Principle Problem: Resale value

[CARBIZ]

Yeah, they play with the prices of the new car and trade in but if you're paying attention you can make sure that the gap moves in your favor every time. It's just a matter of being able to subtract. A similarly equipped Cobalt priced out at a few hundred dollars less than the Toyota. I've always thought GM's option packages were strange and wondered how they decided what would be standard and what options would require other options and so forth.

I think I also benefitted by purchasing a car that the dealer was stuck with. Unlike most Corolla S's this one lacks the ground effects and spoiler. I think someone ordered it and then didn't take delivery because it's not equipped the same way most cars on the lots were.

Still, I really didn't like the look of the Cobalt sedan so even for thousands less I don't think I would have picked it up.

Ya didn't like the LOOK of the Cobalt sedan, but you did the Corolla?

Note to self: avoid Kansas. Don't even take flight that flies over Kansas.

[CARBIZ]

I'm not much for the fake wood grain details myself though some people like those. I even admit that the exterior styling of the Corolla is bland compared to others. But I'm old so simple isn't such a big deal to me. My favorite look is on the VW Jetta and I don't usually go for much bolder than that. The materials in the Cobalt are just cheaper, especially the lower end models, and that's why they start to look bad sooner. Worst case scenario I get burned on this car like I did on my Ion and right after it gets paid off I start to suffer repeated mechanical failures and the appearance begins to deteriorate substantially.

I've got a comfortable car to get me to and from work and pulled 36 mpg in combined driving on the first full tank of gas. My only complaint is that the radio doesn't sound as good.

If the Astra turns out to be that car this fall then I'll drive one next time I'm in the market for a new car.

And if I hit the lottery and money doesn't matter so much I'll pick up a Corvette. And a Porsche. And a CTS. Maybe a classic Bughatti.

As I said earlier, I equate resale value with the practical usefullness of the car after a certain age and five to seven years is the window I'm concerned with.

An earlier response was made about why you would want to drive one of the old S models for 200,000 miles. I think once you hit 100,000 and are going strong you start to wonder how far you can make it despite the rattles and thread bare seats. It was easy to find a good seat cover for those cars and you could just turn the radio up. The parts were small and common. Tires, brakes, shocks and such were cheap compared to other cars and that kept maintanance costs from getting annoying.

I honestly doubt my Corolla will have those advantages but I'm enjoying the change so far. We'll just see how things hold out and what happens five years from now.

Clearly, you never drove the Cobalt. Even the base LS has a better ride/handling than the Corolla. I drive them back to back with clients all the time: no contest. And the woodgrain is not standard on the Cobalt. Most have the brushed aluminum look. Incidentally, the posted Cobalt pic above is from the 2006 model, not 2007.

The Pioneer speaker package with 10" sub in the trunk is a $300 option on any level of Cobalt, making it the best damn kick-ass system available in the lower classes. Even the cheapest package has decent speakers.

Sounds to me like you met a good salesman at the Toyota store, he got you sipping from the punch bowl and now you are commited, literally.

Unless you paid cash (and even then, the Cobalt LT is priced less than the Corolla CE and has more equipment), the Cobalt is a LOT less in payments. Do not get sucked in by sticker prices. Around here, there is a $750 retail delivery credit on the LT AND two loyalty programs (including Toyotas, Hondas, VW, etc) that can knock off another $1,000 or $750, depending on what you or anyone in your family is driving!)

This is the trouble that price whores get into. They don't stick to one dealer and build up a relationship. If they did, they would be able to take advantage of programs and time their purchase just right - and save a bundle.

[Drew Dowdell]

Yeah I know, I hate that Toyota did that *they did it to the last gen Camry too). But then, I also hate the way the center stack/console in the Aura isn't symmetrical.

Doesn't have to be symetrical... just has to line up right. Look at how the HVAC controls don't line up with the stereo and vents above it....like the Aura does...

[The O.C.]

It's the Ion & Vue's distinctly Fisher Price interiors that marked them as downscale or low rent. The No haggle policy left little chance to truly sell on price. That's why the desireability of the latest (ironically non-polymer) products is so critical to the brands revival.

I just had an ION 3 as a rental and drove about 375 miles between Tampa and Miami last week.

We all know this already.....but it was appaling how bad the interior and exterior fit-and-finish and materials were. I was more embarrassed to be seen in this Saturn than any Kia or Hyundai rental I've had.

On the plus side, you can see where they put the money......the actual ride-and-handling and powertrain were very nice.....solid chassis, nice lack of float, wallow, and buck.....and a seemless Ecotec powertrain and 4-speed automatic. In fact, this ION seemed way taughter and more solid than the Cobalts I've had as rentals....(those creaked and groaned over pavement imperfections, etc.

The 2.2L could have used more power.....(or the 2.4L upgrade option) but it was quiet on the freeway, relatively smooth, and I averaged a solid 30mpg for the time I had it....and that was mostly highway driving, but at an elevated 80-85mph....with lost of foot-to-the-floor action just to get up to speed.

[Flybrian]

We all know this already.....but it was appaling how bad the interior and exterior fit-and-finish and materials were. I was more embarrassed to be seen in this Saturn than any Kia or Hyundai rental I've had.

You clearly have not rented an old Accent. But furthermore...

I just had an ION 3 as a rental and drove about 375 miles between Tampa and Miami last week.

WTF? I would've definitely bought you lunch at a great Thai place in downtown.

[The O.C.]

Doesn't have to be symetrical... just has to line up right. Look at how the HVAC controls don't line up with the stereo and vents above it....like the Aura does...

yeah....wooo hooo.....love that fit and finish where the center stack meets the console.

How about the fact that the center stack is closer to the left side of the dash versus the right side?

This interior is a joke....

[The O.C.]

Clearly, you never drove the Cobalt. Even the base LS has a better ride/handling than the Corolla. I drive them back to back with clients all the time: no contest. And the woodgrain is not standard on the Cobalt. Most have the brushed aluminum look. Incidentally, the posted Cobalt pic above is from the 2006 model, not 2007.

The Pioneer speaker package with 10" sub in the trunk is a $300 option on any level of Cobalt, making it the best damn kick-ass system available in the lower classes. Even the cheapest package has decent speakers.

Sounds to me like you met a good salesman at the Toyota store, he got you sipping from the punch bowl and now you are commited, literally.

Unless you paid cash (and even then, the Cobalt LT is priced less than the Corolla CE and has more equipment), the Cobalt is a LOT less in payments. Do not get sucked in by sticker prices. Around here, there is a $750 retail delivery credit on the LT AND two loyalty programs (including Toyotas, Hondas, VW, etc) that can knock off another $1,000 or $750, depending on what you or anyone in your family is driving!)

This is the trouble that price whores get into. They don't stick to one dealer and build up a relationship. If they did, they would be able to take advantage of programs and time their purchase just right - and save a bundle.

Here we go again......sad that you guys have to blindly bash someone that makes a purchase decision and gives concise precise reasons for why he did so.

He said he didn't like the looks of the Cobalt. That's his opinion and you can't bash him for having his opinion.

In regards to the actual product, obviously he got a deal on the Toyota that you can't match.

"Price whores" as you so beautifully called him don't become "price whores" because they chose a vehicle with.....

1) better resale value....EVEN CONSIDERING how many fleet and rental units Toyota does

2) a much higher-quality interior using much more upscale materials, better switchgear, and a glovebox lid that doesn't go "klaaaang" when you shut it

3) a vehicle with seemingly comparable features and amenities to the GM competition for a comparable price

Why don't we stop bashing people like Jason and cars like the Corolla.....and get on GM's ass to start producing small cars that actually have a hint of "world-class" in them (like maybe the Astra) and that don't sell on price only. EVEN YOU, CARBIZ.....all your arguments strangely seem to be how price competitive the Cobalt is....how payments are less....the discounts that are available, etc.

Seems to me that's the only way YOU seem to be ever able to sell Cobalt versus Civic, Corolla, Mazda3......

Edited June 19, 2007 by The O.C.

[CARBIZ]

Here we go again......sad that you guys have to blindly bash someone that makes a purchase decision and gives concise precise reasons for why he did so.

He said he didn't like the looks of the Cobalt. That's his opinion and you can't bash him for having his opinion.

In regards to the actual product, obviously he got a deal on the Toyota that you can't match.

"Price whores" as you so beautifully called him don't become "price whores" because they chose a vehicle with.....

1) better resale value....EVEN CONSIDERING how many fleet and rental units Toyota does

2) a much higher-quality interior using much more upscale materials, better switchgear, and a glovebox lid that doesn't go "klaaaang" when you shut it

3) a vehicle with seemingly comparable features and amenities to the GM competition for a comparable price

Why don't we stop bashing people like Jason and cars like the Corolla.....and get on GM's ass to start producing small cars that actually have a hint of "world-class" in them (like maybe the Astra) and that don't sell on price only. EVEN YOU, CARBIZ.....all your arguments strangely seem to be how price competitive the Cobalt is....how payments are less....the discounts that are available, etc.

Seems to me that's the only way YOU seem to be ever able to sell Cobalt versus Civic, Corolla, Mazda3......

Against the Corolla, I take the customer over to our sister store and DRIVE it. Hands down, Cobalt wins. Against the Civic, huge price difference. The imports spend their money on fancy switchgear; whereas, GM spends it on auto headlights, decent speakers, split rear seat that isn't just fabric, most standard hp in its class, etc. None of the vehicles in this class are losers any more, but the Corolla is the most dated both literally and figuratively.

Again (sigh), I can only speak for the market up here (which is only Canada's biggest) and the Corolla does not hold its value any better when all the "extraneous" factors are weighed in. If I sound defensive, it is only because I am sick of hearing how good the Corolla is - BECAUSE IT ISN'T.

As I have said (tirelessly), if I lose a sale to the Mazda 3 or Civic - oh, well. If I lose it to the Corolla, I question the person's sanity.

[The O.C.]

You clearly have not rented an old Accent. But furthermore...

I don't think it's a good idea to compare a 2007 model GM product to an old Hyundai Accent?

<yikes>

[Drew Dowdell]

yeah....wooo hooo.....love that fit and finish where the center stack meets the console.

How about the fact that the center stack is closer to the left side of the dash versus the right side?

This interior is a joke....

fit and finish is another issue. we're talking design here. stay on track.

The center stack doesn't have to be in the center ya know.... Sometimes in driver oriented vehicles it's turned to the driver.

or like the one in your very own CTS.

But... it's not a perfectly symmetrical and horizontal BMW dash, so it's crap.

[Newbiewar]

that is the stupidest statement i ever heard...

my vehicle lost a lot of value after i purchased it... so i purchased a toyota...

i hate to break it to you... but vehicles are bad investments...

toyotas values drop a lot too...

trust me... my brother got ripped off on his matrix...

but if you keep paying on your saturn... i bet... you wont have as big of payments and you'll be out of dept sooner

[Drew Dowdell]

I don't think it's a good idea to compare a 2007 model GM product to an old Hyundai Accent?

<yikes>

When both were released around the same time and the GM replacement is mere months away... yeah, I think it's valid.

[CARBIZ]

that is the stupidest statement i ever heard...

my vehicle lost a lot of value after i purchased it... so i purchased a toyota...

i hate to break it to you... but vehicles are bad investments...

toyotas values drop a lot too...

trust me... my brother got ripped off on his matrix...

but if you keep paying on your saturn... i bet... you wont have as big of payments and you'll be out of dept sooner

[/quote

Careful, Newbiewar, don't rattle the import humper's cage too much. Too many people are drinking from Toyota's punch bowl. As I am sure you know, the flashpoint for many people is their trade. Someone pulls in with their 8 year old rattle bucket with 200,000 miles and then starts bitching about how many repairs they've had to do.... It's worse here because of the way our salt eats away at the bodies long before a vehicle is mechanically finished. Then you break the bad news to the poor guy that his 8 year old sled with 200k MILES is worth $300 and he looks at you like you've got two heads!

Along comes the Toyota/Honda/Nissan/Mazda SALESMAN, who says,"Hey, buddy, those American cars sure don't hold their value, but you know what, we'll give you $1,000 for it anyway, because we want to earn your business," as he is slipping the sale sign from the Corolla off the windshield so Mr. Customer can't see it.

BINGO! We have a sale, because Slick Salesman found the right verbage and tapped into the prevailing mood that American cars suck and people's unreasonable expectations. To my chagrin, I have proven time and time again that people don't want to hear the truth. They prefer the BS.

[thegriffon]

Although the Cobalt is not a looker, at least it does not look like someone slapped on its faced and elongated it like Tom's face in the cartoon, when he puts his mouth in Jerry's hole. Interior is much cleaner in the cobalt too. I would have totally understood, if it was Cobalt vs. Mazda3. But against Crapolla it is ugly??? That is new.

To each their own, but that is exactly what they did do to the Corolla—elongated the nose so you wouldn't notice how small it was.

[enzl]

that is the stupidest statement i ever heard...

my vehicle lost a lot of value after i purchased it... so i purchased a toyota...

i hate to break it to you... but vehicles are bad investments...

toyotas values drop a lot too...

trust me... my brother got ripped off on his matrix...

but if you keep paying on your saturn... i bet... you wont have as big of payments and you'll be out of dept sooner

[/quote

Careful, Newbiewar, don't rattle the import humper's cage too much. Too many people are drinking from Toyota's punch bowl. As I am sure you know, the flashpoint for many people is their trade. Someone pulls in with their 8 year old rattle bucket with 200,000 miles and then starts bitching about how many repairs they've had to do.... It's worse here because of the way our salt eats away at the bodies long before a vehicle is mechanically finished. Then you break the bad news to the poor guy that his 8 year old sled with 200k MILES is worth $300 and he looks at you like you've got two heads!

Along comes the Toyota/Honda/Nissan/Mazda SALESMAN, who says,"Hey, buddy, those American cars sure don't hold their value, but you know what, we'll give you $1,000 for it anyway, because we want to earn your business," as he is slipping the sale sign from the Corolla off the windshield so Mr. Customer can't see it.

BINGO! We have a sale, because Slick Salesman found the right verbage and tapped into the prevailing mood that American cars suck and people's unreasonable expectations. To my chagrin, I have proven time and time again that people don't want to hear the truth. They prefer the BS.

That's not the scenario that gets people, this one is:

Newlywed buys Cobalt. Wife gets pregnant with twins. "N" returns to Chevy dealership to trade in Cobalt after 1-2 yrs. and finds out his Cobalt is worth 50% as a trade. (Import & Domestic dealers use the same 'book', so your example is somewhat flawed in that regard as well).

Now stung by the realization that he's screwed, "N" bebops down to the local Toyota, Nissan or Honda dealer and promises not to make the same mistake twice, end of story. The fact that the local import shop is probably newer, cleaner and better staffed only helps seal a deal made possible only by the pitiful state of the manufacturer of said Cobalt.

"N" is your core guy, gone in an instant. Mr. 200k with his hoopdie won't be back for another 8 years!

You sound like a great salesman, but that's the reality today. Fact.

[griff7774]

That's not the scenario that gets people, this one is:

Newlywed buys Cobalt. Wife gets pregnant with twins. "N" returns to Chevy dealership to trade in Cobalt after 1-2 yrs. and finds out his Cobalt is worth 50% as a trade. (Import & Domestic dealers use the same 'book', so your example is somewhat flawed in that regard as well).

Now stung by the realization that he's screwed, "N" bebops down to the local Toyota, Nissan or Honda dealer and promises not to make the same mistake twice, end of story. The fact that the local import shop is probably newer, cleaner and better staffed only helps seal a deal made possible only by the pitiful state of the manufacturer of said Cobalt.

"N" is your core guy, gone in an instant. Mr. 200k with his hoopdie won't be back for another 8 years!

You sound like a great salesman, but that's the reality today. Fact.

This book you refer to is just a guide it is not the law or the salesman's bible(some treat it that way)

the 'shop fact, that you stated is hearsay and should be striken from your statement

there is some truths in both of you guy statements

[CARBIZ]

This book you refer to is just a guide it is not the law or the salesman's bible(some treat it that way)

the 'shop fact, that you stated is hearsay and should be striken from your statement

there is some truths in both of you guy statements

No, it sounds more like some people are stuck in the '90s. I haven't used "the book" in a few years. With what is happening at the auctions these days, the "book" is obsolete as soon as it is printed. Any idiot who gets rid of a two year old car is going to get hosed. How much would you lose on a Mercedes, Enzl? Compare transaction prices, and keep in mind that the "cash" customer is extremely rare. (As my accountant has sagely pointed out, there is no such thing as "cash," because your money should be working for you.) Compare lease rates, finance rates. How about the $750 Retail Delivery Credit on a new Cobalt (as we speak) and GM will give you $750 just for having a smal import in your driveway - I am serious. $1,000 if you have a mid-size competitor's SUV or minivan.

So, the $19,800 (freight in) Cobalt LT, can be had for $1,750 off (plus GM and the Clean Air Fund will give you $1,000 for your 12 year or older car, even if it isn't running) before the dealer discounts a dime. Oh, what will Toyota give you? $500 off their $19,300 price for the CE (with a lot less equipment than the LT, BTW). Then interest rates, insurance, oh and don't forget the Toyota has to go to the dealer every 3 months or else............

I don't like having to sell on price, but GM is on the defensive at the moment and I don't mind having the arsenal to slap the import shopper with. A back to back test drive doesn't hurt, either.

But people can believe what they want. Some of us live it every day.

[CARBIZ]

Oh, just to add to your scenario: GMAC will let us bury any amount of negative equity, provided the customer's credit will support it (they used to cut off at 120% over list price, but that limit has been waived). So, if the hapless couple gets into a bind, they won't have to come up with the cash. They can buy or lease the Cobalt for 2.4% OR the Optra 5 is 72 months at ZERO PERCENT.

Not so our precious Toyota. If they will bury the negative equity at all (what - you don't think they will lose ANYTHING on their 2 year old Corolla?), it will be at 3.9% or higher.

One last thing: most of the guys over on the used car lot at our Toyota store are making six figures. Talk about getting hosed? Try buying a 2 year old Toyota - and it wasn't the guy trading in the vehicle who made the money, I can tell you that!

It is this fiction that Toyota's are unbreakable and that they hold their value better that is feeding this positive feedback loop. People in the business who should know better are not helping either.

[enzl]

Oh, just to add to your scenario: GMAC will let us bury any amount of negative equity, provided the customer's credit will support it (they used to cut off at 120% over list price, but that limit has been waived). So, if the hapless couple gets into a bind, they won't have to come up with the cash. They can buy or lease the Cobalt for 2.4% OR the Optra 5 is 72 months at ZERO PERCENT.

Not so our precious Toyota. If they will bury the negative equity at all (what - you don't think they will lose ANYTHING on their 2 year old Corolla?), it will be at 3.9% or higher.

One last thing: most of the guys over on the used car lot at our Toyota store are making six figures. Talk about getting hosed? Try buying a 2 year old Toyota - and it wasn't the guy trading in the vehicle who made the money, I can tell you that!

It is this fiction that Toyota's are unbreakable and that they hold their value better that is feeding this positive feedback loop. People in the business who should know better are not helping either.

Hang on....I can accept that GMAC will give you a better financing deal than TMC, but that's because the $ you're 'given' in the GMAC financing is swallowed up the minute that new GM rolls off the lot.

You're 100% correct that the Toyota Corolla isn't a demonstrably better product than the Cobalt, but simple, exact 100% real time Adam Smith economics will dictate pricing....obviously, the demand for a Corolla (or Civic) is greater than a Cobalts.

Additionally, you're being somewhat disingenuous selling a deal on price, as you and I both know that much more than a monthly payment is factored into a cost of ownership equation.

As for other makes--I'm not saying anything about MB's resale---we're talking Toyota v. Chevy here...and Chevy pales in comparison when you're talking cars, especially small ones.

As for your used Toyota lot...of course they're doing well---which only means that the dealership is doing well, as they are getting paid on profit, no? SO, this generally means more $ for renovations, tech, advertising....it is a positive feedback loop---one which Chevy shows little sign of slowing.

As my office shares a building with our Chevy dealership, I know all too well exactly how our deals are being cut. On average, our non-commercial Chevy customers are less educated, less wealthy, less credit-worthy and much more likely to be upside down than our Toyota customers (& the Toyota store is in a nasty area of town).

Just because GMAC is willing to lend on these scenarios doesn't make it a wise bet for the consumer. What's the real world difference if I bury an extra $2000 in negative equity or cost you the same $2,000 by charging you a higher financing rate?

I realize that you have personal and Biz reasons for your opinions, and I respect them, even if I don't agree. We're really just arguing about perception, as I believe the glass is half-empty and GM is in crisis, you clearly believe otherwise. For both our sakes, I hope you're right.

[CARBIZ]

As well as having North America's busiest highway, Toronto has North America's highest insurance premiums. I would go into the reasons why, but it isn't PC to say so; however, leasing is very big in Toronto, not just with the BMW crowd (who will sell their first born to lease their first Beemer), but with the low-end crowd, too. A lease of $300 a month will break many people, because they have to come up with another $200 a month in insurance. Yeah, those fancy buildings dotting our skyline are all insurance companies and banks.

Anyway, the beauteous thing about leasing, is that it quite clearly shines the light on the real market.

FACT: A Corolla CE is about $15 a month MORE than a Cobalt LT - with less equipment and the buy back is higher. Which is the better deal, then? The Civic is even worse - you would literally be out about $3-4k by the end of the lease on a Civic and face a stiffer buy back. One cannot gloss over those facts.

Factor in insurance (imports are stolen more and parted out), the 4 trips to the dealer a year (Cobalt has 2) and the myth of the Japanese juggernaut fades away.

I wonder why none of the import humper magazines actually does a real world study? It wouldn't be hard to do: pick a group of consumers from different parts of the country, some import and some domestic, and follow them from the moment of purchase or lease to, say, 5 years or 6. Let them keep every receipt, every invoice. Instead, they pull ficitious numbers off websites, citing insurance rates that aren't real, residuals that some bank has set, and going from list price - what is list price anyway?

As I said, GenX couple wants to ditch their 2 year old Civic, they are in far worse shape than ditching their 2 year old Cobalt. In both cases, they will get screwed, but with the Cobalt they will get lube and a condom first.

And why are the "grosses" at GM stores higher than Honda or Toyota? Numerous co-workers of mine have gone to work for the Dark Side and left again because they were making $150 flats on all their deals. Why is that?

[enzl]

As well as having North America's busiest highway, Toronto has North America's highest insurance premiums. I would go into the reasons why, but it isn't PC to say so; however, leasing is very big in Toronto, not just with the BMW crowd (who will sell their first born to lease their first Beemer), but with the low-end crowd, too. A lease of $300 a month will break many people, because they have to come up with another $200 a month in insurance. Yeah, those fancy buildings dotting our skyline are all insurance companies and banks.

Anyway, the beauteous thing about leasing, is that it quite clearly shines the light on the real market.

FACT: A Corolla CE is about $15 a month MORE than a Cobalt LT - with less equipment and the buy back is higher. Which is the better deal, then? The Civic is even worse - you would literally be out about $3-4k by the end of the lease on a Civic and face a stiffer buy back. One cannot gloss over those facts.

Factor in insurance (imports are stolen more and parted out), the 4 trips to the dealer a year (Cobalt has 2) and the myth of the Japanese juggernaut fades away.

I wonder why none of the import humper magazines actually does a real world study? It wouldn't be hard to do: pick a group of consumers from different parts of the country, some import and some domestic, and follow them from the moment of purchase or lease to, say, 5 years or 6. Let them keep every receipt, every invoice. Instead, they pull ficitious numbers off websites, citing insurance rates that aren't real, residuals that some bank has set, and going from list price - what is list price anyway?

As I said, GenX couple wants to ditch their 2 year old Civic, they are in far worse shape than ditching their 2 year old Cobalt. In both cases, they will get screwed, but with the Cobalt they will get lube and a condom first.

And why are the "grosses" at GM stores higher than Honda or Toyota? Numerous co-workers of mine have gone to work for the Dark Side and left again because they were making $150 flats on all their deals. Why is that?

I can't debate the Toronto marketplace...I'm assuming you're 100% accurate.

That still doesn't change things here in the States, where leasing is not as dominant, and the play you have in a leasing deal (rate, residual, incentives, et al.) aren't as important.

As for Honda and Toyota salesmen, the NEW carsalesmen may very well be stuck with flats, probably due to the bargaining skills of the customers...the USED lot is where a ton of money can be generated, as the customer has no idea what I paid for their vehicle. As for Chevy grosses, that only reconfirms my local experience of poor credit/less educated people ---those in Toronto are also heading to the local Chevy store, apparently.

As for an interesting survey, the best I've ever read is Top Gears annual in the UK....while it has little application to this argument, they use a ton of different factors to rate vehicles on an annual basis. It's a great read (I can't remember which month they do it)...but it seems to use solid methodology and has very interesting results...

[CARBIZ]

I can't debate the Toronto marketplace...I'm assuming you're 100% accurate.

That still doesn't change things here in the States, where leasing is not as dominant, and the play you have in a leasing deal (rate, residual, incentives, et al.) aren't as important.

As for Honda and Toyota salesmen, the NEW carsalesmen may very well be stuck with flats, probably due to the bargaining skills of the customers...the USED lot is where a ton of money can be generated, as the customer has no idea what I paid for their vehicle. As for Chevy grosses, that only reconfirms my local experience of poor credit/less educated people ---those in Toronto are also heading to the local Chevy store, apparently.

As for an interesting survey, the best I've ever read is Top Gears annual in the UK....while it has little application to this argument, they use a ton of different factors to rate vehicles on an annual basis. It's a great read (I can't remember which month they do it)...but it seems to use solid methodology and has very interesting results...

You'd like to believe that, wouldn't you? A televison producer who used to produce for one of your major network's top people just bought a Tahoe this week. He makes more money than God. Perhaps loyalty factors in. I know in my case, that is true. People don't get so agitated when they've already bought/leased 2 or 3 vehicles from me.

Two of the guys who left here said that Honda drops their pants right away to get the deal. They also bash GM a lot, which I suspect turns a lot of people off. Around here, many of the Honda and Toyota dealers have undergone major renovations and are undoubtedly feeling a financial pinch to pay for them; whereas, the GM dealers are paid for.

The cost of doing business in Canada is far higher than the U.S., for sure. Many companies have found that out the hard way. Toronto's market is just as diversified as the California market. The last figures I saw has GM at 14% share in this city; 26% nationally. None of that bothers me. It was inevitable, IMO. Let's face it, a Hyundai was a joke when I got into the business 10 years ago and they didn't even have a SUV - now they have a couple SUVs, and their car line is at least interesting.

But if we keep carping on what was and what GM DID wrong and the consumers pick up on our public squabbles; well, I believe that is where the damage is done. The nitpicking over soft plastics and which magazine said what has little do with the real nuts and bolts. We both know that. And we both know that GM has made huge strides, with the one black cloud being the upcoming labor talks.

I think the 2nd weakest link in GM's chain (the first being their spotty advertising!) is the transient nature of salespeople. GM gives us a lot of tools to battle the import humper and to slow down the confused "clipboard shoppers," but most salespeople just want to get a quick deal and can't be bothered to get educated or challenge the misconceptions that are out there. Why should they - in 6 months they will be working at another store anyway, right?

[enzl]

You'd like to believe that, wouldn't you? A televison producer who used to produce for one of your major network's top people just bought a Tahoe this week. He makes more money than God. Perhaps loyalty factors in. I know in my case, that is true. People don't get so agitated when they've already bought/leased 2 or 3 vehicles from me.

Two of the guys who left here said that Honda drops their pants right away to get the deal. They also bash GM a lot, which I suspect turns a lot of people off. Around here, many of the Honda and Toyota dealers have undergone major renovations and are undoubtedly feeling a financial pinch to pay for them; whereas, the GM dealers are paid for.

The cost of doing business in Canada is far higher than the U.S., for sure. Many companies have found that out the hard way. Toronto's market is just as diversified as the California market. The last figures I saw has GM at 14% share in this city; 26% nationally. None of that bothers me. It was inevitable, IMO. Let's face it, a Hyundai was a joke when I got into the business 10 years ago and they didn't even have a SUV - now they have a couple SUVs, and their car line is at least interesting.

But if we keep carping on what was and what GM DID wrong and the consumers pick up on our public squabbles; well, I believe that is where the damage is done. The nitpicking over soft plastics and which magazine said what has little do with the real nuts and bolts. We both know that. And we both know that GM has made huge strides, with the one black cloud being the upcoming labor talks.

I think the 2nd weakest link in GM's chain (the first being their spotty advertising!) is the transient nature of salespeople. GM gives us a lot of tools to battle the import humper and to slow down the confused "clipboard shoppers," but most salespeople just want to get a quick deal and can't be bothered to get educated or challenge the misconceptions that are out there. Why should they - in 6 months they will be working at another store anyway, right?

I wasn't implying that ONLY less educated/less wealthy customers shop Chevy, just that. in my experience, the Toyota customer is a little more credit worthy, on average, at our stores. That being said, you're spot on about salesmen...they are terminal job hoppers, for the most part.

We have policies for hiring that encourage green peas. We spend about 6 months training them, then most use our name to hop to another store after the training period. (BTW, more than 50% of the hoppers are back within a year asking for their old job back, but that's another story.)

It sucks, but like the restaurant biz, sales seems like a transient bunch. It is a big problem for all of the manufacturers that they can't do better at retention.

[CARBIZ]

I wasn't implying that ONLY less educated/less wealthy customers shop Chevy, just that. in my experience, the Toyota customer is a little more credit worthy, on average, at our stores. That being said, you're spot on about salesmen...they are terminal job hoppers, for the most part.

We have policies for hiring that encourage green peas. We spend about 6 months training them, then most use our name to hop to another store after the training period. (BTW, more than 50% of the hoppers are back within a year asking for their old job back, but that's another story.)

It sucks, but like the restaurant biz, sales seems like a transient bunch. It is a big problem for all of the manufacturers that they can't do better at retention.

Interesting point about the credit worthy thing, and I don't entirely disagree with you, but this would have an interesting consequence that I have long observed. Let's just suppose this more "educated" consumer makes a conscious choice to buy a Corolla over, say, the Cobalt. Given that the Corolla is more money up front, parts or more money, servicing is probably more (our Toyota shop rate is $10 higher than Chevy's), service demands are higher (3 months, versus 6), insurance probably higher, etc. - could it not possibly serve that this "educated" consumer is then goingn to baby his purchase, because he consciously paid more for it? It is a "premium" choice. He will wash it, wax it, and in general look after it.

Contrariwise, college kid buys the Cobalt because it is cheaper, drive the &#036;h&#33; out of it, never washed it, barely makes the 6 month maintenace schedule - in fact, he goes to his uncle for oil changes! After 3 years, the Cobalt falls apart from misuse. Said college kid bad-mouths Chevrolet to all his friends. Voila! Self-fulfilling prophecy.

Something to think about!

[enzl]

Interesting point about the credit worthy thing, and I don't entirely disagree with you, but this would have an interesting consequence that I have long observed. Let's just suppose this more "educated" consumer makes a conscious choice to buy a Corolla over, say, the Cobalt. Given that the Corolla is more money up front, parts or more money, servicing is probably more (our Toyota shop rate is $10 higher than Chevy's), service demands are higher (3 months, versus 6), insurance probably higher, etc. - could it not possibly serve that this "educated" consumer is then goingn to baby his purchase, because he consciously paid more for it? It is a "premium" choice. He will wash it, wax it, and in general look after it.

Contrariwise, college kid buys the Cobalt because it is cheaper, drive the &#036;h&#33; out of it, never washed it, barely makes the 6 month maintenace schedule - in fact, he goes to his uncle for oil changes! After 3 years, the Cobalt falls apart from misuse. Said college kid bad-mouths Chevrolet to all his friends. Voila! Self-fulfilling prophecy.

Something to think about!

I'd take your example and take it one step further:

The Chevy guy is less likely to service his vehicle regularly. Simple socioeconomics, IMO. That being said, the Toyota buyer clearly has to rationalize the extra costs...consider it a 'peace of mind' tax. Most consumers will happily pay for that state of mind, real or imagined. The truth is that, at worst, statistics tell you the most vs. least reliable means 1 extra shop visit every 2 years or so.

[The O.C.]

fit and finish is another issue. we're talking design here. stay on track.

The center stack doesn't have to be in the center ya know.... Sometimes in driver oriented vehicles it's turned to the driver.

or like the one in your very own CTS.

But... it's not a perfectly symmetrical and horizontal BMW dash, so it's crap.

I'm talking about the GM-Corporate-bin radio/HVAC pieces being misaligned ON the center stack. I'm not complaining about the center stack part of the dashboard itself....but the components set IN the center stack.

[The O.C.]

This book you refer to is just a guide it is not the law or the salesman's bible(some treat it that way)

the 'shop fact, that you stated is hearsay and should be striken from your statement

there is some truths in both of you guy statements

No....not just a "guide." The values established for Kelly Blue Book, NADA, MMR are based alot off of ACTUAL VALUES derived from the sales of pre-owned vehicles through auction lanes.

When a wholesaler goes to purchase an off-lease Cobalt at an auction, for example, he's going to try to buy it for, let's say, $4,000 "back of book." What this means is that Kelly Blue Book establishes a wholesale price for that particular year and model (NO ONE ever refers to "retail" value in the car business.) Then, due to the poor resale value of the vehicle, most of the time it won't even go through auction for what "book" is. Therefore, the wholesaler isn't going to buy the car unless he can get it for enough "back" of "book."

A MINI, for example, might go through the auction for $1,000-$1,500 OVER "book" due to it's higher desirability in the marketplace.

[CARBIZ]

I'd take your example and take it one step further:

The Chevy guy is less likely to service his vehicle regularly. Simple socioeconomics, IMO. That being said, the Toyota buyer clearly has to rationalize the extra costs...consider it a 'peace of mind' tax. Most consumers will happily pay for that state of mind, real or imagined. The truth is that, at worst, statistics tell you the most vs. least reliable means 1 extra shop visit every 2 years or so.

Keep in mind that Toyota/Honda, etc. are the "new kids on the block," and as such were able to train a whole new set of customers to service the vehicles "their" way. The Big Three never had that luxury. Having grown up with the good 'ol boys, if you'd told my father in the '70s that he could not do his own oil changes, he would have told the dealer to F-off. The imports had a clean slate, and trained their customers differently.

Fast-forward 30 years when opening the hood of an average car is a daunting experience, and the imports are already set up for it. Forensic accounting being what it is, and the power of new tracking software at the manfacturer's level makes a good argument for dealer servicing; however, I would warrant that the percentage of new domestic owners who service at their dealer is lower than for the imports.

Our Toyota store gets to fix a lot of issues that the owner never even knows about when he drops by 4 times a year.

[CARBIZ]

No....not just a "guide." The values established for Kelly Blue Book, NADA, MMR are based alot off of ACTUAL VALUES derived from the sales of pre-owned vehicles through auction lanes.

When a wholesaler goes to purchase an off-lease Cobalt at an auction, for example, he's going to try to buy it for, let's say, $4,000 "back of book." What this means is that Kelly Blue Book establishes a wholesale price for that particular year and model (NO ONE ever refers to "retail" value in the car business.) Then, due to the poor resale value of the vehicle, most of the time it won't even go through auction for what "book" is. Therefore, the wholesaler isn't going to buy the car unless he can get it for enough "back" of "book."

A MINI, for example, might go through the auction for $1,000-$1,500 OVER "book" due to it's higher desirability in the marketplace.

And a Bentley would go for even more, I am sure............................

[The O.C.]

And a Bentley would go for even more, I am sure............................

Not necessarily.......or so my wholesaler friend tells me........