Sr. Citizen's Question On Car Pricing ?
Hello,
Real amateur when it comes to negotiating for a new car. In my 70's now, not that sharp with negotiating, and would appreciate any opinions on this: I see in the various Forums and newsgroups that an "appropriate" first offer on a new car would be perhaps 500 max. over the Dealers Invoice. Seems to be a magic number. How is the Dest. charge handled ? Would this 500 over invoice offer figure include the destination charge which seems to run about 700 these days, or is the dest charge (usually) added on to whatever price you and the dealer agree upon ? Thanks, B. |
Re: Sr. Citizen's Question On Car Pricing ?
In article <OICdna-TSuPTljHVnZ2dnUVZ_qadnZ2d@comcast.com>,
"Robert11" <rgsros@notme.com> wrote: > I see in the various Forums and newsgroups that an "appropriate" first offer > on a new car would be perhaps 500 max. over the Dealers Invoice. Seems to > be a magic number. > > How is the Dest. charge handled ? It's an absolute; it has to be listed on the sales paperwork directly. The car price, invoice or otherwise, is separate from the destination charge. Thank you, unions. > Would this 500 over invoice offer figure include the destination charge > which seems to run about 700 these days, or is the dest charge (usually) > added on to whatever price you and the dealer agree upon ? Added on. http://www.edmunds.com even shows it that way in their listings. |
Re: Sr. Citizen's Question On Car Pricing ?
Elmo P. Shagnasty wrote:
> In article <OICdna-TSuPTljHVnZ2dnUVZ_qadnZ2d@comcast.com>, > "Robert11" <rgsros@notme.com> wrote: > >> I see in the various Forums and newsgroups that an "appropriate" first offer >> on a new car would be perhaps 500 max. over the Dealers Invoice. Seems to >> be a magic number. >> >> How is the Dest. charge handled ? > > It's an absolute; it has to be listed on the sales paperwork directly. > The car price, invoice or otherwise, is separate from the destination > charge. > > Thank you, unions. > > > >> Would this 500 over invoice offer figure include the destination charge >> which seems to run about 700 these days, or is the dest charge (usually) >> added on to whatever price you and the dealer agree upon ? > > Added on. > > http://www.edmunds.com even shows it that way in their listings. "dealer invoice" is a ridiculous price fixing mechanism. reality is, there's no way dealers can pay their real estate costs, advertising, sales staff and cost of inventory for a mere $700. absolutely no way. |
Re: Sr. Citizen's Question On Car Pricing ?
The April issue of Consumer Reports has info on this.
April's issue is always the annual "car buying" issue. Public libraries keep these at the reference desk or in the magazine section. |
Re: Sr. Citizen's Question On Car Pricing ?
In article <zamdnXC128KzgjHVnZ2dnUVZ_tzinZ2d@speakeasy.net> ,
jim beam <spamvortex@bad.example.net> wrote: > "dealer invoice" is a ridiculous price fixing mechanism. Agreed. I'm amazed at people who swear by a number that's written on paper. "I'd never pay sticker, by definition that's a ripoff." Well.....with a high demand car, it may reflect the market value of the car. Hell, sticker may be UNDER market value! Those same people swear by "I'll pay $200 over invoice, nothing more"--without realizing that they've conditioned the carmakers to "release" this number they call "invoice" price, which in reality is--ta daaa--just another sticker price. |
Re: Sr. Citizen's Question On Car Pricing ?
Waiving the right to remain silent, "Elmo P. Shagnasty"
<elmop@nastydesigns.com> said: > In article <zamdnXC128KzgjHVnZ2dnUVZ_tzinZ2d@speakeasy.net> , > jim beam <spamvortex@bad.example.net> wrote: > >> "dealer invoice" is a ridiculous price fixing mechanism. > > Agreed. > > I'm amazed at people who swear by a number that's written on paper. > "I'd never pay sticker, by definition that's a ripoff." Well.....with a > high demand car, it may reflect the market value of the car. Hell, > sticker may be UNDER market value! > > Those same people swear by "I'll pay $200 over invoice, nothing > more"--without realizing that they've conditioned the carmakers to > "release" this number they call "invoice" price, which in reality is--ta > daaa--just another sticker price. You'd need to be the accounant at a dealership to know what they really paid for a car... -- Larry J. - Remove spamtrap in ALLCAPS to e-mail "A lack of common sense is now considered a disability, with all the privileges that this entails." |
Re: Sr. Citizen's Question On Car Pricing ?
"Robert11" <rgsros@notme.com> wrote in message
news:OICdna-TSuPTljHVnZ2dnUVZ_qadnZ2d@comcast.com... > Hello, > > Real amateur when it comes to negotiating for a new car. > In my 70's now, not that sharp with negotiating, and would appreciate any > opinions on this: > > I see in the various Forums and newsgroups that an "appropriate" first > offer > on a new car would be perhaps 500 max. over the Dealers Invoice. Seems to > be a magic number. > > How is the Dest. charge handled ? > > Would this 500 over invoice offer figure include the destination charge > which seems to run about 700 these days, or is the dest charge (usually) > added on to whatever price you and the dealer agree upon ? > > Thanks, > B. > > Sounds like you might want to take someone with you-- a shrewd relative/friend, etc. |
Re: Sr. Citizen's Question On Car Pricing ?
Larry in AZ wrote:
> Waiving the right to remain silent, "Elmo P. Shagnasty" > <elmop@nastydesigns.com> said: > >> In article <zamdnXC128KzgjHVnZ2dnUVZ_tzinZ2d@speakeasy.net> , >> jim beam <spamvortex@bad.example.net> wrote: >> >>> "dealer invoice" is a ridiculous price fixing mechanism. >> Agreed. >> >> I'm amazed at people who swear by a number that's written on paper. >> "I'd never pay sticker, by definition that's a ripoff." Well.....with a >> high demand car, it may reflect the market value of the car. Hell, >> sticker may be UNDER market value! >> >> Those same people swear by "I'll pay $200 over invoice, nothing >> more"--without realizing that they've conditioned the carmakers to >> "release" this number they call "invoice" price, which in reality is--ta >> daaa--just another sticker price. > > You'd need to be the accounant at a dealership to know what they really paid > for a car... > as i understand it, they don't even pay, they just sell it, then remit an agreed amount back to the manufacturer. |
Re: Sr. Citizen's Question On Car Pricing ?
Waiving the right to remain silent, jim beam <spamvortex@bad.example.net>
said: > Larry in AZ wrote: >> Waiving the right to remain silent, "Elmo P. Shagnasty" >> <elmop@nastydesigns.com> said: >> >>> In article <zamdnXC128KzgjHVnZ2dnUVZ_tzinZ2d@speakeasy.net> , jim beam >>> <spamvortex@bad.example.net> wrote: >>> >>>> "dealer invoice" is a ridiculous price fixing mechanism. >>> Agreed. >>> >>> I'm amazed at people who swear by a number that's written on paper. >>> "I'd never pay sticker, by definition that's a ripoff." Well.....with >>> a high demand car, it may reflect the market value of the car. Hell, >>> sticker may be UNDER market value! >>> >>> Those same people swear by "I'll pay $200 over invoice, nothing >>> more"--without realizing that they've conditioned the carmakers to >>> "release" this number they call "invoice" price, which in reality >>> is--ta daaa--just another sticker price. >> >> You'd need to be the accounant at a dealership to know what they really >> paid for a car... >> > > as i understand it, they don't even pay, they just sell it, then remit > an agreed amount back to the manufacturer. That would depend on the dealer's contract with the manufacturer. I could see some of them even being on COD if their credit isn't very shiny... -- Larry J. - Remove spamtrap in ALLCAPS to e-mail "A lack of common sense is now considered a disability, with all the privileges that this entails." |
Re: Sr. Citizen's Question On Car Pricing ?
Larry in AZ wrote:
> Waiving the right to remain silent, jim beam <spamvortex@bad.example.net> > said: > >> Larry in AZ wrote: >>> Waiving the right to remain silent, "Elmo P. Shagnasty" >>> <elmop@nastydesigns.com> said: >>> >>>> In article <zamdnXC128KzgjHVnZ2dnUVZ_tzinZ2d@speakeasy.net> , jim beam >>>> <spamvortex@bad.example.net> wrote: >>>> >>>>> "dealer invoice" is a ridiculous price fixing mechanism. >>>> Agreed. >>>> >>>> I'm amazed at people who swear by a number that's written on paper. >>>> "I'd never pay sticker, by definition that's a ripoff." Well.....with >>>> a high demand car, it may reflect the market value of the car. Hell, >>>> sticker may be UNDER market value! >>>> >>>> Those same people swear by "I'll pay $200 over invoice, nothing >>>> more"--without realizing that they've conditioned the carmakers to >>>> "release" this number they call "invoice" price, which in reality >>>> is--ta daaa--just another sticker price. >>> You'd need to be the accounant at a dealership to know what they really >>> paid for a car... >>> >> as i understand it, they don't even pay, they just sell it, then remit >> an agreed amount back to the manufacturer. > > That would depend on the dealer's contract with the manufacturer. I could > see some of them even being on COD if their credit isn't very shiny... > why would they bother with cod if that dealer isn't much good? surely they'd want to retain ownership? |
Re: Sr. Citizen's Question On Car Pricing ?
Robert11 wrote:
> Hello, > > Real amateur when it comes to negotiating for a new car. > In my 70's now, not that sharp with negotiating, and would appreciate any > opinions on this: > > I see in the various Forums and newsgroups that an "appropriate" first offer > on a new car would be perhaps 500 max. over the Dealers Invoice. Seems to > be a magic number. Not magic at all. The dealer doesn't pay the manufacturer the "invoice price," and you routinely see dealers advertise "under invoice." The last two cars I purchased we paid well under invoice. Clearly the dealer wasn't selling these vehicles at a loss. Between holdback, factory to dealer incentives, and other kickbacks, selling at invoice is very very profitable for the dealer. You want to go up from dealer cost, not up or down from invoice or MSRP. Unfortunately determining dealer cost is very difficult. You need to know all the incentives for a specific vehicle in a specific region of the country. Offer $500 over dealer cost, if you can figure out dealer cost. |
Re: Sr. Citizen's Question On Car Pricing ?
SMS wrote:
> Robert11 wrote: >> Hello, >> >> Real amateur when it comes to negotiating for a new car. >> In my 70's now, not that sharp with negotiating, and would appreciate >> any opinions on this: >> >> I see in the various Forums and newsgroups that an "appropriate" first >> offer >> on a new car would be perhaps 500 max. over the Dealers Invoice. >> Seems to >> be a magic number. > > Not magic at all. The dealer doesn't pay the manufacturer the "invoice > price," and you routinely see dealers advertise "under invoice." The > last two cars I purchased we paid well under invoice. Clearly the dealer > wasn't selling these vehicles at a loss. Between holdback, factory to > dealer incentives, and other kickbacks, selling at invoice is very very > profitable for the dealer. > > You want to go up from dealer cost, not up or down from invoice or MSRP. > Unfortunately determining dealer cost is very difficult. You need to > know all the incentives for a specific vehicle in a specific region of > the country. > > Offer $500 over dealer cost, if you can figure out dealer cost. $500 over cost doesn't cover overheads, commissions, anything. there's no way they'd sell for that. |
Re: Sr. Citizen's Question On Car Pricing ?
On Aug 22, 12:10 am, jim beam <spamvor...@bad.example.net> wrote:
> SMS wrote: > > Robert11 wrote: > >> Hello, > > >> Real amateur when it comes to negotiating for a new car. > >> In my 70's now, not that sharp with negotiating, and would appreciate > >> any opinions on this: > > >> I see in the various Forums and newsgroups that an "appropriate" first > >> offer > >> on a new car would be perhaps 500 max. over the Dealers Invoice. > >> Seems to > >> be a magic number. > > > Not magic at all. The dealer doesn't pay the manufacturer the "invoice > > price," and you routinely see dealers advertise "under invoice." The > > last two cars I purchased we paid well under invoice. Clearly the dealer > > wasn't selling these vehicles at a loss. Between holdback, factory to > > dealer incentives, and other kickbacks, selling at invoice is very very > > profitable for the dealer. > > > You want to go up from dealer cost, not up or down from invoice or MSRP.. > > Unfortunately determining dealer cost is very difficult. You need to > > know all the incentives for a specific vehicle in a specific region of > > the country. > > > Offer $500 over dealer cost, if you can figure out dealer cost. > > $500 over cost doesn't cover overheads, commissions, anything. there's > no way they'd sell for that.- Hide quoted text - If profit (or not) made on the front end won't cover it, profit made on the back end would. Some dealers make more on financing and/or service than sales. |
Re: Sr. Citizen's Question On Car Pricing ?
Siskuwihane wrote:
> On Aug 22, 12:10�am, jim beam <spamvor...@bad.example.net> wrote: >> SMS wrote: >>> Robert11 wrote: >>>> Hello, >>>> Real amateur when it comes to negotiating for a new car. >>>> In my 70's now, not that sharp with negotiating, and would appreciate >>>> any opinions on this: >>>> I see in the various Forums and newsgroups that an "appropriate" first >>>> offer >>>> on a new car would be perhaps 500 max. over the Dealers Invoice. � >>>> Seems to >>>> be a magic number. >>> Not magic at all. The dealer doesn't pay the manufacturer the "invoice >>> price," and you routinely see dealers advertise "under invoice." The >>> last two cars I purchased we paid well under invoice. Clearly the dealer >>> wasn't selling these vehicles at a loss. Between holdback, factory to >>> dealer incentives, and other kickbacks, selling at invoice is very very >>> profitable for the dealer. >>> You want to go up from dealer cost, not up or down from invoice or MSRP. >>> Unfortunately determining dealer cost is very difficult. You need to >>> know all the incentives for a specific vehicle in a specific region of >>> the country. >>> Offer $500 over dealer cost, if you can figure out dealer cost. >> $500 over cost doesn't cover overheads, commissions, anything. �there's >> no way they'd sell for that.- Hide quoted text - > > If profit (or not) made on the front end won't cover it, profit made > on the back end would. Some dealers make more on financing and/or > service than sales. > don't believe it. all that fancy real estate, and all those sales dudes with all their gold jewelry getting fat on $500? no way. and there's no way the sales dudes get a share of selling you a $900 timing belt replacement. bottom line, the myths about minimal margins in car sales have to be a complete crock - otherwise car sales would be mail order or from some dirt lot three hours out of town. basic math. |
Re: Sr. Citizen's Question On Car Pricing ?
jim beam wrote:
>> Offer $500 over dealer cost, if you can figure out dealer cost. > > $500 over cost doesn't cover overheads, commissions, anything. there's > no way they'd sell for that. Yet they do that all the time. Of course they're not selling every vehicle on the lot for $500 over cost, you're correct that this would not cover their overhead. You have to look at the big picture like the dealer does. A dealer views a $500 (or less) over cost sale in several ways: 1. As pure upside revenue that they would otherwise not have, because the potential customer will leave. 2. As an opportunity to sell financing, an extended warranty, paint protectant, fabric guard, glass etching, Lo-Jack, and a long list of other very high-margin dealer installed, mostly worthless, options. 3. As future potential revenue for the service department. Of course they're not going to sell a vehicle that is in short-supply and high-demand for $500 over dealer cost, or even $500 over invoice, but there are very few vehicles that fall into that category. The Honda Odyssey used to be in that category, now the Prius and Civic hybrids are probably in that category now. If you have to have the hot car of the moment, you'll pay more (have patience, supply will catch up with demand), but you can easily buy high-volume vehicles like the Camry and Accord for $500 over dealer cost (or less), depending on the time of year. I.e., the last Camry we purchased had an MSRP of $20,728, and invoice of $18,551 (including destination), a factory to dealer incentive of $1000, factory kickbacks (holdback plus advertising subsidy, plus WFR) to the dealer of 5% of the base invoice ($928) (Toyota bases this on invoice, not MSRP like most manufacturers). The dealer cost was $16,623. The price they were selling them at was $16,988, and this wasn't a negotiated price, it was "all model 2532 in stock at this price." Of course it wasn't as simple as walking in and plonking down the money. When it became clear that we weren't buying a warranty, or financing, or digital floor mats, the vehicle suddenly became "unavailable," with a bizarre excuse about how it had been damaged on the lot and then repaired, and how it needed to be "cleared" by Toyota before it could be sold. However returning the next day, we worked around the dealer's shenanigans by financing the vehicle then paying off the loan a week later. In my experience, the best deals are found during, and right after the XMAS season (when many people have no money to spend, and the excitement of the new model year has worn off) and in the summer before the next year's models come out. National sales figures show December and January as the slowest months, and it's been that way for a long time. To me, the most amusing thing is when perfectly mediocre vehicles like the PT Cruiser are hyped beyond belief and dealers are able to charge thousands over MSRP to dumb people. |
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