Topic: Role of MDSA re: trade-in vehicles?

[prufrock]

Hi, this is my first post here, so please bear with me.

My wife and I were looking at buying a 2006 Honda Pilot EX-L. We currently have a 2001 Accord LX V6.

The dealership we have been going to for five years for service (talking to one saleman many times over the years) has the exact vehicle we wanted.

However, when we went to "negotiate" a deal, we were told some things that flabbergasted me.

1. The black book value of our car was between $9,000 and $12,000 (a Toyota dealer claimed $9,800 and $12,500 and online it's different again)
2. He said they couldn't work the trade-in value any higher because of issues with a regulatory body. I believe he said it was the Motor Dealer Standards Association of British Columbia (MDSA).

The crux of his spiel was that if his dealership sold a used vehicle and there was some kind of problem with it, they could be stuck paying for repairs on the vehicle. He then said that if he tried to sell our car (with a black book of say $12,500) for something like $17,000 (unreasonable for a very well-maintained car with 91,000 km and over two years of comprehensive warrabty left?), he could be in trouble for, in his words, "gouging".

I can understand a dealer not wanting to pay more for a trade-in because it wants to generate profit from the car. This other excuse sure seemed lame, and honestly feels so absurd that it is souring us on the dealership entirely.

Our approach was that on a $44,500 vehicle, when we intend to buy full extended warranty, have dealt with our servicing there for five years (although it is 45 minutes away from us) and would continue to do so, we would have liked a total of $15,500 off the MSRP including our car.

We were essentially offered $12,500 for a trade-in, and that was it. He said the dealer made no money from extended warranties and accessories.

So my newbie questions are:

1. Were we fed a complete line of BS regarding the inability to sell a used vehicle over black book (or within 20%)?
2. Should we take this as the Honda sales attitude of "the cars sell themselves" or as that one salesperson's inability to deal well?
3. Are we jumping the gun walking from the dealership altogether? I can just as easily drive an hour over the border into Alberta and buy there.

Thanks for any help answering my vague questions!

Shawn

[Craig]

#1, with perhaps a little of #2 thrown in as well.

What's scary is, people fall for this crap.

How many km on the Accord?

[Trainman]

Welcome!

Other dealers in BC (who are members of MDC) do not seem too worried about this.  There was a 96 Ford Contour for sale in Kamloops a while back, asking $9,800.  Black book on our 96 Mystique (almost the same car) was $2,800.  We sold ours for $5,000  .

Most people on this board will say that extended warranties and aftermarket accessories are big profit centers for dealers, so I would take your dealers comments with a grain of salt.

Too bad you will not save the PST by buying in Alberta.   

Good luck.

Link to the Motor Dealer Council of British Columbia (MDC): http://www.mdcbc.com/

[prufrock]

Hi Chansen and Trainman!

Our Accord has 91,000 Kms.

We decided to put it up for sale privately. Anyone looking at it will see the care we have taken with the car. Honestly, I would rather sell it for $15,000 to someone I know than give it to them for $12,500. With two years left on the comprehensive warranty, I have no qualms about it being a great buy.

The hilarious part is when we were buying back in 2001, Honda sales reps both in BC and Alberta touted their resale value, especially on V6s, as a major selling point.

We are very disappointed in this dealership after years of patronage. The sales rep is also the sales manager, so I guess there is no room to improve with them.

We value honesty a lot. If the rep had said, "I can't do that because our profit line is too small", I would have had no problem. Outright lies I have a problem with, and it demonstrates poor long-term thinking. We were set to be Honda owners, and customers of the dealership, for a very long time.

Thanks for your insight!

Oh, and I edited my original post for embarrassing typos. Oops!

[84im]

Your biggest mistake was thinking that the dealer valued you as a customer.  You may want to sell the Accord privately, and an extended warranty for a Honda seems like an oxymoron.

Got caught between posts....looks like you're going the private sale route....smart move.

[barrie1]

I agreed with selling the car privately and also doing business with a different dealership as well. They have fed you a whole truck load of the Horse stuff on their offer. A used car with 2 years warranty on it will command a high dollar on their lot and they know it. 

[Craig]

That's a nice used car.  The private route is a good decision.

[prufrock]

I agreed with selling the car privately and also doing business with a different dealership as well.

Thanks for the advice.

The car goes in the local paper tomorrow. We live in a weird area, where leased Ford trucks rule the roads, but with all the oil patch money, oftentimes people buy vehicles for their kids for graduation/college. We have our fingers crossed.

As for a new dealership, we had been torn between the Pilot (which had the room we really wanted and the same ride as our car) and the 4runner (which had the look we have always wanted and a dealer 6 blocks away).

It looks like our approach is going to be the new 4runner V6 Limited. With all the information I am getting from these forums, I feel much more confident that I can work a deal there now. I will test the waters with Honda across the border in Alberta, but I think this is the better choice now.

If anyone has any advice about dealing with Toyota, I am listening carefully. 

Shawn

[Craig]

4Runner.  Fantastic SUV.  Get the V6 unless you need the extra towing capacity of the V8.  Helped my parents buy one last year.  Great acceleration in its class and they're getting under 12L/100km to boot.

[articsteve]

If you are in a non competitive market, and it sounds like you are, then don't over estimate the size of your discount.

Pilot and 4 Runner two different animals.  Personally if I had that kind of cash I'd go to the heavier more truck like unit such as is the 4Runner.

Before you start driving all over northwestern Canada to shave a few hundred bucks off a vehicle, spend $25.00 on line and receive 2 "suggested selling" price quotes from apa.ca   Your assuming way too much about what cars and used cars should sell for and you need some hard info at least to give you a base line. 

[prufrock]

Before you start driving all over northwestern Canada to shave a few hundred bucks off a vehicle, spend $25.00 on line and receive 2 "suggested selling" price quotes from apa.ca   Your assuming way too much about what cars and used cars should sell for and you need some hard info at least to give you a base line. 

I don't disagree with you, and we never expected miracles. However, over Spring Break we were visiting family in Kelowna. A Honda sales rep there offered us $14,000 trade-in on our car, and that was without even trying to negotiate anything. The MSRP was the exact same, but that is a significant enough difference to give one pause. We weren't ready to jump into a purchase at that time; I wish now we had done so.

We are definately going to sign up to APA and see what kind of information pops out. Going back to my original post, I have no problem with a dealer trying to maximize profit. I do have problems with dealers being deceitful and treating me like I can't use my brain and a computer to discover if they're full of crap or not.

I have no illusions that we will get the same price as someone with 10 dealerships within an hour. But I have lots of vacation time coming up, and will happily wait until I am in the Okanagan or lower mainland visiting family again if it means thousands of dollars difference (savings +tax +interest).

As for the V6 4Runner, we love it! I wish it had a little more cargo room (we travel with pets), but it is awesome. I was a little concerned about it being rear-wheel drive with only part-time 4wd, but on 4runner.org the consensus seems to be that people wish they could get the same option on their V8s.

Shawn

[mdxtasy]

Great advice so far.  Dealer's trying to screw you...typical behaviour from a guy trying to maximize profit.  Nothing wrong with that, but the tactics are questionable.

The new Pilots have less feature gaps with the MDX now....they've added more features to the Pilot over the years and now is getting up there in content.  I like the MDX better.  

[hondasalesguy]

I'm in Ontario so I can't speak for the market in rural B.C. But I can tell you that a Pilot EX-L as about $3700 margin in it. In Ontario if we could "hold" half of that and give up the other half we would do it in a heartbeat. You may even be able to negotiate $2500 off if the dealer had a few too many on his lot.

As far as the Accord, you said it was an LX V6. That was not and never will be a very popular Accord, as it is plainer than even the EX-L 4 cylinder model. In 2002 they replaced the LX V6 with the SE V6, adding alloy rims, sunroof, 6 pack CD changer, heated seats, and a few more goodies I can't remember. So the desirability of your Accord isn't bad, it just isn't great. The Canadian Black Book site (accessible through toyota.ca - go to "vehicles" then to "appraise your trade in") gives a range of $9400 to $11,200. So with your car maybe only being worth on the low end (say $10,000), if he gives you $12,500 total trade and discount, he is probably right on the money.

What I am saying is you cant have it on both ends, if you get a big dsicount off MSRP, he is going to pay you true wholesale for your trade.

[prufrock]

Thank you for your response Hondsalesguy. I have sent you a PM as well.

For an unpopular model, it sure was a bugger to find back in'01! 

[The Mighty Duck]

^ Probably because they didn't make many of them...  I never even new there was a "base model" V6 Accord!  Very nice ride, nonetheless.  Good luck selling it privately if you go that route.

[wildk9]

My experience with Honda was very much the same. I was a 10 year Honda buyer, having bought 3 cars at the  same dealership. I went to lease a new 2000 Civic and even signed the deal when they started dicking around in the credit department, saying my credit rating was bad and I needed to put down a larger amount. I called them on it, after checking my credit rating (which was excellent) and told them to take the deal and shove it.

I walked across the street, got a different car, paid nothing down and had lower payments than the Civic. The car lasted me as long as the Civic would have, without a single issue and Honda lost my business for life. I would have leased their vehicle for 3 years and gotten into an Accord afterwards but they blew it. I agree with many that Honda plays these games because they think they can and people will continue to fall for it. Frankly, I think their days are getting short. They either better change their attitude or in another 10 years (or less) they'll be in serious trouble as more people go to other car manufacturers and realize Honda isn't the be-all and end-all of cars.

[articsteve]

My experience with Honda was very much the same. I was a 10 year Honda buyer, having bought 3 cars at the  same dealership. I went to lease a new 2000 Civic and even signed the deal when they started dicking around in the credit department, saying my credit rating was bad and I needed to put down a larger amount. I called them on it, after checking my credit rating (which was excellent) and told them to take the deal and shove it.

I walked across the street, got a different car, paid nothing down and had lower payments than the Civic. The car lasted me as long as the Civic would have, without a single issue and Honda lost my business for life. I would have leased their vehicle for 3 years and gotten into an Accord afterwards but they blew it. I agree with many that Honda plays these games because they think they can and people will continue to fall for it. Frankly, I think their days are getting short. They either better change their attitude or in another 10 years (or less) they'll be in serious trouble as more people go to other car manufacturers and realize Honda isn't the be-all and end-all of cars.

they started dicking around in the credit department, saying my credit rating was bad and I needed to put down a larger amount.

Honda Canada Finance don't dick potential customers around just for fun.  Credit bureau rating based on good repayment history is a different issue than being over extended vis-a-vis income on a car loan application.  Honda Canada Finance don't dick good customers around without reason.   

[wildk9]

Believe what you will but my credit rating then and now is spotless. Always has been, always will be. I have no problem getting credit and as mentioned, I walked across the street the same day and got credit from another dealer, no problem.

I had asked for a $0 down deal and the credit department wasn't going for it, despite the fact that the salesman signed the deal and it was authorized by the sales manager. When I asked why they were not honoring the deal, they said it was because I had poor credit. When I presented an Equifax credit report a few hours later, which showed I was clean, they said they didn't do $0 down deals for that amount. The other car I purchased was actually for more money, with a lesser interest rate and $0 down, $0 first month payment. I walked in with a credit report and had a car the next day, with $0 down $0 first month payment. It may have very well been the salesman covering his a$$, when Honda Canada came back to him and said WTF for making a $0 down deal, but I was told by the sales manager that my credit was bad when it clearly was not and when confronted by the facts, was told a different story. It wasn't so much the fact that they couldn't do the deal but the fact that I was told (wherever the info originated from) that I had bad credit. Most people, especially those not as informed, would have said "OK then, I'll put more money down". I'm not such a person. I place very litle value on material things and a Honda is certianly not a 'must haev' item for me.

About two years ago my friend had a similar experience while buying a Honda. She was told her credit was less than perfect and had to pay a higher interest rate. What they didn't know is that she actually works for Equifax Canada as an accountant. You should have seen their faces when she told them off. 

Again, she walked right nex t door and bought a Nissan Maxima, not hassles and had a better deal and better car in about 2 days.

My experience with Honda is over.

[articsteve]

The fact is that if a potential buyer applies to Honda Canada Finance and has a good history of prompt debt repayment together with the necessary monthly income to make the level of payments associated with the price of the car then they are granted the credit.  If you or your lady associate were turned down then it's because you lacked one of those elements.

[wildk9]

The fact is that if a potential buyer applies to Honda Canada Finance and has a good history of prompt debt repayment together with the necessary monthly income to make the level of payments associated with the price of the car then they are granted the credit.  If you or your lady associate were turned down then it's because you lacked one of those elements.

God you're thick.
WE DIDN'T LACK ANY OF THOSE CRITERIA. MY FRIEND WORKS FOR EQUIFAX AND WE HAD A CREDIT RATING IN OUR HANDS WITHIN HOURS. WE'VE NEVER MISSED A PAYMENT ON ANYTHING AND HAVE MORE THAN ENOUGH MONEY TO QUALIFY AND DID SO THE SAME DAY AT ANOTHER DEALER. THOSE ARE FACTS. AS A MATTER OF FACT, BOTH MY WIFE AND i WERE WORKING BACK THEN, OWNED A HOUSE, HAD ONLY A 22% DEBT RATIO AND NO OTHER BILLS.

THE WHOLE REASON THAT WE WERE PISSED WAS NOT BECAUSE WE WERE TURNED DOWN BY HONDA CREDIT (WE WEREN'T) BUT THE FACT THAT THEY LIED ABOUT US HAVING BAD CREDIT AND THE RECANTED THERE STORY WHEN CONFRONTED BY A CREDIT HISTORY.

Sometime I think you just argue for the sake of arguing.  Why don't you STFU about things you know nothing about. Were you there? did you have access to my credit report? Are you a credit specialist? A banker? You act as if you just know everything there is to know about everything and everyone. Guess what? There are experiences that happen in the world that you know NOTHING about. I would prefer you limit you opinion to things you actually knwo about. My credit history is not one of them.