Financing Institutions

[minn19]

No they don't typically do that for the manufacturer financing, but they WILL try to push and say "let's check and see if we can do better with our lenders". It's universal and they all do it, because as @anmut said they get kickbacks, etc...

Yup, I wasn’t disputing that. At least the consumer has a choice at the manufacturers offer nationally or the dealers local lender offer (assuming state law allows it). I’ve benefited form that competition on past car deals.

I’ve only shopped for one other boat and that was a Lund/Alumacraft fishing boat. They didn’t do anything like this. Yamaha is the only company I’ve seen do something like this on a such an expensive product.

 

[F.M.]

I would agree with this. Most of the time dealers get kickbacks from their financing offers. However walking in the door with an approved loan and a set amount gives you more advantage to get the price you want - however in the current times this is probably doesn't apply.

No they don't typically do that for the manufacturer financing, but they WILL try to push and say "let's check and see if we can do better with our lenders". It's universal and they all do it, because as @anmut said they get kickbacks, etc...

With major manufacturers financing, the rates are usually advertised and published for everyone to see, so it's hard to give a customer a rate other than the advertised one.

With outside financing sources, the dealers are free to mark up a rate, usually anywhere from .5% to as much as 2%, and still manage to be fairly competitive with the manufactures. The banks then cut the dealer a check for the markup. 1-2% on a $50k boat/vehicle adds up to a pretty large chunk of change for the dealer every month.

 

[F.M.]

Asking dealers to stick to a territory, adds value to the brand. Less competition between dealers for the same brand helps them hold profit margin on new boats and helps keep resale value of used boats up too.

 

[minn19]

Asking dealers to stick to a territory, adds value to the brand. Less competition between dealers for the same brand helps them hold profit margin on new boats and helps keep resale value of used boats up too.

Why would it help keep used boat values up? I’m not sure I agree with that as used boat (car etc) values are based on a number of market factors (as you obviously know).

 

[F.M.]

Why would it help keep used boat values up? I’m not sure I agree with that as used boat (car etc) values are based on a number of market factors (as you obviously know).

Yes, multiple market factors are involved for determining used vehicle values. The number one factor is availability. By limiting the amount of new boats a dealer can order and sell, availability stays low and value stays high. Less new boats of a specific brand/model equals less used boats.

When banks make loans on used boats/vehicles, they need a value to decide how much to lend. The most common way for a bank to get a value for a used vehicle is from NADA. NADA is basically an indirect way of just asking a dealer. Dealers are the ones that set those NADA values. X# of dealers are polled nation wide about values and those numbers are used to come up with the published values. If every new boat/vehicle were discounted heavily, used values would have to go down as well. Dealers need the value gap between new and used to stay proportionate.

 

[HangOutdoors]

Dealers need the value gap between new and used to stay proportionate.

That is the trick. Throw that off and that Gap widens, consumers may buy more used and those who bought new are riding the negative equity a lot longer and won't buy new or trade in. Or ultimately look for another Brand of Boat that has higher residual values. Then that has a downward pressure on New values and New sales, which could hinder innovation and change. It is what one of our clients deals with all the time in a different industry. They want to keep the spread where it makes sense to buy New as well as trade in and up but still show value and be appealing to buy used. That way they have new customers, returning customers and those that buy used to be introduced into the brand. Flood the market and it becomes a shit show.

 

[F.M.]

It's all one big hustle that we have no choice but to participate in. The best thing one can do when purchasing used vehicles is do your homework and don't be afraid to travel. When purchasing new, ask about rebates, dealer incentives, and holdback. Even if you don't know what you're talking about, it'll add some pressure to the sales team to work with you more to earn the sale. When trading ask the dealer to show you real numbers based on ACV of the trade instead of an inflated trade value.

To the dealers, it's all a game, and it's fun when customers don't know they're playing. When the customer plays the game back, it takes all the fun away.

 

[minn19]

Yes, multiple market factors are involved for determining used vehicle values. The number one factor is availability. By limiting the amount of new boats a dealer can order and sell, availability stays low and value stays high. Less new boats of a specific brand/model equals less used boats.

When banks make loans on used boats/vehicles, they need a value to decide how much to lend. The most common way for a bank to get a value for a used vehicle is from NADA. NADA is basically an indirect way of just asking a dealer. Dealers are the ones that set those NADA values. X# of dealers are polled nation wide about values and those numbers are used to come up with the published values. If every new boat/vehicle were discounted heavily, used values would have to go down as well. Dealers need the value gap between new and used to stay proportionate.

Availability is one thing, but I'm not sure if it is the biggest factor all the time. Are you saying Yamaha limits how many boats they manufacture every year with this in mind? Because that is the only way to truly limit the amount of boats on the market. It doesn't matter if you push them all through one dealer like we basically have here in MN or multiple ones.

If you make a solid reliable product (and back it up) which Yamaha does it will create desire for said product (not just their boats) thus keeping values up. This has been shown many times with mass produced vehicles or boats (F150s/Camrys/Tacomas/Lund/Alumacraft boats) etc etc.

Any way, it is obvious I think Yamaha and their dealers make some things unnecessarily difficult that causes negative feelings towards the brand, which isn't good for any business in the long term.

 

[HangOutdoors]

If you make a solid reliable product which Yamaha does it will create desire for said product (not just their boats) thus keeping values up. This has been shown many times with mass produced vehicles (F150s/Camrys/Tundras/Lund/Alumacraft boats) etc etc.

You are absolutely correct, but it also depends on the product as well. Vehicles are one thing. A luxury item like a 40-50k + boat is another. Plus lets be honest. They basically give away the cars and trucks now, especially on leases. I can basically get a 55k+ F150 for under $300 a month for two years. That is ridiculous. That makes a huge difference. People payment shop a lease vehicle that will be upside down to the bank or MFG at the end based on the turn in price. It is a different environment. Plus god forbid you are over miles a lot at the end of the lease. They just keep pushing the negative equity down the road. GM Financial and GM got burned on that a while ago big time. They need to churn those Auto's and Truck's to survive, they created their own mess. Plus the more they make and show up at Dealerships, the better the leases and payments need to be.

 

[F.M.]

Availability is one thing, but I'm not sure if it is the biggest factor all the time. Are you saying Yamaha limits how many boats they manufacture every year with this in mind? Because that is the only way to truly limit the amount of boats on the market. It doesn't matter if you push them all through one dealer like we have here in MN or multiple ones.

If you make a solid reliable product which Yamaha does it will create desire for said product (not just their boats) thus keeping values up. This has been shown many times with mass produced vehicles (F150s/Camrys/Tundras/Lund/Alumacraft boats) etc etc.

Any way, it is obvious I think Yamaha and their dealers make some things unnecessarily difficult that causes negative feelings towards the brand, which isn't good for any business in the long term.

I agree that things are made difficult that don't need to be.

Yes, I'm saying yamaha produces X amount of boats based on the previous years sales. Dealers are allotted a set number of units that they can order based on their previous years sales. Dealers can take the full allotment or order less, but not more. The dealers orders are delivered on a set schedule throughout the year based on when they choose to have them delivered. If a dealer would like more inventory, they can use the Yamaha dealer system to locate units and purchase/trade with other dealers. The can even just transfer a unit through their floorplan, and never even have to cut a check. The only way a dealer can get a larger order allotment next year is to somehow aquire more units from other dealers. But every dealer wants more units, so that is usually tough to do. Sometime around July/August/Sept, Yamaha will offer a second order period for current year models that are left in their inventory, at a pretty decent discount off of invoice, or with an extra backend rebate, or holdback. It's a gamble, but ordering more units this way can get you a larger order next year, if you can sell through them quickly enough.

 

[minn19]

You are absolutely correct, but it also depends on the product as well. Vehicles are one thing. A luxury item like a 40-50k + boat is another. Plus lets be honest. They basically give away the cars and trucks now, especially on leases. I can basically get a 55k+ F150 for under $300 a month for two years. That is ridiculous. That makes a huge difference. People payment shop a lease vehicle that will be upside down to the bank or MFG at the end based on the turn in price. It is a different environment. Plus god forbid you are over miles a lot at the end of the lease. They just keep pushing the negative equity down the road. GM Financial and GM got burned on that a while ago big time. They need to churn those Auto's and Truck's to survive, they created their own mess. Plus the more they make and show up at Dealerships, the better the leases and payments need to be.

This isn't a whole lot different from what a lot of people do with boats. Many are upside down for years paying very low payments/long terms on expensive boats and can't get out of them when they want to sell/trade them. If Yamaha and others had lease options, I can guarantee it would be a very popular one. Yet there is still strong demand for a lot (not all) of those leased used cars and trucks.

Again, there are many other boat manufacturers that don't do this and have very strong resale values as well.

 

[minn19]

I agree that things are made difficult that don't need to be.

Yes, I'm saying yamaha produces X amount of boats based on the previous years sales. Dealers are allotted a set number of units that they can order based on their previous years sales. Dealers can take the full allotment or order less, but not more. The dealers orders are delivered on a set schedule throughout the year based on when they choose to have them delivered. If a dealer would like more inventory, they can use the Yamaha dealer system to locate units and purchase/trade with other dealers. The can even just transfer a unit through their floorplan, and never even have to cut a check. The only way a dealer can get a larger order allotment next year is to somehow aquire more units from other dealers. But every dealer wants more units, so that is usually tough to do. Sometime around July/August/Sept, Yamaha will offer a second order period for current year models that are left in their inventory, at a pretty decent discount off of invoice, or with an extra backend rebate, or holdback. It's a gamble, but ordering more units this way can get you a larger order next year, if you can sell through them quickly enough.

So it sounds like Yamaha doesn't artificially keep manufacturing numbers low. They will build as many as they think they can sell. They watch out for their bottom line and not really the used market/owners bottom line, which is understandable as they are a for profit company of course.

It'll be interesting to see how many Yamaha decides to churn out for 2021 coupled with what a lot of people think (including me) will be a number of very nice used 2019/2020s for sale if things get back to normal non 'Rona times.

 

[F.M.]

So it sounds like Yamaha doesn't artificially keep manufacturing numbers low. They will build as many as they think they can sell. They watch out for their bottom line and not really the used market/owners bottom line, which is understandable as they are a for profit company of course.

It'll be interesting to see how many Yamaha decides to churn out for 2021 coupled with what a lot of people think (including me) will be a number of very nice used 2019/2020s for sale if things get back to normal non 'Rona times.

If I implied that Yamaha was trying to control values of used boats it wasn't intentional. They are doing what's best for the company. Used boat values are just a side effect their sales model/strategy. It's good for owners, not for those looking to purchase.

 

[Daddy Fat Sacs]

Wow didn’t expect this to turn the way it did but I do appreciate the context from everyone. I would like to think I’m pretty knowledgeable when it comes to sales as that’s what I do for a living and understand the logistics. The one thing I don’t agree on is Yamaha handcuffing a potential customer; especially when you are a national manufacturing brand. To me it should t matter where your sale comes from as long as it’s sold. I’ve been online now looking at national lenders and honestly not finding much of anything that’s promising. Like not even close. I spoke with the out of state dealer again and he was adamant about using one of their local lenders with a substantial down payment which isn’t going to happen. So.....this whole thing may have just been a waste of time and I’m back at square one

 

[minn19]

Wow didn’t expect this to turn the way it did but I do appreciate the context from everyone. I would like to think I’m pretty knowledgeable when it comes to sales as that’s what I do for a living and understand the logistics. The one thing I don’t agree on is Yamaha handcuffing a potential customer; especially when you are a national manufacturing brand. To me it should t matter where your sale comes from as long as it’s sold. I’ve been online now looking at national lenders and honestly not finding much of anything that’s promising. Like not even close. I spoke with the out of state dealer again and he was adamant about using one of their local lenders with a substantial down payment which isn’t going to happen. So.....this whole thing may have just been a waste of time and I’m back at square one

I got a cashiers check from a local lender (CU) and brought it to the dealer. Is that something you are willing to try and do? Otherwise maybe look at a site like lending tree and see if they have anything helpful.

Or I'm reading this wrong and the dealer only wants to take payment from that bank? If so they are really trying to make a killing on this sale in all ways.

 

[Dixie Highway]

I spoke with the out of state dealer again and he was adamant about using one of their local lenders with a substantial down payment which isn’t going to happen.

To me that screams the fact that he's trying to line his pocket on the back end of the deal. I guess you could go one of two ways, tell him thanks but you don't appreciate being limited to a lender of his choosing, or you could go to Yamaha yourself and ask if they appreciate dealers pushing customers to outside lenders. My guess is that they don't, so maybe he'll get a phone call from them? Either one doesn't necessarily get you a boat sooner though.

 

[Daddy Fat Sacs]

I got a cashiers check from a local lender (CU) and brought it to the dealer. Is that something you are willing to try and do? Otherwise maybe look at a site like lending tree and see if they have anything helpful.

Or I'm reading this wrong and the dealer only wants to take payment from that bank? If so they are really trying to make a killing on this sale in all ways.

That option of using my own lender is there, unfortunately all of my local CU are not meeting my criteria for both rates and term lengths.

To me that screams the fact that he's trying to line his pocket on the back end of the deal. I guess you could go one of two ways, tell him thanks but you don't appreciate being limited to a lender of his choosing, or you could go to Yamaha yourself and ask if they appreciate dealers pushing customers to outside lenders. My guess is that they don't, so maybe he'll get a phone call from them? Either one doesn't necessarily get you a boat sooner though.

I mean I can, but like you stated it won’t get me in a boat any faster at this point. I did contact Yamaha this morning and got the run around without a straight answer on any of my questions so