I'm about to make the plunge for an '04 TL, and I'm encountering a new sales tactic that I haven't seen before (granted, I haven't bought a car for 5 years). Here's the setup:

- Produce two trims close in price, but one more desireable than the other (+/- nav) to the target market.
- Make the less desireable model abundantly available so that buyers have an opportunity to see colors and drive the car. Even have a used, dirty "demo" model available to entice customers with limited availability desirable model.
- Store desireable model off premises in a warehouse and tell customers that they have none in (local) stock.
- Tell customers desireable model will be available shortly, but they must "stand in line" (by putting down a deposit) to insure delivery.
- Refuse to negotiate on price, since the desireable model is "hard to get."

How does a customer fight this tactic? Since my car is "available" in less than a week, I know darn well these tyhings are not that hard to get. Especially in THIS market!!! What a sting!

 

My advise: Try another dealer (in the Bay Area this is particularly effective since there's an abundance of dealers) or try the Internet (carsdirect.com, for example).

 

By buying another brand of car. The law of supply and demand kept MDX's at MSRP for two years.

 

I did the Internet quote tactic - $1000 off MSRF was the best they could do due to "limited" availability. Hogwash! Anything they can get in a week is not limited.

 

I would argue that the supply is sufficient for demand and the dealers are playing a new game - "perceived supply." When I bought a car 9 years ago and wanted a particular color, I was told they had "discontinued that color" to decreased the perceived supply, and that turned out to be a bunch of crap. I think the same story telling is going on here

 

Buying another brand is a way around this. IF they were doing what you say, don't you think they would be caught? A salesman would leak this. Honda, Acura, Toyota, and Lexus have had this problem since they existed. You have more than likely just always bought at a less desireable time.

 

just make as if you were thinking about different car too, and if they they play this game just tell them youl get the other car instead, b/c you like both the same.

 

It's a big game. The thing is that once you decide to buy you have to know specifically what you want, and how much you are prepared to pay. If the dealer jerks you around, tell them you will go elswhere and if they do not waiver, provided you are being reasonable, walk out the door. If they really want to sell, they will stop you. Note that car sales are not particularily strong right now and even Acura is offering incentives.

 

what kind of incentives is acura offering?

 

I think that you are missing the point of 'hard to get' even though I agree with you post.

I am going to be outrageous with my numbers to make a point....

Lets say there are 2 million less desirable 'things' available and 2 million MORE desireabe 'things' available.

If there are only 1.9 milllion people interested in the less desireable thing and 2.1 million in the more desireable thing you have a 'hard to get' situation. What they mean by that is SOMEONE ELSE IS WILLING TO PAY MORE for the thing, not that we do not have it.....

People buy into this 'hard to get' stuff and think that I need it NOW and so the price goes up. Buy the other one for cheaper and be happy.

 

also watch out for those black helicopters following you!

 

While I'm usually the first one to agree that big corporations (like Honda) are soulless greed machines that WOULD employ nasty tactics like this one, there are a couple of flaws in the original poster's theory.

First, the car market is very competitive. This is not Coke versus Pepsi. Despite consolidations and disappearing brands, the American consumer still has an unbelievably rich market of new cars from which to choose. Honda had no way of knowing the TL would be so popular, let alone wildly popular.

Second, MSRP is a very complicated pricing system used by all the manufacturers, except maybe GM's Saturn division. (Does Saturn still have set prices?) If Honda had wanted to ensure that the car was going to sell for around $35k, they could just as easily have set the MSRP at $37k. Imagine how happy we'd all be then, thinking what "bargains" and "great deals" we were getting by having 2-3 grand knocked off MSRP.

Why didn't Honda do that? Because they had no way of knowing the car would be so popular and they figured a higher MSRP would scare people off. They wanted to be clearly below the BMW/Mercedes price points because they designed their TL to compete in that market segment (and to an extent, they succeeded). Honda picked an MSRP based not only on profit margins but also market expectations. Keep in mind, MSRP's are loosely set when the car is still in the design phase! It would have been easy to pick a higher number.

Third, Honda had every reason to think the navi option would be much less popular than it is. Why? Market history. The second-gen TL's and CL's sold in a ratio of about 8:1 non-navi to navi. Even accounting for an increased demand for navi, Honda estimated only about 20-25% of '04 TL buyers would want the navi (ratio of 5:1 or 4:1). They were wildly wrong. But it takes time to change the production line specs, and in the interim non-navi TL's are piling up at dealerships.

You asked how you can fight this so-called tactic? Buy or lease a TL without navi - especially one sitting on the lot. With a little negotiating savvy, you will get a great deal, anywhere from $1000-2500 below MSRP depending on where you live, what color you want, and how good your negotiating skills are.

You want the navi? Then you won't do so well. But this is no Honda conspiracy. This is a miscalculation on their part. Neither Acura's executives nor their dealership owners are happy to have so many non-navi TL's sitting around. The salespeople are certainly happy when they sell a navi TL at or near MSRP - it's a nice commission. But in the bigger scheme, all those non-navi cars sitting around are costing Acura and their dealers a lot of money.

And some lost sales. They know that people who really want Navi and either won't or can't wait will buy a G35 or something else in the marketplace. Believe me, car dealers DO NOT want customers to have to wait. They much prefer having the car you want on the lot. Yes, they may have to give you a better discount (if you're a savvy customer). But they also get to close the deal TODAY and that means a lot in the new car sales business.

Sooner or later Acura will be able to match TL production to demand. Most of us on this forum agree that by summer, or fall at the latest, navi TL's will be plentiful and reasonable discounts will be available on either model.

So another way for you to "fight" this "tactic" would be simply to wait a few months longer.

 

Very insightful post, and the might I just add that the law of supply and demand is in force. and if there is a scarce supply of the Navi models and they are in demand, guess what, deals will not be availiable and you will pay more. Models with lots of supply will sell for less as they are taking up space and finance dollars on the dealers lots.

 

So why else would they design a car that was so full of modern gadgetry? They were clearly aiming for those of us in the early-adopter techno crowd who love all these modern conveniences. If they went through the trouble of incorporating a fairly new standard (Bluetooth), and voice recognition, I find it hard to believe that they would underestimate the demand for the navi.

Guess I'm doing pretty good with $1000 under invoice on a navi then huh?

I think they already have matched production with demand - at least in this area. If they can get me the exact car I want in a week, there isn't much of a backlog (if any). The dealers aren't stupid either. They aren't going to order non-navi models if their customers aren't requesting them. So they aren't losing any money here. The only reason they have them around in the first place is to show people 99% of what they "can't have" so they have more bargaining power.

I would do that if I didn't have to spend money on my current vehicle to keep it running until then. Guess I'll have to test drive the G35 and see if that fits the bill.

Thanks for taking the time to comment on this situation!

 

Yep, I agree. I've posted similar comments on various forums. Take two EQUIVALENT cars from different makers.

Car A: Priced at 38,000. Has a $1500 rebate and dealer discounts another $3000. Out the door price: $33,500. Dealer profit is $200.

Car B: Priced at $33,000. No rebate. Tight supply, harder to find. No discount. Out the door price: $33,000. Dealer profit is $3000.

There are many people that will RUN away from Car B. They feel the dealer is making too much so they are being ripped off. They will buy Car A because afterwards they feel good and can brag about what a great deal they got.

But the cars are equal in the mind of the buyer. He wanted both equally. So why did he spend $500 more? I guess it's because dealer profit matters more than other factors. Notice the high volume of posts here that read like "did I pay too much?" or "did I get a good deal?" or people that won't buy because the price is close to MSRP? (Obviously, a person should get the best deal he can).

Now look at car A as maybe a Cadillac CTS which you can deal on vs. a TL where you can't (in some areas - TL deals are available too). Some people will run down the street to buy the Caddy because they can't deal on the TL. And end up paying more. (Assume for this simplified argument that these two cars are equal in the buyers mind). Make it BMW vs. TL, even. I know people that refused to buy a Saturn because the dealers wouldn't deal. When pressed, they thought the price was very fair, but they won't buy unless they get a "bargain."

Many of these same buyers won't look at other factors, like what the car will be worth when it's time to sell. The rebates and discounts backfire for that. (The American cars with perma-rebates typically have very low resale values). People are fixated on what the dealer profit is. What about what the manufacturer profit is? Why doesn't that matter to people? Because they don't know what it is, and can't find it on the Internet, and can't bargain on it anyway.

People buy houses, furniture, etc. without knowing what the dealer/contractor makes in profit, and they usually don't care. They'll buy a living room set for $4000 and give away more in profit than they did on their last 3 cars combined. But they will be happy. The car business is strange, for many reasons, many of them the dealers' fault over the years. This message would get even longer if those were discussed.

 

In retrospect I would imagine they find it hard to believe, too, and are busily kicking themselves and each other. But hindsight in marketing is like hindsight in stocks - interesting but generally worthless.



Pretty good indeed. Are you saying you actually have such a deal pending? I've heard of no one getting anything even close to that cheap on a Navi. No offense, but I would have to say either you're being dishonest with me or the dealership is being dishonest with you.

Since I want to give you the benefit of the doubt, I'll ask you this question instead - if you do have such a deal, why are you on this forum bitching about sales tactics?

 

I don't know if it was said or not, but including supply and demand into the argument is part of it, but if you have ever studied the process that the Japanese use in "lean manufacturing" or Just In Time manufacturing, you know that indeed supply is short; for a reason.

Where corps. like GM and Ford use limited numbers of suppliers that still mass produce their supplies to create a demand for the end product (which ultimately hikes prices to end consumers), the Japanese have many suppliers for their parts always 'bartering' for the lowest price. In maintaining the lowest price/best quality on supplies by always 'shopping' for their suppliers, they also regulate manufacturing to the point of having very little raw materials until the product is ordered/demanded. Thus creating the best products at the best price with the best quality Just In Time for you to have it when you need it.

I'm not saying my TL was ordered for me, but I came in to my dealer and said I'd love to have a DGP, 6-speed non-navi. They told me the same stuff, 'limited availability'. So I said OK, I'll wait, just let me know when you get one in. When I bought my car, I looked at the build date and the car was amazingly only 7 days old. If the Japanese were selling these cars here in America, you could get exactly what you wanted (6-speed, color, navi, etc.) probably within a week of you 'ordering' it. But here in the US, sales rule, so the terms perceived supply are like you said, only gimicks to get the most money from you. That's just they way it works, as far as I can see.

Burr

 

Great point, Burr. The non-navi TL's sitting around on dealer lots are costing money in terms of tied up capital. Like you, my TL was literally new-born when I picked it up. And she'd been at the dealer less than 48 hours, just long enough to come off the truck, get entered into the system, get checked out and prepped, and then delivered to me. That's lean, smart use of capital and the dealers love it.

Having said that, I don't think it's entirely a matter of perceived supply. If I had decided at the last moment to walk away from the deal, that TL would not have sat on the lot long anyway. And that is why I felt satisfied to get a mere $800 off MSRP, even though in the past I was used to getting much better deals on my cars.

 

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scifitechguy quote:
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Guess I'm doing pretty good with $1000 under invoice on a navi then huh?
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TLGator then wrote:
Pretty good indeed. Are you saying you actually have such a deal pending? I've heard of no one getting anything even close to that cheap on a Navi. No offense, but I would have to say either you're being dishonest with me or the dealership is being dishonest with you.

Since I want to give you the benefit of the doubt, I'll ask you this question instead - if you do have such a deal, why are you on this forum bitching about sales tactics?
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TLGator-
Perhaps scifitechguy meant $1000 under MSRP so please give him a chance to correct himself. No one is getting less than invoice even for non-navi that I've seen.

I paid full MSRP for my '02 Odyssey based on talking around and finding out that was what others were paying. I thought the price was fair since I had paid the same amount (after discounts) for my '98 Town & Country four years earlier and the Odyssey was better. So I would just say that forums like this are great because you can post what you paid and help others to a)not get ripped off b)not smolder over not getting a deal. We all want deals, but the smart person compares the price to the quality of the product and is happy when things work out.

To take Hybrids analogy one more step; what if there was a car A that was better than expensive car B, but the dealer wanted to ADD a "profit fee" to car A which brought A up to the price of B. After getting hot and bothered and choking for a while the smart person would fork out the extra dough and get A (if he needed/wanted the car and others were paying the same inflated price) even though it would hurt to do so. Believe me the pain would go away after the car proved to be the product it was reported to be.

I did not get a Nav on my Odyssey, it just seemed too high tech. Now I wish I had. I think Acura did not realize that the Navs time "had arrived". People are getting techno faster now and with the voice activated it seems to be a more user friendly technology so they buy. Hopefully, the production of these Nav units will catch up (and come down in price - $2000 has got to include some major profit!!) so we can get the car we want at a good price.

 

Because I'm used to $500 over invoice, not $2000 over invoice (with is what you pay at $1000 under MSRP), so I don't see this as such a great deal. With dealer holdbacks and other "creative" renumerations to dealers, they are making a killing, even at this price. I'm bitching because if these cars were in such "short supply," why aren't the non-navi also in "short supply?"

And if the Japanese are so good at just in time manufacturing, why aren't they also producing navis "just in time?" I suppose someone is going to blame it on a short supply of flat panel displays. And if the navis are in such high demand, why are they even shipping the non-navis if they're so good at responding "just in time?" I think they want them on the lots to bait customers into switching to the navis, where they can more easily hike the price. Give me another good reason.

Sorry, I'm just a hard working skeptic who isn't inclined to buy these "explanations" when I've been lied to before.

 

Hybrid - great post

scifitechguy - Evidently you did mean $1000 under MSRP, not under invoice. Big difference. Glad that's cleared up. You're still getting a pretty good deal RELATIVE to many other buyers on this forum.

I don't mean to sound overly harsh, but I'm still perplexed by your basic complaint. If you think you're paying too much for the car, being lied to about supply, etc., then WHY are you even thinking of giving Acura your business? There are plenty of similarly equipped cars out there. IMO none is quite like the TL, which is why I now have one, but then again I also don't think Honda is purposefully manipulating the navi supply.

Look, it isn't as if a person can't make it through the day driving a G35 or ES330 or any of several German or American near-luxury sedans. If you perceive that Acura is playing you, why not forget the TL and check out other options?

 

The dealers aren't stupid either. They aren't going to order non-navi models if their customers aren't requesting them. So they aren't losing any money here. The only reason they have them around in the first place is to show people 99% of what they "can't have" so they have more bargaining power.

 

Another almost real life "dealer profit above all else" example:

Let's say for some reason that a family has decided that their choice of cars comes down to a TL w/Nav or a Ford Excursion SUV.

The best they can do is $500 off the TL MSRP. Final price is something like $34,700. Assume dealer profit here is $3000.

On the Expedition, they get a $2500 rebate (I don't know what they are actually running), and the dealer gives them another $4000 off. So they get it for $6500 under MSRP and the bottom line is, say, $38,000. Assume dealer profit is $300. (Ignore holdback in both examples).

Some people would jump at the Excursion deal, because of the perceived bargain, bragging rights to their friends about their great deal, etc. and they'd go away mad from the Acura dealer.

But look at another factor. I've read in several sources that Ford makes $15,000 per Excursion at the manufacturer level. I don't know what Acura makes, but it's probably more like $5000. So why isn't this important to buyers? It's completely irrelevant. So shouldn't dealer profit be irrelevant too? Shouldn't the actual bottom line price compared to the competition be what matters? Why do we care what the dealer made, and only on cars, and not other products?

I'm just saying there's lots of psychology involved in car buying.

(And, again, I'm not saying people shouldn't get the best price they can. I'm just pointing out that there are lots of factors involved, and people shouldn't reject an "MSRP" car just because there's no discount.)

 

I agree with the various people who say the final price is the only thing that matters.....

However, most cars have MSRP close to thier 'perceived value' when compared to other cars. So, if a TL had MSRP of $40 K and you got $3K off would you have purchased the car? Not me... I would have looked at the G35 a lot closer and maybe bought one in the low $30s. Also, I would have looked at the Accord in the mid $20s. BMW and Mercedes charge more because they have a higher 'perceived value' with a lot of people. Me, I thought they were WAY overpriced.

 

scifitechguy,

I can assure you the dealers in my area are not "holding back" their nav units to get higher prices. Of all TL's produced, for the first three months, only 19% were Nav's. They are ordering all the Nav's they can get. The others here are correct in that the back orders should be almost completely caught up by the next month or two.

i am very impressed with the responses already posted by other members. Therefore, I shall only add that in the end, only you can control what you feel is a good deal. If you don't want the car, pass on it! I'm sure someone else would love to get a nav for $1000 off MSRP.

 

Let me add that per Acura, dealerships are only allocated 27% navigation units for every order. So that means even if they were allowed to order 50 cars each allocation, they could really only have 13 navigation units. Therefore, they can either order 13 navi and 37 non-navi or 50 non-navi entirely. It's their choice, and I'm sure most of the dealers are happy to order the maximum 13 navi for that allocation.

 

Is this really true? I thought that dealerships were given quotas of nav and non-nav cars from acura. Acura sets the number of cars being built and distributes them. The fact that dealers have a boatload of non-navs clogging their inventory (and costing them money in terms of idle inventory and the initial loans to get the vehicles in the first place), is more due to acura missing the boat on the demand for nav vs non-nav in their production numbers more than dealers trying to create some sort of percieved shortage to gain bargaining leverage over the buyer.

 

Marquis,

You hit the nail on the head. Dealers will take a sale no matter what the car. If navs are hot, they want as many navs as they can get. The only problem is getting them!

 

Gimmie a break please. These things have been in production for months now. Are you trying to tell me that production can not be adjusted in that amount of time to increase the number of nav units in response to market demand? Ford, maybe. GM, maybe. But I'm not buying this from a Japanese maker with computerized production lines that can adjust model specs on the fly. Want more navis? Flip the production line switch to divert more vehicles to the "navi mod room!"

As I said, there's a reason why nav units are in "short supply," and it has nothing to do with production capabilities or short-sightedness. On the contrary, they know EXACTLY what they're doing - "Stand in line to get a one week delivery and pay us MSRP!" Now THAT'S precision manufacturing for you! I think I'll sit on the sidelines for a bit to see how long they can balance this knife.

 

Well, you SHOULD sit on the sidelines for a bit, since as many of us have suggested to you, it is likely the supply will improve in the coming months and you'll be able to get a nicer discount on a Navi.

But I must say, and this is going to sound offensive but I don't know how to soften it, you really sound pretty paranoid. You seem to think this huge Japanese company is manipulating a complex supply conspiracy on their brand-new model just so the dealers can charge a few extra hundred bucks per car.

As I said in a previous post, I'm usually the first to agree that big companies can't be trusted, but this particular conspiracy is really just too silly to consider seriously. Though evidently you do.

Anyway, sit and wait, you'll likely be rewarded.

 

I second the previous post, you're a frigging loonatic!

 

A 6 month wait list is "limited". Like $7k over MSRP in dealer markup for the Merc SL a few years ago. Kiss my a$$.

Actually, we bought a Honda Element last year for my wife and the sales guy tried the "limited" angle with us. He tried not to budge on MSRP b/c (he said) it was a new model and it was in demand. The only problem was there were three on the lot at the time. Now granted they did not have the color we wanted, they did have two of the same model (EX 4-wheel drive). So I asked him if he could please tell us how many Elements they had on their lot right then. He said three. I explained to him that my definition of "in demand" is more buyers than cars and he would just have to get the color we wanted at the right price or lose the sale.

He then said he could get the color we wanted by trading with another dealership for the same model and the next week he had ours on the lot. He took $1900 off of the car and did not charge any labor for the sidestep rails we added because we went ahead and completed the paperwork and gave him our down payment.

I know we were only dealing with the color but as long as cars are coming in pretty regularly, you should be able to agree on the terms, get as much of the deal completed as possible and wait 1-2 weeks for the car without having to pay full nut for it. I mean waiting 3-4 months for a car is one thing but a couple of weeks is not enough to justify only selling at MSRP.

 

OK, guess you're right. Better go take my medication now... :smokin:

Just to prove my point, let's gather some data from the good folks on this forum. I did a search here and discovered that these cars are made in Ohio. So if the Navi's are in short supply, the manufacturing date on the vehicle should be within a few weeks of the sale date. If they're coming right off the line, it can't take more than a week or two to get anywhere in the eastern half of the US, right?

So for all of you new TL owners out there, please figure out the number of days between the manufacturing date and the delivery date and reply here. If I'm right, the time difference is more like a month or two than a week or two. If I'm a paranoid loonatic, the difference will be within two weeks.

Let the people speak!

 

No offence, but I would not wait one second for an Element nor would I spend one cent. :yack: Has the Element ever been in demand? I think not, but your point is well illustrated.

 

It may complicate the Navi shortage situation somewhat that the same or similar Navi units are used in the Accord, MDX, TSX (I assume), and maybe RL (don't know on that one). Also, the maker of these units I would assume is producting these and other products for makers other than Honda/Acura. If they are like other businesses these days, they are running on minimal or less than minimal staffing levels due to not wanting to hire more people. That's a recipe for shortages that take a while to remedy. Even Alpine couldn't just turn up production instantly. They no doubt source a lot of components (chips, maybe screens, etc.) from other sources. So it can take several months to effectively crank up production to where we actually see extra Navi cars from Acura. At $2000 per unit, I'm sure Acura is making money on them and wants to sell all they can. There's some benefit to creating an artificial shortage at the dealer level, but not at the Acura level. Acuras profit is always about the same per car, unless they make so many they have to offer rebates. I really don't see any way that the dealers are hiding thousands of Navi cars.

 

I have to admit that I find this thread fascinating. I have learned so much about allocations, supply/demand, dealership selling techniques, etc. I consider myself a rather savvy auto buyer. Never have I paid more than $500.00 over invoice, usually lower. I live in Wisconsin where arguably most dealerships aren't high on auto manufacturers lists when it comes to delivering cars. So I'm disappointed to learn $1000.00 off MSRP is a good deal. It can be frustrating when the dealership knows they've got you by the testicals. I've always found it's best to walk into the dealerships with a real vague look, not sure what you're looking to buy.

The points made about certain dealerships hiding cars which they want to sell at MSRP, sadly, I believe are true. It's a tough market out there. Forums like this and websites that publish dealer pricing has made it tough to make a buck. But trust me, no owner of a car dealership is going hungry.

If I really want something so bad I can taste it...I go and buy it. Heck, it's only money. But if I'm in no hurry, enjoying the buying experience, I can be a salesperson's worst nightmare.

Pricing also is extremely dependant on competition. If you've got a few Acura dealerships within a few hundred miies of each other it's easy to play one against the other. I don't have that luxury, unfortunately.

So, after reading this informative thread, I think I'll wait until the demand lessens, until the 05s come out, or unless I come across a good Infiniti G35x salesperson.

 

I hear ya'. My wife took one look at that thing and she wouldn't walk away from it. She travels all the time and needed room for her sample cases. I definately "scratched her itch" so to speak but that thing looks like a moon buggy. Horribly underpowered but very easy to drive and it's four-wheel drive. She thinks it "looks cute". I told her I wouldn't be seen in it.

 

I am new to the TL scene however I sold cars for many years in Denver Colorado, and I can tell you this much. A salesman will sell a car if it is available to him, no matter where the car was located. Additionally the salesman does not set the price, he is merely a conduit that facilitates the bargaining process from management. There more than likely is no game being played it is simply a matter that they are trying to hold onto as much of the MSRP as they can. I was selling cars for Infiniti when the G35 Coupe came out... and it was simple. We only sold them for full pop because the buyers were wanting them badly enough to pay the full MSRP for the vehicle. So my advice to you is this, go and look elsewhere and find if you can get a better price... if not, then decide if paying the extra money is worth getting what you want. Even though I was able to talk with the sales team at the Mile High Acura store about things like "holdback" and other jargon in the autosales field, it took me going to a dealership in St. Louis MO and calling the Denver dealership about options that was on "thier" car while I was at the dealership in St. Louis. But I did get the discount I was looking for, but it took me a couple of weeks of negotiating and being ready to walk away from the deal knowing that they car I wanted could be sold the next day to someone else than me. Just decide what you want and where your boundaries lie!!