By Kevin Miller
My sister in law, Jill, recently needed to replace her worn-out, decade-old Mazda. She wanted a small, fuel efficient five door hatchback. Knowing I’m a “car guy” (and being fairly un-interested in cars herself), she asked me to help her figure out what cars should be on her shopping list and to go shopping with her. I did some research for her, which led to us test-driving the Honda Fit, Scion xD, and Nissan Versa. She had also wanted to drive the Suzuki SX4 Crossover, but the fact that Suzuki’s nearest dealer was 40 minutes away resulted in the Suzuki being crossed off of the list. After driving and deliberating, she decided on a Scion xD with automatic transmission.
We had originally been planning on a month-end shopping trip in an attempt to get a better deal, but Scion’s Pure Price scheme made doing so a non-issue. While we had test-driven the xD at a suburban Toyota/Scion dealership, we didn’t end up returning there because the sales reps were high-pressure and condescending, and the whole place had a dishonest feel to it. We ended up finding the Nautical Blue Metallic xD she wanted at a downtown Seattle Toyota/Scion store (which is known for its no-commission sales force) using the store’s online inventory tool. We tried on a Saturday morning to make an appointment at the dealership for that afternoon, but only got to leave voicemail messages, and also got no response from an emailed request. So we simply showed up at the store to buy the car.
Fortunately, we were greeted promptly and introduced to the dealership’s Scion specialist, a knowledgeable and friendly woman who confirmed that the blue xD was in inventory and led us out for a test drive to confirm that Jill still wanted to buy the xD. There was never any pressure, and none of the people at the store had the slimy aura we had experienced at the first Toyota dealership.
Because of Scion’s Pure Price policy, we went in essentially knowing how much the transaction would cost: $16120 for the car, plus around 9 percent state sales tax and a couple hundred dollars for licensing fees. Jill had saved up money for the car, so there was no financing to worry about. On the typically-dreaded trip to the F&I office, I figured we were in for a sign-and-drive, in-and-out experience. While we were in the F&I office longer than I had anticipated, it was actually not a bad thing.
The F&I Manager of the dealership efficiently prepared all of the forms, and then started talking to us about pre-paid maintenance and extended warranties. My guard was up- I remembered having spent way too much for an extended warranty on my new 2001 Saab 9-5 in the F&I office at an Oregon Saab dealership before I knew anything about vehicle buying. I also remembered how I had saved a ton of money on an extended warranty for my Volvo V70 three years later by shopping around. I assumed we would buy Jill’s extended warranty in the same way. As both the Saab and the Volvo I had purchased came with maintenance plans included, I had never previously looked in to prepaid maintenance plans.
We ended up learning something that I hadn’t discovered in any of my Scion research- Scion’s Pure Price structure extends to their available interior/exterior protection services, pre-paid maintenance and extended warranty pricing. The same maintenance package for a Yaris or Corolla, which includes eleven service visits (having an MSRP of approximately $2400 if all purchased at today’s prices) was priced around $1450, but it cost $990 for the Scion. Too, the Toyota-branded extended warranty (7 year, 75,000 miles) was almost $800 less expensive for the xD than it would have been for a Corolla or Yaris; and within $100 of the aftermarket plan I had priced (though my plan lacked the roadside assistance that the Toyota-branded plan includes). The dealership’s business manager was skilled at selling both the maintenance and warranty products, and managed to sell my sister-in-law both the extended warranty and the service plan.
During the time we were discussing both of these plans with the business manager, he candidly shared that the dealership makes a lot more money selling those same plans to Toyota customers than to Scion buyers. The dealership’s profit on the xD’s extended warranty was just $240, rather than the $995 they make selling the same plan to Toyota customers. He told us that Scion caps the price on both of those plans, including them in the marque’s Pure Price philosophy. That was unexpected, and appreciated.
The experience of buying a new car can often be stressful and confusing, fraught with worries about getting ripped off, both on vehicle price negotiations and on the purchase of products such as prepaid maintenance and extended warranty. Buying a new Scion, much of that worry is taken away because of the Pure Price menu pricing offered on both vehicles and service plans. While it is fairly well known that Scion vehicles are priced this way, I found no marketing material mentioning Pure Pricing for service plans. With such pricing reducing stress when buying a car, it seems that Scion is missing out on a golden opportunity to attract customers by marketing the Pure Price service plans as well.
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