On special order, what is the best discount off MSRP I can get in SoCal?
06-01-2017, 09:53 AM
#21
It is so difficult to characterize cash as a "disadvantage," but do so I must.
Let me give just a hint of an insight. I have used AFS, I have used MY OWN bank, I have used the dealer's financing relationships over the nearly 30 Audi's I have owned. I have outright purchased ONLY 1 Audi -- a 5000CS Turbo. Fat lot of good writing a check did for me.
Now, don't get me wrong, being able to write a check for the car did not bring down the wrath of the financial gods upon my house -- but, the owner of the Porsche+Audi dealership at the time told me that when I finance a car using "his finance guy" he gets a "%" of the amount financed. He, therefore, has -- at least potentially -- SOME incentive to persuade me (perhaps with a discount, perhaps with a non-cash "spiff") to finance through his Bank du jour -- three years ago that was "The Royal Bank of Scotland." Who knew?
So, while paying cash may make you perceive (and perception is reality, remember) you were not at a disadvantage, there is at least the possibility that your perception is or was distorted -- you were dreaming.
Is this "cash penalty" a big deal? How would I know -- I have no clue what is a big deal to you. Having said that, keep telling yourself cash is not a disadvantage if you like -- for all I know NOTHING may have been different had you financed or leased or put it on layaway for pity's sake.
However, there is at least the possibility that buying via a loan (that has no prepayment penalty) and then paying the loan off in one lump, if you think that is a good use of YOUR funds, might be a teeny, tiny bit more advantageous.
In the grand scheme, try this: Learn how to be a good customer and there is a pretty good chance your dealer will treat you like one.
For the record, I do not work for, nor have I ever, any car company or dealership. I'm a software guy who just happens to love Audis and who has empathy with auto dealers.
Just remember, "Car dealers are sitting ducks. Like newspapers, like retail banks, auto dealers perform a disparate bundle of informational and physical functions. They tell the customers about models and options. They offer test drives. They broker financing. They make a market in second-hand cars. They hold inventory, prepare cars for final delivery, and perform after-sales maintenance, often under warranty of the manufacturer.
These very different activities are bundled together because of the logic of one-stop shopping: Consumers are nervous about the ability to get rid of their old car or get financing. They [may feel] they have few alternative sources of information about models and features. They want the manufacturer to stand behind the servicing. When they find their car, they want it right away [if they are from the US]. Combinations of these motives lead enough consumers to accept enough parts of the bundle to sustain the combined business definition.
This bundling has pricing implications. Once consumers have identified a chosen model, they tend to see price as the only selection criterion, and because this is a major and [perceived] high-risk purchase, they [may] shop around. This forces dealers to compete aggressively on price -- so aggressively that most make little or no margin on the car itself. To offset this, they then [attempt] to extract high[er] margins from the low attention ancillary products and services: Options, packages, financing, trade-in, [pre-paid services] and warranty. As with . . . banks, the logic of the bundle drives the practice of cross-subsidy.
[Today -- but, unfortunately for them, diminishing apace] dealers have [somewhat of] an information advantage over the customer. Customers expend a lot of physical energy trying to correct these [information advantaged] asymmetries, [often] pitting one dealer against another. They then expend emotional energy on haggling. Everybody suffers: asymmetry of information drives up the consumer's cost of search and also increases the dealer's sales costs because so much time is wasted on unsuccessful sales pitches.
There are also compromises in the physical configuration of the dealer network. The ideal network for providing after-sales warranty service would consist of smaller repair shops close to the customer. But the ideal network for holding new-car inventory would be highly centralized: A handful of [very] large regional sites. The actual dealership network is local enough to provide a reasonably convenient shopping experience for people who want to look at new cars. It is regional enough to provide regional efficiency in the management of inventory. But it is a compromise between the varying economics of its constituent activities.
The result [has become] a massively compromised system. (remember: Car dealers are sitting ducks.) As a physical distributor, it is less efficient than direct factory delivery, or regional distribution centers. Its service levels [can be] inferior [and more costly] to those of specialized repair chains [or local, unaffiliated, experts]. As a provider of unbiased product information its value added is [often] negative.
. . . as long as these activities are bundled together (by the customer's economics of searching), none of this matters: The only mainstream competition for an auto dealer is other auto dealers who are just as bad.
However, eliminate the informational glue holding all these functions in a single, compromised business model, and the multiple businesses that emerge can evolve in radically different directions, each driven by its own, very different economics. It is easy to imagine an uncompromised business targeted against each function the dealer performs.
Web sites provided by the car manufacturers, for example, make it eas[ier] for customers to compare the specifications of different cars. And, although a manufacturer's marketing division is hardly an unbiased source of information, a large car company has far more brand exposure than a dealer, and will therefore represent its products more objectively.
[Auto dealers franchise laws, while strong, are also under constant attack, some of it from the manufacturers themselves.]
[The foregoing] deconstruction of the auto dealer [was presented] hypothetically, although [much] of this is already happening. Even (some of) the manufacturers are chipping away at an edifice that [some believe] is on the verge of collapse. Competitively disadvantaged in every component in their service bundle and faced with the melting of whatever glue held that bundle together, dealers are [apparently, ultimately] doomed to [further] deconstruction, somehow, at some point.
But there are countervailing forces holding the structure together. The car manufacturers have an enormous investment in their current dealer networks; indeed the dealer network is a major component in their (currently defined) competitive advantage. It would be easier for them (paradoxically) to blow up the whole structure if they owned it and could take strategic control. But they are tied by the franchise laws, which are administered in the US by the states. And dealers seem to wield inordinate influence in state politics.
These factors may hold things up, twist the course of deconstruction into irrational contortions, and cause the collapse, when it comes to be more precipitous than would otherwise be the case. But they will not prevent it. The smarter manufacturers are already -- cautiously, discreetly beginning to move."
- excepted from "Blown to Bits: How the New Economics of Information Transforms Strategy" - by Philip Evans, Thomas S. Wurster [the bracketed portions were added by me]
"We have met the enemy and he is us." - Pogo
Drive it like you live. - markcincinnati
Let me give just a hint of an insight. I have used AFS, I have used MY OWN bank, I have used the dealer's financing relationships over the nearly 30 Audi's I have owned. I have outright purchased ONLY 1 Audi -- a 5000CS Turbo. Fat lot of good writing a check did for me.
Now, don't get me wrong, being able to write a check for the car did not bring down the wrath of the financial gods upon my house -- but, the owner of the Porsche+Audi dealership at the time told me that when I finance a car using "his finance guy" he gets a "%" of the amount financed. He, therefore, has -- at least potentially -- SOME incentive to persuade me (perhaps with a discount, perhaps with a non-cash "spiff") to finance through his Bank du jour -- three years ago that was "The Royal Bank of Scotland." Who knew?
So, while paying cash may make you perceive (and perception is reality, remember) you were not at a disadvantage, there is at least the possibility that your perception is or was distorted -- you were dreaming.
Is this "cash penalty" a big deal? How would I know -- I have no clue what is a big deal to you. Having said that, keep telling yourself cash is not a disadvantage if you like -- for all I know NOTHING may have been different had you financed or leased or put it on layaway for pity's sake.
However, there is at least the possibility that buying via a loan (that has no prepayment penalty) and then paying the loan off in one lump, if you think that is a good use of YOUR funds, might be a teeny, tiny bit more advantageous.
In the grand scheme, try this: Learn how to be a good customer and there is a pretty good chance your dealer will treat you like one.
For the record, I do not work for, nor have I ever, any car company or dealership. I'm a software guy who just happens to love Audis and who has empathy with auto dealers.
Just remember, "Car dealers are sitting ducks. Like newspapers, like retail banks, auto dealers perform a disparate bundle of informational and physical functions. They tell the customers about models and options. They offer test drives. They broker financing. They make a market in second-hand cars. They hold inventory, prepare cars for final delivery, and perform after-sales maintenance, often under warranty of the manufacturer.
These very different activities are bundled together because of the logic of one-stop shopping: Consumers are nervous about the ability to get rid of their old car or get financing. They [may feel] they have few alternative sources of information about models and features. They want the manufacturer to stand behind the servicing. When they find their car, they want it right away [if they are from the US]. Combinations of these motives lead enough consumers to accept enough parts of the bundle to sustain the combined business definition.
This bundling has pricing implications. Once consumers have identified a chosen model, they tend to see price as the only selection criterion, and because this is a major and [perceived] high-risk purchase, they [may] shop around. This forces dealers to compete aggressively on price -- so aggressively that most make little or no margin on the car itself. To offset this, they then [attempt] to extract high[er] margins from the low attention ancillary products and services: Options, packages, financing, trade-in, [pre-paid services] and warranty. As with . . . banks, the logic of the bundle drives the practice of cross-subsidy.
[Today -- but, unfortunately for them, diminishing apace] dealers have [somewhat of] an information advantage over the customer. Customers expend a lot of physical energy trying to correct these [information advantaged] asymmetries, [often] pitting one dealer against another. They then expend emotional energy on haggling. Everybody suffers: asymmetry of information drives up the consumer's cost of search and also increases the dealer's sales costs because so much time is wasted on unsuccessful sales pitches.
There are also compromises in the physical configuration of the dealer network. The ideal network for providing after-sales warranty service would consist of smaller repair shops close to the customer. But the ideal network for holding new-car inventory would be highly centralized: A handful of [very] large regional sites. The actual dealership network is local enough to provide a reasonably convenient shopping experience for people who want to look at new cars. It is regional enough to provide regional efficiency in the management of inventory. But it is a compromise between the varying economics of its constituent activities.
The result [has become] a massively compromised system. (remember: Car dealers are sitting ducks.) As a physical distributor, it is less efficient than direct factory delivery, or regional distribution centers. Its service levels [can be] inferior [and more costly] to those of specialized repair chains [or local, unaffiliated, experts]. As a provider of unbiased product information its value added is [often] negative.
. . . as long as these activities are bundled together (by the customer's economics of searching), none of this matters: The only mainstream competition for an auto dealer is other auto dealers who are just as bad.
However, eliminate the informational glue holding all these functions in a single, compromised business model, and the multiple businesses that emerge can evolve in radically different directions, each driven by its own, very different economics. It is easy to imagine an uncompromised business targeted against each function the dealer performs.
Web sites provided by the car manufacturers, for example, make it eas[ier] for customers to compare the specifications of different cars. And, although a manufacturer's marketing division is hardly an unbiased source of information, a large car company has far more brand exposure than a dealer, and will therefore represent its products more objectively.
[Auto dealers franchise laws, while strong, are also under constant attack, some of it from the manufacturers themselves.]
[The foregoing] deconstruction of the auto dealer [was presented] hypothetically, although [much] of this is already happening. Even (some of) the manufacturers are chipping away at an edifice that [some believe] is on the verge of collapse. Competitively disadvantaged in every component in their service bundle and faced with the melting of whatever glue held that bundle together, dealers are [apparently, ultimately] doomed to [further] deconstruction, somehow, at some point.
But there are countervailing forces holding the structure together. The car manufacturers have an enormous investment in their current dealer networks; indeed the dealer network is a major component in their (currently defined) competitive advantage. It would be easier for them (paradoxically) to blow up the whole structure if they owned it and could take strategic control. But they are tied by the franchise laws, which are administered in the US by the states. And dealers seem to wield inordinate influence in state politics.
These factors may hold things up, twist the course of deconstruction into irrational contortions, and cause the collapse, when it comes to be more precipitous than would otherwise be the case. But they will not prevent it. The smarter manufacturers are already -- cautiously, discreetly beginning to move."
- excepted from "Blown to Bits: How the New Economics of Information Transforms Strategy" - by Philip Evans, Thomas S. Wurster [the bracketed portions were added by me]
"We have met the enemy and he is us." - Pogo
Drive it like you live. - markcincinnati
Last edited by markcincinnati; 06-01-2017 at 10:03 AM.
06-01-2017, 12:18 PM
#23
Custom build? You mean you ordered colors, fabrics, options, combinations and configurable features that are not on the "Build" page(s) of the audiusa website?
I thought Audi typically didn't allow Custom-builds (in Audi-speak: Audi Exclusive) for at least 6-months after general availability.
My dealer told me there was an Audi Exclusive jumping off charge of $2,500 (meaning that you can get "Purple Pearl" paint if you're willing to pay an additional $2,500, and if you want Purple Leather -- assuming such a thing can be done for a stack of hundred-dollar bills "this thick" -- they'll do that too and quote a special charge for the custom Purple Leather) and that these charges are never discounted.
Realizing, of course, that the dealer may just want to quell haggling for "custom builds," I grant this may be an Audi-Urban-Myth, but prey tell what did, or how did, you get them to accept a custom build AND get 10% off too?
Inquiring minds.
I thought Audi typically didn't allow Custom-builds (in Audi-speak: Audi Exclusive) for at least 6-months after general availability.
My dealer told me there was an Audi Exclusive jumping off charge of $2,500 (meaning that you can get "Purple Pearl" paint if you're willing to pay an additional $2,500, and if you want Purple Leather -- assuming such a thing can be done for a stack of hundred-dollar bills "this thick" -- they'll do that too and quote a special charge for the custom Purple Leather) and that these charges are never discounted.
Realizing, of course, that the dealer may just want to quell haggling for "custom builds," I grant this may be an Audi-Urban-Myth, but prey tell what did, or how did, you get them to accept a custom build AND get 10% off too?
Inquiring minds.
06-01-2017, 12:41 PM
#24
AudiWorld Super User
There is Audi Exclusive for the Q5 and SQ5
06-01-2017, 04:32 PM
#26
AudiWorld Member
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At the time I purchased my 2017 Q5 3.0T in December 2016, Audi had an offer going on where if you financed the vehicle through Audi they would pay the first months payment up to I believe $700. I had the finance department calculate for me what I needed to put as a down payment so the the first payment was as close to $700 as possible. When I received my first months statement it showed $700 of it was paid by Audi. I then immediately contacted Audi Finance and told them I wanted to pay off the balance of my loan. I sent in my check and then received my title in the mail. It could not have been any easier. I have no idea if Audi is currently offering any incentives like what I received back in December. Best of luck.
BTW - when I purchased my vehicle in December they also had another offer for anyone owning a 2001 or newer Lexus, Infiniti, MB, or BMW, where they could get an additional $750 off their purchase. I happen to also own a 2001 Infiniti i30t so was able to take advantage of this to lower my purchase price by an additional $750. The great thing was the Audi dealership I worked with brought both these to my attention as we were working through the details. It was a great buying experience.
BTW - when I purchased my vehicle in December they also had another offer for anyone owning a 2001 or newer Lexus, Infiniti, MB, or BMW, where they could get an additional $750 off their purchase. I happen to also own a 2001 Infiniti i30t so was able to take advantage of this to lower my purchase price by an additional $750. The great thing was the Audi dealership I worked with brought both these to my attention as we were working through the details. It was a great buying experience.
Last edited by auntrout; 06-01-2017 at 04:37 PM.
06-01-2017, 05:43 PM
#27
At the beginning of May, if you were a "returning" Audi buyer, there was an Audi Loyalty Bonus available from AFS ($750). The program changes, you need to find out what it is "at the moment" of your close.
Even if you were NOT using Audi financing, you were offered $500 as an Audi Loyalty Bonus. Once the deal was done, far as I can tell, you could do what ever you felt was prudent.
AFS's deal was not quite as good as other financial entities, you should get ALL of the details possible and then, as they say, "be guided accordingly."
If you want to shop, the thing is, I would assume on any given day, your persistence would work to get you a better interest rate. I would aim for some number UNDER 3%, but there could be reasons to choose something over 3%, especially if you are going to pay off the loan in less than 31 days.
I had NEVER bought a car in my life -- always leased. I purchased this time and I must admit there are days when I feel "it's mine all mine," then there are days that I am "nervous" since I purchased a depreciating asset, whereas leasing seemed the sensible thing to do in terms of always having a new car, in warranty with a "known" cash requirement.
Audi's leasing programs at the introduction of new models are, "roll up your arm and bend over," and, my office is 17 miles from my house, so, what the heck, I bought the thing, this time. After so many years of NEVER buying, I do wonder "what in the wide wide world of sports" I was thinking. But every day, I get more comfortable with the notion.
My friends think I'm nuts because I don't have a house payment, but at least that seems to make sense in terms of the old "balance sheet."
As I almost always say: Drive it like YOU live.
Even if you were NOT using Audi financing, you were offered $500 as an Audi Loyalty Bonus. Once the deal was done, far as I can tell, you could do what ever you felt was prudent.
AFS's deal was not quite as good as other financial entities, you should get ALL of the details possible and then, as they say, "be guided accordingly."
If you want to shop, the thing is, I would assume on any given day, your persistence would work to get you a better interest rate. I would aim for some number UNDER 3%, but there could be reasons to choose something over 3%, especially if you are going to pay off the loan in less than 31 days.
I had NEVER bought a car in my life -- always leased. I purchased this time and I must admit there are days when I feel "it's mine all mine," then there are days that I am "nervous" since I purchased a depreciating asset, whereas leasing seemed the sensible thing to do in terms of always having a new car, in warranty with a "known" cash requirement.
Audi's leasing programs at the introduction of new models are, "roll up your arm and bend over," and, my office is 17 miles from my house, so, what the heck, I bought the thing, this time. After so many years of NEVER buying, I do wonder "what in the wide wide world of sports" I was thinking. But every day, I get more comfortable with the notion.
My friends think I'm nuts because I don't have a house payment, but at least that seems to make sense in terms of the old "balance sheet."
As I almost always say: Drive it like YOU live.
Last edited by markcincinnati; 06-01-2017 at 05:49 PM.
06-02-2017, 12:13 AM
#28
AudiWorld Member
Custom build? You mean you ordered colors, fabrics, options, combinations and configurable features that are not on the "Build" page(s) of the audiusa website?
I thought Audi typically didn't allow Custom-builds (in Audi-speak: Audi Exclusive) for at least 6-months after general availability.
My dealer told me there was an Audi Exclusive jumping off charge of $2,500 (meaning that you can get "Purple Pearl" paint if you're willing to pay an additional $2,500, and if you want Purple Leather -- assuming such a thing can be done for a stack of hundred-dollar bills "this thick" -- they'll do that too and quote a special charge for the custom Purple Leather) and that these charges are never discounted.
Realizing, of course, that the dealer may just want to quell haggling for "custom builds," I grant this may be an Audi-Urban-Myth, but prey tell what did, or how did, you get them to accept a custom build AND get 10% off too?
Inquiring minds.
I thought Audi typically didn't allow Custom-builds (in Audi-speak: Audi Exclusive) for at least 6-months after general availability.
My dealer told me there was an Audi Exclusive jumping off charge of $2,500 (meaning that you can get "Purple Pearl" paint if you're willing to pay an additional $2,500, and if you want Purple Leather -- assuming such a thing can be done for a stack of hundred-dollar bills "this thick" -- they'll do that too and quote a special charge for the custom Purple Leather) and that these charges are never discounted.
Realizing, of course, that the dealer may just want to quell haggling for "custom builds," I grant this may be an Audi-Urban-Myth, but prey tell what did, or how did, you get them to accept a custom build AND get 10% off too?
Inquiring minds.
Sorry, Didn't mean to say "special build". Normal options here on my side.
SQ5 Prestige with DAP, 21" wheel's, and S sport package. Color's are pretty normal Navarra Blue with black interior.
With the 10% discount the lease number's definitely reflect I was shocked when I saw such low numbers. Trust me definitely was not expecting that big of a discount right off the bat. Maybe because I live in Michigan and they want to earn my business?
06-02-2017, 05:33 AM
#29
fast16: It's not too late to change your order back to the 20" wheels -- living in Michigan (at least as bad as Ohio, my hometown) you are likely to find potholes are really not your friends. Unsprung weight will increase, cornering will likely be not as good, ride, interior noise, tire tread-life will be negatively impacted and the necessity of Winter Wheels & Tires will rear its expensive head. All this goodness in the 21" wheels and tires, plus they CHARGE MORE for them!
A bent 21" wheel is breathtakingly expensive to replace, too.
A bent 21" wheel is breathtakingly expensive to replace, too.
06-02-2017, 05:41 AM
#30
AudiWorld Member
fast16: It's not too late to change your order back to the 20" wheels -- living in Michigan (at least as bad as Ohio, my hometown) you are likely to find potholes are really not your friends. Unsprung weight will increase, cornering will likely be not as good, ride, interior noise, tire tread-life will be negatively impacted and the necessity of Winter Wheels & Tires will rear its expensive head. All this goodness in the 21" wheels and tires, plus they CHARGE MORE for them!
A bent 21" wheel is breathtakingly expensive to replace, too.
A bent 21" wheel is breathtakingly expensive to replace, too.