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Dealer Mark Ups!

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Old 01-31-2003 | 05:51 PM
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Dealer Mark Ups!

Here is a thread between a local Mazda dealer and myself after I went to www.kbb.com and clicked on the "free price quote link". This discussion is the result, enoy.
This is after I asked why they were so much over MSRP.

From Me:

Yes at $5000 over invoice the demand should meet your limited supply and no thanks on the four-banger Mazda-Ford6.

In this economy I will not pay 1 penny over invoice; I would consider a dealer lucky to get invoice for any model car at this point in time. There will be people that over-pay for this car so enjoy the influx of lunk-heads while they last.

From Dealer:

rfowler@sunnyvale.mazdaleads.com wrote:

Hi Mr.

The reason for the markup is the extremely limited supply, All vehicles in limited supply are marked up in this fashion The hummer H2 is 7 to 10 thousand over msrp the chevy ZO6 is 6 to 9 thousand over msrp when the new ford thunder bird first came out they sold for as much as 56 thousand dollars. and the list goes on and on. I think if you try other dealer web sites rather then on line buying services you will find similar prices besides if they have no way to get the car what difference dose the quote make for instance some online buying services are quoting msrp on there web sites but can they actually get the car if mazda dealers won't sell it for that as for the deposit this is the beginning of the purchase process and this number is not out of line for down payment . If at delivery the customer wants 100% financing arrangements can be made at that time. IF you are looking for a more reasonably priced car we would be happy to sell you any in stock Mazda6 for 500.00 over invoice. This is a sport sedan car and driver compared to the BMW 3 series and the AUDI A 4 for more information on the new Mazda6 go to our web site at http://www.sunnyvalemazda.com
Thanks Rob

Robert Fowler
Sunnyvale Mazda
(408) 738-1976
ZOOM-ZOOM !
Old 01-31-2003 | 06:22 PM
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They have to put food on their tables too and market value will determine any mark-up, just like real estate. I'f you're a homeowner I'll bet you arent crying over the appreciation and will gladly sell for 3-4 times it's original "invoice" price. One penny over INVOICE? If the cars don't sell, the mark-up if any will be reduced. You should have pre-ordered MSRP before January 15.
You will be a lonely guy for drawing the line at dealer invoice, as you watch the "lunk-heads" take delivery of theirs. Maybe you better go man-handle Nissan for a 350Z or G35 coupe. Sounds like Sunnyvale was up front with you.
Old 01-31-2003 | 07:06 PM
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I think you've confused "invoice" and "MSRP". If you won't pay a penny over invoice, then the dealer will make $0 on the sale. I won't pay over MSRP personally. Hell, half the time I wait for a movie to come out on video rather than pay to see it in the theatre.
Old 01-31-2003 | 07:12 PM
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My idea is that dealers will price over msrp at first, then when it goes the way of the Mazda6 and the 350z where no one is buying it, then they will discount.
Old 01-31-2003 | 07:29 PM
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msrp not invoice

Fëakhelek, you are right. I wrote invoice instead of MSRP. This was the second e-mail back and forth from this dealer. They like to gouge out here as much as possible. Where is the Saturn experience? Too bad Saturns are junk.

As far as putting food on their table, give me a f*cking break. MSRP is high enough.
Old 01-31-2003 | 07:32 PM
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Toadman

Toadman, I am a home owner and did not become one by over-paying for my toys. You can be first in line and pay an extra $5000 and I will find the right price elsewhere.

If anyone knows a good CA dealer, let me know.
Old 01-31-2003 | 07:34 PM
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Concurring with everyone's comments, and attempting to clarify:

You should NOT pay a penny over MSRP. If they are asking over MSRP, take your money elsewhere!

If, on the other hand, you are demanding the car at invoice - well, then I want some of whatever you're smoking, friend. No way anyone will give it to you at invoice. There's no way they CAN! Not if the RX-8 is to be a success. Maybe a year or two from now, you can work a deal at invoice, but this is PRE-ORDER, bro! You gotta pay if you wanna play. That includes the recommended Premium petrol!

B-Nez sets mode to -soapbox -rants

Edit: Okay, just read your replies. You meant MSRP - cool. FYI, I am getting the first one at my dealership not because I paid over, but because I started their waiting list last year. I'm paying MSRP.

Last edited by B-Nez; 01-31-2003 at 07:43 PM.
Old 01-31-2003 | 07:50 PM
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Originally posted by Fëakhelek
I think you've confused "invoice" and "MSRP". If you won't pay a penny over invoice, then the dealer will make $0 on the sale. I won't pay over MSRP personally. Hell, half the time I wait for a movie to come out on video rather than pay to see it in the theatre.
but athome you don't get the big screen or the big sound....and it's only 8-9 bucks, instead of dropping 20K+ on a home entertainment system to mimic that of a theatre.

at least there are some movies worth seeing on the big screen....
Old 01-31-2003 | 07:53 PM
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Re: msrp not invoice

Originally posted by mjgc0

As far as putting food on their table, give me a f*cking break. MSRP is high enough.
haha, tell that to all the millionare/billionare's in this world. why do they need all that money? even if you make a over a million each year, you'd think that'd be good enough, wouldn't you? greedy people will always be greedy....and you get more greedy with more money you make. there will be a limited few who might be an exception. the mentatlity between us and them are completely different, something you and I can't understand cause neither of us has had the experience of being truly wealthy, not just well off.
Old 01-31-2003 | 07:57 PM
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there's nothing wrong with paying MSRP, it just sucks knowing that maybe as time goes by, you'd have the opportunity to pay close to invoice, but that just goes along with supply and demand. of course this is a mass produced car, unlike the Audi RS6, BMW M5, etc....it's not like the rx8 is playing at that level, but definitely unique.
Old 01-31-2003 | 08:26 PM
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Just a frustrated/annoyed comment on my experience today with the car and dealers...

I've been going back and forth all day with a dealer telling me that since everyone is selling the car from $2000-$7000 over MSRP, in spite of the fact that I listed off places that WERE offering MSRP, and he supposedly called one of them and verified that they were selling them for MSRP, he was still trying to convince me to come buy one from him for so much over.

And this, in spite of the fact that he knew I work for auto retailer.

I am so frustrated. I have a meeting with another dealer tomorrow who says he will give me MSRP. We'll see what happens- he is probably going to jerk me around too. As much as I love this car, I'm not catering to greedy dealers- at MSRP they're making at LEAST $2k, usually more, AND they get the benefit of knowing that if I need to get car fixed, I have to come back to them since there aren't exactly tons of places that can fix a rotary. I'm starting to wonder if maybe I should just wait a year and get one when we start getting them on our lots at work.
Old 01-31-2003 | 09:04 PM
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Originally posted by Fëakhelek
If you won't pay a penny over invoice, then the dealer will make $0 on the sale.
Not true. See this article at edmunds.com for an explanation of how a dealer can sell at invoice and still make a tidy profit.
Old 01-31-2003 | 09:10 PM
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Smile

I think we all know that some dealers were going to try and screw us. Mazda will have to get this under control or the Rx-8 will not be a seller. It needs to be a seller.
Old 01-31-2003 | 09:13 PM
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Welcome to a capitalist society!

It's the classic law of Supply and Demand. How much do you want the car? If you are not willing to pay the price, then you don't want it that much. Currently other lunk-heads want it more than you. They are willing to pay the price.

This is basic business economics. Don't knock the system. The dealers have to eat too. And if they aren't selling any cars, they will lower the price.

Sounds like you don't want the car that much or are not willing to shop around. The dealer I choose with my pre-order on-line wanted $2k over MSRP, so I went to a different dealer and am paying MSRP, unfortunately since they are selling at MSRP, they had already sold out thier first alotment. My baby is in the second batch coming in July just because I took one extra day.

If you want to be first on the block @ MSRP, you needed to be in line along time ago. Sorry if it sounds like I'm siding with the know-nothing greedy dealers. I am not. I am just siding with proven economics.

The dealers are not the idiots, the uniformed, got-to-have-it-now-at-any-price people are.

***ON SOAPBOX***

I am now in escrow to sell my home which I bought for 4 years ago brand new for $812k. What is someone willing to pay for it? The wonderful sum of $1.35m. Why did the price jump so high so fast??? Because I did my research and bought into a small private valley that was quickly filling up. Immediately after the new homes sold out, the only way to get in the valley is to buy an existing home. KA-CHING! I'm paying cash for my 8.

CAPITALISIM: SUPPLY & DEMAND. Respect it. Protect it. Use it to YOUR advantage. Otherwise we will all end up driving Trabants (originally posted Trubants, thanx eccles).

***OFF SOAPBOX***

IMHO

Last edited by Puppy1; 01-31-2003 at 11:21 PM.
Old 01-31-2003 | 09:43 PM
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mjgc0, I guess there was a miscommunication with Dealer Invoice vs. MSRP. That was what I was challenging, but the law of Supply and Demand will rule. If you're patient, I'm sure mark-ups will decrease like the S2k. Depends how soon you really want one so shop around. Mazda was very considerate to let the die-hards who've been here for a year take first stab at it at MSRP with a pre-order and dealers who would accomodate, vs. the ludicrous Ebay auctions. Very commendable for a car company, IMHO.
Old 01-31-2003 | 10:38 PM
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Toadman, that's part of what some of us, at least, are upset about- these are the pre-orders that are going for way over MSRP. And yes, that's supply and demand, but that also doesn't mean we all have to like it. I imagine people were going through this at the beginning of January when the pre-orders started, as well.

I knew what I was getting into when I decided to buy the car. Doesn't mean I have to like arguing to get a price that isn't going to screw me.

:p
Old 01-31-2003 | 10:43 PM
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Question

i am confuse. you guys are talking about the msrp only, right. However, the out door price will more the the msrp because the excludes tax, title, and license fees aren't including in the msrp. so, do you guys are counting the out door price is over the msrp, too?
Old 01-31-2003 | 10:49 PM
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I'm expecting to pay an extra $1,100-$1,200 on top of whatever I pay the dealer for the car for those. Which is yet another reason I don't want to pay more than MSRP. And I'm assuming there's also going to be another $99-$199 processing/documentation fee, that is completely dealer profit, on top of that.
Old 01-31-2003 | 11:17 PM
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Re: Welcome to a capitalist society!

Originally posted by Puppy1
Otherwise we will all end up driving Trubants.
That would be Trabant.
Old 02-01-2003 | 02:26 AM
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Yikes! I would say that is butt ugly, but I actually like my butt better than that car.
Old 02-03-2003 | 12:46 PM
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Dealer woes

You are all correct that it is simply the law of supply and demand. I was simply posturing for the dealer when I mentioned that I would go get a Z instead. I am not interested in the 350Z. More likely, I will wait until price comes in line with reality. As wonderful as the RX-8 will be, it is not a BMW or Porsche and it's mission is to come in competitive in the 30K range. I think it will succeed if it does come in at this target range and I do want to see the RX-7 breathe again.
Dealers would always have you believe that you should spend more and get less. A cubic zirconia looks just like a real diamond!

Anyway, if anyone has found a dealer recently that is decent, I would appreciate a point in their direction. The dealers in Silicon Valley are greedy and not competitive with the outlying areas.

And I did mean MSRP not invoice, sorry for confusion. I just think it is a crime to charge more than MSRP as it kills the mission of the car to come in and compete in a price range but again, supply = deman. Those willing to pay more than MSRP will drive the price factor upwards. Case in point is the 13K Miata that sold well over 20K when that wasn't its target price point to enter the market.
I guess the bottom line is I want to pay MSRP and yes I can wait for the second or third or fourth shipment, dealers just better hope that all the people out there like me don't start wanting a different car before the price falls in line with MSRP.
Old 02-04-2003 | 01:29 PM
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Mazda's web site kinda sucks for getting more than three dealers at a time (it would be nice to get every one in, say, northern cal at once), but you can just go down the list and call dealers and ask their pricing policy. I posted in the West forum what my personal results were, although there's lots of dealers that I didn't try - I was going to try up in Marin and Sacramento next.

I ended up with Capitola Mazda in Santa Cruz, who aren't marking up although they have a big (refundable) downpayment. They don't have large allocations either, although they were the most knowledgable and have had preview RX-8's by their dealership before or after Laguna Seca testing.
Old 02-04-2003 | 06:06 PM
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Thanks for the tip. I will keep them in mind if things go well and I find myself able to afford a new car soon. Santa Cruz isn't that far from me.
Old 02-04-2003 | 07:01 PM
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the final word on the whole buying car for MSRP is.. some dealers are doing it.. some aren't... the dealers that are doing it deserve praise here in the forum...

(MODS, how about a "locked thread" run by a moderator or someone with some time on their hands (like me) with dealers and sales managers who guarentee MSRP (or very close to MSRP)

-- for instance my dealer here Jeff Haas in Houston, 0 dealer markup over MSRP , however they do add 1 dealer option in the form of a paint/interior protection package.. only 300$... not to bad for someone who lives in the Texas heat and expects the paint/interior to show signs of fatigue.
Old 02-04-2003 | 08:25 PM
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I ordered mine from Gunther Mazda here in south Florida, and they charge $0 over MSRP. They have also said that they will be receiving cars starting in April... a might earlier than everywhere else.


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