Nissan Cuts Dealer Margins, Shoppers Likely to See Price Increases

By

Senior Pricing Analyst

Alex Bernstein is the Senior Pricing Analyst for CarsDirect.com. Each month he studies immense volumes of pricing and incentives data in search of trends that are useful to car shoppers. In the process, he often breaks industry news stories -- his analyses and insights have been featured on websites such as Automotive News, The Detroit News, Autoblog, The Truth About Cars and The Car Connection.

Follow On: Google+ | Website

, Senior Pricing Analyst - April 16, 2015

How does an automaker raise prices without changing any of their advertising? By cutting into dealer margins with higher invoice prices. Documents reveal this is exactly what Nissan has done in April. Our analysis reveals that a combination of subtle price increases and rebate cuts may affect shoppers by nearly $1,000 in some cases this month. Here's what you need to know.

Not the price hike you expect

In a bulletin released to dealers, Nissan recently announced an "interim pricing action" effective April 7 on most models. Dealer invoice prices have increased by amounts equal to 0.7% of MSRP.

On well-equipped trim levels this boils down to an increase of $250 on average. At the same time, Nissan has kept MSRP values unchanged. So although retail prices are the same, the prices paid by dealers are going up.

See the current Nissan lineup>>

A subtle tactic

If you're wondering what this has to do with you, consider that many dealers base their pricing off a car's invoice value. In cases like that, any change in the invoice is reflected in a dealer's quoted price. Meanwhile, the sticker price remains completely unchanged.

Handling price increases like this is an old tactic. Nissan did something similar back in January of last year, with an increase of around 1% across the lineup. They're not the only one that does this. Earlier this year, BMW raised invoice prices by 1.5% to help fund more robust advertising.

Side-by-side: Altima vs. the competition>>

Double impact

This may not seem like much but the impact is actually magnified if you consider what Nissan has been doing with incentives. In April, models like the Altima and Maxima had rebates cut by $750 and $500, respectively.

What shoppers can potentially end up with is the double impact of a higher invoice price with smaller incentives. On an example like the Altima 3.5 SL, a $238 invoice hike and $750 incentive cut equates to a total potential increase of $988- not a small amount.

Read our buying analysis for the Nissan Altima>>

Our take

The recent changes may not be obvious but they will undoubtedly influence prices quoted by dealers. Due to a mix of inventory, shoppers may also see a situation where they are quoted two different prices on an identically-equipped car.

For many shoppers, $100 or $200 can sometimes make or break a purchase. The double effect of smaller incentives and higher base prices could be a source of pain for some.

It will be interesting to see how this affects Nissan's sales performance. Will they use the extra money to fund bigger incentives later, perhaps for Memorial Day? That remains to be seen, but we'll keep our eyes open for any changes.

Get a customized quote on a Nissan Altima>>

Looking for the best way to keep track of purchase and lease deals? Check out our CarsDirect Pricing Insider and Deals Articles pages for tips and advice on picking the right time to buy or lease your favorite car or truck.

Offers listed here are based on a resident in Southern California and may be subject to change. Most lease offers are for well-qualified buyers based on available credit and exclude tax, license, title, registration, document fees and insurance. Not all buyers may qualify. Please check with your CarsDirect Trusted Dealer to confirm offer details and eligibility.

, Senior Pricing Analyst

Alex Bernstein is the Senior Pricing Analyst for CarsDirect.com. Each month he studies immense volumes of pricing and incentives data in search of trends that are useful to car shoppers. In the process, he often breaks industry news stories -- his analyses and insights have been featured on websites such as Automotive News, The Detroit News, Autoblog, The Truth About Cars and The Car Connection.

Follow On: Google+ | Website