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I'm dealing with a dealership that has a car advertised for 17k. But when I asked for the OTD price, he told me it was 21 after taxes and everything. I feel like that's bullcrap though, no way all the taxes and fees add up to 4k.
OTD prices around here are figured on Tax, tag, and any destination delivery costs. That is not the important part. The dealer has given you his OTD price. Now you either take it or leave it, depending upon your pre-determined financial commitment. I always call three or four dealers in a 50 mile area and ask for the same car with OTD numbers. Armed with those numbers I either take the lowest, or use the lowest number to negotiate with one of the other dealers.
Good luck, and a word of advice. Don't be married to a particular car, it makes the bargaining processes less personal/emotional and more business centered. Once you have committed to a certain vehicle, you are less likely to walk away if the deal doesn't meet your financial expectations. (cold, calm and calculating, not drooling and moon eyed)
Don't pay those stupid fees! Any of them! You should not be responcible for the delivery, paperwork or anything other than the vehicle, taxes and tags - obviously insurance as well, but any of those fees no!
Don't pay those stupid fees! Any of them! You should not be responcible for the delivery, paperwork or anything other than the vehicle, taxes and tags - obviously insurance as well, but any of those fees no!
Given that delivery is factored into the sticker price on the window sheet, you're going to pay it one way or the other. Whatever money they knock off the sticker...the delivery fee was factored into that in the first place. Doc fees can be negotiated, however.
That said, OTD price is whatever price you negotiated on the vehicle plus tags, tax, title and fees. No getting around that and any dealer can give you the breakdown on the buyers order if you think he's BSing you. Tax is a ***** though, you'd be surprised how much that can add depending on state. Shouldn't be "bad" on a 17K vehicle. My current car was about 40 grand out the door after my trade, I think only 3 or so of that was taxes, maybe a bit more.
Every time I have paid cash for a car or painting or other high dollar negotiable item, I've told them that the price I am willing to pay includes everything and they can do the math backwards to get there (tax, shipping, insurance, installation, etc).
Ignore sticker, that's fiction printed by the factory/dealer.
I determined the actual cost by starting with:
The wholesale price of the car
+ the wholesale price of each factory option,
+ the wholesale price of each dealer-installed option, (ONLY accept the ones you want, and are reasonable - IE: GPS, sat radio, alarm, but NOT undercoating, etc.)
+ tax, factory-mandated delivery and/or prep,
+ tag & title fees (should I choose to have the dealer do the paperwork instead of spending a lot of time and effort myself)
- Factory Incentive rebates (aka. trunk money)
= retail cost to the dealer.
Contact all the dealers within the distance you're willing to travel. (I did every one in 4 states around me). Asking for an Internet Sale OtD price. Very few will responded, but enough did for me.
The OtD quotes minus the retail sales average, yields each Dealer's Profit.
Now: Search the local papers, Craigs List, eBay, forums for your local area, etc. and find out what your exact Make/Model is selling for, to get an idea of how popular it is, which will drive up the What the Market Will Bare profit amount. It could be a couple hundred dollars up to a thousand, ore even more for a hot seller that's rare.
If the profit from a Dealer's quote is way-high, ask for a detailed list of their extra fees. They may be charging for the first tank of gas, floor mats, delivery prep (removing tags, adding oil, etc.) all of which really belong in the Dealer's overhead and should NOT be an extra.
Pick the offer that has the Dealer profit you think is reasonable.
(Note: dealers DO work for their money, are running a business, and do deserve some profit, you and the market determine how much).
The above process should let you see where every penny goes.
It may take 10,15 even 20 man-hours of research, but when I did it, it saved me about $4,200 over local average selling price - a very good return for my time and a quick and easy sale for the dealer. Both happy.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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Quote:
Originally Posted by drinkchamp
I'm dealing with a dealership that has a car advertised for 17k. But when I asked for the OTD price, he told me it was 21 after taxes and everything. I feel like that's bullcrap though, no way all the taxes and fees add up to 4k.
How do you calculate the bottom line price?
I live in NY btw
Yes, that's about right if they charge you dealer prep, destination and documentation charges. That's all negotiable, however, and you can walk away if they insist on charging you. Give them your "out the door" price and they will have to lower the price of the car or pay those other charges themselves. In a hot new car market that might be difficult to pull off, but now in the new car sales slump you are in command. You can tell them to take it or leave it, and go elsewhere if they don't meet your offer.
Don't pay those stupid fees! Any of them! You should not be responcible for the delivery, paperwork or anything other than the vehicle, taxes and tags - obviously insurance as well, but any of those fees no!
You can, as long as they lower the price of the car accordingly. If a dealer quotes me $25k for a car out the door and I'm happy with it I don't really care what the breakdown is.
I've always found it to be around the price + 12% (depending on state sales tax this could fluctuate a bit). 17k to 21k is the dealer padding his commission quite a bit. I'd expect 19k max.
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