No Monkey for now

[Olyrider]

Honda Motor Company (HMC), like virtually all manufacturers, itemizes freight & set-up. It is based on the engine size, and doesn’t distinguish geographical differences in the U.S.. ALL dealers are charged the same. Each dealer may then mark it up to whatever they want it to be. My lifelong experience is that almost every dealer misstates the actaul F&S to their customers by telling them “This is what HMC charges us.” The F&S charges are a cost of doing business so the dealer’s gross margin is tagged on. It is separated out from the original retail price to make the unit seem less expensive. (Obviously). Asking a dealer to forego F&S doesn’t just reduce their “profit”, it slips into the “losing money” category. The “hang tags” we placed on each unit would show the “price” of the unit in large font, and underneath that, in smaller font, would say “plus freight, set-up, and document fees”.

The “document fee” is PURE PROFIT. Always meant to be. A collaborative, insidious, and made-up charge to generate additional revenue. Ever notice how the fee, when mentioned on a radio ad, ALWAYS says “may include a NEGOTIABLE document fee of up to $150”? At least it always does within the state of Washington. It’s the law. Intended for customers to HEAR the word negotiable so they realize it isn’t mandatory.

I experienced all of this as the finance mgr at a Honda dealer for three years. I would listen to one of the owners sell bikes and side-by-sides as she, and the sales mgr, cleverly manipulated customers into over-paying. My “job” was to get the customer approved with a finance company at the lowest interest rate possible. Let’s say 4.00%. Then tell them “Congratulations! Your credit is SO GOOD, we just got you approved for a five-year loan at 6.00%! (The dealer gets an instant credit for the 2% difference, and the longest possible borrowing term increases that amount)

Math is hard. People are innumerate. (Illiterate...only with numbers not letters). The dealerships count on getting customers that didn’t sit in the front row in math class. It’s their bread and butter. As the owner would often say “I am NOT their mother! They are making their own choice!”

Still barely pays the bills, though. Owning a dealership is a financial struggle in the best of times. These aren’t the best of times.

You might think I’m a cynic, but all I’ve done is set down the facts...not just opinions.

[LongRanger_imp]

^ Agree 100%

A buddy walked into a Honda car dealership years ago, negotiated the price on a new S2000, and agreed to the dealer's financing. He drove the car home. Two weeks later the dealer called to say they'd be unable to honor the finance contract at the agreed-upon interest rate, but they would finance the car at a higher rate. This was unacceptable to my friend so he drove the S2000 back to the dealer, dropped off the keys, and walked across the street to finance a new Mercedes. The Honda dealer got stuck with a used S2000 with several hundred miles on it. (In hindsight, I imagine they had no difficulty reselling the car).

[Ole_imp]

If my dealer tries to pull that crap on me when my Super Cub 125 comes in I am walking. And he knows it already. 25% added fees is bullcrap on such a low cost bike.

My deposit is 100% fully refunded in writing.

[Cormanus]

Thanks for the insight, Olyrider. What sort of profit would a dealer make on a motorcycle sale?

[alprider]

well i dont know wehre is the problem.....i pay max what is/stands on the honda page.........or just the official honda paper pricelist

means in my case here just : 4480 plus 130 

bcos our prices here are normal still included all taxes and so on...

btw.
a typical thing here is for example in a restaurant....we pay / support (salary) not the waiter with the tip.......its all includ in the price of the restaurant card...

[Cormanus]

alprider, the problem lies in the fact that different countries have different laws about what has to be disclosed as part of the price. In the US it appears that dealers can advertise bikes at price plus taxes and charges whereas in other jurisdictions—Australia, for example—dealers must advertise the drive-away-no-more-to-pay price for their state. Go to a motorcycle site here and price a new model. It will ask your postcode and then give you the price which includes registration, insurance and dealer charges.

So, were I to want a new Monkey, the Honda website advises me it should cost AU$6,074 made up as follows:

Recommended Retail Price $5199
Stamp Duty (government charge) $162
Compulsory Third Party Insurance $309
Registration and Statutory charges $205
Deliver, Pre-delivery & Inspection $199

[suhawk305]

Thanks for the insight, Olyrider. What sort of profit would a dealer make on a motorcycle sale?

+1, being on the inside works of a dealership, Olyrider would know.
Simply stated, my experience of trying to negotiate a bottom-line price for a vehicle at a dealership is like playing “Whack-a-Mole” at the County Fair! Dealer padding pops-up all over the place!

[alprider]

hmm but all this extra fees and tax gives the state and are fixed or not ? so you can make caclulate self the bill amount befor... just no surprice after ?

[GoldOxide_imp]

Honda Motor Company (HMC), like virtually all manufacturers, itemizes freight & set-up. It is based on the engine size, and doesn’t distinguish geographical differences in the U.S.. ALL dealers are charged the same. Each dealer may then mark it up to whatever they want it to be. My lifelong experience is that almost every dealer misstates the actaul F&S to their customers by telling them “This is what HMC charges us.” The F&S charges are a cost of doing business so the dealer’s gross margin is tagged on. It is separated out from the original retail price to make the unit seem less expensive. (Obviously). Asking a dealer to forego F&S doesn’t just reduce their “profit”, it slips into the “losing money” category. The “hang tags” we placed on each unit would show the “price” of the unit in large font, and underneath that, in smaller font, would say “plus freight, set-up, and document fees”.

The “document fee” is PURE PROFIT. Always meant to be. A collaborative, insidious, and made-up charge to generate additional revenue. Ever notice how the fee, when mentioned on a radio ad, ALWAYS says “may include a NEGOTIABLE document fee of up to $150”? At least it always does within the state of Washington. It’s the law. Intended for customers to HEAR the word negotiable so they realize it isn’t mandatory.

I experienced all of this as the finance mgr at a Honda dealer for three years. I would listen to one of the owners sell bikes and side-by-sides as she, and the sales mgr, cleverly manipulated customers into over-paying. My “job” was to get the customer approved with a finance company at the lowest interest rate possible. Let’s say 4.00%. Then tell them “Congratulations! Your credit is SO GOOD, we just got you approved for a five-year loan at 6.00%! (The dealer gets an instant credit for the 2% difference, and the longest possible borrowing term increases that amount)

Math is hard. People are innumerate. (Illiterate...only with numbers not letters). The dealerships count on getting customers that didn’t sit in the front row in math class. It’s their bread and butter. As the owner would often say “I am NOT their mother! They are making their own choice!”

Still barely pays the bills, though. Owning a dealership is a financial struggle in the best of times. These aren’t the best of times.

You might think I’m a cynic, but all I’ve done is set down the facts...not just opinions.

In a similar way, that was my experience with the CB1100. The heckle level was actually quite low because we knew each other. However, he did show the math that his personal take was actually about $150. Now, the CB is no Monkey, but the honesty and perspective gave me a better understanding of the business. The dealer itself did not make much more. I started to question how bike dealerships actually make decent profit in sales. Anyway, that is other discussion.

[Cormanus]

hmm but all this extra fees and tax gives the state and are fixed or not ? so you can make caclulate self the bill amount befor... just no surprice after ?

Yes, the state charges are fixed and not negotiable. Only the RRP and dealer deliver fees could be negotiated. My point was that Australia may differ from the US in that I got that price from the Honda Australia website and it would be a brave dealer who would go above it.

I'd be interested in any insights into how dealers make a profit. I suspect getting purchasers to take finance is one way.