[WWI Flying Ace]

I put this question on a different thread but didn't get an answer, so I'm putting it here as its very own thread.

What (if anything) will GM do to keep the dealers from harming the Volt through typical huge markups? They did this with Solstices, they did it with G8's, and I know they do it with other "gotta have it" cars when they first come out.

GM needs the Volt to be a grand slam home run...the dealers could torpedo this quickly if they start adding a $5,000 premium fee on top of the MSRP. Does GM have any options (direct selling to customers, or mandating a 'no markup' policy to Chevy dealers for the first model year, etc.) or are they at the mercy of the dealers once they get their hands on the cars?

If there are no options for GM and dealers get a free hand, what do you think...how much will dealers tack on to the price of a Volt above and beyond MSRP?

 

[JoeReal]

It depends on the hype that precedes just before the release and if there are waiting lists on the dealers. Take for example with Prius. In some parts of Los Angeles, the dealer mark up sometimes go as high as $6K over MSRP because of very strong demand. Here in some parts of N.Cal., there is between $1K to $3K mark-up over MSRP. A Toyota dealer several blocks away from the office has $0 markup, but, mysteriously, their MSRP is $2K more than the others by adding just a few worthless blings to the car.

 

[calgaryvolt]

Since GM is in need of a pretty major overhaul in their vehicle line up maybe they should consider an overhaul of their sales procedures.

I would prefer that they do away with private dealership. If you want to lower the price of vehicles and attract more customers get rid of the middle man. GM could lower prices, establish regional or national standards and maybe even generate some more revenue from the sales of vehicles.

Customers wouldn't have to drive from dealership to dealership looking for the best deal (some people might like to do that, I hate it.) Customers would also come to expect a certain attitude at dealership and during the car buying process. Dealer wouldn't have to be so pushy and the customer might even get more value out of a vehicle in the end.

If I could go to a dealership and not be hassled or pressured, not have to deal with them trying to throw on this and that at the point of sale and not have to drive across town to see what the other guy can do for me I'd be much more satisfied. Car buying can be stressful for many people, change the procedure and attitude during the process and more customers might be attract to purchase a new GM vehicle.

I'm sure that a multi national, multi billion dollar business like GM has professional a lot smarter than I am who have studied the sale process though.

 

[calgaryvolt]

I forgot to mention that if I could purchase a vehicle online from GM's website (either from inventory or an order) have a price and sales form prepared and printed off only to take to the dealership for financing or to finalize the payment and have the vehicle delivered to my home (worst case scenario the dealership) I would gladly use that option.

 

[DaV8or]

Chevrolet dealers are independently owned and operated franchises, just as are almost all car dealerships. One exception being Saturn. Those dealerships belong to GM and as such they control pricing. Unfortunately for us, Chevy dealers are free to charge whatever they want for the car, so many dealers will mark up. GM does try to control mark ups a bit by the allocation process. Dealers that abide by GM's wishes will get preferential treatment as to the numbers of cars allocated to their dealership. So if a dealer gets their first Volts and marks them up $10,000 and they sit on the lot, during the next round of allocations, that dealer might only get one or none as they are in limited supply. Dealers that sell at MSRP will be supplied more.

GM does have another potential way of controling the dealer mark up unique to the Volt. The Volt will have systems and equipment that will require a dealer to commit to selling the car whereby they will have to send technicians and sales people to be trained and special tools and diagnostic equipment be purchased. They will then be an Authorized Volt dealer. This special arrangement could perhaps allow GM to require the authorized dealers to sell Volts only at MSRP for certain period of time by contract. I have no idea if they will or can do this, it's just an idea that I hope they look into.

 

[BestTimesNow]

From Edmunds:

“The speculation is that federal tax credits could shave anywhere from $3,000 to $7,000 off the Chevrolet Volt's sticker price. General Motors has not announced pricing on the Volt, but Automotive News on Monday cited unnamed sources who said a $40,000 sticker "is likely" on the Volt.”

http://www.edmunds.com/insideline/do/News/articleId=126517

$$$$$$$$$$$$$$

Here’s another way to solve it:

The federal government should allow a tax credit, only if the car was purchased for a contract price that did not to exceed the MSRP. This would make it unattractive for the dealer to try to get a few thousand more dollars, because he would be rising the customers cost by about $5,000 or $10,000.

 

[DaV8or]

Here’s another way to solve it:

The federal government should allow a tax credit, only if the car was purchased for a contract price that did not to exceed the MSRP. This would make it unattractive for the dealer to try to get a few thousand more dollars, because he would be rising the customers cost by about $5,000 or $10,000.

Well that's what a mark up is. Raising the customers cost by thousands of dollars just because they can. You see, some people will be so desperate to get this car, that they'll pay the extra money just to have the car first. I'm sure that some reading this forum right now will be willing to go over MSRP when the time comes. This is how mark ups work. Then later, when there is a good supply of cars and demand slows down it goes to normal MSRP and finally under MSRP to move them off the lot. Supply and demand and GM can do little to control it. Remember, the "S" in MSRP is for suggested retail price.

 

[RRRB]

Dealer markup, markdown

If demand is strong enough that there can be additional dealer markup, that is a good thing for the Volt and ensures that there will be more and more cars coming. People may not like dealer markups, but they like dealer markdowns --- they are the two sides of the same coin, balancing the supply with the demand.

 

[Altazi]

Big Dealer Markup on Volt = Me Buy Prius

I would like a Volt, but I'm not willing to "bend over" for one.

 

[Tom]

Markets and Competitive Price Pressures

The price of a haircut is determined by what the guy down the block charges. The price of electronics, a global industry, by the global price. Car dealerships are local. But, this is the information age. Some national websites (travel, hotels, morgage rates) have been established to give consumers information on goods and services, which has created pressures for national pricing in local markets.

A website, e.g. gm-volt.com, could post prices of Volts at the different dealerships. This could give the community of Volt buyers, who choose to bargain, some leverage with local dealers. Undoubtedly, there would be some dealers, who in the interest of volume, would give better deals. Some motivated individuals could even broker Volt deals.

 

[BestTimesNow]

I guess my point is that tax dollars should not be paid to help someone over pay for a car. If someone wants to pay $42,000+ for a volt, then fine, but then don't give the guy a $7,000 rebate or tax credit from the taxpayers. The tax rebate is an incentive for the early adopter to take a risk on a new product, not a bonus for the dealership.

We already paid for a some wealthy peoples Hummers in the last government boondoggle.

"Write-Off 100% of Your New SUV? Yes, If It's Under 100,000!"

http://www.hybridcenter.org/hybrid-vs-hummer.html

 

[WWI Flying Ace]

That is kind of my thinking too...if the government does grant a tax credit, it would suck for the consumer to then be forced to turn around and give all or some hefty chunk of that credit back to a dealer for a stinkin' markup. What would be the point of that?

It is supply and demand as others have pointed out, but what is the point of GM lobbying hard with the government for a tax credit, only to allow dealers to eat that whole credit up with a price hike just because they can. Well, "allow" may be the wrong word...as others stated there is only so much leverage GM has here, but perhaps a special case for the Volt since it is so unique?

I really like the idea that others had for online ordering...THAT would be REALLY stretching the envelope..."buy your cutting edge car in a cutting edge way"...that would be sweet!

GM, Please put something in place to prevent dealers from tacking huge markups on the Volt, at least the initial deliveries! Otherwise every penny spent lobbying today is wasted if the dealers are just going to grab the money anyway!

 

[DaV8or]

A website, e.g. gm-volt.com, could post prices of Volts at the different dealerships. This could give the community of Volt buyers, who choose to bargain, some leverage with local dealers. Undoubtedly, there would be some dealers, who in the interest of volume, would give better deals. Some motivated individuals could even broker Volt deals.

In practice this is what I have seen happen. Not all dealerships are evil and greedy. Some dealerships really get it. Unfortunately, internet sales are a really tiny, tiny part of a dealerships over all sales and so the people that they have managing internet sales aren't always super savvy. However there is always a few good people out there willing to do the leg work and they will no doubt find a site like this one once the car gets closer to reality.

It's too soon right now. Right now I would guess that most Chevy dealers don't even know what a Volt is. Many of them really are that clueless and they only focus about six months in the future. However, when they start getting two, three calls a day about a new car, then they'll do some research and try to get up to speed. Trust me, when anybody who frequents this forum actually steps into a dealership, they will know far more facts about this car than anybody working there. Sad but true.

The way it usually goes is an internet sales guy from some dealership will join the forum and start interacting with us. This dealership, like some others out there, like to do business in volume and don't have a problem selling at MSRP on a hot new vehicle. These guys will order your car for you, but the catch is you'll have to go to where they are to pick it up or pay a fair chunk of change to have it delivered. Some people are willing to do this and some aren't. It could mean traveling a thousand miles to get a fair deal.

 

[DaV8or]

I guess my point is that tax dollars should not be paid to help someone over pay for a car.

That has been my beef with announcing that there are going to be tax rebates on the car long before the pricing is set. It just encourages the manufacturer and dealer to raise the price. I still believe that the government should only step in to spur sales of a new technology only after it is proven that it can't sell in sufficient numbers on it's own.

Fortunately (IMO), there is no way for the government to mandate how much a product is sold for, so while it's a nice idea, it's not going to happen. Even if the rebate was dependent on a receipt that shows MSRP, the dealer mark up would be line itemed something like "Dealer Special Prep" or "Expedieted Value Fee" or who knows what, so as to not be part of the actuall cost of the car. Of coarse in practice that's what it is. No, I don't think we can look to the government to avoid mark ups, we just have to be willing to shop hard, travel if nessicary and if all else fails, wait.

 

[dsmwookie]

In practice this is what I have seen happen. Not all dealerships are evil and greedy. Some dealerships really get it. Unfortunately, internet sales are a really tiny, tiny part of a dealerships over all sales and so the people that they have managing internet sales aren't always super savvy. However there is always a few good people out there willing to do the leg work and they will no doubt find a site like this one once the car gets closer to reality.

It's too soon right now. Right now I would guess that most Chevy dealers don't even know what a Volt is. Many of them really are that clueless and they only focus about six months in the future. However, when they start getting two, three calls a day about a new car, then they'll do some research and try to get up to speed. Trust me, when anybody who frequents this forum actually steps into a dealership, they will know far more facts about this car than anybody working there. Sad but true.

The way it usually goes is an internet sales guy from some dealership will join the forum and start interacting with us. This dealership, like some others out there, like to do business in volume and don't have a problem selling at MSRP on a hot new vehicle. These guys will order your car for you, but the catch is you'll have to go to where they are to pick it up or pay a fair chunk of change to have it delivered. Some people are willing to do this and some aren't. It could mean traveling a thousand miles to get a fair deal.

I will be one of those people willing to commute. I won't mind driving 1,000 miles especially since Ill be in my new fuel efficient vehicle. It is also practice of good business, the dealership is their for my convenience not theirs. If convenience ceases to exist so will they...

 

[WWI Flying Ace]

I will be one of those people willing to commute. I won't mind driving 1,000 miles especially since Ill be in my new fuel efficient vehicle. It is also practice of good business, the dealership is their for my convenience not theirs. If convenience ceases to exist so will they...

Me too. Hell, I've already done it once...I took a train two states away and drove my Solstice home from there after buying over the internet, rather that pay a dealer markup. Small Eastern US states, so it was like 2.5 hrs, but it was worth it to save the thousands the dealers in my area were adding to the price of the car.

 

[mark4090]

I think I read somewhere in a previous discussion that they will be rolling out first in states such as CA, WA, NY, FL, TX. Has any of this changed?

 

[WWI Flying Ace]

I think it is actually Washington DC, rather that Washington state...but I could be wrong.

 

[DaV8or]

I think I read somewhere in a previous discussion that they will be rolling out first in states such as CA, WA, NY, FL, TX. Has any of this changed?

Something like this. They haven't said otherwise yet, but at this stage in the game, everything can be subject to change.