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RVing message boards => Newcomers' Corner => Topic started by: NCSU Dad on October 27, 2017, 10:59:34 AM

Title: Dealer Price Sales Antics
Post by: NCSU Dad on October 27, 2017, 10:59:34 AM
A lot of newcomer threads relate to used pricing. We drove to the dealer to see this Class C floorplan. I had checked NADA to find their base price range as low $43,850 - average $52,850. MSRP $72,567.

"USED 2016 WINNEBAGO MINNIE WINNIE 22R   Stock #: 12155C Location: Winston Salem 
Length: 24 ft    Sleeps: 6    Certified Pre-Owned Back by a 12-Month Warranty! *See dealer for details.
Normal Price: $63,110
Plemmons' Discount: $10,115
Your Price: $52,995

PAYMENTS FROM: $297 /mo.    *20.00% down    5.74% apr    240 months"

The salesman told me this was a consignment sale.

1. What the salesman could not explain was what does "Normal Price" mean?
2. What source do "Normal Price" numbers come from?
3. How does a dealer discount something the dealer does not own?

My question on this forum:
Is this common pricing practice?
If so what do 1 & 2 mean?

Thanks!

PS - Doing the math of 20% down plus 240 payments the buyer would end up laying out $81,879. for a $52,995 unit.  :o
Title: Re: Dealer Price Sales Antics
Post by: OBX on October 27, 2017, 11:12:24 AM
We bought a brand new TT two years ago.  I found that dealers tried to push used models at the same price or more than we paid for our new TT.  My impression at the time was that many of the used models were not only expensive but they were lower end than what we bought.  I know and understand the mantra about buying used to save on depreciation but I suspect there are a good number overpaying for used models.  I also like to negotiate and I know many people are not comfortable negotiating.
Title: Re: Dealer Price Sales Antics
Post by: SeilerBird on October 27, 2017, 11:44:45 AM
$52,850 is normal retail on NADA. It is just overpriced as all RVs for sale usually are. This gives them plenty of wiggle room for a discount or a trade in. When shopping for an RV remember you gotta kiss a lot of toads before you kiss a prince.

http://www.nadaguides.com/RVs/2016/Winnebago/M-22R-Ford/6549665/Values
Title: Re: Dealer Price Sales Antics
Post by: Isaac-1 on October 27, 2017, 01:28:12 PM
Also you have to love that 20 year financing where people will be upside down on the coach if they decide to sell it any time in the next 17 or 18 years.
Title: Re: Dealer Price Sales Antics
Post by: SeilerBird on October 27, 2017, 01:42:19 PM
Also you have to love that 20 year financing where people will be upside down on the coach if they decide to sell it any time in the next 17 or 18 years.
:)) :)) :))
Title: Re: Dealer Price Sales Antics
Post by: Gary RV_Wizard on October 27, 2017, 01:54:57 PM
Surely this is not your first exposure to advertising hyperbole? Like jewelry stores offering 75% off? Or "Today only!" prices?

Quote
1. What the salesman could not explain was what does "Normal Price" mean?

What the store wished it could sell it for.

Quote
2. What source do "Normal Price" numbers come from?

A dark region slightly below the sales manager's tail bone.

Quote
3. How does a dealer discount something the dealer does not own?

By quoting a fictitious asking price and then offering the real one as the discounted price.

Quote
PS - Doing the math of 20% down plus 240 payments the buyer would end up laying out $81,879. for a $52,995 unit.
The arithmetic of "Buy Now - Pay Later' hasn't changed since the first loan was granted 1000+ years ago.
Title: Re: Dealer Price Sales Antics
Post by: NCSU Dad on October 27, 2017, 03:13:48 PM
Surely this is not your first exposure to advertising hyperbole? Like jewelry stores offering 75% off? Or "Today only!" prices?

Nope! My second career was working the office side of a boat dealership. Their BLOWOUT PRICES were in fact the regular selling price. The WAS price was always inflated as much as the owner thought he could get away with before lightning struck.
Title: Re: Dealer Price Sales Antics
Post by: Sun2Retire on October 27, 2017, 03:31:53 PM
Their BLOWOUT PRICES were in fact the regular selling price.

Related to this topic, if anyone needs a mattress I've noticed there are several sales going on in our part of town  ;) ;D
Title: Re: Dealer Price Sales Antics
Post by: SeilerBird on October 27, 2017, 03:47:27 PM
Related to this topic, if anyone needs a mattress I've noticed there are several sales going on in our part of town  ;) ;D
Here is Florida we have these stupid billboards announcing mattress stores are ripping you off and a web address. Well I am not buying a mattress online, I want to go to a rip off mattress store and actually lie on one before I buy one.
Title: Re: Dealer Price Sales Antics
Post by: Gary RV_Wizard on October 28, 2017, 10:36:16 AM
RV dealer selling and pricing has become much like the proverbial used car lot. I think we have ourselves to blame, at least in part, because buyers have learned (online) that they should demand huge discounts and they shop nationwide to get even a few extra discount dollars. Dealers quickly learned that lowball pricing was the way to gain sales, and that many buyers didn't look much beyond the percentage discount or distinguish between a real factory MSRP and a dealer list price.  This ferocious pricing war also led to things like add-on dealer fees and charges for PDI or prep that used to be included in the selling price. Some buyers get distracted by the discount and fail to notice that the bottom line, out-the-door price is actually higher than at another store that did not advertise such steep discount pricing.

We also see much lamentation about shoddy PDI and prep work, but again, if the last dollar has to be squeezed out of each deal, the dealer is going to cut his costs to the bone to make that possible.
Title: Re: Dealer Price Sales Antics
Post by: Arch Hoagland on October 28, 2017, 11:37:24 AM
I think it boils down to....Whatever the traffic will bear.

If they keep buying at very high prices run the price higher till they quit buying.
Title: Re: Dealer Price Sales Antics
Post by: winona on October 28, 2017, 12:08:03 PM
What I'd like to see:  A car dealer saying "this is not the time to buy!  Don't buy now!" as every ad I hear is "now's the time to buy."  Well then, when ain't it the time to buy??    :o
Title: Re: Dealer Price Sales Antics
Post by: Lou Schneider on October 28, 2017, 01:09:32 PM
Section 233 of the Federal Trade Commission's Guide and Trade Practice Rules makes for interesting reading:

https://www.ecfr.gov/cgi-bin/text-idx?SID=676bd39fe43a808fcb417973b3d0247e&mc=true&tpl=/ecfrbrowse/Title16/16cfr233_main_02.tpl (https://www.ecfr.gov/cgi-bin/text-idx?SID=676bd39fe43a808fcb417973b3d0247e&mc=true&tpl=/ecfrbrowse/Title16/16cfr233_main_02.tpl)

Or am I overlooking an exemption for RV dealers?
Title: Re: Dealer Price Sales Antics
Post by: kdbgoat on October 28, 2017, 03:01:57 PM
Or am I overlooking an exemption for RV dealers?

After reading section 233.3, we both must be. I don't think an RV is ever sold at list price except on paper. The list price gives the dealer's finance manager a lot of leeway when trying to finance an RV. That's why a lot of folks are underwater as soon as they drive off the lot.
Title: Re: Dealer Price Sales Antics
Post by: NCSU Dad on October 28, 2017, 03:04:33 PM
Showing the customer the invoice means nothing. Dealers get discounts and no cost to the dealer options based on the number of units ordered in advance. Also discounts are given if the dealer is a cash buyer. These are not reflected on the "dealers invoice".

Lets not forget what is called dealer back-end money. The dealer gets a percentage of the APR when the dealers finance broker connects a buyer with a lender. Also the dealer gets a cut when the broker sells the customer extended warranties, credit life insurance, etc.

If you want to ruin a dealers day pay off the unit or refinance with another lender. I think it was within 12 months of the sale. The broker will debt the dealer for the back-end money paid to the dealer.
Title: Re: Dealer Price Sales Antics
Post by: Gary RV_Wizard on October 28, 2017, 04:18:07 PM
Quote
Or am I overlooking an exemption for RV dealers?

The rig in question here is used and also a consignment, so the notion of a list price doesn't even enter into it.

There are numerous dodges for 233, e.g. "nationally advertised at..." or simply referring to "MSRP" rather than stating that tit is a normal sales price. If a dealer has a piece of paper in his files that shows he was quoting a price like that last week, e.g. an inventory listing given to his sales staff stating some price, he has perfectly legal grounds for referencing that price as the "regular sale price". The sales staff off course knows that price is inflated for the purpose of giving bigger discounts, and that everybody gets some discount or trade or both, but the regular price is documented.
Title: Re: Dealer Price Sales Antics
Post by: NCSU Dad on October 28, 2017, 07:34:35 PM
Section 233 of the Federal Trade Commission's Guide and Trade Practice Rules makes for interesting reading:

https://www.ecfr.gov/cgi-bin/text-idx?SID=676bd39fe43a808fcb417973b3d0247e&mc=true&tpl=/ecfrbrowse/Title16/16cfr233_main_02.tpl (https://www.ecfr.gov/cgi-bin/text-idx?SID=676bd39fe43a808fcb417973b3d0247e&mc=true&tpl=/ecfrbrowse/Title16/16cfr233_main_02.tpl)

Or am I overlooking an exemption for RV dealers?

Thanks for sharing that. Wow a government regulation I can understand. I always thought price advertising was anything goes.
Title: Re: Dealer Price Sales Antics
Post by: Gary RV_Wizard on October 29, 2017, 10:01:21 AM
Quote
I always thought price advertising was anything goes.

It pretty much is. 233 is largely unenforceable, in my opinion. It has no clear cut criteria and determining the predominant market price in some area is a major accounting project. And then the FTC has to argue in court that its market area definition and data applies to the particular case, and that the store advertised a price with intent to mislead. It's a extremely difficult argument for them, which is why you rarely see/hear of a FTC action based on 233.

Further, these days, the ready availability of internet discount stores in addition to stix & brix makes the notion of a local market price or a list price a joke.
Title: Re: Dealer Price Sales Antics
Post by: Old_Crow on November 01, 2017, 11:59:01 AM
Related to this topic, if anyone needs a mattress I've noticed there are several sales going on in our part of town  ;) ;D

We just completed a 1600 mile run from N Arizona back to Arkansas.  All along the way, we saw signs for mattress sales at almost every furniture store.  What's with that?  Can't anyone sell a mattress at list price anymore?
Title: Re: Dealer Price Sales Antics
Post by: Oldgator73 on November 01, 2017, 12:45:27 PM
We just completed a 1600 mile run from N Arizona back to Arkansas.  All along the way, we saw signs for mattress sales at almost every furniture store.  What's with that?  Can't anyone sell a mattress at list price anymore?

We get our mattresses on Amazon Prime. Getting back to dealerships. Several times I have gone to dealerships because of an ad only to find that what was offered in the ad was no longer available. This happened when we lived in Japan. The overseas bases have new car sales at base exchanges. There was an ad in the base paper for Jeeps for a certain price. I went there and was told they couldn't give me that price. I showed the ad and was told that was a mistake. I wrote up a complaint for the Commander's Hotline and the day after it was printed I got a call from the dealership. I was told I could have any Current year Jeep at the prior year price. When I bought my current truck I took my wife's car to trade in. I was informed by the Internet salesman that they were offering 125% of Blue Book for trade ins. When I got there I was told that only if I bought a high dollar vehicle. $27,000 did not qualify. I started to leave and the sales manager got a little indignant and asked what I wanted. I told him my out the door price including the trade in and said nobody would give me that deal. I told him an out of state dealer already did. I got my deal.
Title: Re: Dealer Price Sales Antics
Post by: Badlands Bob on November 03, 2017, 11:02:46 PM
A lot of people trade in their used RV when they buy a new one.  Many of those people are upside down on these trade-ins and having an inflated MSRP would give the dealership some ability with the finance company to roll negative equity into the new loan.  Car dealerships do the same thing.  Depreciation during the first couple of years will tear the stitching out of your wallet.
Title: Re: Dealer Price Sales Antics
Post by: Utclmjmpr on November 05, 2017, 11:50:21 AM
 For every seller full of BS,, there is a buyer that,s just as full.>>>Dan