Buying process/dealer holdback money

[32ValveSymphony]

Let's talk about the buying process for a minute. My car with the options I want is going to be right at $60k MSRP. The dealer invoice is pretty easy to find. Now, the new Shelby is a hot commodity right now, I understand that. I'll be looking at a 2014 so hopefully the dealerships will be a little more eager to deal with me one year from now.

I will probably use dealer invoice as a starting point on negotiations. Through my limited research on the Internet, it seems Ford uses a 3% dealer holdback. That holdback is on the total MSRP of the car, so for a car that's going to be right at $60,000, they're looking at about $1800 they will get back from Ford.

We as buyers are at the mercy of our own personal discretion, judgement, logic, etc., and the "advertised" invoice prices easily found for these cars to make a deal on a car. I realize it boils down to what you as a buyer are comfortable paying, but I'd like to go into negotiations armed with all the knowledge I can scrounge up.

For the car I'll likely order, MSRP is $59,330. Advertised dealer invoice is $54,122. Even if they sell the car at $54,122, they will still get the holdback of ~$1800 from Ford.

I understand supply and demand. When demand declines a little bit and supply increases, why in the world should getting the car at dealer invoice be such a pain in the ass?

 

[topless10th]

i ordered on march 7th with nothing down and got $1000 over invoice and half the svt fee on mine. of course i buy a $60k truck from him every 3-5 years.

 

[Red Turtle]

Good luck, going to be tough to find someone to come off MSRP at this time. Even late in the year, I don't see dealers selling for invoice or into holdback.

 

[ON D BIT]

Seems more than fair to me, and in fact, they could easily come down from the invoice price $800 and still make at least $1000 on the sale.

I understand supply and demand. When demand declines a little bit and supply increases, why in the world should getting the car at dealer invoice be such a pain in the ass?

Wow...That 1k dollars you think the dealer will make is gross. Do you run a business? There is a huge difference between gross and net. The dealer out of that 1k you think he is making has to pay the electricity, water, all the other utilities that are needed to run a business, salesman/salesmen, gsm, gm, finance, host/hostess, tech, lot man that cleans the car up, advertising/marketing, and fill the gas tank(just this will eat up 5-10% of your example in gross revenue). All this has to be paid prior to the dealer taking anything as profit.
If the dealer only gets one per year, they had to pay a 1k just to get the car.

As an example a small dealer who will get one gt500 a year pays 1k to get the vehicle, 1k to 2k just to pay the overhead on the sale. So before the dealer takes a profit they need to make 1k to 3k on each gt500.
A friend from another forum ran a dealer for 20 years. Not one year in those 20 did they turn a profit on new car sales! After everything and everyone was paid there was no more money left.oke:

I want to add one more thing. Costco the whosesale leader here sales everything at 15% gross profit. After everything is paid most of that is eaten up with overhead. 54k x 1.15 ~ 62k. This should make msrp look like a bargain!

 

[BOD89LX]

Keep in mind when you look up the invoice price online it does not add the regional advertisement charge which can be over a $1000 bucks I know on my car it was $855 or so. Also keep in mind the $2000 SVT fee the dealer has to pay and if they only sell one or 2 SVT's they will figure that into the deal. As hot as this car is you are not going to see below invoice price on them keep in mind the hold back pays to keep the dealership open. Maybe when the 2015's come out and they are a better car you may find some 14's sitting around that could be had for the type of deal you are thinking about.

 

[32ValveSymphony]

MSRP a bargain.... That's a first. Lol. Look, all I'm saying is dealer invoice should not be out of the question.

 

[Jryan3]

Supply and demand is right.. I generally refer to myself as a tight a$$, but I also understand that if you want the latest and greatest you are gonna pay more. Before I ordered my gt500, I had a '13 gt/cs on order for $750 below invoice. I was able to order a gt500 at an agreed price of $1300 off msrp.. I have heard all of the "Ford will build as many of these as people order" argument. I can't say for certain this is true or not (I have been told by people with generally reliable sources that this is not the case). It is no secret that the order process for this car is not the same as the run-of-the-mill Mustang (at least not at this point), where it is very likely that you will receive an ordered car in 6-8 weeks, and many times less than that. Compare that to 3-4 months minimum for a gt500 order. Maybe eventually this will change. If you wait until '14 to get one, surely the bomb will have cleared by then and you will be able to get a little better deal?.. There are many on here that claim to have gotten invoice or just above on the '13, so there are some deals out there now. I say f*** it!, I got a decent deal and I want that b**** NOW! :rockon:

 

[32ValveSymphony]

Good luck, going to be tough to find someone to come off MSRP at this time. Even late in the year, I don't see dealers selling for invoice or into holdback.

That's why I said in my OP that I was going to be looking at a 2014 a year from now.

 

[32ValveSymphony]

Supply and demand is right.. I generally refer to myself as a tight a$$, but I also understand that if you want the latest and greatest you are gonna pay more. Before I ordered my gt500, I had a '13 gt/cs on order for $750 below invoice. I was able to order a gt500 at an agreed price of $1300 off msrp.. I have heard all of the "Ford will build as many of these as people order" argument. I can't say for certain this is true or not (I have been told by people with generally reliable sources that this is not the case). It is no secret that the order process for this car is not the same as the run-of-the-mill Mustang (at least not at this point), where it is very likely that you will receive an ordered car in 6-8 weeks, and many times less than that. Compare that to 3-4 months minimum for a gt500 order. Maybe eventually this will change. If you wait until '14 to get one, surely the bomb will have cleared by then and you will be able to get a little better deal?.. There are many on here that claim to have gotten invoice or just above on the '13, so there are some deals out there now. I say f*** it!, I got a decent deal and I want that b**** NOW! :rockon:

I hear ya. Really, anything between invoice and MSRP would be a "decent" deal on this car right now, and one that I would probably jump on, too.

Just seems like if, even at invoice, the dealership is going to make $1800 back in holdback money, that should not be an offer that would insult anyone.

 

[fleshmcfilth123]

Holdback should be completely irrelevant when buying a car. Expecting the holdback is like buying a $10 pizza, having it delivered, and giving the pizza guy $8 since he makes $4 an hour and delivered the pizza in half an hour.

 

[ON D BIT]

MSRP a bargain.... That's a first. Lol. Look, all I'm saying is dealer invoice should not be out of the question.

And I just told you that the dealer will lose money at dealer invoice! How is this hard to understand?:??:

Just seems like if, even at invoice, the dealership is going to make $1800 back in holdback money, that should not be an offer that would insult anyone.

No they will not make $1800. That money is used to pay for dealer overhead! After everyone is paid there will be no money left over for profit. Possibly the dealer will need to pay more money in fees than the 1800 they took in.

 

[Jryan3]

I hear ya. Really, anything between invoice and MSRP would be a "decent" deal on this car right now, and one that I would probably jump on, too.

Just seems like if, even at invoice, the dealership is going to make $1800 back in holdback money, that should not be an offer that would insult anyone.

Well, at the right time, they would probably jump at the chance to make $1800. But, if you want to order a car exactly how you want it, your chances are EXTREMELY SLIM for quite some time. Most likely, you are gonna get that kind of deal on a car that has sat in inventory for a LONG time. I don't think anyone would be "insulted" if you offered them invoice, they would just send you on your way. This is capitalism. If they can sell a car at msrp with people lined up to get them, of course they are not gonna sell it for ~5k less just because they are still making "$1800".. At least not right now.

 

[Klinsmann18]

That's why I said in my OP that I was going to be looking at a 2014 a year from now.

Not going to get 2014s at invoice either. After one year of this great car plus the fact it will be the last version of that model...nope. Might as well accept what we are all saying right now.

 

[32ValveSymphony]

And I just told you that the dealer will lose money at dealer invoice! How is this hard to understand?:??:



No they will not make $1800. That money is used to pay for dealer overhead! After everyone is paid there will be no money left over for profit. Possibly the dealer will need to pay more money in fees than the 1800 they took in.

I'm not sure why you're so bent out of shape. Relax. Like I said, I'm just trying to understand the relationship between invoice and MSRP. Holdback is a part of the equation.

 

[32ValveSymphony]

Holdback should be completely irrelevant when buying a car. Expecting the holdback is like buying a $10 pizza, having it delivered, and giving the pizza guy $8 since he makes $4 an hour and delivered the pizza in half an hour.

I'm not "expecting" the holdback, and it's also not irrelevant when they're trying to tell you they're not making any money on the deal.

 

[JakeSpoon3]

I followed a similar approach including invoice for the starting point in negotiations. The dealership I purchased my 11 GT500 from sold to new management. However, the same salesman I used last time retained his position. I called him on the phone just like 2010 when I purchased my first Shelby, and told him I'd meet him half-way between invoice and MSRP. We both agreed, so I drove over only to meet a gentleman named ZACH (new finance manager / lot lizard). Sat down with my salesman and immediately recognized he was somewhat nervous. When Zach came over to talk with me, I knew why. Good Ole Zach began telling how this was a limited production, collector's edition..blah blah blah. To ease my salesman's pain, I asked if my deal was still good....to which Zach said most dealerships are selling their Shelby's for 10 to 15 thousand over MSRP, but we only want 9. I laughed at Zach and told him he was crazy. I walked out with the ten thousand down payment in my pocket. To make a long story short, I called their direct competitor and asked if they would meet me half-way between invoice and sticker. He agreed and I placed my order the next day. I did however call my salesman back just so he could tell Zach.

My personal opinion: Lot lizards (ie anyone who sells cars) are generally greedy by nature. Putting on a suit and tie gets their jollies off. They tend to be the guys you remember from school who have always wanted to wear some type of uniform or have a badge which gives them a little authority. Ripping people off and reaping the profit is par for the course in their mind.

 

[ON D BIT]

I'm not sure why you're so bent out of shape. Relax. Like I said, I'm just trying to understand the relationship between invoice and MSRP. Holdback is a part of the equation.

You are missing the point entirely. The money you think is profit is not. It is money that the dealer needs to pay bills. I would like to see you run any business with a 4% markup.:lol: This is what you are asking a dealer to do. 4% is 2k on a 54k sale.

 

[32ValveSymphony]

I followed a similar approach including invoice for the starting point in negotiations. The dealership I purchased my 11 GT500 from sold to new management. However, the same salesman I used last time retained his position. I called him on the phone just like 2010 when I purchased my first Shelby, and told him I'd meet him half-way between invoice and MSRP. We both agreed, so I drove over only to meet a gentleman named ZACH (new finance manager / lot lizard). Sat down with my salesman and immediately recognized he was somewhat nervous. When Zach came over to talk with me, I knew why. Good Ole Zach began telling how this was a limited production, collector's edition..blah blah blah. To ease my salesman's pain, I asked if my deal was still good....to which Zach said most dealerships are selling their Shelby's for 10 to 15 thousand over MSRP, but we only want 9. I laughed at Zach and told him he was crazy. I walked out with the ten thousand down payment in my pocket. To make a long story short, I called their direct competitor and asked if they would meet me half-way between invoice and sticker. He agreed and I placed my order the next day. I did however call my salesman back just so he could tell Zach.

My personal opinion: Lot lizards (ie anyone who sells cars) are generally greedy by nature. Putting on a suit and tie gets their jollies off. They tend to be the guys you remember from school who have always wanted to wear some type of uniform or have a badge which gives them a little authority. Ripping people off and reaping the profit is par for the course in their mind.

I would have been pretty upset if that happened to me.

There are a lot of variables to take into account, and the bottom line is the salesman's job is to make you BELIEVE you are getting the best deal possible, and that they're really doing you a favor. If you're okay taking them at their word, that's your problem for being a sucker. I'm just trying to decide what is honest and fair for both parties. It sounds like you did good!

 

[32ValveSymphony]

You are missing the point entirely. The money you think is profit is not. It is money that the dealer needs to pay bills. I would like to see you run any business with a 4% markup.:lol: This is what you are asking a dealer to do. 4% is 2k on a 54k sale.

I must have slept through your business management class, prof.

 

[fangstang]

$1K over invoice is more then enough