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

[El Rubio]

The best bet is to not NEED the vehicle. They always ask you if they give you the deal you want, are you willing to buy today? The reason is statistically, you are not likely to return. In most cases, they will not let you leave if they are willing to sell for your price. Obviously, you need to be realistic, but you need to be willing to walk away.

I purchased a vehicle once where the salesman was great, no hassles, just perfect. The finance guy was a jackass and almost cost them a sale. I was financing a $25k vehicle with $5k down. First he tried to sell me the $2800 extended warranty. He said the vehicle had over 20 computers and if any of them failed beyond 3years, it would be expensive. I told him I would rather bank the $2800 and take my chances. He tried to belittle me as if I didn't know what I was talking about. Then he tried to sell me gap insurance which would cover the difference between what I owed and actual value should I total the vehicle. It was $900. I told him I would talk to my insurance guy about that. He laughed at me and said that regular insurance companies can't offer gap insurance. I knew better and told him I was about to leave. He stopped trying to squeeze me for a few hundred here and there and got the deal finished. I spoke to the manager a few days later and told him how I felt. I doubt it made a difference. Oh, the gap insurance was $30 a year with my insurance.

 

[SimpleGreen]

The best bet is to not NEED the vehicle. They always ask you if they give you the deal you want, are you willing to buy today? The reason is statistically, you are not likely to return. In most cases, they will not let you leave if they are willing to sell for your price. Obviously, you need to be realistic, but you need to be willing to walk away.

I purchased a vehicle once where the salesman was great, no hassles, just perfect. The finance guy was a jackass and almost cost them a sale. I was financing a $25k vehicle with $5k down. First he tried to sell me the $2800 extended warranty. He said the vehicle had over 20 computers and if any of them failed beyond 3years, it would be expensive. I told him I would rather bank the $2800 and take my chances. He tried to belittle me as if I didn't know what I was talking about. Then he tried to sell me gap insurance which would cover the difference between what I owed and actual value should I total the vehicle. It was $900. I told him I would talk to my insurance guy about that. He laughed at me and said that regular insurance companies can't offer gap insurance. I knew better and told him I was about to leave. He stopped trying to squeeze me for a few hundred here and there and got the deal finished. I spoke to the manager a few days later and told him how I felt. I doubt it made a difference. Oh, the gap insurance was $30 a year with my insurance.

Dealer tried to pull my $1,000 off out of the equation, stating that they couldn't find my employer in their list. This may or may not have been true as the notification I had received was over a year old at that time. Either way, we had been discussing prices all week with that $1,000 off in mind. When he said I coudn't have it, I started gathering my papers and getting up for the door. They quickly reconsidered.

 

[RyanW]

Another thing that is nice to have in the back pocket, the girl at the DMV that does all the dealership paperwork. When dealers send in the bill of sale and title, she sees all the real numbers. I used to have that connection, and you'd be amazed at what some people pay for cars. 2 people in the same day, exact same car, $10,000 price difference.

There are certain tactics that some dealers use, and they are old school and very frowned upon in the modern day car game. Selling udercoating and scotchguard is a big sign that you need to leave and never return. There's always the infamous 7, 10, and 30 day call back scam too. This is when the finance guy or salesman calls you stating that the financing changed overnight, which is impossible, or that you suddenly aren't approved for the agreed upon terms.

*One more thing, the "invoice" that people see, isn't the real invoice. Even on family plan the dealer can make good money.

The following is a long drawn out story of how I had to deal with Team Honda a few years ago;

We had one dealer try this with one of our car purchases a few years ago. After doing all my research and actually understanding the numbers and what the fine print means, regardless of my experience in the dealership world, I made an outstanding deal. I was buying for my wife, so the car was hers, the money was mine. They decided to play the game on my wife. Well, we bought 3 days before the end of the 1st qtr, the car had only existed for 3 weeks, was the most expensive car available from the manufacturer, and I squeezed them for every little digit that counts, plus the car wasn't on the lot, so we had to wait for it to show up, which was over the weekend, no big deal. We picked it up the following week, and my wife starting using it as normal. The following week, she received a phone call saying she needed to "come in and sign some more paperwork." She told me and I knew immediately what was going on. We waited a few more days, fairly deep into the following month and the next quarter. I went with her, and they threw the spiel. All of a sudden we needed to pay an extra $100 a month. I stayed cool, and played along for a few minutes, knowing what numbers were changed for the dealer and salesman to make a killing. He asked if we still our original paperwork, I lied and said no, even though it was in my wife's purse. He proceeded to hand us a new contract and paperwork, back dated to our original purchase date, 10 days prior. I looked it over, saw the grossly inflated numbers, and handed it back to him saying I wouldn't sign a contract today that is dated 10 days ago. I knew this particular car needed every sale it could get for the 1st quarter, so I just played the angle as though I wanted the date to be current, knowing full well that it would kill numbers and commisions that were already on the books. He handed it back with a new date, the mileage was wrong, not accounting for the driving we had done, and then I said the only way I'll sign anything new is if I'm buying the car as used. The finance manager had a look on his face as though he had just **** a brick. I also mentioned that my wife had damaged the car pretty bad already and we had it scheduled to go into the body shop. Total lie, but we were smart enough to not bring the car with us to the dealership that day.

I told them just cancel the contract, we won't worry about fixing the car back and we would return it withing the hour. He left the room, and came back with the GSM and GM. They wanted to know about the car and the damage, and how we were going to fix it, and when we would sign the paperwork. Knowing every single digit on that contract, I grabbed a blank one and started writing numbers, I filled out the entire form for them. Handed it over and said "this." I didn't "screw them" but I managed a very good deal for me, and a minimal commission for them. Suddenly everthing was good with our financing, it seemed our credit all of a sudden became Tier 1 again, and we left, with a payment $50 LOWER than we started with.

My wife didn't realize a friend of hers was a manager at that dealer until a few weeks later. He told her he had heard about our deal and didn't realize it was her until she told him about it. He said they never had anyone come in and do what we did and come out on top. We have another family friend who was a GSM for a Honda dealer in Dallas, and was in town for the holidays later that year, saw our car and asked us about it. He of course was curious what we paid for it and even he said he's never sold one that cheap, and we got a hell of a deal.

 

[blackboltss]

All,

I got the invoice from the dealer

haha... don't trust that. I pulled that trick a time or two

 

[dfsutton]

haha... don't trust that. I pulled that trick a time or two

Read the rest of the post before you quote and laugh at me. Pretty damn rude of you.

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[blackboltss]

hold on there fella... was not laughing at you. I was laughing because they tried to pull that on you....

 

[dfsutton]

hold on there fella... was not laughing at you. I was laughing because they tried to pull that on you....

If you looked, I compared it with several other sources and it all said the same thing. $27,687. That's Edmunds, Kelley blue book, and Nada.com. So, should I trust none of them?

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[RyanW]

I wouldn't trust KBB, it's a joke. Edmund's is decent, but it's also sponsored by dealerships. I like USAA's car buyer service. It's pretty damn good, and a great place to start negotiating. If you go in there with some ridiculous low ball offer, you've probably already lost, because they see that every day. When I was doing car sales, my favorite customers came in with 800+ beacons and they usually bought at 2% over invoice. They didn't get a super fantastic deal, but they got a good fair deal, and usually were in and out pretty fast, as opposed to the 4-6 hours it usually takes.

 

[blackboltss]

Dude.. I wouldn't of have sent you a PM trying to help you if I didn't know what I was talking about. I sold cars and have family that owns several big area dealerships... I know the ins and outs of it. I offered help, if you don't want it then fine. Doesn't bother me one way or another. Im done with this tread. You need to chill have a beer. Best of luck in your purchasing experience.

 

[Knave]

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.

2013 Mazda CX-5 Touring

 

[crazy white boy]

Dealer hold back fees are the fees that they get from the manufacturer of the vehicle. They can sell you the car for exactly what they paid for it and they will still make 3-5 percent on dealer hold back fees. Never let them charge you for transport fees to get the car to the dealership. Used cars is where they really make money they go in really low on your trade and turn around and sell for anywhere from 50 to 100 percent mark up.

 

[dfsutton]

Never let them charge you for transport fees to get the car to the dealership.

Why and how do I go about this?


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[JBP55]

Dealer hold back fees are the fees that they get from the manufacturer of the vehicle. They can sell you the car for exactly what they paid for it and they will still make 3-5 percent on dealer hold back fees. Never let them charge you for transport fees to get the car to the dealership. Used cars is where they really make money they go in really low on your trade and turn around and sell for anywhere from 50 to 100 percent mark up.

Good post, this is correct but dealers do have overhead and expenses to pay. A dealer would get a lot of laughs at some of the posts in this thread, but not your post.

 

[Ellis1958]

My brother-in-law is a sales manager at a upper end dealership. His advice to me was easy.

- Ask to see the dealer invoice. That piece of paper showing what the dealership paid for the vehicle. If they won't show it or give you some numbers scribbled on a piece of paper, walk.

- Deduct from that value any rebates from the manufacturer to the dealer.

- From there negotiate a percentage of invoice minus rebates. 3% is a darn good deal. 4% is fair for both sides. 5% if you absolutely have to have THAT vehicle. Never go more than 5%.

- Don't discuss financing till the price negotiating is done.

Did exactly that with my last vehicle. No I didn't buy from my brother-in-law. Ended up with 4% over invoice nimus rebates which the in-law said is pretty much as low as he will go and still make a profit. Bar napkin figuring shows the dealership made $1000. I'm good with that.

 

[Btl_Rkt_Sci]

My brother-in-law is a sales manager at a upper end dealership. His advice to me was easy.

- Ask to see the dealer invoice. That piece of paper showing what the dealership paid for the vehicle. If they won't show it or give you some numbers scribbled on a piece of paper, walk.

- Deduct from that value any rebates from the manufacturer to the dealer.

- From there negotiate a percentage of invoice minus rebates. 3% is a darn good deal. 4% is fair for both sides. 5% if you absolutely have to have THAT vehicle. Never go more than 5%.

- Don't discuss financing till the price negotiating is done.

Did exactly that with my last vehicle. No I didn't buy from my brother-in-law. Ended up with 4% over invoice nimus rebates which the in-law said is pretty much as low as he will go and still make a profit. Bar napkin figuring shows the dealership made $1000. I'm good with that.

Are the rebates you're referring to the ones that are advertised and ultimately passed on to the customer? Otherwise, where do you see these rebates?

 

[JBP55]

My brother-in-law is a sales manager at a upper end dealership. His advice to me was easy.

- Ask to see the dealer invoice. That piece of paper showing what the dealership paid for the vehicle. If they won't show it or give you some numbers scribbled on a piece of paper, walk.

- Deduct from that value any rebates from the manufacturer to the dealer.

- From there negotiate a percentage of invoice minus rebates. 3% is a darn good deal. 4% is fair for both sides. 5% if you absolutely have to have THAT vehicle. Never go more than 5%.

- Don't discuss financing till the price negotiating is done.

Did exactly that with my last vehicle. No I didn't buy from my brother-in-law. Ended up with 4% over invoice nimus rebates which the in-law said is pretty much as low as he will go and still make a profit. Bar napkin figuring shows the dealership made $1000. I'm good with that.

Very good advise.

 

[Ellis1958]

Are the rebates you're referring to the ones that are advertised and ultimately passed on to the customer?

Yes. My new ride was a 2010 Toyota Tundra. Here's how to find the customer rebates.
- Go to Toyota.com
- Find the model your looking at. For example Tundra Double Cab.
- In the upper right hand corner is a tab "Tundra Shopping Tools". Mouseover that and enter your zip code. Click go.
- You have now left the national site and are at the local distributor site. In my case Gulf States Toyota. GST, remember that as the rebates use the abbreviation.
- At the top click "Offers". Then click your model again on the left.
- There is all the rebates and offers.

In some cases you can mix and match. I rolled Toyota Care along with the rebate. Didn't pay a cent for my first two service intervals at 10k and 20k miles. Since it's end of the model year the 2012s need to move. There's another $1000 rebate.

Easy enough to sign those rebates back to the dealer. Just knock the value of the rebates off invoice. If the dealer gets in a wad over that then say fine, have the rebates sent to my house. We'll now negotiate a much lower percentage over invoice. My dealer didn't do that but I was told to keep that card in my pocket. Just in case.

I may not have gotten the best deal on the planet but I certainly didn't get it stuck in and broken off.

 

[tonen123]

I am looking at getting a new tundra, if you dont mind me asking how much did you pay for yours, and what options did you get on it. I am looking at a 2013 tundra crew maxcab. They are asking 40k for it, I dont really want to pay that.

 

[RyanW]

It takes a bit of GoogleFu, but if you can find the forums on edmunds site, you can see the real numbers that people are paying. Not jsut bottom line figures but ALL of the numbers, plus realistic rates and things of that sort. If you get lucky, there'll be a disgruntled finance guy that will tell everyone the absolute lowest most difficult to get price and all the little fun numbers that go along with it on that nice long form.

 

[Scott.Thornton]

Feel free to use google. Lying about a deal to another dealer is still a lie. I attempt to do everything in a way that God will approve of, not what will satisfy my human need at that point in time.