Dealer Markups (Stateside)?

[SloAlfa]

On the fence! My dealer from New Jersy was to order my car in March, didn't happen. Now April. Got an email from him Saturday afternoon was ready to order (not sure since it was 11 PM in GB) and oh by the way wants $20,000.00 for MARK-UP. Whoa this had never been discussed. I think this isn't right and just greed with the dealer. Talking delivery date Nov / Dec 2022. Which may mean Jan / Feb? Summer tires , it would properly have it shipped to Maryland.
So I am taking the day to rethink this whole thing over.

Thinking of tapping out for this same reason. You can say what you want about other brands such as Porsche. At least they are up front about the whole thing and you can decide BEFORE you order. Issue I have is that you put a deposit down and wait several months only to be told when it’s down to order time there is a “markup”. Meanwhile passing up other cars that could have been purchased but waited.

 

[4380r]

Personally I would reach out to lotus HQ and discuss the matter with them. Many dealerships in the US are NOT marking up the price…
1. Lotus will help you get a Emira at the retail.
2. Dealership may be forced to change its strategy.. I could lose allocations which would have a devastating effect on their Business.

While Lotus can clamp down somewhat on price gouging on the part of the dealers, it's highly unlikely they will pressure dealers to not do it at all. The dealers are franchisees, they run their own business. They put together business models that work for them, which includes covering the cost of doing business in their respective regions.

What one is more likely to see is that most dealers won't add markup for initial depositors, when someone drops out, rather than moving everybody up a notch, they will 'claim' that spot as theirs, add the markup, and shop it down the line, offering placeholders to either keep their place in line, or move up by paying the ADM. Failing that, they will shop the spot to people not even in line.

While there may be a few dealers that are Lotus only, for most Lotus is an add-on brand. One they can do without. Lotus needs dealers more than the dealers need Lotus.

If past is prologue, the Emira will be a cash cow for the first year, maybe two. Once everyone who wants one has one, you will see dealers dropping Lotus fairly quickly.

Happened with the Elise. While they are very different cars: the Elise being very niche and the Emira more mainstream, the Emira has to deal with something the Elise didn't: competition. Good or bad, there simply wasn't anything like the Elise on the market.

The Emira has to compete with established brands and models for Porsche, Chevy, BMW, etc. So if the dealerships find the cost of carrying the brand isn't offset by revenue generated, they will drop the marque.

 

[Green]

While Lotus can clamp down somewhat on price gouging on the part of the dealers, it's highly unlikely they will pressure dealers to not do it at all. The dealers are franchisees, they run their own business. They put together business models that work for them, which includes covering the cost of doing business in their respective regions.

What one is more likely to see is that most dealers won't add markup for initial depositors, when someone drops out, rather than moving everybody up a notch, they will 'claim' that spot as theirs, add the markup, and shop it down the line, offering placeholders to either keep their place in line, or move up by paying the ADM. Failing that, they will shop the spot to people not even in line.

While there may be a few dealers that are Lotus only, for most Lotus is an add-on brand. One they can do without. Lotus needs dealers more than the dealers need Lotus.

If past is prologue, the Emira will be a cash cow for the first year, maybe two. Once everyone who wants one has one, you will see dealers dropping Lotus fairly quickly.

Happened with the Elise. While they are very different cars: the Elise being very niche and the Emira more mainstream, the Emira has to deal with something the Elise didn't: competition. Good or bad, there simply wasn't anything like the Elise on the market.

The Emira has to compete with established brands and models for Porsche, Chevy, BMW, etc. So if the dealerships find the cost of carrying the brand isn't offset by revenue generated, they will drop the marque.

Nice explanation!

 

[digilotus]

I don’t see the practice of ADM being the big issue. It’s the surprise factor - they should be up front about it so customers can choose rather than holding them hostage.

As for $20k ADM on an Emira, it’s about $25k on a GT4 and $75k on a GT4 RS. 😬

 

[SloAlfa]

Nice explanation!

Meh, mostly true. The only thing that is not true and happening now is dealers ARE charging markup to original deposit holders. They are getting around the argument because there was no universal deposit tracking system put in place by Lotus. So dealers are calling saying. “Aw man, you didn’t make the original FE cut BUT, someone just dropped out and I’ll get you in for 20k”.

 

[digilotus]

Meh, mostly true. The only thing that is not true and happening now is dealers ARE charging markup to original deposit holders. They are getting around the argument because there was no universal deposit tracking system put in place by Lotus. So dealers are calling saying. “Aw man, you didn’t make the original FE cut BUT, someone just dropped out and I’ll get you in for 20k”.

I thought Lotus were checking against the reservation name and potentially removing allocations if not assigned to the original deposit holder but I could well be wrong.

 

[SloAlfa]

I thought Lotus were checking against the reservation name and potentially removing allocations if not assigned to the original deposit holder but I could well be wrong.

They may be but they never tracked the order you put your deposit in. They can go down the list and call ALL deposit holders with a valid deposit confirmation to get their markeup. Make sense? All they have to do is say. Damn, you didn’t make the first allocation cut for a FE but someone just canceled and you were next on the list but you have to pay $20k. They can do that all day long because there was no transparency in allocation number vs total allocations the dealers get. Most dealers took in way more deposits then allocations so that rule of checking against the confirmation number is too little too late attempt to show some organization by lotus. It’s a “feel good” rule internally to lotus and the dealers are giving them the finger (and customers).

 

[SloAlfa]

I don’t see the practice of ADM being the big issue. It’s the surprise factor - they should be up front about it so customers can choose rather than holding them hostage.

As for $20k ADM on an Emira, it’s about $25k on a GT4 and $75k on a GT4 RS. 😬

Agree on the surprise factor! Could not agree more.

The unknown is the depreciation percentage on the Emira when compared to the GT4 and RS. They have ADH but may be able to absorb it from a depreciation % standpoint. Most GT4s out there (no matter the year) are selling second hand over what original sticker was and continue to hold.

 

[TomE]

They may be but they never tracked the order you put your deposit in. They can go down the list and call ALL deposit holders with a valid deposit confirmation to get their markeup. Make sense? All they have to do is say. Damn, you didn’t make the first allocation cut for a FE but someone just canceled and you were next on the list but you have to pay $20k. They can do that all day long because there was no transparency in allocation number vs total allocations the dealers get. Most dealers took in way more deposits then allocations so that rule of checking against the confirmation number is too little too late attempt to show some organization by lotus. It’s a “feel good” rule internally to lotus and the dealers are giving them the finger (and customers).

Dealers were required to submit details of each deposit to Lotus.

I agree the dealer could work down their list telling people they need to pay markup to get a V6 FE and Lotus can’t see that from the order sequence. Effectively the dealer is sorting their list into people who want a V6 FE and people who are waiting for i4 or Base V6. The dealer just has to tell Lotus a bunch of people wanted V6 FE and a bunch didn’t. The deposit and order info will align with that.

What’s harder is for someone who didn’t previously place a deposit to now step in and pay a markup to get an early slot. They’d have to place a deposit now, which Lotus “could” see and determine is recent. I say “could” because it relies on Lotus policing it. The dealer could argue someone cancelled a spot and they sold it to someone new off the street. Again, hard for Lotus to control this.

Dealers can largely control this to their own agenda. Lotus can only do something about it if people tell them what’s happening, because the dealers certainly won’t.

 

[SloAlfa]

Dealers were required to submit details of each deposit to Lotus.

I agree the dealer could work down their list telling people they need to pay markup to get a V6 FE and Lotus can’t see that from the order sequence. Effectively the dealer is sorting their list into people who want a V6 FE and people who are waiting for i4 or Base V6. The dealer just has to tell Lotus a bunch of people wanted V6 FE and a bunch didn’t. The deposit and order info will align with that.

What’s harder is for someone who didn’t previously place a deposit to now step in and pay a markup to get an early slot. They’d have to place a deposit now, which Lotus “could” see and determine is recent. I say “could” because it relies on Lotus policing it. The dealer could argue someone cancelled a spot and they sold it to someone new off the street. Again, hard for Lotus to control this.

Dealers can largely control this to their own agenda. Lotus can only do something about it if people tell them what’s happening, because the dealers certainly won’t.

Agree on all points as usual Tom. Just wish I had as much faith in lotus and the dealers as you did.

I’ll send my details along to Lotus if I decide to tap out. I can and will post the details here also. . Can’t before because I’ll lose my spot for sure, that’s what I was told….

Again, this has been beat to death. A better, more organized ordering process could have kept this to a minimum.

At the end of the day. The car market won’t be like this forever and the manufacturers and dealers that did it right will profit in the long run, while some gain short term.

 

[Porter]

Sorry you're dealing with Victory Lotus. I got the same phone call and canceled. They told me they already have people lined up to pay 20k. Clearly they don't and are continuing their trend of lying to customers. As other said this should be reported to Lotus North America as they would like to know this information.

This place? It looks super shady. I can't believe these people qualify as a dealer for Lotus. There isn't even any signage. Maybe that's updated now, but this Street View is from July of 2021, so it's not an "old" image. And the Enterprise Rent-A-Car is still there.

[edit] They also seem to be complete assholes.

 

[PaulP]

Meh, mostly true. The only thing that is not true and happening now is dealers ARE charging markup to original deposit holders. They are getting around the argument because there was no universal deposit tracking system put in place by Lotus. So dealers are calling saying. “Aw man, you didn’t make the original FE cut BUT, someone just dropped out and I’ll get you in for 20k”.

Yes this is exactly what happened to me and who knows if it’s bs or true

 

[VL3X]

This place? It looks super shady. I can't believe these people qualify as a dealer for Lotus. There isn't even any signage. Maybe that's updated now, but this Street View is from July of 2021, so it's not an "old" image. And the Enterprise Rent-A-Car is still there.

View attachment 4422


[edit] They also seem to be complete assholes.
View attachment 4423

That street view is out of date. They moved from Princeton to New Brunswick within the last year or so I think.

 

[VL3X]

This is why dealers need social media managers to monitor these reviews and forum talk and give them an opportunity to respond and improve.

 

[LotusB]

While Lotus can clamp down somewhat on price gouging on the part of the dealers, it's highly unlikely they will pressure dealers to not do it at all. The dealers are franchisees, they run their own business. They put together business models that work for them, which includes covering the cost of doing business in their respective regions.

What one is more likely to see is that most dealers won't add markup for initial depositors, when someone drops out, rather than moving everybody up a notch, they will 'claim' that spot as theirs, add the markup, and shop it down the line, offering placeholders to either keep their place in line, or move up by paying the ADM. Failing that, they will shop the spot to people not even in line.

While there may be a few dealers that are Lotus only, for most Lotus is an add-on brand. One they can do without. Lotus needs dealers more than the dealers need Lotus.

If past is prologue, the Emira will be a cash cow for the first year, maybe two. Once everyone who wants one has one, you will see dealers dropping Lotus fairly quickly.

Happened with the Elise. While they are very different cars: the Elise being very niche and the Emira more mainstream, the Emira has to deal with something the Elise didn't: competition. Good or bad, there simply wasn't anything like the Elise on the market.

The Emira has to compete with established brands and models for Porsche, Chevy, BMW, etc. So if the dealerships find the cost of carrying the brand isn't offset by revenue generated, they will drop the marque.

What Lotus can do is move the allocation to a different dealer. When the deposit information was sent to Lotus it was submitted with the following info:

So Lotus has a copy of everyone's Signed Buyer's Agreement, hopefully everyone has an agreement and it says MSRP on it. I asked for it to be included on all three of my deposits with Lotus.

Either way, you're right that dealers are franchises and can do their own thing, but that's the case with their own inventory OR potentially a cancelled spot. They can't do that kind of bait-and-switch with a pre-order, can they? That's the kind of action which should be reported and not tolerated. It ultimately hurts Lotus as a brand. This is something both Ford and Chevy have been announcing and are making/have threatened changes in allocation as a result.

TL;DR: I'd contact Lotus HQ for sure about this, even if nothing is done for you specifically, Lotus should have evidence about how a dealer is affecting their brand.

 

[MajHall04]

I have a deposit for the I4 at Victory. I truly hope this ADM debacle is nixed by the time my order comes up in 2023. I have been a Porsche, BMW and Mercedes guy. I am very excited about the Emira but my excitement is not worth and extra 20K. Lotus needs to flourish.

 

[VL3X]

So Victory Lotus not only lost an Emira sale by not responding when I called back in July to make a deposit (technically 2 Emira sales, since my friend and I ended up driving an hour further to Summit), but now they lost another sale by not even bothering to respond to my inquiry to purchase some Lotus lifestyle merchandise. It's like they can't even be bothered. Take my money!

 

[MajHall04]

On the fence! My dealer from New Jersy was to order my car in March, didn't happen. Now April. Got an email from him Saturday afternoon was ready to order (not sure since it was 11 PM in GB) and oh by the way wants $20,000.00 for MARK-UP. Whoa this had never been discussed. I think this isn't right and just greed with the dealer. Talking delivery date Nov / Dec 2022. Which may mean Jan / Feb? Summer tires , it would properly have it shipped to Maryland.
So I am taking the day to rethink this whole thing over.

I’m in the same boat and I believe with the same dealer and I also Live in Maryland. I want the i4 so I have some time. I hope they change but I’m send emails out now to get on a list elsewhere. Crappy sales model.

 

[MajHall04]

I am #5 on a local Z06 list at MSRP. I will wait but I might just cancel the emira since they want 20k ADM. i would have been the “ new” person lotus is seeking but the dealership is screwing them.

 

[MajHall04]

Just got on the Gator list and now have to cancel my order at the other spot!