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FDP Forum / Moe's Tavern (_8^(I) / Any car salesman here? Can you share some secrets? Or anyone else the knows, of course.

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RKSTRAT
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USA

"Clapton is Good"
Nov 3rd, 2017 08:24 AM   Edit   Profile   Print Topic   Search Topic


We have discussed this before, but I have some confusion.
I have been looking to PURCHASE a NEW car. Not pre-owned, not leased. That decision is solid.

It is between two luxury brands, brand A and brand B. The details are not important.

So for brand A, I was looking at the 2017, which was discounted.
I waited thought, as the pickings were slim. The 2018 came out about a month ago. When I do the Edmunds fair pricing, the 2018s are selling at up to 2K below invoice! How can that be?

So for brand B, I am looking at a 2017 and they have had two identical vehicles that I am interested in on the lot for about a month and a half. There doesn't seem to be a super great deal on them. If I do the Edmunds fair pricing they are coming is about 2K above the invoice. But I haven't started negotiating yet. Of course the Edmunds fair pricing can change pretty quickly I guess when the more severe discounts on 2017s begin.

Are car sales just slow? Should I push for an under invoice price for brand B?

Peegoo
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Nov 3rd, 2017 08:34 AM   Edit   Profile   Print Topic   Search Topic

Invoice is an imaginary number. Sticker price is just as blurry.

The number that matters is dealer cost--which is not invoice--and that is how you determine what a fair price is.

"Fair" is somewhere around 4%-5% over dealer cost: you're getting a good price, and the dealer is making some money on the sale.

This is a simplified version of the math tho. You have to do some homework, as well as look at all the additional charges the dealer will tack on (or try to tack on) that will appear on the buyer's order.

The other aspect is financing. Shop around (check your bank or CU) for best rate. There are differences. Many dealers offer incentives too, so figure all of that into your math.

Don't sign anything until you understand every cost on the buyer's order and and all the provisions of the financing deal.

Peegoo
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Nov 3rd, 2017 08:43 AM   Edit   Profile   Print Topic   Search Topic

The cost difference you're seeing between brands A and B are probably due to market demand.

Makes/models that steadily sell over time (due to good reviews, good customer satisfaction, image, etc.), rarely have discounts attached. Makes/models that are really slow movers get discounted to move the inventory. The longer a vehicle sits on a dealer's lot, the more it costs the dealer.

Car makers offer incentives (bonuses in the form of discounted vehicle cost) to dealers if they can keep the inventory moving. This is why the invoice price is not the whole truth: manufacturer's discounts offered to a dealer are not included in the invoice price.

RKSTRAT
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USA

"Clapton is Good"
Nov 3rd, 2017 08:44 AM   Edit   Profile   Print Topic   Search Topic

Gotcha, but if one car is over invoice and the other is under invoice,
I would guess that means something, relatively? Not absolutely, as you explained. I mean, 4K off a sticker price of a 2018 can't be all that bad, can it?

While we are at it, I was also offered an "employee discount" through the automaker, as I am considering my third "Brand A" vehicle in a row. I am wondering if that will be better than 4K off sticker?


mfitz804
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Staten Island, NY

Our resident rational liberal
Nov 3rd, 2017 08:48 AM   Edit   Profile   Print Topic   Search Topic

"I have been looking to PURCHASE a NEW car. Not pre-owned, not leased. That decision is solid."

If this was inserted in an attempt to keep this thread from devolving into a "you should never buy a new car, its a waste of money" thread, good luck with that with this crowd!! I would reference you to the thread where I asked how to get out of a badly financed vehicle, and the advice I got was "don't finance a vehicle", which of course is only good advice at that time if the vehicle you financed was a time traveling DeLorean.

Negotiating an under the invoice deal on a 2018 car will be very hard. Even though the dealer will still be making money, they usually don't want to do that. That being said, if the incentives offered are really good, it could be that its still worth it to them. You should check out what incentives are presently being offered by Brand A, that may well be the difference and you may be able to get your price slightly below invoice.

Regarding Brand B, on what are you basing the statement that there doesn't seem to be a super good deal on them? Have you attempted negotiations.

My technique for negotiating a purchase (or lease) is simple. Figure out what people are actually paying (internet sources, or if you know someone who has the same car that you are comfortable discussing things with, that works too). I often base my negotiations on what I want my monthly payment to be since I finance. So you need to figure that out as well, I usually figure it out with 0%, .9%, and 1.9% interest so I am well informed.

If the "going" rate is $300 a month, I usually go in and tell them it has to be $250. I also establish what interest rate they are offering, hoping for 0% which the last couple times I purchased, was available.

Then they scramble about until they get the deal as close to $250 as they can. Then I reject that deal as being too much. Then they go back to see what else they can do.

Eventually, they will reach a point where they can do no more for me, and I then either accept it, or I walk out. Typically it will be near the 'going" rate, and I will usually save a few dollars.

If they let you walk out, then they really couldn't do the deal. If they chase you into the parking lot, then they are yours.

Twice I had a dealer ask me if I was willing to walk out over $15-20 a month. The response to that is "are you willing to LET me walk out over $15-20 a month?"

One time I got my deal (after being chased into the parking lot), the other time I did not, and I walked out and did not look back. Always be ready to walk out. You don't need their car, they need your business.

j!mi
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NNJ

Sometimes you feel like a nut. . .
Nov 3rd, 2017 09:16 AM   Edit   Profile   Print Topic   Search Topic

You will get your best deals as you are walking out. Plenty of other fish out there.

mfitz804
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Staten Island, NY

Our resident rational liberal
Nov 3rd, 2017 09:23 AM   Edit   Profile   Print Topic   Search Topic

"You will get your best deals as you are walking out. Plenty of other fish out there."

Exactly. There is not a car dealer on earth that will let you walk out on a deal they can do. If they let you walk, you were asking for too much.

RKSTRAT
Contributing Member
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USA

"Clapton is Good"
Nov 3rd, 2017 09:53 AM   Edit   Profile   Print Topic   Search Topic

Okay, this is getting helpful. Of course I have done all this many times before, but I never saw a new model fair price going way below invoice.

"Regarding Brand B, on what are you basing the statement that there doesn't seem to be a super good deal on them? Have you attempted negotiations."

Yeah, didn't start negotiating yet.

mfitz804
Contributing Member
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Staten Island, NY

Our resident rational liberal
Nov 3rd, 2017 10:06 AM   Edit   Profile   Print Topic   Search Topic

So maybe there IS a good deal to be had, then...

Pinetree
Moderator Emeritus
(with many stars)

NW Pennsylvania

Nov 3rd, 2017 10:06 AM   Edit   Profile   Print Topic   Search Topic

Just remember, you do this every couple of years or so... and they do it every day.



6L6
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San Francisco, CA

Nov 3rd, 2017 10:09 AM   Edit   Profile   Print Topic   Search Topic

You may have heard the tune, "Drives Out Good" on CAR TALK (Click & Clack).

It was written and recorded by a close buddy of mine whose father made his living in the used car business in Florida. In short, "Drives Out Good" is a Used Car salesman's way of saying it will make it to the street from the lot and not much further...

I inspired (demanded!) my buddy to write the song after hearing so many hysterically funny stories he knew about the car business.

Whether it's a new one or a used one, do your homework and you'll probably be OK.

I should add that 18 months ago I bought my Son-in-Law's 2002 Porsche 911 Carrera Cabriolet. This Forum was very helpful in alerting me to important areas to check out. There were also those who said to run away from this car as fast I could!

I bought it, replaced whatever needed replacing, and have been having the time of my life using it as my daily driver. The sticker price on this car when new was $102K, but you can buy them all day long now for under $20K.

I sure wouldn't look past buying a used car. Why not let someone else eat the depreciation?

6

(This message was last edited by 6L6 at 12:58 PM, Nov 3rd, 2017)

LudwigVonFender
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USA

Own your finances...don't be owned
Nov 3rd, 2017 11:15 AM   Edit   Profile   Print Topic   Search Topic

I think the time of year you are buying can impact what kind of a 'good deal' you are going to get. It has been my experience that between November and April, you are not going to get the kind of deal you may be looking for as that is the time frame the new model year is selling. At least, that's what I have found around these parts. They also don't seem to have as many incentives in that time frame as well. YMMD(differ) on the type of vehicle you are looking at though.

My most recent purchase was done toward the end of June this year when I bought a '17 F150. At that time, they had an incentive I'd never heard of called a 'trade in incentive' where they gave me $1750 for my trade in addition to what they gave me for my trade which was considerably more. I did something unusual though. I traded two vehicles in for the F150.

When I was planning, I sat down and figured out just how much I thought was a fair trade offer for my two trades. When I actually did the deal, I got a good bit more for my trades, thanks to that 'trade in incentive' than I had in mind. Add the other incentives they had and it was more money than I've ever put down on a new vehicle to the tune of just under 22K, the amount of money I paid for one of my trades back in '06 when I bought it new. I don't want to forget to tell you that if you are a vet, let them know. They usually have an incentive for that as well. In my case, $750.

I ended up with the truck I was looking for with all the 'bells and whistles' I wanted plus a bit more with the financing I had in mind as well.

So, I think timing has a lot to do with what kind of good deal you may want.

Here's something else you may or may not know. Dealers make more money on your trade in than they do with the new vehicle they are selling you. I point this out to the sales guy when I'm dealing and their eyes usually look like saucers when I do and then they say, after a moment of hesitation, "you're exactly right". I'm not sure that revelation will help turn a better deal for you but, it doesn't hurt to let them know you know something about their business.

Peegoo
Contributing Member
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Enjoying

the downtime
Nov 3rd, 2017 12:02 PM   Edit   Profile   Print Topic   Search Topic

If you have a Car Max nearby, take your 'trade-in' and ask them for a quote. They will give you a reasonable value on your car--usually much better than when trading in at the dealer against a new/used vehicle.

Another thing dealers do when you finance through them is they "pay off your trade-in" if you still owe on that. Pay close attention to the details if you decide to go this route with the dealer, because you can get legally soaked.

Not all dealers are crooks, but they will try to squeeze every percentage point they can from you because they're in business to make a profit--not do community service.

LHW

Southwest Florida

Alone in my principles
Nov 3rd, 2017 12:08 PM   Edit   Profile   Print Topic   Search Topic

I haven't bought a new car in 9 years, but I remember getting a better deal by shopping online. Once we decided on the car, we went to the dealership and the paperwork was ready to sign. No muss, no fuss.

LudwigVonFender
Contributing Member
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USA

Own your finances...don't be owned
Nov 3rd, 2017 12:27 PM   Edit   Profile   Print Topic   Search Topic

That's one thing I left out. Shopping online. This is how I've purchased by last three vehicles including my F150. So much more easy to shop and find what you are looking for this way without driving all over the place. I shop 4 different dealers this way all from the safety of my Safe Place throw rug! 8^D

Peegoo
Contributing Member
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Enjoying

the downtime
Nov 3rd, 2017 12:50 PM   Edit   Profile   Print Topic   Search Topic

Many banks and credit unions offer online buying service--and it's usually a good deal and an easy buying experience.

You will receive an out-the-door price (includes taxes & tags) before you even show up at the dealership.

Note that these services should be the start of your search for the best deal. You can take that price to other dealers, and if they can beat the deal--you'll buy from them.

damuniz
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South Jersey/USA

She turned me into a newt!....
Nov 3rd, 2017 01:04 PM   Edit   Profile   Print Topic   Search Topic

IMO and I read online on some car research sites on how to buy a car, the sites like Kelly Blue Book, Edmunds and others who tell you what the invoice price and the "Fair Market Price" are all fake numbers biased on the Dealers side. That invoice price is not the true dealers cost. It is padded in the dealers favor. The Fair Market Price might be an average of what people are paying but again that is based on false numbers.

In any bell curve some people are paying more and some are paying less. If you are trying to get the lowest possible price you have to negotiate. The Fair Market Price is the average not the best/lowest price.

Dealers are also given incentives from the manufacturer the consumer knows nothing about. If a dealer hits certain quotas (monthly, quarterly and anually) they can get as much as $300-$400 on each vehicle they sell. that can add up really quickly. They are also give up to 4% on each car called hold back money. This to help pay for the dealer's overhead costs.

The best time to go is the last few days of the month/quarter. The dealer may be willing to take a loss on one vehicle to make his quota for that month/quarter and potentially make thousands based on his total sales for that month/quarter.

Also, I don't know when it started that the buyer had to pay for the destination costs of the car. I never had to pay that in the past. I always told the dealer it was his cost to do buisness. He could not sell me a car if it wasn't on his lot. If I special ordered a car then sure I would pay the destination fee. Now all the sites say it is a buyer cost, non-negotiable. Everything is negitiable IMO.


jhawkr
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Wichita, KS USA

It's all gravy from here on...
Nov 3rd, 2017 01:25 PM   Edit   Profile   Print Topic   Search Topic

Costco and Sam's also have buyer assistance programs that can help the average Joe keep from just getting totally soaked. But, not the cheapest route as they have to make a few bucks too.

jefe46
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State of Jefferson

Nov 3rd, 2017 04:36 PM   Edit   Profile   Print Topic   Search Topic

No dealer will sell a car at 4-5 % over invoice.
That would be 4-5 % gross profit when they are looking for 20+ %.

Any dealer who does that is "stealing the trade" or going broke or is getting an incentive from the factory for that particular vehicle.

Salesmen don't have the "secrets" the sales manager, general manger, possibly F&I manager and the dealer.
All else are drones. No offense to salesmen, I admire their ability to drink the kool-aid and eat the jello.

The Monroni/MSRP Federally mandated sticker is easy to read.

No dealer will show you the true invoice. That would be moronic.

As to destination charges, these are directly from the manufacturer/distributor and usually equalized across the county ie someone in Florida will pay the same amount as someone in California.

jefe46
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State of Jefferson

Nov 3rd, 2017 04:41 PM   Edit   Profile   Print Topic   Search Topic

"Exactly. There is not a car dealer on earth that will let you walk out on a deal they can do. If they let you walk, you were asking for too much."

This is true and obvious.




"Just remember, you do this every couple of years or so... and they do it every day."

They are professionals, you are an amateur.
The deck is stacked and the house always wins.

Just as there are other dealers, there are other customers.

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FDP Forum / Moe's Tavern (_8^(I) / Any car salesman here? Can you share some secrets? Or anyone else the knows, of course.




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