Small Enough To Care? 2016 MX-5 Totaled During First Mile Of Ownership - Mazda Steps Up And Replaces Car

Interested in feeling a little better about the state of humanity in general? If so, put down those pills and booze and listen to this. Earlier this week, the very first, brand-new 2016 Mazda Miata met its end, by being rear-ended by an F-150 less than a mile from the dealer. Gutting, right? Well, incredibly, Mazda is going to make things right.

Things started on Monday, when the Miata’s buyer (who goes by SCSM on the MX-5 Miata Forum) and his wife went to pick up their new, unashamedly red (Soul Red, according to Mazda) Launch Edition Miata, which is one of a series of only 1000. Barely a mile or so away from the dealership, a Ford F-150, slammed into the rear of the Miata without even taking the courtesy to brake.

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TheSteve - 7/24/2015 12:07:12 PM

0 Boost

It's unclear of the Miata was purchased or leased. If it was leased, then the lessor own the vehicle, and receives payment from the insurance company. This *MIGHT* be a case of:
- Some arm of Mazda is the lessor and owns the vehicle
- Some Mazda rep realizes the car will be a write-off and/or knows the insurance has a "replacement vehicle" rider
- Some Mazda rep scores a PR hit by telling the lessee "we'll replace it. I've put in the order already," and gets a bundle of goodwill.

Note that the cars a dealer sells (not leases) are (a) purchased from the manufacturer by the dealer, so the dealer then owns it, and then (b) resold to the consumer, at which point the consumer owns it. It this case, I find it extremely hard to believe that a dealer would take the hit and replace a customer's car at a huge loss. For example, on a car that sells for $20,000 retail, it wouldn't be unusual for the dealer to pay the manufacturer $17,000 (the car's dealer invoice cost) and resell it for around $20,000 to make a $3,000 profit, less expenses. Replace that car at your own cost and you're suddenly $14,000 in the hole (plus expenses), and hoping to recoup some part of that by parting out the wrecked car.

MDarringer - 7/25/2015 1:36:52 PM

-1 Boost

My guess is Mazda saw an opportunity to do some PR.

Reading your post makes it sound like you think the dealer buys cars from the manufacturer for dealer stock that they in turn sell but that they also have separate stock on the lot owned by the manufacturer that they lease. I can assure you that is NOT how it works.

Also the dealer invoice example you shared may not be that cut and dried. Let's say the invoice is $17K and I sell for $20K. I may also have a manufacturer bonus upon selling the car that makes the true invoice let's say $15K. Moreover, there can be a bonus for getting the customer to use car brand financing rather than their own which in turn has the effect of reducing the invoice if you will..

TheSteve - 7/26/2015 3:19:02 PM

+1 Boost

MDarringer wrote "...Reading your post makes it sound like you think the dealer buys cars from the manufacturer for dealer stock that they in turn sell but that they also have separate stock on the lot owned by the manufacturer that they lease..."

No, that is not what I'm saying. I AM saying:

(1) Dealer buys vehicles from manufacturer (dealer owns the vehicle, or title)

(2) If dealer sells vehicle to buy, including financing, then the customer owns the vehicle. If financed, the financial lender has a lien on the vehicle.

(3) If the vehicle is leased, then the customer does NOT own the vehicle. The leasing company owns the vehicle's title, and are therefore the legal owners. They also require the lessee (person making the payments) to have insurance in which the lessor (owner of the vehicle) receives the settlement for any insurance payout in the event of a totalled car.