Negotitating for a new car. How far below invoice is the price the dealer pays?

[dfsutton]

All,

I'm negotiating on a new car for my wife and was wanting to get some advice. I got the invoice from the dealer and also looked it up on Edmunds and it shows the invoice price on both being right at $27,700. There is currently a $3500 rebate, which would bring the invoice down to 24,200. I've gotten the dealer to offer $23,500 plus TT&L for the deal. Here is my question. Is there any more room for me to try lower this down or have I hit bottom? I thought the hold back was normally about $500, but this dealer has offered $700 below the invoice ($4200 below invoice including the $3500 rebate). I'm not super knowledgeable about cars, and was wondering if this was a good deal like it sounds, or if there is more work to be done. Thanks.

 

[jasonj5313]

Rule of thumb for me is, nada trade in value. My reasoning is, if I wreck the vehicle my inusrance will pay average retail plus ttl. Gap insurance is not necessary if this is the case.

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[dfsutton]

Rule of thumb for me is, nada trade in value. My reasoning is, if I wreck the vehicle my inusrance will pay average retail plus ttl. Gap insurance is not necessary if this is the case.

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Can you explain this more. I don't know if I'm completely understanding you.

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[RyanW]

Give me the details of the car and I will give you an honest best price, that a dealer will actually sell it to you for.

 

[Swampwood]

A dealer is in business to make money and not to give that vehicle away for the famous $100 over invoice phrase. With that knowledge and your wit about you; you should research the type of vehicle you need and its price (MSRP). Once you have your price gun loaded, go find a car you want, take away the "so called" rebates and give me's and that is your starting price. You should be able to go down from there, because all the price give-aways to this point have been paid for by concessions from the manufacture, you haven't negotiated for any of them! Depending on what time of the month it is, sales quota level achieved and how gullible the sales person find you to be will determine what your final price will be! Know what you can afford before you ever go in to deal and never let them dictate "monthly payments" to you...they get over on people that way all the time. Hope that helps.

 

[jasonj5313]

Can you explain this more. I don't know if I'm completely understanding you.

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Nada.com trade in value.

If you can get at or below the trade in value of a car you have a good deal.

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[thatguy]

I don't really pay much attention to what the salesman quotes. I do all my dealing in the finance office. I pick a price point, pick a note, pick a vehicle. If the finance guy can't make it work I leave. (so far I have never had to leave without what I wanted)

 

[returningliberty]

My experience has been slightly different. The last car I bought before my current one, I got quotes from every dealership who had one. I then pitted them against each other until I got a MSRP 19,500 to about 12,500. Once I got the right dealer, she quoted me 12,000 (on the phone). I then talked to her supervisor, and I lied and said the deal was 11,000, which she balked at, and we finally settled on 11,400. I wrote them a check, picked up my new truck, and drove off.

Now, this was a year old model that had been sitting there for a long time , and no one was buying trucks with bad gas mileage at the time.

The Last car I bought had an MSRP of like 32,000, which I haggled down to 25,000. I could probably have gone further, but I was ok with that price at the time. Only got 2k off after the rebates etc. even paying cash.

YMMV.

 

[king4456]

Give me the details of the car and I will give you an honest best price, that a dealer will actually sell it to you for.

Ryan ford explorer 2013 with a 39.5k price tag XLT. 2k in rebates down to 31500. Good or not

 

[Barry J]

even paying cash.

YMMV.

They would rather you not pay cash. They make a comission of the financing. Haggle them down saying you will finance and then pay cash after the deal is made.

 

[CEHollier]

They would rather you not pay cash. They make a comission of the financing. Haggle them down saying you will finance and then pay cash after the deal is made.

LOL - Lie to them like they lie to you.

 

[JadeRaven]

Holdback can be anywhere from $500 to a couple grand on a more expensive car.

You have probably negotiated a good deal.

Don't get screwed on the trade.

 

[edman87k5]

As said before, it depends on the car and the dealer.Bigger dealers get more kick back and therefore pay less for vehicles. Some cars have only a couple thousand more than the dealer paid as the msrp, some trucks it is more like 15k.
I think jason5315 is talking about buying a used vehicle. His summation is also not always good. Take a 1 year old truck or jeep with under 10k miles. There is a strong chance the nada trade value is actually higher than what you can buy a new one at.

 

[dwr461]

My advice from having bought or leased many cars both used and new over the years. Never buy a new car. Ever. Period.

Buy a clean used car with a bumper to bumper warranty. You'll a little more for the warranty but now you got the same protection that a new car would have.

I bought a 2006 Mercury Grand Maquis with 40K miles on it in 2010. I bought the warranty 24 months or 24K miles. The alternater was replaced under warranty. I bought a car that retailed in 2006 for $45,000 for $14,000.

Thats a $31,000 depreciation in four years! $7,750 per year. Lost! Not just lost but I would've paid interest on my loss!

Buying new cars is for suckers in my opinion.

Dave

 

[RyanW]

Ryan ford explorer 2013 with a 39.5k price tag XLT. 2k in rebates down to 31500. Good or not

Need all the options for a good price

Without knowing the options and working only off of a base model XLT FWD, you should be able to knock $2800 off sticker right off the bat before any hold back or incentives. Is that price including any kind of trade-in or anything? If you can find a 2012, you can really snag a great deal. Ford puts a LOT of extra money in their cars merely for giving dealers the ability to slap a "$10,000 off" sticker on their cars and trucks, but it all depends on the options and the region.

 

[JBP55]

Like asking about a gun, there is some good advise and some not so good advise in this thread. I concur with Jade Raven.

 

[SimpleGreen]

My advice from having bought or leased many cars both used and new over the years. Never buy a new car. Ever. Period.

Buy a clean used car with a bumper to bumper warranty. You'll a little more for the warranty but now you got the same protection that a new car would have.

I bought a 2006 Mercury Grand Maquis with 40K miles on it in 2010. I bought the warranty 24 months or 24K miles. The alternater was replaced under warranty. I bought a car that retailed in 2006 for $45,000 for $14,000.

Thats a $31,000 depreciation in four years! $7,750 per year. Lost! Not just lost but I would've paid interest on my loss!

Buying new cars is for suckers in my opinion.

Dave

Probably because a Grand Marquis is/was old, antiquated, junk.

I don't see a problem buying new as some vehicles depreciate far worse than others. I bought my '12 Camaro new with 14 miles on it. They actually hold value surprisingly well, especially the SS car (highest in their class). However, that's a $26K car. Half as much room to drop value.

In the end, I'd say just do your numbers, compare dealers, and if you are happy with it, buy. There were no rebates or anything to be had on a '12 Camaro when I bought, so all I got it down as $1,000 due to where I worked. I left happy, so regardless of whether or not it was a screaming deal, I have not been dissapointed with it yet. Did fair with the trade in and down payment, so the car cannot depreciate faster than what I owe, either.

 

[RyanW]

Until I got ahold of a Wrangler, I never realized how high their resale value is. If you think you can negoiate a good deal on a Jeep, the dealer will see you coming a mile away. Dealers make, at most, $1,700 on a Wrangler, gross. There are never any rebates, nor incentives. You can get special plan pricing, but that really doesn't add up to a whole lot. If you think you are going to snag a deal on a low mileage newer used one, you've got another thing coming, the resale is unreal, and they are in pretty high demand.

A Grand Marquis on the otherhand, when they were still made, were a dime a dozen. They held no resale value because of the massive amount of government fleet vehicles constantly being on the market for cheap, even ones in great shape with low mileage. You're also comparing full sticker retail as opposed actual market price, which was about $10-15k less, so the depreciation really wasn't as bad as you make it seem.

Cars that always have huge rebates tend to appear to lose more value, when in reality, over half of that lost value was money that was never spent from day 1. I brand new F150 stickers for $36,000, but there's $10,000 in rebates. So you could say that day one, the truck is only worth $26,000, and you just lost $10k from sticker, OMG the money was thrown away!!!! But in reality, the money was never there. When you factor in the ungodly taxes that this state charges for buying a car (TX only charges 4%) and all the associated fees, then the numbers really get sketchy.

 

[dixiejarhead]

They would rather you not pay cash. They make a comission of the financing. Haggle them down saying you will finance and then pay cash after the deal is made.

This. I go in with cash, but don't tell them. I price out the sticker price and convert to 65% of sticker for my starting point. I generally walk out two to three times before they deal....

Example: 2008 Hummer H3, sticker 33,900.00. Walked out with it for 23,900.00.

 

[Sugarbug]

I worked at a dodge dealership for a while. On one commander I sold, the manager showed me what they paid for it.

The difference between what they paid and what the sticker showed was $20,000. He thought I would think that was cool. I didn't.