I won’t name the dealer/manufacturer yet, but just got a call from my sales rep:
I had ordered a car a few months ago. They were selling them at $500 under MSRP for orders. I also had a corporate/association discount which they would honor to take another $2500 off.
Got a call today. Was told that the dealer was now only honoring this corporate pricing for “local” customers…I’m about 35 miles away, which isn’t much in SoCal. Apparently, they want all these cars local for servicing…which doesn’t make a whole lot of sense since I can get it serviced near, say, my workplace etc…He claims each dealer has an “area” and they want to sell in that space.
In addition, he now mentioned a useless $500 dealer add on, which nullifies the $500 discount…so MSRP.
So, about a $3000 difference.
In today’s market, I really shouldn’t be surprised at such shenanigans. Heck, even before this crisis this wouldn’t have shocked me!
My question: Does any manufacturer pay more to sell locally? Or is this just a bunch of hot air?
As I was reading, not yet done with what your wrote, the moment I saw $500 off MSRP and a $2,500 discount I was like “Ya right”. Being on this site you have to know market conditions and that this just isn’t something that’s happening especially in CA. One of the main reasons volume dealers can lose a lot of money (back in normal times) on a car is because they’d make that profit up with service. Believe it or not dealerships make more selling a ton of cars below MSRP then only a decent amount at or above MSRP. Some of it has to do with service and other parts of it are the monthly volume bonuses from the manufacture. Well at least when it comes to Toyota’s.
While it is true all the stuff mentioned above. I suspect it really is:
Oh Snap, we got someone who wants to buy this special order for way over what OP is paying, lets make up some reasonable crap and get them to cancel their order.
They most likely meant PMA and not region. Everything they are telling you just sounds wrong. PMA is the Primary Marketing Area. I am very familiar with Los Angeles and that area is massive so PMA can be a pretty small diameter there.
Man back when I moved here from Cali they told me my PMA was Houston to Dallas to Austin lol. Now it’s about a 30 mile range unless it’s a special circumstance. Everything is just selling so quickly to only Houston residents it doesn’t make sense to venture out especially on hard to get units.
He is probably referring to their home market rather than geographic region as @Ryan_S. Usually dealers have certain zip codes they are responsible selling to and if they don’t sell a certain percentage to that area or other dealers oversell that area, they risk future allocations being assigned to them. They won’t get punished on that one car they sell you, but there is a risk in the future.
From their POV, your chance of coming back for service and parts (probably 60% of their business) is close to nil. They’d rather find someone who most likely will.
When I was shopping for a Lexus last month in Southern California, several dealers told me they could give me a better deal (no markup from MSRP) if I was local. Most dealers did not seem to care, although when one asked where I lived, I mentioned my office was close to their location (my home was not that close.)
Encountered this all the time. Reasoning from the dealerships GMs were that they would loose the service $$$$. Sadly the sales reps were left in the dark about this unwritten policy and would circle back to see what went wrong.
Not an expert on these things at all but I feel this is ‘hot air’ because otherwise dealer should not have promised to honor the corporate discount in the first place and then back off.
Whether I like it as a customer or not, I do get the dealers’ side about local deals being more profitable. They are definitely entitled to set the terms that are best for their business. But agreeing to something and then walking back seems like bait and switch.
I did and I’m not buying the excuses. If it really was about selling to customers that live close to the dealership then they wouldn’t have agreed to the numbers in the first place. Typical dealership shenanigans.
