GM Bans Dealer Premiums on Saturn Sky Red Line

[BigPontiac]

IL Exclusive: GM Bans Dealer Premiums on Saturn Sky Red Line

Date posted: 05-23-2006

ANN ARBOR, Mich. — Saturn General Manager Jill Lajdziak said that orders are still being taken for the upcoming 2007 Saturn Sky Red Line and she promises Saturn dealers won't gouge customers who want the hottest version of the new roadster.

"The dealers won't charge a premium, because it doesn't fit with the brand [image]," she explained in an interview with Inside Line. Saturn built its reputation on no-dicker stickers, along with strict attention to customer service.

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Full URL: http://www.edmunds.com/insideline/do/News/articleId=115473

[sciguy_0504]

Does this mean GM had to ban the practice because dealers were doing it? What a nice way to soil dealer/Saturn reputation just as an influx of product is on its way.

[CSpec]

Too bad auto prices are so static. GM could really clean up charging an appropriate price upon intro, and then lowering it as demand wanes.

[Sixty8panther]

GOOD!

Now let's hope the same happens when the

5th gen. Camaro hits the streets!

[enzl]

Right...we'll see how that works out.

If I'm a Saturn dealer (probably fighting for my business life), I'm charging what the market will bear...you can't stop it from happening.

[enzl]

Too bad auto prices are so static. GM could really clean up charging an appropriate price upon intro, and then lowering it as demand wanes.

Yes. They're called REBATES...

[PurdueGuy]

This is very good. Some Saturn dealers really ticked off their customers when some decided to tack on an extra $5,000 or whatnot. My local dealership did it, and now they have a couple more unclaimed Skys coming, because the buyers backed out. Wouldn't suprise me if it was enough to lose some customers for good. Tacking on extra is an abomination to the Saturn culture.

[Flybrian]

No $h!. At some Pontiac dealers, a Solstice runs $4-6k above sticker and the G6 'vert has about another grand added on.

[VenSeattle]

As the articles states, Saturn does not negotiate on MSRP prices. This has been the case since Saturn began. this was 100% predictable and expected. Based on the Saturn dealerships I spoke with last year, none of them anticipated mark-ups. It's just not a Saturn business practice.

[Newbiewar]

Right...we'll see how that works out.

If I'm a Saturn dealer (probably fighting for my business life), I'm charging what the market will bear...you can't stop it from happening.

well if GM finds out, they dont have to supply you with new vehicles...

its a franchise you must go by GM's rules...

[Stuart]

Right...we'll see how that works out.

If I'm a Saturn dealer (probably fighting for my business life), I'm charging what the market will bear...you can't stop it from happening.

I am a Saturn dealer (have 3 stores in NJ), and have no intention of selling any Saturn vehicle over MSRP. The Saturn franchised dealers have worked hard for the past 15 years to do business in a different manner and value our reputation. Charging over list for a handful of cars is not worth risking that. Besides, what's good for the goose is good for the gander -- getting a reasonable gross margin on all our vehicles is the way to go.

[cavalier36]

I dont think they should be allowed to charge over sticker.. do you think if you took that same car back 3 or 4 years later they would give you $5,000 more than the kelly blue book value??? of course not.. they would laugh in your face!!!!

and if you financed the car after 3 years you would surely owe more than its worth..

[PurdueGuy]

I am a Saturn dealer (have 3 stores in NJ), and have no intention of selling any Saturn vehicle over MSRP.  The Saturn franchised dealers have worked hard for the past 15 years to do business in a different manner and value our reputation.  Charging over list for a handful of cars is not worth risking that.  Besides, what's good for the goose is good for the gander -- getting a reasonable gross margin on all our vehicles is the way to go.

You need to talk to the dealers that are part of large dealership groups, like the one here in Lafayette, IN. The owner doesn't give a rip about Saturn, it's just one brand name among a dozen he owns dealerships for, and that's just locally. He was one of the morons that decided that the base sky's should have an extra $5K tacked on.

[Newbiewar]

my question is how are they to regulate this?

[enzl]

my question is how are they to regulate this?

They can't and they won't. It's a PR move, pure and simple.

I admire the dealerships that hold the line...

but if it ain't ADM, it'll be forcing people into ext. warranties, Vin etches, Simonizing, etc....to evade GM's wrath at many Saturn places...

[Camino LS6]

I suspect that the "no- markup" rule is part of the franchise agreement between GM and Saturn dealers. So, yes , I think GM can stop the practice. Unfortunately, that doesn't hold true for any other division - sorry '68.

[Newbiewar]

I suspect that the "no- markup" rule is part of the franchise agreement between GM and Saturn dealers. So, yes , I think GM can stop the practice. Unfortunately, that doesn't hold true for any other division - sorry '68.

well gm might start collapsing old franchises and replacing them with better located franchises with new contracts...

[The O.C.]

Right...we'll see how that works out.

If I'm a Saturn dealer (probably fighting for my business life), I'm charging what the market will bear...you can't stop it from happening.

Enzl, you are so right.

GM can't dictate pricing....EVEN to a Saturn dealer with a signed Saturn dealer agreement.

Coming from someone that's worked for GM and worked for a dealership, Jillie's statement is nothing more than a loose threat that doesn't hold up.

I hope they DON'T inflate the stickers.....but reality says if the car is hot, they will.

[The O.C.]

well if GM finds out, they dont have to supply you with new vehicles...

its a franchise you must go by GM's rules...

Sorry....wrong-o.

I know you work for a dealership but reality is that the state franchise laws protect a dealership WAY beyond what you may even feel is appropriate.

If a dealer marks up a SKY.....and Saturn withholds product.....the state WILL side with the dealer should the dealer choose to push the issue.

Trust me...I know...I was in Dealer Development for Suzuki for three years and know dealer agreements, state franchise laws, and legal posturing in-and-out.

Same goes for a Chevy dealer or import dealer or Ford dealer or whomever.

AND....you have to remember that the dealer is an independent business and the manufacturers are not "franchises" in the true definition of the word (at least legally they aren't.) Therein lies a ton of differences.

[Newbiewar]

Sorry....wrong-o.

I know you work for a dealership but reality is that the state franchise laws protect a dealership WAY beyond what you may even feel is appropriate.

If a dealer marks up a SKY.....and Saturn withholds product.....the state WILL side with the dealer should the dealer choose to push the issue.

Trust me...I know...I was in Dealer Development for Suzuki for three years and know dealer agreements, state franchise laws, and legal posturing in-and-out.

Same goes for a Chevy dealer or import dealer or Ford dealer or whomever.

AND....you have to remember that the dealer is an independent business and the manufacturers are not "franchises" in the true definition of the word (at least legally they aren't.)  Therein lies a ton of differences.

but... if GM wanted to throw CSI into it... they could dealerships with bad CSI get crappy selection from the factory... dealers with Good CSI like us get the best and the quickest response from GM...

[The O.C.]

but... if GM wanted to throw CSI into it... they could dealerships with bad CSI get crappy selection from the factory... dealers with Good CSI like us  get the best and the quickest response from GM...

True...and good for you guys. Good CSi is a great way to get in the mfr's good graces.

But what about that high-CSi Saturn dealer that is also charging a $5K addendum for the SKY?

[Newbiewar]

True...and good for you guys.  Good CSi is a great way to get in the mfr's good graces.

But what about that high-CSi Saturn dealer that is also charging a $5K addendum for the SKY?

haha we are on the top 10 for the country in CSI scores only being beat by a 1 or 2 chevy dealerships and some cadillac dealerships... but i will say we fudge our numbers

i'm sure they could include transaction price in with the saturn dealerships... but then again... why cant these dealerships just do what saturn does best... not haggle...

although i do think saturn customers are wealthy...

Edited June 2, 2006 by Newbiewar

[David]

I went last night and looked at a fully loaded Charger SRT8, 43K MSRP. Drove it and loved the car. Really roomy and just flys. Sales person then upon returning to the dealer ask's me if I would like to sit down and talk.

Sure, what is the best price off MSRP your willing to start at.

Sales person say's due to these being limited production and special cars, the actual price is 53K + 395 for the sealant they put on the auto.

I got up and told him with gas prices the way they are, people like me willing to buy a auto that sucks up gas is more rare than his car. Since he thinks I am stupid and will pay over MSRP, clearly they do not want to sell a car.

I paused to give him a chance to change and say something like let me talk to the sales manager about the price. NOPE, he says I am missing the exclusive nature of owning a limited vehicle and plenty of people will pay what they ask to own this car.

That must be it, I am missing something and I walked out and got into my CTS and drove away.

Boy talk about stupid sales people.

[Newbiewar]

  I went last night and looked at a fully loaded Charger SRT8, 43K MSRP.  Drove it and loved the car.  Really roomy and just flys.  Sales person then upon returning to the dealer ask's me if I would like to sit down and talk. 

Sure, what is the best price off MSRP your willing to start at.

Sales person say's due to these being limited production and special cars, the actual price is 53K + 395 for the sealant they put on the auto.

I got up and told him with gas prices the way they are, people like me willing to buy a auto that sucks up gas is more rare than his car.  Since he thinks I am stupid and will pay over MSRP, clearly they do not want to sell a car.

I paused to give him a chance to change and say something like let me talk to the sales manager about the price.  NOPE, he says I am missing the exclusive nature of owning a limited vehicle and plenty of people will pay what they ask to own this car.

That must be it, I am missing something and I walked out and got into my CTS and drove away.

Boy talk about stupid sales people.

i know there are something manufatures can do about actual selling price, because i heard from a ford guy, that their jaguar & land rover dealership was being sued by ford for charging too much or something...

but our dealership and owners wont allow us to sell over msrp... and also the banks wont finance over a certain % over MSRP... for example... the most i know a bank will finance is 30% over...

so on a 43k$ vehicle... 0 money down, the most the bank will finance should be around 56k$ well if they want to charge you 53k... plus tax, they have to reduce the price, because the banks wont finance that much... and if you have any negative equity... forget about it...

dont listen to what the salesmen say... the reason they do mark ups, is so after negotiation they can be at msrp... at least thats what i am told by other dealerships... cause some chevys do markups on everything 2-3k... and just hope to get back to MSRP instead of 2-3k below MSRP

[enzl]

i know there are something manufatures can do about actual selling price, because i heard from a ford guy, that their jaguar & land rover dealership was being sued by ford for charging too much or something...

but our dealership and owners wont allow us to sell over msrp... and also the banks wont finance over a certain % over MSRP... for example... the most i know a bank will finance is 30% over...

so on a 43k$ vehicle... 0 money down, the most the bank will finance should be around 56k$ well if they want to charge you 53k... plus tax, they have to reduce the price, because the banks wont finance that much... and if you have any negative equity... forget about it...

dont listen to what the salesmen say... the reason they do mark ups, is so after negotiation they can be at msrp... at least thats what i am told by other dealerships... cause some chevys do markups on everything 2-3k... and just hope to get back to MSRP instead of 2-3k below MSRP

For a Dodge dealer to have product to ADM is rare. They're going to take advantage of the situation. That's human nature.

As a sidenote, some dealers pay Salesmen only on front-end, or perhaps at a higher rate than 'the back.". This guy may have misjudged you...but were you willing to buy at MSRP if that was offered???? I know I wouldn't sell an SRT-8 for less than sticker....a big fat loan along with it is a bonus, from the dealer's perspective. You could find out easily by placing a call to the dealer's internet or fleet manager...