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Smart Shopper Honda Extended Warranties Pricing and Info
3107 messages, Last post on Nov 30, 2009 at 1:36 PM
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Honda's family squabble Using hints from Honda field reps, a small Rhode Island dealership began taking service contract business away from Honda stores around the country. Guess who got mad. Kathy Jackson Automotive News | September 8, 2008 - 12:01 am EST PROVIDENCE, R.I. There was something about young, apple-cheeked Gardiner Reynolds that Honda field reps liked. A couple of them took the energetic, Gen Y computer whiz under their wings. In the process, they helped Reynolds save his grandmother's small, struggling Rhode Island auto dealership, Saccucci Honda. Reynolds, now 28, oversees one of the nation's top-selling retail Web sites for Honda parts and accessories. Another site he launched at Saccucci Honda may be the No. 1 retailer of Honda-backed extended warranties. These days, the little dealership can hold its own with much larger stores. It sells a huge number of service contracts at cost and rakes in factory bonus money based on volume. The Honda execs were so impressed with the kid's online operation which has only two employees that they brought executives from Japan to see for themselves. American Honda Finance Corp.'s finance and insurance zone manager once stood up at a dealer meeting and called Saccucci Honda's Internet business: "American capitalism at its best." But not everyone was thrilled. When several big Honda dealerships around the country began to complain about losing business to Saccucci's Web site, Honda got the message. The automaker put a stop to the online sales of Honda-backed warranties. Saccucci sued and now the dispute is in court. Monthly supplements Internet sales have provided a nice niche for Saccucci Auto Group. Heres how the dollars are flowing from cyberspace. WEB SITE WHAT IT SELLS MONTHLY REVENUES hondapartsdeals.com Honda parts and accessories $200,000-300000 myhondawarranty.com Honda extended warranties $200,000 myfordwarranty.com Ford/Lincoln Mercury extended warranties $60,000 The answer: The Web Saccucci Honda hasn't had it easy this decade. Honda is having a good year, but the dealership's sales and profit margins on sales of new vehicles are dropping. The family-owned dealership has a tiny customer base on the island city of Middletown, R.I., with a population of 16,000. And right down the road, Boston-based Ernie Boch operates the largest Honda dealership in the country famous throughout New England for ubiquitous TV commercials urging customers to "come on down" for the deals. Saccucci Honda's owners 83-year-old Cora Saccucci and her two daughters, Barbara, 56, and Carol, 53 are a conservative bunch. For years, they knew only one way to do business the old-fashioned way. Then in 2006, Honda executives began applying pressure. In letters to the Saccuccis, they complained about the dealership's lack of working capital and the store's outdated facility, which also houses a Lincoln Mercury franchise. Automotive News http://www.autonews.com/apps/pbcs.dll/article?AID=/20080908/ANA0... 1 of 4 9/11/2008 14:55 The Saccucci women worried and began looking for an answer. It turned out to be right under their noses: Barbara's son Gardiner, a 2003 computer science graduate from Providence College. The field reps took an immediate liking to Reynolds. They had begun pushing dealers to turn to e-commerce and the kid seemed to have the right stuff. "Honda would bring people in from Japan and say, 'Look what this kid has done,' " Barbara Saccucci said during court testimony here last month. "We make very little if any net profit on new and used-car sales. With Gardiner, I felt we were on the right track to enter the new millennium." ENLARGE Computer whiz Gardiner Reynolds, the son of one of the dealership owners, capitalized on Internet sales to expand the tiny store's customer base. Photo credit: NEAL HAMBERG Vital to bottom line But after complaints from Honda's National Dealer Advisory Board, the automaker decided that beginning April 1, it would prohibit Honda and Acura dealers from selling Honda-backed extended service contracts online. On March 28, Saccucci Honda won a temporary restraining order. The dealer council says Saccucci's low-priced online contracts were undercutting other dealers' in-house sales of service contracts and damaging the brand image. Barbara Saccucci says the online sales keep her in business. "Honda has a pump-in, pump-out list that shows where we have sold out of market and where others have sold in," she says. "We lose sales to other markets all of the time, so we have to work hard on the phone and the Internet to bring in sales. "This is an important part of our bottom line," she adds. "We may have to reconsider keeping the franchise if they take" away the online sales. Saccucci Auto Group was founded in the 1950s by Cora's husband, Michael Saccucci, who died in 1984. Michael was the general manager of a Lincoln Mercury store in nearby Newport, R.I. He acquired the franchise from the owner and in 1968, bought 5.5 acres in Middletown and moved the Lincoln Mercury store to the site. The Honda franchise was added in 1978. These days, the store sells about 80 to 100 new and used Hondas monthly and has 53 employees in the small, aging Automotive News http://www.autonews.com/apps/pbcs.dll/article?AID=/20080908/ANA0... 2 of 4 9/11/2008 14:55 dealership. Cora, working alongside her husband, handled jobs in all parts of the dealership and brought in the girls to keep it a family affair. Each of the women owns one-third of the business. "My husband always told me he would die before me," says Cora, an octogenarian who comes to the store every day. "He told me not to ever take on a partner and, if I do sell the franchise, to keep the land," which court records show is valued at nearly $3 million. The three women hope to pass the franchise on to Reynolds and his 23-year-old cousin, Michael Meyer, Carol's son and the store's sales manager. Building business "When Gardiner came to the business, he knew how to make the Internet work," Barbara said. "Everybody at Honda and at the dealership were happy because they knew this was a new revenue source." Reynolds started in sales when he joined the dealership out of college. According to court testimony, he soon came under the mentoring of Dan Enderley, the dealership's parts and service rep from American Honda. Enderley "felt the Internet was the future; he lit that fire in me," Reynolds said. "He came by often and would take me out to lunch. He knew we were small and thought we were too caught up in the family dealership. He thought the Internet could help us compete with bigger stores." Under Enderley's tutelage, Reynolds launched Hondapartsdeals.com in May 2004. The Web site initially sold only accessories. The next year, Reynolds added Honda's entire parts business, which brings in $200,000 to $300,000 a month. That's the same amount the dealership sells in parts a |
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Replying to: joconnor (Sep 11, 2008 10:57 am) If people are smart enough to find Saccucci Honda's prices, then they're a consumer who is too smart to pay inflated dealer prices.
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Replying to: jet10000 (Sep 11, 2008 2:17 pm) Amen. It is not Saccucci that is "damaging the brand" as the article states. It is American Honda trying to strong arm a small dealer who has found a way to expand their reach nationwide that leaves a bad taste in my mouth. I pray Honda looses and I hope someone at the corporate office is reading this. Shame on them. It is looking more and more like a Maxima for me. Let American Honda keep their Accord. late edit The end of the article is missing from the OP. The article goes on to state only 1% of contracts are sold online. The other 99% are still sold in dealerships. (and Honda is fighting this???) Some dealer in Highland Park, IL complains that if there are issues or misunderstandings, the local dealer's integrity is in question as they have to explain a sale that they never participated in. Other dealers say that online sales are damaging relations between dealers and customers who felt they were being ripped off by dealers who sold inhouse at a higher cost. (gee, I wonder why judging by the 100% markups some have reported in this forum. I'm all for a dealer making money, but good grief. A couple hundred is one thing, but a grand+ over cost --wow!)
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Replying to: traindriver (Sep 11, 2008 8:36 pm) They could avoid this entire debocle by just fixing the price - but that would prevent unscrupulous dealers from taking advantage of ill informed buyers with their check books out on the table. |
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Replying to: joconnor (Sep 11, 2008 10:57 am) Saccucci Honda vs Honda of America Latest News by joconnor I concurr with jet10000, great post j . Our contributor gardinerr should be pleased as well. Not only free publicity but very informative. Apple cheeked ? Who knew? Glad to see this forum tilt once again to uniformity with other Edmunds forums and again provide a service for those who need helpful information. As always, to purchase or not a personal choice but never pay retail. |
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I like many bought the Honda Care warranty. Can anyone recommend a decent Auto Warranty. I have been looking into Warranty Direct...... Any ideas? Help!
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Replying to: cody2007 (Sep 17, 2008 4:42 pm) |
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Replying to: cody2007 (Sep 17, 2008 4:42 pm)
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Replying to: mitzij (Sep 18, 2008 4:47 am) " The only contract I would ever recommend would be one that is backed by, even if only tangentally-as in HondaCare-by the manufacturer. " I knew we could agree !, though financially sound Warranty Direct's product offers less protection and a higher price than the online sellers of HC EW. Go with the manufacturer product. I |
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Replying to: mksheth (Sep 09, 2008 3:03 am) I want to cancel my EW wich I bought for my new 2008 EXL I bought last Saturday. Can you please give me the process to cancel the EW. THX |
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