Toyota dealers learn a lesson from Ferrari...

Play all the games they desire. I buy the bottom line. Be it Ferrari, Toyota or anything else. I own both. Stupid buys as stupid asks.

 

Ferrari dealers sell new cars at MSRP, not above, not below.

It is the flippers who resell above MSRP, using the dealers as brokers.

 

Several years ago I saw this same "Market Value Adjustment" on Mini's when they were red hot in California.

The other trick dealers do is to add all kinds of accessories to the cars on their lots and overcharge for them. There are no "plain Jane" cars and if you ask for one, they don't know when one will be available.

It's supply and demand. Like it or not, that's capitalism. If you build a great product that everyone wants, you are entitled to reap the reward.

 

Dealers can get in trouble for this with FNA. It's not as common as you think. It happens I'm sure to some great customers but it's not common.

So, what's the penalty from FNA? Simple. They hold back your allocation for breaking the rules or force management changes in an organization.

 

I know for a fact that it does happen.

CW

 

I said it was rare. I didn't say it didn't happen.

 

That's a lot of gas.

 

That's an excellent point. For the added mark up, you could buy another car and drive a really long time for "free". It's the problem that the Chevy Volt has. For the cost, it takes too long for the payoff of the investment.

 

BUT WE'RE SAVING THE PLANET MAN

 

I've been thinking the Prius C, as the first hybrid in the US under $20K should be selling like hotcakes.

But with an extra $7K, that's too expensive even for the world's BEST hotcakes!

 

Mr. Supply meet Mr. Demand.

 

Maybe not as rare as you believe, however.

CW

 

+1 You'd have to keep and drive the Prius C a very high number of miles to make up for the $6995 "market adjustment" mark-up, at least at current gas prices. Now if gas went to $9/gal., only half as many, but then we'd be seeing huge market shift in a lot of other ways.

 

Could always order the stripped Mini that you desired, if you were willing to wait three to six months for delivery.

 

ill never understand why people are willing to pay any markup due to demand. i guess if i were filthy rich my perspective would change, though i can't imagine it being that way.

 

This has been going on forever. That's why it's Manufactures "Suggested" Retail Price. Only Saturn and Scion expressly forbid dealers from adding "adjusted market value ". I was in the car business for 17 years. I once sold a new '97 Plymouth Prowler for $100,000 and the car had a $32,000 MSRP. Everyone was doing it on that car. The couple were actually happy with that because their local dealer wanted $117,000 for the one they had. They craziest mark-up I ever witnessed was the Chrysler PT Cruiser. When they announced production of that car the dealership I worked for began taking deposits for $5,000 over MSRP. By the time the first car hit the ground at the dealership we had 162 deposits. Only a hand full of people dropped out and didn't buy the car. Those who did we called the next person in line and offered them the car. One instance we had a few people pass on an avalible car because it was the wrong color or options. Then we got to a lady (who happened to be my customer) who took that car. She drove it for a couple of months and when the one she ordered came in (Candy Apple Red vs Black on the first one) she bought it too and gave the black one to her daughter. It's a matter of supply and demand. Dealer agreements are different between certain manufactures and their dealers. Toyota "strongly discourages" addition dealer mark-up but doesn't forbid it. I truly believe Honda encourages it at Honda dealers but not at Acura dealers. However at Acura dealers they almost mandate the addition of accessories. The "Protection Package" which consists of mud flaps, all-season floor mats and a trunk liner was added to every new vehicle we sold because Acura set New Car accessory goals and if you didn't meet those goals they cut allocation. Reality is if you don't like paying additional mark-up or for accessories then buy something else. Dealers do this because the automakers (in most cases) have shrunk profit margin on cars to the point that dealers have to look for other revenue streams. The difference between invoice and MSRP on a new Chevrolet Cruise that has every factory option is about $1200. On a $23,000 car that isn't much to work with. A $70,000 Escalade has $6,000 in make-up between invoice and MSRP however the last time someone paid MSRP for an Escalade was 4 years ago.

On a final note (sorry for being so long winded) there is a saying in the car business. "The customers you make money on are the happiest. The ones that come in and grind you down to little or no profit are always unhappy." I always prefered happy customers because it paid my bills but (believe it or not) with modern day Customer Satisfaction Indexes it is imparitive that the customer is happy. The only time I EVER received a survey that was less than 100% in 17 years was on a deal that I didn't make money on. I have never had a problem with making customers good deals but the terrible survey was never worth the minimum commission.

 

the insight is honda answer to toyota and to my knowledge (I tried one yesterday in Lakeland FL) is starting below $20K for the base model without market adjustment gimmick....;o)

 

Its interesting that Toyota can add a "adjusted market value" to the price of the Prius C but GM cant give away the Chevy Volt... lol

 

It's quite normal. When I was at the dealer, the GT had a markup when it came out. The first few Shelby's, the Boss, first Raptors. Anything people want that are in limited supply. But marking up an "economy" car seems a little stupid. Your immediatey alienating customers.

 

The only folks that I know who actually pay the mark ups are folks that can't really afford to do it, but have that need to be seen. But, I guess if they have the credit scores to be able to "how much a month it" over and over again, they are not too far underwater, but it would be nice if they moved out of their parents' basement.