Will dealers be allowed to gouge us?

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adric22

Well-known member
Joined
Apr 23, 2010
Messages
2,488
Location
Fort Worth, TX
One thing I worry about is going to the dealer to pickup my Leaf and they decide to add a $5,000 market adjustment fee to it because of high demand and short supply. If this happens, I won't be able to buy one despite the fact I plopped down $99 for my reservation.
 
I think all early deliveries will have their pricing arranged on-line, directly with Nissan. Or, at least the dealers will be tightly Nissan-controlled.

Later on (maybe mid 2011), who knows?
 
I did a Nissan chat on this topic recently and they were quick to tell me that the dealers set prices, and that it is against Federal law for Nissan to sell cars directly to consumers. Here is a paste of the relevant text from the chat.

Randy:
My concern is the phrase you have on your website that says "Dealer sets price". At MSRP, I would have to come up with $36K or $37K to buy the car before the incentives are paid out, I am concerned about the dealer's pricing. In the past, dealers are notorious for adding anywhere from $2K to $5K to a desirable car because they are usually in short supply. If the Nissan dealer does that on the Leaf, it's a showstopper for me. I would much prefer to pay through the Nissan website and just pick up the car at the dealer and lock it in at MSRP, but it doesn't look like that will be happening. Do you think the dealers will be asking MSRP or will they try to raise the price?

Tim:
Federal law prohibits major automobile manufacturers from entering into sales transactions with individuals. Please let me research this further for you, Randy.

Tim:
Thank you for your patience. While Nissan cannot price the transactions that take place between the consumer and the dealer, they will work with both parties to help them arrive at a fair price. The Nissan Leaf will also be available for lease. For the lease, Nissan will roll the benefit of the tax credit into the monthly payment. The Nissan LEAF will be available via 3-year lease, for a payment starting at $349/mo with $1,999 as a down payment for the qualified customer.
 
Suddenly, coming up with $2000 instead of almost $40,000 seems like something to consider seriously.

With the Lease, is there no sales tax or license fees, since the "customer" does not own the car?

Does the lease include the charging station?
Or, is that still another $2200 or so?
How much is a second charger, if the first dies or for a second (2nd home or work) location?

Can one get out of the 36-month lease if unable to continue the payments? How?

Who pays for maintaining and repairs?

Is "different" insurance necessary for a leased car (and, is considered a rental)?

Thanks, Gary
 
My understanding (and I'm pretty sure about this) is that you will negotiate a price with the dealer at the time you place your order. It is your responsibility to make sure you have all important details in writing. Some dealers may want to charge more than MSRP, and some buyers may be willing to pay. My local dealer has told me categorically that he will charge MSRP and will not add on any other charges (other than, I presume, the "document fee" which is on every car purchase.)

As with any car purchase, you should get it in writing that there will be no dealer add-ons that you have not agreed to. As long as there are enough dealers that there is competition, my guess is that there will be other dealers like mine who will deal fairly with you. I doubt you'll be able to negotiate a lower price than MSRP until the cars are sitting unsold on dealer lots. Won't it be nice when there are so many electric cars that you can just walk in, say "I want that one" and drive it away! But that day is a few years off still.
 
Hi Gary,
I think there is tax and license rolled on top of the $349 lease price. The Nissan website does have that disclaimer that the $349 price doesn't include those fees. However, by leasing you do get the fed tax credit immediately, so that is a plus. And I hear you about putting down almost $40K instead of the $2K for the lease. I'm going to explore both options and see what the price will be both ways. And also what the residual price would be after the lease if I wanted to buy the car.

When I was reserving, they did say that the SL version lease would be $379...I guess we'll figure out a way to get it one way or another.
 
Many lease agreements have a mileage "limit", and one gets charged extra for over-limit miles at the lease end.

Will the Leaf lease have a limit?

What will the "buyout" price be at the end-of-lease?

Is that extra-miles charge (if any) deducted from the offered buyout price?

Thanks, Gary
 
$379 - $349 = $30 x 36 = $1080, just a bit over the $1000 up-front extra charge for the SL.

The SVs might be scarce.

The $349 x 36 is around $13,000.

I would like to understand the whole lease process.
 
Car Leasing FAQ

Webster's Dictionary defines a lease as "a contract by which one conveys real estate, equipment, or facilities for a specified term and for a specified rent." In other words, a car lease is a fancy way of saying you will be renting a car. But not like the typical car rental. With a car lease you are paying monthly installments, which will reflect an interest rate as well as the depreciation of the value of the car you are leasing.

While most people think they are leasing from a car dealership, in reality you are leasing it from a leasing company. The dealership sells the car to the leasing company, who then lease it to the consumer under the terms agreed upon between the consumer and the dealer. These terms include the capitalized cost, the monthly payments, the length of the lease and the interest rate.


Start here for an excellent overview of what a lease is, the two types, the process, scams, and negotiating tips.

Keep in mind overall that a dealership is an individual company and is in business to make money. The first rule of sales is 'ask for it' - if they ask for an extra $10,000 and you give it to them, then it's not the dealer's fault. ;)

Andy
 
There was a "chat" of sorts on Twitter #carchat last week, I asked multiple times about the Lease mileage limit, and what the residual would be at the end of the 36 month lease. My questions where ignored. I don't think they know yet, or they don't want to release that information yet.

I do think that if the lease residual + the initial $1999 payment and either the $349 or $379 / month payment (depending upon model you choose), doesn't have too much of a premium over outright paying cash, it is a better way to go, as you do get the $7500 Federal credit, without having to qualify for it as a Federal tax credit on your next years taxes (some people may not be eligable for several reasons), and, it puts the onus on Nissan to prove the battery pack life is good, and the car is trouble free, at least for the first 36 months, if it isn't, they will be taking a lot of Leafs back in 36 months..

Also of course it's better for your cash flow, you don't need to put out the money all at once / upfront.

If the car is fantastic, you can always buy the lease out at the end of the 36 month term, unless they try to pull an EV1, and I doubt that will happen (this time around)
 
mitch672 said:
Also of course it's better for your cash flow, you don't need to put out the money all at once / upfront.

I've to ask after seeing several such statements - is financing dead ?
 
evnow said:
mitch672 said:
Also of course it's better for your cash flow, you don't need to put out the money all at once / upfront.

I've to ask after seeing several such statements - is financing dead ?

of course not, but paying cash or financing the car are both the same, you are buying the car outright, and are commited to the full purchase price, eventually. with Leasing the commitment is less total $, for the first 36 months, then you can decide if you want to go "all in" and buy it outright.

sure the lease will end up being more money overall, but in 3 years, there might be much better EV's/Battery packs, and you might want to upgrade. You can just turn the car in, and not have to sell it. The car could be the best thing since sliced bread, and there is nothing better on the horizon, pay the residual at 36 months and own it then.
 
I've never been a car salesperson. But I have been in lubricant sales since May 2002 and some of the dealers with which I work are car salespeople - and have shared details of their sales training. In the military we learn the benefits of 'knowing the enemy' - I'll toss out some thoughts to help as we think about our impending Leaf purchase.

Professional sales folks learn to qualify a potential customer to see if they are good prospect. Once they decide thru their learned dialog that the prospect is good, they slide into a well-practiced process that almost automatically leads to a sale just as a moving sidewalk automatically moves one to the destination. The invisible conveyer belt automatically moves us to the final signature that seals the deal.

The sales person is confident and they assume from the start that they will make the sale. They don't hear objection - it's automatically ignored.

They know that once a prospect answers five questions 'yes' that the next questions to follow are also likely to be 'yes'. They know that one of a human's strong motivators is fear - and fear of loss is used to make a person want something even stronger. (I’m not sure if we have that in blue… John – will you go to the side lot and see if we have any blue Leafs over there? I don’t think we have any more in the back lot…) As your mood sinks and your heart starts to beat faster, you hope and pray that John finds ‘your’ car in the side lot! Your car? How did they do that?!

Sales people know that small sales are much easier to make than a large sale - so don't expect questions like: "do you want the extra mats, stripes, covers, undercoating, and driving shoes for an extra $4000?" But do expect a couple of 'yes' questions that lead up to the benefits of mud flaps - you want them? Excellent! (make an x on the form). Isn't it a beautiful day to drive? Can't you feel the smooth takeoff as you pull out of the parking lot? Yes? Come to think of it - when you pull out, these cargo straps will keep your groceries from rolling around in the back. Oh? You want that too? Excellent choice! (another x on the form). You know, Mr. Smith - you're smarter than the other folks so I'll let you in on a secret. This Scotch Guard normally costs $250 but since I like you I'll take $100 off that price. Yes? Good choice sir! More conversation, more questions, more smiles, more little x's on the form.

Eventually the time with the salesperson ends and you get to wait a bit for the financial advisor to complete the paperwork and call you in. Congratulations on your new car! While the folks finish getting your car ready for you, we have just a couple of things to complete. Here are your terms, just x here and endorse there (they’ll generally not use the word ‘sign’ – mom said not to ‘sign’ anything without reading it, right? We’ll just have you endorse it. Yes – it’s ok.) Here are your title forms – we’ll take care of these so you don’t have to stand in line. You’re welcome – just endorse here please. Ok – here are the final pages – we’ll process the loan and take care of this for you. Thank you very much – here are your keys!

Sometime later you realize that you have mud flaps and cargo straps – where did THOSE come from?! I didn’t buy those! (flip flip flip) Where did those little x’s come from?! ;)

None of us would consider jumping into the middle of a pro-sports game without preparing. Neither should we when buying a car.

Start now while there’s no pressure and lots of time. Learn about leases. Meet with an attorney, accountant, or tax professional and figure out which is best for you and your situation – buy or lease? How long a loan? How much down payment? What are my limits?

These are some of your pre-buy pushups and sit-ups. Remember – you’re going to be up against a well trained and experienced professional using a tried and true process that almost always leads to a sale. Even the brand-new sales folks have been to school to learn a very effective sales proces - have you? You get to play your part in the game! Remember that you have the upper hand – if the process isn’t going the way you want, walk away. Turn the tables and make them sweat – they need the sale more than you want the car. There are other cars and other dealers and they know that! If you take the upper hand early on and stand your ground you’re more likely to walk out with a car on your terms.

Will dealers be allowed to gouge us? Only if we let them! Good hunting, commander! :D
 
Will dealers be allowed to gouge us? Only if we let them! Good hunting, commander!

AndyH, it may not be that simple. Let me give you an example. Right now I have a 2010 Honda Insight. When it first came out nearly a year ago most dealers only had 1 or two on their lot, some didn't have any at all. I was ready to buy because the car I was driving was 14 years old and falling apart and I knew it wasn't going to last another few months. I already knew I wanted the Insight, so I wasn't going to buy a different car, nor was I in a position to wait longer.

So I found the dealer with the car I wanted in the color I wanted. Everything was going well until they tacked on an extra $5,000 to the MSRP for a "market adjustment." They also tacked on another $4,000 worth of add-on junk that I didn't want. When I refused to pay any of that, they basically refused to do business with me.

So I ended up going to another dealer and bought a different color but at least they didn't tack on any extra money or accessories.

The problem here is that we had to reserve our leaf and pick a dealer in that process. So I'm now stuck buying my Leaf from that dealer. So if that dealer tries something similar on me, then I will have no choice. I'll either have to give in and pay it, or just pass on buying the car until it becomes more available on all dealer lots.
 
adric22 said:
The problem here is that we had to reserve our leaf and pick a dealer in that process. So I'm now stuck buying my Leaf from that dealer. So if that dealer tries something similar on me, then I will have no choice. I'll either have to give in and pay it, or just pass on buying the car until it becomes more available on all dealer lots.


I was under the impression that all we were doing is picking a preferred dealer. I don't think there is any obligation there. Otherwise, why were we able to pick from a number of other dealers at the same time.

I'll tell you this much, I will NOT give my business to any dealership who adds onto MSRP. Nor will I buy a bunch of extra "junk" (except maybe floor mats).
 
mitch672 said:
of course not, but paying cash or financing the car are both the same, you are buying the car outright, and are commited to the full purchase price, eventually. with Leasing the commitment is less total $, for the first 36 months, then you can decide if you want to go "all in" and buy it outright.

But when financing you aren't putting the money all upfront. Just like in lease. So, in terms of comparison, I'd compare the money paid for lease to financed buy.

Assuming 5% interest rate, doc fee of 500 - if the residue after 3 years is 11,000 - financing & lease would turn out to be the same in WA.
 
I've been told by a friend that in WA the document fee is limited by law to $150. I've never known this friend to make such a categorical statement unless he knows.

My dealer (who has had mistaken "facts" before, and therefore is not an impeccable source of information) told me the lease financing rate will be 1.5%.

Of course, without knowing the residual or the allowed mileage or any of the other stuff that AndyH speaks of above (much of which I'd never heard of, as I've never leased a car, or even financed one: if I can't afford to pay cash for a thing, I do without) we cannot know if leasing is a good deal financially or not. The one advantage we do know is that you can walk away from the car in 3 years. I imagine a lot of folks will go this route due to lack of trust of the batteries. Conceivably, I could lease in the hopes of getting a better EV (Maybe a Tesla Model S) in three years.

When the 2004 Prius came out, there were long waits, and every car at most dealerships was spoken for long before it arrived. Some dealers charged $5,000 or $10,000 over MSRP, and others included dealer add-ons whether you wanted them or not. But there were lots of dealers who charged MSRP and dealt fairly. I expect it will be the same with the Leaf.
 
daniel said:
I've been told by a friend that in WA the document fee is limited by law to $150. I've never known this friend to make such a categorical statement unless he knows.

I also found out that banks take some doc fee to give auto loans. So, I should just exclude this in my calculation.

The one advantage we do know is that you can walk away from the car in 3 years. I imagine a lot of folks will go this route due to lack of trust of the batteries. Conceivably, I could lease in the hopes of getting a better EV (Maybe a Tesla Model S) in three years.

Exactly. I'm hoping for better batteries and wider choice in 3 years too.

When the 2004 Prius came out, there were long waits, and every car at most dealerships was spoken for long before it arrived. Some dealers charged $5,000 or $10,000 over MSRP, and others included dealer add-ons whether you wanted them or not. But there were lots of dealers who charged MSRP and dealt fairly. I expect it will be the same with the Leaf.

I think one difference is that consumers like us have better choices to "retaliate" against profiteers. With the interest in Leaf being so high in media, can you imagine stories about dealer gauging on Leaf that will be printed on front page of every newspaper - esp since the federal govt is giving $7.5K rebate ?

If my dealer acts funny, I'll make sure it gets printed on the front page of Seattle Times. Here is my mail exchange with the dealer recently ...

I'd like to select Eastside Nissan as my preferred dealer, since you are the closest. But at the same time I'd like to go with a dealer who will honor the MSRP figures Leaf has and won't try to profiteer. Have you decided on how you would price the vehicle ?

The honest answer is that we haven't firmly decided what we're going to do on price as a number of things are still in flux. Having said that, you don't have to stay with the dealer that you pick tomorrow and it is not until August that consumers and dealers will be asked to formally commit on dealer choice and pricing. If you are not happy with our pricing policy, you will have the opportunity to select another franchise. I do not anticipate doing anything that will alienate our consumer base.
 
adric22 said:
Will dealers be allowed to gouge us? Only if we let them! Good hunting, commander!

AndyH, it may not be that simple. Let me give you an example. Right now I have a 2010 Honda Insight. When it first came out nearly a year ago most dealers only had 1 or two on their lot, some didn't have any at all. I was ready to buy because the car I was driving was 14 years old and falling apart and I knew it wasn't going to last another few months. I already knew I wanted the Insight, so I wasn't going to buy a different car, nor was I in a position to wait longer.

So I found the dealer with the car I wanted in the color I wanted. Everything was going well until they tacked on an extra $5,000 to the MSRP for a "market adjustment." They also tacked on another $4,000 worth of add-on junk that I didn't want. When I refused to pay any of that, they basically refused to do business with me.

So I ended up going to another dealer and bought a different color but at least they didn't tack on any extra money or accessories.

The problem here is that we had to reserve our leaf and pick a dealer in that process. So I'm now stuck buying my Leaf from that dealer. So if that dealer tries something similar on me, then I will have no choice. I'll either have to give in and pay it, or just pass on buying the car until it becomes more available on all dealer lots.

Absolutely! And you've shown that ultimately you took control of the situation, made your decisions, and bought the car. I assume from your comment that price was more important to you than color - so you set your limits and acted. You played the game rather than letting the game play you.

I think I can identify with your Insight purchase. I had a similar experience with VW. They took a 'break' from importing diesel engined cars into the US. When they arrived there was demand but little stock. I visited a large dealer in the St Louis area to look, talk, and test drive - not buy. I told the salesman that met me in the parking lot that I had questions and was not here to buy. We talked, found out that they didn't have a color I liked, only had automatic transmissions not the 5-speed I prefer, and only had a couple of the new diesel Jettas on the lot. We took one for a drive. When we returned, I asked about the numbers - what's it cost to buy one of these? Again - I am Not Buying Today. No - don't prep a car - I'm not driving one away today! They had me sit until one of the loan folks was available - they'd run me thru the numbers. As I sat, I watched them wash and wax the car, get the owners manual from the rack, install the floor mats, and do all the other prep they do before handing a car off to a new owner. I sat back, watched the machine work, and learned. When I walked into the loan tech's office, the first thing she said was 'congratulations! I understand you just bought a new Jetta!' :D Talk about certainty of conviction! The sales person ignored the multiple clear statements of "I'm not buying", ignored transmission preference, color, and trim level - and made it very, very easy for me to buy the car he wanted to sell me.

The point is - as you clearly outlined - a salesperson is concentrating on what THEY want - to sell a car. Any car. Commissioned sales means no sale=no food in the fridge. They have a problem - cars on the lot that they want to move.

Your problem is different - buy the car you want at the price you want to pay at the terms you want. All of the purchase aspects might be more or less flexible. You had already sold yourself on the car, had pressure to buy due to the experienced car you were driving (and if you drove it to the dealership the salesman knew it too and could use that 'need to buy' against you!). He knew you needed to buy and had decided on the car - he could concentrate on leading you to buy one of the cars on the lot and then upselling anything he could. You did your part, set your limits, made choices, and found a supplier that could get you a more acceptable vehicle.

We aren't locked into a dealer. We might not be locked into a geographic area (I have no idea about this). How much is a post office box in an initial roll-out area? ;) But yes - we may be adding our own restrictions - we want a Leaf in the color and trim level we want and we don't want to pay more than necessary. We know that this is an early release, we'll have to wait, and there may be mistakes in shipping. So...it should help us to know what we want but also explore what we're willing to accept. Regardless of how events unfold - we always, always, always have a choice.

Andy
 
garygid said:
Suddenly, coming up with $2000 instead of almost $40,000 seems like something to consider seriously.

With the Lease, is there no sales tax or license fees, since the "customer" does not own the car?

Does the lease include the charging station?
Or, is that still another $2200 or so?
How much is a second charger, if the first dies or for a second (2nd home or work) location?

Can one get out of the 36-month lease if unable to continue the payments? How?

Who pays for maintaining and repairs?

Is "different" insurance necessary for a leased car (and, is considered a rental)?

Thanks, Gary

The consumer does still pay for tax and license on a leased vehicle. The insurance is the same. Getting out of a lease is pretty much the same as what happens if you file for bankruptcy a return a purchased vehicle. It'll count big time against your credit. The consumer pays for maintenance and repairs that are not covered by a warranty. Leasing a vehicle is the same as buying it - it's just that you're buying if for just a set period of time. After that it goes back to the manufacturer. Most leases will allow you to purchase the vehicle when the lease is over. The purchase price (called the "buyout") will be specified in the lease contract.


I'm afriad I can't answer the questions about he battery charger. I think I read that the charger can be factored into the finance agreement. I'm assuming you would pay the same price if you install a second charger unit at another location.
 
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