Will dealers be allowed to gouge us?

[sjfotos]

Hello Gary,
I additionally posted a good summary from the GM Volt forums under the Finance section on the Boards here. I also included the link to the original post. The author is a former (or current) GM lease specialist. Julie has it all correct. I would simply add that the things to be careful about in a lease transaction are what the total allowed mileage is and how well you treat cars. If you go over the contract miles or you tend to be rough on cars it can be very expensive. You will be assessed for excessive wear and tear or miles over the contract. The advantage to a lease is that you can turn the car over at the end of 3 years. If the technology changes or does not work out, you are not stuck with the long term commitment of a 5 year car loan or the sunk cost of a fully paid car that no one will buy. I copied the link below.

http://gm-volt.com/2010/04/08/how-nissan-can-lease-the-leaf-ev-for-349-per-month/

 

[daniel]

How is "wear and tear" determined??? Is there some objective standard? Or do they just look at the car and decide that it "looks pretty worn"? If you're buying or selling a used car, buyer and seller examine the car, form opinions, and negotiate. But in this case there are contractual fees involved, so there must be some way to settle the matter when the lessee says the car is tip-top and the lessor says it's got excessive wear and tear.

 

[hill]

Dealers will undoubtedly be gracious & fair.
:lol:

I got a wonderful opportunity to get a different car WAY before the rest of first time buyers recently (hybrid) ... and it was one of the first off the boat ... totally loaded. HERE is a list of items EACH dealer is allowed to mark the cost up, on ANY car they sell:

- District (or Dealer) Advertising: an amount based on a % of invoice
- Wholesale Financial Reserve: Cost of financing millions of dollars of cars in dealer inventory.
- Holdback: Cash to dealer under the dealer's invoice price. So True dealer cost is generally calculated as dealer's invoice price minus Holdback.
- Transportation/Delivery: Speaks for itself. Amount paid to get new items from port, to dealer.

So, even if you THINK you are paying too much, the dealer's view is that if the the dealer eats these items, then Joe Sales guy won't be able to pay for his kids new braces, and the AC/Heating bill won't get paid in the show room. Now ... throw in simple Business 101 principals. You may have a car in short supply with high demand. That's why the RAV4-ev USED sometime sold for more than it originally cost. Sorry for the reality check. If it's too big a dose, just disregard until you see the price tag.

 

[evnow]

So, even if you THINK you are paying too much, the dealer's view is that if the the dealer eats these items, then Joe Sales guy won't be able to pay for his kids new braces, and the AC/Heating bill won't get paid in the show room.

Nonsense. MSRP already gives dealers a lot more than other cars give.

Let us take a simple example. Seattle area has 4 Nissan dealers. Seattle will get 1,000 cars this December (I hope). So, each dealer gets to sell about 250 cars - with absolutely no selling cost. Thats a lot of profit already - without breaking sweat.

If dealers think they can gouge on the most anticipated rollout in recent years with possibly the whole world watching, with amplified social networks, they will be in for a rude shock.

 

[sjfotos]

I actually don't think there will be much gouging, but we will see. Nissan has limits to what they can do in this regard, but the strategic nature of this rollout will likely mean that they will exert all of the pressure they legally can.

It would surprise most people that the profit margin on new car sales is not especially robust.

 

[sjfotos]

I can't vouch for the accuracy, but buried in this article is the option to lease the residential charger for $30/month.

http://www.examiner.com/x-27898-Green-Technology-Examiner~y2010m4d25-Nissan-LEAF-now--taking-advance-orders-in-five-states--OR-WA-CA-Phoenix-and-Eastcentral-TN

 

[Rat]

I'd like to know if we have the flexibility to go to another dealer even though the other dealer doesn't have the color or package we reserved. Are those specific preferences tied to our local dealer and are the local dealers at first sent a selection of cars that match the reservations for that particular combination? Assuming we are free to go elsewhere if the local dealer is gouging us (we believe) and we turn down that dealer for the chance to buy "our" car, then do we lose a preference and have to reserve another one? What if we change our mind and decide on a different color or option package. Can we change when we see them in the dealer's lot or do we have to get back at the end of the line again?

 

[evnow]

Ok. Here is the reply from another dealer close to me.

Thank you for your continued loyalty to *** Nissan. We do not have any plans to mark up the Leaf above MSRP. You are more than welcome to purchase it through us at the factory MSRP price.

I encourage everyone to contact all your nearby Nissan dealers and see who is prepared to commit to MSRP pricing.

 

[mxp]

Ok. Here is the reply from another dealer close to me.

Thank you for your continued loyalty to *** Nissan. We do not have any plans to mark up the Leaf above MSRP. You are more than welcome to purchase it through us at the factory MSRP price.

I encourage everyone to contact all your nearby Nissan dealers and see who is prepared to commit to MSRP pricing.

Suppose one has a relative/family working as a Nissan car sales rep, would he/she be able to sell the LEAF below MSRP at all?

Since the official statement from Nissan is the dealer sets the price, it theorectically could go + or - from MSRP right?

 

[evnow]

Suppose one has a relative/family working as a Nissan car sales rep, would he/she be able to sell the LEAF below MSRP at all?

Since the official statement from Nissan is the dealer sets the price, it theorectically could go + or - from MSRP right?

Absolutely. If the demand < supply, as is the case usually, they do sell for less than msrp (as you know). In this case since demand is likey > supply, we want to make sure they don't try to gouge us (and the government too, considering they are giving $7.5K to reduce the price).

 

[daniel]

Obviously, if the dealers are setting the price, they can go below MSRP. I would not expect this to happen during the first couple of years when demand is high, even if you have a relative working there, but it's up to the dealer. Prohibiting them from lowering the price would be illegal restraint of trade.

My dealer has promised MSRP and no added trickery. Maybe someone should start a thread in which people could post the names of dealerships who have or have not promised to sell for MSRP and whether they've promised not to play fast and loose with added charges.

 

[Jimmydreams]

Maybe I'm naive, but I can't imagine with as much fanfare, cameras and buzz as will undoubtedly surround the launch of the Leaf (combined with whatever influence Nissan corporate can use on the individual dealers) that anyone would charge more than MSRP. After the initial launch and the cameras go away, anything is possible. But the early adopters, I feel, will be fairly well protected. Nissan does NOT want any bad press surrounding this, especially if they're the first EV's to hit the street.

 

[evnow]

Maybe I'm naive, but I can't imagine with as much fanfare, cameras and buzz as will undoubtedly surround the launch of the Leaf (combined with whatever influence Nissan corporate can use on the individual dealers) that anyone would charge more than MSRP. After the initial launch and the cameras go away, anything is possible. But the early adopters, I feel, will be fairly well protected. Nissan does NOT want any bad press surrounding this, especially if they're the first EV's to hit the street.

It is upto us. If we meekly submit and pay more they will take more. If we ensure that they will get bad press if they gouge, then they won't.

This launch is not like other launches. We have federal $7.5K and state rebates too. They are not giving all these rebates so that dealers can make money - so I think in this case paying more than MSRP is clearly to be opposed.

BTW, one more dealer has promised to sell at MSRP to me.

I will like you to pick our dealership,because we will honor the MSRP figures, please call me at the office to give me more needed information.

 

[jhartman]

When I ordered my first Prius (2002, ordered in 2001) there wasn't a problem with price gauging because the car wasn't that popular and the dealer placed the order. When the second generation came along Toyota let the "Prius Pioneers" (those who had ordered the first generation) pre-order the second generation. Just like the Leaf, you had to pick a dealer when you placed your order. Some dealers honored the MSRP, but others did not. Basically the car was delivered to them so they figured out that if the person who ordered it wouldn't pay the extra $5,000, they could turn around and sell it to the next person that walked in the door. The Los Angeles area was problematic because there was high demand, however smaller cities did not see the same demand initially.

I would recommend talking to a couple of different salespeople before you choose a dealer. Once you've decided on a dealer get the deal in writing. Some dealers may be hesitant, however I would walk away from anyone who refuses to put something in writing.

With the 100 mile charge we are definitely limited to the number of dealerships you can drive your car home from, but hopefully there will enough dealers willing to honor the MSRP. The smart ones will understand that the early adapters are usually the biggest promoters and if they treat you right you are quite likely to bring them more business.

If we're really lucky maybe an honest dealer will even join the group. One of first Prius groups benefited from a Toyota internet saleswoman who took a special interest in the car. Of course she benefited from increased sales.

 

[LEAFfan]

Dealers will undoubtedly be gracious & fair.
:lol:

I got a wonderful opportunity to get a different car WAY before the rest of first time buyers recently (hybrid) ... and it was one of the first off the boat ... totally loaded. HERE is a list of items EACH dealer is allowed to mark the cost up, on ANY car they sell:

- District (or Dealer) Advertising: an amount based on a % of invoice
- Wholesale Financial Reserve: Cost of financing millions of dollars of cars in dealer inventory.
- Holdback: Cash to dealer under the dealer's invoice price. So True dealer cost is generally calculated as dealer's invoice price minus Holdback.
- Transportation/Delivery: Speaks for itself. Amount paid to get new items from port, to dealer.

So, even if you THINK you are paying too much, the dealer's view is that if the the dealer eats these items, then Joe Sales guy won't be able to pay for his kids new braces, and the AC/Heating bill won't get paid in the show room. Now ... throw in simple Business 101 principals. You may have a car in short supply with high demand. That's why the RAV4-ev USED sometime sold for more than it originally cost. Sorry for the reality check. If it's too big a dose, just disregard until you see the price tag.

I can't speak for other dealers, but my dealer here already told me that they aren't ALLOWED to charge over MSRP since Nissan owns them...he said since they are not an Independent dealer, they have to sell THIS car at the already set price...when Nissan's letter said "dealer sets price", they were talking about all the Independent dealers. So I'm not a BIT worried about paying over MSRP.

 

[jhm614]

...but my dealer here already told me that they aren't ALLOWED to charge over MSRP since Nissan owns them...

Maybe we should also start a list of dealers owned by Nissan. I know there is a local one called "Nissan of Fort Worth" and one called "North Texas Nissan" but others seem to be named after the owner "Don Davis Nissan", "Grubbs Nissan", etc.

 

[sjfotos]

Thank you for trying to ask Mitch. I "listened" in and did not see this addressed. It will be interesting to see how they address this. At thousands of units, that residual value gets big real quick.

 

[evnow]

Maybe we should also start a list of dealers owned by Nissan. I know there is a local one called "Nissan of Fort Worth" and one called "North Texas Nissan" but others seem to be named after the owner "Don Davis Nissan", "Grubbs Nissan", etc.

I searched a bit - couldn't find any online lists.

 

[adric22]

Maybe we should also start a list of dealers owned by Nissan. I know there is a local one called "Nissan of Fort Worth" and one called "North Texas Nissan" but others seem to be named after the owner "Don Davis Nissan", "Grubbs Nissan", etc.[/quote]

I had already picked Don Davis Nissan simply because it was on the list on the website and was the closest to my house. But if we do find out that we are better off going through a Nissan-owned dealer, I may see about changing that.

 

[DaveinOlyWA]

we will obviously not know anything for sure until we sign the dotted line, but i was part of the Priority purchase program for the 2010 Prius. a select group of us were offered a price significantly below MSRP. now there was still dealer prep added to the price we were given, but that was only a few hundred dollars. considering i was getting a few thousand below sticker, i was not complaining