YACT: Domestics: Why bother having a high MSRP

[ajayjuneja]

So why do domestic cars have high sticker prices (of the same level or higher than the imports in the same class) when no one in their right mind would pay MSRP for them.

I just saw a cavelier in the newspaper that had an MSRP of $17520, yet after rebates and stuff, it was $8995.

No one in their right mind would pay $17K for a chevy cavelier, so why have it priced there in the first place? Why not price it at 12K rather than offering "rebates" to move these pieces of junk off the lot?

For 18K you can buy a nice altima... who would ever pay 17K for a cavelier...

 

Because they want to make people think they're getting a good deal. By having a high initial price, the dealer can make a profit on the car and the buyer can think, "Ooh! I'm getting a great deal!" even though the 'deal' is actually mediocre.

 

[ajayjuneja]

note: I know high demand cars (Corvette, GTO, etc.) sell for MSRP (or more) sometimes.

 

[tnitsuj]

Originally posted by: ajayjuneja
So why do domestic cars have high sticker prices (of the same level or higher than the imports in the same class) when no one in their right mind would pay MSRP for them.

I just saw a cavelier in the newspaper that had an MSRP of $17520, yet after rebates and stuff, it was $8995.

No one in their right mind would pay $17K for a chevy cavelier, so why have it priced there in the first place? Why not price it at 12K rather than offering "rebates" to move these pieces of junk off the lot?

For 18K you can buy a nice altima... who would ever pay 17K for a cavelier...

You would be surprised what people pay for POS cars.

 

[TitanDiddly]

So they can make you think you're getting a l33t deal. Or, if you're smart enough to know that the MSRP is nutty, then you have no idea of the actual value of the car. Maybe they get MSRP on fleet sales.

 

[ajayjuneja]

Originally posted by: jumpr
Because they want to make people think they're getting a good deal. By having a high initial price, the dealer can make a profit on the car and the buyer can think, "Ooh! I'm getting a great deal!" even though the 'deal' is actually mediocre.

Are americans that stupid? To think that a chevy cavelier is worth nearly as much as a loaded civic/corolla/sentra?

 

[JYDog]

If every car buyer studied their purchases thoroughly, the dealerships would go out of business.

 

[Rastus]

They use the high MSRP as a financing tool. Some people with bruised credit can't get a loan for 100% of the price of a car. It looks like they had a large down payment to the finance company.

 

Originally posted by: ajayjuneja

Originally posted by: jumpr
Because they want to make people think they're getting a good deal. By having a high initial price, the dealer can make a profit on the car and the buyer can think, "Ooh! I'm getting a great deal!" even though the 'deal' is actually mediocre.

Are americans that stupid? To think that a chevy cavelier is worth nearly as much as a loaded civic/corolla/sentra?

Yes. I just got (about 2 weeks ago) a 2004 Honda Accord LX 5-speed for $18,500 which is about invoice. It was a good deal because not many people buy manual transmission Accord sedans. However, I know that many people simply walk into a dealer, say "I want that one," and walk out paying $25,000 for an Impala, which is much less car for the money than the Accord.

 

[LongCoolMother]

Originally posted by: jumpr

Originally posted by: ajayjuneja

Originally posted by: jumpr
Because they want to make people think they're getting a good deal. By having a high initial price, the dealer can make a profit on the car and the buyer can think, "Ooh! I'm getting a great deal!" even though the 'deal' is actually mediocre.

Are americans that stupid? To think that a chevy cavelier is worth nearly as much as a loaded civic/corolla/sentra?

Yes. I just got (about 2 weeks ago) a 2004 Honda Accord LX 5-speed for $18,500 which is about invoice. It was a good deal because not many people buy manual transmission Accord sedans. However, I know that many people simply walk into a dealer, say "I want that one," and walk out paying $25,000 for an Impala, which is much less car for the money than the Accord.

the man speaks the truth. people think impalas whip accords. the truth is, accords>impala for the price.

 

[ajayjuneja]

I walked into the Infiniti dealer saying "I want that one."


I just said, "and hears what I want to pay for it." in addition...

 

[ajayjuneja]

So is this 0% financing in lieu of rebates a scam then?

seems like if you don't get the $3,000 rebate, you basically can look at that as paying $3,000 interest on the car...

seems like it'd be more effective to pay cash, take the rebate, and finance the rest through your bank at 3-5% then --you'd still come out $1200 or so ahead.

 

[NutBucket]

Originally posted by: LongCoolMother
the man speaks the truth. people think impalas whip accords. the truth is, accords>impala for the price.

Jizzo?

 

[AgaBoogaBoo]

it's all marketing

 

[ElFenix]

Originally posted by: jumpr

Originally posted by: ajayjuneja

Originally posted by: jumpr
Because they want to make people think they're getting a good deal. By having a high initial price, the dealer can make a profit on the car and the buyer can think, "Ooh! I'm getting a great deal!" even though the 'deal' is actually mediocre.

Are americans that stupid? To think that a chevy cavelier is worth nearly as much as a loaded civic/corolla/sentra?

Yes. I just got (about 2 weeks ago) a 2004 Honda Accord LX 5-speed for $18,500 which is about invoice. It was a good deal because not many people buy manual transmission Accord sedans. However, I know that many people simply walk into a dealer, say "I want that one," and walk out paying $25,000 for an Impala, which is much less car for the money than the Accord.

just as many morons walk into honda dealers and say 'i want that one' and pay msrp on an accord

 

[CPA]

Originally posted by: ajayjuneja

seems like if you don't get the $3,000 rebate, you basically can look at that as paying $3,000 interest on the car...

That's not exactly right. You're missing the other side - taking the rebate and getting an interest rate. It's just another way to make people feel that they got a good deal. But the difference between taking the rebate and paying 4-5% interest or taking 0% and no rebate is a matter of a few dollars. The car companies and finance companies know what they are doing. It's all a part of the marketing.

 

Originally posted by: ElFenix

Originally posted by: jumpr

Originally posted by: ajayjuneja

Originally posted by: jumpr
Because they want to make people think they're getting a good deal. By having a high initial price, the dealer can make a profit on the car and the buyer can think, "Ooh! I'm getting a great deal!" even though the 'deal' is actually mediocre.

Are americans that stupid? To think that a chevy cavelier is worth nearly as much as a loaded civic/corolla/sentra?

Yes. I just got (about 2 weeks ago) a 2004 Honda Accord LX 5-speed for $18,500 which is about invoice. It was a good deal because not many people buy manual transmission Accord sedans. However, I know that many people simply walk into a dealer, say "I want that one," and walk out paying $25,000 for an Impala, which is much less car for the money than the Accord.

just as many morons walk into honda dealers and say 'i want that one' and pay msrp on an accord

Good point, but my personal feeling is that American cars have inflated MSRPs when compared to foreign competitors.

 

[ajayjuneja]

Also, why don't Import car companies have to do this tactic?

Cause the cars are good?

Would the cavelier not go off the lot if the MSRP was a more realistic 12K? given most people pay 10K or whereabouts for it...

 

[pukemon]

Originally posted by: ajayjuneja
Are americans that stupid? To think that a chevy cavelier is worth nearly as much as a loaded civic/corolla/sentra?

Yes.

Everything the rest of the world has to say about Americans is true, but we just ignore them and say they're wrong, or we just ignore them. Or we blackmail them.

 

[OS]

Originally posted by: jumpr
I just got (about 2 weeks ago) a 2004 Honda Accord LX 5-speed for $18,500 which is about invoice. It was a good deal because not many people buy manual transmission Accord sedans. However, I know that many people simply walk into a dealer, say "I want that one," and walk out paying $25,000 for an Impala, which is much less car for the money than the Accord.

Unless there is something missing, for a before TTL price, 18.5k for a manual accord is not particularly good. I paid 18.3k before TTL on an auto 2003 4dr LX. The auto alone is a $700 or so option.

 

Originally posted by: OS

Originally posted by: jumpr
I just got (about 2 weeks ago) a 2004 Honda Accord LX 5-speed for $18,500 which is about invoice. It was a good deal because not many people buy manual transmission Accord sedans. However, I know that many people simply walk into a dealer, say "I want that one," and walk out paying $25,000 for an Impala, which is much less car for the money than the Accord.

Unless there is something missing, for a before TTL price, 18.5k for a manual accord is not particularly good. I paid 18.3k before TTL on an auto 2003 4dr LX. The auto alone is a $700 or so option.

The price is after TTL, including destination and no first month payment.

 

[GasX]

Originally posted by: ajayjuneja
So is this 0% financing in lieu of rebates a scam then?

seems like if you don't get the $3,000 rebate, you basically can look at that as paying $3,000 interest on the car...

seems like it'd be more effective to pay cash, take the rebate, and finance the rest through your bank at 3-5% then --you'd still come out $1200 or so ahead.

That's the over-simplified way of looking at it. In fact, the "right choice" depends on the individual. What interest rate can you get? what is the term of your loan? Does financing the full cost of the car and putting $3000 in your pocket make sense for you (not bloody likely...)?

More often than not: If you have a hefty trade-in and/or down payment, the cash back is easily the better deal. If you put very little down, the 0% is the better deal.

 

[Chadder007]

Originally posted by: jumpr

Originally posted by: OS

Originally posted by: jumpr
I just got (about 2 weeks ago) a 2004 Honda Accord LX 5-speed for $18,500 which is about invoice. It was a good deal because not many people buy manual transmission Accord sedans. However, I know that many people simply walk into a dealer, say "I want that one," and walk out paying $25,000 for an Impala, which is much less car for the money than the Accord.

Unless there is something missing, for a before TTL price, 18.5k for a manual accord is not particularly good. I paid 18.3k before TTL on an auto 2003 4dr LX. The auto alone is a $700 or so option.

The price is after TTL, including destination and no first month payment.

Does anyone else think Destination Charge is BS?? What is it for?

Also if you pay a car off early....do you save from that because of the Financing? Or is is still factored in over the total length of the loan no matter what? (ive always paid cash for stuff)

Like if you pay it off 6 months early, then you save 6 months worth of interest right?

 

[BigSmooth]

Over the last few years, since rebates became basically mandatory on American cars for consumers to consider them, MSRPs have been inching higher and higher to make up for all the "incentive spending".

As others have said, higher MSRP = higher average transaction price since you can still offer rebates and the buyer thinks they are getting just as good of a deal.

 

[GasX]

Originally posted by: Chadder007
Like if you pay it off 6 months early, then you save 6 months worth of interest right?

On nearly all loans, the answer is yes. There are certain types of loans that you committ to paying ALL of the interest due regardless of how fast you pay it off. These are often used by appliance retailers and are rarely if ever seen on car loans - always read the fine print!!!