are all SoCal dealers adding a markup to GXs now?

[ruddy]

Hi,

As I've made up my mind to buy a GX as a replacement for my horrible old Jeep, I'm running into the problem of the "flavor of the week" nature of a CNG car with gas prices so high.

I have had two cars offered to me in the last couple of weeks, both with dealer premiums added (one I had to buy stuff from them like lojack--which had not yet been installed) and the other wanted $2500 which they didn't disclose when they took money from me as a deposit in exchange for priority on their list a month ago.

Needless to say, I walked away from both. Now I'm wondering where to buy my Civic GX. I will wait a few months or I will pull the money out of my pocket today, I just want to know that I'm dealing with someone reputable and honest. Recommendations from folks here on the board for LA, Valley, OC car dealers you can trust?

[freedml]

Re: are all SoCal dealers adding a markup to GXs now?

Did the dealer who took a deposit promise you sticker price in writing? Did they give you your money back when you decided not to buy the car?

Curtis at Robertson's Palmdale Honda is probably your best bet for a no-markup GX. But, frankly, I doubt that will be in his control once the GXs start rolling in and the sales manager knows that they are in great demand and will easily command a markup.

[ruddy]

Re: are all SoCal dealers adding a markup to GXs now?

No, the promise was from their business manager who took my deposit. Sales guy just shrugged and said that only sales guys can make promises like that. I just shrugged and told them they had lost my service business, too. BTW, Colonial is a bunch of incompetent nincompoops. They then screwed up trying to refund my deposit onto my CC, but it did get done eventually. FWIW, their fleet manager was extremely apologetic, since she understood I was getting hosed, but it was in the hands of the sales guy by then.

I will contact Curtis, as well as every other dealer I can find near me. There are many options in L.A. fortunately, and I think the heat behind the GX will cool in the next couple of months as gasoline prices drop (inevitable before an election) and folks realize that CNG requires a bit more commitment than other alt-fuel/hybrid options. I'm willing to be patient to avoid the regret that comes from willingly allowing myself to be ripped off.

[freedml]

Re: are all SoCal dealers adding a markup to GXs now?

By 'business manager' I'll assume he/she only took the deposit and was not involved in actual sales.

I'll assume the 'promise' was verbal since if it were in writing I bet you could have bought the car for sticker price. I don't think anyone at Honda would tolerate a dealer violating a written agreement with a customer. Or you could buy the car and sue for the difference between the price in writing and the price you paid.

[ruddy]

Re: are all SoCal dealers adding a markup to GXs now?

There was no way I was going to get it in writing, but I was just naive enough to believe them when several people told me it was their policy to sell at sticker on these cars. At the same time, my risk was nil (except for my time), so it was a gamble. I lost. Oh well.

[freedml]

Re: are all SoCal dealers adding a markup to GXs now?

Key word: "was"

[ruddy]

Re: are all SoCal dealers adding a markup to GXs now?

Yes, well, "fool me once"...

Ken

[WellFedEd]

Re: are all SoCal dealers adding a markup to GXs now?

...and I think the heat behind the GX will cool in the next couple of months as gasoline prices drop

Unless another hurricane shuts down things down again!

[jetboatjohnny]

Re: are all SoCal dealers adding a markup to GXs now?

...and I think the heat behind the GX will cool in the next couple of months as gasoline prices drop

I really doubt that

[Curtis]

Re: are all SoCal dealers adding a markup to GXs now?

The pricing in a dealership is generally set by the General Sales Mgr. He's directly below the owner and runs the show. Sometimes it comes from the owner himself. If you wanted to see mark-ups you should have been around when the S-2000 first hit the floors. I saw dealers selling from $5000-$15000 over MSRP. The reason is that there are very few available and they want them to stick around for a while. Refer to the recent Mugen Si.

The problem comes when someone comes in and wants the thing so badly that they bay the high markup. Then the dealer thinks... Hmmmm, that last one worked so well, I'll try it again. Every time a markup is paid, it reinforces the practice. A practice I loath incidently.

The problem is that anytime you have a popular car that's in low supply and high demand, dealers see the opportunity to retain (or increase) profit. I have yet to hear anyone scream when the price on the car they were buying was reduced. The window sticker clearly states MAUNFACTURERS SUGGESTED RETAIL PRICE (MSRP). So if they can sell it for less... why cant they sell it for more? It's a supply and demand world. Oil is the best example I could site at the moment.

When a dealer says one thing and does something else... that's questionable. Although I could see a circumstance where the manager is told how to sell the car and some time later that changes due to the change in the market. Something that makes him look like a schmuck, but is out of his control.

I have avoided getting into the discussion of how I am going to have to sell the 09's when they come in. I don't want to lock them into something that may well change before the time comes. I can only hope that the situation will (somehow) get better by then... but I'm not going to hold my breath. I've seen markups as high as $5000, with $4000 the most common number I hear. Even though I understand it, I don't have to like it.

I still get calls where buyers explicitly say that they'll gladly pay way over sticker to get to the top of the list. Something I haven't heard you volunteer for. I would bet that they'll get their car, somewhere, somehow, and probably at your expense. If these buyers disappear, so will the markups... and I doubt that will happen.

Face it, it's not illegal, outside of company policy, unethical or sneaky... it's just business. How many buyers are so cheap that they hunt around to find a dealer that will sell a car below invoice... at invoice, or some similarly rediculous number? I guess this is the dealers way of staying afloat.

[ruddy]

Re: are all SoCal dealers adding a markup to GXs now?

Thanks for your reply, Curtis. I have a different opinion on the matter, however, and it comes from the consumer's perspective.

I certainly understand supply/demand in the car world, and there may well be folks who will overpay--but it won't be all of them.

On top of that, had they been up front with me, as any reputable dealer would be, then I would have no complaint, but they weren't, and they wasted my time, and kept me from talking to other dealers because I thought I had already found a car.

And here's where the smart dealership would understand that creating a lasting relationship with the customer will be to their benefit--service. Since much of the service on the GX can only be done by an authorized mechanic (and assuming that servicing the CNG-specific parts of the car require specialized knowledge), this dealership should want my business. In a city with no other options, I suppose they can charge whatever they want, but in the case of LA, I have at least 5 or 6 authorized GX dealerships within 25-40 miles of me. Needless to say, Colonial Honda will not get a single service dollar from me. And my understanding is that over the lifetime of the car, the service money means a lot more to the dealership than the few thousand they may make on the sale. I could be wrong about that, but there's also repeat sales business and word of mouth. And the GX is nothing if not a word of mouth kind of car. I just see their behavior as short-sighted and greedy, in addition to sleazy.

I should point out, too, that the GX is a car that requires a lot of the owner, in terms of behavior modification--not everyone is cut out to own a CNG car. The reality becomes less palatable, too, as the cost of owning and operating the car rises to the equivalent of a gas-powered vehicle. And if you haven't noticed, gas is slowly moving back toward $4 and I believe it will drop below $4 in the next few weeks as public pressure mounts toward the oil industry (I think this has been the pattern the last couple of years every time Exxon or Shell announces record profits). Also, they don't want to be an election issue. When gas drops below $4, you're going to see the mania about incremental gas savings dissipate and the true market for the GX will return--those who are truly committed to alt-fuels and lowering their carbon footprint. Again, I may be wrong, but this is how it seems to me and all of that points toward a drop in the number of people willing to pay over sticker price for the car.

[Curtis]

Re: are all SoCal dealers adding a markup to GXs now?

I completely agree with you on every point. It goes to prove the old addage that a happy customer will tell 3 people... an unhappy customer will tell 10, or in your case, about 3500 people.

[Adrian]

Re: are all SoCal dealers adding a markup to GXs now?

I think the simple answer to your question is a very likely YES. I doubt very much that you will be able to get a 2009 Civic GX without a mark-up...though I wish you good luck. Having said all that, I know if it were me, I would call every single GX dealer in So Cal write down the prices and then start looking out of state and factor in transportation costs. That is what I did in buying my two 2008's. I bought my first one in December '07 for $750 below MSRP and free mudflaps . By the time a decided to buy my second, the same dealer, Scott Robinson, was no longer willing to sell below MSRP, so I paid MSRP + mudflaps It was a few weeks later that it seems the remaining GX dealers that had a GX in stock began charging a few grand over MSRP.

[ruddy]

Re: are all SoCal dealers adding a markup to GXs now?

Good advice, Adrian, but the dealers I have spoken with haven't yet set their pricing for the '09s.

I'm patient and persistent, and have managed over the years to get the deal for new cars that I want. I find that being transparent and reasonable goes a long way with reputable dealers. And every one of them with whom I speak is giving me information that I didn't have before, whether they know it or not. The insight I gain here will help as well and eventually (before the end of the quarter) I believe I will have my car, at my price. But we'll see.

[rabwc]

Re: are all SoCal dealers adding a markup to GXs now?

In NorCal a salesman at Walnut Creek (a 45-75 min BART ride from Oakland or SFO airports) Honda (925-934-0530) said (on 8/9/08) they are becoming the premier distributor of GX's in the Bay Area and expect to get a larger allocation for 2009 models. Call to get on the wait list and possibly avoid a SoCal markup ... He expected the price to be about $500 more that the 2008 (a guess).