From: nau@ssesco.com (William Nau)
Subject: Re: Dealer Prep Ought to be Road Kill!
Organization: SSESCO
Date: Tue, 12 Jan 1993 15:07:36 GMT

In article <1993Jan12.035722.5237@informix.com>, aland@informix.com (Colonel Panic) writes:
|> In article <C0K07t.DDz@ssesco.com> nau@ssesco.com (William Nau) writes:
|> 
|> "ISSUE NUMBER ONE: Advertising Fees and Dealer Prep: cost of doing business,
|>  or blatant sham and scam?" 
|>  William Nau?"
|> 
|> >Dealer Inspection, Dealer Prep, Advertising, and Delivery Charge are all
|> >part of the the dealers profit.  If he expects to be paid for it, it should
|> >be included in his profit.  
|> 
|> "WRONG!"  
|> 
|> Look, people.  Delivery charges and national advertising fees are a COST OF
|> GOODS SOLD.  So are prep charges if the dealer uses an outside prep center
|> (although there may be some markup on prep; it varies).  These are separate
|> line-items that are paid for outside of the invoice cost of the car & options
|> themselves.  You can argue all you want that the dealer should pay for it out
|> of his/her markup, which you probably CAN if you are paying MSRP.  But if
|> you're being a smart buyer and researching invoice prices, don't kid yourself
|> into thinking that you can offer $100 over invoice or whatever and expect the
|> dealer to *also* pick up the other costs and still make enough money for
|> the sale to be worth his time.  If you're taking something off the lot that he
|> may have trouble moving otherwise, that's one thing; he may be willing to take
|> a minor loss on such a car.  Otherwise, don't get pissed if he tells you to 
|> walk.  If you want to get an ACCURATE estimate of dealer's cost for a given 
|> car, you need to ALSO factor in the extra cost he pays for national 
|> advertising, delivery, or whatever.
|> 
|> >In normal transactions, we give the seller a profit.  Why?  Because of the
|> >services he provides.  For some reason, car dealers think we should pay for
|> >the services AND still give them profit.  They are not two seperate things.
|> >William R. Nau
|> 
|> So, in other words, you expect car dealerships to be non-profit operations?
|> If you believe in this, *you* open a dealership, and I'm sure the whole
|> net will beat a path to your door.

Apparently Colonel didn't bother reading my post.  Never did I say that
dealers should not be paid for their expenses.  They should.  Never did
I say that the dealer should not make a profit.  They should.  It's 
business.  We all understand that.  Reread my first paragraph.  I was
attacking their methods.  They get you going on the price of a car and
when you think you have a base, surprise you with these extra charges.
The extra charges should be upfront.  They are with every other kind of
transaction.

  Ever buy a pizza from Pizza Hut?  Pizza hut advertises.  They don't
charge you an extra fee for that.  They have someone prepare
the pizza.  They don't have an extra prep charge.  They take account
for these costs in their profit margin.  Never have I had an extra
surprise $1.50 when I bought a pizza.  It's misleading.  It's deceptive.
It's a nasty negotiating trick.

We are all willing to let the dealer make a profit.  Don't make us
out as stupid.  It only lowers your credibility.
-- 
William R. Nau
Supercomputer Systems Engineering and Services Company (SSESCO)
511 11th Avenue South, Suite 216
Minneapolis, Minnesota 55415-1536
(612) 342-0003

nau@SSESCO.com
Newsgroups: rec.autos