Car Website Valuations

[Eric Sarjeant]

Yes Eric, FL has fixed pricing on warranties and many companies won't sell warranties there.

The problem isn't Zurich vs CNA, but Toyota vs Toyota, Honda vs Honda etc.

When I bought my last Acura, the dealer wanted $2600 for a 7yr/120k zero deductible Acura warranty and $1450 for the 4yr/60k maintenance plan. An online dealer sold me the same warranty for $1100 plus $850 for the maintenance plan. I got the same letter from Acura in the mail and it showed up in the Acura system as if I had bought it from a dealer. That's my gripe.

The guy who doesn't know about ordering a warranty online (let's forget about FL for a moment) ends up paying more than double. That's my gripe.

I think that most everyone would rather pay a little extra to realize that they aren't getting a worse deal than the other guy.

It also has nothing to do with price fixing. Saturn sold cars at a fixed price. Tesla sells cars at a fixed price. The problem is with the auto manufacturer's association that refuses to face the reality of the modern world - and that makes life for honest dealers like yourself a lot more difficult.

Since new car sales aren't a profit center (and haven't been for awhile), what is the problem with creating a realistic new pricing structure with a small profit built in and let the used car sales and service centers make the profit?

Your point is totally understandable logic. Just that it’s the business’ call how they want to do business. You as the customer can choose to go elsewhere of course. I actually agree with you nearly 100% in theory but I disagree completely that we need to tell a business (in any industry) how to do their job. They will sink or swim. Some figure it out the hard way.

 

[desmocruiser]

It also has nothing to do with price fixing. Saturn sold cars at a fixed price. Tesla sells cars at a fixed price. The problem is with the auto manufacturer's association that refuses to face the reality of the modern world - and that makes life for honest dealers like yourself a lot more difficult.

Since new car sales aren't a profit center (and haven't been for awhile), what is the problem with creating a realistic new pricing structure with a small profit built in and let the used car sales and service centers make the profit?

Not certain using 2 examples of car makers that weren’t or aren’t very often profitible in Saturn and Tesla Are good ways to support your fixed price argument.

You or maybe another member were on the right path earlier, the actual consumer hasn’t shown overwhelming interest In fixed retail automotive pricing on New Cars.

The ideology behind it is popular until you are spending your money And most people want a better deal on a new car, even in a fixed price model.

How popular is “how to get a better price on a Tesla“ on Google? I am pretty certain it will auto fill your request.

Any new car purchaser can spend time researching a new car, gain enough knowledge to walk in or dialogue online to one location and make a fair deal likely with no negotiation, but instead my guess is many or possibly most (over 51%) consumers engage multiple dealers in a price beating competition and then complain about the process.

Seemingly with today’s consumers, it takes good dealers that have a business model that will accommodate all customers within the statistical normal distribution to be successful, such as Eric’s And others.

 

[ceb]

Not certain using 2 examples of car makers that weren’t or aren’t very often profitible in Saturn and Tesla Are good ways to support your fixed price argument.

You or maybe another member were on the right path earlier, the actual consumer hasn’t shown overwhelming interest In fixed retail automotive pricing on New Cars.

The ideology behind it is popular until you are spending your money And most people want a better deal on a new car, even in a fixed price model.

How popular is “how to get a better price on a Tesla“ on Google? I am pretty certain it will auto fill your request.

Any new car purchaser can spend time researching a new car, gain enough knowledge to walk in or dialogue online to one location and make a fair deal likely with no negotiation, but instead my guess is many or possibly most (over 51%) consumers engage multiple dealers in a price beating competition and then complain about the process.

Seemingly with today’s consumers, it takes good dealers that have a business model that will accommodate all customers within the statistical normal distribution to be successful, such as Eric’s And others.

Actually, Saturn and Tesla are decent examples. Saturn had a lousy product but Tesla is the buyer's darling and few, if any, people are complaining about the pricing model. Googling "how to get a better price on a Tesla" gives you a couple of pages of ways of reducing your ownership costs, such as renting your car on Turo to make your payments, but nothing about how to get an actual discount aside from tax rebates.

The problem is that we've been conditioned to expect a hefty discount. Since the mid 2000's, we've also been conditioned to expect huge rebates direct from the manufacturer.

And that is why a single dealership trying to do "no-haggle" pricing falls flat unless they have the lowest price possible - which isn't possible.

So while I'm not a fan of Tesla or their "price of the day" pricing structure, the basic premise that every customer pays the same price (this week) regardless of if they are in Des Moines or Los Angeles makes sense.

You're certainly correct that none of this will work until the customer is "reconditioned" to accept that you buy a car like you buy a toaster.

 

[ScotyDosentKnow]

...but you don't buy a loaf of bread or a deodorant directly from the manufacturer.

The problem is the pricing structure. Cars are the only new consumer product that has a flexible price and a decent negotiator gets a better price than a poor negotiator. The sad part is that if the car industry went to a fixed price, then the dealerships would most likely make more money - but the average consumer would also get a fairer price and wouldn't feel fleeced.

When was the last time you bought a tube of toothpaste and said "man, I got screwed"?

Eric - while I agree with most of what you said, I believe that the biggest problem with new car sales is the need to negotiate. When Apple offers you the $99 Apple care, it may be overpriced but that is the price. Go to another Apple store and it is $99. Go to Walmart and it is $99. AT&T, Sprint, T-Mo and VZW all sell the same product for $99.

As I said earlier, no other consumer item requires haggling to get "your" price.

You have obviously never shopped for a mattress.......what a s*** show/racket. Mattress I wanted last week was on "Black Friday Sale"......after 2 hours in the place I managed to get them down $600 off the "black friday price" and free delivery that was $150.00. Couple that with all mattress models are different between different stores......I would rather car shop

 

[Steve1]

Getting back to 200 valuations... does anyone know how accurate the MSRP/invoice/dealer cost websites are? For example car-buying-strateties.com claims that the dealer cost for a 2019 LC is $75,683. How accurate do you reckon that is?

 

[Eric Sarjeant]

Getting back to 200 valuations... does anyone know how accurate the MSRP/invoice/dealer cost websites are? For example car-buying-strateties.com claims that the dealer cost for a 2019 LC is $75,683. How accurate do you reckon that is?

Very close.

 

[Steve1]

Is the rest of that article accurate? Specifically the part where it talks about dealer negotiations and the fact that dealers now expect the consumer to be educated on the actual dealer cost? Makes sense that they should be, and I'd welcome it if they are.

If true, then there's a few 2019's out there selling very close to dealer cost. Reading Eric's earlier post about banana's, it looks like these must be starting to turn brown and the dealers want them to move.

 

[bloc]

It’s November 2019 and even though 2020 model didn’t add anything significant, selling a 19MY in 2020 would be looking a lot like a brown banana from a dealer’s perspective. Knowing that, A few of us would seek out 19s to save some money.

A seller with a product that the buyer knows they need to get rid of.. not ideal for them.

 

[Sandroad]

Very interesting insights in this thread.

 

[rusty87]

It’s November 2019 and even though 2020 model didn’t add anything significant, selling a 19MY in 2020 would be looking a lot like a brown banana from a dealer’s perspective. Knowing that, A few of us would seek out 19s to save some money.

A seller with a product that the buyer knows they need to get rid of.. not ideal for them.

I thought the same thing, but ended up working a better deal on a fresh off the boat 2020 than the left over 2019s in my area a few weeks ago. So I think even this “depends”.

 

[Steve1]

I thought the same thing, but ended up working a better deal on a fresh off the boat 2020 than the left over 2019s in my area a few weeks ago. So I think even this “depends”.

Now that is a surprise. I assume your dealer did not have both 2019's and 2020's on the lot?

 

[tincan45]

Getting back to 200 valuations... does anyone know how accurate the MSRP/invoice/dealer cost websites are? For example car-buying-strateties.com claims that the dealer cost for a 2019 LC is $75,683. How accurate do you reckon that is?

I like to use Edmonds "build and price". Keep in mind 'Invoice' is always a little overstated and there are almost always back-end incentives to the dealer. Especially if it's a previous model year. Knowing just that, you can usually get a pretty good deal at or near invoice without a long drawn-out process. I used to buy a new Tacoma every two years so I got pretty good with build codes and pricing. It was always fun to call a dealer and say "I want a 7544 with OF and TP only" and watch the junior sales guys glaze over.

Education is key. Ask for a build sheet get familiar with all the build options and know exactly what you want before you even start to consider price.

 

[Eric Sarjeant]

It was always fun to call a dealer and say "I want a 7544 with OF and TP only" and watch the junior sales guys glaze over.

Education is key. Ask for a build sheet get familiar with all the build options and know exactly what you want before you even start to consider price.

I’ll take a 6156 in 1F7/42 with no EY please.

 

[tincan45]

I’ll take a 6156 in 1F7/42 with no EY please.

LOL. See - Eric knows!

However, I've seen your builds Eric, and they don't have build codes for that level of amazing!

 

[rusty87]

Now that is a surprise. I assume your dealer did not have both 2019's and 2020's on the lot?

They had two 2019s I wasn’t interested in due to color and/or rear entertainment systems. There are multiple dealers in my area, so it wasn’t so much about an individual dealer’s inventory. Some were quite proud of their 2019s even as 2020s were arriving and selling.

 

[Steve1]

I like to use Edmonds "build and price". Keep in mind 'Invoice' is always a little overstated and there are almost always back-end incentives to the dealer. Especially if it's a previous model year. Knowing just that, you can usually get a pretty good deal at or near invoice without a long drawn-out process. I used to buy a new Tacoma every two years so I got pretty good with build codes and pricing. It was always fun to call a dealer and say "I want a 7544 with OF and TP only" and watch the junior sales guys glaze over.

Education is key. Ask for a build sheet get familiar with all the build options and know exactly what you want before you even start to consider price.

So you mean you deal something like:

1. Email dealer: "I saw you have a 2019 advertised on website X. I'm interested will you please send me the build sheet."
2. Compute dealer price on Edmonds
3. Email dealer: "Looks good, I'd like to offer $X for it, all in" (by all in I mean no dealer fees, etc., only value add stuff).
4. See if they accept?

Seems simple enough.

 

[tincan45]

So you mean you deal something like:

1. Email dealer: "I saw you have a 2019 advertised on website X. I'm interested will you please send me the build sheet."
2. Compute dealer price on Edmonds
3. Email dealer: "Looks good, I'd like to offer $X for it, all in" (by all in I mean no dealer fees, etc., only value add stuff).
4. See if they accept?

Seems simple enough.

Yep, pretty much. But I wouldn't get caught up with what they have advertised or 'on the lot'. Dealers can trade with other dealers or pull from factory allocation. The key is knowing EXACTLY what you want and let the dealer find it. If they can't find it or they find the right vehicle but it has a bunch of additional junk options, let them know, a good dealer will work with you. With the exception of my first 4runner, I don't think I've ever bought a unit on the lot. I've always pulled from allocation and got the options I wanted and none of the port adds and or options I didn't. Land Cruisers may be a little different due to limited allocation, but the process is the same.

 

[Steve1]

Yep, pretty much. But I wouldn't get caught up with what they have advertised or 'on the lot'. Dealers can trade with other dealers or pull from factory allocation. The key is knowing EXACTLY what you want and let the dealer find it. If they can't find it or they find the right vehicle but it has a bunch of additional junk options, let them know, a good dealer will work with you. With the exception of my first 4runner, I don't think I've ever bought a unit on the lot. I've always pulled from allocation and got the options I wanted and none of the port adds and or options I didn't. Land Cruisers may be a little different due to limited allocation, but the process is the same.

Great stuff, thanks. One more question: if the dealer does not happen to be local, say for instance you use the 'get a quote' function on the Edmunds website, is there a delivery charge to get it to your location?

 

[Eric Sarjeant]

Great stuff, thanks. One more question: if the dealer does not happen to be local, say for instance you use the 'get a quote' function on the Edmunds website, is there a delivery charge to get it to your location?

I typically don’t charge to deliver in the Midwest (driving). Yes though. If you want shipped, it adds up, up to $1/mile

 

[CharlieS]

I typically don’t charge to deliver in the Midwest (driving). Yes though. If you want shipped, it adds up, up to $1/mile

Another great option is a fly and drive. Maybe take the secondary roads instead of interstates to keep the RPMs varied for a new car? I've done this with a bunch of harder to find used cars where the best option was far away. Not sure how much you save, but at least those miles are yours and it can make for a fun road trip.