MSRP and car dealers

Miscellaneous and Personal Stuff I Must Share
1

Just whingeing away here

Truth in advertising my ass. Christ, MSRP is now just some fantasy bait and switch price. At least for in-demand electics, hybrids and plug in hybrids. I’m in the market for a plug-in hybrid SUV. Think a Toyota RAV4 or Hyundai Tuscon. Both feature MSRP + “market adjustment” of around $3k. Which just means there is a shortage, so use market adjustment to price gouge additional monies. And it means the base out the door price is at least $3k below the advertised price.

MSRP may or may not include the delivery cost to the dealer, which is usually in the $1000 range.

MSRP does not include those silly dealer add-ons like premium floor mats or paint enhancements.

MSRP does not include a cash price versus using the dealer financing option. If you say “I’m paying cash” then suddenly the price goes up. :face_with_symbols_over_mouth:

Feels like a total bait-and-switch. And frustrating since I wanna buy a new vehicle but simply trying to figure out the “real” sales price is a chore.

2

It is an unfortunate truth that car dealerships take advangage of the laws in many states that protect their business model and raises prices for consumers. Why we still accept this in 2023 is a mystery to me. Maybe we’re just used to being screwed over?

3

I have never understood the marketing model for vehicles. I just don’t get the haggling. Almost nothing else in my life involves that, why should buying a car? Tell me what you’re charging and I’ll decided whether or not to buy it.

4

I’ve had the dealer try and ding me for VIN etching and Microdot security so that the parts can be tracked if the car is stolen and taken to a chop shop.

Look, I’m not reassembling my car from recovered components. I have insurance for that. Unless my insurance company is going to offer a discount greater than the cost, I’m not buying it.

5

MSRP has always been a scam. Start your purchase over. Forget everything you’ve done so far.

  1. use the internet to learn as much as possible about the car, its options, it’s current market price.

  2. if needed, use a local dealer to get a test drive. Don’t talk money with them. Don’t even use them for information about options; half the time the salesperson hasn’t even bothered to learn about the merchandise. Test drive the car, thank them, tell them you’re still just looking, then leave.

  3. decide which color and options you want.

  4. call the dealer and ask for Fleet and Leasing Sales. Tell them what you want and ask for a price. They won’t want to spend much time with you which is why step 3. They expect their customers to already know what they want. They won’t haggle but their price is fair and often a few thousand less than you’d pay if you bought it from a salesperson at the same dealer. You can repeat the call to another dealer’s Fleet and Leasing salesperson, but there won’t be much variation.

6

True.

Agree that consulting sites like KBB to find something akin to a fair market price for your area (including all the semi-useless options larded onto new vehicles) is a good idea.

It does seem lately that dealers are less apt to gouge full MSRP (or higher) on new vehicles due to “supply chain issues”.

7

I don’t know how many things you buy that cost $25k and way up, but for me, it’s cars and houses, and both of those involve haggling. I think there’s haggling because of the huge price tag, and that makes it worth it to try and swing the price by a few thousand either way. If I’m buying a $200 smartwatch, I’m not going to invest a ton of time to save $3 or something.

8

Then there’s the “area markup” bullshit. I went to buy a new CR-V in 2005 and ended up looking at an Acura RDX instead. Really liked it. Then I noticed on the sticker an area markup of some significant dollars. I asked him what that was about and he said “well, they’re really popular in Seattle”. Yeah, but I’m in Anchorage, AK, so I’d want that removed. Then I went in to haggle, which I’m pretty good at, and he dragged the sales manager over who told me that the RDX is selling for several thousand over MSRP in Seattle (again!?) and that they wouldn’t negotiate. I went and bought a Chrysler 300 instead.

9

I disagree. The price of a car was never MSRP and was always what the customer and the dealer negotiated. The real bait and switch going on is when after waiting weeks for your car to arrive, the dealer decides to jack up the price thousands of dollars above the agreed to/signed agreement price.

10

This is pretty close to the way I have done it, except for the last part - when you have identified a specific model, options, color, etc, send an email with all that to the “Internet Sales” dept of several local dealers who would carry that car and ask them for a quote. If you are really confident, tell them how much you want to pay for the “Out the door” price - but otherwise just ask them for a quote. Usually one or more will reply to the email and you can go from there. AIUI the Internet Sales depts typically don’t do the whole haggling and “Let me get my manager” bit - they are there to move inventory. When you have a solid quote in hand, make an appointment to go buy the car, and if they pull any bullshit when you get there, walk away.

Another bit of advice, the first thing to settle on buying a car is the price - make them quote you the “Out the door” price with all taxes, fees, etc. Get it in writing. THEN you can discuss financing, if you are paying cash, trade-in value, etc. This whole game they play is to keep the final price opaque so they can play around with you on all the other stuff, but if you land the price first, you have more control over the outcome. My 2¢.

11

The price goes up if you pay cash because the dealership isn’t getting the kickback from the bank or finance company.

When we bought my wife’s new vehicle earlier this year we agreed to finance through a local credit union they go through, which was their second choice after the manufacturer financing. The following month when the payment was due we paid the whole loan off. Cash isn’t always king when trying to buy something.

As a side note when they tried to sell us the extended warranty their big selling point (and written on a large white board) was how this warranty saved their customers something like $75,000 in repairs in the past 5 years. I asked if the brand of cars they are selling needed $75,000 worth of repairs in the last 5 years I may not want to purchase such an unreliable brand. End of that conversation.

12

Here is my one anecdotal experience with buying a new car. We decided what we wanted and we found the car in stock at multiple dealers. We used their online quote tool and said that we wanted the out the door price. We got the quotes from I think4 dealers. We picked the lowest cost one and wrote back confirming that was the out the door price. We said we’d be in with a check the next day and to have it ready. Probably took 15 minutes to fill out the paperwork and handover the check.

Now, this was 11 years ago, but it appears this car manufacturer still lists inventory and still has an e-bid process. I’m guessing this will only work with easier to find cars and e/hybrids will be a bit harder to work this process.

13

Last car I bought new (I’m usually a used-sporty-car-with-dubious-reliability guy) was a decade ago, and I followed Cap’n Carl’s advice without really planning it.

I walked in, said I wasn’t buying right away, but wanted to test drive a couple of options. Did so, got out of there quickly, and later that week i walked in and said “Hi, I’m interested in _____ at the price I saw on your web site.”

Old-school salesman in a plaid polyester sportcoat said "Ohhh, you’ll want Kyle, he’s our on-LINE sales department (I italicized the words he’d grumbled with disdain).

Kyle was great, and rushed the paperwork through, while the old guard shuffled around whispering to each other and glaring at us. I was out of there with a new car in fifteen minutes.

.

eta: The week before, I’d had a really young car salesman that I assumed would be less of a dinosaur, but, no, he’d been trained very strictly by Ankylosauruses.

I’d said I wasn’t buying soon, but asked about a car’s price. He took me back to “his office” (a generic desk out on the sales floor), scribbled on a piece of notebook paper, folded it four times, and told me to open it and tell him my reaction to the number.

Well, my reaction was “Pffft! … You do realize this is more… a LOT more!.. than anyone else is selling this car for, right?”

“Well, that was just to get your reaction. Now we can start working on a price…” and, as he got out another sheet of paper and started dividing it into four quadrants, I said “You’ve been taught some really antiquated selling techniques that aren’t going to work these days. So, BYE!”

14

Holy crap! Was he wearing a checkered jacket, too? When My Beloved and I go car shopping the two things that will make us laugh out loud and walk out immediately are the Four-Square Con and “I will have to run this by my manager, of course. I may have cut you a bit of slack on this deal, but I’m sure there’ll be no problem!”.
Here is a good run down of the Four Square scam: https://www.consumerreports.org/consumerist/dealerships-rip-you-off-with-the-four-square-heres-how-to-beat-it/

15

Art imitating life…

16

Last vehicle I bought, I went into a Herb Chambers dealership, looked at the trucks, found one I liked, and started the process.

The salesman hands me a piece of paper with a grid of different monthly payments. All 84 months, but with no info on the rate or the down payment/trade in (he hadn’t asked me a single question before showing me how low my payments could be).

I asked him what the rate on this was, and he said
“that depends on your credit.”
But you’ve just handed me something with payments on it, you must have assumed some rate to calculate this?
“Those are just examples.”

This went round and round until I stood up, told him he should have asked me what I planned to do (I was a cash buyer*) and went somewhere else.

*And to add to what others have said, you can get a better deal by taking the financing and just paying it off at the first payment. I’ve often wondered if that means the dealer doesn’t get their kickback, if paid off too soon

17

The last time I went to buy a car, when the salesman got up to go ‘talk to the manager’ I waited about 30 seconds & then followed him. After all, if you’re negotiating on my behalf shouldn’t I be a part of the conversation & if the manager is the one doing the negotiation why do I need you to shuttle back & forth between us? He was actually quite flustered when I threw him off of his game. I got some free entertainment but not a car there.

18

Heh, I am only willing to negotiate the price of the car and the price of my trade in. I know my credit is good and I know that my wife is going to pay off the car a couple of years early at the very least. At the first mention of a lease or monthly payment, I let them know that I’ll walk out on the next mention of either.

I’ve also walked off the lot because the dealer and I were $4K apart on the value of the trade-in, and I knew my number was at least 2K below what was being asked for by retailers for the same model, year, and options. By the time I got home there was a message on my answering machine that they’d give me what I was asking for on my trade-in.

I have paid MSRP on a car that was difficult to find (that particular model and package was rare and didn’t stay on the lot long), or on a car that I had ordered. In those cases, you don’t really have much leverage, but you get exactly what you want.