.
ReplyDelete