How Come Automakers Offer Different Deals In Different Regions?

Illustration for article titled How Come Automakers Offer Different Deals In Different Regions?
Photo: Alanis King/Jalopnik

As Jalopnik’s resident car-buying expert and a professional car shopper, I get emails. Lots of emails. I’ve picked a few of your questions and will try to help out. This week we are discussing regional deals and how to potentially manage a community “shared” vehicle.

First up, why do some brands offer better deals in some areas compared with others?

“I was just looking at lease deals and was struck by the difference in rates based on geography. Admittedly, different amounts due at signing, but not enough to explain the discrepancies.

For example, a 2020 Sonata Hybrid per US News:

- $129 per month for 36 months with $3997 due at signing - a total of $8641 for the term of the lease... if you’re in the Northeast.

- $239 per month for 36 months with $2699 due at signing - a total of $11303 for the term: $2662, or 30.8% more than the first option

My question is somewhere around why it’s SO different by region. Do they just have a glut of these cars in the Northeast? What are the requirements to take advantage of these offers? For $2662 (not that I’m looking for a Sonata, but as an example) I’ll gladly pick up a car away from home. “

Advertisement

The likely explanation is that the dealer cash and other rebates are more aggressive in that region because there is excess inventory that needs to be cleared out. Also, automakers will sometimes direct better programs to certain metro areas over others as part of their marketing strategy. In terms of taking advantage of these deals, it could be worth traveling, or even having a car shipped, if the price difference is great enough.

However, in some instances the rebate and incentive programs apply only to transactions by people who are registering the car within that region. For the most part, the Japanese and Korean automakers don’t restrict out-of- region customers from taking advantage of discount programs, though I have found exceptions to that. The domestic brands typically will apply the rebates/programs based on the customer location regardless of where the dealer is. Bottom line: it’s critical that when you contact the dealers, you inform them of your location so they can run the appropriate program that would apply to you.

Next, what is the best way to manage a car purchase done by a group?

“I have a bit of an unusual question for you. I live on a heavily wooded cul de sac, and many of my neighbors spend weekends doing large outdoor chores: buying 50+ bags of mulch, splitting firewood and hauling it, going to the nursery and buying small trees, large bushes, etc... Over beers, we’ve talked about buying a community pick up truck. About 4-5 neighbors would chip in for the purchase, and then maybe twice a year those same neighbors would chip in to cover regular maintenance costs and insurance. The truck would live at the end of the street, and via a Google doc, ‘owners’ could sign up when they need to use it.

Is this a good idea or no? We’d probably be looking at an older model that is ~$2,000 or less. We don’t need anything fancy, nor for highway driving - a real beater. Could we set up an llc, and have the business own the truck so no one person is liable? I’ve tried search Google for any articles related to this idea and have come up completely empty.”

Advertisement

I have heard of instances where two parties co-buy a car, and this tends to work out OK. However, when you add a handful of “owners” into the mix it sounds like a plan that may work great in theory but will quickly fall apart because of logistics, scheduling and the frustrating game of “Who pays for what?” Also, managing the liability for insurance is another wildcard. What may be the best plan is to have one person buy the truck and then “rent” it out at a reasonable cost to other people when they need it.

Got a car buying conundrum that you need some assistance with? Email me at tom.mcparland@jalopnik.com!

Tom is a contributing writer for Jalopnik and runs AutomatchConsulting.com. He saves people money and takes the hassle out of buying or leasing a car. (Facebook.com/AutomatchConsulting)

Share This Story

Get our newsletter

DISCUSSION

Regarding the ownership of a vehicle by multiple parties, by what the author has described, it would be used about the same amount as a private aircraft. Here’s how my dad does it with his airplane. :
He and his three partners created an LLC, and each wrote a funding check for the same amount. The LLC purchased and insures the airplane. The LLC “Charges” each member a monthly fee to cover the storage and amortized cost of the annual inspection. Additionally, each member pays a flat fee per hour of “hobbs time” or engine run time to the LLC. That flat fee covers the cost of fuel and amortized maintenance costs such as oil changes. There is a credit card in the plane that is used to cover fuel purchases, and that bill is paid by the LLC.

It’s a pretty simple system, really. When someone wants to upgrade a piece of instrumentation, the group votes and it is written into the bylaws of the LLC that all four members must vote unanimously for any improvement or project costing over a certain dollar amount. Improvements or projects under a certain amount can be passed by a 75% vote, so long as the total of projects passed by a 75% vote during a given calendar year does not surpass another dollar amount. If someone every wants to leave the LLC, the other members may (not shall) buy him out for his share of the market value of the airplane. A member can also sell his share of the LLC for any amount, so long as the other members vote in favor of the new purchaser.

Obviously since we’re talking about a truck and not an aircraft, the dollar amounts are going to be a little different but the concept can remain the same.