Automotive

Honda dealers - profit margin vs. fair offer. Are dealers being greedy???

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  • Mar 13th, 2012 8:27 am
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Deal Expert
Feb 29, 2008
30106 posts
5547 upvotes
Montreal
Rainne wrote: People don't really care about long-term quality these days, the general attitude is buy cheap, use it, replace it and buy a new one.

Japanese products (MiJ specifically) command a premium over other brands because of quality control.

Be careful now. That may have been true 20 years ago, but now it's debatable. The Fusion is built in Mexico and does better in reliability than camry or Accord.
Deal Addict
Jun 29, 2003
2092 posts
1942 upvotes
I wanted to provide an update. It is possible to buy a Honda at 3% over invoice. Montreal area (and Toronto as well from what I hear) dealers are in collusion. You have to go outside the city or to another city to buy your car.
Deal Addict
Jul 11, 2010
2959 posts
139 upvotes
Honda/Toyota = order takers, not salespeople
Deal Addict
User avatar
Jun 22, 2004
3048 posts
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Rehan wrote: ...Dealerships have MANY other ways to make money besides the apparent markup above the invoice price.

...
I love the use of 'apparent markup'. I think dealers are loving CCC and APA, manufacture a 'cost' that ensures a profit and anything above that is gravy - and buyers feel they got a deal.
Rehan wrote: In Canada, the Honda Civic is already cheaper than a similar Hyundai Elantra. That's probably why there were 2.3x as many Civics sold in November (#1 selling car for the month) than Elantras (#2).
Does 'cheaper' consider the difference in financing rates? Just wondering as traditionally Honda has higher rates than Hyundai.
Deal Addict
Nov 21, 2007
1213 posts
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Kitchener
jakemtl wrote: I wanted to provide an update. It is possible to buy a Honda at 3% over invoice. Montreal area (and Toronto as well from what I hear) dealers are in collusion. You have to go outside the city or to another city to buy your car.
No, as mentioned in this thread multiple times it's that they have a lineup of people happy to pay 6%+ so they don't need to go any lower.
Deal Addict
Oct 30, 2008
2120 posts
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Toronto
spike1128 wrote: There is some demand for Honda vehicles, but Hyundai has been bleeding them dry for the past year. I know some people who went from Honda to Hyundai, because Hyundai agrees to pay the last few months of the Honda lease just to get the people into Hyundai vehicle. Honda will need to match Hyundai's prices or risk getting destroyed. I for one used to drive a Acura base model and it's still going strong after 10 years still in the family. I still believe in Honda quality, but I prefer to drive something else.

I for one don't want a Hyundai over a Honda, because I don't think Hyundai is good enough to replace a Toyota or a Honda for that matter. The general public seem to want to go buy whichever give them the best value and hence you see more new Hyundais being driven around.

I also don't believe that Honda can operate like the old days, because of services like CCC and others giving people more knowledge on how to buy a car for a more fair price.

My 2 cents.
Why would they want to match Hyundai's prices? After a few years, a Honda typically retains its value much better than a Hyundai. That comes at a premium. Yes, over the last few years Hyundai has produced good cars (as a result of giving a blank cheque to a German designer as the Koreans on their own still can't design a car for **** and this is reflected with older Hyundai/Kia/Daewoo looks and reliability). And Honda also has a long history of reliability that Hyundai doesn't. So that's why people pay more for a Honda. When they go and sell it, as long as it has been pretty well maintained, they are literally guaranteed to get more money than someone selling a comparable Hyundai model.
Lior Hershkovitz
Broker at Mortgage Edge, specializes in construction financing and private lending
Construction rates start p+2.5%, 2nd mortgage start 5.99%, private financing start 7% max. 95% LTV
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Mar 8, 2010
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Too many sheep driving the price of hondas up.
RFD OT: Serious answers to stupid questions.
RFD Definition of 'troll': Someone whose opinion you don't like.
Deal Addict
Oct 30, 2008
2120 posts
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Toronto
knapper wrote: I love the use of 'apparent markup'. I think dealers are loving CCC and APA, manufacture a 'cost' that ensures a profit and anything above that is gravy - and buyers feel they got a deal.



Does 'cheaper' consider the difference in financing rates? Just wondering as traditionally Honda has higher rates than Hyundai.
I just financed a 2012 Civic last week at 2%. Don't know how much Hyundai is offering right now but even if it's zero percent financing, I still wouldn't buy one because down the road I can recuperate the savings through the Honda having the better resale value.
Lior Hershkovitz
Broker at Mortgage Edge, specializes in construction financing and private lending
Construction rates start p+2.5%, 2nd mortgage start 5.99%, private financing start 7% max. 95% LTV
Jr. Member
User avatar
Jul 16, 2011
122 posts
29 upvotes
MISSISSAUGA
poedua wrote: And that seems to be the pervasive attitude of many on RFD...that the cheapest price is synonymous with getting the best deal or value.

It's not always the case IMO, sometimes paying a higher price for something does in fact represent the ' best value ' for your money....in other words the cheapest price doesn't always represent the best value.

Price is simply what you pay,,....value is what you get. ;)

Very well said!!
Sean Chaudhry
Town + Country BMW
(416) 875 0931
sean.chaudhry@tcbmw.com for rates, residuals and current rebates on all New and Pre Owned CPO BMW's
Deal Addict
Dec 16, 2001
1864 posts
838 upvotes
Oakville
jakemtl wrote: I wanted to provide an update. It is possible to buy a Honda at 3% over invoice. Montreal area (and Toronto as well from what I hear) dealers are in collusion. You have to go outside the city or to another city to buy your car.

My dad bought his new 2010 CR-V at ~$300 (~1%) over invoice in Scarborough. Dealers in Mississauga, Downtown, etc were willing to pricematch the Scarborough.

We found the dealers in the smaller cities weren't willing to sell below 3% over invoice.

You can go through the many posts of people using the CCC report, ~1% over invoice or even lower is not unheard of. It all comes down to negotiating and your dealer location.
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