Market Watch! GM's Incentives Drop - Japan's Shoot Up

[big blue]

Market Watch! GM's Incentives Drop - Japan's Shoot Up

Original Link

Just got the year-end sales figures from our crack team of automotive data editors and analysts. These guys have my ultimate respect, because they somehow manage to corral all the sales, pricing and incentives figures scattered throughout the automotive industry and transform them into something a journalist major can understand. Some of the more compelling figures from 2006:

1. General Motors' U.S. market share dropped to 24.6 percent, but the bulk of it came from cutting back on fleet sales. Not surprisingly, GM's incentive spending also dropped by 17.5 percent, to its lowest level since 2002 (and the lowest level of any domestic carmaker). Per vehicle incentive spending averaged $2,987. Our analyst are actually predicting an increase in GM market share for 2007.

2. Toyota's market share grew to 15.5 percent, and they officially became the third largest automaker (in terms of sales) in North America (displacing Chrysler). So the "Big 3" term is certifiably dead (or, at the very least, it now indicates a different group of automakers...). However, Toyota's incentive spending was at the highest level in five years, with an average of $1,061 per vehicle.

3. Nissan had the highest incentive spending of any Asian carmaker (that's Japan and Korea) with an average of $2,309 per vehicle (that's up 30 percent from 2005). Their market share dropped to 6.2 percent.

4. Honda's market share rose to 9.2 percent, while their average incentive spending was $720 per vehcle. However, the Pilot had record incentives at $1,550 and both the MDX and RL had incentives of over $2,000 throughout 2006.

5. Ford and Chrysler both lost market share. Ford's average incentive spending was $3,438 per vehicle, Chrysler's was $3,798 (both amounts are the highest in five years for each company).

6. Hyundai/Kia is on fire. They sold 12,000 vehicles in 1994; last year they sold 450,000 vehicles. Market share is up to 4.6 percent. Average incentive spending was $1,777 per vehicle. They should easily crack the half-million mark for sales in 2007.

[siegen]

4. Honda's market share rose to 9.2 percent, while their average incentive spending was $720 per vehcle. However, the Pilot had record incentives at $1,550 and both the MDX and RL had incentives of over $2,000 throughout 2006.

The RL needs incentives to sell. But the Pilot and MDX were both on their last years (well the Pilot is now, and the MDX was in 2006). Honda's incentives are still amazingly low, and the vehicles they're spending a lot on are the most expensive from their lineup. Lol @ Chrysler, $3,800! At least GM is realizing incentives hurt them in the long run. It's either hurt now, save yourself later, or cash in a little now, and be even more screwed later. Looks like Chrysler is taking the later route.

[Northstar]

$3k is still too much for GM to be spending on vehicles. I predict that with the new T900 Silverado and Sierra incentives will drop about $700 more on average (just from those two models, as I'm guessing they make up about 1/5 of GM's sales and their incentives are going to drop dramtically). Also, the Lambdas should help as well as the new Malibu when it comes. Those are all replacing heavily-discounted vehicles (Lambdas replace CSVs).

[Z-06]

Ideally I would like to see GM's incentive drop below $500. But I do not think it will happen anytime soon. I somehow do not understand how these so called analysts seperate the incentives from the price which the customer has bargained down to. But certainly credit goes to GM for this change of tide. In addition the import humper #1 edmunds is being a bit soft and actually giving good words about GM.

[big blue]

Looking at Chrysler, its just painful to see that amount of incentives being used. Ok I admit..it's a little funny too. Nissan and Toyota's increased incentives didn't come as a surprise as I've been seeing their commercials a lot lately, BUY BUY BUY!

As for Honda, the RL is just enjoying its existence sitting there on dealer lots and even with incentives I'm not sure I'd buy the thing. There are much better competitors out there or coming soon from other manufacturers and within Acura as most people prefer the TL over the RL.

"Our analyst are actually predicting an increase in GM market share for 2007."

When was the last time we saw that typed out about GM?

In addition the import humper #1 edmunds is being a bit soft and actually giving good words about GM.

IMO, Edmunds is a good car site whether you believe it or not and one I visit daily along with C&G. It's not that they've "gone soft", it's because GM is starting to make good products and naturally, good news follows good products. Saying Edmunds is becoming soft towards GM is taking away the credit GM has earned by developing well made vehicles. Edited January 17, 2007 by big blue

[Intrepidation]

Looking at Chrysler, its just painful to see that amount of incentives being used. Ok I admit..it's a little funny too. Nissan and Toyota's increased incentives didn't come as a surprise as I've been seeing their commercials a lot lately, BUY BUY BUY!

As for Honda, the RL is just enjoying its existence sitting there on dealer lots and even with incentives I'm not sure I'd buy the thing. There are much better competitors out there or coming soon from other manufacturers and within Acura as most people prefer the TL over the RL.

"Our analyst are actually predicting an increase in GM market share for 2007."

When was the last time we saw that typed out about GM?

IMO, Edmunds is a good car site whether you believe it or not and one I visit daily along with C&G. It's not that they've "gone soft", it's because GM is starting to make good products and naturally, good news follows good products. Saying Edmunds is becoming soft towards GM is taking away the credit GM has earned by developing well made vehicles.

I agree, edmunds will give a car good reviews if it's a good car. If they were import humpers they wouldn't give such high marks to the Charger, 300, Magnum, Aura, Fusion, Outlook, etc. Those all got good reviews because they are good cars. Just like they give bad reviews to bad cars (go check out the Echo road test). Sure, they can be a little stupid at times, and some of their comments are unnecessary and idiotic, but for the most part they're good. I also like TCC.

Edited January 17, 2007 by Dodgefan

[CARBIZ]

It seems obvious that so-called incentives hurt resale and image; however, they are a mixed blessing in reality. Some customers are what I call Olympic Negotiators. That is, they will shop for the deal, not the vehicle. They don't care if they even like the vehicle, as long as they think the dealer is bleeding out its eyes. For these people, a $300 discount receives a mere snort or chuckle. It is for these people that the many "hidden" and not hidden programs are useful.

I have had people whine to me that they loved the Versa but wouldn't buy it because the dealer wouldn't budge on the price and the lease rate was 6.9. Give them $1,000 off a Cobalt and that is just an opening bid! Without these incentives, we might lose a few of those people, which on the face of it isn't such a bad thing, but GM needs to scrounge for every customer these days.

[big blue]

I also like TTC.

Hmmm not really familiar with TTC...or did you mean TCC?

[Intrepidation]

Hmmm not really familiar with TTC...or did you mean TCC?

Yes XD

[thegriffon]

Part of it is also down to mix-The vehicles Toyota spends heavily on incentives still don't sell, so the average remains very low, while the few models GM offers high incentives on make up a much larger percentage of sales. From a financial point of view it's still bad for GM—you don't want to be dependent on a segment which depends heavily on incentives to sell—but as a reflection of relative popularity it can be misleading.

[haypops]

3. Nissan had the highest incentive spending of any Asian carmaker (that's Japan and Korea) with an average of $2,309 per vehicle (that's up 30 percent from 2005). Their market share dropped to 6.2 percent.

Too bad that whole take over thing didn't work out so save GM. (sarcasm)

[gm4life]

I am an one of those people who will come in and fight, fight, fight, fight and fight some more. Look at it this way my Bonneville SLE was $32,935.00 sticker... (Never would pay that!) The dealer had the car listed at $26,349.00 (with 3,000 miles it was a dealer exec. car) as I recall, but that was too high (but I LOVED the car and had to have an SLE because of the styling and my wife wouldn't let me get a GXP because of fuel economy. This was June 15ish 2005 keep in my mind I drove down to the dealer the DAY it was listed and I let the games begin... I made NO mention of my trade until the end, so I got him down to $25,000... I am like not good enough Kerry, he came back and counter offered me with $23,749 (I had wanted $22,000) I said no way Kerry. He went back into the boss and said $23,000 is my lowest. I said why thanks for your time at that price I do not want the Bonneville. Oh, John just wait here lets see what I can do... (As I was walking out the door by the way) Alright John let me go back and talk to my boss again (3rd time) okay I can do $23,000 I said Kerry thats still 1 grand more than I want to spend! Okay he said I can do 22,499, I said sorry that is 500 more than I will spend. Walks back the his boss again and comes out with a smile alright John how about $22,000 even? I said no thats still a lil' more than I will spend, says alright, how about $21,966? I said Kerry you got yourself a deal. I quickly wrote down that number and I said I have a trade... His eyes pop out of his long head, okay a 1992 Cadillac Sedan Deville 90k he takes a look at it and says... How about 1,000 grand I say no way I can ebay it for double or closer to triple. Went inside to see the boss how about 1,500 I said naw, then he said okay I can do $1,933 so the car is an even 20,000 (plus tax etc.) I said thats fine... That is how I love to buy a car and play the game! I have been doing it since 1971 on my first Azteck Gold Bonneville Sedan! I wouldn't buy a car anyother way, three long hours later the car was mine!

I find the car I want if it is not a good deal I work 'em over till I get what I want, or I walk. I don't just buy a car that has a good price. (I hate that! I won't settle for less!)

[Intrepidation]

I am an one of those people who will come in and fight, fight, fight, fight and fight some more. Look at it this way my Bonneville SLE was $32,935.00 sticker... (Never would pay that!) The dealer had the car listed at $26,349.00 (with 3,000 miles it was a dealer exec. car) as I recall, but that was too high (but I LOVED the car and had to have an SLE because of the styling and my wife wouldn't let me get a GXP because of fuel economy. This was June 15ish 2005 keep in my mind I drove down to the dealer the DAY it was listed and I let the games begin... I made NO mention of my trade until the end, so I got him down to $25,000... I am like not good enough Kerry, he came back and counter offered me with $23,749 (I had wanted $22,000) I said no way Kerry. He went back into the boss and said $23,000 is my lowest. I said why thanks for your time at that price I do not want the Bonneville. Oh, John just wait here lets see what I can do... (As I was walking out the door by the way) Alright John let me go back and talk to my boss again (3rd time) okay I can do $23,000 I said Kerry thats still 1 grand more than I want to spend! Okay he said I can do 22,499, I said sorry that is 500 more than I will spend. Walks back the his boss again and comes out with a smile alright John how about $22,000 even? I said no thats still a lil' more than I will spend, says alright, how about $21,966? I said Kerry you got yourself a deal. I quickly wrote down that number and I said I have a trade... His eyes pop out of his long head, okay a 1992 Cadillac Sedan Deville 90k he takes a look at it and says... How about 1,000 grand I say no way I can ebay it for double or closer to triple. Went inside to see the boss how about 1,500 I said naw, then he said okay I can do $1,933 so the car is an even 20,000 (plus tax etc.) I said thats fine... That is how I love to buy a car and play the game! I have been doing it since 1971 on my first Azteck Gold Bonneville Sedan! I wouldn't buy a car anyother way, three long hours later the car was mine!

I find the car I want if it is not a good deal I work 'em over till I get what I want, or I walk. I don't just buy a car that has a good price. (I hate that! I won't settle for less!)

What a scheming, underhanded bastard you are! Very well done. :AH-HA_wink:

[CARBIZ]

Hell, I'd love to work in your area, gm4life, if the guys there can mark up a vehicle $4,383 and still make money off ya!

I had a guy like that recently. He had spoken to another salesperson a month or so before and came back with no appointment, nothing. No patience or respect for the time the other salesperson had spent with him, he wanted to look at the Optra right now. So, reluctantly, I spoke with him. We looked at a few cars and he started making stupid offers on the lot. This puzzled me. Where do you get these figures from, I asked. A $18,000 car (new) and you are coming up with $2,000 discounts. When I refused to play his game, he retorted that this is how he always buys cars. I retorted right back, "Well, it can't be doing too well for you, can it? A month has gone by and you still haven't bought anything!"

[caddycruiser]

I am an one of those people who will come in and fight, fight, fight, fight and fight some more. Look at it this way my Bonneville SLE was $32,935.00 sticker... (Never would pay that!) The dealer had the car listed at $26,349.00 (with 3,000 miles it was a dealer exec. car) as I recall, but that was too high (but I LOVED the car and had to have an SLE because of the styling and my wife wouldn't let me get a GXP because of fuel economy. This was June 15ish 2005 keep in my mind I drove down to the dealer the DAY it was listed and I let the games begin... I made NO mention of my trade until the end, so I got him down to $25,000... I am like not good enough Kerry, he came back and counter offered me with $23,749 (I had wanted $22,000) I said no way Kerry. He went back into the boss and said $23,000 is my lowest. I said why thanks for your time at that price I do not want the Bonneville. Oh, John just wait here lets see what I can do... (As I was walking out the door by the way) Alright John let me go back and talk to my boss again (3rd time) okay I can do $23,000 I said Kerry thats still 1 grand more than I want to spend! Okay he said I can do 22,499, I said sorry that is 500 more than I will spend. Walks back the his boss again and comes out with a smile alright John how about $22,000 even? I said no thats still a lil' more than I will spend, says alright, how about $21,966? I said Kerry you got yourself a deal. I quickly wrote down that number and I said I have a trade... His eyes pop out of his long head, okay a 1992 Cadillac Sedan Deville 90k he takes a look at it and says... How about 1,000 grand I say no way I can ebay it for double or closer to triple. Went inside to see the boss how about 1,500 I said naw, then he said okay I can do $1,933 so the car is an even 20,000 (plus tax etc.) I said thats fine... That is how I love to buy a car and play the game! I have been doing it since 1971 on my first Azteck Gold Bonneville Sedan! I wouldn't buy a car anyother way, three long hours later the car was mine!

I find the car I want if it is not a good deal I work 'em over till I get what I want, or I walk. I don't just buy a car that has a good price. (I hate that! I won't settle for less!)

That's all well and good IF the discount is there to be had--it surely was with a demo Bonneville. You obviously knew there was, and went from there.

On the other hand, there are people (i.e., relatives of mine) who go in wanting to get a newly released vehicle with a very small invoice-MSRP spread, demand a price well below what would actually be invoice, and then think the dealer is either 1) an idiot or 2) doesn't want to deal hard enough to get their business. Most people aren't this strange, but some still are. Kinda exactly like the guy CARBIZ mentioned.

It's people like the latter, and variations on that, who will have the hardest time getting used to the idea of either small ($500 - $2000 max) or no cash on the hood, regardless of a lower MSRP, features, etc.

I'm all for it, though, and hope it continues. Hopefully gone are the days when you'd walk into a Chevy dealer and get $10k+ below sticker on any new Tahoe/Suburban on the lot before any negotiations, like we and thousands of others have done (technically would be a good thing, IF the original sticker wasn't so inflated in the first place).

Edited January 18, 2007 by caddycruiser

[CARBIZ]

The funny thing about "sticker" price is that it is supposed to be there so the dealer can make money. Typically, a 6-9% spread over "cost." That was all and fine when GM had 40%+ market share and a relatively stable market that existed, say, 25 years ago. The trouble now is that dealers are cutting each other's throats as the market share slides.

It makes me chuckle when I have a customer say that it is quite reasonable for a dealer to make $600 on a $25,000 vehicle. Do they know what the mark up on food, clothing and furniture is?

It strikes me as odd that people will fight and scream to save $100 on a car deal, then walk into some fancy grocery store and pay $25 too much on a $100 order of groceries. I, on the other hand, don't gnash and grind a salesperson when I am buying a high ticket item, because I realize that over the course of that item's use, the hundred dollars won't matter much; however, I will walk out of a grocery store when I see that I am getting ripped off. At the end of a year, the groceries will add up to a lot more than the hundred or so bucks I saved on the high ticket item.

[DetroitNut90]

I am an one of those people who will come in and fight, fight, fight, fight and fight some more. Look at it this way my Bonneville SLE was $32,935.00 sticker... (Never would pay that!) The dealer had the car listed at $26,349.00 (with 3,000 miles it was a dealer exec. car) as I recall, but that was too high (but I LOVED the car and had to have an SLE because of the styling and my wife wouldn't let me get a GXP because of fuel economy. This was June 15ish 2005 keep in my mind I drove down to the dealer the DAY it was listed and I let the games begin... I made NO mention of my trade until the end, so I got him down to $25,000... I am like not good enough Kerry, he came back and counter offered me with $23,749 (I had wanted $22,000) I said no way Kerry. He went back into the boss and said $23,000 is my lowest. I said why thanks for your time at that price I do not want the Bonneville. Oh, John just wait here lets see what I can do... (As I was walking out the door by the way) Alright John let me go back and talk to my boss again (3rd time) okay I can do $23,000 I said Kerry thats still 1 grand more than I want to spend! Okay he said I can do 22,499, I said sorry that is 500 more than I will spend. Walks back the his boss again and comes out with a smile alright John how about $22,000 even? I said no thats still a lil' more than I will spend, says alright, how about $21,966? I said Kerry you got yourself a deal. I quickly wrote down that number and I said I have a trade... His eyes pop out of his long head, okay a 1992 Cadillac Sedan Deville 90k he takes a look at it and says... How about 1,000 grand I say no way I can ebay it for double or closer to triple. Went inside to see the boss how about 1,500 I said naw, then he said okay I can do $1,933 so the car is an even 20,000 (plus tax etc.) I said thats fine... That is how I love to buy a car and play the game! I have been doing it since 1971 on my first Azteck Gold Bonneville Sedan! I wouldn't buy a car anyother way, three long hours later the car was mine!

I find the car I want if it is not a good deal I work 'em over till I get what I want, or I walk. I don't just buy a car that has a good price. (I hate that! I won't settle for less!)

Wow...I want you with me when I go to buy my car...

Anyways, good for GM. It's slow progress, but it's progress nonetheless.

[AxelTheRed]

"Hyundai/Kia is on fire."

If only...

Edited January 18, 2007 by AxelTheRed

[ellives]

"Hyundai/Kia is on fire."

If only...

I hope it's true and they put the hurt on Toyota eventually.

[regfootball]

i get good deals on my cars always.

but it also explains that my last 4 cars were two diamantes, an aztek and a 500.

moral: if you want a deal, you likely will not get a 'hot' car, so naturally the cool cars will likely not have much incentives. At the same time, the uncool cars, you will find vehicles that are good and suit your needs well. Sometimes you need to avoid 'style' or the latest features and really focus on a vehicle's core virtues.

I need vehicles that are spacious and good on long road trips, and will fare well in a crash. For the prices I've paid for what i drive, I generally have been well suited to get the bigger car, even if its not as 'sublime' as an Accord or as hip as a Jetta.

But everyone knows how they most wisely spend their money. Most people will spend more for payments on 2 little compact cars than what I get for my money. I just have to ignore the fact I am not driving a 'cool' car.

One example I was thinking of the other day as I saw another clueless chick driving a new Honda CRV. She likely forked out 26-27k for that piece of 4 cylinder slug crap that won't get out of its own way. She likely could have had a base Pilot for same $$$ or better yet, something more useful like a Mitusbishi Endeavor, and had a six cylinder with tons more room and not a tin can, for like 5 grand less.

I guess I am a different breed though.

Edited January 18, 2007 by regfootball

[RJB]

I am an one of those people who will come in and fight, fight, fight, fight and fight some more. Look at it this way my Bonneville SLE was $32,935.00 sticker... (Never would pay that!) The dealer had the car listed at $26,349.00 (with 3,000 miles it was a dealer exec. car) as I recall, but that was too high (but I LOVED the car and had to have an SLE because of the styling and my wife wouldn't let me get a GXP because of fuel economy. This was June 15ish 2005 keep in my mind I drove down to the dealer the DAY it was listed and I let the games begin... I made NO mention of my trade until the end, so I got him down to $25,000... I am like not good enough Kerry, he came back and counter offered me with $23,749 (I had wanted $22,000) I said no way Kerry. He went back into the boss and said $23,000 is my lowest. I said why thanks for your time at that price I do not want the Bonneville. Oh, John just wait here lets see what I can do... (As I was walking out the door by the way) Alright John let me go back and talk to my boss again (3rd time) okay I can do $23,000 I said Kerry thats still 1 grand more than I want to spend! Okay he said I can do 22,499, I said sorry that is 500 more than I will spend. Walks back the his boss again and comes out with a smile alright John how about $22,000 even? I said no thats still a lil' more than I will spend, says alright, how about $21,966? I said Kerry you got yourself a deal. I quickly wrote down that number and I said I have a trade... His eyes pop out of his long head, okay a 1992 Cadillac Sedan Deville 90k he takes a look at it and says... How about 1,000 grand I say no way I can ebay it for double or closer to triple. Went inside to see the boss how about 1,500 I said naw, then he said okay I can do $1,933 so the car is an even 20,000 (plus tax etc.) I said thats fine... That is how I love to buy a car and play the game! I have been doing it since 1971 on my first Azteck Gold Bonneville Sedan! I wouldn't buy a car anyother way, three long hours later the car was mine!

I find the car I want if it is not a good deal I work 'em over till I get what I want, or I walk. I don't just buy a car that has a good price. (I hate that! I won't settle for less!)

I agree I need you to deal for me too, maybe I don't know how to talk to the sales people here in Michigan or something but they usually don't give in when I am dealing with them. I have walked out of alot of dealerships pissed off because they won't budge an inch. Maybe I need to be more of an a-hole with them. In fact maybe I should lie to the sales guy that keeps calling me and just make up a number from another dealership and say flat out I'm going there and what are you going to do for me?

[CARBIZ]

......... a customer lie? NAH! Never happens. All you will do is piss off a rookie. The veterans can smell BS a mile away. Besides, there is no magic in this business, guys. For new cars, all dealers pay exactly the same thing for the same vehicle. As for used vehicles, in the case of GM dealers we all go to the same auctions and fight over the same "rentals." Our used car manager knows what dealers are paying for Malibus, Cobalts, whatever. I even laugh when we call a wholesaler to get a quote on a trade-in and the wholesaler snorts that he has already quoted on that vehicle from another dealer!

So, you can huff and puff all you want. When someone tells me they can lease an Equinox for $50 a month (why is it always $50 and not $5?) less than what I quoted them, I tell them to run right over there and lease it. The only part that galls me is that I have to pretend that the other dealer is lying to them when, in fact, I know it is the customer lying to me.

Nobody wins in this case, boys and girls.

[RJB]

I'm screwed then...I'll bend over and grab my ankles I guess when the time comes to get a new vehicle.

[Z-06]

Looking at Chrysler, its just painful to see that amount of incentives being used. Ok I admit..it's a little funny too. Nissan and Toyota's increased incentives didn't come as a surprise as I've been seeing their commercials a lot lately, BUY BUY BUY!

As for Honda, the RL is just enjoying its existence sitting there on dealer lots and even with incentives I'm not sure I'd buy the thing. There are much better competitors out there or coming soon from other manufacturers and within Acura as most people prefer the TL over the RL.

"Our analyst are actually predicting an increase in GM market share for 2007."

When was the last time we saw that typed out about GM?

IMO, Edmunds is a good car site whether you believe it or not and one I visit daily along with C&G. It's not that they've "gone soft", it's because GM is starting to make good products and naturally, good news follows good products. Saying Edmunds is becoming soft towards GM is taking away the credit GM has earned by developing well made vehicles.

In no sense I am taking credit away from GM, edmunds has found little something about a good car from GM. Yes, the good cars of yesteryears from GM are bad compared to what we are seeing now, edmunds has certainly softened some.

[regfootball]

......... a customer lie? NAH! Never happens. All you will do is piss off a rookie. The veterans can smell BS a mile away. Besides, there is no magic in this business, guys. For new cars, all dealers pay exactly the same thing for the same vehicle. As for used vehicles, in the case of GM dealers we all go to the same auctions and fight over the same "rentals." Our used car manager knows what dealers are paying for Malibus, Cobalts, whatever. I even laugh when we call a wholesaler to get a quote on a trade-in and the wholesaler snorts that he has already quoted on that vehicle from another dealer!

So, you can huff and puff all you want. When someone tells me they can lease an Equinox for $50 a month (why is it always $50 and not $5?) less than what I quoted them, I tell them to run right over there and lease it. The only part that galls me is that I have to pretend that the other dealer is lying to them when, in fact, I know it is the customer lying to me.

Nobody wins in this case, boys and girls.

not after volume bonus incentives are factored in. Mega dealers 'buy' the cars for less in the end, because of the kickbacks they will get from selling more cars....after the fact. even if the invoice is the same. I've been told these extra kickbacks for volume, beyond the normal holdbacks, can be 1000 bucks or more per vehicle. This gives them a real competitive advantage for long term market share.

re: leases, most of the time lease structures will end up similar between dealers. However, when I was shopping 500's and quests for leases about a year or so ago, I actually was quoted some widely variable lease payment prices. When shopping I presented the same parameters to every dealer with exact specs on the model i was looking for. Perhaps the aggressive dealers made up the difference with reduced cap cost pricing and financing rates and fees. There in fact was a spread of 50-60 bucks on the quest vans I looked at and probably about the same spread a month on 500's. An aggressive dealer will play with the line items they can to try to get your lease business if they are hungry. It used to be that all cars leased at MSRP. No any more. And I am ok with that.

Edited January 18, 2007 by regfootball

[Drew Dowdell]

Toyota's incentive spending was at the highest level in five years, with an average of $1,061 per vehicle.

Buying their way into the #1 spot. Hope it bites them in the ass.

[haypops]

Buying their way into the #1 spot. Hope it bites them in the ass.

It will if the cars are troublesome and don't provide good value. If, however, the cars hold up well ... then what?

[Drew Dowdell]

It will if the cars are troublesome and don't provide good value. If, however, the cars hold up well ... then what?

Toyota recalled more cars in 2006 than they sold in North America in 2006.

[regfootball]

It will if the cars are troublesome and don't provide good value. If, however, the cars hold up well ... then what?

the part toyota does not get is that with them trying to flood the market, their 'legendary' resale value will go in the toilet. Its one thing to have the colluj edunacated snob set buy toyotas in small numbers and overpay because they have the dough, but when whitebread middle class Amurcha with Bush era incomes starts buying way too many of them and buys them with many incentives, then the resale goes in the tank. I wonder if toyota is aware that this will happen. Once a bunch of neglected Camlees start flooding the auto auctions, etc. its not gonna mean squat how well they hold up. Supply and demand. Too many underpriced used Camry's will make it tougher to sell the new ones, unless they slap even more incentives on them.

Edited January 18, 2007 by regfootball

[The O.C.]

Buying their way into the #1 spot. Hope it bites them in the ass.

Then.....how do you classify GM's spending levels.....at almost three times Toyota's?

[regfootball]

Then.....how do you classify GM's spending levels.....at almost three times Toyota's?

gotta keep those union plants runnin

[caddycruiser]

......... a customer lie? NAH! Never happens. All you will do is piss off a rookie. The veterans can smell BS a mile away. Besides, there is no magic in this business, guys. For new cars, all dealers pay exactly the same thing for the same vehicle. As for used vehicles, in the case of GM dealers we all go to the same auctions and fight over the same "rentals." Our used car manager knows what dealers are paying for Malibus, Cobalts, whatever. I even laugh when we call a wholesaler to get a quote on a trade-in and the wholesaler snorts that he has already quoted on that vehicle from another dealer!

So, you can huff and puff all you want. When someone tells me they can lease an Equinox for $50 a month (why is it always $50 and not $5?) less than what I quoted them, I tell them to run right over there and lease it. The only part that galls me is that I have to pretend that the other dealer is lying to them when, in fact, I know it is the customer lying to me.

Nobody wins in this case, boys and girls.

GREAT point and why I actually have a high level of respect for most dealers who deserve it. I can't imagine dealing with the large number of customers who bat lie against lie, and get mad over dollars, just to most of the time have the satisfaction that they really saved a big chunk. Not saying a good deal isn't worth fighting for, but sadly for salesmen (most of which who are honest and pleasant), dealing with people too hung up on nickels and dimes is just nuts.

It's also a good point how the selling prices have changed so much over the years. A long time ago, real transaction prices were closer to MSRP--just like ANYTHING else you buy in the world--but when products started getting dull and underwhelming and the market was just flooded, fire sales started with big cash laying everywhere, and people just became addicted and won't buy most cars without it.

[Drew Dowdell]

Then.....how do you classify GM's spending levels.....at almost three times Toyota's?

Toyota already has great percived quality.

GM is trying to regain that perception.

GM got to be number one with breath taking design and amazing performance, a position they are trying to regain.

Toyota is going to be number one by throwing in a free ice-maker with each refrigerator they sell.

[CARBIZ]

Just to build on Regfootballs' earlier point, I gather that selling vehicles in the States is a whore's game. First of all, there are no Canadian superstores. A big GM dealer in Canada will sell 125 new cars a MONTH. In the States, that would read a WEEK. Nobody has a clear advantage up here. Secondly, at least up in Canada, we see the monthly reports and the average selling "gross" across an entire "zone" will spread by maybe $100. There are a lot of myths about car buying. Again, I can only speak for Canada, but I know that Chrysler dealers sell closer to invoice because they do get "hold backs" and other such nonsense. GM is a little more above board with their dealers, which is why they have a better relationship with them. There are subtle ways that GM can slam a dealer who doesn't keep in line: no dealer will survive long by constantly and drastically undercutting their cousins.

And if you think you are being clever by shopping around to 12 dealers for the same vehicle, and it takes you 3 months to get around to all those 12 dealers, newsflash: the programs and incentives probably changed, which is why the guy you bought from gave you such a great deal!

The dealer is not the money man - it is the manufacturer. I can knock off $500, but GM can knock of $5,000, if it chooses!

Price whores are just that: whores. I repeat: there is no magic in selling cars. It is just like any other business. If you buy a widget for $5, you hope to sell it for $6 and pay the rent. If a fire sale story turns out to be true, it probably was the vehicle with lot damage, or that sat on the lot for 18 months, or that was dealer traded 3 times.

In my experience, most people who brag about the amazing deal they got are either outright lying, or sadly confused. I used to argue with people, now I just offer them $1,000 cash to prove the deal their buddy/cousin/butcher/dog's groomer got. Strangely, I never see those customers again to claim their $1,000. We are all human with human memories and agendas. I have kept a written journal for 30 years and I can tell you from experience that if you embellish a story to make it more interesting, eventually your memory will adjust and you will believe that is what happened. People who retell their favorite car stories are no different. Do you think someone is going to brag to you that they got hosed? Of course not. We all want to sound like we know what we are talking about and be important.

I had a couple almost get divorced in front of me because the husband shrugged and said how great his Accord has been. His wife, who was considering leasing a Venture (and eventually did - behind his back!), challenged him and remarked that he always was bitching about how much every trip to the dealer was costing. Is he trying to be a big man in front of the greasy salesman, or is his memory selectively deleting bad news about his car because deep down he realized he paid too much and is continuing to pay too much?

Find a dealer you like and work with them, not against them. By being fair and honest up front, you might be surprised at how well you are treated. If you are treated badly, then complain to the general manager. That guy shouldn't be working there!

[regfootball]

Just to build on Regfootballs' earlier point, I gather that selling vehicles in the States is a whore's game. First of all, there are no Canadian superstores. A big GM dealer in Canada will sell 125 new cars a MONTH. In the States, that would read a WEEK. Nobody has a clear advantage up here. Secondly, at least up in Canada, we see the monthly reports and the average selling "gross" across an entire "zone" will spread by maybe $100. There are a lot of myths about car buying. Again, I can only speak for Canada, but I know that Chrysler dealers sell closer to invoice because they do get "hold backs" and other such nonsense. GM is a little more above board with their dealers, which is why they have a better relationship with them. There are subtle ways that GM can slam a dealer who doesn't keep in line: no dealer will survive long by constantly and drastically undercutting their cousins.

And if you think you are being clever by shopping around to 12 dealers for the same vehicle, and it takes you 3 months to get around to all those 12 dealers, newsflash: the programs and incentives probably changed, which is why the guy you bought from gave you such a great deal!

The dealer is not the money man - it is the manufacturer. I can knock off $500, but GM can knock of $5,000, if it chooses!

Price whores are just that: whores. I repeat: there is no magic in selling cars. It is just like any other business. If you buy a widget for $5, you hope to sell it for $6 and pay the rent. If a fire sale story turns out to be true, it probably was the vehicle with lot damage, or that sat on the lot for 18 months, or that was dealer traded 3 times.

In my experience, most people who brag about the amazing deal they got are either outright lying, or sadly confused. I used to argue with people, now I just offer them $1,000 cash to prove the deal their buddy/cousin/butcher/dog's groomer got. Strangely, I never see those customers again to claim their $1,000. We are all human with human memories and agendas. I have kept a written journal for 30 years and I can tell you from experience that if you embellish a story to make it more interesting, eventually your memory will adjust and you will believe that is what happened. People who retell their favorite car stories are no different. Do you think someone is going to brag to you that they got hosed? Of course not. We all want to sound like we know what we are talking about and be important.

I had a couple almost get divorced in front of me because the husband shrugged and said how great his Accord has been. His wife, who was considering leasing a Venture (and eventually did - behind his back!), challenged him and remarked that he always was bitching about how much every trip to the dealer was costing. Is he trying to be a big man in front of the greasy salesman, or is his memory selectively deleting bad news about his car because deep down he realized he paid too much and is continuing to pay too much?

Find a dealer you like and work with them, not against them. By being fair and honest up front, you might be surprised at how well you are treated. If you are treated badly, then complain to the general manager. That guy shouldn't be working there!

what I have found is that where I end up buying my cars is a place that gives me a GOOD price, but also, a sales experience where they respect me and I end up appreciating their honest effort to provide great customer service. I find that even if I missed getting the absolute lowest price, I got it for really darn close, but I established a good relationship with whoever I dealt with.

The place I bought my Prism from new, they called back often to see how I liked the car and also sent many cordial 'soft marketing' mail pieces. They concentrated on trying to earn repeat business and building a relationship with one saleman.

The same thing occurs now with where I got my 500. Every time my salesman sees me crusing the lot just to browse, he runs out and says hi....or if i come in for an oil change, he always finds me and asks me how its going. I even get Christmas cards from the dealer. I got a great deal, but I do genuinely find they want my business long term and want to establish a good future realtionship.

Same with where I got my Aztek. Even though the salesman was a family friend, he showed great patience working to find what I wanted exactly and continued to call periodically to see how it was turning out and making sure we were happy with it.

Even the used lux car broker I bought from, they were a zero pressure dealer, with one price. thing was, they had low prices and great cars to pick from. Other friends bought cars from the same place and the level of respect all of us got from the dealer was unheard of good. Even now if i go back to test drive something they have, they always make sure to be very accomodating to what i am looking for.

So I can see why a salesperson would get frustrated with buyers who act like they are on a safari hunt. Some buyers really need to try to deal on a human level. I usually decide within the first 2 minutes if the salesperson is worth my time. If I think they are a good person to deal with, then I try to cut through the crap and cut to the chase quick....this is what I want, this is what I think you can sell this to me for, am I close? If you throw a FAIR number out there that leaves a bit of negotiation room, and its not a ridiculous absurd offer, you'll find in a lot of cases you will get a person working hard on your side. You need to work with THEM as much as they work with you. And it also helps to not dick around with the sales manager. When you sense you are getting close to being together on price, when you get to meet the sales manager, MAKE IT CLEAR that you are there to write checks and buy cars NOW and they you feel you are VERY CLOSE on price. If they KNOW you are SERIOUS, its amazing how flexible those guys get to close the deal.

Edited January 19, 2007 by regfootball

[CARBIZ]

Well said.

[gm4life]

It was not a demo vehicle trust me, you can tell by the abuse. (This thing was mint hell even the carpet was perfect and so was the exterior there were 3 marks on it I found was all!) This was driven by the second in command at the dealership. I am positive. Anyways I like to play the good ol' game. My son found the car for me on the internet and I said son that is way to much to pay. He then replied pardon this politically incorrect statement... 'Jew em'! (that is exactly what I did) ((I have nothing against Jewish people by the way and have the upmost respect for them.))

Edited January 19, 2007 by gm4life