Prisoners in the enemy camp - Page 3
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Thread: Prisoners in the enemy camp

  1. #21
    crv|oc Rank: Junior Wildcat's Avatar
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    Quote Originally Posted by VIVADUDE View Post
    I once bought a Mazda truck from an Acura dealer.........
    Our Acura was bought at a Toyota dealer, and had been a trade-in at the same company's Infiniti dealer a few months prior. Our blue CR-V came from a Dodge dealer, where it had apparently sat for a while and was finally discounted way below the going price. I think the Accord slithered out from under a rock somewhere.

    Quote Originally Posted by JB in AZ View Post
    With that said, I also have had a similar experience to Mike728's where a vehicle I traded in sat for months and months on a dealer's lot, and finally was priced below what they gave me for it. The manager who makes the decision to "buy" the trade-in is human, and considering how many there are through out the US and Canada, I'm sure there have been many "mistakes" like this made in appraisals.
    Maybe not so much a mistake, but they wanted your deal to go through, and they took a gamble on the vehicle selling soon, at a price they could live with. Thing is, the local demand for a model can change month by month. It also may matter what time of year it is available for sale, such as, around the time the next year's model is released. And it costs the dealer money to keep it on the lot--a very general figure I'd heard years ago for carrying inventory was a cost of about 1.5% per month. So each month it sits, the dealer is losing money. So rather than hang onto it for another few months, they'd rather move it out even if they lose some money on it.
    2009 CR-V EX-L / 2009 CR-V EX-L #2 / 2004 Civic LX / 1997 CR-V LX / 2002 Accord EX-L V6

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  4. #22
    crv|oc Rank: Junior
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    Quote Originally Posted by JB in AZ View Post
    Some posts here are only critical, of everyone and everything, and are intended to incite.

    I certainly have been sucked into responding to their baiting style in the past. I attempt to only write positive and helpful posts, and to not reply to overly critical posts, and posts that only intend to incite.

    With that said, I also have had a similar experience to Mike728's where a vehicle I traded in sat for months and months on a dealer's lot, and finally was priced below what they gave me for it. The manager who makes the decision to "buy" the trade-in is human, and considering how many there are through out the US and Canada, I'm sure there have been many "mistakes" like this made in appraisals.

    Most of us know the dealer's business model demands that they make money. Some of us accept that just as we know a restaurant charges many times more for a hamburger and a soda than we can make it ourselves at home. Some of us, who are able to do so, also prefer the newest safety features and economy that new cars offer, knowing that when we trade in after a few years, we have helped other working folks feed their families. (ok, that part may be a bit of a stretch)
    I know you're not talking to me, as my posts are intended purely to dispel misconceptions and help folks understand how these things really work. Of course there are as many variations in examples, on individual deals, as there are dealers. But the pattern is pretty much standard. I am only trying to contribute, though some folks might feel they have to take it personally. That said, you state that your trade in was finally priced below what they gave you for it. Nope. That's just what they told you they gave you for it. In reality they just showed that on paper, and hid their profit in the numbers on the new unit. That is SOP, ask any car salesman friend. Also, you are more likely to be helping the dealer finance his pro sports team.
    Larry


    Now that I've learned my lesson, I'm supremely confident that next time I'll make a different mistake.


    2007 CR-V EX-L AWD Green Tea Metallic
    1991 Ford F250 Lariat Supercab LWB 4X4, 460 AT

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  6. #23
    crv|oc Rank: Junior
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    Quote Originally Posted by Wildcat View Post
    Maybe not so much a mistake, but they wanted your deal to go through, and they took a gamble on the vehicle selling soon, at a price they could live with. Thing is, the local demand for a model can change month by month. It also may matter what time of year it is available for sale, such as, around the time the next year's model is released. And it costs the dealer money to keep it on the lot--a very general figure I'd heard years ago for carrying inventory was a cost of about 1.5% per month. So each month it sits, the dealer is losing money. So rather than hang onto it for another few months, they'd rather move it out even if they lose some money on it.
    That system you are talking about is called a floor plan. Dealers actually use it to float a long term loan, using somebody else's money backed by the Carmaker, as part of the franchise agreement with the factory. This applies to new units only. It's a revolving system that depends on total units sold to keep it going. The used car portion of the business operates independently, and works like any other used car outlet, except that they have direct access to their own trade-ins when they want it. They only take that option when they have already made an excellent profit on that unit, or when they already have a buyer lined up, such as an employee. They never lose money on any car, used, or new.
    Larry


    Now that I've learned my lesson, I'm supremely confident that next time I'll make a different mistake.


    2007 CR-V EX-L AWD Green Tea Metallic
    1991 Ford F250 Lariat Supercab LWB 4X4, 460 AT

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  9. #24
    crv|oc Rank: Senior
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    Quote Originally Posted by kloker View Post
    That system you are talking about is called a floor plan. Dealers actually use it to float a long term loan, using somebody else's money backed by the Carmaker, as part of the franchise agreement with the factory. This applies to new units only. It's a revolving system that depends on total units sold to keep it going. The used car portion of the business operates independently, and works like any other used car outlet, except that they have direct access to their own trade-ins when they want it. They only take that option when they have already made an excellent profit on that unit, or when they already have a buyer lined up, such as an employee. They never lose money on any car, used, or new.

    Could not agree more.
    2017 stripped EX-L - unmolested by the dealership
    Built July 2017, Indiana USA

    MAN LAW - raise your hood once a week and have a look

  10. #25
    crv|oc Rank: Senior
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    Quote Originally Posted by crv383 View Post
    Could not agree more.
    Dealers make their most money on service.

    Here's something interesting for those of you thinking car dealers are making huge profits on sales:
    https://www.autonews.com/nada/auto-d...ions-nada-says

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  12. #26
    crv|oc Rank: Sophomore
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    Quote Originally Posted by Mike728 View Post
    Dealers make their most money on service.

    Here's something interesting for those of you thinking car dealers are making huge profits on sales:
    https://www.autonews.com/nada/auto-d...ions-nada-says
    If this is the case then when I read some of the posts in which people ask about "My manual says I should do a minor/major maintenance or this service at such and such miles", I always cringe. With the exception of people who abuse their cars or have severe operating routine, then maybe it warrants it, but to me, religiously following the manual's maintenance sounds like kaching to the dealer to me. With all the cars I've owned, I've never bothered to look at the maintenance schedule and I have not had a car that blew up on me. And yes, one of the cars have is a much maligned old model Hyundai.

  13. #27
    crv|oc Rank: Senior
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    Quote Originally Posted by Mike728 View Post
    Dealers make their most money on service.

    Here's something interesting for those of you thinking car dealers are making huge profits on sales:
    https://www.autonews.com/nada/auto-d...ions-nada-says
    Yep! "Back in the day" (and I don't often use that phrase, but it does seem appropriate here!) I ran a service dept of a major GM dealership for many years, so I KNOW how profit/loss works in a new car dealership, as opposed to some posters making statements of fact based solely from a buyer's point of view. Often times a dealer will take a loss on a new vehicle sale to get the volume up so they might make their tiered sales "bonus" incentive for the month/quarter, which also dictates their factory allotment of popular vehicles they want for their inventory.
    2019 Acura RDX Advance Pkg
    Previously owned Hondas:
    2018 CR-V Touring 2WD (Traded 1/22/19 for '19 RDX)
    2014 CR-V EX-L Navi
    2001 Civic EX 5 Spd

  14. #28
    crv|oc Rank: Senior
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    Post deleted out of respect.
    Last edited by crv383; 04-10-2019 at 11:00 AM.
    2017 stripped EX-L - unmolested by the dealership
    Built July 2017, Indiana USA

    MAN LAW - raise your hood once a week and have a look

  15. #29
    crv|oc Rank: Freshman
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    Quote Originally Posted by JB in AZ View Post
    Often times a dealer will take a loss on a new vehicle sale to get the volume up so they might make their tiered sales "bonus" incentive for the month/quarter, which also dictates their factory allotment of popular vehicles they want for their inventory.
    Makes complete sense given how the manufacturers manage incentives and vehicle allotments with the dealerships. The car manufacturers have gotten quite sophisticated in their incentive and quota programs over time.

    The dealerships have to move cars, and at the end of the day it is not the price of any given car that matters in the context of making their monthly and quarterly top line numbers. At the dealer where I buy my Hondas, the sales staff get a flat fee per car sale, and they too have an incentive ladder that pays out an increasing bonus on top as they exceed their target sales quota.
    Last edited by williamsji; 04-10-2019 at 10:54 AM.

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  17. #30
    crv|oc Rank: Freshman
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    Quote Originally Posted by Mike728 View Post
    Dealers make their most money on service.
    I agree. The car sale is their service departments main lead generation channel for targeting ads, coupons, sales, etc. to get you into their shop too.

    And in my experience, Honda appears to keep dealerships on a short leash where customer satisfaction on maintenance and service is concerned. I see the service reps bending over backwards at the dealership where I have my Hondas serviced to insure that I am completely satisfied with any service or maintenance performed, and sure enough.. a Honda survey pops in my email within a week asking me to provide feedback on some very well thought out quality monitoring. And I can see the Service reps have been trained well as they are focused on everything that will get surveyed by Honda in the follow-up survey. Does not mean the dealerships are perfect in terms of service, but I do respect that Honda keeps close tabs on their service cycles with customers.

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