A GIANT FU to Audi!!

Rave E55 · 12th June 2002, 00:08

After contacting every Audi dealer in the tri-state area, none of which would take a deposit and guarantee me an RS6 at msrp when they arrive in the US, I contacted Audi NA here are my results.

I wrote;
"Can you find me a dealer in the tri-state area that will guarantee me an RS6 at msrp when they are released in the US, I am willing to put up a substansal deposit.

Audi NA;
Dear Ron:

"Thank you for contacting Audi of America.

We appreciate your interest in the Audi RS6, but we cannot yet give you any information on pricing, as we are still several months from start of production for this model, and it will be late 2003 before the vehicle is actually available. To our knowledge, no MSRP has been established as yet.

As you are no doubt aware, this will be a limited-edition model; only 850 will be made available in the U.S. As we approach production date more information will no doubt be released.

If we can help in any other way please write again.

Marjorie
AudiTalk"

My response;
Can you give me a dealer that will guarantee me one at MSRP and I will gladly leave a deposit, I understand the MSRP has not be established. I would just like to know that I will get one at MSRP when the first few arrive.

Audi NA;
Ron, that is impossible to guarantee. The MSRP is the suggested retail price, not a guaranteed price. The dealer may adjust the price higher or lower to accommodate market conditions.

I wrote;
So basically you are telling me that Audi condones dealerships charging above MSRP for a desired car, if this is the case I will NEVER buy an Audi.

Audi NA;
Selling below MSRP is also a possibility. MSRP means Manufacturer's Suggested Retail Price. It is not a fixed sticker price, and, as we mentioned, the dealer may sell for more or for less.

Me;
A car should NEVER be sold for than MSRP, below is fine. BMW and Mercedes both frown upon dealers selling a car above MSRP. I don't know why this is such a hard concept for you to understand. I must tell you for my first dealings with Audi, you have really put a bad taste in my mouth, I doubt I will ever own an Audi, I guess it's MB or BMW for me.

Audi NA;
We're sorry you disagree with the concept and hope you will be happy in your choice.

JFB · 12th June 2002, 00:35

Quote:

Originally posted by Rave M5
BMW and Mercedes both frown upon dealers selling a car above MSRP.

Ron, I bet that you could have had the exact same message thread with a BMWNA rep about a deposit on the E60 M5.

BMWNA has stated before that the dealers are "independent franchisees" and that BMWNA cannot set the prices.

BMWNA does control how allocations are distributed for these limited availability vehicles. Same for Audi, Porsche, etc. If selling at or below MSRP is a manufacturer policy, then it seems they could deliver more allocation to those dealers who abide by the policy. But that could viewed by the competition police as an indirect attempt to control pricing by withholding inventory from non-compliant dealers.

The counterpoint we've heard from the dealers' perspective is that it is supply and demand economics at work. If a willing buyer will pay well above MSRP, then that defines the "market price" the car is worth. If the dealer does not mark up the MSRP, then unscrupulous arbitrageurs will take up the delivery positions so they can immediately resell the cars for a profit that could have gone to the dealership. (We saw this sort of "scalping" with the E39 M5.)

IMHO, the best way to counter the gouging behavior is for consumers to show discipline and not pay outrageous premia over MSRP. The problem is that there are many buyers who are not as price sensitive as you or me.

Rave E55 · 12th June 2002, 00:38

Quote:

The problem is that there are many buyers who are not as price sensitive as you or me.

I like the way you put it, I'm not on a budget I'm price sensitive. lol

Jim Dolan · 12th June 2002, 01:14

I'm surprised they were as forthcoming as they were. I, like you, do not like dealers selling above msrp. It turns me right off. And as to selling below msrp that does not necessarily mean they lose and selling above is an offset, as suggested by the writers comments. Dealers often sell below msrp to clear out cars not as hot like wagons and unpopular colors only to replace them with more popular ones. Marking a car up looks like naked greed and most people don't like it.

I would never buy a marked up car, I'd go get another one from another dealer.

Chris Foote · 12th June 2002, 01:19

Rave, I've gotta tell ya....why a RS6? With the depreciation hit you'll take in trade in, you can byu the Dinan Mods and have a much safer car to boot (ever seen the A6 crash test results?).

Paying over MSRP is absurd, IMHO. Of course, I don't have a bottomless pocket either like some on the board do

(Hey, more power to ya guys!)

I am actually quite surprised the Audi rep was as knowledgeable as she was -- she knew how many units were coming into the US! BMW reps can give you any quantitative information

-Chris

SWing · 12th June 2002, 01:25

The Only car-markers I know that wouldnt let the dealership charge you above MSRP if you're on the waitlist are

- Mercedes
- Porsche

Even BMW, back a year ago when the M3 was heavily sought after, did not really curb the greedy dealers. Dealers around the bay area are asking 20k over sticker...and they're very rude an obnoxious...come on..we're spending ~80k on a car and are practically begging them to sell us one....

Hopefully, things will change for the better as more car-makers turn to the policy similar to the ones implemented by MB / Porsche.

Cheers,

KKelly · 12th June 2002, 01:45

I don't really disagree with the practice. For one, I think they do take a hit on less popular cars and consumers aren't up in arms that they are getting a discounted price. Also, they wouldn't do it if people would not pay the premium. That is the supply demand argument and makes sense. You should be more pissed at the idiots paying $10k over for an M3.

I have a friend who just bought an E46 with 15k miles on it for $45k. The sticker on the car was $58k+. He bought it from a dot commer who was only 25 and still got his insurance through his dad. He was not a car nut at all and said he rarely had the car over 5k rpm. It was likely the guy paid a premium so he took a 30% hit in a year.

greg · 12th June 2002, 02:31

I hate it too - but accept it. It is the way things work. It is capitalism. Welcome to the free market economy. (I wouldn't have it any other way.)

Dealers are independent, and they are absolutely legally free to charge whatever the hell they want. When supply is scarce and demand is high, some people are willing to pay a higher price to get a car early. Always has been that way, always will be. Competition keeps prices fair better than any control.

Some dealers will take deposits in advance at MSRP, some won't. It is their choice, and it is your choice. If you want a scarce car early, you may have to pay a premium for the privilege.

Don't believe Mercedes and Porsche dealers don't do this too - I know for a fact they do around here. When I bought my 996 Turbo, the two closest dealers were getting $185K for them. That was too rich for my blood - I found a much better deal elswhere. My choice. But I paid $10K over list for my M5. By the time I took delivery, they were getting $20K over list, and the waiting list was over a year, even for Peter Pan, the highest volume dealer in the county. I know I could have waited and shopped and paid less. But I wanted to buy the car from the dealer 5 blocks from my house (my choice - turns out to not have been worth much - I expected better loaner car treatment at service time) and to get the car early. I have had the pleasure of driving my M5 since March of 2000. I consider the premium I paid to have been the price of admission at that time. And I have no regrets.

It DOES work both ways. Right around now you can get AWESOME deals on Porsches. A dealer who was forced to sell at list when conditions were good would have every right to complain when other dealers were "low balling" to get the business in harder times. The manufacturer has very little control, period.

If I were you, and if you really want the car ( as opposed to really want to pay list - a price you don't even know) I would look for a dealer willing to commit to $5K over list and see if anyone bites. If that doesn't work, try $10K over. That car WILL be rare, and if is performs as it should and is produced in the volumes they say, the price will go UP once the reviews come out (just like they did on the M5. The reviews came out in March 2000.

The only thng that irks me about all this is that all those $$ are 100% profit for the dealer. It is insane. But it is a fact of life.

Rave E55 · 12th June 2002, 02:41

Greg,
I am very surprised about your attitude towards this matter, what about plain old greed? And what about some sort of customer/dealer loyalty. There are plenty of ways for the dealer to make money and to make sure that the auto enthusiast that buys the car actually keeps and drive it. This whole situation of selling cars 10-40 G's above sticker is sickening and I will never do it. For me it is a matter of principle.

greg · 12th June 2002, 02:51

Rave - that is your right, your choice. Nobody is forcing you to buy the car. I have no problem with that. But I support the dealer's right to run a business any way he chooses. If you had a business (I don't know if you do or don't) you would like that right too. That means you get to set your prices. And I support the right of some guy with a lot of cash willing to throw a premium in the toilet just to get a car. You hold out for list - you won't lose as much as me when you sell. But I will have been driving and enjoying the car a lot longer. My choice.

I have my limits too. And I am wiser. I will shop more dealers, incl. out of statre, before I buy my next BMW. I will choose whether to buy now, later, local or remote, or not at all.

This isn't unique to cars. It happens with home prices, prescription drugs, fine wines, cameras ... in fact it happens with almost everything you buy.

By the way, suppose the RS6 comes out at $150K list? Would you buy it if you could get it at list? How about at $175K?