European Stars and Stripes, Darmstadt, Germany
When it comes to buying new cars, the military exchange service is neither the only, nor always the best, game in Europe.
Those who want autos built to American specifications can pursue a variety of options. While these alternatives come with some added risk and require more effort than walking into the nearest AAFES car sales office, they often offer significant rewards in the form of opportunities for greater savings and faster service.
Primarily, the choices are three:
⦁ Negotiate directly with a stateside dealer.
⦁ Hire a broker to find a car for you.
⦁ Purchase from an off-post dealer in Europe.
The first option, a stateside dealer, has the greatest potential for savings, experts say. Is also requires some hard bargaining and extensive legwork in arranging financing and shipping.
But Jack Gillis, director of public affairs for the Consumer Federation of America in Washington, said it eliminates some of the “middlemen” from the AAFES sales network.
“It appears to me that too many people are involved (in the AAFES system) -too many profit takers,” said Gillis, who also is the author of The Car Book, a consumer guide on the new-car business.
Profit must be made by the manufacturer, the U.S. sales company, its European subsidiaries and the exchange service.
“It seems clear to me that exchange customers would be better served if they purchased a car directly themselves, or through some other vehicle,” Gillis said.
Gillis suggests that consumers buy directly from stateside dealers, who can order cars and arrange overseas transportation in the same manner as military car sales agents, often at better prices. Some stateside credit unions also will order cars for customers who finance the car through that institution, Gillis said.
Other experts suggest that auto brokers are a reasonable option for Americans overseas. For a fee, a broker will research the price of the customer’s desired car and find a dealer with a good standing offer.
“A customer doesn’t have to go through a marathon session with a car dealer to get a good price,” said Dan Madden, sales manager for Nationwide Auto Brokers in Detroit.
“The major advantage a broker has is that by moving volume for a dealer, the dealer is more inclined to bring the price down,” Madden said .
First Lt. Rocco Sirizzotti of Nurnberg, Germany, swears by the auto broker who last year helped him save $1,600 on a 1991 Honda Accord. Sirizzotti paid the stateside broker $100 to find a dealership with an Accord in stock that fit his desires.
“I couldn’t buy the car from the dealer on base and the salesman at the place off base wanted way too much money,” Sirizzotti said. “The broker turned out to he a great deal. I am afraid that many servicememhers consider AAFES their only option.”
The brokerage found a dealership on the East Coast that offered the car for about $16,000, including shipping fees and options. That price reflects about a 6 percent markup over the wholesale price of the car, according to the broker he used. That is about the same as the markup on the American-made cars sold through AAFES.
Had Sirizzotti purchased an American-made car he probably would have saved even more, Madden said. The markup on imported cars is generally more than what dealers ask on domestic models, he said. Also, the Honda Accord is a high-demand vehicle. It has been the top-selling model in the United States for three years.
“I think we could deliver a domestic car to a (U.S.) port for $450 to $500 over the invoice price,” Madden said. “The customer would have to pay the shipping costs, which seldom run more than $1,000.” Madden’s brokerage operates out of Detroit. A broker closer to a port probably would charge less, he said.
Sirizzotti said that when he went to the Auto Exchange, an off-base dealership, he was quoted a rockbottom price, including transportation, of $17,600 for an Accord. The Auto Exchange is one of a handful of companies in Europe that target American military car buyers by selling Japanese and German cars with U.S. specifications.
The Auto Exchange – which sells Hondas, Mazdas, Nissans and Volkswagens – is the largest distributor of imports to the military in Europe, according to sales figures released by the companies. Toyota Car World is the second largest. Together the companies sell 7,500 cars a year.
Americans in Germany also can purchase U.S.-specification cars from European dealers. People have reported saving money by purchasing European models here and shipping them back to the States.
However, the amount of savings on these cars has fallen in recent years as the dollar has weakened against European currencies. Also, the military does not extend its free transportation to cars that have never been on American soil. Customers who purchase a European-made vehicle overseas must pay to ship it to the States.
Unlike military car sales agents, the off-base dealers will negotiate on price. But they also operate without the 7 percent price cap that exists for AAFES concessionaires.
These unregulated dealers generally begin with a markup around 15 percent, said Eddie Rivera, a Toyota Car World salesman in Darmstadt, Germany. Some sales agents will start the process at a much higher amount, he said.
That is what happened to Susan Harris, a civilian employee in Darmstadt who purchased a 1992 Toyota Paseo from an off-post dealer in November. According to consumer cost guides, the wholesale price of a Pasco with all options is about $10,600.
But Harris paid what the company was asking, $ 14,895, excluding transportation and dealer preparation. That is a markup of more than 35 percent.
Officials for both companies claim that their prices reflect the costs associated with operating on the German economy,
“Our prices are slightly higher than the companies on base because they don’t face the overhead we do,” said Colin Fish, sales manager for the Auto Exchange.
“We give the military person a choice – a chance to buy a quality import if that’s what he wants,” Fish said. “And we can put a customer in a car in a day, sometimes. If he buys from on base he might have to wait weeks or months.”
In Sirizzotti’s case, his bank in Germany paid the stateside dealer for the car April 24. The car was delivered to Sirizzotti in Frankfurt three weeks later – less than half the time it takes military concessionaires to deliver a car from the States.
But using a broker still leaves a middleman in the picture, Washington’s Gillis said. Customers can deal directly with U.S. dealers and save the broker’s fee.
“I tell people in the U.S. never to buy a car through a broker,” Gillis said. The military’s car sale program and brokers serve the same purpose, he said. “Why pay $250 for someone to order a car for you when the dealer will do it?”
But most stateside dealers establish minimum profit margins and customers may have to shop among several dealers to get the lowest price, said James Ross, a veteran auto salesman and author of three books on the ins and outs of the car business. In the end, the cost of calling several stateside dealers from Europe might be more than a broker’s fee, Ross said.