Added dealer markups on hot cars

I was in GM sales there is nothing wrong with an addendum sticker raising the price of the car for almost no reason. Been there done that especially with the chev ssr and some vette dealers do it as well. If its a hot product GM dealerships milk it for all they can
Erik

 

On 9 out of 10 brands out there they don't care. When the new 6-er came out at BMW there was a markup, X5 4.8, etc. To be honest we used huge second-stickers as a tool to discourage all the rediculous test-drive requests from non-buying folk and happily sold the cars for MSRP, but every once in a blue moon somebody actually was willing to pay it. If they walked you when you offered full MSRP I'm shocked, but if you asked below sticker on a car which has a markup that doesn't surprise me at all. The salesperson would sell you the car if they'd let him, but there's no chance of the owner letting it go for less than ideal profit.

 

"Normal" franchise rules (you know, the ones created back in the day when Buick Roadmaster were considered hot) for autos generally prohibit mfgs from dictating what dealers can charge, with Saturn being the obvious exception. That's where the whole "suggested" portion of MSRP comes in.

Do mfgs like it? Probably not. They only make money on the sale (usually, what we consider to be "invoice") of a vehicle to the dealership. They don't get anything from the Additional Dealer Markup, perhaps aside from the bad publicity.

Bob Lutz of GM recently stated on an MSNBC interview that he didn't like the fact that dealers charge extra for the new Corvette Z06. He then went on the say that "...but we can't really do anything about it." It's probably true. Pretend you're an MFG and get asked this by your "Strategic Consultant" on staff: What's more profitable, pissing off your entire dealer network, or making lots of customers happier that negotiations can start at MSRP instead of MSRP+ADM?

It's not a simple answer. Personally, as a consumer, I don't like it much either, but my only real recourse is to wait and buy something in the secondary market. If I was the mfg, I'd probably echo Lutz's sentiments - the franchise "beast" has a lot of inertia, and it would take mucho effort to change the current system, so why not just continue to follow the path of least resistance? And finally, if I owned a dealership, I'd want the freedom to charge whatever the market would bear. That's just the rub with capitalism, I suppose.

 

You need to find another dealer ...there are some ethical ones out there. When I bought my 2000 e39 M5 back in early 2000 I paid MSRP even though a lot of BMW dealers were charging $5k to $10k over MSRP. I just put a deposit on a new GT-R with a written agreement that I will get the car for MSRP, where I have heard of other Infiniti dealers not willing to commit to selling for MSRP. You just have to shop around...

 

Yes from the deales perspective. It didn't doesn't change how many cars we get ect. It's like gm doesn't know
Erik

 

If you are the type who is willing to pay just to be the first one on the block, go for it. If you accept that being the first one on the block won't last long, give it a little time.

Dealers have pulled this stunt for many different models over the years.

 

It's not a stunt, rather simple supply and demand.

No one has a problem when the dealer is sitting on 142 examples of a model and has to give them away at $500 below invoice. People will go on and on about it being "too bad", "it was their own stupid fault for ordering the wrong cars", and "they deserve it for having made me pay $1,000 over MSRP on my Vette".

When a dealership can get more than MSRP it simply shows the manufacturer mispriced the car. The price of any product is what the market will bare. We are so use to advertisements knocking $6000 off a new Lincoln that we assume all MSRPs are artifically too high. Every once and a while a PT Cruiser comes along and proves the market will pay more than the manufacturer's bean counters thought. There is a post from this week asking if Ferrari left money on the table by under pricing the Enzo.

 

One more time, in English?

 

Yes it's from a dealers perspective. What they(the dealer) are charging doesn't affect how many cars they get or anything. It's like GM doesn't even know about it(the price raping).

 

Just wait a few months, the Saturn SKY will be out.
Same car, better looking and Saturn has one price only, its been their way of selling since they started.

 

Nothing new at all. I remember when the 1st Gen Miata came out, some people paid $30,000 for them with their MSRP at $15,000 or so. Same goes for the NSX, they were asking close to $200,000 and were getting them as the rumor was that they are limited production vehicles, much the same with the S2000, so much for the "limited production" by Honda *LOL*.

 

I'd be interested aas to how many Skys go out the door without the rust/paint/and fabric protection package priced at a tidy profit for the dealership.

"Sorry Mr. Customer, we put the permium protection package on all of the Skys when they get off the truck because we have seen that our customers want to protect their investment...that'll be an additional $2,100.00"

There is ALWAYS a way around the whole one price selling hoopla that Saturn is famous for and God bless them, this is America people...free market etc etc etc. If you don't want to pay the premium wait a year or so...it was the same way with the PT cruiser when it came out, now they are selling them in the Detroit area at invoice less all of the dealer holdback.

 

Well Jim I think you are right, to an end. Obviously the dealer(s) mark these cars because they believe that there is a market for said vehicle at said price. If they felt there was not then they would be selling the car at MSRP. They know that for every 10-20 people who, like PeterS, say F this and walk out in disgust, there are 1-2 people who suffer from "gotta be the first on the block to have it" syndrome. These people are willing to pay the over inflated price for the vehicle, thus justifying the mark-up. It's like my dad always said, " A (insert item) is only worth the amount somebody is willing to pay". Obviously if they have marked the vehicle up, then the dealership is confident that somebody is willing to pay that amount, thereby justifying the price. It's no different than some of the Muscle Cars that are being sold for ludicrous amounts of money. While many people believe that the prices are not justified for 40+-year-old American cars, the market dictates otherwise. All of that said my dad also had another saying “A fool and his money…….” There is a fool born everyday and a plenty of people waiting to take advantage of his foolishness.

PeterS, if you really want that car, then my best advice would be to wait a few months until the hype subsides and you can get the vehicle at MSRP (or below). Better yet I would suggest that you look for a comparable car from another manufacturer (BMW, Mazda, Honda) all of which are better cars IMHO. Though they are all priced a bit higher than the Pontiac I think you will be more satisfied with your purchase. Personally I would be happier about spending 32-33K for a BMW than I would 26-27 K for a Pontiac.

 

I had a friend who was looking for a Subi WRX STi when they were asking huge mark-ups. He refused to pay it, but told the salesman - "here's my name and number, I'm a buyer at MSRP, when you want to sell it at MSRP, give me a call".

Two months later on the morning of the last day of the month, he got a call. Bought it that afternoon and even got an extra $1K off.

 

I just returned from Jiffy Lube. While waiting I flipped through a car magazine that had there, it had a Bugatti article. In the letters to the editor a Pontiac dealer wrote in saying that people were not interested in ordering this vehicle since GM refuses to give any time frame for delivery, not even the year. We could infer the inability to pin down a delivery date is helping fuel the premium pricing.

 

I don't think GM is in any positon to be allowing over MSRP sales on any car. They are in rough shape right now, and any sale for them is a good sale. GM should crack down on this hard. To many lost buyers for this reason.

 

It is as simple as writing an addendum(sp) sticker and adding that next to the window sticker. Talk about easy money
Erik

 

You need to realize that GM does not count a vehicle sale when it leaves the dealer's lot...GM counts a vehicle sold when the dealership takes delivery. Once the dealership has the vehicle GM couldn't care less. If the dealer can sell them above MSRP that is their business. Remember it is Manufacturer's SUGGESTED Retail Price...after all it is just a sugestion.

 

"Been there, done that" ? Cool expression. Charging over MSRP on the Chevrolet SSR? When did that happen, the first six minutes after it's introduction. That vehicle was being heavily discounted before the end of it's first model year, for a number of reasons, not the least of which were: Too expensive, leaked info about the corvette engine being put in it in the 2nd year of production,etc. As for the GM cars that have enough desirability and rareness (atleast initially) to sell for over MSRP, it's a short list over the last 7-8 years. Corvette Z06 (2006 model), the Solstice and probably the Saturn Sky. To you folks that think GM is damaging itself by allowing dealers to gouge (?) people on the above 3 cars, please keep in mind that Pontiac has delivered approx. 7,000 Solstices (sp?) to date and Chevrolet has the capacity (because of the hand built, 7L engine) to build only 5,000-7,000 Z06's a year. We can assume the Saturn Sky will have about the same production as the Solstice, so I don't think these 3 cars are going to solve GM's woes. To finish, GM dealers don't have the franchise on "milking it for all they can" in regards to a hot new car. This is a Ferrari forum, right?
Jimmy