Invoice Prices for 2015 Genesis for reference

[Crusty Old Shellback]

Talk about a discussion going off the deep end.

There are a few things your not taking into account Mark:

1. most dealers do not keep the cars they take in on trade. they auction or whole sell them out to the used car delers. If it's an exceptional car, then they will kep it. My last two trade ins were that exception and were on their used car lot the next day. But I'm very miticuloius about my cars.

2. the majority of cars that people think are perfect cars and should take top value on trade in are not. So when the dealer offers you 60% of wholesale, don't be too disapointed. I think Tommy has coverd this very well but you can't seem to grasp it. A dealer is not going to cut into his profit between wholesale and retail just to make you happy. he may cut in it a little, but not much, he's a bussiness.

3. And car dealers did not start the bargining, it was done long before cars were around. And in a lot of countries around the worl, it's still done for just about ALL consumer products.

4. I'm sorry mark, but Tommy is right once again. The base mark up on just about everything in the retail bussiness is 100%. Even your on line stores.

5. Apparently you've been dealing with some bad dealerships. I've not had as bad of an experience as you when buying new cars. But then again, I'm pretty straight up with the salesman when I first meet him. And he quickly learns that I'll walk in a heart beat. I drove in in a car so I can easily get in it and drive away. Never had the lost key issue. My last 4 cars have been thru 3 different dealerships but ony 2 different salesmen. Treat me right and I'll continue to buy from you.

As for dealer markups over MSRP, it's been done by a lot of different dealers on a lot of different car manufactures. get a hot car and limit supply and it gets marked up, plain and simple. Don't liek the mark up, then don't buy it.

When I went to buy my R Spec, there was the sticker with the dealer ad ons, about 5K worth. First thing I told the sales man, " I know why you put those things on the car and I understand it. But I did not ask for them nor do I want them. So I'm not willing to pay for them. You can either take them off or we can start with the MSRP sticker price." We started negoiating at the MSRP sticker price.

 

[akuma]

Not to get into the fray here, but I think the time many teachers work is not just when they are in class teaching, anymore than someone who waits on people for their job is not working when no one is in line. Most good teachers I have known, work way beyond their stand up teaching time and for many, it can be close to equal in prep time and grading. Many also participate in other activities at school which may not be during their teaching times.

i'll agree about the good teachers, but the medicre ones (and they are legion; the ones that are probably just there to collect a check) will probably just recycle (or SLIGHTLY modify) their stale lesson plans every year and even sometimes their exams (with answers). also many subjects and classes don't have a large amount of grading to begin with. physical education, art, music, history, English/literature, shop (some trade skill), etc.

 

[TOMMYJR9]

Crusty u got it

 

[TOMMYJR9]

Mark maybe this will help . You are coming from entitlement and emotion. The car dealer is coming from intellect and facts and history. To us it's a piece of metal we deal with it every day all day long there's no emotional bond or attachment to a car based on features colors new-car smell etc. etc. it's like when a policeman goes upon a crash scene or ambulance driver goes upon the cras it's all part of a days work.

 

[ksoze]

We started negoiating at the MSRP sticker price.

Actually, start negotiating at invoice price

 

[Mark_888]

i didn't mean to imply as such. i was just stating my own opinion about their pay/hardships as there seems to be a sentiment around the country that they are being underpaid for honorable, tireless, selfless work. i just don't feel they work harder/longer hours than car salesman or get less.

http://www.teacherportal.com/teacher-salaries-by-state/

there were 24 states with an average salary over $50,000 (10 states over $60k and 2 over $70k), another 21 states between $45k and $50k. only 2 states (Mississippi and South Dakota) were under $44k.

if an average teacher (high school) teaches six hour (usually a little under an hour) classes a day (many teach only 5), they're getting paid about $50 for each of those hours. in any other job, 50 bucks an hour translates to over 100k a year. and that's just base salary. but i've already said way too much on this irrelevant subject.

car salesman are kind of like fee based restaurant servers. do you really need them? i suppose, but should you pay an extra tax on the goods that increases with the price of the goods bought despite the same service? i'm sure the salesman and servers will feel entitled to it.

Job salaries are like car prices. It depends on supply vs demand. A teacher needs a college education and often times additional classes to get a teaching certificate. This means not everyone can get a job as a teacher. There are rarely very many educational or licensing requirements to be a car salesperson.

 

[ksoze]

The car dealer is coming from intellect and facts and history.

That is not a growing trend, my friend. Print that on a T-shirt and see how it plays on the street.

 

[sandy]

The fact is the auto dealer industry has barely evolved from the Model T and has used it's lobbying might and dollars to keep themselves inserted in a modern transaction which does not need them as much anymore. Your inside view offers nothing to counter that.

The times of having to see an insurance guy to buy insurance, go to a bank to deposit a check, go to a store to rent a video or buy an album for one song is long gone. The traditional car dealership is a relic of the past and it's presence is due more to force than need. While there may be a place for that experience for some, the majority of us are forced to deal with a process which in no way is in step with todays consumer.

While I agree with you directionally, you are way, way, way ahead of yourself in discounting the need for traditional retailing, particularly in the case of cars where customers want to test drive, sit-in-it, touchy/feely the materials etc.

And you may also be overestimating the sophistication of the average car buyer, I would guess the majority is in need of hand holding (which of course works for and against).

This is not to say things could not be improved.

How would you structure the modern new car delivery system?

 

[Mark_888]

4. I'm sorry mark, but Tommy is right once again. The base mark up on just about everything in the retail bussiness is 100%. Even your on line stores.

What? Yes, for most retail items such as clothing and electronics the wholesale cost is 60% of the MSRP. By your math that may be close to 100% markup, but Tommy claimed 300% markup, so please stay with the facts.

But hardly anyone pays MSRP these days, since high volume discounters can sell items with maybe a 20% markup and make billions. For big ticket items like cars, the markup is not going to be as much, for reasons that should be obvious.

 

[TOMMYJR9]

True how about the mark up on "BOTTLED WATER" now am I incorrect ?

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[sandy]

The Union control of the teaching profession results in little/no reward for excellence and little/no penalty for mediocrity (or worse). I have yet to know of an industry or profession where this formula works well.

 

[Mark_888]

That is not a growing trend, my friend. Print that on a T-shirt and see how it plays on the street.

OK, you win the post of the year award.

 

[ksoze]

How would you structure the modern new car delivery system?

Allow manufacturers to sell direct to the public if they wanted. Simple. Choices.

http://www.newyorker.com/talk/financial/2014/04/21/140421ta_talk_surowiecki

 

[Mark_888]

True how about the mark up on "BOTTLED WATER" now am I incorrect ?

I think you are confusing manufacturing cost, with retail cost. There are a lot of mouths to feed in the entire supply chain, but the difference between wholesale (what a retailer pays) and retail cost (what a consumer pays) is not usually 300% (unless the retailer is filling the bottles of water in the back of the store from the tap). But I will admit that on some low cost items the markup can be high. But it is not reasonable to compare a bottle of water with a $50K vehicle. Anyway, I have a Britta water filter, precisely because the cost of bottled water is ridiculous.

 

[TOMMYJR9]

I agree . If you look at it like this Hyundai makes the car then sells it to the dealership then the dealership sells it to the sales dept then the sales department sells it to the customer. Everybody along the way has their fingers in the pie. JUST LIKE EVERY OTHER BUSINESS LIKE I'VE SAID 100 TIMES OVER AND OVER. If you remember and my earlier post the sales department is a customer of the service and parts department service department is a customer of the parts department. We send invoices iner company and inner department to track all of the purchases and sales just like any other business or customer. My used car manager all the time fights with service and parts cause we pay premium for everything there is no discount for us but don't discount customers for example I did a oil change and tire rotation on my personal Genesis and it cost me $52 for customer gets a special promotion of 19.95 go figure

 

[Mark_888]

I agree . If you look at it like this Hyundai makes the car then sells it to the dealership then the dealership sells it to the sales dept then the sales department sells it to the customer.

Sort of, but when the dealership sells to sales department, that is called an inter-company transaction and there is no real profit there (and no one pays taxes on any such phantom profit).

 

[Mark_888]

While I agree with you directionally, you are way, way, way ahead of yourself in discounting the need for traditional retailing, particularly in the case of cars where customers want to test drive, sit-in-it, touchy/feely the materials etc.

And you may also be overestimating the sophistication of the average car buyer, I would guess the majority is in need of hand holding (which of course works for and against).

This is not to say things could not be improved.

How would you structure the modern new car delivery system?

I don't think they can eliminate retail outlets, but in some countries the manufacturer sells direct to the customer without independent dealers. In most US states, that is illegal, which was in the news recently regarding Tesla automobiles.

 

[TOMMYJR9]

No Mark again their separate entities were not switching or swapping an item or a vehicle it's being purchased as I said 1 million times. That account for all of those add-ons pinstriping Nitro fill wheel guards mudflaps " the pack" etc.

 

[TOMMYJR9]

Correct there is no taxes paid but there is a markup on the item or products or services that's how we get charged as I said before we get we pay more than a retail customer.

 

[sandy]

Allow manufacturers to sell direct to the public if they wanted. Simple. Choices.

http://www.newyorker.com/talk/financial/2014/04/21/140421ta_talk_surowiecki

It's not that simple. Dealers make huge capital investment in a dealership and as well as additional dollars over the years in building a business with advertisng etc. They do this with an understanding via their franchise agreement that their supplier (the mfg) will not someday decide he will now become their competitor. There is a certain degree of fairness to that.

In the case of Tesla, where no pre-existing franchisees exist, I can see your point.

However, this is not to say that mfg's selling direct would necessarily be an improvement. It might and in some industries it is. I'm not really expert enough to take a serious stand.