| hondacuraworld |
From the offices of American Honda:
In an effort to maintain and protect the Honda brand image, American Honda Motor Company (AHM) will be implementing a new internet policy as it related to the Honda Care and Acura Care Vehicle Service Contract (VSC) products. This new VSC Internet Policy will become effective April 1, 2008.
After careful consideration of the Honda National Dealer Advisory Board recommendations, AHM has determined that internet selling of Honda Care and Acura Care VSCs negatively impacts the Honda and Acura brands as well as the Honda and Acura automobile dealer network.
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Therefore, if you've been considering the purchase of an online AcuraCare or HondaCare contract, do it soon.....as we will be wrapping up our internet sales of such contracts by the end of March.
Always striving to offer the best possible prices on these contracts, in the time prior to the shutdown of said sales, we will continue to offer the lowest possible prices, and will match or beat any online competitor.
Just passing the news along..... |
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| dj-mdx2 |
Holy sh!t! That's just a crappy decision. The dealers must be breathing down Honda's neck due to profit losses. Glad I got mine.
Can you still buy a warranty from a different dealer from the one you bought the car from though? For example, would I be able to buy one from your dealership but not online? |
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| hondacuraworld |
| I'm operating under the assumption that we won't be doing any out-of-region warranty sales after April 1. If anyone would be under careful watch, it'd be me :rolleyes: |
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| Randy B |
I hope that does not happen.
Thanks for the heads up Tim!
Randy B |
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| ncelk |
| I am willing to be that overall warrany purchases go down significantly. Sounds like a backwards step for Acura and Honda. They gonna end online car purchases too? Might as well, since that cuts into dealers profit margins as well. Boo Honda/Acura. This will come back to haunt them. |
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| drjay |
quote:
Originally posted by dj-mdx2
Holy sh!t! That's just a crappy decision. The dealers must be breathing down Honda's neck due to profit losses. Glad I got mine.
Right on! |
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| Warzau |
| Now that is stupid. So instead of me buying any warranty I will not buy one. |
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| Ceenit |
quote:
Originally posted by hondacuraworld
I'm operating under the assumption that we won't be doing any out-of-region warranty sales after April 1. If anyone would be under careful watch, it'd be me :rolleyes:
I certainly hope that you did not receive any negative reviews from your management regarding the on-line service you have been providing.
I think I speak for most everyone on this board that you specifically have been an incredibly positive aspect to Acura ownership....and that is in terms of customer service, responsiveness, and competitive pricing. The post-sales service and support you provide is a primary reason why many of us stick with the Acura brand and consider purchasing additional Acura vehicles. |
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| hondacuraworld |
Thanks for the kind words, they never go unappreciated :)
No, management here is extremely pleased with my performance. Funny, when I started our online sales here back in 2000, almost every one of the major competitors that I faced back then, is gone. People come and go doing this kind of work, fortunately I've managed to weather the storm :cool:
What I meant by my statement is that if any place is going to be under close scrutiny and bears watching, it'd be me. To date since I took over the online sales of extended warranty contracts back in November of 1995, I've processed close to 1,000 warranties.
There are a lot of people that I've spoken with and told them it was to their advantage to wait to purchase, so that they can get the most for their money as the contract dates run irrespective of the factory warranty.
For that reason, I'm trying to get a mass email generated to my customer base to let everyone know of the impending changes to Honda/Acura's VSC structure, as prices as we know them may never be this low again. |
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| Warzau |
quote:
Originally posted by hondacuraworld
Thanks for the kind words, they never go unappreciated :)
No, management here is extremely pleased with my performance. Funny, when I started our online sales here back in 2000, almost every one of the major competitors that I faced back then, is gone. People come and go doing this kind of work, fortunately I've managed to weather the storm :cool:
They should be pleased. Tim I have NEVER bought a extended warranty for a car in all my years of purchasing cars. Since we all had such good dealings with you I never hesistated purchasing TWO from you. I still can't see how not allowing customers to buy Honda warranties from authorized dealers online has anything to do with protecting the marque. |
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| BillHeart |
This is silly IMO.
I bet a couple of Acura/Honda dealers threw a fit that a couple of other dealers were selling them at a discount online.
If I had a customer who wanted a warranty and got a price with very low markup from another dealer, I'd probably just match it. It's no different to me than a local customer who gets a below market price on a new Vehicle from a dealer in, say, New Jersey.
Generally we'll match it. Does it happen all the time? No. Does it happen on occasion? Yes. It's part of doing business.
If I had to speculate it was probably one or more Florida dealers, Florida treats extended warranties as insurance policies under law. And as such you have to sell them at what's basically a set MSRP so those guys can't negotiate warranty prices (Legally). No more, no less. If I am a Florida dealer and my own mother wanted to buy an extended warranty, I would legally have to charge her MSRP.
I could see them banning 'net sales into Florida, but otherwise it's not like the Canada situation, this is an otherwise level playing field. |
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| HuMan321 |
quote:
Originally posted by BillHeart
This is silly IMO.
I bet a couple of Acura/Honda dealers threw a fit that a couple of other dealers were selling them at a discount online.
If I had a customer who wanted a warranty and got a price with very low markup from another dealer, I'd probably just match it. It's no different to me than a local customer who gets a below market price on a new Vehicle from a dealer in, say, New Jersey.
Generally we'll match it. Does it happen all the time? No. Does it happen on occasion? Yes. It's part of doing business.
If I had to speculate it was probably one or more Florida dealers, Florida treats extended warranties as insurance policies under law. And as such you have to sell them at what's basically a set MSRP so those guys can't negotiate warranty prices (Legally). No more, no less. If I am a Florida dealer and my own mother wanted to buy an extended warranty, I would legally have to charge her MSRP.
I could see them banning 'net sales into Florida, but otherwise it's not like the Canada situation, this is an otherwise level playing field.
I believe that Tim already could not sell in Florida.
My opinion is that more people became aware of Internet pricing and asked their local dealers to match it is what has probably caused the backlash.
A similar situation happened to me with online sales of Mirage speakers. I bought mine online and was told that he was having to discontinue Internet sales as the "authorized" sales base was give the parent company crap about Internet discounting If he didn't stop, he would lose his "authorized" dealer status. He went on to say that it was not common knowledge to the local "authorized" dealers until people were taking in printouts of his pricing and looking for price matching. He said he got alot of hate communication from dealers on this. |
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| pianoman41 |
quote:
Originally posted by Warzau
They should be pleased. Tim I have NEVER bought a extended warranty for a car in all my years of purchasing cars. Since we all had such good dealings with you I never hesistated purchasing TWO from you. I still can't see how not allowing customers to buy Honda warranties from authorized dealers online has anything to do with protecting the marque.
I did the exact same thing. I've owned many cars and never bought an extended warranty, because, well, realistically speaking most of the time it is the dealer who makes out, and not the buyer. (If it wasn't, they wouldn't offer them for sale). But after a sour experience trying to save money by going with an aftermarket warranty company, I bought my extended warranty for my TL-S through Tim. And I was so pleased that when we got our MDX I went right out and bought another one for it through Tim. And then I've bought parts through Tim. Why? Because he's got awesome service and awesome prices. Here's a hint to the dealers: if you had the same prices and the same service, I'd buy through you because you're closer and I don't have to wait for shipping.
Like others have speculated, I'm sure some dealers with big clout at American Honda complained that warranty Internet sales were killing one of their biggest cash cows and they weren't happy. That's a shame. Instead of matching prices or offering better service, they go run and complain and try to get their competition regulated out of business. Unfortunately it looks like it may have worked. For now. Hopefully AcuraCare warranties take a nose-dive in the next six months and instead of making less money on warranties they make no money. Serves them right.
I'll still buy parts from you Tim as long as they let you sell them. :) |
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| BillHeart |
I think that we're generally comparing Apples and Oranges here. Now, I am a manager on the sales side of an Acura dealership (And am working to become a site sponsor).
The difference is that what Tim does is what I call "found business". It's the same with what I do with eBay. Will I take short deals on eBay? Sure. It's incremental business that I would otherwise not have. Thanks to eBay we're going to move an extra 25 used cars this month, that's substantial for us, we normally sell 30 or so used cars, about half of those being Acura Certified cars. Now, one store in New York isn't going to skew the market on CPO Acuras. I know the used car managers at over half a dozen other Acura dealerships, they are all doing fine and I'm not putting them out of business. Same with Tim, I asked our new car manager today if we ever had a customer ask us to match an online price on an AcuraCare warranty. He did not recall it ever coming up. Reality is, on 60 or so new car sales that we'll do this month I doubt that we sell more than, I dunno, 10-15% with AcuraCare warranties. Over half of our customers lease, and a good chunk of those who buy trade them in before the new car warranty expires. I have only taken 2 Acuras in this month out of 11 so far that were out of warranty. An 04 TL with 60k and an 02 RL with 65k.
On used cars we sell every single 03 and newer car with under 80k miles certified. If it doesn't qualify to be a certified car it doesn't belong on my lot IMO. So there's no real chance to sell an AcuraCare warranty for us on used cars because, well, the warranty's included.
Also, well.. it's not like we're driving Mercedes-Benzes or Jaguars, these are very reliable cars.
So I have no problem and lose little, if any revenue from what Tim does.
I also don't think that Tim is hurting other dealers as a general rule. What I think happened was a couple of other dealers saw his site and ganged up on American Honda.
Do I think that a normal retail customer who walks into Tim's store to buy a new or used car is going to be offered an AcuraCare warranty for what Tim sells them for? I could be wrong but I do doubt it. Being brutally honest, who offers any item that they have for sale for the absolute lowest that they will take for it?
We do make money on AcuraCare and HondaCare warranties and what we refer to as "back end" revenue is important to us. Margins on new cars are razor thin and our overhead is huge. That being said, we are free to charge what we want but last I checked we were still under MSRP on them. Again, I can't say as I don't work in finance. |
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| hondacuraworld |
quote:
Originally posted by BillHeart
That being said, we are free to charge what we want but last I checked we were still under MSRP on them. Again, I can't say as I don't work in finance.
Check your VSC rate guide, there are no MSRPs on AcuraCare warranties. It's whatever the market bears.
I honestly have no idea what they charge for them on in-house deals as that's another area of the dealership entirely. Your "found money" analogy is somewhat correct, but Acura's entire new vehicle paradigm has changed dramatically.
Used to be that when I started with Acura 14 years ago, Acura would give you X amount of cars per month.....let's throw out an arbitrary number like a good round 100. If you've got only 100 cars to pay your dealership's overhead (throwing the back-end absorption model out of the picture for a sec), then you have to maximize profits on each and every one of those in-stock models and preorders. Prices held at MSRP or higher.
Now, dealers can get pretty much as many cars as they want, therefore everyone's in the game of trying to price shop. The more the customer shops price, the lower the point on the price/demand curve becomes. Same with warranties. I started that ball rolling online back in 2005.
And I know that I was targeted in that bulletin and VSC policy guide. They lifted the words right from my own website. But that's nothing new, other dealers call my dealer principal all the time complaining that my business is ruining their margins. Whatcha gonna do..... ;) |
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| kingmdx |
Just saw this thread...well this sucks...
Tim I 100% agree with you and what you do. I bought my 8yr/120k warranty online and when I called the dealer they wouldn't even budge below DOUBLE :eek: the price. They just said they can't do it for less...so they rather give up a sure sale of a non existent fixed priced warranty than meet an online price (or even come really close) when we all know they will still make a profit even off the price I paid online. I said well thanks I wanted to give them the option to meet the price since they were the dealer I bought the X from but i'm not going to pay double out of pure loyalty. I understand companies have overhead stuff to pay for but double ..come on isn't that a bit extreme.
Honestly if i had to pay nearly 3,000 for the warranty I would do as other people do ..use the X and sell it within factory warranty...save my 3k for another vehicle.
I think this will also hurt some used car sales because I was looking to buy a used car this summer for my younger brother for school (honda/acura most likely) and I was keeping in mind the prices of the extended online warranties etc. but if these things go up to those crazy prices at dealers only when i factor that in I may now have to rethink the whole idea and go with a cheaper new car with full warranty. Maybe shift to another brand entirely... nissan/infiniti *cough* :p
I'm also not shocked that dealerships complained about the online sales. It was only a matter of time.
Imagine if they really did this for parts also..lol....then my X would stay bone stock :p ... will i pay a dealership nearly 800 to put on a roof rail ...helllll no. I would rather do without. I know some people are better off than others and would still buy the rail but I am young so I look at my money like a hawk and do you know how hard a person works for 800 !!!
Well it was good while it lasted. Those people who still need get on it and buy online asap.... dealers know that the online thing is ending also (duhh) and I won't be shocked if their prices in store raise after the 1st. |
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| hondacuraworld |
| Yep, only a few days left. I'll be closing down that section of my website on Friday afternoon so that I have time to process the remainder of the warranties that people submit. I'll still be selling them through about noon on Monday, March 31. |
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