Employee pricing: Yay or nay?

It seems that all of the American auto-makers are offering some sort of “you pay what we pay” deal right now. Do you think that this is any better than what you could negotiate for? Does this essentially make all the dealerships “no hassle - no haggle” places?

The whole thing must be working well for the dealers and auto-makers or else they wouldn’t by copying each other. I’m just not so sure that what’s good for them is also good for me.

Your thoughts?

If they are actually giving the employee prices, then yes, it’s a haggle free deal.

I’ve got a friend that works for Ford. He’s allowed to give away something like 4 or 5 ‘A’ plans a year and 10 or so ‘X’ plans. (I’m not exactly sure on the number of plans, and I think it changes based on sales or employee performance, etc.)

Anyway, I bought my car using one of the plans. It saved me at least $3K I’d say. No haggle at all. I walked in, gave them a pin number I received from my friend, they showed me the invoice from the factory, and that’s the price I paid. Easy as pie. The only problem I had was finding a dealership that would accept the plan or that had the car I wanted (2002 Ford Escape.) I purchased it in late 2001 when the Escapes were flying out of dealerships so I guess they didn’t wanted to lose their profit.

The huge discounts have actually made me consider buying a new car – pickup, actually. This is a huge change in my personal philosophy. There’s no way I’d buy a new vehicle without these huge discounts.

For example, I had been considering buying an “island” truck. Some old pickup with a few good years left in it, but ugly as hell and not really safe to take off the island. Local use only, so if you have to walk, you at least stand a good chance of getting picked up by a neighbor. A vehicle that will cost less than $1500.

Dodge is running a sale right now that’s got me considering a new, $24,000 pickup. Why am I considering it? Because they will sell it to me for $18,000.

That’s a discount that I just can’t ignore. Will I buy the new pickup? Probably not. I’m not keen on adding a $300 loan payment to my current financial situation.

But I’m thinking about it. Sure is a pretty new truck, and I like the features…

FWIW I work for one of those companies (I work for Volvo, owned by Ford) anyway I got an e mail the other day from the department that adminsters the employee, friends and family pricing. It suggested that if a friend wanted a new Ford then they should probably go to the dealer rather than get the friends and family PIN, as the employee price deal was better. So it looks like a cool deal from here.
A couple of things to note:
Not all models of all cars are included. The super hot car you want may not be included. I am also sure that this pricing is on MY 05 only, no 06s included.
GM kicked this off as a way to get rid of their 05’s. Their 06 model line prices will be lowered to allow them to stop putting rebates on the cars. So instead of having an MSRP of $22,000 -$2,000 rebate, the new MSRP is planned to be closer to $20,000 with NO rebate.
So if you are considering a new car, no time like the present.
(shameless plug) Buy a Ford, I need a raise. :wink:

I just traded my 10-year old Taurus for a new car. The only downside was that they gave me peanuts for a trade in (but my car was starting to experience some serious mechanical problems that would have cost me around $1,500 to fix anyway.) Even with the lousy trade in, I got a brand new car (not a Kia) for less than 10 grand, and no cash down.

Not sure.
But I’m infinitely amused by one commercial that has a bunch of people claiming how proud they are to make and work on such wonderful cars.

And every single one of the people are in advertising (they print their job titles next to them in the commercial). Not a single engineer, designer, mechanic, welder, factory worker, etc. is anywhere in the commercial.

I alwys want to scream back “you don’t make a car. You sell the car, but you don’t make a damn thing. You’re just stealing the credit. Quit telling me how ‘proud’ you are of someone else’s work.”

This looks like the thread to slip this in:

I’ve been looking hard at the Toyota Matrix. The weird thing is that I’ve been finding that it’s not depreciating for being used, or that some used cars are anti-deprciating!

Here’s a hypothetical example of what I’m finding.

2003 Matrix, 30K miles. I figure that’s 10% of the usable miles on a new Toyata (300K being the estimated lifespan). That’s the best 10% too, as you’d think they’d be the least likely to have repair costs.

Realistic price (not MSRP) for 2005 Matrix with same options, according to Edmunds: $15,800. Kelly Blue Book value of used example: $14,300. That’s a 9.5% reduction in price, and that’s ignoring that it’s the sweet miles that are gone, and the 2005 price is probably higher than the 2003 price.

So what’s up with that? Are people just blindly paying this because most won’t number crunch like a big geek (me)? How can a car anti-depreciate? Is there something I’m missing?


My thoughts?

I don’t think the bottom-dollar price changes much, no matter what they call the pricing scheme.

Just keep grinding them with lo-dollar offers 'till they either stomp off, or threaten to have you thrown off the lot. You’ll lose out on some cars, 'cause the salesman (or manager) won’t deal with you. But it’s a great way to “feel around for the bottom” (if you get my drift). Once you’ve figured out the low-end, go to a different lot and start over.

My last few purchases?
2005 Camry: Sticker-27,400; paid 22,500
2000 Chev PU (1-ton crewcab) Sticker-unknown (I ordered it); paid 25,600 (don’t know how I did on this one)
1997 Aerostar: Sticker-22,500; paid 17,000 (note: this one got hail damaged during the negotiations)
1991 Ford Diesel Pickup: Sticker-23,000*; paid 19,500 (didn’t do so great here)
1990 Acura Legend: Sticker 24,600; paid 19,650

*I think this was the price, memory’s a little hazy

I just “built” the truck I have now (a 2005 chevy Colorado) on Chevy’s website and the MSRP is $27,000. I bought mine before the employee discounts incentive for a little over $20,000. I didn’t see anywhere on the site what my discount might be but I can’t see how it’d be less than that.

My whole stance was to wait out the salesman…make him endure long periods of silence (after he got me into his “office”) and force HIM to do the talking. I did a lot of reflecting that day in his office, just not on buying a truck. I think there’s a natural tendancy for people to keep a conversation going and I bet it’s a familiar tactic to a salesman. I just tried it on him.

Hold on there. I work for a manufacturer as a sales manager. I’m very proud of the products which we make. Yes, I never spend a moment on the line, but I’m part of the team.

As a General Motors retiree, I’m mostly happy with it. When GenMot sells lots of their wares, it has to be good for me.

However, our employee discount was a negotiated benefit in our contract. When everybody gets my discount, I no longer have a discount. I’m back to square one, paying what everybody else pays.

We qualify for the GM employee discount anyway b/c we have family that worked for them, but have never used it. I just can’t bring myself to buy a brand new car at this point. However, we also had a friend selling cars at a GM dealership for a while, and he told us that if we were to go buy a new car, we could haggle ourselves a better price than that discount would give us. He claimed that they ask you first if you have the discount, if you do, they give you the price. End of haggling, end of discounts. So it is no-haggle if you go with the discount. BUT he said you can haggle the price lower than that if you are smart and you don’t use the discount. It sounded strange to me but IIRC he said if you use the employee discount you cannot use any other discounts or haggle any more, and at the time he claimed it was better not to use the discount and just haggle your way down. This might have required good credit, money down, or other things I didn’t get into though.

Now this was a few years ago so car pricing and the market for GM cars may have changed by then, I don’t know. I don’t think the GM employee price is necessarily much better than what you can work out for yourself anyway though. Personally I still would rather buy a car that is a few years old and let someone else take the biggest depreciation hit.

Well I’ll take a swag or 2 on this. Perhaps the cost of a new car is set just a bit too high pricing people out of the market, so there is a great demand for ‘amost-as-close-as-I-can-get-to- new’ which would be those 30K mile cars.

Perhaps a redesign has happened and people still want the old style.

Perhaps people want a car that they don’t have to worry too much about. Some may get very upset if a brand new car gets scratched or dinged within the 1st months, but perhaps less so if it was a used car, maybe it came with a scratch. Also people don’t have to park it in the last row to avoid dings.

What this says to me is (a) they’re really, freakin’ desperate to make some sales so they can get people happy about owning an American car and maybe buy some parts down the line, or (b) they’ve been totally ripping us off all these years by charging us $27,000 for something that they can afford to sell for $20,000.

Can’t it be both?

That’s why car manufacturers have always favored short-term rebates on specific models instead of across the board “sales” like the current round. Whether or not they can “afford” to sell at these prices is debatable, but they sure as hell don’t want to sell at these prices.

I vote for (a).

My husband sells Fords in a small town. All of the following information is about Fords, but I imagine it largely applies other manufacturers. Someone said that only certain cars and models are included, which is true. Only 2005 models carry employee pricing, and Mustangs and hybrid Escapes are excluded. Sorry, you cannot order a 2006 Mustang GT with employee pricing. :slight_smile:

Also, “employee pricing” refers to employees of dealerships, etc. (X or Z or D plan; I can’t remember), which has never been the rock bottom deal that A plan pricing for manufacturing employees is. And it’s not “pay what we pay” – they always make something off a sale, even to employees.

Are there good deals to be had? Certainly. Is every car on employee pricing the most awesome best deal ever? No. Before this new gig, most 2005 models (excluding very hot sellers) had rebates on them – sometimes $5-6K. With employee pricing, those rebates are history. On a lower-end model that doesn’t cost as much in the first place, you will probably pay more with employee pricing than you would have with rebates. However, if you are in the market for a higher-end trim level on a more expensive vehicle, you can save quite a bit.

Personally, I hope this goes away as soon as possible – it’s stressing my husband out. While more people are coming through, they tend to have inflated expectations – like getting a new 2006 Mustang for $200 a month with no money down. They are ticked when they find this is impossible, and since they can’t yell at anyone else, they yell at the salesman, whose fault it (really!) is not. And then they find out what they will get for their trade (the market for which has tanked, since the perception is that new is even cheaper than used), and they really yell. It stinks.

YMMV, of course.

Yeah, the salesmen are taking a beating on commissions, but the dealers still make money on holdbacks. I see now where Dodge is also going to offer a $3500 rebate along with the ‘our price’ deal. This has been a bad year for auto sales, so they need to clear the lots. The good prices apply almost exclusively to what’s on the lot. Inventory costs money, and if this stock is still sitting there when it comes time to order the 2006 models, it could get ugly.

If these promotions are successful, (and they appear to be since the other makers are all copying each other) it would seem that in the very near future, it would be a very good time to buy a used car. I’m guessing that the majority of people trade cars instead of just outright buying one. If the dealers aren’t giving much in trade value as mentioned above and they have a lot of cars, the used car price should be fairly attractive, no?