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Discussion Starter #1
These days, most of our browsing is done online via internet. And a lot of dealers have 'internet only' pricing. Does that mean they dont have any room for negotiation? It seems I come in about 10-12% below that price, and they either dont respond or simply say 'this is our best price' and leave it at that.

What gives? Do they seriously not have any wiggle room? I see a 2014 MDX 62k miles or $36k. I came in at a reasonable starting offer of $32k and I got the most tepid response of This is our best price, please come in for a test drive. I am a 6 hr drive away, I need to agree on a price and put a down a deposit before I come in for a test drive.

Anyways, has anyone experienced this or am I just doing it wrong?
 

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Internet pricing more than likely means the least they can/will accept while still maintaining a gross. You have to remember that there are a lot of factors at work in the price of a new vehicle that aren't apparent at a first glance.

Now in relation to pricing of new vehicles across the board, there's a methodology. When you're talking about used, there's a virtually infinite supply of used cars in the market. With new, a dealer gets a finite supply according to the volume of their dealership in their district. Therefore, expenses of running a dealership vs. profit margin have to be spread out across what new inventory they *have*, versus their inventory turn. Ideally, as memory serves you don't want a new vehicle to sit on the lot beyond 45 days....every dealership pays floorplan interest on the cars in stock (no dealers that I know of pay cash for their inventory).

That said, if you have a vehicle that typically has a 14 day turn your negotiating posture will not be as strong. Same with special orders, unless it's something that typically *would* sit around for a while.

Adding it all up, if you have a dealership that has a premium location (which costs more to operate) and you're searching for a vehicle with good demand, then no....the dealership can't afford to give it away for less.

Now, you have to remember that 10-12% below their internet price probably represents a loss. I can't be sure, but if it's not then I'd be shocked. Acura isn't like GM that gives rebates or incentives to either consumers or dealers.

I remember back when the Insight first came out back in 2000. We in Buffalo had half a dozen sitting on the lot for months in winter. We couldn't get rid of them. But in Seattle, there was a 5 month wait at prices above MSRP. When shopping for a vehicle...location location location.
 

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Discussion Starter #3
Thanks for your insight HondaAcuraPlanet. I came in 10-12% under because most dealers bake in a 10-15% profit from the get go. Plus I know that nobody accepts the first offer anyways, so I was expecting them to come back with 5% off, and then we ping pong back and forth until we reach a number, at least that's how I thought deal negotiations work.

The car has been on the lot for 3 weeks going on 4 weeks. So I was expecting them to come back with a number but these 'Internet Sales Managers' respond with the urgency of sloths. It takes them on average 2 days to get back to me with a non answer, where the response is usually 5 words or less.

I don't get it, I thought this was how negotiations go, but I guess I am wrong.
 

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Though it may have been on the lot for 2 or 3 weeks, it hasn't hit that "magic" 45 day number yet.

Let me give you a little more insight into the whole process.

New car dealerships have historically operated on what's called an "absorption model", which has changed somewhat in the last 10-15 years. Basically, it means that the service and parts end of the dealership should be able to pay all of the operating expenses of the dealership, and anything sales makes is then the dealership's profit. Naturally it's a loosely based thing, but ideally that's the way it's supposed to work. If you shop dealers that are outside your general area, you won't be able to get much discount on a popular model unless it hits the 45 day number because that dealership just lost years of service and repairs on your vehicle, giving that money over to your local area. That dealer has zero ability to retain you as a service customer. We're getting tons of requests for the new NSX, but you can surely bet we're not selling outside of the district because we just had to pony up well into the six figure range for special tools to work on them.

The point of discounts happen when it becomes more expensive to keep a vehicle on the lot than it does to have it burning gas in someone's driveway. That part of it is no different than used cars.

I've worked in sales too, but not for Acura. When you talk about dealing with a local franchise, as a general statement you find that the harder a customer tries to beat you up over price, by and large the worse the customer is during the ownership experience.....and that's years and years. If you're dealing local, remember.....you want the dealership to make a reasonable profit, and you want a pleasant transaction. Things like this pay off for years down the road and in fact result in you getting a lower price on the car.

I remember many moons ago I took delivery of a vehicle off the lot. They squeezed every nickel they could for me on the price, and I got an amazing deal. Working there though, I had to even change my own plates because they were busy with "real customers". Never again. Next time, I paid the best price they offered the public. I spent a grand more, but in the grand scheme I was treated like a customer. That to me was well worth the money in a large transaction. Naturally, my situation was different than 99.9% of car buyers, but you get what I mean.
 

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Discussion Starter #5
Though it may have been on the lot for 2 or 3 weeks, it hasn't hit that "magic" 45 day number yet.

Let me give you a little more insight into the whole process.

New car dealerships have historically operated on what's called an "absorption model", which has changed somewhat in the last 10-15 years. Basically, it means that the service and parts end of the dealership should be able to pay all of the operating expenses of the dealership, and anything sales makes is then the dealership's profit. Naturally it's a loosely based thing, but ideally that's the way it's supposed to work. If you shop dealers that are outside your general area, you won't be able to get much discount on a popular model unless it hits the 45 day number because that dealership just lost years of service and repairs on your vehicle, giving that money over to your local area. That dealer has zero ability to retain you as a service customer. We're getting tons of requests for the new NSX, but you can surely bet we're not selling outside of the district because we just had to pony up well into the six figure range for special tools to work on them.

The point of discounts happen when it becomes more expensive to keep a vehicle on the lot than it does to have it burning gas in someone's driveway. That part of it is no different than used cars.

I've worked in sales too, but not for Acura. When you talk about dealing with a local franchise, as a general statement you find that the harder a customer tries to beat you up over price, by and large the worse the customer is during the ownership experience.....and that's years and years. If you're dealing local, remember.....you want the dealership to make a reasonable profit, and you want a pleasant transaction. Things like this pay off for years down the road and in fact result in you getting a lower price on the car.

I remember many moons ago I took delivery of a vehicle off the lot. They squeezed every nickel they could for me on the price, and I got an amazing deal. Working there though, I had to even change my own plates because they were busy with "real customers". Never again. Next time, I paid the best price they offered the public. I spent a grand more, but in the grand scheme I was treated like a customer. That to me was well worth the money in a large transaction. Naturally, my situation was different than 99.9% of car buyers, but you get what I mean.
That's a brilliant point that I hadn't even thought about. That they definitely would save their discounts for a local buyer so they can make money off service and repairs. Next time I will keep my mouth shut on where I live until we've got the ball rolling. It seems many dont even want to talk to me, and I see now it all makes sense. Heck, I'd probably do the same. I guess I'll hold out for 3 more weeks.

Here's a response from another dealer: "I want to thank you for your interest in the 2014 Acura MDX. We are an internet dealer and always put our best price on-line and do not negotiate."

Pretty firm on the negotiation.
 

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Discussion Starter #6
So I spoke to the GM of the dealership today because I responded to a survey they sent me and I basically gave them a piece of my mind about his salespeople for ignoring my emails. The GM was very transparent and said look we got the mdx as a trade in for $33,500 and put in $1700 in repairs/service, so they are all in at $35,200 and so they aren't making much money on it, about $700.

Is this true? I know when they say they pu tin $1700 in repairs, its at the Acura service rate, so that's probably more like $600-800 bucks, then again, he could be padding it completely, no way for me to know.

I told him I appreciated his transparency, but I will think about it. I will wait for the magic 45 days and if its still there, I'll offer $35k for it. if not, time to move on!
 

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Totally possible if it's a CPO. There's a fee of (I *think*) $600 that the dealer has to pay to certify it and extend the powertrain warranty. All services have to be brought up to date, and all tires must be the original brand and have a minimum depth of I think 8/32". That said, if they certified it, did the maintenances, did a brake job, and hung 4 tires on it....that will easily hit that figure.
 

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Let me add to this that the sales department doesn't get a "bargain" on service work. Usually the sales department pays full labor rate on service, or gets a minimal discount. Parts are generally 30% over dealer cost on an internal repair order (which is more than I sell them for....ha :) ). This way, all departments end up "participating" in the gross profit figure that would otherwise be hoarded by the sales department.
 

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I bought my MDX used from the a dealer with whom I had a long-term relationship. I got the price from the net and tried to negotiate as well - they also said, nicely, it was their best price and they couldn't negotiate.

I was a little put off by this at first but stepped back and compared the price to blue book/other dealers/private parties and realized it was a very good price. They had the service records, Carfax, the dealership had treated me fairly over many years and they were much easier to work with than buying from a private party or shady used car lot. I think in the end they knocked off something like $40 to a nice round number and we made the deal. I'm glad I did and continue to take the MDX and my wife's TL there for service I don't want to bother with myself (for $40 I'm happy to let them change the oil/filter, check out the car, vacuum and wash it while I drink their Starbucks coffee and work at their desks in the waiting room). Good luck with your search.
 

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I'm also looking for an used 2014 MDX Advanced which quotes around 36.6K by the dealer. Do you think the asking price 30-32k is too much? It's been in the lot the last 2 weeks. Let me know the price point I can target. Tomorrow I'm going to the showroom. Any help is useful at this point as I have never negotiated with dealers and my current car got it through private party.
 

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Discussion Starter #11
I'm also looking for an used 2014 MDX Advanced which quotes around 36.6K by the dealer. Do you think the asking price 30-32k is too much? It's been in the lot the last 2 weeks. Let me know the price point I can target. Tomorrow I'm going to the showroom. Any help is useful at this point as I have never negotiated with dealers and my current car got it through private party.
Is the 36k internet price? how many miles does it have? Like HondaPlanet said, 45 days is the magic number, 2 weeks is still primetime. I basically was blown off whenever i came in 3-4 k lower than the internet price. Also, where are you looking? I have to drive 4 hours to see a 2014 MDX advance for 37k, 32k miles. And something about cars on the lot any longer than that make me suspect that somethigns wrong with it. i.e. i see very cheap 2014 mdx advance, for about 33k, but the carfax is really weird, basically no record history until 2 yrs after the first sale with 49k miles, then a week later it goes on sale and the odometer is 5miles less, then a month later, its back to an even 50,000 flat. Something is shady with this one, so I pass on cars that have sat TOO long.

So you can always try and let us know how it works out.
 

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I basically was blown off whenever i came in 3-4 k lower than the internet price.
On a used car? Well it's no wonder. Average used car profit is $3-4K. You're offering them what amounts to a wholesale auction number. That said, it's going to be easier for them to send it to an auction rather than deal with a customer transaction.
 

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On a used car? Well it's no wonder. Average used car profit is $3-4K. You're offering them what amounts to a wholesale auction number. That said, it's going to be easier for them to send it to an auction rather than deal with a customer transaction.
Yea on a used. I know its not going to be accepted - no first offer ever is unless its at full asking price. My impressions were if you have to throw a number out, throw out a very low one, then they come down a little, and u come up a little and ping pong back and forth until u agree. But to my surprise, they'll just ignore you or make little effort if any .
 

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Sure, I've been selling AcuraCare since 2004 :)

You have to change tack on your process, or you won't end up with the deal you want.

One thing you have to remember is that phone orders aren't perceived as ready to buy, and email ones even less so. You're not doing it from a position of strength. Want the best deal? Stroll into the dealership on a Tuesday through Thursday mid morning closer to the end of the month. It's their least busy time and will allow the salesman to toss you the keys and talk with you about the deal without a waiting line of "ups" wanting to be shown different vehicles where he could make more money.

But at the same time, be realistic and trust that the bottom number they give you is truly their bottom number. You can always say you'll think about it, but the moment you start lowballing and standing pat on that lowball figure, the more the salesman is convinced that you have wasted his/her time, and is far less apt to dealing with you at all. If they really *can* do better, they will pursue you.
 

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Is the 36k internet price? how many miles does it have? Like HondaPlanet said, 45 days is the magic number, 2 weeks is still primetime. I basically was blown off whenever i came in 3-4 k lower than the internet price. Also, where are you looking? I have to drive 4 hours to see a 2014 MDX advance for 37k, 32k miles. And something about cars on the lot any longer than that make me suspect that somethigns wrong with it. i.e. i see very cheap 2014 mdx advance, for about 33k, but the carfax is really weird, basically no record history until 2 yrs after the first sale with 49k miles, then a week later it goes on sale and the odometer is 5miles less, then a month later, its back to an even 50,000 flat. Something is shady with this one, so I pass on cars that have sat TOO long.

So you can always try and let us know how it works out.
Actually, the car has 39k on it. I have low balled but didn't work out. The internet price was 36.6k but asked them 30k. The car is in a very nice condition, test drove and really liked it. Clean car fax as well (1 owner) but, still hesitant to buy the used car for the internet price. As I'm moving from my 2003 Honda accord used car to 2014 Acura MDX due to 6 seater requirement. So, for me it is a big move.
 

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Discussion Starter #17
Actually, the car has 39k on it. I have low balled but didn't work out. The internet price was 36.6k but asked them 30k. The car is in a very nice condition, test drove and really liked it. Clean car fax as well (1 owner) but, still hesitant to buy the used car for the internet price. As I'm moving from my 2003 Honda accord used car to 2014 Acura MDX due to 6 seater requirement. So, for me it is a big move.
Did they even counter? At least you went in and test drove it. I would expect them to come back with a number. What did they do? Say no, and point you to the door?

If you can find something for like $35.9k of a similar model, maybe just slightly higher miles, then you should be able to get some negotiation. But if they flat out said no goodbye without any effort, then I personally wouldn't go back.
 
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