Buying process/dealer holdback money

[shanezt]

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 agree with most of what you are saying, but this is not true. the service/parts department pays the bills and alot of the salaries.

 

[TrueBlueGT]

I'd like to know what you're trading in and where these fair dealerships are. I have a sonic blue 03 that it would not take a crazy offer to get me to let go of. Kind of prefer a four door truck or new(er) jeep. I'm in KS also. Pm me on the dealerships if you prefer. Thanks.

 

[ON D BIT]

i agree with most of what you are saying, but this is not true. the service/parts department pays the bills and alot of the salaries.

The money that is brought in by new car sales is not net profit. New car sales do not make enough money to cover costs. You are correct most of the money in a dealership comes from service/parts, used car sales, and finance dept. The money from these departments are used to cover the shortfall created by new car sales and is generally the profit a dealership will have. We agree on this!

 

[shanezt]

The money that is brought in by new car sales is not net profit. New car sales do not make enough money to cover costs. You are correct most of the money in a dealership comes from service/parts, used car sales, and finance dept. The money from these departments are used to cover the shortfall created by new car sales and is generally the profit a dealership will have. We agree on this!

yeah in my experience the back end is all the profit. extended warranties (we sell ours at 1k markup), alarms, tint, etching, etc. then the holy grail, used car sales :rolling:

 

[silver408coupe]

These are limited cars, yes. However, 99% of the other cars on the lot are not and that's why you might get a better deal than you think. Those cars and some of the not so informed buyers that pay for them will make up any lost profit from the sale of the 1% special ticket items. They may have been sitting on their car for a while and might just want to sell. You never know. Dealer ships are money makers when you get the right people. I have seen one dealership owner over the last 22yrs go from a small lot with 5 cars to now owning several dealerships of each make of car. He is huge. If a dealship won't sell you a single car cause they will go under, I don't want to do business with them. Don't cry me a river. If they don't make any money on my one purchase, at least make me a customer and try it again when I come back for another one. And I will be back if you give me a good deal and I KNOW I got a good deal. Make sense?

 

[JakeSpoon3]

Thats the beauty of having choices. If one dealer does not want to come down off their price, another will

Let it go, man. I edited the original post because I made it sound like I thought the dealership was making $1800 profit with the hold back money. I didn't think I would need to spell out to you that I understand they have to pay bills, just like any other business.

The point of the thread, if you actually read it, is that I think invoice is a fair starting point for negotiations. Would I expect them to jump on that deal this early in the game? Of course not. But it gives you an idea what the markup to MSRP is. If you want to ignore the other $1800, that's your problem.

The difference between invoice and MSRP is much more than $2000. It's closer to $5000. I'm starting to think you're the one who's confused.

You are spot on with the $5,000 between invoice and MSRP.

 

[JakeSpoon3]

Thats the beauty of having choices. If one dealer does not want to come down off their price, another will

Let it go, man. I edited the original post because I made it sound like I thought the dealership was making $1800 profit with the hold back money. I didn't think I would need to spell out to you that I understand they have to pay bills, just like any other business.

The point of the thread, if you actually read it, is that I think invoice is a fair starting point for negotiations. Would I expect them to jump on that deal this early in the game? Of course not. But it gives you an idea what the markup to MSRP is. If you want to ignore the other $1800, that's your problem.

The difference between invoice and MSRP is much more than $2000. It's closer to $5000. I'm starting to think you're the one who's confused.

You are spot on with the $5,000 between invoice and MSRP.

 

[NEp8ntballer]

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.

shoulda waved the down payment in this face when you got up and left and told him to wave goodbye to some easy money.

 

[Fuerza]

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.

Dealers make money in other areas too. The finance manager will make commission on getting a buyer to use dealership financing. They can also make money on selling you extended warranties, GAP and other things like BS wheel and tire packages and roadside assistance packages. The margin for new cars may be small however they get enough suckers to pay MSRP. They rape you on a trade in also, they will make money on the resale of a trade in addition to the new car sale. And anyone who trades in a used car for another used car is a huge win for the dealership. I see nothing wrong with starting new car buying at invoice price.

 

[CAPTAIN JACK]

" Lot Lizards " come over to my dealership, and call me that!! You got a lot of damn nerve

 

[Chris!]

Dealers make money in other areas too. The finance manager will make commission on getting a buyer to use dealership financing. They can also make money on selling you extended warranties, GAP and other things like BS wheel and tire packages and roadside assistance packages. The margin for new cars may be small however they get enough suckers to pay MSRP. They rape you on a trade in also, they will make money on the resale of a trade in addition to the new car sale. And anyone who trades in a used car for another used car is a huge win for the dealership. I see nothing wrong with starting new car buying at invoice price.

Some of this is right. Some of this is wrong. But starting at invoice on a GT500 probably won't get a dealer to take you seriously.

 

[Chris!]

" Lot Lizards " come over to my dealership, and call me that!! You got a lot of damn nerve

Pay no mind...

 

[Chris!]

Err double post

 

[32ValveSymphony]

Some of this is right. Some of this is wrong. But starting at invoice on a GT500 probably won't get a dealer to take you seriously.

:shrug:

I'm damn sure not going to start out at MSRP. It's a hell of a lot easier to start low and have to work your way up a little bit than to start high and then decide, nah, I'm only willing to pay x amount.

If they choose not to take me serious starting out at invoice, it's no sweat off my back. I choose not to take them serious if they start out with a bogus number just to see if I'll bite.

 

[Chris!]

:shrug:

I'm damn sure not going to start out at MSRP. It's a hell of a lot easier to start low and have to work your way up a little bit than to start high and then decide, nah, I'm only willing to pay x amount.

If they choose not to take me serious starting out at invoice, it's no sweat off my back. I choose not to take them serious if they start out with a bogus number just to see if I'll bite.

Good luck. It doesn't work that way.

You're much better off asking for a fair price for both parties - not being insulting.

 

[32ValveSymphony]

Good luck. It doesn't work that way.

I guess we've had different experiences. I've purchased 14 new cars in the last 13 years, so I think I have a little idea of how the negotiation process works.

 

[Chris!]

I guess we've had different experiences. I've purchased 14 new cars in the last 13 years, so I think I have a little idea of how the negotiation process works.

You've purchased 14 specialty vehicle in the last 13 years?

I deal with hundred of retail vehicle transactions weekly- I know how it works.

 

[Never_Enough]

You're not buying till the 2014s come out so you'll be fine. Worry about it then. A lot can change in a year.

 

[32ValveSymphony]

You've purchased 14 specialty vehicle in the last 13 years?

I deal with hundred of retail vehicle transactions weekly- I know how it works.

I guess it depends on you definition of specialty. They have not all been speciality by any means, and only one (corvette) that was in the $60k range.... which is why I'm trying to get a full understanding of msrp vs. invoice on this specific car. The last car I bought that was similar (specialty, two year run, hot commodity) was a new Terminator.

 

[Never_Enough]

Good luck. It doesn't work that way.

You're much better off asking for a fair price for both parties - not being insulting.

:lol: :bash: