Invoice vs. MSRP vs. Cost
02-03-2004, 05:04 PM
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Invoice vs. MSRP vs. Cost
I am looking at a car that has an MSRP of $21,595 the invoice amount is $19,942. I assume the cost to the dealer is even less. What exactly does the invoice amount refer to?
02-03-2004, 05:33 PM
#2
Invoice is a made-up number to fool the public into thinking that that's what the dealership pays for the vehicle. It's total BS.
The actual cost depends on the size of the dealership's allotment, which is the number of vehicles they are allocated from the factory. The bigger the dealership, the cheaper they can get cars for.
The actual cost depends on the size of the dealership's allotment, which is the number of vehicles they are allocated from the factory. The bigger the dealership, the cheaper they can get cars for.
02-03-2004, 05:36 PM
#3
Oh, yeah. If you ask the dealership for their invoice, they will show it to you. If you ask them for the cost, they will either play dumb or be like "I'm just a salesman. I don't have those figures."
Sometimes it's best to deal with the fleet manager of the dealership. Either way, you're basically dealing with him/her because even when you talk with a salesperson, they always take your offer to the manager. By talking to the manager directly, you can save time and money.
Sometimes it's best to deal with the fleet manager of the dealership. Either way, you're basically dealing with him/her because even when you talk with a salesperson, they always take your offer to the manager. By talking to the manager directly, you can save time and money.
02-03-2004, 05:40 PM
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There is also a dealer holdback number which is part of their profit. It is anywhere from a few hundred to over 1k per car. Generally it is tough to dip into this number on a popular car. Get near the end of a month or quarter and you sometimes can.
02-03-2004, 06:17 PM
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most people i have talked to afree that 3% over invoice is a fair price. This way the dealer makes some money on the sale and u save some cash cause ur not paying msrp. They will usually let the car for this much as long as it's not in high demand (i.e sti, rx8 or g35c)
02-03-2004, 06:51 PM
#7
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If you're a AAA member you can generally get a price of about $800 over invoice, so anything under that is a decent deal. Most places won't sell you a car for under invoice, but you can generally get pretty close to the invoice price from what I've seen.
Anything under invoice is usaully on a leftover car (like the 03 CL's that are still on the dealers lot). I almost bought a 2002 Accord leftover in Oct 02 (the 03's were already on the lot). The dealer went down to 1700 under invoice without me trying real hard, but I decided to spend the extra $$ and get the CLS 6spd.
Anything under invoice is usaully on a leftover car (like the 03 CL's that are still on the dealers lot). I almost bought a 2002 Accord leftover in Oct 02 (the 03's were already on the lot). The dealer went down to 1700 under invoice without me trying real hard, but I decided to spend the extra $$ and get the CLS 6spd.
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02-03-2004, 07:01 PM
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Originally posted by Pure Adrenaline
Sometimes it's best to deal with the fleet manager of the dealership. Either way, you're basically dealing with him/her because even when you talk with a salesperson, they always take your offer to the manager. By talking to the manager directly, you can save time and money.
Sometimes it's best to deal with the fleet manager of the dealership. Either way, you're basically dealing with him/her because even when you talk with a salesperson, they always take your offer to the manager. By talking to the manager directly, you can save time and money.
02-03-2004, 07:04 PM
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Originally posted by greenmonster
If you're a AAA member you can generally get a price of about $800 over invoice, so anything under that is a decent deal. Most places won't sell you a car for under invoice, but you can generally get pretty close to the invoice price from what I've seen.
If you're a AAA member you can generally get a price of about $800 over invoice, so anything under that is a decent deal. Most places won't sell you a car for under invoice, but you can generally get pretty close to the invoice price from what I've seen.
we got our expedition at $600 over invoice AAA seems like a good deal although I don't think you can get deals on hot cars
02-03-2004, 08:01 PM
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Re: Invoice vs. MSRP vs. Cost
Originally posted by CLSter
I assume the cost to the dealer is even less. What exactly does the invoice amount refer to?
I assume the cost to the dealer is even less. What exactly does the invoice amount refer to?
Floor Plan dealers(larger types) have more wiggle room for 2 main reasons:
1) They buy in bulk(fleet purchases, etc)
2) They buy their Financing in bulk(they pay less interest on the iron while it sits on the lot)
The only real method you can use is to start at invoice, talk to 2 or 3 dealers & get their best price(on a newer model). But remember...they don't have to sell a car to you at any discount...but most will charge what the market will bare.
If it's a brand new model---don't expect any deal---if you're trading---don't expect a good deal.
Now, if it's an older car that's been out a few years...invoice should be a starting point & go LOWER. Just ask "How low BELOW invoice will you sell this car for?". Ask 2 or 3 dealers & you'll have a decent deal from one of them, I'm sure.
02-03-2004, 08:42 PM
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Re: Invoice vs. MSRP vs. Cost
Originally posted by CLSter
I am looking at a car that has an MSRP of $21,595 the invoice amount is $19,942. I assume the cost to the dealer is even less. What exactly does the invoice amount refer to?
I am looking at a car that has an MSRP of $21,595 the invoice amount is $19,942. I assume the cost to the dealer is even less. What exactly does the invoice amount refer to?
Then take the invoice price, subtract the holdback and any rebates. Then add 5% of that figure back in (the dealer isn't there to make us feel good, he needs to make a buck). Add tax, freight (if it wasn't in the invoice price) and tags. Thats what you should pay. Not one penny more. Be prepared to walk if they won't do it. Another dealer will.
Most dealers are more flexible toward the end of the month. That's when the floor plan kicks in. The floor plan is the interest they pay to the bank (or whomever is financing their purchase of the cars they have in stock) and usually is due monthly. If they sell the car, they don't pay interest for it.
It's best if you can do a cash deal (if you need financing, arrange it yourself with your bank or credit union). Tell the salesperson "I'll give you X (insert the figure arrived at above) for this car 'on the street'"- that means bottom line including tax & tags. DO NOT drool over the car, it will blow your credibility when you tell them thats the price or you walk.
Have fun.
02-03-2004, 09:09 PM
#12
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One of my favorite websites -- chock full of useful information.
http://www.carbuyingtips.com
Almost everything the consumer needs to know about car purchases.
http://www.carbuyingtips.com
Almost everything the consumer needs to know about car purchases.
02-04-2004, 08:00 AM
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Re: Re: Invoice vs. MSRP vs. Cost
Originally posted by Starter
1) Then take the invoice price, subtract the holdback and any rebates. Then add 5% of that figure back in (the dealer isn't there to make us feel good, he needs to make a buck). Add tax, freight (if it wasn't in the invoice price) and tags. Thats what you should pay. Not one penny more. Be prepared to walk if they won't do it. Another dealer will.
2) It's best if you can do a cash deal (if you need financing, arrange it yourself with your bank or credit union). Tell the salesperson "I'll give you X (insert the figure arrived at above) for this car 'on the street'"- that means bottom line including tax & tags.
1) Then take the invoice price, subtract the holdback and any rebates. Then add 5% of that figure back in (the dealer isn't there to make us feel good, he needs to make a buck). Add tax, freight (if it wasn't in the invoice price) and tags. Thats what you should pay. Not one penny more. Be prepared to walk if they won't do it. Another dealer will.
2) It's best if you can do a cash deal (if you need financing, arrange it yourself with your bank or credit union). Tell the salesperson "I'll give you X (insert the figure arrived at above) for this car 'on the street'"- that means bottom line including tax & tags.
2) Dealers will rarely give you a better deal when you procure your own financing, since they make money on that too. Banks sell money to dealers at low prices & the dealers make a couple percent on each financing deal. Plus, it gives them incentive to sell warranties, Life & AH, Gap insurance, etc.
#2 is the biggest myth going.
02-04-2004, 09:03 AM
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Originally posted by liquid_x
we got our expedition at $600 over invoice AAA seems like a good deal although I don't think you can get deals on hot cars
we got our expedition at $600 over invoice AAA seems like a good deal although I don't think you can get deals on hot cars
If you want to be the first on your block to own a hot new car, you still have to pay for that privilege
02-04-2004, 10:44 AM
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Originally posted by greenmonster
If you want to be the first on your block to own a hot new car, you still have to pay for that privilege
If you want to be the first on your block to own a hot new car, you still have to pay for that privilege
02-04-2004, 10:52 AM
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Originally posted by chris3240929
New Z Roadster went for $7K over MSRP at a dealership near me.
New Z Roadster went for $7K over MSRP at a dealership near me.
I see alot of used 350Z coupes advertised forsale from private owners with prices that are very close to what you paid you would pay for a new one at dealer invoice.
The original buyers got hit with the "new car" markup and want's to pass the expensive off on the buyer
I have seen a touring and track model with 9-11K miles selling for $26K locally. Looks like some people don't mind taking the big depreciation hit.
02-04-2004, 11:19 AM
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What car are you looking at? That will determine what you have to pay.
For instance, a honda is cheaper in Chicago and Houston. A friend of mine flew to Houston and purchased an Odyssey at invoice about 11 months ago. The Denver dealers wanted $2K over invoice and wouldn't negociate at all. With the flight and other costs, he saved about $1400 bucks.
On the other hand, if you want a Ford, you should be paying a few bucks under invoice plus taking the big rebates (or Zero down, depending on your finances).
One last place to look for prices, edmunds.com. Don't pay any attention to what edmunds says you should pay, look at the "Customer Discussion" boards to see what other people have been paying. Most people will tell you exactly what they paid and where they got the deal. That's how my friend ended up in Houston.
For instance, a honda is cheaper in Chicago and Houston. A friend of mine flew to Houston and purchased an Odyssey at invoice about 11 months ago. The Denver dealers wanted $2K over invoice and wouldn't negociate at all. With the flight and other costs, he saved about $1400 bucks.
On the other hand, if you want a Ford, you should be paying a few bucks under invoice plus taking the big rebates (or Zero down, depending on your finances).
One last place to look for prices, edmunds.com. Don't pay any attention to what edmunds says you should pay, look at the "Customer Discussion" boards to see what other people have been paying. Most people will tell you exactly what they paid and where they got the deal. That's how my friend ended up in Houston.
02-04-2004, 11:20 AM
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Originally posted by greenmonster
I see alot of used 350Z coupes advertised forsale from private owners with prices that are very close to what you paid you would pay for a new one at dealer invoice.
I see alot of used 350Z coupes advertised forsale from private owners with prices that are very close to what you paid you would pay for a new one at dealer invoice.
These are the ones to look out for. They are practically brand new with a good price. 350Z is a good example...I see a ton of them on the used lots & the prices are coming down. Maybe I'll buy one in a few years
02-04-2004, 11:25 AM
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Originally posted by GEB
A friend of mine flew to Houston and purchased an Odyssey at invoice about 11 months ago. The Denver dealers wanted $2K over invoice and wouldn't negociate at all. With the flight and other costs, he saved about $1400 bucks.
A friend of mine flew to Houston and purchased an Odyssey at invoice about 11 months ago. The Denver dealers wanted $2K over invoice and wouldn't negociate at all. With the flight and other costs, he saved about $1400 bucks.
Or he could've just called around...taking a flight =
Originally posted by GEB
One last place to look for prices, edmunds.com. Don't pay any attention to what edmunds says you should pay, look at the "Customer Discussion" boards to see what other people have been paying. Most people will tell you exactly what they paid and where they got the deal. That's how my friend ended up in Houston.
One last place to look for prices, edmunds.com. Don't pay any attention to what edmunds says you should pay, look at the "Customer Discussion" boards to see what other people have been paying. Most people will tell you exactly what they paid and where they got the deal. That's how my friend ended up in Houston.
02-04-2004, 11:30 AM
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My past 3 cars, (GMC Truck, Nissan Xterra, CL - All NEW) I got for 150-250- over the invoice cost. So they all made 150-250 per car plus the holdback which is usually 2-3% of the invoice price. PLUS, they even get a manufactures kick-back at the end of the year which is like a rebate that the dealer see's..
Trust me, no dealer ever LOOSES money!!!
Trust me, no dealer ever LOOSES money!!!
02-04-2004, 11:56 AM
#21
Originally posted by CLean
My past 3 cars, (GMC Truck, Nissan Xterra, CL - All NEW) I got for 150-250- over the invoice cost. So they all made 150-250 per car plus the holdback which is usually 2-3% of the invoice price. PLUS, they even get a manufactures kick-back at the end of the year which is like a rebate that the dealer see's..
Trust me, no dealer ever LOOSES money!!!
My past 3 cars, (GMC Truck, Nissan Xterra, CL - All NEW) I got for 150-250- over the invoice cost. So they all made 150-250 per car plus the holdback which is usually 2-3% of the invoice price. PLUS, they even get a manufactures kick-back at the end of the year which is like a rebate that the dealer see's..
Trust me, no dealer ever LOOSES money!!!
They made more than 150-250 per car, because invoice is NOT what they pay. Trust me, they made thousands per car.
Holdback is usually 3% of the MSRP, not invoice.
02-04-2004, 12:01 PM
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Originally posted by Pure Adrenaline
A couple things I want to clear up.
They made more than 150-250 per car, because invoice is NOT what they pay. Trust me, they made thousands per car.
Holdback is usually 3% of the MSRP, not invoice.
A couple things I want to clear up.
They made more than 150-250 per car, because invoice is NOT what they pay. Trust me, they made thousands per car.
Holdback is usually 3% of the MSRP, not invoice.
I will start below invoice then. Damn, and I thought I did well by getting my NAV for 'free' when I got the CL-S.
02-04-2004, 12:13 PM
#23
Originally posted by CLSter
I will start below invoice then. Damn, and I thought I did well by getting my NAV for 'free' when I got the CL-S.
I will start below invoice then. Damn, and I thought I did well by getting my NAV for 'free' when I got the CL-S.
My dealership was the only Acura dealership within a 40-minute radius. The best price I could get out of them after a week of negotiating was 30,200 for an '03 TL-S without Nav, with MSRP of 31,830.
Whoop-de-do, I got 1630 off the sticker. There are other members who got the same car for like 27-29k. But my guess is that competition is much stiffer out there.
So yeah, keep that in mind.
02-04-2004, 12:20 PM
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Originally posted by Pure Adrenaline
They made more than 150-250 per car, because invoice is NOT what they pay. Trust me, they made thousands per car.
Holdback is usually 3% of the MSRP, not invoice.
They made more than 150-250 per car, because invoice is NOT what they pay. Trust me, they made thousands per car.
Holdback is usually 3% of the MSRP, not invoice.
You seem to think there is yet another 'invoice' number even lower...so explain yourself.
I get copies of dealer invoices all day long because I'm in commercial finance for a large bank, so I'd love to hear what you have to say.
02-04-2004, 12:36 PM
#25
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Re: Re: Invoice vs. MSRP vs. Cost
Originally posted by Starter
You need to do some research. Find out the following: 1) invoice price (and does it include the freight). 2) holdback - this is an incentive from the mfg to the dealer. 3) any special rebates (cash back or whatever) or deals going on now.
Then take the invoice price, subtract the holdback and any rebates. Then add 5% of that figure back in (the dealer isn't there to make us feel good, he needs to make a buck). Add tax, freight (if it wasn't in the invoice price) and tags. Thats what you should pay. Not one penny more. Be prepared to walk if they won't do it. Another dealer will.
Most dealers are more flexible toward the end of the month. That's when the floor plan kicks in. The floor plan is the interest they pay to the bank (or whomever is financing their purchase of the cars they have in stock) and usually is due monthly. If they sell the car, they don't pay interest for it.
It's best if you can do a cash deal (if you need financing, arrange it yourself with your bank or credit union). Tell the salesperson "I'll give you X (insert the figure arrived at above) for this car 'on the street'"- that means bottom line including tax & tags. DO NOT drool over the car, it will blow your credibility when you tell them thats the price or you walk.
Have fun.
You need to do some research. Find out the following: 1) invoice price (and does it include the freight). 2) holdback - this is an incentive from the mfg to the dealer. 3) any special rebates (cash back or whatever) or deals going on now.
Then take the invoice price, subtract the holdback and any rebates. Then add 5% of that figure back in (the dealer isn't there to make us feel good, he needs to make a buck). Add tax, freight (if it wasn't in the invoice price) and tags. Thats what you should pay. Not one penny more. Be prepared to walk if they won't do it. Another dealer will.
Most dealers are more flexible toward the end of the month. That's when the floor plan kicks in. The floor plan is the interest they pay to the bank (or whomever is financing their purchase of the cars they have in stock) and usually is due monthly. If they sell the car, they don't pay interest for it.
It's best if you can do a cash deal (if you need financing, arrange it yourself with your bank or credit union). Tell the salesperson "I'll give you X (insert the figure arrived at above) for this car 'on the street'"- that means bottom line including tax & tags. DO NOT drool over the car, it will blow your credibility when you tell them thats the price or you walk.
Have fun.
I used Edmunds.com for my research:
http://www.edmunds.com/
They list all of the above and are a very good resource. The last car that I purchased new was a 2000 Jetta for my wife. I got the numbers from Edmunds, got a loan from my credit union and waited until 4:30pm on the last day of the month. I asked for and got the car for $300 UNDER invoice.
02-04-2004, 12:41 PM
#26
Originally posted by chris3240929
We've already mentioned Invoice-Holdback=Cost...anything below that depends on the volume of the dealership/factory program incentives.
You seem to think there is yet another 'invoice' number even lower...so explain yourself.
I get copies of dealer invoices all day long because I'm in commercial finance for a large bank, so I'd love to hear what you have to say.
We've already mentioned Invoice-Holdback=Cost...anything below that depends on the volume of the dealership/factory program incentives.
You seem to think there is yet another 'invoice' number even lower...so explain yourself.
I get copies of dealer invoices all day long because I'm in commercial finance for a large bank, so I'd love to hear what you have to say.
Also, just because you receive dealer invoices all day long, that doesn't mean that's the 100% actual price they pay for the vehicle. One of my friend's family owned a Ford dealership. Invoice is just a made-up number.
If a car with the MSRP of 30,000 dollars has an invoice price of 26,000, then do you really think the dealership paid 26,000 for that car? Well, you're the banker with the dealer invoices. You tell me. But from my experience and research after research, it leads me to believe that dealerships actually pay less than that.
When I was getting my TL-S, the saleslady pitched the usual lines. I said, "Look, you don't have to show me the invoice. I already know that from my research. But we both know that's not the actual price you paid for the car. I want to find a price where I can save money and you still make a profit." She was stunned and went back to her manager.
The equation should look more like this -->
invoice - profit = actual cost
See, holdback is NOT factored into the cost/invoice/profit, because it's an incentive that the corporate pays to the dealership ON THE SIDE to maintain the car until its sale. This includes cleaning, gas, fluids, interest payment to the finacing bank, etc.
.02
02-04-2004, 12:53 PM
#27
Also, I would like to point out that while I didn't get the best price in the country using my tactics, but I did probably get the best price I could get in Southeastern Michigan. The closest other dealership, Suburban Acura about 45 minutes away, flat out said "We can't beat that price. I would get fired for selling this car for that price. Thanks for looking into us, but you got a good deal so I suggest taking it."
Good enough for me.
Good enough for me.
02-04-2004, 12:59 PM
#28
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Originally posted by chris3240929
They are practically brand new with a good price. 350Z is a good example...I see a ton of them on the used lots & the prices are coming down. Maybe I'll buy one in a few years
They are practically brand new with a good price. 350Z is a good example...I see a ton of them on the used lots & the prices are coming down. Maybe I'll buy one in a few years
http://www.vpcars.com/scripts/CarSea...y&newused=used
I've been thinking about a used c5 z06 or 350z to use as a summer only car, and the Z's are coming down in prices quick. Even with the used dealer making a coupla bucks off the deal, they prices on used Z's are becoming very attractive. I can only imagine what these things are going for at the dealer auctions.
02-04-2004, 02:00 PM
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Originally posted by Pure Adrenaline
You're telling me that dealerships don't make that much money per vehicle?
So now you're asking me? lol ...Actually, they make more on used car sales.
When factoring in financing costs, they do make thousands in pure profit over the course of the financing term.
Wrong. Dealers buy their money just like a consumer. The bank makes the money over the course of the loan, not dealers...dealers don't hold loans unless you buy a 76 Pinto at a 'Buy Here, Pay Here" place.
Also, just because you receive dealer invoices all day long, that doesn't mean that's the 100% actual price they pay for the vehicle.
As I stated earlier...the invoice is the accepted pricing. Holdback is pure dealer profit. Anything more than Holdback is based on volume & sales incentives, ie: Not numbers you will be able to determine when trying to buy the car as they vary from dealer to dealer. Too many variables to consider, marketing, demographics, etc, etc. Not to mention, that a dealer cannot possibly factor in what incentives he will have at months-end, if you're buying the car on the 1st day of the month.
One of my friend's family owned a Ford dealership. Invoice is just a made-up number.
When banks approve new-car loans, they often NEED the factory invoice to justify the advance on the deal, any special term requested(ie:72 months or more), & if the dealer gets a rate DISCOUNT because he borrowed less than a certain percentage of the value of the car(dealer discounting). Ex. Invoice is $25K, customer only financed $15K, so the bank 'gives' the dealer a lower buy rate(interest) on the loan. Banks do that because it is a less-risky loan if only a small percentage of the car is financed.
If a car with the MSRP of 30,000 dollars has an invoice price of 26,000, then do you really think the dealership paid 26,000 for that car? Well, you're the banker with the dealer invoices. You tell me. But from my experience and research after research, it leads me to believe that dealerships actually pay less than that.
First off, dealer markup normally is $3K or less...MUCH less on imports like Toyota. Average is more like $1,500. Maybe more on some high-end models(lexus/infiniti). The people making the money on new cars are the factories. Like I said earlier, USED is where dealers make most of the money. Invoice is what it is...aside from any programs/incentives(which do not amount to excess thousands of dollars as you seem to think).
When I was getting my TL-S, the saleslady pitched the usual lines. I said, "Look, you don't have to show me the invoice. I already know that from my research. But we both know that's not the actual price you paid for the car. I want to find a price where I can save money and you still make a profit." She was stunned and went back to her manager.
I'm not seeing a point here...?
The equation should look more like this -->
invoice - profit = actual cost
Should be, maybe in your opinion, but it starts at retail, MSRP. Vast majority of people pay retail because they trade. Those Holdback & incentive numbers are not published for a reason...the dealers are in business to make money, not give away cars.
See, holdback is NOT factored into the cost/invoice/profit, because it's an incentive that the corporate pays to the dealership ON THE SIDE to maintain the car until its sale.
Would you like me to scan an invoice for you? Holdback is clearly marked, along with advertising fees & dealer incentives ON EVERY INVOICE.
This includes cleaning, gas, fluids, interest payment to the finacing bank, etc.
I already addressed this one above.
You're telling me that dealerships don't make that much money per vehicle?
So now you're asking me? lol ...Actually, they make more on used car sales.
When factoring in financing costs, they do make thousands in pure profit over the course of the financing term.
Wrong. Dealers buy their money just like a consumer. The bank makes the money over the course of the loan, not dealers...dealers don't hold loans unless you buy a 76 Pinto at a 'Buy Here, Pay Here" place.
Also, just because you receive dealer invoices all day long, that doesn't mean that's the 100% actual price they pay for the vehicle.
As I stated earlier...the invoice is the accepted pricing. Holdback is pure dealer profit. Anything more than Holdback is based on volume & sales incentives, ie: Not numbers you will be able to determine when trying to buy the car as they vary from dealer to dealer. Too many variables to consider, marketing, demographics, etc, etc. Not to mention, that a dealer cannot possibly factor in what incentives he will have at months-end, if you're buying the car on the 1st day of the month.
One of my friend's family owned a Ford dealership. Invoice is just a made-up number.
When banks approve new-car loans, they often NEED the factory invoice to justify the advance on the deal, any special term requested(ie:72 months or more), & if the dealer gets a rate DISCOUNT because he borrowed less than a certain percentage of the value of the car(dealer discounting). Ex. Invoice is $25K, customer only financed $15K, so the bank 'gives' the dealer a lower buy rate(interest) on the loan. Banks do that because it is a less-risky loan if only a small percentage of the car is financed.
If a car with the MSRP of 30,000 dollars has an invoice price of 26,000, then do you really think the dealership paid 26,000 for that car? Well, you're the banker with the dealer invoices. You tell me. But from my experience and research after research, it leads me to believe that dealerships actually pay less than that.
First off, dealer markup normally is $3K or less...MUCH less on imports like Toyota. Average is more like $1,500. Maybe more on some high-end models(lexus/infiniti). The people making the money on new cars are the factories. Like I said earlier, USED is where dealers make most of the money. Invoice is what it is...aside from any programs/incentives(which do not amount to excess thousands of dollars as you seem to think).
When I was getting my TL-S, the saleslady pitched the usual lines. I said, "Look, you don't have to show me the invoice. I already know that from my research. But we both know that's not the actual price you paid for the car. I want to find a price where I can save money and you still make a profit." She was stunned and went back to her manager.
I'm not seeing a point here...?
The equation should look more like this -->
invoice - profit = actual cost
Should be, maybe in your opinion, but it starts at retail, MSRP. Vast majority of people pay retail because they trade. Those Holdback & incentive numbers are not published for a reason...the dealers are in business to make money, not give away cars.
See, holdback is NOT factored into the cost/invoice/profit, because it's an incentive that the corporate pays to the dealership ON THE SIDE to maintain the car until its sale.
Would you like me to scan an invoice for you? Holdback is clearly marked, along with advertising fees & dealer incentives ON EVERY INVOICE.
This includes cleaning, gas, fluids, interest payment to the finacing bank, etc.
I already addressed this one above.
Best advice anyone can give about car buying is BUY USED, FROM PRIVATE PARTY...
02-04-2004, 04:41 PM
#31
Some of the things I said clearly missed their points getting through to you.
If it's the bank making all the profits from financing, then why is it that dealerships always scam people with higher interest rates? There are clearly incentives to the dealerships that you've failed to mention.
I understand where you're coming from about the invoice being the accepted price. In banking terms, I guess, yeah. But as an ordinary customer, like me for example, invoice is just a made-up number to me. You mentioned that it's the "accepted" price, but how is it accepted, and what is it based upon? You haven't explained that yet.
The example I gave, you totally dodged my question. I specifically asked whether or not the invoice would be the price the dealership paid to the factory. You answered with how profit margins vary, like with Toyota. That wasn't my question. Let me ask you again. Do you think the dealerships pay the publicly announced invoice numbers to the factory for the cars?
I gave the story about my buying experience, because clearly the saleslady wasn't ready for what I said. I was 20 at the time, she probably figured me for another innocent dumb customer. Her reaction and more importantly the new price she got from her manager after that is what I was trying to point out. What do you mean you don't see a point?
Holdback numbers ARE publicized. Although they don't give specific amounts, it usually says a percentage of the MSRP.
What I meant when I said holdback is not factored into the cost/profit equation was that holdback is paid ON THE SIDE to the dealership from the factory. It's money that the dealership spends to maintain their cars. It's not a straight-up incentive (although it could be translated that way, because the more cars you sell as fast as you can, the more money they make off the holdback's)
Also, you're telling me that holdback is clearly marked on the invoice, yet before that you said holdback is not publicized because dealerships are in the business to make money. So which is it?
In a way, I think you're looking at this from a banker's point of view. I'm strictly looking at this from a buying customer's point of view. Who, where and how the invoice price was produced is none of my concern. It is simply a made-up number for me, and many, many, many, many people have bought cars for under invoice. If you think that invoice is the accepted price and is what the dealerships pays to the factory, then how is this possible? They would be losing money. Yet, like you said, they are in the business to make money.
Invoice is just a magical, meaningless number to me, except for the fact that the closer to the invoice the price is (or lower), the better. Other than that, it holds no value to me.
If it's the bank making all the profits from financing, then why is it that dealerships always scam people with higher interest rates? There are clearly incentives to the dealerships that you've failed to mention.
I understand where you're coming from about the invoice being the accepted price. In banking terms, I guess, yeah. But as an ordinary customer, like me for example, invoice is just a made-up number to me. You mentioned that it's the "accepted" price, but how is it accepted, and what is it based upon? You haven't explained that yet.
The example I gave, you totally dodged my question. I specifically asked whether or not the invoice would be the price the dealership paid to the factory. You answered with how profit margins vary, like with Toyota. That wasn't my question. Let me ask you again. Do you think the dealerships pay the publicly announced invoice numbers to the factory for the cars?
I gave the story about my buying experience, because clearly the saleslady wasn't ready for what I said. I was 20 at the time, she probably figured me for another innocent dumb customer. Her reaction and more importantly the new price she got from her manager after that is what I was trying to point out. What do you mean you don't see a point?
Holdback numbers ARE publicized. Although they don't give specific amounts, it usually says a percentage of the MSRP.
What I meant when I said holdback is not factored into the cost/profit equation was that holdback is paid ON THE SIDE to the dealership from the factory. It's money that the dealership spends to maintain their cars. It's not a straight-up incentive (although it could be translated that way, because the more cars you sell as fast as you can, the more money they make off the holdback's)
Also, you're telling me that holdback is clearly marked on the invoice, yet before that you said holdback is not publicized because dealerships are in the business to make money. So which is it?
In a way, I think you're looking at this from a banker's point of view. I'm strictly looking at this from a buying customer's point of view. Who, where and how the invoice price was produced is none of my concern. It is simply a made-up number for me, and many, many, many, many people have bought cars for under invoice. If you think that invoice is the accepted price and is what the dealerships pays to the factory, then how is this possible? They would be losing money. Yet, like you said, they are in the business to make money.
Invoice is just a magical, meaningless number to me, except for the fact that the closer to the invoice the price is (or lower), the better. Other than that, it holds no value to me.
02-04-2004, 08:30 PM
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Originally posted by Pure Adrenaline
In a way, I think you're looking at this from a banker's point of view. I'm strictly looking at this from a buying customer's point of view. Who, where and how the invoice price was produced is none of my concern. It is simply a made-up number for me, and many, many, many, many people have bought cars for under invoice. If you think that invoice is the accepted price and is what the dealerships pays to the factory, then how is this possible? They would be losing money. Yet, like you said, they are in the business to make money.
Invoice is just a magical, meaningless number to me, except for the fact that the closer to the invoice the price is (or lower), the better. Other than that, it holds no value to me.
In a way, I think you're looking at this from a banker's point of view. I'm strictly looking at this from a buying customer's point of view. Who, where and how the invoice price was produced is none of my concern. It is simply a made-up number for me, and many, many, many, many people have bought cars for under invoice. If you think that invoice is the accepted price and is what the dealerships pays to the factory, then how is this possible? They would be losing money. Yet, like you said, they are in the business to make money.
Invoice is just a magical, meaningless number to me, except for the fact that the closer to the invoice the price is (or lower), the better. Other than that, it holds no value to me.
I've already explained how that number can be lowered/affected by dealer volume, holdback, etc. in my previous post.
Re-read my post. I've explained Holdback thoroughly. If a dealer wants to dig into their holdback, that's their business...but don't count on that & consider yourself lucky if it happens.
I think the problem here is your lack of understanding of what an invoice actually is. It is actual piece of paper...AN INVOICE. BILL OF SALE. Just like you went into a store & bought a piece of fruit & got a receipt. It breaks down RETAIL, WHOLESALE & DEALER PROFITS. The only thing it won't show is dealer incentives, rebates, etc...because these are things that can change after a vehicle is shipped or are based on quotas/monthly sales. These factors are the "SIDE" figures you keep mentioning...not holdback.
How do you think dealerships/factories maintain their inventories, etc...they count on their toes?
I've been trying to link a scanned invoice so you will get it into your head what it is...but I'm having trouble since the file is too big.
02-04-2004, 08:41 PM
#33
Originally posted by chris3240929
Invoice is THE normal price a dealership pays...PERIOD...not just 'in banking terms'. It most certainly is NOT a "made up number, magical number" as you say.
I've already explained how that number can be lowered/affected by dealer volume, holdback, etc. in my previous post.
Re-read my post. I've explained Holdback thoroughly. If a dealer wants to dig into their holdback, that's their business...but don't count on that & consider yourself lucky if it happens.
I think the problem here is your lack of understanding of what an invoice actually is. It is actual piece of paper...AN INVOICE. BILL OF SALE. Just like you went into a store & bought a piece of fruit & got a receipt. It breaks down RETAIL, WHOLESALE & DEALER PROFITS. The only thing it won't show is dealer incentives, rebates, etc...because these are things that can change after a vehicle is shipped or are based on quotas/monthly sales. These factors are the "SIDE" figures you keep mentioning...not holdback.
How do you think dealerships/factories maintain their inventories, etc...they count on their toes?
I've been trying to link a scanned invoice so you will get it into your head what it is...but I'm having trouble since the file is too big.
Invoice is THE normal price a dealership pays...PERIOD...not just 'in banking terms'. It most certainly is NOT a "made up number, magical number" as you say.
I've already explained how that number can be lowered/affected by dealer volume, holdback, etc. in my previous post.
Re-read my post. I've explained Holdback thoroughly. If a dealer wants to dig into their holdback, that's their business...but don't count on that & consider yourself lucky if it happens.
I think the problem here is your lack of understanding of what an invoice actually is. It is actual piece of paper...AN INVOICE. BILL OF SALE. Just like you went into a store & bought a piece of fruit & got a receipt. It breaks down RETAIL, WHOLESALE & DEALER PROFITS. The only thing it won't show is dealer incentives, rebates, etc...because these are things that can change after a vehicle is shipped or are based on quotas/monthly sales. These factors are the "SIDE" figures you keep mentioning...not holdback.
How do you think dealerships/factories maintain their inventories, etc...they count on their toes?
I've been trying to link a scanned invoice so you will get it into your head what it is...but I'm having trouble since the file is too big.
Thanks for the info. I am sure there are some things I was wrong about, and thanks for correcting me. Hey, it can only help me next time I purchase a car, right?
02-04-2004, 09:23 PM
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http://www.imagestation.com/picture/...1/f9b68d79.jpg
These numbers are for a 2004 Explorer Sporttrac 4X4.
Another thing I seem to notice these days is the creeping up of the difference between invoice & MSRP...due to the large rebates everyone is giving away.
More smoke & mirrors...
These numbers are for a 2004 Explorer Sporttrac 4X4.
Another thing I seem to notice these days is the creeping up of the difference between invoice & MSRP...due to the large rebates everyone is giving away.
More smoke & mirrors...
02-05-2004, 12:00 AM
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invoice is a very real number but dealers will go below it if conditions are right:
1) your getting dicked on your trade ( thats just shiffling money around)
2) dealer hold back- which is usually 3% unless the dealership did something stupid and lost it
3) rebates consumer is unaware of ( ex old passports) that the dealer retains
but invoice is a legit # to a certain extent and at or just above invoice is a very good deal on imports like honda
1) your getting dicked on your trade ( thats just shiffling money around)
2) dealer hold back- which is usually 3% unless the dealership did something stupid and lost it
3) rebates consumer is unaware of ( ex old passports) that the dealer retains
but invoice is a legit # to a certain extent and at or just above invoice is a very good deal on imports like honda
02-05-2004, 06:54 AM
#36
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Originally posted by mackers
1) your getting dicked on your trade ( thats just shiffling money around)
1) your getting dicked on your trade ( thats just shiffling money around)
Most trade ins never see the dealer's lot. 80-90% of trade ins go straight to auction. Don't let the dealer BS you, this is where they make a nice piece of change - in getting you to take less for a trade.
Want a good deal on a trade? Don't trade, sell it yourself!
02-05-2004, 09:46 AM
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Don't forget you have a ton of negociating room on freight and PDI, which are usually lumped together. Well, at least PDI, the dealer pays frieght, and they just pass 100% of that on to you, so there's not much room. But when thy lump in PDI, you need to do your homework.
Case in point - I was neg for a 320i. Freight and PDI were $1400 Cdn. I knew BMW frieght was $300. So $1100 in PDI...which is:
1. The Pre-delivery inspection $??
2. Tank of gas $40
3. Locking wheel nuts $50??
4. Floor Mats $??
I was doing this math right in front of the dealer, and when I asked him if the floormats were encrsuted with diamonds my wife said he started to blush! hahahaha!! That is PURE profit for the dealer, so make sure you look into what you are paying for.
About holdback, interesting as BMW is one of the few (only?) mfrs that do not require their dealers to pay a holdback.
Note that you can neg on the holdback percentage elsewhere, but not if the car has been on the lot for >3 months (as that 3 months has eaten up the dealer's hold back). If you are getting it straight from the factory there is more room to move vis a vis holdback.
However, typically dealers are more willing to move a car that has been on the lot. I was able to get a fair deal on my CLS as it was a 2001 in the showroom and the 2003's were just arriving. On paper, I was negoticiating for what was effectively a 2 year old car with virtually no mileage. I was able to get it for less than invoice, because after 3 months, the holdback % had been eaten up, and the dealer was paying acura interest on the car for almost 2 years.
For hot cars, it was totally different. I went into Nissan with a checque for 4% over invoice on an Altima (first year the new ones were out) and the manager politely said no. He could do the same on a spec v or a max, anything except the altima. I'm glad he did, because that's what lead me to my Acura (it was only $1,000 more).
Case in point - I was neg for a 320i. Freight and PDI were $1400 Cdn. I knew BMW frieght was $300. So $1100 in PDI...which is:
1. The Pre-delivery inspection $??
2. Tank of gas $40
3. Locking wheel nuts $50??
4. Floor Mats $??
I was doing this math right in front of the dealer, and when I asked him if the floormats were encrsuted with diamonds my wife said he started to blush! hahahaha!! That is PURE profit for the dealer, so make sure you look into what you are paying for.
About holdback, interesting as BMW is one of the few (only?) mfrs that do not require their dealers to pay a holdback.
Note that you can neg on the holdback percentage elsewhere, but not if the car has been on the lot for >3 months (as that 3 months has eaten up the dealer's hold back). If you are getting it straight from the factory there is more room to move vis a vis holdback.
However, typically dealers are more willing to move a car that has been on the lot. I was able to get a fair deal on my CLS as it was a 2001 in the showroom and the 2003's were just arriving. On paper, I was negoticiating for what was effectively a 2 year old car with virtually no mileage. I was able to get it for less than invoice, because after 3 months, the holdback % had been eaten up, and the dealer was paying acura interest on the car for almost 2 years.
For hot cars, it was totally different. I went into Nissan with a checque for 4% over invoice on an Altima (first year the new ones were out) and the manager politely said no. He could do the same on a spec v or a max, anything except the altima. I'm glad he did, because that's what lead me to my Acura (it was only $1,000 more).
02-05-2004, 10:19 AM
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Originally posted by GINge!
Note that you can neg on the holdback percentage elsewhere, but not if the car has been on the lot for >3 months (as that 3 months has eaten up the dealer's hold back). If you are getting it straight from the factory there is more room to move vis a vis holdback...
...I was able to get it for less than invoice, because after 3 months, the holdback % had been eaten up, and the dealer was paying acura interest on the car for almost 2 years.
Note that you can neg on the holdback percentage elsewhere, but not if the car has been on the lot for >3 months (as that 3 months has eaten up the dealer's hold back). If you are getting it straight from the factory there is more room to move vis a vis holdback...
...I was able to get it for less than invoice, because after 3 months, the holdback % had been eaten up, and the dealer was paying acura interest on the car for almost 2 years.
Holdback does not go away after 3 months. Look at the pic I scanned of an invoice.
The only incentive for selling a car quickly is there will be less accrued interest while the car is sitting collecting dust on the lot.