You can not advertise below invoice!
08-24-2015, 05:51 AM
#1
Thread Starter
You can not advertise below invoice!
Did you know that Honda dealers are prohibited from advertising vehicles below invoice whether in print, online or broadcast media. After three offenses in one year, a dealership can lose its marketing assistance, which can be $400 per vehicle for many dealers!
Honda argues its policy, probably the toughest in the industry, are in place to protect the brand, which, in practice, has helped Honda vehicles retain some of the highest residual values among all brands.
Toyota is preparing to ban dealerships from advertising vehicles at below-invoice prices, in line with Honda’s policy. It’s not being well received by some of Toyota’s dealers. Some of the larger ones say 3 out of 4 sales are below invoice.
Since we all know that new car invoices, unlike almost any other products, are merely a starting point for negotiations on the final selling price, to me this is a just a form of price fixing. What do you think?
Honda argues its policy, probably the toughest in the industry, are in place to protect the brand, which, in practice, has helped Honda vehicles retain some of the highest residual values among all brands.
Toyota is preparing to ban dealerships from advertising vehicles at below-invoice prices, in line with Honda’s policy. It’s not being well received by some of Toyota’s dealers. Some of the larger ones say 3 out of 4 sales are below invoice.
Since we all know that new car invoices, unlike almost any other products, are merely a starting point for negotiations on the final selling price, to me this is a just a form of price fixing. What do you think?
08-24-2015, 06:32 AM
#2
If they are not prohibiting the dealer from selling below invoice, it's really more of a marketing gimmick, and it doesn't seem to effect the outcome of the sale of the car, just the full page newspaper ads. David Chrysler out side of Phila. has been using the line $1 over invoice for years, I am not sure I see much difference.
08-25-2015, 09:36 AM
#4
Registered User
Please define invoice. The dealers invoice (his cost) (before all kickbacks etc) or the MSRP sticker price on the window?
It seems you are talking about MSRP and calling it invoice, but there is no "invoice" at the retail end of it, until the car is sold.
It seems you are talking about MSRP and calling it invoice, but there is no "invoice" at the retail end of it, until the car is sold.
08-25-2015, 03:30 PM
#5
I don't know if cars are technically a retail item.
In the retail space this silly concept of minimum advertised pricing.
a retailer can sell it for anything he wants but he just can't advertise it at a lower price than the manufacturer approves.
Advertising it for less "damages the value" of the manufacturers product.
personally I hate the existing practice as it is price fixing.
In the retail space this silly concept of minimum advertised pricing.
a retailer can sell it for anything he wants but he just can't advertise it at a lower price than the manufacturer approves.
Advertising it for less "damages the value" of the manufacturers product.
personally I hate the existing practice as it is price fixing.
08-25-2015, 03:58 PM
#6
Ive worked in sales with Honda for over 10 years and due to the internet advertising has to be aggressive to get the consumers attention when theres so much competition. I rarely lose customers to other brands but I will lose to another Honda dealership who decides to take a bigger loss than I do. Honestly if theres no profit in the deal i see no reason to sell it unless we're over stocked. Most dealerships in my area which is northern NJ will advertise leases with payments that equate to under invoice and Corporate does nothing about it.. My dealership does the same thing and no one from corporate really cares as long as we meet their goals in volume sales. As a sales person the last thing I want to do is sell the advertised car since its a blowout to just get you in through the door so the goal is to switch you to another car lol
08-25-2015, 04:22 PM
#7
I don't know if cars are technically a retail item.
In the retail space this silly concept of minimum advertised pricing.
a retailer can sell it for anything he wants but he just can't advertise it at a lower price than the manufacturer approves.
Advertising it for less "damages the value" of the manufacturers product.
personally I hate the existing practice as it is price fixing.
In the retail space this silly concept of minimum advertised pricing.
a retailer can sell it for anything he wants but he just can't advertise it at a lower price than the manufacturer approves.
Advertising it for less "damages the value" of the manufacturers product.
personally I hate the existing practice as it is price fixing.
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08-25-2015, 04:35 PM
#8
Thread Starter
Ive worked in sales with Honda for over 10 years and due to the internet advertising has to be aggressive to get the consumers attention when theres so much competition. I rarely lose customers to other brands but I will lose to another Honda dealership who decides to take a bigger loss than I do. Honestly if theres no profit in the deal i see no reason to sell it unless we're over stocked. Most dealerships in my area which is northern NJ will advertise leases with payments that equate to under invoice and Corporate does nothing about it.. My dealership does the same thing and no one from corporate really cares as long as we meet their goals in volume sales. As a sales person the last thing I want to do is sell the advertised car since its a blowout to just get you in through the door so the goal is to switch you to another car lol
08-25-2015, 04:37 PM
#9
Ive worked in sales with Honda for over 10 years and due to the internet advertising has to be aggressive to get the consumers attention when theres so much competition. I rarely lose customers to other brands but I will lose to another Honda dealership who decides to take a bigger loss than I do. Honestly if theres no profit in the deal i see no reason to sell it unless we're over stocked. Most dealerships in my area which is northern NJ will advertise leases with payments that equate to under invoice and Corporate does nothing about it.. My dealership does the same thing and no one from corporate really cares as long as we meet their goals in volume sales. As a sales person the last thing I want to do is sell the advertised car since its a blowout to just get you in through the door so the goal is to switch you to another car lol
Internet shopping is the way to go!
Closest dealer met the best price I had received....
Getting it for over $3k off MSRP.....
I'm feeling good about the deal.....
CR-V is being assembled around 9/10/15.
08-25-2015, 07:01 PM
#10
I'm not really sure that the dealer's invoice really means anything anyway. Very few dealers actually pay the manufacturer the invoice price.
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