Car Biz: Internet Car Shopping - a real-life sample

Sometimes, people ask what it's like to buy (or sell) vehicles over the internet. The correspondence below, between 'Charlie Jones' and me, provides an example, centered on issues of availability and pricing.

I have changed the customer's name to Charlie Jones and the name of his home town to Oak Hollow, TX. But all the rest is exactly transcribed from a recent correspondence. Note that the earliest message is at the bottom, and the exchange between us ends with my e-mail just below this introduction. 'Charlie' and I had recently talked by telephone for the first time, and we had exchanged several e-mails before these, including full specifications for the Honda model of interest to Charlie and his wife. "HCL" in the text refers to my dealership, Honda of Clear Lake.

At this writing, I don't know if I'll sell Charlie the Fit Sport he wants. But this exchange is real, and I'm happy to share it; we're more open and clear than many internet stores. If you have questions, or want to buy a Honda, get in touch!
Dr. Will
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Date:December 3rd 2008 12:21PM
Subject:Driveout numbers

Dear Charlie,

I enjoyed talking with you. The incoming, available Tidewater Blue Fit Sport Automatic with VSA and Navigation is VIN JHMGE88679S031608. It was assigned to HCL on November 26; with a 21-day average transit time, ETA at our dealership would be mid-December.

With standard equipment, guaranteed driveout -- including all fees, as well as HCL's exclusives, Oil Changes for Life, free service loaner vehicles and shuttle services, VIN etch with a $5000 indemnity against theft and vandalism, and the attention of the top-rated Honda service department in this six-state zone -- is $20,788.23. This contrasts with a retail driveout for the same vehicle of $21,293.79. And it represents a total profit to our dealership of less than $167. You'll be getting the best-equipped Fit, which most authorities think is the best motor vehicle value in America, from the best Honda dealership I know. I hope that will earn your business!

Please call or e-mail if I can be of further service.

Blessings and best wishes,
Will Hensel
Dr. William C. Hensel, Manager, CU/Fleet/Internet Sales, Honda of Clear Lake

Cell: 281-217-4835 Landlines: 1-800-NEW-HONDA (1-800-639-4663) or 281-338-6666, ext. 1136

--------- Original Message ----------
Thank you for your honesty, Will.
The dealer that is offering us the deal on the Fit is not as close as the Clear Lake dealership which has come under my wife’s and I consideration. We are willing to exchange distance for a little added expense, but I will need some finalized numbers on the best deal and financing you can offer.

Respectfully,
Charlie Jones

From: hcl-netsales7@leadcrm.com [mailto:hcl-netsales7@leadcrm.com] Sent: NoneTo: charlie.jones@comcast.com

Subject: RE: RE: RE: RE: We can help with that!

Dear Charlie,

You wrote: Can give me the specs on the 2009 Honda Fit Sport with NAV/VSA that you plan to sell me? I already have one commitment at $19,400 (drive out).

My General Manager looked at the numbers and your message, and told me to communicate to you: 'Yeah, we can do that; tell him to come on in.' That's his message, and he's our final pricing authority.

On the other hand, $19,400 is the exact driveout for an '09 Fit Sport NAV/VSA with manual transmission, if sold at invoice. As you may know, there is virtually no markup, absolutely no holdback, and therefore minimum potential for discounting a Fit at any trim level.

So I'm guessing that two of the following are the case:
1. The other commitment refers to a dealership willing to lose about $800 or $900 (or more) to sell you a Fit Nav/VSA unit with automatic transmission.

2. My GM is saying he's willing to do the same.

3. The other dealership is jerking you around (technical term :-), and will discover to their consternation that they made an 'error' in quoting you a low-ball price referring to a less expensive vehicle than the one you want to purchase.

4. That's what my GM has in mind.

I don't know which two of the above best fit the current situation--only God knows at this point. But:

If I lived in Oak Hollow and Dealer X who gave you the $19,400 driveout quote is closer to you than HCL, I'd go see them, look at the vehicle they told me they'd sell me for $19,400 driveout, and if it's a brand-new 2009 Fit model GE8869GW (the automatic Fit Sport VSA/NAVI you have been discussing) in the Tidewater Blue you prefer, I'd buy that.

If it turned out to be a different vehicle or a different price, I'd e-mail or call me, satisfy yourself that I'll be treating you with integrity, and come and see me, and let us show you the Fits we have available, and earn your business.

If Dealer X is also a good distance from you, ask them for the VIN on the vehicle they quoted at $19,400, and if it begins with these characters, it's worth a closer look: JHMEG886 _ 9 S _ _ _ _ _ _ . The Tidewater Blue Sport AT V/N unit I would provide you has VIN JHMGE88679S031608.

Absolute cost of that model in any metro Houston dealership is $18,955.39; and at any non-Houston dealership, $18,755.39. At the lower figure, driveout in Texas, with no additional fees or costs, would be $20,150.69. And for my dealership, that triple-net driveout figure would be $20,621.54 (we pay $200 to a metro consortium for marketing on every vehicle, and add VIN etch and Oil Changes for Life--both of which save you much more than they cost, but they do have a cost).

Hence, if you can buy what you have asked for at $19,400, I'd say go for it! My owner or GM have the authority to sell a car at any price they select; but that very low number is beyond the end of my own pricing guidelines. If you cannot actually purchase the car you want at that very attractive price, please give me the opportunity to provide the car you want at the lowest price possible.

Blessings and best wishes,
Will Hensel, HCL CU/Fleet/Internet Sales.

---------- Original Message ----------

Can give me the specs on the 2009 Honda Fit Sport with NAV/VSA that you plan to sell me?
I already have one commitment at $19,400 (drive out).

Sincerely,
Charlie Jones