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Bait & Switch and Other Bad Advertising Tactics

222 messages,  Last post on Sep 13, 2011 at 2:30 PM

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Messages Page 21 of 23

#193 of 222 Re: Invoice Sale! [jipster] by jwilliams2

Aug 07, 2010 (11:38 am)

Replying to: jipster (Aug 07, 2010 11:30 am)
Yes, especially if they are not disclosed up front. Every car I have bought I reduced the total price I offered by the amount of the doc fee. And I do recommend shoppers focus on the bottom line.

#194 of 222 Re: Invoice Sale! [jwilliams2] by jipster

Aug 07, 2010 (11:49 am)

Replying to: jwilliams2 (Aug 07, 2010 11:40 am)
Absolutely nothing deceptive about it from the manufacturer
 
If it (Louisville Assesment fee) is an advertising fee... why not call it an advertising fee? I'd say it's because most people feel paying extra in advertising is just another way to squeeze money from the customer. Advertising is a normal cost associated in running a business. It should be included in the invoice price. But, right or wrong in charging the advertising fee... it is deceptive.

#195 of 222 Re: Invoice Sale! [jipster] by kyfdx HOST

Aug 07, 2010 (12:20 pm)

Replying to: jipster (Aug 07, 2010 11:49 am)
It's the dealer's invoice from the manufacturer... If they changed it from the actual invoice, then that would be shady, right? They said they are selling for invoice... Then, they show you the actual invoice... It's not their fault what is printed on it.... or, that it doesn't agree with what Edmunds reports...
 
They know what (Louisville Assessment fee) means.. the document wasn't designed for the consumer.. And, they aren't charging an advertising fee... They are charging dealer invoice..
 
I really don't see anything deceptive about it, at all.... They are charging invoice, and they show you the invoice... Not their fault that the consumer might have a preconcieved notion of what their invoice might be..
 
Plus, if you are using the jipst method, they'll come crawling around with a cheaper price, eventually, anyway..

#196 of 222 Re: Invoice Sale! [kyfdx] by fezo

Aug 07, 2010 (12:38 pm)

Replying to: kyfdx (Aug 07, 2010 12:20 pm)
I suppose. It is annoying after listening to so many "but you don't haggle on the price of a refrigerator" (even though a lot of folks do) and such it strikes me that I've never paid an advertising fee on a refrigerator either. I'm sorry but advertising fees only strike me as a way to advertise one price and actually sell at another. It's not classic bait and switch but it's in the neighborhood.

#197 of 222 Re: Invoice Sale! [kyfdx] by euphonium

Aug 07, 2010 (1:50 pm)

Replying to: kyfdx (Aug 07, 2010 12:20 pm)
Where and how do the Holdbacks figure into the "invoice cost"?

#198 of 222 Re: Invoice Sale! [euphonium] by kyfdx HOST

Aug 07, 2010 (4:01 pm)

Replying to: euphonium (Aug 07, 2010 1:50 pm)
Doesn't matter... the dealer pays the invoice cost, not the consumer...
 
Seriously... I think only Toyota actually includes the holdback as a line item on the invoice.... For all other makes, it's an "off-the-invoice" item that gets credited to the dealer.... probably in aggregate for the month..

#199 of 222 Re: Invoice Sale! [kyfdx] by blckislandguy

Aug 07, 2010 (7:04 pm)

Replying to: kyfdx (Aug 07, 2010 4:01 pm)
Whoa! This discussion is too simplistic. True dealer cost is very hard to establish. I scanned these posts about "invoice" in wonderment. It seemed that most people assumed that the dealer "invoice" was his cost. Then someone mentioned the "holdback" and the host dismissed this rebate to the dealer which can be as high as 2% of the invoice as something that "doesn't matter."
 
Guys, dealer holdback matters a great deal because it reduces the dealer's cost. Knowing the "invoice" total is simply the tip of the iceburg regarding dealer cost. In addition to holdback rebates , there are factory to dealer incentives (AKA "cash in the trunk"), informal arrangements ("If you can move 5 Impalas, we'll try to help you with an allocation for a 'vette"), etc.
 
Moreover, wouldn't it be very helpful to know how long the car has been in inventory? A little detective work on the inventory label might be revealing. The Nashua NH BMW dealer still has a brand new, two year old 2009 750li in stock. If I were looking for a 2009 7 Series, I'd almost rather know that rather than his "invoice". The same BMW dealership has a two wheel drive , V12 760L in stock. When I expressed amazement that they would stock such a car in New Hampshire, I was told " We didn't order it. The factory just sent it to us." in a tone of resignation. All in all, a little work can go a long way in establishing a dealer's basis.

#200 of 222 True Dealer Cost by jchan2

Aug 07, 2010 (8:21 pm)

is always difficult to gauge. It always appears that some dealers are moving cars at steep losses. While the line that new car sales don't provide the profits that it used to may be true, I'm pretty sure a new car dealer is not going to lose his shirt selling new Accords.
 
Besides invoice price, there will always be holdbacks, manufacturer incentives, volume bonuses, etc for dealers to hit. Also, a Hyundai salesman told me recently that no matter the price, Hyundai pays him $100 directly to sell a Sonata. However, I'm sure he receives a percentage of the profit the dealer makes as well.
 
And just because a dealer has had a brand new car sitting on their lot for 2 years does not mean they will deal. I faced a Volvo dealer unwilling to deal on an untitled 2008 Volvo S40 a few months back.

#201 of 222 Re: Invoice Sale! [kyfdx] by jwilliams2

Aug 07, 2010 (10:31 pm)

Replying to: kyfdx (Aug 07, 2010 12:20 pm)
Excellent post, kyfdx. You are 100% correct in that the invoice wasn't designed for the consumer. It is a billing document between the manufacturer and the dealer.
 
And to clear up any remaining misunderstanding about adv. fees, this supports the manufacturers regional ads and can vary by region depending upon the media costs in each market. That is why it is split out on the invoice, because those charges vary by market. The dealer still has to pay for their own local ads, be they print, TV, radio, direct mail, sponsorships, etc. And this cost is included in the price you pay just like other products. When you purchase other products, you do pay for the advertisement in the price. But you are not looking at the internal billing document or invoice between say GE and the retailer. You can't walk into Best Buy and see the invoice on that refrigerator.
 
 And yes, dealers for most brands do get holdback. It is paid to the dealer monthly, quarterly, or even annually to offset the dealers interest or floorplan expense. Otherwise, a dealer wouldn't have any incentive to stock any cars, and only order what they had actually sold. Car manufacturers could not operate that way. And dealers don't talk about it, because the money is basically already offset by this expense. Not to mention that usually the sales department doesn't get paid on it.
 
And as for money paid by the manufacturer directly to the salesperson, known as spiffs, keep in mind the average salesperson sells between 10-12 cars per month, many of them at a minimum commission. Which probably averages $50-150 per car. They are not exactly getting rich, especially when you consider usually only certain models have spiffs, and for only a limited period of time.
 
Rebates and incentives are almost always passed on to the consumer. Most of this information is readily available on sites such as this. If the dealership didn't, they would place themselves in an uncompetitive situation and lose sales.
 
I understand some folks obsession with dealer cost. But it doesn't really matter. It is what they will sell it for that matters. And a total out the door price is the best way to comparison shop while looking for that best price.
 
Car dealers are not charitable institutions. They are in business to make a profit, and have enormous expenses. They simply cannot stay in business without making a sufficient margin on their products.

#202 of 222 Re: True Dealer Cost [jchan2] by jb_turner

Aug 08, 2010 (6:46 am)

Replying to: jchan2 (Aug 07, 2010 8:21 pm)
Why even be concerned about dealer cost, holdbacks, this fee, that fee... etc... What matters is the OTD price.
We all pay an OTD price. Just shop comparing apples to apples for the best OTD price.

Messages Page 21 of 23

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