Is the economy really that bad?

[Dean]

My wife's car is 10 yrs old and over 125k miles, so we decided to go look around for a possible replacement. She like the looks of the new Camaro so we stopped at the Chevy dealer in Springfield. There where 8 on the lot and where all the LT models. I looked at the sticker and most where around $27-$29K, which I didn't think was too bad.
But here is the kicker, next to the factory stick was a dealer sticker marking the car up another $8k for "Market adjustment". I have never paid sticker price for a new car, and all be damned if I pay more than sticker. I find it hard to believe that in these economic times, there are people out there willing to pay that much more. (Thus, is the economy really that bad)
Anyway, after looking at the Camero, it was decided the back seat was too small. We stopped at the Dodge dealer yesterday and she liked the Challenger R/T, she said it was more her size. So it looks like that is what we may try and trade for.

 

[wsuffa]

Re: Is the ecomony really that bad?

Apparently the Camaro is in very high demand - GM can't make enough.

Supply-demand (manipulation of inventory?).

There were cases of "additional dealer markup" on hybrids like the Prius last year, and it's still very hard to get most hybrids without paying full sticker.

 

[jesse]

I've seen it on motorcycles -- dealers telling me that on a $3500 MSRP bike they'd want $4500 because it is in demand. I walked out.

 

[Anthony]

Wait a while and the prices will go down as supply and demand equalize.

 

[Obi Heed Kenobi]

Plus, I wonder if the car market has reached the point where it's better to charge a premium for the few cars that will be sold, rather than trying to sell a whole bunch of cars at pennies on the dollar?

 

[SCCutler]

I have always disliked additional dealer markup (it's their right, I guess, but it still irks me), and have always avoided doing business with dealers which apply it.

It is also found in another form, called (variously) “fabric sealant,” “paint protectant,” “window etching,” “cargo mats,” “floor mats” - you name it.

When my wife and I were shopping, in Southern California, for a Jeep Cherokee when they were new and very hot (this is a while back), most dealers had several thousand dollar add-ins for “Additional Dealer Markup.” At least they were honest. In the process, we came across one dealer which had a row of dusty, unwanted Eagle Premiers (remember them? Neither does anyone else...), and they had big signs in the windshields advertising $2,500 rebates (these cars had been sitting for a LONG time)... and, next to the price sticker on the side window, was an “additional dealer markup” sticker of $1,500.00. The salesman did not understand why I found that funny.

We ended up finding a dealer which would actually deal from the original sticker and not “pack” the car with extras, and we bought from them right away.

The market’s the market, but I’d opt not to do business with dealers in that mode. Just me.

 

[wbarnhill]

When the MINIs were flying off the lots because of the gas hike last year, I was glad that the dealer didn't charge me anything over MSRP. Apparently in the larger markets like LA and Las Vegas, it was totally common to see "Market Adjustment" of 1000$ or 1500$ tacked onto the sale price. Funny thing was, if you ordered it from MINI instead of buying off the lot, you got it without that market adjustment and just like you wanted it. Option #2 was to go to another dealer outside the absurd market area, tell them what you wanted, and when they looked it up and saw a vehicle just like you want is at Dealer #1, they'd call, trade the car for a production slot, and you'd still get the car without the market adjustment.

Dunno how that'd work with a Camaro though, I'm guessing you can't factory order one of those...

 

[EppyGA]

Gee, remember the P.T. Cruiser

 

[Anthony]

When the Toyota FJ Cruiser first came out, the dealers were charging premiums over sticker. You couldn't even get a brochure. Now they are sitting on lots with deep discounts.

 

[Dean]

Dunno how that'd work with a Camaro though, I'm guessing you can't factory order one of those...

Yes you can, but the two dealers I talked with said 6-8 months to get it.

 

[wsuffa]

I have always disliked additional dealer markup (it's their right, I guess, but it still irks me), and have always avoided doing business with dealers which apply it.

It is also found in another form, called (variously) “fabric sealant,” “paint protectant,” “window etching,” “cargo mats,” “floor mats” - you name it.

When my wife and I were shopping, in Southern California, for a Jeep Cherokee when they were new and very hot (this is a while back), most dealers had several thousand dollar add-ins for “Additional Dealer Markup.” At least they were honest. In the process, we came across one dealer which had a row of dusty, unwanted Eagle Premiers (remember them? Neither does anyone else...), and they had big signs in the windshields advertising $2,500 rebates (these cars had been sitting for a LONG time)... and, next to the price sticker on the side window, was an “additional dealer markup” sticker of $1,500.00. The salesman did not understand why I found that funny.

We ended up finding a dealer which would actually deal from the original sticker and not “pack” the car with extras, and we bought from them right away.

The market’s the market, but I’d opt not to do business with dealers in that mode. Just me.

Yep. Just the way I handle things.

Walked away from a couple of dealers in SA - they had "etched" the windows with "theft protection" and done the rustproofing thing and thought that was worth an extra $1500. They wouldn't deal when I said "no", so I walked.

Bought a certified used car here in DC last fall, ended up with an OK price and decent car. The dealership, however, made me wonder if I should be certified after the experience. They weren't selling many cars, yet the dealer made is as difficult as possible to get the deal done. Nearly 3 hours.... mostly waiting for paperwork, having to listen to the pitch for additional services (rustproofing, extended warranty, sealers, etc - finally led me to say: "well, if the car is so crappy that I need all that stuff, maybe I better think twice or find another kind of car"... at which point they backed off).

There are a couple of buying services that avoid a lot of that crap, the key is finding the right one....

 

[Mxfarm]

Wait a while and the prices will go down as supply and demand equalize.

At some point the prices will go up because of the low production - lower the volume - and the price will have to go up, to cover the fixed cost and higher vendor costs.

I.E. amortize the employee pension/medical over fewer cars.

marc

 

[nddons]

About a month ago I needed to replace my wife's Explorer. We were also looking at an Expedition, and learned that they are VERY, VERY hard to come by these days. In the Milwaukee area, there were only 3 or so. In the Quad Cities, there was only 1. I learned they shut down a line, and are now making them on the F Series Super Duty line.

Anyway, the V8 Expedition was 1 mpg better than the V6 Explorer, so we started to look more closely at a single Expedition that came off the truck while we were at the lot. Through my EAA membership, I got X-plan pricing (basically below cost) and we closed the deal. Ford was very anxious to sell.

 

[ScottM]

I just bought a new vehicle. I had been looking since January and have run across this very thing lately. The dealers are not selling cars and are trying to make their profits from the few that they are able to sell. The logic sorta makes sense in that they have to increase margins to keep the dealership open. So they hope that they will sell to people who HAVE to drive away. I was fortunate that I did not need to buy so I kept working the system. I finally was able to find a deal by taking delivery at the last day of the month on a car that they had in inventory for 4 months. Even then the best I was able to negotiate was invoice with a couple of freebies.

 

[wsuffa]

I just bought a new vehicle. I had been looking since January and have run across this very thing lately. The dealers are not selling cars and are trying to make their profits from the few that they are able to sell. The logic sorta makes sense in that they have to increase margins to keep the dealership open. So they hope that they will sell to people who HAVE to drive away. I was fortunate that I did not need to buy so I kept working the system. I finally was able to find a deal by taking delivery at the last day of the month on a car that they had in inventory for 4 months. Even then the best I was able to negotiate was invoice with a couple of freebies.

That's a standard ploy, Scott, to get more money from you.

I had a dealer try the same thing with me one time back in the '80's - he claimed that I'd have to pay more for a car off the lot because "he was paying interest on the car to have it there". But if I wanted to wait "8-12 weeks", then maybe they could order one at a little lower cost.

I walked and bought from another dealer. And paid the price that I would have for special order from the first dealer. The second one realized that it was costing him money every day a car sat on his lot.

 

[dmccormack]

Buying a car for near cost requires a few simple steps:

1. Online research (cars.com and edmunds.com)

• You will not be seeing actual "dealer invoice." But you will get close.
• Keep in mind the closer to base model car you are shopping for, the lower the margins (in other words, the dealer doesn't make as much on the L model as he does on the GLX)

2. Test drive several cars -- even the same model -- at several dealers.

• Tell the dealer up front "I'm doing research and will not be buying today. But depending on my experience here I will or won't be back."
• If they won't let you test drive, walk.

3. Write up the list of cars and amounts you are willing to pay for each. Make this your bottom line, will not budge, not one penny over amount. This is Offer price.

4. Compare your amounts with the invoices you looked up. If you were realsitic, the amounts will be close. Add $500 to your final figure (admit it -- you will go at least $500 over your bottom line). This is Final price.

5. This final figure is your shopping price. Go back to each dealer that let you test drive. Tell them you want car X for offer price. When he/she says, "I need to talk to my manager..." let him/her know "You have one trip to your manager -- after that I leave -- I have a list of dealers I am makiing this ofer to." And mean it.

6. She will come back with a higher number. If it's at or below your final price, you are both happy. If it's above your final price, say, "I can give you up to $500 on my offer as markup -- I get a car, you get a sale, and I'm out of your hair and you can sell the next person. But you have to take this offer -- no more talking to the manager.."

"I can't do that..."

6. You reply: "OK, see ya.. " and WALK OUT!

In 99.99% of dealerships in this country you will be chased by the dealer begging you to come back inside. Only return on one condition -- to sign papers to purchase the car at the Final price.

 

[ScottM]

That's a standard ploy, Scott, to get more money from you.

I had a dealer try the same thing with me one time back in the '80's - he claimed that I'd have to pay more for a car off the lot because "he was paying interest on the car to have it there". But if I wanted to wait "8-12 weeks", then maybe they could order one at a little lower cost.

I walked and bought from another dealer. And paid the price that I would have for special order from the first dealer. The second one realized that it was costing him money every day a car sat on his lot.

Oh I have had that doe before too. My favorite was where he tried to add extra costs for advertising and electricity for lighting the car on his lot. I'll haggle with those guys for another two or three hours with no intent to buy when they pull that BS. I figure if they think I am that stupid they deserve to be distracted from making money.

My favorite thing I did to a dealer who was screwing around was that we had the entire deal written up, nothing signed, when I get a cell phone call from that dealer. The call was an unsolicited telemarketing call to get me to come buy from them. It was a recorded call.

I got the sales manager and to his face told him the deal just went south because of his telemarketing plan. I ripped up the deal and walked. I never heard from them again.

 

[Anthony]

At some point the prices will go up because of the low production - lower the volume - and the price will have to go up, to cover the fixed cost and higher vendor costs.

I.E. amortize the employee pension/medical over fewer cars.

marc

The price will only go up to what the market can bear. Cost is not as much the driving factor as the market. Automakers sell cars at a loss all the time.

The Camaro is the new, hot car. Many want them now to stand out and its really just a psychological/ego thing. When that wanes, no more dealer mark ups.

 

[mikea]

That "dealer markup" thing is an old story. I'm old enough that I remember when EVERY single Honda dealer was doing that after the first gas price shock - in the days when Chicago had one Honda dealer and he had no cars in stock. Any fool that pays that money might as well just run into the mens room and throw several $thou down the toilet. You lose enough money just driving a new car off the lot without adding to the rip off.

Your right. You would think this nonsense wouldn't be around when dealers don't even know if they can stay open. They know they can sell that car at near list to another dealer if things get tight.

Dean, check out the *real-soon-now* Ford Taurus SHO. It had plenty-o-room and kicks butt.

http://www.fordvehicles.com/2010taurus
http://jalopnik.com/5147709/2010-ford-taurus-sho-the-sleeper-awakens

This is a laugh:

You could trick it out!

 

[mikea]

I have always disliked additional dealer markup (it's their right, I guess, but it still irks me), and have always avoided doing business with dealers which apply it.

It is also found in another form, called (variously) “fabric sealant,” “paint protectant,” “window etching,” “cargo mats,” “floor mats” - you name it.
...
We ended up finding a dealer which would actually deal from the original sticker and not “pack” the car with extras, and we bought from them right away.

The market’s the market, but I’d opt not to do business with dealers in that mode. Just me.

This is where it is real nice to use an employeee EBP plan or a group deal through Costco or Sams Club.

You say what you want and how it should be configured and a dealer who will do it gets in touch. You walk in with a price and they may try, but they really can't add a thing. They have to give you the car for that price.

I bought my Mustang like that but from a dealer where my sister-in-law knew the general manager. I made up my own spreadsheet of the Edmunds "dealer cost" for each option I wanted on the car. She faxed it to them, he told his guys to do the deal, and I got $400 off of that!

Right now, I'm getting the bug for a used full size Lincoln Town Car or Mercury Marquis luxo-boat to replace my Sable. Somebody stop me.

 

[mikea]

This is where it is real nice to use an employeee EBP plan or a group deal through Costco or Sams Club.

You say what you want and how it should be configured and a dealer who will do it gets in touch. You walk in with a price and they may try, but they really can't add a thing. They have to give you the car for that price.
...

I just looked. Ford gives us about 7% off of MSRP... not like you could negotiate a better deal on your own or anything. Considering they add $895 for destination charges and we pay nearly 10% state sales tax....

....Do people really buy these things?

 

[nddons]

I just looked. Ford gives us about 7% off of MSRP... not like you could negotiate a better deal on your own or anything. Considering they add $895 for destination charges and we pay nearly 10% state sales tax....

....Do people really buy these things?

Mike, if you're an EAA member, look into their X-plan pricing. You have to jump through minimal hoops, like getting a PIN number from EAA, but in my case the pricing was lower than Edmunds dealer cost pricing.

 

[mikea]

Mike, if you're an EAA member, look into their X-plan pricing. You have to jump through minimal hoops, like getting a PIN number from EAA, but in my case the pricing was lower than Edmunds dealer cost pricing.

Same very same deal. They offer it to lot of affinity groups.

I'd like to believe any shmoe can do as well or better off of MSRP. When I got my $400 below Edmunds dealer cost 10 years ago it was a lot more than 7% off of MSRP.

 

[dmccormack]

Same very same deal. They offer it to lot of affinity groups.

I'd like to believe any shmoe can do as well or better off of MSRP. When I got my $400 below Edmunds dealer cost 10 years ago it was a lot more than 7% off of MSRP.

Read my previous post and you'll fuhgetabout MSRP.

 

[Ghery]

Way back in 1989 I was looking for a Ford Escort. Never owned a Ford before, but I'd had good luck with them as rentals and wanted a cheap commute car. One dealer had a 4 door with air conditioning and cruise that had been on his lot for MONTHS. I knew what I would pay at another dealer for a 2 door w/o air and cruise, neither of which mattered to me for a commute car in Silicon Valley. So, I offered the salesman that lower price as that was all the car was worth to me. He wandered off to talk to the manager. I told my wife, "Watch. He'll be gone for about 5 minutes, then will come back with the offer wadded up. When he does, we walk." 5 minutes later, he came back with it wadded up, and we left. I didn't care, I was going to get the other one for the price I was willing to pay. Oh, and that 1988 1/2 Escort wound up being the most reliable car I'd owned until my Jeep Wrangler came along.

When we bought our 1997 Jeep Grand Cherokee we were looking at comparible vehicles from Chevy and Ford. Didn't like the Chevy, there was a bump in the floor on the front passenger side for the cat underneath, right where my wife liked to put her feet. So that didn't go anywhere. The Ford Exploders looked OK. Got an offer from the Jeep dealer that looked OK, but I thought they could do better. Headed for the door to visit the Ford dealer one more time and didn't make it out before the price on the Jeep dropped to what I was willing to pay.

The Wrangler was the easiest. By that time I knew about Edmunds.com and had the "invoice" price for the vehicle and all options. Dealer was selling fixed price - invoice + $500. That was better than the Edmunds suggested negotiated price. Easiest car buy I've ever done. And 10 years and 145,000 miles later, that Wrangler is still on the road.

I really don't like shopping for a car. Maybe that's one reason (not the only one) I run them until they won't run anymore. Minimizes dealing with car salesmen.

 

[mikea]

Read my previous post and you'll fuhgetabout MSRP.

Even when they chase you down they aren't going to stop trying to rip you off as long as they're breathing.

"Your trade in isn't worth as much."

"Just sign this form with the blank boxes, the rustproofing, fabric protector, dealer installed...."

Like the radio ad I heard: "Is BMW still offering financing? Yes! In fact we can put you a new BMW for the same as ten years ago! That's right! We're offering the same monthly payment on a brand new 5-series as 10 years ago!"

I have a hope that anyone who could buy a new BMW would ask how many payments.

 

[imQ]

Reading this thread makes me glad I work where I do. Pick out what I like, send in the email to GM or Chrysler, (haven't tried Ford yet.) and get a PIN, and a fixed price, then go get it. The salesman gets $50, period. And my blood pressure loves me for it.

 

[Geico266]

I was just out looking at new Toyota pickups. Nice trucks. Sales man when with me on a test drive and wanted me to "Stop over there, and turn the wheel sharp and hit the gas." This was to show me the stability control system. I then called the sales manager and told him why I will not be buying a new Toyota pickup from his dealership.

Brand new trucks being treated like a "red headed step child" right off the dealer's lot in Lincoln, NE. I have nearly 300K miles on my diesel Dodge CTD. I didn't get that kind of miles from a Dodge by beating the hell out it, and I'm certainly not going to buy a new truck that I know has been beat before it is broken in.

 

[tdager]

In answer to the question....no it is not that bad.

At least not according to what I have seen in the crowded restaurants, crowded shopping centers, etc.

What is different is that people are still spending but it is actually more in line with that they freaking make, not some dufus making 30K a year buying a freaking Hummer. We had a FALSE economy for the last few years and now we are back to reality.

 

[ScottM]

Reading this thread makes me glad I work where I do. Pick out what I like, send in the email to GM or Chrysler, (haven't tried Ford yet.) and get a PIN, and a fixed price, then go get it. The salesman gets $50, period. And my blood pressure loves me for it.

Well you are missing out on the fun of buying a new car. I enjoy it. But I make sure when I walk into a showroom I have and keep the upper hand. I would hate to be in a position where I HAVE to buy a new car. That stinks. It has been more than 20 years since that has happened to me. It was not fun then and it is not fun now.

 

[dmccormack]

Even when they chase you down they aren't going to stop trying to rip you off as long as they're breathing.

"Your trade in isn't worth as much."

"Just sign this form with the blank boxes, the rustproofing, fabric protector, dealer installed...."

Like the radio ad I heard: "Is BMW still offering financing? Yes! In fact we can put you a new BMW for the same as ten years ago! That's right! We're offering the same monthly payment on a brand new 5-series as 10 years ago!"

I have a hope that anyone who could buy a new BMW would ask how many payments.

Never, ever trade a car.

Sell privately and make market value or more, not blue book wholesale value.

For example - A few years ago my 1997 Jeep Wrangler wholesale value was $700.

I sold it for $4,000.

Yes --- three thousand, three hundred more.

And the guy that bought it was estatic.

 

[mikea]

Reading this thread makes me glad I work where I do. Pick out what I like, send in the email to GM or Chrysler, (haven't tried Ford yet.) and get a PIN, and a fixed price, then go get it. The salesman gets $50, period. And my blood pressure loves me for it.

That's the same X plan deal. As above I think you could get a better price on your own.

 

[mikea]

Never, ever trade a car.

Sell privately and make market value or more, not blue book wholesale value.

For example - A few years ago my 1997 Jeep Wrangler wholesale value was $700.

I sold it for $4,000.

Yes --- three thousand, three hundred more.

And the guy that bought it was estatic.

I bought the Sable what it was worth as a trade in. 4 years later Kelly says I can sell it for twice as much.

I've got fingers crossed that Click and Clacks "Anything that runs is worth $1000." is true.

 

[CJones]

I've got fingers crossed that Click and Clacks "Anything that runs is worth $1000." is true.

http://www.cars.gov/

I was going to do that with my old pickup, but nothing I wanted would meet the new MPG requirements and I didn't want to take on payments for a new vehicle right now. Oh well, I'm sure someone will make use of the program...

 

[mikea]

http://www.cars.gov/

I was going to do that with my old pickup, but nothing I wanted would meet the new MPG requirements and I didn't want to take on payments for a new vehicle right now. Oh well, I'm sure someone will make use of the program...

Ditto. The Sable, and maybe the minivan - I need to check - get more than 18 mpg.

Once again, I'd be better off being even more stupid than I am.

Could I just poke the gas tank with an ice pick and claim I get lower mileage?

 

[Dean]

In answer to the question....no it is not that bad.

At least not according to what I have seen in the crowded restaurants, crowded shopping centers, etc.

What is different is that people are still spending but it is actually more in line with that they freaking make, not some dufus making 30K a year buying a freaking Hummer. We had a FALSE economy for the last few years and now we are back to reality.

I tend to agree with you, I know a lot of people have lost their jobs, but I think some companies were using the economic down turn as a way to cut staff.

 

[Obi Heed Kenobi]

I was just out looking at new Toyota pickups. Nice trucks. Sales man when with me on a test drive and wanted me to "Stop over there, and turn the wheel sharp and hit the gas." This was to show me the stability control system. I then called the sales manager and told him why I will not be buying a new Toyota pickup from his dealership.

Brand new trucks being treated like a "red headed step child" right off the dealer's lot in Lincoln, NE. I have nearly 300K miles on my diesel Dodge CTD. I didn't get that kind of miles from a Dodge by beating the hell out it, and I'm certainly not going to buy a new truck that I know has been beat before it is broken in.

I have had the exact same experience, and the exact same thought, before. If they have a dedicated test-drive vehicle for that, fine - but I don't know of a single dealership that does.

They say you don't need to break in vehicles anymore, but I don't buy it.

 

[imQ]

That's the same X plan deal. As above I think you could get a better price on your own.

Not yet. I've hit other dealers and tried to beat the price before. The X plan is only one of the price levels offered. I work at the dealer parts warehouse, and I'm registered with GM Ford, Chrysler, & Nissan as an employee. Works wonders.