I work at a Honda dealership...

[gwaps]

When I say you give yourselves headaches this is what I mean. Why not just walk in pay MSRP and enjoy the experience just like when you buy an Iphone. They are making far more in profit than a car sale does. Even a t-shirt has more profit in it. Its the years and years of bad experiences and I'm not sure when it started, but thats shaped where peoples heads are at when walking into a dealership. They don't see the value in the product and just look at how much am I getting off the car. Back to the Iphone, this years model added barely anything and yet still sold out and is backordered and did anyone negotiate?? Not one person. But of course, we as people now know that negotiating is a thing when buying a car so brand new civic comes out and I need to get money off. Now there are websites that make it so you get a fair deal. The dealership loses but its okay because we have holdback and make an average of 100-500 per car to pay for the lights, the employees, service, etc etc etc . BUT the problem is that's not good enough for people they have to feel like they won. For example, I had a customer negotiate everything through email and finally came in and I thought we were completely done but then they offer a price that was $1000 less "just because". We can't just make discount cars "just because". Most of peoples shitty experiences at dealerships happens during negotiating because we won't do a price that we can't do. Then they leave unhappy because they think we were just pulling one over on them and they go to the next place and the next place can't do the price either.

Now remove the dealership aspect completely, as a business owner would you sell your services for a loss? Or would you try to make as much profit as possible because you need to feed your family,kids and survive?

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[gwaps]

We should just walk in and pay MSRP? So that same guy should buy your over inflated extended warranty as well? When I can shop online at any Honda dealership nationwide and get the lowest price. I get that their may not be too much markup off dealer cost as a possibility but if that's true who can't we see what others can sell for the same price ? Besides a car is alot more expensive than an Iphone or a TV.

 

[Negan]

No one pays MSRP because the standard business model for car sales is to have an adversarial game of cat and mouse between the customer and the salesman. If we had a fixed price model direct from the manufacturer, like I alluded to several times earlier, we wouldn't have this negative experience.

And, dealerships are profitable businesses. So, please don't tell us the whole "we make enough to keep the lights on". You make plenty. If you don't, sell the franchise to someone that knows how to run it in the black.

 

[forumpricinglol]

We should just walk in and pay MSRP? So that same guy should buy your over inflated extended warranty as well? When I can shop online at any Honda dealership nationwide and get the lowest price. I get that their may not be too much markup off dealer cost as a possibility but if that's true who can't we see what others can sell for the same price ? Besides a car is alot more expensive than an Iphone or a TV.

I'm not saying that you should pay MSRP because thats not the world we live in. I'm more saying use the information thats out there and buy the car for a fair price and keep it moving and enjoy the experience.

No one pays MSRP because the standard business model for car sales is to have an adversarial game of cat and mouse between the customer and the salesman. If we had a fixed price model direct from the manufacturer, like I alluded to several times earlier, we wouldn't have this negative experience.

And, dealerships are profitable businesses. So, please don't tell us the whole "we make enough to keep the lights on". You make plenty. If you don't, sell the franchise to someone that knows how to run it in the black.

And Negan, I completely agree to a fixed price model just like going in to buy an iphone or a tv or almost any product. I don't understand why it has to be a back and forth thing and people can't just see the value in the product and buy. I would pay more for a Honda then other brands though so how would it be determined which price was higher or lower??

And I'm not saying it is not a profitable business I'm saying we don't make money off of selling cars really. We take losses more than gross on deals. Its through service and finance that we make profit.

 

[forumpricinglol]

Also really enjoying the forum btw guys super awesome community!! Not being sarcastic!

 

[Negan]

And Negan, I completely agree to a fixed price model just like going in to buy an iphone or a tv or almost any product. I don't understand why it has to be a back and forth thing and people can't just see the value in the product and buy. I would pay more for a Honda then other brands though so how would it be determined which price was higher or lower??

And I'm not saying it is not a profitable business I'm saying we don't make money off of selling cars really. We take losses more than gross on deals. Its through service and finance that we make profit.

Good to hear that someone in car sales agrees with fixed pricing. In terms of figuring out what the fair price is, I've gone over that in some earlier posts in this thread. The short answer: the market takes care of that.

In terms of dealership profit, I understand that new car sales can be minimally profitable, or even losses. However, like you've said, you end up making money in other ways. It's like saying making printers is not profitable because you almost give the things away for free. ...Well, yes, but you make money on the ink, which in turn makes you enough profit to stay in business. So, the point is, selling a car does make you money, even if indirectly.

 

[josby]

When I say you give yourselves headaches this is what I mean. Why not just walk in pay MSRP and enjoy the experience

Haha, my lease would've cost me $4500 more if I'd paid MSRP. I was at the dealership for 3 hours. That's $1500/hour earned. Headache? For that kind of money, I'd gladly take a migraine and brain freeze at the same time!

 

[gwaps]

I'm glad at least one salesman admits to making money on what's called , "The Back End". ( trade in , financing and extended warranty) After I get quotes after Christmas from 100+ dealers I'll be very liked by the Dealers. I more than likely will use our credit union for lower interest rate. They won't be able to match. Not trading in my Matrix . Finally, If I Choose To Get extended warranty from Honda, it will also be from the lowest bidder and not necessarily where I buy my car . So not much profit that day is anticipated.

 

[dannyo67]

Haha, my lease would've cost me $4500 more if I'd paid MSRP. I was at the dealership for 3 hours. That's $1500/hour earned. Headache? For that kind of money, I'd gladly take a migraine and brain freeze at the same time!

The argument is that without interference from the inefficient dealer reselling system, market forces would reduce the MSRP to somewhere below where the median price is now, because the middleman would be cut out. Comparing current MSRP to this hypothetical MSRP is misleading.

If right now Honda makes their money and the Dealer makes their money, after cutting out the dealer some of that would go to Honda and some of that would get re-captured in a lower price point by the consumer. Then dealerships would be more of licensed service departments.

I think that dealerships should be able to exist if the model works, but the idea that they have to or that this is the only way that works, or the idea that we should prop them up with laws like the one Tesla has to combat in Texas is super dumb. Let the market sort itself out.

 

[Negan]

The argument is that without interference from the inefficient dealer reselling system, market forces would reduce the MSRP to somewhere below where the median price is now, because the middleman would be cut out. Comparing current MSRP to this hypothetical MSRP is misleading.

If right now Honda makes their money and the Dealer makes their money, after cutting out the dealer some of that would go to Honda and some of that would get re-captured in a lower price point by the consumer. Then dealerships would be more of licensed service departments.

I think that dealerships should be able to exist if the model works, but the idea that they have to or that this is the only way that works, or the idea that we should prop them up with laws like the one Tesla has to combat in Texas is super dumb. Let the market sort itself out.

Couldn't agree more.

 

[forumpricinglol]

The argument is that without interference from the inefficient dealer reselling system, market forces would reduce the MSRP to somewhere below where the median price is now, because the middleman would be cut out. Comparing current MSRP to this hypothetical MSRP is misleading.

If right now Honda makes their money and the Dealer makes their money, after cutting out the dealer some of that would go to Honda and some of that would get re-captured in a lower price point by the consumer. Then dealerships would be more of licensed service departments.

I think that dealerships should be able to exist if the model works, but the idea that they have to or that this is the only way that works, or the idea that we should prop them up with laws like the one Tesla has to combat in Texas is super dumb. Let the market sort itself out.

EXACTLY. THANK YOU. haha Thats exactly the point I was trying to make. It would become a better experience overall for the client and the salesperson. Just like when you walk into an Apple store and everyone's happy to take care of you and you're happy to spend all your money.

 

[forumpricinglol]

I'm glad at least one salesman admits to making money on what's called , "The Back End". ( trade in , financing and extended warranty) After I get quotes after Christmas from 100+ dealers I'll be very liked by the Dealers. I more than likely will use our credit union for lower interest rate. They won't be able to match. Not trading in my Matrix . Finally, If I Choose To Get extended warranty from Honda, it will also be from the lowest bidder and not necessarily where I buy my car . So not much profit that day is anticipated.

Well of course money is made on that. Some sales plans don't benefit the salesperson though so if you've heard they don't make money on that it may be for that reason. Now as per your method of purchasing, that's great if you have the time to do that but I don't think you need to cross shop 100+ dealers. After the first 10 I think you should've narrowed it down to fair price. $50 better than a deal is pretty petty to pick one dealership over another especially if you've already worked with a really nice salesperson who understands the product. Another thing, a lot of times dealerships CAN match credit unions or even have the rate sheets for specific credit unions. Selling your car privately is always going to get you more money. It's like trading in a video game vs selling it privately or really anything you trade into a business. They will take almost anything in and you don't have to worry about finding a buyer. It's more so for the ease of it so you don't have to handle it yourself. Look at KBB if you do consider trading in beforehand that way you don't get ripped off. As far as the warranty, yes you can go for the lowest bidder but make sure you're comparing apples to apples and don't get suckered into a warranty that you can only use in Madagascar. Just really look at the details because they can be tricky. HondaCare is a very good extended warranty. Not bashing anything you do just trying to make your life a little easier.

 

[josby]

The argument is that without interference from the inefficient dealer reselling system, market forces would reduce the MSRP to somewhere below where the median price is now, because the middleman would be cut out. Comparing current MSRP to this hypothetical MSRP is misleading.

Ah ok, I thought he was suggesting people should pay MSRP currently!

 

[VarmintCong]

When I say you give yourselves headaches this is what I mean. Why not just walk in pay MSRP and enjoy the experience just like when you buy an Iphone. They are making far more in profit than a car sale does. Even a t-shirt has more profit in it. Its the years and years of bad experiences and I'm not sure when it started, but thats shaped where peoples heads are at when walking into a dealership. They don't see the value in the product and just look at how much am I getting off the car. Back to the Iphone, this years model added barely anything and yet still sold out and is backordered and did anyone negotiate?? Not one person. But of course, we as people now know that negotiating is a thing when buying a car so brand new civic comes out and I need to get money off. Now there are websites that make it so you get a fair deal. The dealership loses but its okay because we have holdback and make an average of 100-500 per car to pay for the lights, the employees, service, etc etc etc . BUT the problem is that's not good enough for people they have to feel like they won. For example, I had a customer negotiate everything through email and finally came in and I thought we were completely done but then they offer a price that was $1000 less "just because". We can't just make discount cars "just because". Most of peoples shitty experiences at dealerships happens during negotiating because we won't do a price that we can't do. Then they leave unhappy because they think we were just pulling one over on them and they go to the next place and the next place can't do the price either.

Now remove the dealership aspect completely, as a business owner would you sell your services for a loss? Or would you try to make as much profit as possible because you need to feed your family,kids and survive?

You are right, if carmakers changed dealerships to be more like Apple Store, with fixed prices, they could reduce MSRP by eliminating a lot of the middleman costs, and you'd have a much better experience. But they can't, the dealership system is protected by the government as others posted.

But I always have a good experience if I go to a BMW, Mini or say, Fiat dealership. It's companies like Honda, Toyota and Chevy that tend to make the experience horrible.

 

[forumpricinglol]

You are right, if carmakers changed dealerships to be more like Apple Store, with fixed prices, they could reduce MSRP by eliminating a lot of the middleman costs, and you'd have a much better experience. But they can't, the dealership system is protected by the government as others posted.

But I always have a good experience if I go to a BMW, Mini or say, Fiat dealership. It's companies like Honda, Toyota and Chevy that tend to make the experience horrible.

But why would you say you have a better experience at BMW stores?

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