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Re: Sr. Citizen's Question On Car Pricing ?
On Aug 23, 11:09 am, jim beam <spamvor...@bad.example.net> wrote:
> Siskuwihane wrote: > > On Aug 23, 10:09 am, jim beam <spamvor...@bad.example.net> wrote: > >> Siskuwihane wrote: > >>> On Aug 22, 10:26 pm, jim beam <spamvor...@bad.example.net> wrote: > >>>> Siskuwihane wrote: > >>>>> On Aug 22, 8:48 am, jim beam <spamvor...@bad.example.net> wrote: > >>>>>> 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 invoiceor 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. > >>>>> I don't believe it was stated anywhere that every vehicle was sold at > >>>>> that price. Not everyone who walks into the dealership knows what they > >>>>> are doing so vehicles get sold at many different price points. The > >>>>> fact is cars do get sold at $500 or less over invoice all the time. > >>>> you don't understand - "invoice" is fictional. even if it sells at > >>>> "under" invoice, the dealer still has a profit because the /actual/ cost > >>>> is way lower. > >>>>>> 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.- Hide quoted text - > >>>>> And they would be serviced in that same dirt lot or by mail? Financed > >>>>> from that same dirt lot or by mail? > >>>> do you believe that the dudes on the sales floor with the gold chains > >>>> and bad teeth get cross-subsidized by the service department???- Hide quoted text - > >>> No one made that claim. Sales people are paid for sales. It's much > >>> better to go home with $100 in your pocket from a $500 over deal than > >>> to go home after working 10 hours with nothing. While these deals do > >>> not support the dealership, the back end can and does as has already > >>> been explained. > >> but it doesn't support the sales people on commission. > > > Once again, no one made that claim. It's been explained already. > > >> what incentive do /they/ have to sell for only $100??? > > > Are you just looking to argue? > > no, i just want to inject some commercial reality into what is clearly > the very non-commercial world in which you live. > > > No one is saying that ALL sales result > > in a $100 commission, but when it's SLOW, it's better to have made > > $100 than go home after working all day empty handed. There are days > > you'll make a lot of profit on a car and the commission that goes with > > it and days you won't, it's stated in what you quoted below. > > dude, when there's $20k worth of car sitting on the lot, with all those > real estate, advertising, insurance, tax, admin staff, phone bills and > commission overheads biting your ass, there's absolutely no freakin' way > you're going to let that thing go for only $100. absolutely no way. > > > > >>> As was also stated it doesn't happen everyday, but > >>> when it comes to making a sale-vs-no sale, it will happen, especially > >>> during slow times. > >> there's no way you're going to let $20k of inventory go for only $100. > >> that's 0.5% profit. even high volume retailers like a supermarket can't > >> live on margins that skinny. > > > Last time, profit is also made on the back end (lose out front, gain > > it on the back end) and in service, > > and the small profit sale deals do not happen every day. The end. > > you don't understand. the dealer makes profit on sales. not $100 > profit. big multi-thousand dollar profit. every time. that's where > all huge-ass sales real estate gets paid. all the multi-page > advertising in your local paper gets paid. all the tv ads get paid. No, you don't understand. $100 was the salepersons profit, the dealer made $400+, then they made money on financing, extended warranty or GAP insurance, credit life insurance , trade-in re-sale, 3000 mile "service" , "dealer recommended maintenance" , parts, warranty work, "the next dummy who paid full retail" , and on and on. The consumers job is to get that $500 over deal and walk on the rest. Note the part at the end of this quote where it says "the profits from used car sales and from parts and service are what keep the dealership in business." http://autos.aol.com/article/general...11143309990001 "First of all, that revenue mix significantly changed over the last several years, especially for Ford, GM and Chrysler franchise dealers. Consumers spend a lot of time haggling over the price of a new car, but new car sales aren't what they used to be in terms of the role they play in the car dealers' revenue. In the past -- during more flush times -- the profits from new car sales were much greater than they are now, said Paul Taylor, chief economist for the National Auto Dealers Association (NADA), based in McLean, Va. In fact, due in part to heavy incentives, the latest stats show that car dealers are actually losing money on new car sales. "On net, the average new car dealer is losing about $30 per new car sold through June of this year, and that is inclusive of new car finance and insurance revenue," Taylor said. "So, during difficult years for new car sales, like this year, the profits from used car sales and from parts and service are what keep the dealership in business." Then there is this tidbit, "Dealer financing is another area where a new car dealer can make exorbitant amounts of money, sometimes more than the profit on the sale of the car itself." |
Re: Sr. Citizen's Question On Car Pricing ?
Siskuwihane wrote:
> On Aug 23, 11:09�am, jim beam <spamvor...@bad.example.net> wrote: >> Siskuwihane wrote: >>> On Aug 23, 10:09 am, jim beam <spamvor...@bad.example.net> wrote: >>>> Siskuwihane wrote: >>>>> On Aug 22, 10:26 pm, jim beam <spamvor...@bad.example.net> wrote: >>>>>> Siskuwihane wrote: >>>>>>> On Aug 22, 8:48 am, jim beam <spamvor...@bad.example.net> wrote: >>>>>>>> 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. >>>>>>> I don't believe it was stated anywhere that every vehicle was sold at >>>>>>> that price. Not everyone who walks into the dealership knows what they >>>>>>> are doing so vehicles get sold at many different price points. The >>>>>>> fact is cars do get sold at $500 or less over invoice all the time. >>>>>> you don't understand - "invoice" is fictional. even if it sells at >>>>>> "under" invoice, the dealer still has a profit because the /actual/ cost >>>>>> is way lower. >>>>>>>> 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.- Hide quoted text - >>>>>>> And they would be serviced in that same dirt lot or by mail? Financed >>>>>>> from that same dirt lot or by mail? >>>>>> do you believe that the dudes on the sales floor with the gold chains >>>>>> and bad teeth get cross-subsidized by the service department???- Hide quoted text - >>>>> No one made that claim. Sales people are paid for sales. It's much >>>>> better to go home with $100 in your pocket from a $500 over deal than >>>>> to go home after working 10 hours with nothing. While these deals do >>>>> not support the dealership, the back end can and does as has already >>>>> been explained. >>>> but it doesn't support the sales people on commission. >>> Once again, no one made that claim. It's been explained already. >>>> what incentive do /they/ have to sell for only $100??? >>> Are you just looking to argue? >> no, i just want to inject some commercial reality into what is clearly >> the very non-commercial world in which you live. >> >>> No one is saying that ALL sales result >>> in a $100 commission, but when it's SLOW, it's better to have made >>> $100 than go home after working all day empty handed. There are days >>> you'll make a lot of profit on a car and the commission that goes with >>> it and days you won't, it's stated in what you quoted below. >> dude, when there's $20k worth of car sitting on the lot, with all those >> real estate, advertising, insurance, tax, admin staff, phone bills and >> commission overheads biting your ass, there's absolutely no freakin' way >> you're going to let that thing go for only $100. �absolutely no way. >> >> >> >>>>> As was also stated it doesn't happen everyday, but >>>>> when it comes to making a sale-vs-no sale, it will happen, especially >>>>> during slow times. >>>> there's no way you're going to let $20k of inventory go for only $100. >>>> that's 0.5% profit. even high volume retailers like a supermarket can't >>>> live on margins that skinny. >>> Last time, profit is also made on the back end (lose out front, gain >>> it on the back end) and in service, >>> and the small profit sale deals do not happen every day. The end. >> you don't understand. �the dealer makes profit on sales. �not $100 >> profit. �big multi-thousand dollar profit. �every time. �that's where >> all huge-ass sales real estate gets paid. �all the multi-page >> advertising in your local paper gets paid. �all the tv ads get paid. > > No, you don't understand. > > $100 was the salepersons profit, the dealer made $400+, then they made > money on financing, extended warranty or GAP insurance, credit life > insurance , trade-in re-sale, 3000 mile "service" , "dealer > recommended maintenance" , parts, warranty work, "the next dummy who > paid full retail" , and on and on. The consumers job is to get that > $500 over deal and walk on the rest. > > Note the part at the end of this quote where it says "the profits from > used car sales and from parts and service are what keep the dealership > in business." > > > http://autos.aol.com/article/general...11143309990001 > > "First of all, that revenue mix significantly changed over the last > several years, especially for Ford, GM and Chrysler franchise dealers. > Consumers spend a lot of time haggling over the price of a new car, > but new car sales aren't what they used to be in terms of the role > they play in the car dealers' revenue. In the past -- during more > flush times -- the profits from new car sales were much greater than > they are now, said Paul Taylor, chief economist for the National Auto > Dealers Association (NADA), based in McLean, Va. In fact, due in part > to heavy incentives, the latest stats show that car dealers are > actually losing money on new car sales. > > "On net, the average new car dealer is losing about $30 per new car > sold through June of this year, and that is inclusive of new car > finance and insurance revenue," Taylor said. "So, during difficult > years for new car sales, like this year, the profits from used car > sales and from parts and service are what keep the dealership in > business." > > > > Then there is this tidbit, > > "Dealer financing is another area where a new car dealer can make > exorbitant amounts of money, sometimes more than the profit on the > sale of the car itself." > > do you know what "p.r." is? do you know how "news" gets placed? i do because i've been involved in it. and what makes it to print is absolutely no guarantee of accuracy. especially when there is a concerted effort to "reposition" something. again, i know this from personal experience from a repositioning in which i was involved. i also have finance experience, and again, there's no way a $20k vehicle's being sold with 0.5% mark-up. now, you go away and believe your little propaganda stories so it makes you feel warm and fuzzy about what a great deal you negotiated. |
Re: Sr. Citizen's Question On Car Pricing ?
On Aug 23, 8:29 pm, jim beam <spamvor...@bad.example.net> wrote:
> Siskuwihane wrote: > > On Aug 23, 11:09 am, jim beam <spamvor...@bad.example.net> wrote: > >> Siskuwihane wrote: > >>> On Aug 23, 10:09 am, jim beam <spamvor...@bad.example.net> wrote: > >>>> Siskuwihane wrote: > >>>>> On Aug 22, 10:26 pm, jim beam <spamvor...@bad.example.net> wrote: > >>>>>> Siskuwihane wrote: > >>>>>>> On Aug 22, 8:48 am, jim beam <spamvor...@bad.example.net> wrote: > >>>>>>>> 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. Clearlythe dealer > >>>>>>>>>>> wasn't selling these vehicles at a loss. Between holdback, factory to > >>>>>>>>>>> dealer incentives, and other kickbacks, selling at invoice isvery 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, profitmade > >>>>>>>>> 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. > >>>>>>> I don't believe it was stated anywhere that every vehicle was sold at > >>>>>>> that price. Not everyone who walks into the dealership knows whatthey > >>>>>>> are doing so vehicles get sold at many different price points. The > >>>>>>> fact is cars do get sold at $500 or less over invoice all the time. > >>>>>> you don't understand - "invoice" is fictional. even if it sells at > >>>>>> "under" invoice, the dealer still has a profit because the /actual/ cost > >>>>>> is way lower. > >>>>>>>> bottom line, the myths about minimal margins in car sales have to be a > >>>>>>>> complete crock - otherwise car sales would be mail order or fromsome > >>>>>>>> dirt lot three hours out of town. basic math.- Hide quoted text - > >>>>>>> And they would be serviced in that same dirt lot or by mail? Financed > >>>>>>> from that same dirt lot or by mail? > >>>>>> do you believe that the dudes on the sales floor with the gold chains > >>>>>> and bad teeth get cross-subsidized by the service department???- Hide quoted text - > >>>>> No one made that claim. Sales people are paid for sales. It's much > >>>>> better to go home with $100 in your pocket from a $500 over deal than > >>>>> to go home after working 10 hours with nothing. While these deals do > >>>>> not support the dealership, the back end can and does as has already > >>>>> been explained. > >>>> but it doesn't support the sales people on commission. > >>> Once again, no one made that claim. It's been explained already. > >>>> what incentive do /they/ have to sell for only $100??? > >>> Are you just looking to argue? > >> no, i just want to inject some commercial reality into what is clearly > >> the very non-commercial world in which you live. > > >>> No one is saying that ALL sales result > >>> in a $100 commission, but when it's SLOW, it's better to have made > >>> $100 than go home after working all day empty handed. There are days > >>> you'll make a lot of profit on a car and the commission that goes with > >>> it and days you won't, it's stated in what you quoted below. > >> dude, when there's $20k worth of car sitting on the lot, with all those > >> real estate, advertising, insurance, tax, admin staff, phone bills and > >> commission overheads biting your ass, there's absolutely no freakin' way > >> you're going to let that thing go for only $100. absolutely no way. > > >>>>> As was also stated it doesn't happen everyday, but > >>>>> when it comes to making a sale-vs-no sale, it will happen, especially > >>>>> during slow times. > >>>> there's no way you're going to let $20k of inventory go for only $100. > >>>> that's 0.5% profit. even high volume retailers like a supermarket can't > >>>> live on margins that skinny. > >>> Last time, profit is also made on the back end (lose out front, gain > >>> it on the back end) and in service, > >>> and the small profit sale deals do not happen every day. The end. > >> you don't understand. the dealer makes profit on sales. not $100 > >> profit. big multi-thousand dollar profit. every time. that's where > >> all huge-ass sales real estate gets paid. all the multi-page > >> advertising in your local paper gets paid. all the tv ads get paid. > > > No, you don't understand. > > > $100 was the salepersons profit, the dealer made $400+, then they made > > money on financing, extended warranty or GAP insurance, credit life > > insurance , trade-in re-sale, 3000 mile "service" , "dealer > > recommended maintenance" , parts, warranty work, "the next dummy who > > paid full retail" , and on and on. The consumers job is to get that > > $500 over deal and walk on the rest. > > > Note the part at the end of this quote where it says "the profits from > > used car sales and from parts and service are what keep the dealership > > in business." > > >http://autos.aol.com/article/general...aler-is-run/20... > > > "First of all, that revenue mix significantly changed over the last > > several years, especially for Ford, GM and Chrysler franchise dealers. > > Consumers spend a lot of time haggling over the price of a new car, > > but new car sales aren't what they used to be in terms of the role > > they play in the car dealers' revenue. In the past -- during more > > flush times -- the profits from new car sales were much greater than > > they are now, said Paul Taylor, chief economist for the National Auto > > Dealers Association (NADA), based in McLean, Va. In fact, due in part > > to heavy incentives, the latest stats show that car dealers are > > actually losing money on new car sales. > > > "On net, the average new car dealer is losing about $30 per new car > > sold through June of this year, and that is inclusive of new car > > finance and insurance revenue," Taylor said. "So, during difficult > > years for new car sales, like this year, the profits from used car > > sales and from parts and service are what keep the dealership in > > business." > > > Then there is this tidbit, > > > "Dealer financing is another area where a new car dealer can make > > exorbitant amounts of money, sometimes more than the profit on the > > sale of the car itself." > > do you know what "p.r." is? do you know how "news" gets placed? i do > because i've been involved in it. and what makes it to print is > absolutely no guarantee of accuracy. I know what you mean, I recently saw a claim that rental car companies only pay 50% of sticker for a new car and since I've been involved in it, I knew it was a very inaccurate staement. >especially when there is a > concerted effort to "reposition" something. again, i know this from > personal experience from a repositioning in which i was involved. i > also have finance experience, and again, there's no way a $20k vehicle's > being sold with 0.5% mark-up. > now, you go away and believe your little propaganda stories so it makes > you feel warm and fuzzy about what a great deal you negotiated.- Hide quoted text - I never buy new and never mentioned any deals I had (or didn't). Must be another example of something being inaccurate. |
Re: Sr. Citizen's Question On Car Pricing ?
In article <f9WdnRNIr-o2Ni3VnZ2dnUVZ_uGdnZ2d@speakeasy.net>,
jim beam <spamvortex@bad.example.net> wrote: > do you know what "p.r." is? do you know how "news" gets placed? i do > because i've been involved in it. and what makes it to print is > absolutely no guarantee of accuracy. especially when there is a > concerted effort to "reposition" something. "It's not a station wagon! It's an SUV!" "It's not an SUV! It's a crossover!" |
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. > > 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. > > Some required reading for buying a car: http://www.edmunds.com/advice/buying...6/page001.html http://www.edmunds.com/advice/buying...2/article.html http://www.edmunds.com/advice/buying...6/page008.html a |
Re: Sr. Citizen's Question On Car Pricing ?
Siskuwihane wrote:
> I know what you mean, I recently saw a claim that rental car companies > only pay 50% of sticker for a new car > and since I've been involved in it, I knew it was a very inaccurate > staement. >> now, you go away and believe your little propaganda stories so it makes >> you feel warm and fuzzy about what a great deal you negotiated.- Hide quoted text - > I never buy new and never mentioned any deals I had (or didn't). Must > be another example of something being inaccurate. Jim actually revealed another common misconception regarding car buying, that of the "0.5%" mark-up. Dealers would be quite happy with 0.5% over dealer cost on vehicles that are in sufficient supply. He's a source of incorrect information on many different subjects. |
Re: Sr. Citizen's Question On Car Pricing ?
a wrote:
> Some required reading for buying a car: > > http://www.edmunds.com/advice/buying...6/page001.html > > http://www.edmunds.com/advice/buying...2/article.html > > http://www.edmunds.com/advice/buying...6/page008.html Also, don't trust the dealer for the "invoice" price. I saw someone mention in a Toyota forum that the dealer had an "invoice" that showed additional fees for TDA (advertising), holdback, and WFR. In reality these are rebates to the dealer from the manufacturer, not additional costs to the dealer. The dealer does contribute to regional advertising, which is what the TDA fee from Toyota is intended to subsidize. The true invoice pricing is easily available on-line. Once you know the invoice you can work backwards to figure out the dealer cost (somewhat, since you don't know what additional factory to dealer incentives are in place). The Edmund's TMV prices are much higher than you ever have to pay. Also, what Jim doesn't understand is that the invoice price is much more than the dealer pays for the vehicle, something that Edmund's makes very clear, "the invoice price is almost always higher than the amount the dealer actually ends up paying to the manufacturer. This results from a variety of discounts offered to the dealer that do not appear on the invoice." That's why invoice price is really the defacto retail price in many areas. |
Re: Sr. Citizen's Question On Car Pricing ?
SMS wrote:
> Siskuwihane wrote: > >> I know what you mean, I recently saw a claim that rental car companies >> only pay 50% of sticker for a new car >> and since I've been involved in it, I knew it was a very inaccurate >> staement. > >>> now, you go away and believe your little propaganda stories so it makes >>> you feel warm and fuzzy about what a great deal you negotiated.- Hide >>> quoted text - > >> I never buy new and never mentioned any deals I had (or didn't). Must >> be another example of something being inaccurate. > > Jim actually revealed another common misconception regarding car buying, > that of the "0.5%" mark-up. Dealers would be quite happy with 0.5% over > dealer cost on vehicles that are in sufficient supply. not true. business 101. simply can't cover overheads for $100. > > He's a source of incorrect information on many different subjects. sure - i'm a massive bullshitter. but getting back on topic, let's do a little math: let's say a dealer has 6 sales dudes. let's say each one grosses $50k - to be conservative. to make $50k a year, that's 500 vehicles with 0.5% markup per year, or say 10 per week. for 6 sales dudes, that's 60 cars a week. that's about 6 transporter trucks per week. and that's with 100% of the net going to the sales dudes. now, let's say the sales dude keeps 50% of the net, the rest going to the dealer. that means 120 cars a week, 12 transporters per week, and out of that net $6000 [50% x 120 x $100], the dealer has to pay at least two on staff admins at say $1000 per week. then the kids that do the detailing of the new inventory. that's another $1000 per week, minimum. then real estate and/or loans, that will be another $2000/$3000 per month minimum. then insurance, utilities, advertising, etc. bottom line, you go ahead and believe these guys only make 0.5% markup. but you'll be deluding yourself because the math just doesn't work. |
Re: Sr. Citizen's Question On Car Pricing ?
SMS wrote:
> a wrote: > >> Some required reading for buying a car: >> >> http://www.edmunds.com/advice/buying...6/page001.html >> >> http://www.edmunds.com/advice/buying...2/article.html >> >> http://www.edmunds.com/advice/buying...6/page008.html > > > Also, don't trust the dealer for the "invoice" price. I saw someone > mention in a Toyota forum that the dealer had an "invoice" that showed > additional fees for TDA (advertising), holdback, and WFR. In reality > these are rebates to the dealer from the manufacturer, not additional > costs to the dealer. The dealer does contribute to regional advertising, > which is what the TDA fee from Toyota is intended to subsidize. > > The true invoice pricing is easily available on-line. Once you know the > invoice you can work backwards to figure out the dealer cost (somewhat, > since you don't know what additional factory to dealer incentives are in > place). > > The Edmund's TMV prices are much higher than you ever have to pay. > > Also, what Jim doesn't understand is that the invoice price is much more > than the dealer pays for the vehicle, eh? that's what /i/ have been telling /you/. > something that Edmund's makes very > clear, "the invoice price is almost always higher than the amount the > dealer actually ends up paying to the manufacturer. This results from a > variety of discounts offered to the dealer that do not appear on the > invoice." duh. > That's why invoice price is really the defacto retail price in > many areas. no, it's because the schmucks that don't understand pricing look at "dealer invoice", pay a little over, then think they got a good deal because "dealer invoice" set their pricing expectations. |
Re: Sr. Citizen's Question On Car Pricing ?
On Aug 26, 12:02 am, jim beam <spamvor...@bad.example.net> wrote:
> SMS wrote: > > Siskuwihane wrote: > > >> I know what you mean, I recently saw a claim that rental car companies > >> only pay 50% of sticker for a new car > >> and since I've been involved in it, I knew it was a very inaccurate > >> staement. > > >>> now, you go away and believe your little propaganda stories so it makes > >>> you feel warm and fuzzy about what a great deal you negotiated.- Hide > >>> quoted text - > > >> I never buy new and never mentioned any deals I had (or didn't). Must > >> be another example of something being inaccurate. > > > Jim actually revealed another common misconception regarding car buying, > > that of the "0.5%" mark-up. Dealers would be quite happy with 0.5% over > > dealer cost on vehicles that are in sufficient supply. > > not true. business 101. simply can't cover overheads for $100. Why do you keep spouting off about a $100 deal when NO ONE mentioned or suggested it? Do you think making things up will help your argument? You also ignore the fact that several times it was posted that these types of deal are not the norm, but again, you just want to ignore anything else being stated. > > > > > He's a source of incorrect information on many different subjects. > > sure - i'm a massive bullshitter. About the $100 deal, yes you are. > but getting back on topic, let's do a little math: > > let's say a dealer has 6 sales dudes. let's say each one grosses $50k - > to be conservative. to make $50k a year, that's 500 vehicles with 0.5% > markup per year, or say 10 per week. for 6 sales dudes, that's 60 cars > a week. that's about 6 transporter trucks per week. and that's with > 100% of the net going to the sales dudes. > > now, let's say the sales dude keeps 50% of the net, the rest going to > the dealer. that means 120 cars a week, 12 transporters per week, and > out of that net $6000 [50% x 120 x $100], the dealer has to pay at least > two on staff admins at say $1000 per week. then the kids that do the > detailing of the new inventory. that's another $1000 per week, minimum.. > then real estate and/or loans, that will be another $2000/$3000 per > month minimum. then insurance, utilities, advertising, etc. As expected, you also ignore the back end, a source of revenue that is very profitable, sometimes more so than an individual car sale. > bottom line, you go ahead and believe these guys only make 0.5% markup. > but you'll be deluding yourself because the math just doesn't work. Once again, the BS flies when you state they "only" make 0.5% markup, sometimes they do, more often they don't. Over and over that has been stated and yet you continue as if EVERY vehicle was sold at the same markup. You're either very stupid or just being an ass (troll), past experience says it's the latter. |
Re: Sr. Citizen's Question On Car Pricing ?
Siskuwihane wrote:
> On Aug 26, 12:02 am, jim beam <spamvor...@bad.example.net> wrote: >> SMS wrote: >>> Siskuwihane wrote: >>>> I know what you mean, I recently saw a claim that rental car companies >>>> only pay 50% of sticker for a new car >>>> and since I've been involved in it, I knew it was a very inaccurate >>>> staement. >>>>> now, you go away and believe your little propaganda stories so it makes >>>>> you feel warm and fuzzy about what a great deal you negotiated.- Hide >>>>> quoted text - >>>> I never buy new and never mentioned any deals I had (or didn't). Must >>>> be another example of something being inaccurate. >>> Jim actually revealed another common misconception regarding car buying, >>> that of the "0.5%" mark-up. Dealers would be quite happy with 0.5% over >>> dealer cost on vehicles that are in sufficient supply. >> not true. business 101. simply can't cover overheads for $100. > > Why do you keep spouting off about a $100 deal when NO ONE mentioned > or suggested it? Do you think making things up will help your > argument? You also ignore the fact that several times it was posted > that these types of deal are not the norm, but again, you just want to > ignore anything else being stated. It's rather common for people that have paid more than others to make up stories such as this. > >> >>> He's a source of incorrect information on many different subjects. >> sure - i'm a massive bullshitter. > > About the $100 deal, yes you are. > >> but getting back on topic, let's do a little math: >> >> let's say a dealer has 6 sales dudes. let's say each one grosses $50k - >> to be conservative. to make $50k a year, that's 500 vehicles with 0.5% >> markup per year, or say 10 per week. for 6 sales dudes, that's 60 cars >> a week. that's about 6 transporter trucks per week. and that's with >> 100% of the net going to the sales dudes. >> >> now, let's say the sales dude keeps 50% of the net, the rest going to >> the dealer. that means 120 cars a week, 12 transporters per week, and >> out of that net $6000 [50% x 120 x $100], the dealer has to pay at least >> two on staff admins at say $1000 per week. then the kids that do the >> detailing of the new inventory. that's another $1000 per week, minimum. >> then real estate and/or loans, that will be another $2000/$3000 per >> month minimum. then insurance, utilities, advertising, etc. > > As expected, you also ignore the back end, a source of revenue that is > very profitable, sometimes more so than an individual car sale. It's much more than that. As in nearly all businesses, the same product is sold at different prices to different customers, often wildly varying prices. We all know people that have paid MSRP, or over MSRP for a new car, simply because they were unaware of how the process works. What many people are unaware of, and the manufacturers and dealer want to keep it that way, is how many people believe the "invoice" is some sort of holy grail. Honda and Toyota don't liking cutting production levels except in drastic situations. They'd rather offer incentives to dealers to sell more product. This is why you often see "all in stock at this price" ads (not the come-ons of "1 at this price") at prices significantly under invoice. One dealer near me recently had an "all model 2532 Camry Automatics in stock" for $18,588, with the note "93 in stock." The invoice is $19,174. The dealer receives about $950 back from Toyota for each vehicles sold, plus any factory to dealer incentives, plus that price included $500 in a factory to buyer incentive. This represents $864 over cost, even though it's $586 under invoice. If the dealer is getting more incentives from Toyota, good for him or her, that's not my concern. It's quite amusing to see people all concerned about whether the dealer is making enough profit. No dealer is going to accept a deal that is bad for them financially. They hold most of the cards. What they don't know before agreeing on a price is how much extra crap they can sell the customer in the finance department. The high margin items like warranties, financing, and WAO (worthless add-ons) are sold in the finacne department by high-pressure professionals. > Once again, the BS flies when you state they "only" make 0.5% markup, > sometimes they do, more often they don't. Over and over that has been > stated and yet you continue as if EVERY vehicle was sold at the same > markup. You're either very stupid or just being an ass (troll), past > experience says it's the latter. No one ever said they made 0.5% mark up on any vehicle, let alone every vehicle. But it is true that they often accept deals that they couldn't do if they were to sell every vehicle at that price. There will always be another customer along later, and there is no shortage of vehicles to sell to them. |
Re: Sr. Citizen's Question On Car Pricing ?
Siskuwihane wrote:
> On Aug 26, 12:02�am, jim beam <spamvor...@bad.example.net> wrote: >> SMS wrote: >>> Siskuwihane wrote: >>>> I know what you mean, I recently saw a claim that rental car companies >>>> only pay 50% of sticker for a new car >>>> and since I've been involved in it, I knew it was a very inaccurate >>>> staement. >>>>> now, you go away and believe your little propaganda stories so it makes >>>>> you feel warm and fuzzy about what a great deal you negotiated.- Hide >>>>> quoted text - >>>> I never buy new and never mentioned any deals I had (or didn't). Must >>>> be another example of something being inaccurate. >>> Jim actually revealed another common misconception regarding car buying, >>> that of the "0.5%" mark-up. Dealers would be quite happy with 0.5% over >>> dealer cost on vehicles that are in sufficient supply. >> not true. �business 101. �simply can't cover overheads for $100. > > Why do you keep spouting off about a $100 deal when NO ONE mentioned > or suggested it? who wrote: "No one made that claim. Sales people are paid for sales. It's much better to go home with $100 in your pocket from a $500 over deal than to go home after working 10 hours with nothing."??? > Do you think making things up will help your > argument? You also ignore the fact that several times it was posted > that these types of deal are not the norm, but again, you just want to > ignore anything else being stated. er, you're the one arguing the above. as if dealers sell for some minuscule profit after paying "dealer invoice". > > >> >> >>> He's a source of incorrect information on many different subjects. >> sure - i'm a massive bullshitter. > > About the $100 deal, yes you are. > >> but getting back on topic, let's do a little math: >> >> let's say a dealer has 6 sales dudes. �let's say each one grosses $50k - >> to be conservative. �to make $50k a year, that's 500 vehicles with 0.5% >> markup per year, or say 10 per week. �for 6 sales dudes, that's 60 cars >> a week. �that's about 6 transporter trucks per week. �and that's with >> 100% of the net going to the sales dudes. >> >> now, let's say the sales dude keeps 50% of the net, the rest going to >> the dealer. �that means 120 cars a week, 12 transporters per week, and >> out of that net $6000 [50% x 120 x $100], the dealer has to pay at least >> two on staff admins at say $1000 per week. �then the kids that do the >> detailing of the new inventory. �that's another $1000 per week, minimum. >> � then real estate and/or loans, that will be another $2000/$3000 per >> month minimum. �then insurance, utilities, advertising, etc. > > As expected, you also ignore the back end, a source of revenue that is > very profitable, sometimes more so than an individual car sale. it's a separate profit center - it doesn't pay any sales dude's commissions. again, how are you going to pay overheads and commissions on $100? [rhetorical] answer is, you're not - so "dealer invoice" is bullshit. that's my point. and thats the point you just don't seem to be able to grasp... > > > >> bottom line, you go ahead and believe these guys only make 0.5% markup. >> � but you'll be deluding yourself because the math just doesn't work. > > Once again, the BS flies when you state they "only" make 0.5% markup, > sometimes they do, more often they don't. Over and over that has been > stated and yet you continue as if EVERY vehicle was sold at the same > markup. You're either very stupid or just being an ass (troll), past > experience says it's the latter. again, you just don't read what i say - "dealer invoice" is a fiction designed to deceive - and successfully so if you believe a dealer makes a profit selling at a price that alleges to be some skinny margin of this number. and successfully so given that you're /still/ stubbornly clinging to its comfort! |
Re: Sr. Citizen's Question On Car Pricing ?
On Aug 26, 8:49 am, jim beam <spamvor...@bad.example.net> wrote:
> Siskuwihane wrote: > > On Aug 26, 12:02 am, jim beam <spamvor...@bad.example.net> wrote: > >> SMS wrote: > >>> Siskuwihane wrote: > >>>> I know what you mean, I recently saw a claim that rental car companies > >>>> only pay 50% of sticker for a new car > >>>> and since I've been involved in it, I knew it was a very inaccurate > >>>> staement. > >>>>> now, you go away and believe your little propaganda stories so it makes > >>>>> you feel warm and fuzzy about what a great deal you negotiated.- Hide > >>>>> quoted text - > >>>> I never buy new and never mentioned any deals I had (or didn't). Must > >>>> be another example of something being inaccurate. > >>> Jim actually revealed another common misconception regarding car buying, > >>> that of the "0.5%" mark-up. Dealers would be quite happy with 0.5% over > >>> dealer cost on vehicles that are in sufficient supply. > >> not true. business 101. simply can't cover overheads for $100. > > > Why do you keep spouting off about a $100 deal when NO ONE mentioned > > or suggested it? > who wrote: > > "No one made that claim. Sales people are paid for sales. It's much > better to go home with $100 in your pocket from a $500 over deal than > to go home after working 10 hours with nothing."??? > Exactly, the deal was $500 over, salesman $100, dealer $400+Back end. You say dealer can't cover overheads on $100 and again, NO ONE mentioned it or suggested it, even the example I gave has the dealer making at least $400 off the vehicle alone. Your $100 dealer profit was a total fabrication on your part. |
Re: Sr. Citizen's Question On Car Pricing ?
Siskuwihane wrote:
> On Aug 26, 8:49�am, jim beam <spamvor...@bad.example.net> wrote: >> Siskuwihane wrote: >>> On Aug 26, 12:02 am, jim beam <spamvor...@bad.example.net> wrote: >>>> SMS wrote: >>>>> Siskuwihane wrote: >>>>>> I know what you mean, I recently saw a claim that rental car companies >>>>>> only pay 50% of sticker for a new car >>>>>> and since I've been involved in it, I knew it was a very inaccurate >>>>>> staement. >>>>>>> now, you go away and believe your little propaganda stories so it makes >>>>>>> you feel warm and fuzzy about what a great deal you negotiated.- Hide >>>>>>> quoted text - >>>>>> I never buy new and never mentioned any deals I had (or didn't). Must >>>>>> be another example of something being inaccurate. >>>>> Jim actually revealed another common misconception regarding car buying, >>>>> that of the "0.5%" mark-up. Dealers would be quite happy with 0.5% over >>>>> dealer cost on vehicles that are in sufficient supply. >>>> not true. business 101. simply can't cover overheads for $100. >>> Why do you keep spouting off about a $100 deal when NO ONE mentioned >>> or suggested it? >> who wrote: >> >> "No one made that claim. Sales people are paid for sales. It's much >> better to go home with $100 in your pocket from a $500 over deal than >> to go home after working 10 hours with nothing."??? >> > > Exactly, the deal was $500 over, salesman $100, dealer $400+Back > end. > > You say dealer can't cover overheads on $100 and again, NO ONE > mentioned it or suggested it, even the example I gave has the dealer > making at least $400 off the vehicle alone. Your $100 dealer profit > was a total fabrication on your part. but those were /your/ numbers. and all this time, apparently without your understanding, i've been saying those numbers are bull because they're _too low_. |
Re: Sr. Citizen's Question On Car Pricing ?
On Aug 26, 9:14 am, jim beam <spamvor...@bad.example.net> wrote:
> Siskuwihane wrote: > > On Aug 26, 8:49 am, jim beam <spamvor...@bad.example.net> wrote: > >> Siskuwihane wrote: > >>> On Aug 26, 12:02 am, jim beam <spamvor...@bad.example.net> wrote: > >>>> SMS wrote: > >>>>> Siskuwihane wrote: > >>>>>> I know what you mean, I recently saw a claim that rental car companies > >>>>>> only pay 50% of sticker for a new car > >>>>>> and since I've been involved in it, I knew it was a very inaccurate > >>>>>> staement. > >>>>>>> now, you go away and believe your little propaganda stories so itmakes > >>>>>>> you feel warm and fuzzy about what a great deal you negotiated.- Hide > >>>>>>> quoted text - > >>>>>> I never buy new and never mentioned any deals I had (or didn't). Must > >>>>>> be another example of something being inaccurate. > >>>>> Jim actually revealed another common misconception regarding car buying, > >>>>> that of the "0.5%" mark-up. Dealers would be quite happy with 0.5% over > >>>>> dealer cost on vehicles that are in sufficient supply. > >>>> not true. business 101. simply can't cover overheads for $100. > >>> Why do you keep spouting off about a $100 deal when NO ONE mentioned > >>> or suggested it? > >> who wrote: > > >> "No one made that claim. Sales people are paid for sales. It's much > >> better to go home with $100 in your pocket from a $500 over deal than > >> to go home after working 10 hours with nothing."??? > > > Exactly, the deal was $500 over, salesman $100, dealer $400+Back > > end. > > > You say dealer can't cover overheads on $100 and again, NO ONE > > mentioned it or suggested it, even the example I gave has the dealer > > making at least $400 off the vehicle alone. Your $100 dealer profit > > was a total fabrication on your part. > > but those were /your/ numbers. and all this time, apparently without > your understanding, i've been saying those numbers are bull because > they're _too low_.- Hide quoted text - So you just pulled the $100 dealer profit out of thin air, gotcha. My numbers for "some" deals are not too low, what you don't understand (or are simply ignoring) is back end. Even when I provided a link that backed up my statement, you blew it off as "PR". You want to dismiss what I am claiming by saying I "feel warm and fuzzy about what a great deal I negotiated" when I never buy new, in fact I never buy from a dealer. I'm basing what I am posting on past experience when people bought cars FROM me. http://www.heavens-above.com/finance...e_finance.html "Majority of dealers these days rely on the back end profits because the front end profits are getting harder to maintain with increased competition. They will take a "short offer" on the front and make it up by making a killing on the back end. " http://www.cars.com/go/advice/Story....ject=negotiate "With the wide availability of invoice pricing, it's harder for dealers to squeeze margin out of the new-car transaction. Much of the profit has shifted to the "back end," http://www.dealix.com/Corporate/show...px?pressID=317 "As a result, because of the relationship we develop, we make up for any lost margin on the back end." http://www.carclicks.com/financing.html "The financing "arm" of a new car dealership is a prolific profit center--dealers will often take smaller profit deals when selling the car (the "front-end" profit) if they know that they are going to make a nice profit on the financing of the car (the "back-end" profit)" http://ganskyconsulting.com/theories.html "Back end...These profits are very often more than what the dealer made on the sale of the vehicle." |
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