Subaru Dealer Bait-and-Switch

I live in southern Saratoga County, New York, between the cities of Albany, Schenectady, Troy and Saratoga Springs. The story below is true, but I am not going to mention the name of the dealer to hopefully avoid a lawsuit.

I've been looking for a replacement for my 97 OBW and decided that I might want to try a Forester. During the weekend before last I test drove a Forester 2.5X manual with Premium Package and it was very nice.

During that test drive I commented on the fact that the "incentive" for the X was $2000 while the "inventive" for the X with Premium Package was only $1000, raising the differential for the Premium Package from $2350 to a rather high $3350. The salesman, who was in the car with me, then said that his dealership had a promotion until March 31 that was $3000 off the MSRP of all Foresters. (The discount includes the factory incentive - be it $1000 or $2000.) I told him this was quite good, especially for the X with Premium since the incentive for the X with Premium was $1000 less than for the basic X. The color I wanted was not in stock at this dealership, but the salesman said they could get the car in my color from another dealer. No discussion of a higher price. My son was in the car with us and heard this whole discussion.

After I got home I looked at the numbers and they were very good - in fact too good to believe. For example, using only the basic car and delivery, the MSRP for a 2.5X with Premium Package would be $24,770. My data shows that the invoice for this same car would be $23,194, yet the salesman was offering me this hypothetical car for $21,770, which is $424 below invoice when the $1000 incentive is taken into account.

I've been able to purchase cars for close to the invoice price, but never below invoice. This price is also lower than any I have seen discussed here for the same car. So this was either one very good deal or a scam.

The dealer called last Friday and said he found the car in my color at another local dealer and could have it one day after I signed the paperwork. He asked for a $100 deposit over the phone to "hold" the car, but he did not yet know what accessories were already on the car and could not give me the MSRP that would be the basis for the $3000 discount. I was also not quite ready yet to buy.

Last Saturday I visited another dealer to see what his best price was. He said there was no way he could come close to the price of dealer #1.

Over the weekend I decided to buy the car. I suspected that the deal was too good to be true, but would not be able to tell until I tried to buy the car for that price. I was planning to visit dealer #1 today to close the deal when the salesman called to say that the dealer he was getting the car from had another customer for that car so I would have to make a decision today or risk losing the car. (Probably a lie in light of events yet to unfold.) I told him I would be right down. He gave me the list of accessories and the MSRP for the car he located and asked again if was sure that I wanted the car. I said yes, pending my final price. He was quite taken aback, since he said "the price is as we discussed" which could only mean $3000 below MSRP with no additional negotiation on my part. I was unwilling to commit to the purchase until I saw the price on a contract, but did not state this at the time. I mentioned only the fact that I wanted to add a few dealer-installed accessories and he had said during the first test drive that he might be able to negotiate some on those. (This was true on my part.) I took my check book, calculator and accessory price lists and headed down to the dealer.

I took another test drive, this time in an XT automatic since the X manual I drove 10 days ago did not appear to be on the lot. Because of all the discussion here I wanted to check out the automatic climate control, and I assumed the XT and the X have the same climate control system. Based on my short test drive the automatic climate control is OK. More about that in another note.

We sat down at his desk. he told me the MSRP of "my" car was $25,252 with the few accessories it had, and my price would be $22,252. When I asked if he knew the sales tax rate where I lived (it varies by county and we get charged by where we live not by where we buy the car) he disappeared and came back to ask if I was going to finance the car or pay cash. I said cash and he disappeared again.

When he came back he had another salesman with him. I thought salesman #2 was going to try to sell me financing, as happened the last time I purchased a car at another dealership. But, as soon as salesman #2 said "you know the discount is UP TO $3000" I knew the deal was off. He stared telling me about the fact that the incentive for the X with Premium Package was $1000 less than the incentive for the X and that he also had to charge more because the car was not on his lot. I explained to him that the salesman had told me the discount was $3000 for all Foresters even though the incentive was different for different models, and when he offered to find a car in the color I wanted he did not mention a higher price for this service, and told salesman #2 the my son had heard the whole discussion between me and salesman #1. No matter, he told me how much money he would lose if he sold me the car at the price I expected, and I told him that not only was I NOT going to pay the higher price but the deal was off even if he WAS willing to give me the original price.

Now - do I keep my 97 OBW or continue looking for a new Forester? I really do like my old OBW.

-- Vic Roberts Replace xxx with vdr in e-mail address.

Reply to
Victor Roberts
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(snip)

Sigh. I wish it was easier to appoint proxies to handle such negotiating for me (using an escrow account) or order direct and bypass the dealership or something. Some people might enjoy the haggling and lies, but it is more of a PITA than it should be to avoid being screwed in the car sales process.

-- Mark

Reply to
Mark T.B. Carroll

So WHAT did you put the $100 on? It was a hold payment for *something*. If it was for a car that the dealer had then they cannot sell it. If it was for a car that he found elsewhere, he would have to put YOUR $100 on that other car since obviously the dealer wasn't putting it on anything that they had (because they had nothing). That means no other offers can be made on the car. You already put your earnest money down on the car. That shuts out all other deals on the car. Doesn't matter if someone else wants to buy the car. You already put $100 on it so the car is yours (until some expiration period after which you either get refunded or lose the down payment due to non-performance and the car is released for availability).

Sometimes the dealer wants to make the earnest money non-refundable. Depends on the dealer so just ask (or demand). Even if they say it will be refundable, have then note that on the check and have their floor manager initial it. They can always claim that what they said was different than what you remember.

Reply to
Vanguard

Sorry if my message was not clear - I never gave them the $100 "telephone" deposit. I went to the dealership today to sign a contract for a specific car (model, color, accessories) for a specific price. At that time I would have left a deposit of any reasonable amount refundable only if they could not get the car or if the price was different than stated on the contract.

-- Vic Roberts Replace xxx with vdr in e-mail address.

Reply to
Victor Roberts

This was actually less aggravating then some other times when I purchased a car. At least it was over quickly. In

2002 when I purchased my VW Passat the finance guy at the dealership tried for almost 30 minutes to convince me that it was less expensive to take a loan from them then to buy the car with cash from my savings account. They, of course, were going to charge me about double the rate that my funds were earning, but the guy had some very creative arguments. His arguments only made sense if I was going to take the money that I would have used to replenish my bank account after paying for the car and throw it away in Las Vegas or some similar place

At one point when I told him he was wrong, he got a sad look on his face and asked if that meant that his mother had wasted $50,000 sending him to college. Great theater!

-- Vic Roberts Replace xxx with vdr in e-mail address.

Reply to
Victor Roberts

When I bought my Subaru, I asked for quotes from 2 dealers on the cars I was interested in by e-mail, test drove one and bought it for the quoted price. I think it was my easiest purchase I ever made on a motor vehicle.

Blair

Reply to
Blair Baucom

You could have told him that if he had used *his own* money to finance his education, he'd be a little more in touch with reality now.

Reply to
Jim Stewart

On 2006-03-27, Victor Roberts penned:

Eep.

The rate when I bought my WRX was 1.9%. At that rate, it would be hard to come up with a situation where paying it off made sense. (Kind of a moot point, anyway, as I have other loans at higher rates that get my attention first when I have extra cash lying around). I just wish I could get that rate now.

Reply to
Monique Y. Mudama

On 2006-03-27, Victor Roberts penned:

Maybe I'm off base, but if you never gave them any money, it doesn't sound like *that* bad of an experience. Certainly it was a waste of your time.

Or maybe I just have such a low opinion of car salesmen in general that this didn't sound any worse than expected ...

I don't recall any similar tactics being used when I bought my Subaru, but there *was* lots of "oh my god we're not making a penny on this sale" chatter. I ignored it. I don't think I got an especially good deal, but even if I did, if they weren't making money on it somehow, they wouldn't have sold it at that price. That's their problem, not mine.

Reply to
Monique Y. Mudama

That's interesting. I suppose that's easier these days now it's usually easy to find out about the different options packages, etc. from the manufacturer website, so you can be specific enough in what you ask for a quote for. Good idea.

-- Mark

Reply to
Mark T.B. Carroll

I recently (last July) bought a car (new Accord) on Internet via broker

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The experience was pretty good. Even when picking up the car and filling paperwork at a dealership, I didn't deal with a salesman but rather with a fleet manager who behaved as normal person.

Boris

Reply to
Boris

I did something similar when I bought my 97 OBW. This was before commercial use of the Inet so I went to three local dealers with the specifications for the car I wanted - model, color, accessories - and asked for their best price. I told them I wasn't going to haggle or use one dealer's price to get a lower price from another dealer. They each had one chance to give me their best price. It was quite interesting, as one dealer wanted to know how he did against the other dealers. I got three good prices and didn't buy at the lowest price dealership since one that charged a couple of hundred more than the lowest was closer to my home and friendlier. (This dealership was NOT the one described in my original message. It was the one I went to second to get a reality check and the one I will buy from if I decided to get the Forester now)

However, these days are long gone with Internet quotes like you describe.

-- Vic Roberts Replace xxx with vdr in e-mail address.

Reply to
Victor Roberts

You're right, it was only a waste of time and energy, but too much time and energy.

I keep hoping they are evolving.

-- Vic Roberts Replace xxx with vdr in e-mail address.

Reply to
Victor Roberts

If you like your old car you keep it.

Carl

Reply to
Carl 1 Lucky Texan

I bought my 2006 Outback 3.0R VDC wagon at FlatIrons Subaru in Boulder, CO.

Prior to buying it, I had done a lot of reading and test driving. I also signed up for Consumer Unions pricing service, and, had downloaded the actual prices of the car and all accessories. Finally, I wanted to buy the extended warranty (had a BAD experience with my last car, a Saturn lemon, and the extended warranty paid for itself over 10 times), and, found it priced on the Internet at $1500.

When I went to negotiate, mine was the last car of its kind in the state (both the dealer and I had checked), so, I figured--NO WAY am I going to get a good deal.

I offered them their cost + 3% and got it, paid the Internet price for the extended warranty, instead of the list $1950, and got both the Subaru money back + their low interest loan. Was amazed!

Reply to
Bill Bradley

I'm in Denver and actually bought my last car, an Impreza, at Flatirons Subaru. I'm actually in the market for a Forester now and actually just emailed carsdirect.com and will see waht they can do for me but I'm still undecided between a 05 and 06.

Reply to
Mark W

This was November 2004 on a 2005 Forester. I knew what I wanted and found the only two in the area that I would be interested in, as I wanted a XS in one of two colors. I used the Subaru site to find them. They both sent back a price. I had ordered my last three cars because I don't like accepting what just may be on a lot as I have to live with it at least 3-4 years maybe longer. I live over 100 miles from the nearest Subaru dealer so I didn't care really which one I got it from and didn't want the hassle of the dealer going through the antics of having to trade another dealer over one from there lot.

Blair

Reply to
Blair Baucom

I'm in the process of buying a new 2006 OBW (waiting on the dealer to get the model I want from another dealer). The deal seems pretty good, but, like the OP, I'm waiting to see if it actually comes to fruition. While attending a Subaru-sponsored event here in Philadelphia I was given a Subaru "VIP" card, which supposedly allows me to buy a Subaru at my dealer for 2% below invoice, no haggling. Well, that's pretty good. And, you're also allowed to keep any customer incentives. Right now there's a $2000 incentive on all Outbacks, and a $3000 incentive to buy an Outback SE (with navigation, 6-disc CD, etc.). Plus, I just got a $500 Subaru owner customer cash offer in the mail. And, zero % financing for two years.

So, the deal is this: 2% below invoice, PLUS $3500 rebate/customer cash on a new 2006 Outback SE. Comes out to around $5,000 off the MSRP, plus the 0% financing.

With $15,000 for my 2003 OBW trade, I'm out the door for a bit under $8,000, total.

Interestingly, the OBW SE model adds $1500 to the MSRP of a base OBW w/automatic. But, the extra $1000 rebate on the SE model means it only costs an extra $500 to get the nav system, 6-disc changer, climate control, etc.

I should be getting the car tonight or tomorrow. I'll report back and let you know how the deal goes.

Reply to
BrianW

Please do keep us informed. However, I'm a bit surprised that since your car is on the way and will arrive within days, you don't already have a signed contract for the car, including a statement of the final price. Has car buying changed that much?

-- Vic Roberts Replace xxx with vdr in e-mail address.

Reply to
Victor Roberts

We did all our shopping online, and through the Subaru Web site I could see which dealers had the Forester we wanted in stock and in which color and with which accessories. I then got email quotes from the ones who had what we wanted. We wanted a 5 spd with premium package so there weren't that many to choose from. You still get some shenanigans this way as one dealer didn't include the delivery fee--he said his customers like to see all the extra fees broken out so he didn't include it in the quote. We ended up going to the dealer who had the car we wanted in the color we wanted, but we brought the email quotes from the other dealers and showed him the lowest quote. There was some of the "how can they stay in business selling cars that low!" etc. moaning and groaning but they eventually came down to within a couple hundred dollars of the lowest quote (which wasn't in the color we wanted anyway and was a considerably further drive away). Since they also gave us quite a bit more than we expected for our trade-in, and waived the installation fee on the couple of accessories we wanted, we thought we got a satisfactory deal.

I am surprised this dealer let you walk away. Often that's enough to bring the sales manager out to offer you a better deal.

-Yngver

Reply to
yngver

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