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AutoFun Philippines Investigates: Dealers take Honda Civic Type R buyers for a wild ride

VJ Bacungan · Jan 28, 2023 08:30 AM

AutoFun Philippines Investigates: Dealers take Honda Civic Type R buyers for a wild ride 01

The law of supply and demand is one of the most fundamental concepts in economics.

In a nutshell, if lots of people want something (high demand) that isn’t plentiful (short supply), the price would shoot up until the right number of buyers remains. This applies to everything from food items like onions to pricier products like cars.

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However, certain car dealerships are taking this economic principle to absurd extremes.

AutoFun Philippines content head Mikko David reported that some buyers of the recently launched 2023 Honda Civic Type R FL5 were reportedly being asked to fork over nearly ₱800,000 above the car’s ₱3,880,000 list price so that they could get one of the 39 cars in the first batch.

Honda Cars Philippines Inc. (HCPI), in an official statement to AutoFun Philippines, made clear that it does not tolerate price-gouging or “bidding wars,” reiterating to its dealers that all Honda vehicles should not be sold above the list price.

Since then, two more potential Civic Type R buyers have spoken exclusively to AutoFun Philippines under the condition of strict anonymity. 

Their stories serve as cautionary tales to all car buyers and, perhaps, a wake-up call to the Philippine car industry and government regulators to tackle this long-running issue head-on.

Buy someone else’s car

AutoFun Philippines Investigates: Dealers take Honda Civic Type R buyers for a wild ride 01

“Martin” (not his real name) is like many Honda car nuts in the Philippines.

He has a great appreciation for the Japanese brand’s quality, racing heritage, and performance. That’s why he put down a reservation deposit for Honda’s latest Civic Type R.

But after the hot hatchback was launched on Jan. 19, 2023, Martin got news from his Honda Cars agent that he was not included in the first batch of buyers. However, another client who was included was willing to sell his Type R at up to ₱4,500,000.

“Funny how those in the old Honda scene also inflate prices for parts and cars,” he said. “I was hoping things would be different for modern Hondas, but the culture of scalping is widespread. I’m disappointed but not surprised.”

Nonetheless, Martin has not withdrawn his reservation deposit, saying that he will only get the new Type R at the list price of ₱3,880,000.

Although he said HCPI shouldn’t be blamed, he will take action against its dealers. He understands that market forces hold big sway, especially in high-end cars.

“Until there is ample supply or an alternative, prices can’t be controlled,” Martin said. “Other carmakers have the responsibility to step up their game and make their products accommodate spillovers at the very least.”

Wasted time

AutoFun Philippines Investigates: Dealers take Honda Civic Type R buyers for a wild ride 02

Meanwhile, “Eric” (not his real name) told AutoFun Philippines that two Honda Cars dealers wasted months of his time only to demand far above the suggested retail price (SRP).

He said he approached the first dealer ahead of the car's January 2023 launch because he purchased his previous-generation Honda Civic Type R FK8 there.

"I put down ₱1,000,000 to reserve an FL5," Eric said. "Later on, they were asking ₱4,500,000 straight cash, including insurance, which I think is absurd because I was first."

"Kasi raw [It's because] it's a hot unit, it's rare," he added. "How can it be rare? It's not a homologation special, and it's just a dressed-up Civic with a strong engine."

Eric said he would give ₱100,000 more “under the table” for the car but found ₱600,000 over the list price far too steep. He then pulled out his reservation fee from the first dealer and got in touch with the agent of another Honda Cars dealer.

"We agreed on ₱4,250,000 straight-cash payment, which included ₱50,000 under the table to the releasing agent," he said.

Eric already prepared a manager's check to cover the Type R’s list price, with the remaining “grease money” in cold, hard bundles of cash. But on the day the unit was supposed to be released, the dealer reneged on the deal.

"The dealership manager said, "'Sir, 'di pwedeng ganyan sa Honda kasi kailangan lahat ng pasok sa account, makita talaga,'" he recounted.

[Translation: Sir, we can't do that here at Honda because all the money needs to be put into the account, so it's transparent.]

"SRP ayaw niyo [You don't want to sell at SRP], so you leave me with no choice," Eric contended. "Why is this my problem?"

He then said the dealer offered to give him the car under financing, which computes to an additional ₱500,000 above the list price. Financing schemes allow dealers to get a bigger cut of a sale because of the higher monthly payments, along with commissions from financing companies.

"Last offer, I'll pay you ₱4.4 million straight cash," Eric told the dealer. "Hindi raw kasi baka ma-blacklist sila sa Honda Cars Philippines. Alam niyo pala na bawal. Pero bakit hindi ninyo binebenta for SRP?"

[Translation: They couldn't accept it because Honda Cars Philippines might blacklist them. You know it's not allowed. So why aren't you selling the car for SRP?]

"I followed what the agent wanted, tapos biglang ganun [then this happens]," he said. “'Pag 'di ako nakakuha ng FL5 kaagad, 'di ako iiyak. But don't lie to me and don't waste my time. At huwag mo akong paasahin."

[Translation: I won't feel bad if I don't get an FL5 immediately. But don't lie to me, and don't waste my time. And don't lead me on.]

Up to ₱5M for a unit

AutoFun Philippines Investigates: Dealers take Honda Civic Type R buyers for a wild ride 03

Eric also noted that his other friends interested in buying an FL5 were up in arms over the price-gouging at various Honda Cars dealers.

"One was asking ₱4.675 million," he said. "Another was asking for ₱5 million. I know of only one Honda Cars dealership who gave an FL5 for SRP."

"Sobra naman ata yung gusto nilang kita," Eric added. "Garapal na."

[Translation: I think they want too much money. They are being greedy.]

Like Martin, Eric is biding his time to get a Civic Type R at the ₱3,880,000 list price.

How much for a Civic?!

AutoFun Philippines Investigates: Dealers take Honda Civic Type R buyers for a wild ride 04

Both Martin and Eric are successful businessmen who own and are well-versed in high-end performance cars.

Nonetheless, they simply could not understand the logic of buying a new Civic Type R at such ludicrous prices.

Martin said several high-performance cars in the Philippines could match or beat the FL5 Type R’s performance, while selling for far less than the inflated cost of Honda’s new hot hatchback. These include the following:

The FL5 Honda Civic Type R’s SRP is also ₱670,000 more than its predecessor, the FK8 Civic Type R.

“Abroad, they tested several midrange European performance models against the Type R in a drag race, and the FL5 promptly lost,” Martin said.

For Eric, caving in to the demands of greedy dealers was simply not worth it.

"Imagine explaining to someone that you paid ₱4.5 million for a Civic," he said.

Buyer beware

AutoFun Philippines Investigates: Dealers take Honda Civic Type R buyers for a wild ride 05

Martin cautioned all new-car buyers to be very wary when dealers are starting to fleece them.

“Walk away and wear your sensible hat,” he said. “Don’t give in to FOMO (fear of missing out).”

AutoFun Philippines likewise ran a story on what you can do when your car dealer asks above the list price.

Meanwhile, Eric said his experience is a consequence of how the local car market works.

"Welcome to the Philippines, where cash isn't king," he said. "Instead of giving it to people who will enjoy it, they are giving to resellers who are going sell it for even more."

Have you been a victim of dealership price-gouging, even for other brands and models?

VJ Bacungan

Senior Writer

An award-winning multimedia journalist, editor, and host for online and TV who has written in-depth stories on road safety and the Philippine elections. Outside of the media, VJ is an accomplished motorsports champion, English teacher, and dancer.

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