Last post on Dec 06, 2013 at 7:20 AM
You are in the Prices Paid - Buying & Leasing Experiences
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Acura MDX, Car Buying, SUV
#9206 of 13266 Re: keep pushing [acurasales3]
Dec 08, 2009 (9:40 am)
What may be true at your dealership is not true of other dealerships or of other car manufacturers.
You are also spreading half truths and mixing in false statements with your comments.
All auto dealers make money through commission or other incentives from banks and financial institutions. This is also true of insurance brokers, investment brokers, mortgage brokers, and loan officers. It is utterly false to say a dealer does not profit from providing or arranging financing, or they wouldn't offer it.
I don't know how your shop prices accessories, but at the dealership where I purchased, sport running boards cost $571 + labor. I can order the same part from any number of online vendors for $425-$450 (incl. tax and shipping) and have it installed for less than the cost of the part directly from my dealer. I'm sure you'll tell me the online vendors are only making pennies on the sale of the accessory too.
Margins on vehicles vary as well. You know full well the margin on a MDX is greater than the TSX. You also know a car that's been sitting on a lot over 90 days will have a more difficult time being sold since the dealer now owns it and probably lost their holdback, whereas a car that just arrived may move quickly since the dealer can make greater margins through holdback and other incentives for moving it fast.
Dealerships make margin on used car sales, at least that's what all the people I know tell me, just like Gamestop makes most of their profits on used games. They'll buy that 2008 MDX Sport at auction for 10-25% below it's KBB WHOLESALE price, clean it up, and someone will buy it. I don't get why, but people would pay $38k for a 2008 MDX Tech w/20k miles when they can buy a new 2009 MDX Tech for $39-40k. But the margins are totally different on the 2 vehicles and it's not worth losing the sale AFAIK on that 09 when they can make better margins on the 08 used.
Incentives also vary from region to region, month to month, and from dealership to dealership (volume incentives, etc).
And while your dealership may have a higher level of ethics and standards, the fact is there are more lousy dealerships than honest ones. The dealer where I ended up buying tried to pull all sorts of lies and tricks, including asking me for my SSN on a credit application "because per the Patriot Act we need to make sure you're not a terrorist before we sell you a car" when I went to take delivery.
You also can't compare Ford to anyone else. They had the benefit of Cash For Clunkers, from a weaker dollar, and from government backing more than manufacturers like BMW or Acura (making the MDX in Canada is losing money on the exchange into US currently).
I don't get the hostility. Where I live, there are plenty of Acura dealerships, and a good number of them are high volume that don't need big margins on vehicle sales to generate healthy profits for the dealership. They wouldn't sell MDXs for a loss, so even at 34.1k like lexluthor paid, clearly the dealership broke even or made a profit or they wouldn't sell it for that much.
#9207 of 13266 Re: keep pushing [tastycakes55]
Dec 08, 2009 (11:21 am)
There not false statements. If I use an outside lender yes I have an opportunity mark up the interest rate to increase profit. However with Acura Financial Services putting special rates on every Acura product the showroom makes a Flat $100.00 Looks like huge money to me.
Of course the margin increases as you move up the models. It still works out to be approx 6% of invoice. As far as auction are concerned no we are not buying them 10-25% below KBB. FYI no dealer uses KBB for wholesale value. Black book is what Acura uses and we use NADA. KBB is nothing more than bank site. Read the disclaimer at the bottom of the page. It says values given are an opinion and only intended for the person who printed them. Again not a real number. Lets address this little more. First we buy the car at an auction. Now we have to pay auctions fees, then transportation fees, oh yeah then we have to Certify the car. Guess what EVERY MDX requires close to $1500 to bring it up to snuff. Then we have to pay for the certified warranty Whereís all this profit we're suppose to making? Has anyone every thought about the costs incurred or do you think we buy a car and sell it and keep every thing in between? If this is the case I have a Bridge for Sale
You're right with a higher volume dealership you can take a shorter deal and make profit with volume. If lexluthor paid 34,100 for his MDX we'll take 100 at that price. No responsibility for what is written. I could say I paid $32,000 Doesnít make that figure real and his figure isn't real. I see the debits from our accounts. I know what we pay for the cars. He may have gotten one that had transport damage and the dealer took a looser on that car.
Unfortunately the Patriot Act is a real thing. We are required to run OFAC report on every client. Along with a proof of I.D. purpose of this is to try and help lower I.D. theft. SS # is not required to run a OFAC report
I have to ask a question. Why wouldn't you put your SS # on a credit App? That is required to secure a loan. Or did you pay cash in which case the dealer should've used a different form. If we don't run an OFAC and Proof of I.D we can't sell the car period.. NO EXCEPTIONS.
Yes there are good dealers and bad dealers. I have been lucky and never worked for a bad dealer. The major issue I have is there is too much miss information out there. All these heavy incentives are going to end. I'm already seeing it with other manufacturers and Acura. Bottom Line is the manufacture can't buy a loan at 1.5% and sell it for 0 and expect to be stable.
#9208 of 13266 Re: keep pushing [acurasales3]
Dec 08, 2009 (12:39 pm)
You're contradicting what you said. Initially you said dealerships don't make a profit on financing. Now you're conceding they do. You're also saying dealers only make $100 on Acura financing? This is also not completely true. There are incentives with Acura to finance through them on top of any flat fee given from corporate. There may be bonuses paid for hitting targets financing through Acura/Honda. The point is, those are never disclosed to a consumer.
Also, you are going to validate what people think about dealers being sleazy and it's going to affect some dealership out there when someone reading this thread goes to buy a car.
Most dealerships finance managers act like loan brokers. They get your SSN and then see what prequals are available and offer something which is mutually beneficial. I don't see what the problem is if I get a rate at which I'm happy and the dealer gets a commission from the bank or lender. This *should* help sales by making it less about margin on the new cars.
I know dealers use NADA, but not when dealing with customers, so it's moot. My point was that consumer has no knowledge of what a car is selling for at auction when they walk in to buy a used car or to trade in their existing car, but the dealer does. And, no dealer I've ever heard of shares this information with a customer.
If a customer walks into a dealership with a trade-in, dealer references KBB. The dealer will give them an offer based on KBB trade-in, knowing full well the price at which they can profit by selling at auction based on reports on what's sold in the last week.
Likewise, when customer comes in to buy a used car, negotiation is not from NADA auction prices from the last week, but from KBB. If MDXs stop selling well at auction for whatever reason (oversupply, lack of demand, whatever) it would not affect a customer's price in negotiations with a dealer.
So back to the original point - why not push dealers hard on new 09 MDXs? They don't want them sitting on lots longer than 90 days, especially with sales slowing, tax credits expiring this month, and 2010s coming on the lot sometime soon?
Further, the only thing a consumer will know walking in to an Acura dealership is what other people paid. So I understand your position but you shouldn't fault consumers for aggressive negotiations since the dealership is doing the same. The idea is to find a price both can agree with and the dealer knows better based on all the ways they can earn revenue from a single sale and they won't start from their bottom line.
#9209 of 13266 Re: keep pushing [tastycakes55]
Dec 08, 2009 (6:27 pm)
Your right I did contradict myself. My apologies. Yes I am saying the showroom makes $100.00 per contract. If you expect full disclosure about the auto industry why isn't their full disclosure on every item sold. Is there website you can go to find out what it costs to build a new house? No and contractors have a worse reputation.
Yes we do act like a loan broker when there is no special financing. When there is we are pencil pushers and this is why all the items in the finance office are offered. Thatís why it is about margin. Example. Our cash transaction on cars year to date is 47%. Almost 1 out of 2 the people write a check. No opportunity of finance and no flat. So what do I do? I sell, value added items, yes I am very good at it, however if a client comes in my office writes a check and buys nothing I make nothing. Everyone in a showroom is commission. Regardless of what you have read things like incentives to the showroom from the factory very rarely happen. Iíve worked with close to 10 manufactures and over the course of time Iíve seen that happen about a half a dozen times.
No most dealers use NADA for trade in and retail values. KBB is a bank site it is not intended for real value. We pay more for a trade versus and auction due to the fact that we can do a more accurate inspection. When you buy a car at the auction you donít get to throw it up on a rack and find out that a bearing is bad. So how is that relevant? You are right we donít adjust our prices on lot if the auction slows down. Do you know why? Cause cost is cost. The auctions donít reimburse us 30 or 60 days later. Yes every dealer takes a loosing deal itís part of doing business.
I don't fault people for wanting a fair price. I want one as well. I also want a level field. By that I mean if there is to be full disclosure in my industry then there should be full disclosure with every item on the market. I find it crazy that my local music shop makes close to $200 on some of there high end cymbals.
This is why 1 price new car priceing is the best thing for you and me. No games no fake fees no BS.
#9210 of 13266 Re: Payment by Credit Card [acurasales3]
Dec 08, 2009 (6:37 pm)
You are making a number of bogus arguments.
1. Nobody said that a 1.95% higher interest is going to break the bank, but you are grossly understating the cost. My car cost $42.7K plus another $3K in taxes, registration, document fees and god knows what for a total of nearly $46K. I made a $14K downpayment ($9K trade-in and $5K on Amex), leaving a $32K balance on the loan. The monthly installment on a 5-yr $32K loan with a 2.9% interest is $574; with a 4.85% rate it goes up to $602. So, the difference is $28/month, more than twice the $12 figure that you quoted - or $1,680 extra interest over the life of the loan.
2. Adding $5K more debt is "unlikely" to change your credit profile so much that it would bring down your FICO score. At least in my case it did not; I know that because I subscribe to Experian's Triple Advantage service. According to your own post, only a certain kind of people "should be shopping for this caliber of car". Do you think $5K additional credit is going to have a meaningful impact on the credit score that kind of people?
3. You still fail to explain why paying with credit card is "illegal". You said making a down payment with a credit card is "against federal banking regulations". Why would a dealer be aiding and abetting anybody in violating federal banking regulations? They run a business themselves; so certainly they would not be doing anything so publicly to run afoul of the law!
4. "Credit on credit" is a bogus term. I Googled it and the number of results I found was ZERO. If I understand correctly, what you are alluding to would be similar to retail investors borrowing on credit card (or a bank loan) and using the proceeds of that loan as a margin to get additional margin loan from the brokerage house to buy shares. And clearly, that's not even close to what I was trying to accomplish here.
Your credibility just went down the toilet.
#9211 of 13266 2009 MDX with Tech package in socal
Dec 08, 2009 (6:38 pm)
Hi everyone. I am currently entertaining an offer for an mdx with tech package for $39,086. Is this a good price for the car or can I do better? Thanks in advance.
#9212 of 13266 Re: 2009 MDX with Tech package in socal [jurizar]
Dec 08, 2009 (6:55 pm)
Hi, if that's a brand new 2009 model, that doesn't look bad. I live across the river from Manhattan and I just saw my nearest dealer advertising a 2008 MDX (Tech) with 24K+ miles on it for $39,900. I don't know where you live, but in the vicinity of NYC what you are getting would be considered attractive.
#9213 of 13266 Re: 2009 MDX with Tech package in socal [hifiver25]
Dec 08, 2009 (6:57 pm)
I live in southern california. Yeah, that is for a brand new one not including TTL. Thanks....now I somehow have to convice my wife that it's a good deal.
#9214 of 13266 Re: 2009 MDX with Tech package in socal [jurizar]
Dec 08, 2009 (7:05 pm)
I just looked at their website (my nearest acura dealer). They are advertising a 2009 used tech model with 8,750 miles for $40,900. The asking price for the one that I saw on their lot (2008 tech/DVD with 24,500) is now only $37,900. I was there on Saturday, so they have come down $2K in 3 days. I don't know if this info helps you in any way, but I thought I would mention.
BTW, where in SoCal do u live? I lived in LA between '91 and '96. I lived in a number of different neighborhoods there, but spent the longest part in Santa Monica, 2 blocks from the 3rd St. Promenade.
#9215 of 13266 Re: 2009 MDX with Tech package in socal [hifiver25]
Dec 08, 2009 (7:17 pm)
Thanks for the info. I am in Marina Del Rey. 3rd st. promenade is great. i'm waiting to see what they're going to do with that mall since they tore it down like 3 years ago. Like I said, I have to somehow convince my wife that the offer is a good deal.