Wake up call, today's reality?

ctfjr

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Yesterday I brought my wife's Mazda in for service. It was going to be just an hour so I waited for it.

She really wanted a red car so while I was there I went into the showroom to see what it would take to move from hers (white) to a new red one. After listening to the expected "it's very hard to get cars today and prices are up" I was hit with, "We are charging $5000 over MSRP for all our cars".

After confirming that's what they wanted I laughed, thanked him and walked out. Just conformation why for the past 10 years I have purchased my vehicles online.

It's a strange time.
 
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Daren Todd

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Yup, used and new vehicles are absolutely ridiculous at the moment. I'm glad I purchased when I did. And will run the vehicles till the wheels fall off 😁😁😁
 
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OrangeKrush

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Would be a great time to sell.. if you didn't need that (spare) vehicle.
 

Hozzie

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Find another dealer. I just bought a new Suburban and ran into some doing the same thing. Vehicles are harder to find, but if you know what you want, you can find them with some work. I had an additional problem (benefit for me) in that I had employee pricing. Some dealers wouldn't honor that either.

Long story short, I found the vehicle I wanted with a dealer that as willing to honor employee pricing. I had to drive from Nashville to Atlanta area to pick it up, but got what I wanted for the best price.

To be fair, my closest local dealers (one GMC, one Chevy) would have also honored it as we have a big plant locally, they just had no Suburbans or Yukons I was interested in. Just a bit farther away the dealers were arrogent. Just makes me remove them from my future places to buy list.
 
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ctfjr

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Find another dealer. . . .
That's the answer Hozzie! As I mentioned before I use the internet to buy any vehicle - I only stopped in that showroom because I was waiting in the service department.

The best example I have for going to extremes in finding a good price was my buying of my last motorcycle, a Yamaha. I had a local dealer 5 miles from me but found a dealer online who was $1200 less. I asked the local guy to split the difference. He wouldn't. I flew from CT to AL to buy my bike. To be 100% here I had to go to St Louis for business so my company paid for all my travel expenses. I rode my new bike from Cullman, AL to ST Louis and back to CT. Good break in ride :)

btw AL had no temporary tags. I rode with no plate at all.
 
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fried1765

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That's the answer Hozzie! As I mentioned before I use the internet to buy any vehicle - I only stopped in that showroom because I was waiting in the service department.

The best example I have for going to extremes in finding a good price was my buying of my last motorcycle, a Yamaha. I had a local dealer 5 miles from me but found a dealer online who was $1200 less. I asked the local guy to split the difference. He wouldn't. I flew from CT to AL to buy my bike. To be 100% here I had to go to St Louis for business so my company paid for all my travel expenses. I rode my new bike from Cullman, AL to ST Louis and back to CT. Good break in ride :)

btw AL had no temporary tags. I rode with no plate at all.
We think/act alike!
 

Lonesouth

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We used to buy all our Chevy's from Bruce Gluek in Jasper, FL. He made all his money on corvettes, but wouldn't mind selling everything you wanted to buy for $50 over invoice. At that point, all he was doing was having a salesman process the paperwork. That was 20 years ago though, round about ought two.

Incidentally, we should all be taking advantage of the opportunity to refer to 200x as ought x.
 

Hozzie

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In the 'good old days', dealers would get the vehicle you wanted, from another dealer to make the sale. I'm guessing that service isn't there anymore ??
Nope, you may get them to get you one if it is from the same ownership group, but dealers can't get enough cars as it is. They aren't trading them to other dealers for the most part for any reason.
 

Hozzie

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That's the answer Hozzie! As I mentioned before I use the internet to buy any vehicle - I only stopped in that showroom because I was waiting in the service department.

The best example I have for going to extremes in finding a good price was my buying of my last motorcycle, a Yamaha. I had a local dealer 5 miles from me but found a dealer online who was $1200 less. I asked the local guy to split the difference. He wouldn't. I flew from CT to AL to buy my bike. To be 100% here I had to go to St Louis for business so my company paid for all my travel expenses. I rode my new bike from Cullman, AL to ST Louis and back to CT. Good break in ride :)

btw AL had no temporary tags. I rode with no plate at all.
I did the same for my Triumph, but didn't have to go as far. Decided what I wanted and talked to 5 closest dealers. Got lucky and the one 2nd closest to me gave me the best deal up front. Of course everyone else then wanted to match it. No bueno.
 

torch

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"We are charging $5000 over MSRP for all our cars".
I guess if he can't get as many cars to sell in a month, he has to make more per car to cover the expenses. I bet his electric bill, taxes, salaries, Worker's Comp, etc. didn't go down.
 

RCW

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I said it in the Truck Shopping thread.

I could see what the worth of my truck was, but never did see a real truck on a sales lot to even work a deal on.

I gave up.
 

ctfjr

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I guess if he can't get as many cars to sell in a month, he has to make more per car to cover the expenses. I bet his electric bill, taxes, salaries, Worker's Comp, etc. didn't go down.
All true torch however there are always other choices that could be made. I work at a $100mm distribution company. When covid hit the fan in 2020 sales tanked, really tanked. The company made some drastic cuts including major pay cuts for senior managers and smaller cuts across the board. That reduced salaries and worker's comp. Employees were furloughed on a rolling basis. Every other cost cutting measure that was possible was taken. We made it through - enough so that at the end of 2020 every employee was made whole.

Now we too are faced with materials shortages, super long delivery times and we are on allocation for several major lines we sell. As the pricing manager I can tell you we haven't raised our margins. Best practices means you find a way without trying to screw your customers.
 
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dlsmith

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In the 'good old days', dealers would get the vehicle you wanted, from another dealer to make the sale. I'm guessing that service isn't there anymore ??
My daughter's local Chevy dealer (Sarasota) got a Tahoe from another dealer in NC for her.
 

DustyRusty

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All true torch however there are always other choices that could be made. I work at a $100mm distribution company. When covid hit the fan in 2020 sales tanked, really tanked. The company made some drastic cuts including major pay cuts for senior managers and smaller cuts across the board. That reduced salaries and worker's comp. Employees were furloughed on a rolling basis. Every other cost cutting measure that was possible was taken. We made it through - enough so that at the end of 2020 every employee was made whole.

Now we too are faced with materials shortages, super long delivery times and we are on allocation for several major lines we sell. As the pricing manager I can tell you we haven't raised our margins. Best practices means you find a way without trying to screw your customers.
I agree with you on not screwing your customers, but small businesses can't absorb large increases in the wholesale price just to keep the customers happy. My wife's store for the first time in 48 years posted its first loss because they kept the old prices even though the products had gone up in price. She really cares about her customers, and has put off her retirement for another year, hoping to find a buyer for the business. The problem is today young people don't want to work the hours that it takes to own their own business. We are both beyond retirement age.
 

ctfjr

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I agree with you on not screwing your customers, but small businesses can't absorb large increases in the wholesale price just to keep the customers happy. . . . .
Good morning Dusty,
I don't think anyone expects any business to just absorb price increases. That's a recipe for not good things to happen. As I said above, " As the pricing manager I can tell you we haven't raised our margins. " Margins is the key word. Of course when a manufacturer raises their prices to us we reflect that increase. We just don't add $5000 arbitrarily to every big ticket item we sell. In the past year some items like propane tanks have gone up almost 100%. Who could absorb that kind of increase?
 

shelkol

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Just bought a hybrid. Not many available and I paid 1000 over MSRP. Some dealers wanted 5000 over. Would not have done that for a non-hybrid. Got a great price on selling my 9 year old car with 116,000 on it. I justified the grand by saying got that back on selling my old car.

BTW a friend of mine does septic work. Some of his material has increased from $265 to over $1000 during the pandemic.
 

jyoutz

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Yesterday I brought my wife's Mazda in for service. It was going to be just an hour so I waited for it.

She really wanted a red car so while I was there I went into the showroom to see what it would take to move from hers (white) to a new red one. After listening to the expected "it's very hard to get cars today and prices are up" I was hit with, "We are charging $5000 over MSRP for all our cars".

After confirming that's what they wanted I laughed, thanked him and walked out. Just conformation why for the past 10 years I have purchased my vehicles online.

It's a strange time.
My neighbor is general manager of a large Toyota dealership. They historically sold a hundred vehicles per month. He said that most of their business now is used cars (at high prices) because new vehicles are just not very available. The new cars they receive are already pre-sold. Nothing in car sales is the same as it was in 2019.
 

lugbolt

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Oct 15, 2015
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I work at a dealer.

They (manufacturer) sent out a bulletin recently, of many other things on the bulletin, they warned against selling (and specifically advertising) over MSRP. I think Yamaha did too.

The reasoning behind this is because everything we sell is pre-sale. They can't build enough of them. Everything is sold before it's even got a VIN assigned. So if one dealer has presold unit show up after a 6 month wait, and they call the customer to tell him it's there and ready to go, the customer oftentimes has 6 months to shop, and they'll sometimes find a better price somewhere else. Staying at MSRP levels that field so to speak. That doesn't account for dealer discounts that they may get, which are more important than ever right now. With the field level, dealers all have the same opportunities to sell, and it also eliminates the possibility of dealers gouging customers. Obviously it still happens but at least we were all warned. We try to follow the rules.

What they can do, however, is tell people the truth-that we are all sold out, everything is presold, you can order one today just like it and we can customize it as needed. But it'll take 6-8 months to get it. Then the customer says I'll pay extra if needed. We personally don't agree to that but some dealers do, and there's nothing "wrong" with it.

One would think that the dealer can sell for whatever he wants to. They kinda can but the manufacturers also dictate a lot of things like they charge you monthly for each technician that doesn't have certain certifications, etc.

So what some manufacturers do it send out secret shoppers. The government does it too. Basically there's some guy that shows up and says I want to buy that how much. Then if dealer says it's $5000 over MSRP, guy says I'll think on it and walks out. Month later you get a good talking to from the rep. Or if it's a government secret shopper, they just show up and say I want to buy a 1000cc ATV for my 8 year old girl can you sell me this one? This is what I want and I'll pay cash. Well....they have age restrictions, and dealers can't sell 1000cc atv's to anyone knowing a child under 16 will be using it. If salesman don't know about it and makes the sale, they'll get a "visit"-and it's not a nice visit. BTDT.

On that note the little dealer I work for wants another brand and we can sell them easily. I'm already certified to repair them from another shop so that's a huge plus. The dealer across town doesn't really care to sell them but they do, as kind of a "back seat" to another major brand It's like yeah we have those other brand, but you need to look at these-they're way better. So in talking to the rep the other day, he said that we can get that dealer's inventory if we want it, but all the other dealer has to do it mess up, say, they send out a secret shopper and that dealer says "we'll sell you this but it's gonna be X amount over MSRP"--and rep gets wind of it and says ok, you violated dealer agreement, breach of contract, we're pulling our stuff out and giving to those guys across town".

So yes, dealers that are warned against it could potentially be shooting themselves in the foot if they aren't careful.