The FL5 Dealer ADM Markup Thread

[Fanatic]

I'm moving to Ohio, lol.

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[Trey]

An Atlanta dealer offered this today, Gray FL5. $2k market adjust is okay but I didn't want the paint protection package. Someone here may.

 

[Genevagear]

This is my first post on this forum, and it will be long winded. I have been a Honda customer for over 20 years and still own the first car I ever purchased. It’s a 2003 Base Acura RSX (MT), and it’s about to go in for its 360,000-mile service. I’ve been shopping for a CTR and thought I would share my thoughts. I’ve been at it for over a month in the Los Angeles area and have visited almost all the dealerships including Los Angeles Honda, Galpin Honda, Culver City Honda, Marina Honda, Long Beach Honda, Scott Robinson Honda, Cerritos Honda, Downey Honda, to name a few. I realize there are other dealerships, but I feel I have reached my limit and have enough info to get the point. The average ADM is $15K-$20K, with about $5K of non-Honda accessories. The ADM can be worked down, but I think it’s hard to walk out without a total markup of $15K. Can a better deal be had? Yes, I believe so. I’ve decided to postpone my purchase and wait. Paying an ADM that approaches 35% to 50% of the vehicle MSRP is not for me.

Today I called Honda customer service and complained about the ADM and the way the cars are being sold to customers. Here are the points I brought to their attention:

• An ADM of 35% to 50% of the vehicle MSRP is just plain wrong.
  • Comments: Manufacturers sell the vehicle to the dealership. That sale is a choice, and they have the ability reward those dealerships that are fair in pricing and those that are not. Some manufacturers have used those tools in the past. I asked if they reward dealerships that charge MSRP and have waiting lists.
• I don’t mind paying additional for accessories, but they must be Honda accessories/add-ons that I get to choose
  • Comments: Almost all the accessories I saw during my visits to dealerships were cheap add-on items that increase profit. The worst are added alarm systems that require wiring into the vehicle wire harness or connectors. You’re just asking for potential electrical gremlins. Some dealerships refused to sell without the dealer accessories, and some wanted the profit from those items to be added on to the price of the vehicle. All the dealerships said the pricing of the vehicle is due to the fact it’s a “Special” vehicle produced by Honda. My argument to Honda is, if it’s so “Special”, customers should have the final say in how it’s sold and not how the dealership would like to profit from it.
• Most of the Type R vehicle in dealerships have visible scratches and other defects. By looking for and pointing out the defects I attempted to lower price expectations. The dealerships blamed Honda because of the way they are transported, and they refused to lower the price.
  • Comments: Maybe the dealerships are correct, and the cars are being damaged during transit, but I also think some of them get damaged on the showroom. Porsche, for example, charges $1650 for delivery, and they use covered carriers. If Honda is going to produce a limited edition vehicle and allow the dealerships to sell the vehicle at exorbitant markup, then they should be sold defect free. I think most of us would pay an additional $555 for a car that has additional protection in transit.

I called Honda because I don’t think they have received enough negative feedback. I encourage those interested to do so, especially if you purchased a car and/or are a Honda customer. I don’t think Honda has received enough negative feedback to reach a critical mass and to get them to take action. As long as people pay the high prices the market will deliver, and we are accepting the conditions of the sale. The feedback I got during the call is that Honda is not interested in taking the call or taking action. The response reeks of poor customer service, but I am stubborn.

 

[Ohlins8990]

I wrote Honda hand written letters as well. I received a lot of malaise on their part. Considering the only other Honda in my garage is a 160cc single cylinder, it makes me wonder what the ownership experience will be like if/when I get a car. I’m 15 months in on a waitlist. Am I going to see similar markups on parts. Similar wait times? My whole thought process when I put in a deposit was that it would be less stressful to own than the Porsche I had because it’s less “precious”. My friend sent me a low mileage Aston V8 Vantage in the mid 40’s…it’s tempting.

Attaching the responses from Honda below:

Reply 1:
Thank you for contacting American Honda regarding your sales experience at our Honda Dealership. We want to thank you for providing us the opportunity to respond to your message. On behalf of American Honda Motor Co., Inc., we apologize for the circumstances which prompted you to contact us.

American Honda documents and uses feedback in developing training for dealership management. We want to ensure that all customers have a smooth and stress-free sales experience. As such, we have documented a formal dealership complaint on your behalf.

We apologize for any inconvenience and welcome you to reply to this email with any additional comments or concerns.
Sincerely, Elizabeth

American Honda Motor Co., Inc.
Case #: 14291699

Reply 2:
Thank you for contacting American Honda regarding your sales experience. We want to thank you for providing us the opportunity to respond to your message. On behalf of American Honda Motor Co., Inc., we apologize for the circumstances which prompted you to contact us. American Honda documents and uses feedback in developing training for dealership management. We want to ensure that all customers have a smooth and stress-free sales experience.

The MSRP is optimized to benefit customers and American Honda. Price optimization means the recommended price is tailored based on operating costs, historic prices and sales, and the needs of the customer. However, the MSRP is a suggested amount. Dealerships are independently owned and operated and may add markups by adjusting the price based on what the dealership thinks the prospective purchaser would be willing to pay for a particular vehicle. When it comes to finding the best price that suits an individual, it is important to shop around and compare prices.


Sincerely,
Marilyn

Reply 3:
Thank you for submitting your inquiry to American Honda Motor Co., Inc. Customer Relations.
On behalf of American Honda Motor Co., Inc. we apologize for the circumstances which prompted you to contact us related to the difficulty you are having locating a Civic Type R.

We understand and share the frustration of not being able to supply product to all of our customers and we too are not satisfied with the current supply situation.
Please know we are making every effort to improve the inventory at our dealerships.

We encourage you to work with your local authorized Honda dealership for the most up to date inventory availability. To locate a local dealership, you can visit our online Dealer Locator tool at Find a Dealer (honda.com). You can also visit our online inventory tool at Honda Inventory Search | Car & SUV Finder | Honda

Sincerely,
Mayva

American Honda Motor Co., Inc.
Honda Customer Relations

 

[TDC50]

Yeah, those responses make sense. Help adjust the market price on an FL5 and buy something else. Every bit of lower demand will help bring down the price.

Yours truly,

Type R enthusiast

 

[Clark_Kent]

@Genevagear
BLUF: Honda is aware of what is happening at the dealership level. Not much will change. This is the model and it's imperfect. Are you interested in playing or not?

I believe many on this forum empathize with you. The road to getting an FL5 hasn't been easy for most and continues to be challenging. I appreciate your vigor and enthusiasm to address these tactics employed by many dealership; however, what you're seeing is an outgrowth of how automotive sales are regulated in the U.S. and it's not changing anytime soon. To understand why or how this is happening you have to go back about 100 years. Early on auto manufacturers would not have survived if the dealership model wasn't created. Auto manufacturing is capital intensive and the barrier to entry is incredibly high so they needed a conduit to sell vehicles as soon as they're manufactured. The concept of the dealership model was born. The auto manufacturer would sell cars to dealerships, and then in turn use the cash generated from guaranteed and instant sales to continue funding operations and building more cars. Rinse and repeat.

This worked well until it didn't. Automotive manufacturers started to dictate terms of their business relationship with the dealers. The dealers ultimately organized and lobbied state legislatures to pass laws to protect their interests. Chief among them was to prevent a direct to consumer model. 80 years later the model largely remains, for better or worse.

Moving past the question of why are they doing this is and what can we do to stop this isn't your highest and best use IMHO. The question then becomes, since you know the rules of engagement, is this a game you want to participate in?

 

[Genevagear]

@Clark_Kent

I am willing to pay ADM, but anything more than 10% of MSRP reaches my limit. I asked all dealerships if they would accept an offer with $5000 ADM, and the R performance package ($5350) only. I got a lot resistance and no takers. For some reason, Honda dealers cringe at the idea of Honda accessories. I didn't find anyone who knew about the option for reduced mass wheels and a carbon wing! I find the obstinance to sell the accessories odd, but the lack of knowledge not very surprising. The Honda accessories most likely don't provide the return they get with the cheap accessories they pick and tack on. Anyway, that's when I folded my cards and decided to postpone.

 

[RP2000R]

They were charging ADM back in 2000 when I purchased my ITR. Things won’t change and like others have mentioned it’s part of the game with the CTR. My advice is balance your time,, effort, logistics, and the dealer and hopefully you can find a deal that works.

Adm is trending lower due to many factors but msrp will always be a needle in the haystack and most times there are other added cost into the deal.

These cars and most Hondas hold value extremely well. Look at the FK8 you can buy and drive sell in a few years with very minimal losses. Try that with some of the other manufactured and see what happens.

 

[iLikeHondaVtec]

@Clark_Kent

I am willing to pay ADM, but anything more than 10% of MSRP reaches my limit. I asked all dealerships if they would accept an offer with $5000 ADM, and the R performance package ($5350) only. I got a lot resistance and no takers. For some reason, Honda dealers cringe at the idea of Honda accessories. I didn't find anyone who knew about the option for reduced mass wheels and a carbon wing! I find the obstinance to sell the accessories odd, but the lack of knowledge not very surprising. The Honda accessories most likely don't provide the return they get with the cheap accessories they pick and tack on. Anyway, that's when I folded my cards and decided to postpone.

I got a dealer to agree to MSRP actually but they had like 4k in accessories. Also I got another dealer to agree to 5k over and I believe it had no accessories. Im in LA as well. I can forward you the info if you'd like. I looked at lease deals through a business and when I can get 2k off ordering an M2 which comes out o about 65k at a MF of .028 versus the Honda .004 MF the monthly payments are literally like $900 vs $1100 with residuals at 33k for CTR and M2 was like 41k.

I'll begrudgingly go going M2 if I do decide to get a car but I think I want to wait a little longer to see if the CTRs crater like they should.

Why would I buy a 44k car when I can have a 67k car for the same price its just kind of insane.

I love Honda tho and the type R is an awesome car. I had an 07 civic Si sedan that I absolutely loved and wanted to get the modern day version of.

 

[superporpoise]

I bought one at MSRP in OK and shipping it to OR!

I'd definitely recommend looking out of state for those of us on the West Coast — this makes two this month in the middle of the country that I've been able to buy for MSRP (passed the first on to a member here and then regretted it so I bought this one).

Shipping is surprisingly inexpensive — like $1,200 for open or $1,700 for enclosed.

 

[007]

In today's world, for better or worse, fun and engaging cars with low-volume manual transmissions are in high demand. This typically results in one of two scenarios: either the price of the car is significantly marked up, or it's completely sold out. It's hard to say which is more frustrating. Take the GR Yaris, for example: it has been sold out worldwide since its debut. In the UK, some customers who placed orders in 2021 are only just now receiving their cars, enduring over two years of waiting since securing their allocation for the vehicle to be built. True story.

 

[SKINNIE]

@Clark_Kent

I am willing to pay ADM, but anything more than 10% of MSRP reaches my limit. I asked all dealerships if they would accept an offer with $5000 ADM, and the R performance package ($5350) only. I got a lot resistance and no takers. For some reason, Honda dealers cringe at the idea of Honda accessories. I didn't find anyone who knew about the option for reduced mass wheels and a carbon wing! I find the obstinance to sell the accessories odd, but the lack of knowledge not very surprising. The Honda accessories most likely don't provide the return they get with the cheap accessories they pick and tack on. Anyway, that's when I folded my cards and decided to postpone.

Buy out of state and have it shipped to you. Cali isn't the only state in the US

 

[Fanatic]

I bought one at MSRP in OK and shipping it to OR!

I'd definitely recommend looking out of state for those of us on the West Coast — this makes two this month in the middle of the country that I've been able to buy for MSRP (passed the first on to a member here and then regretted it so I bought this one).

Shipping is surprisingly inexpensive — like $1,200 for open or $1,700 for enclosed.

Well deserved. Hope you enjoy it to the fullest. Please post pics after it arrives. : )

 

[RUNN1N]

I don’t think Honda has received enough negative feedback to reach a critical mass and to get them to take action. As long as people pay the high prices the market will deliver, and we are accepting the conditions of the sale.

As soon as you spend a dollar in a dealership with slimy sales tactics/markup, you're endorsing their business practices and helping them to employ them on future customers. I can appreciate your frustration, California seems to be the toughest place to get a Type-R at a fair price.

That said, you do have a few options:

• Expand your search radius--there are a handful of MSRP/low-markup dealerships nationwide that'll sell to out-of-state buyers. Get on a few lists, put down some refundable deposits, be patient, and wait it out.
• Consider an Integra Type-S--you may still need to look beyond California, but the DE5 seems somewhat easier to find at MSRP vs the FL5. Granted, they're different. I get it. I've owned both. You can't go wrong either way.
• Keep arguing with California dealers/hassling Honda--it's your time, spend it how you will, but driving a FL5/DE5 will likely be more satisfying.

 

[Clark_Kent]

Buy out of state and have it shipped to you. Cali isn't the only state in the US

This. Baffling that people waste their time arguing with those dealerships in CA. This isn't 1971. Exercise a little ingenuity and look elsewhere. Just pick up the phone and/or hop online and begin emailing dealerships.

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