Free Republic
Browse · Search
Bloggers & Personal
Topics · Post Article

Skip to comments.

Honda fighting below-invoice online pricing deals
Auto Blog ^ | December 13, 2011 | Jeff Sabatini

Posted on 12/13/2011 3:49:39 PM PST by decimon

>

According to Automotive News, Honda has issued an ultimatum to its dealers: Stop selling cars below invoice price through these websites, or lose the per-car marketing spiffs that the factory gives dealers. Since Honda corporate turned the screws on its dealers in October, TrueCar says Honda sales through its service are down.

>

(Excerpt) Read more at autoblog.com ...


TOPICS: Business/Economy; Computers/Internet
KEYWORDS: collapse; nosale; propaganda; ripoff
Anyone use an online service like truecar.com? If so then how did it work out?
1 posted on 12/13/2011 3:49:43 PM PST by decimon
[ Post Reply | Private Reply | View Replies]

To: decimon

bfl


2 posted on 12/13/2011 3:54:19 PM PST by Smokin' Joe (How often God must weep at humans' folly. Stand fast. God knows what He is doing)
[ Post Reply | Private Reply | To 1 | View Replies]

To: decimon

I’m a Honda fan and currently drive a 2005 Pilot however their pricing is highly inflexible.


3 posted on 12/13/2011 3:57:00 PM PST by TSgt (Suppose you were an idiot and suppose you were a member of Congress. But I repeat myself.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: decimon

Do you have to register to see the prices?..or can you just “look around”?


4 posted on 12/13/2011 4:02:36 PM PST by Doogle (((USAF.68-73..8th TFW Ubon Thailand..never store a threat you should have eliminated)))
[ Post Reply | Private Reply | To 1 | View Replies]

To: All

the dealer model of selling cars is outdated and needs to go. It continues to be a deception based mode of sales.


5 posted on 12/13/2011 4:04:27 PM PST by longtermmemmory (VOTE! http://www.senate.gov and http://www.house.gov)
[ Post Reply | Private Reply | To 1 | View Replies]

To: decimon
Anyone use an online service like truecar.com?
C'mon, they're all car dealers and you can tell they're lying because their lips are moving.
6 posted on 12/13/2011 4:11:00 PM PST by oh8eleven (RVN '67-'68)
[ Post Reply | Private Reply | To 1 | View Replies]

To: longtermmemmory
the dealer model of selling cars is outdated and needs to go. It continues to be a deception based mode of sales.

I agree but states have erected formidable barriers to obstruct a more efficient model. Someone with deep pockets will need to challenge states in court to lift the state barriers. In the early days of the internet, some players tried to challenge the dealer model but they did not have deep enough pockets to sustain the challenge through the courts.
7 posted on 12/13/2011 4:11:39 PM PST by businessprofessor
[ Post Reply | Private Reply | To 5 | View Replies]

To: Doogle

You can just “look around.”


8 posted on 12/13/2011 4:11:42 PM PST by oh8eleven (RVN '67-'68)
[ Post Reply | Private Reply | To 4 | View Replies]

To: oh8eleven

kewl


9 posted on 12/13/2011 4:15:08 PM PST by Doogle (((USAF.68-73..8th TFW Ubon Thailand..never store a threat you should have eliminated)))
[ Post Reply | Private Reply | To 8 | View Replies]

To: longtermmemmory

“the dealer model of selling cars is outdated and needs to go.”

It’s a means of financing the car company and of ensuring vehicles “move” to dealer lots. A dealer may be floating a 10 million dollar inventory. He sells 10 cars, he gets 10 more. Mostly, the dealer has no control over what models they get. In LA a Chevy dealer could probably prosper with just Corvettes, but he has to take x number of low end cars he can never sell. He’ll end up losing money on them.

The dealer usually makes little on a new car. They make all their money on repairs, service and used cars.

Yes, you’re right. The dealer model is bad for everybody except the manufacturer.


10 posted on 12/13/2011 4:16:42 PM PST by Gen.Blather
[ Post Reply | Private Reply | To 5 | View Replies]

To: Doogle
Do you have to register to see the prices?..or can you just “look around”?

I took a look at truecars.com. I could choose a make and model and choose color and options. From that I got the lowest prices for my zip code and how far from my zip code those dealers are. For more than that I would have to give personal information.

11 posted on 12/13/2011 4:18:53 PM PST by decimon
[ Post Reply | Private Reply | To 4 | View Replies]

To: businessprofessor

Porsche tried to break the state franchise barriers but lost.


12 posted on 12/13/2011 4:36:49 PM PST by Paladin2
[ Post Reply | Private Reply | To 7 | View Replies]

To: decimon

I came close to buying a Honda Accord in the early 80’s. The sumbitch dealer wanted to add a $750 “markup” just ‘cuz he could.

Never considered a Honda product again.


13 posted on 12/13/2011 5:16:42 PM PST by 2nd Bn, 11th Mar (The "p" in Democrat stands for patriotism.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Paladin2

Was there a court case? When did Porsche challenge the state franchise laws?


14 posted on 12/13/2011 5:18:05 PM PST by businessprofessor
[ Post Reply | Private Reply | To 12 | View Replies]

To: 2nd Bn, 11th Mar
I came close to buying a Honda Accord in the early 80’s. The sumbitch dealer wanted to add a $750 “markup” just ‘cuz he could.

Yeah, selling price has been a problem with the Japanese cars.

15 posted on 12/13/2011 5:40:31 PM PST by decimon
[ Post Reply | Private Reply | To 13 | View Replies]

To: decimon

Truecar gives you an idea of what a certain model is selling for around your area. This service has helped many people know if they were getting a good deal, okay deal, or no deal at all. It gives you leverage with the dealers.

It is generally the same principle of calling up several dealers, and in each subsequent call, you ask the dealer if he can beat the price of the prior dealer. They hate that, but that’s how you get the best deal. They hate it because it works.


16 posted on 12/13/2011 6:04:59 PM PST by Secret Agent Man (I'd like to tell you, but then I'd have to kill you.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: oh8eleven

Salesmen aren’t dealers.

Dealers put a ton of pressure on their sales people to sell cars. Pressure that you or I would probably walk away from if the job wasn’t critical to us.

Someone posted a really good article here about an undercover guy working as a salesman forboth a high volume new car dealer and a lower volume used car dealer. Very insightful.


17 posted on 12/13/2011 6:07:56 PM PST by Secret Agent Man (I'd like to tell you, but then I'd have to kill you.)
[ Post Reply | Private Reply | To 6 | View Replies]

To: Secret Agent Man
Truecar gives you an idea of what a certain model is selling for around your area.

That's true. If they're accurate, anyway. I was hoping someone with personal experience would weigh in.

18 posted on 12/13/2011 6:20:36 PM PST by decimon
[ Post Reply | Private Reply | To 16 | View Replies]

To: Secret Agent Man; oh8eleven

Someone posted a really good article here about an undercover guy working as a salesman forboth a high volume new car dealer and a lower volume used car dealer. Very insightful.


Edmunds had a link to that story a few yrs back IIRC.


19 posted on 12/13/2011 6:34:41 PM PST by TwoSwords
[ Post Reply | Private Reply | To 17 | View Replies]

To: Gen.Blather

The dealer makes money on holdbacks and factory incentives.


20 posted on 12/13/2011 7:25:24 PM PST by UB355 (Slower traffic keep right)
[ Post Reply | Private Reply | To 10 | View Replies]

To: businessprofessor
I'd guess the 80's. I'm not sure if there was a court case or just serious threats.

As I recall, they wanted to set up regional service centers and possibly regional inventory banks. Many Dealers were not in favor.

21 posted on 12/13/2011 8:45:03 PM PST by Paladin2
[ Post Reply | Private Reply | To 14 | View Replies]

To: businessprofessor
Ah, here we go....

It took a second set of search terms to cough this up:

"Porsche dealers reacted with hostility and a flurry of lawsuits when Porsche A.G., the West German maker of expensive sports cars, announced plans last month to abolish its franchise dealer system in the United States. Porsche, at the time, said consumers were dissatisfied with existing dealers. The company also said it wanted to prevent price gouging on popular models by dealers and to set repair standards. The company was planning to cut in half the commission it pays on each sale and to establish its own sales agents and company-owned sales and service centers. It did not publicly estimate what savings, if any, would result. "

http://www.nytimes.com/1984/03/14/business/the-porsche-franchise-fight.html

22 posted on 12/13/2011 9:06:22 PM PST by Paladin2
[ Post Reply | Private Reply | To 14 | View Replies]

To: Paladin2

Here is a more recent article from Mother Jones. The comments are interesting. MJ is a left wing rag but I have some agreement with the strong lobbying effort by dealers. The article blames Reagan and Bush but almost all politicians support the dealers. Many comments indicate that online sales would not be a major force. The dealers clearly do not believe it. They lobby vociferously to restrict competition of online sales. I am firmly opposed to the state dealer franchise laws. I think the laws restrict interstate commerce and increase consumer prices.

http://motherjones.com/politics/2009/02/why-you-cant-buy-new-car-online


23 posted on 12/13/2011 10:04:01 PM PST by businessprofessor
[ Post Reply | Private Reply | To 22 | View Replies]

To: Secret Agent Man
Pressure that you or I would probably walk away from
Speak for yourself.
While you want to differentiate between salesmen and dealers, my point remains - they're all "liars."
24 posted on 12/14/2011 5:48:30 AM PST by oh8eleven (RVN '67-'68)
[ Post Reply | Private Reply | To 17 | View Replies]

To: businessprofessor
Clearly the franchise laws restrict trade.

The manufacturers do work hard to control the dealers as much as possible (e.g. stuffing them with high profit, expensive loaded vehicles). The fact that there are 50 states to deal with and the fact that the dealers have lots of pressure to bring on the state legislators and Congressional reps acts to maintain the local laws. The dealers could use some power to keep the manufacturers from completly running their businesses.

Back in the old days, options were much more individually available and ordering a vehicle to be built to one's combination of desires and price point was good for those of us who knew what we wanted and could wait for it.

I've always thought that the dealer could be replaced with a vending machine type of arrangement (like those pigeonhole parking operations some large cities used to have). Order your vehicle and pay for it up front. Go to the parking lot and pick it up the day it arrives.

Even better would be to order your vehicle and get a one way ticket to the factory and pick it up there to avoid both the transportation and inventory costs.

My last two vehicles were purchased over the internet (the local dealers had sold out of what I wanted) and it worked out OK. There's a dealer in Kellogg, Idaho that advertizes all over the west and seems to do quite a bit of out of state business. He has annoyed many other dealers.

I think there were quite a few lawsuits by dealers against Ford when Ford dropped out of the heavy and medium duty truck business (1990's).

25 posted on 12/14/2011 5:50:45 AM PST by Paladin2
[ Post Reply | Private Reply | To 23 | View Replies]

To: decimon

BUY AMERICAN

America first.

26 posted on 12/14/2011 5:55:25 AM PST by Cringing Negativism Network ("FREE TRADERS": Self-loathing Americans)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Cringing Negativism Network

Except the “American” cars that suit our needs are overpriced, union-made, steaming piles of sh*t


27 posted on 12/14/2011 6:16:03 AM PST by Spruce (I will never vote for Mitt Romney. And nothing will change that.)
[ Post Reply | Private Reply | To 26 | View Replies]

To: Spruce

Wrong.

I drive an American car.

Before this one, I drove an American car.

Both made in the USA. Best cars I ever had.

Your propaganda is no good here.


28 posted on 12/14/2011 6:19:33 AM PST by Cringing Negativism Network ("FREE TRADERS": Self-loathing Americans)
[ Post Reply | Private Reply | To 27 | View Replies]

To: businessprofessor
"Fitzgerald suspects that if the manufacturers could sell new cars directly over the Internet, consumers would actually pay more for them than they do now. Right now, he says, dealerships actually pay about $2,500 more for a car from the manufacturer than they sell it for. Dealerships make their money elsewhere—on repairs and servicing, financing, and other products."

This is BS as far as the dealers loosing on every sale but making a profit on volume. The dealer rarely sells a vehicle for less than he paid the manufacturer for it. Looking at individual vehicles, it is possible that a dealer can loose on a sale if the vehicle has been on the lot for many months.

Eliminating the dealer would save on some costs, so I'd think that average prices would be lower, but the process of buying could become more complicated and there may be fewer sales if cars couldn't be an impulse purchase.

29 posted on 12/14/2011 6:26:44 AM PST by Paladin2
[ Post Reply | Private Reply | To 23 | View Replies]

To: Cringing Negativism Network

I was window shopping at a Chevy dealer one time and on the sticker it said “Engine made in Brazil”.


30 posted on 12/14/2011 6:29:59 AM PST by McGruff (Hold the House, retake the Senate.)
[ Post Reply | Private Reply | To 26 | View Replies]

To: Cringing Negativism Network
EVERY single American car I have EVER owned had BLINKERS.

Refute THAT, smart boy!

31 posted on 12/14/2011 6:31:51 AM PST by Lazamataz (That's all.)
[ Post Reply | Private Reply | To 28 | View Replies]

To: Lazamataz
"EVERY single American car I have EVER owned had BLINKERS."

There are some things that even cars shouldn't see.

32 posted on 12/14/2011 6:49:44 AM PST by Paladin2
[ Post Reply | Private Reply | To 31 | View Replies]

To: Lazamataz

Oh my.

I am re-assessing my core belief system now.

Thank you for showing me the error of my ways.


33 posted on 12/14/2011 6:53:25 AM PST by Cringing Negativism Network ("FREE TRADERS": Self-loathing Americans)
[ Post Reply | Private Reply | To 31 | View Replies]

To: Cringing Negativism Network

I’m persuasive like that.


34 posted on 12/14/2011 6:54:52 AM PST by Lazamataz (That's all.)
[ Post Reply | Private Reply | To 33 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
Bloggers & Personal
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson