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How does the dealer buyback relationship work?

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Old 08-23-2006, 03:49 PM
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How does the dealer buyback relationship work?

Hi All,

I posted this on another site/forum as well. Won't mention it here because, frankly, I'm not sure of the rules on this.

I haven't posted here since getting the 2004 RX-8 for my significant other. Unfortunately, we've had some issues with her RX-8 (2004, 27K miles). It's on its 3rd engine in as many months--last one blew with maybe a hundred miles or so, driving back and forth to work, mostly in traffic. Apparently it's well known that there are some problems with some of the models, so nothing new there, eh?

The dealership contacted Mazda to work out a replacement deal. Unfortunately, the offer we received is far less than attractive.

In this case, the dealership agreed to give $16K for the car (towards the purchase of another, more expensive RX-8, of course), with Mazda pitching in another amount to subsidize the deal. We were told the car would be taken out of commission.

Now, here's what confuses me. Is the dealer actually losing the $16K, or is Mazda footing the entire bill by subsidizing the dealer through other means?

I'd be quite irritated to discover that we were being upsold, with more money out of our pockets and Mazda's--all to supplement the dealer. While I have no problem with everyone making their margins, it shouldn't be at our expense since we were stuck with the defective vehicle.

I'd have a lot better room to plead my case with Mazda, or whomever, if I understood how this process works between Mazda and the dealer. Any input on this is helpful.

Thanks,

Rip
Old 08-23-2006, 04:09 PM
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You should recieve a new car at no cost to you...you seem to have gotten a lemon....I see your from Texas...Austin to boot....you can sue
Old 08-23-2006, 04:20 PM
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Lemon law might not work since the car already has 27k miles. Not sure what texas laws are exactly though.
Old 08-23-2006, 04:23 PM
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Realy easy to google it.... Google: Lemon law Texas.

And did you know Google is now a verb in the dictionary?
Old 08-23-2006, 04:35 PM
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Originally Posted by zeblien

And did you know Google is now a verb in the dictionary?
That's kinda dumb if it's true...
Old 08-23-2006, 04:38 PM
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Yes its true, The new oxford dictionary added it along with a bunch of other slang words. I believe it officialy means to query information on the internet and specificly using the search engine Google to aquire knowledge.
Old 08-23-2006, 04:42 PM
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Originally Posted by zeblien
Google to aquire knowledge.
Or random useless BS and **** sites you weren't looking for...
Old 08-23-2006, 04:43 PM
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Ya thats true... but what would the internet be without **** and misleading advertising?
Old 08-23-2006, 06:04 PM
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Originally Posted by RipNRun
In this case, the dealership agreed to give $16K for the car (towards the purchase of another, more expensive RX-8, of course), with Mazda pitching in another amount to subsidize the deal. We were told the car would be taken out of commission.

Now, here's what confuses me. Is the dealer actually losing the $16K, or is Mazda footing the entire bill by subsidizing the dealer through other means?
I had a Saturn wagon replaced under Virginia's lemon law several years ago, and in that case, Saturn corporate actually bought the car and not the dealer. I was charged for use (so many cents per mile) and then they forgave the usage fee as a "good will" gesture. The replacement vehicle was identical to mine except for one small option, which they also gave me at no cost as an additional "good will" gesture. They did not reimburse me for the non-Saturn upgrades (window tint and trailer hitch) that I had done to the car.

However, I doubt the lemon law applies to you as, typically, it is only good for the first 12 months of ownership. Do a google serach on "lemon law" for your state and see what the exact terms are. I could be wrong.

It sounds like this is more a "good will" effort to keep you as a happy customer. Who knows how much the dealership is kicking in and how much MNAO is covering. I am not sure it matters.

You need to look at the whole deal. Exactly how much will the exchange cost you out-of-pocket? Subtract from that any additional features the new car has that yours does not. Then divide the remainder by 27,000. It is your call as to whether your current car is worth the per-mile figure they are willing to give you. I would say if it is under 15-20 cents per mile you have a good deal.

Alternately, look at what kind of deal you would get trading-in your 8 on the new car. The "buy back" offer should be much better than if you were simply trading up.

IMHO
Old 08-23-2006, 06:47 PM
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Well, the issue here is around when problems first occurred. For us, at 14K miles. Lemon law calls for 12K miles. Hence the problem. We could probably push it, but I'd rather just find a way to get a replacement.

Any ideas?
Old 08-23-2006, 07:10 PM
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Get the dealer to give you a bottom line on your out-of-pocket for the replacement.
Old 08-24-2006, 09:14 AM
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That's exactly what we requested. The answer is pay $9K more for the same car, 2 years later, that acutally works (or at least we hope so).

Seems as if no one knows the answer to this question, so let me ask another.

Has anyone had success with going to Mazda corp directly? I'm working on that now, and want to see if it's all in vain or not.

Next stop is legal action if we can't get something reasonable worked out...

Rip
Old 08-24-2006, 10:45 AM
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Good luck working with MNAO. I would be suprised if had any interest in replacing your car.

Just curious, what is the sticker price of the new "replacement" car? The offer you have sounds more like the dealer is selling you the car pretty close to their cost (actual, not invoice) with a standard trade-in for your current car.
Old 08-24-2006, 11:52 AM
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Originally Posted by zeblien
Yes its true, The new oxford dictionary added it along with a bunch of other slang words. I believe it officialy means to query information on the internet and specificly using the search engine Google to aquire knowledge.

I wonder if they added "Coke" to represent any soft drink. I love when I go out to eat in the Southern states and they ask me if I want a Coke......I say "yes" and they look at me waiting for what kind of Coke. I say "huh?" and they proceed to read off the different soft drink brands.....Sprite, MDew, Dr.Pepper...... I of course laugh and say "Pepsi". Here in MI we call it "pop" which is just as dumb IMO.
Old 08-24-2006, 12:02 PM
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The sticker on the replacement is $33K. They're offering to sell it at wholesale for around $30K. However, we're only getting around $21K in total replacement value (buyback price) and have a note with around $13K left. In essence, it's costing $9K to replace the vehicle. The issue is that the car is defective. I would not be in the market to buy a car if it just worked as advertised.

While I can understand paying some increased cost because of the year model differences, $9K is unreasonable. The new cost of a similarly equipped car is around $2K more than our original purchase price. I can live with paying a cost in that range.

So, the issue at hand is that we need a working vehicle that operates as advertised. We have significant documentation on the car being well taken care of with appropriate gas, always at least on time with oil changes, etc. This is a defective product. Even now, with the latest engine only a couple of weeks old, it has a very rough idle. It's unacceptable, and I can't seem to get even a reasonably fair deal out of it.

OK. Here is where my rant start, so feel free to ignore...

Why should I have to rebuy the touring package, a spoiler, etc when all of that is already functional on the old car? I was told the old car will not be recirculated, but will be 'removed'. Well, then any diminished value on the car is due to defect and not to owner issues. In addition, the more diminished value it has because of the defect seems to be working against me because the valuation is low. Well, it wouldn't be low if the car were working as advertised, right? This car should have a bb value of $24K or so if I were trading it in. But now, it's being valued at $16K--which is not my fault. On top of this, we shouldn't even be talking trade-in anyway. The car is going to be removed from the market--implying that is has a problem. We should be handling this like a replacement, not a trade-in, which means the value that the dealer believes the car has is generally irrelevant, unless they stand to make money on the trade-in. Hence the reason that I"m asking the question about how this 'buyback' is supposed to work. Seems to me that everyone is making out on this deal but the consumer....

I hope that someone at Mazda will recognize the flaw in this system for solving the problem. ..

--Rip
Old 08-24-2006, 12:18 PM
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Rip, who have you talked to at MNAO? Perhaps you should move up the chain of command. In my experience, if you go high enough in a company you will find someone who can get results. Good luck, sounds like a shitty deal for you.
Old 08-24-2006, 12:21 PM
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You are correct.

If you just walked in to "trade up", the deal would actually be pretty good. They would usually not give that much trade-in plus sticker-discount on a brand new 2006.

However, taken from the perspective that you are doing this to "fix" their problem, it is not nearly sweet enough. Something in the $2K-$4K would be much more reasonable. It can't hurt to keep pushing, they have to be tired of dumping their money into your current car.
Old 08-24-2006, 12:23 PM
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Thanks. Right now I'm still in 'customer service' mode. Not sure how to get a better contact. I requested one from the dealership, but they wouldn't give me one.

If anyone knows someone, PM me! I'll keep your identity secret!

--Rip
Old 08-24-2006, 12:35 PM
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Typically you can request (demand politely) to meet with the "factory rep" or "Regional guy" to discuss the situation. These guys typically come through every 4-6 weeks. If they refuse, call the MNAO customer service 800 number in the owner's manual.
Old 08-24-2006, 01:39 PM
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what Austin dealer are you dealing with?
Old 08-24-2006, 01:53 PM
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It does sound like the typical dealer BS "buy back program", which is just a nice way of saying - give us more money, move up a model year or two and we'll pretend we only did this for you .

On the other hand - the current news of recall may bode well for the next engine, with the newest flash, dropped in the car you currently have may be the solution. All of this should flush out over the next month. You've dealt with it this long (sorry you had to put up w/it) - can you go a few more months to find out? If Mazda has actually figured out what is going wrong & can rectify it (this time as hell for you, I imagine) you may have the vehicle you thought you were buying in the first place.

If not - cause a ruckus in any ear you can catch. At the very least someone will get sick of you calling them and help. Hopefully, you'll find someone who sees the issue for what it is - you didn't get what you agreed to pay for. Good luck.
Old 08-24-2006, 02:26 PM
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I will get back to you on this. I have gone through this process recently. I will e--mail you tonight with what I did.
Old 08-24-2006, 02:28 PM
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ypically you can request (demand politely) to meet with the "factory rep" or "Regional guy" to discuss the situation. These guys typically come through every 4-6 weeks. If they refuse, call the MNAO customer service 800 number in the owner's manual.
That's where I am now. The dealeship just sent me to the 800 number after I told them I didn't think the deal was fair. They would not give me a factory rep contact. Instead, I'm slowly slogging through the channels. I talked to a Mazda guy that works in the customer service area yesterday--he was able to pull up the information on the issues and told me either he'd call back or the factory rep would. Nothing yet, but I'm hoping Mazda will do the right thing.

colin204
what Austin dealer are you dealing with?
Well, hate to say publicly, just to avoid any undue confrontation with them. I'll PM you.

On the other hand - the current news of recall may bode well for the next engine, with the newest flash, dropped in the car you currently have may be the solution. All of this should flush out over the next month. You've dealt with it this long (sorry you had to put up w/it) - can you go a few more months to find out? If Mazda has actually figured out what is going wrong & can rectify it (this time as hell for you, I imagine) you may have the vehicle you thought you were buying in the first place.
We can make it longer--at this point, we're likely just to take the car in again for the rough idle--maybe we'll get a 4th engine... We have the extended warranty as well, so if we don't get a deal, we'll just keep it in the shop ad infinitum and use the dealership's rentals.

Mazda reps, I know you're out there and reading this... Wouldn't it be nice for everyone to know that you're interested in helping a customer out? I'm still only a day and a half into working with you directly and I believe that you'll do the right thing and contact me. I'm not trying to shake anyone down here--all my issues are on record and you have them. I just want a reasonable deal and would love to share a story about how a company worked to rectify such a situation with a product. Everybody wins that way...

Rip
Old 08-24-2006, 03:03 PM
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Originally Posted by RipNRun
....Unfortunately, we've had some issues with her RX-8 (2004, 27K miles). It's on its 3rd engine in as many months--last one blew with maybe a hundred miles or so, driving back and forth to work, mostly in traffic. Apparently it's well known that there are some problems with some of the models, so nothing new there, eh?
I've read the whole thread and I think you're taking the right tack on this. Kudos to you for remaining calm and thinking clearly. Many here fire both barrels and think of the consequences later.....

The thing that alarms me (and should alarm you Americans about to get remanufactured engines) is the fact that you've had two new engines in as many months. Lets assume your first engine died from the "recall issue". The last two didn't though. New engines don't just die after 100 miles.

There is something rotten in the State of Texas.......
Old 08-24-2006, 05:37 PM
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I just received an offer close to RipNRun's. $15K trade in (yikes too low) + $5K "cash assistance" from Mazda and a new Mazda at dealer cost.

The problem with my car is that it caught on FIRE twice! Mazda replaced the back of the car that melted and burned while it was in their Austin, TX dealership's possession, then it happened again while I was driving it. I'm not too thrilled with the knowledge that I have a plastic gas tank under the car. I feel like I need a nomex suit.

I just emailed and called Mazdausa and will be following up with a certified letter detailing the safety issues with my "fireball".

Had my car burned up at the dealership with the first fire I would be in better off than with the low trade in value of a car that has depreciated faster than a Yugo. I'll be interested to see how this all plays out.

Edit***
I just remembered that the GM of the very large Mazda dealer told me that the RX8 at 46,000 miles was half way through it's lifespan!!!!!! I respectfully told him that we're not in the 1970's anymore and cars now routinely last for 250K miles. Maybe General Manager actually believes the RX8 is 1/2 way dead at 46,000 miles. I wonder what Mazdausa thinks about his statement?

Last edited by A-TXRX; 08-24-2006 at 06:04 PM.


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