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Old 10-12-2007, 03:27 PM
 
53 posts, read 247,611 times
Reputation: 25

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I purchased my last vehicles 1.5 years ago and paid $4500 less than sticker. I plainly told him what I would offer for the vehicle. He came back and forth with all these lines for about three hours. Finally, we agreed on my offer. Then it was time to bring in my trade. They gave me $3K more than the dealership I walked into 3 hours earlier. I came out in the good. I could sell my '06 for the price of an '04.

It really is about how hard the dealer wants to move their product. I have been trained as a salesman. There are so many schemes. Most dealers make thousands on each car deal, not including the financing. Even if the buyer finances through a company other than the dealership, the financing institution gives big kickbacks to the dealer.

If you ever pay cash for a vehicle, never pay any where near the sticker. The guy who posted earlier, was screwed. That is an old tactic pulled on buyers. We use to do that a bunch to hagglers. We would wait for them to settle on the purchase price/payments, then one by one, very carefully come through mentioning how tough they were. In actuality, they were laughing behind your back. When you pulled out the cash, the dealership made I bet some where around $15K.

The dealer invoice is a hoax. These are all made up numbers. Cars are made for pennies on the dollar. Think about it. An average manufacturer can produce a hundred cars in a day, start to finish. Then ship them to a region. From there, local haulers grab them and disperse amongst the dealers. The cost for shipping is less than $150 per vehicle.

The best way to see what you should pay is to go on Autotrader or Cars.com and look for your vehicle with about 5,000 miles on it.

See Yah
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Old 10-12-2007, 08:02 PM
 
460 posts, read 1,767,159 times
Reputation: 111
Quote:
Originally Posted by iamweasel View Post
For the record, most dealers do not get additional kickbacks on leases. Maybe a manufacturer or two does something like that but most of the major brands do not. Dealers like leases because you HAVE to return to their dealership to return the car at the end of the lease. (Unless you move more than 50-75 miles away.)

Also, Edmunds.com (and a lot of other websites) frequently have incorrect information on what the dealer invoice price is. Happens all the time.

Lastly, the "dealer invoice" is NOT always the bottom price. (In most cases it is not.)
I know. I paid below invoice for my car. I'm inclined to disagree on your comment on lease incentives for dealers. I think most dealerships make additional bonus on leases...the incentive for them goes beyond 'getting the car back.'

Quote:
If you ever pay cash for a vehicle, never pay any where near the sticker. The guy who posted earlier, was screwed. That is an old tactic pulled on buyers. We use to do that a bunch to hagglers. We would wait for them to settle on the purchase price/payments, then one by one, very carefully come through mentioning how tough they were. In actuality, they were laughing behind your back. When you pulled out the cash, the dealership made I bet some where around $15K
So what? If they made $15k, good for them. As long as "I" got a killer deal, we're both happy. (and I got a killer deal).

A good deal is when both parties are happy. (But I'm familiar with your 'used car sales' perspective that a good deal is about 'who got over'...)

Fortunately, there 'are' some good car sales people who are interested in long term customers, rather than 'getting over.'

At the end of the day, the buyer has to know what the car is worth in various markets, and, as you mentioned, how abundant that vehicle is, and how badly a dealer wants to move cars.

The car I wanted was in very short supply (not many were made). I knew the supply, the dealer knew the supply, and we both knew the cost.

I priced the car I wanted in markets literally coast to coast. (The day before I bought the one I got, I had priced one in California, and the day before I had priced on in D.C. - That's how badly I wanted that particular make and model.)

Back to the OP. Know the price variables of your car, and call around to other markets so you'll know how to deal. Most importantly what what a good deal is before you go in...
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Old 10-12-2007, 08:41 PM
 
53 posts, read 247,611 times
Reputation: 25
Glad your happy with your vehicle. Some times we need to consider how much our time if worth. Is it feasible to spend weeks searching for a vehicle that you may only keep two years?
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Old 10-12-2007, 08:59 PM
 
460 posts, read 1,767,159 times
Reputation: 111
Quote:
Originally Posted by Localguywonderingaround View Post
Glad your happy with your vehicle. Some times we need to consider how much our time if worth. Is it feasible to spend weeks searching for a vehicle that you may only keep two years?
It wouldn't surprise me that the 6 days of research I did would have taken you weeks...some of us aren't that 'slow'.

I kept my last car 7 years. 6 days for this new one was time well spent.

Speaking of valuing time...I'm not going to waste anymore on you. *clicks ignore*
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Old 10-13-2007, 09:24 AM
 
53 posts, read 247,611 times
Reputation: 25
hey gurl,
Honestly, what is the make of your car? What did you pay? I originally wanted to try and find out what everyone was paying for different types of cars. It is hilarious, how we don't even want to disclose anything in privacy on here. No one knows who you are, or really cares.
If consumers were to gather and share, then everyone would benefit. I have to admit, not many search as hard as you gurl. Many people walk out of the dealerships leasing and wasting thousands. They purchase vehicles at sticker, than an extended warranty (that covers nothing that will break), than gap insurance, than they finance through the manufacturer's bank, possibly purchase aftermarket items for the vehicle.

I have found that many don't care about the price, they want to know the payment. They don't even think about the term (months). They don't even consider the total amount it will cost at the duration of the contract.

I have met many buyers tell me, I would like to stay around $400. I ask, "How much are you paying now?" They always reply, well I am paying around $350-$500. The golden rule is that most buyers can purchase about $100 more a month. So we offer a 72 month term at first (6 years). Some actually bite and don't look back at the complete amount financed, they only see that monthly payment. They realize two years from now when they try to trade and have $8K~ in negative equity.

We need to educate each other. That way we can make the "average" sales person be a little more honest.

A few golden rules for buyers:
1)If the dealership wants to run your credit first, get out of there!
2)If the dealership won't agree to appraising your trade first, before picking a car to purchase, get out of there!
3)Make sure you test drive that next vehicle as much as "you" want. Your going to be living with that car everyday. They only want to hurry up and get back to the dealership to pass you along to the finance guy, so they can keep racking up the commission.
4)Do your research once you have found the right car for you. Don't purchase the same day! EMPHASIZE THIS!!! Do not purchase the same day. Most buyers purchase within 72 hours, 98% of the time. The other 2% either go elsewhere or realize they can't borrow the money.
5)Get quotes from other dealers across a decent region! You want out-the-door purchase price. You can then play with the financing on your own or with the dealers help. It is important to find their best selling price out-the-door.
6)Get what you want on that car. Realize you don't need every little item. However, you don't want buyer's remorse. The week after you buy the car your regretting not upgrading the engine size, getting the cd player, power options, etc. Most upgrades are fairly cheap, don't let any one tell you otherwise.
7)Try to purchase from a well established dealer. One that will be around in five years. Make sure they have an ample size maintenance facility.
8)Try to find a sales person that you like!!!!!!!!! No matter where your at and the price they offer, if you don't like your sales person, move on. Your gut instinct is the key warning signal.
9)When financing, make sure you see atleast three types of options from known banks. Don't let them bring you a payment scribled on some glamorous sheet of paper. This is the biggest sales technique ever. A bunch of numbers coming out to some made-up number. Then they show you your payment. Ask to see the actual finance percentage and the terms offered by the loan company.
10)What ever you do, do not give in. If you don't like the offers, or they don't have the exact vehicle in stock, move on. That isn't the last day on Earth you can purchase a vehicle. There will be other options. For instance, if your looking for a forest green color, and they don't even have one in stock, or they have a few, but not with the options you care for, then move on.
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Old 10-13-2007, 04:52 PM
 
2,376 posts, read 2,907,475 times
Reputation: 2254
Quote:
Originally Posted by Localguywonderingaround View Post
I purchased my last vehicles 1.5 years ago and paid $4500 less than sticker. I plainly told him what I would offer for the vehicle. He came back and forth with all these lines for about three hours. Finally, we agreed on my offer. Then it was time to bring in my trade. They gave me $3K more than the dealership I walked into 3 hours earlier. I came out in the good. I could sell my '06 for the price of an '04.

It really is about how hard the dealer wants to move their product. I have been trained as a salesman. There are so many schemes. Most dealers make thousands on each car deal, not including the financing. Even if the buyer finances through a company other than the dealership, the financing institution gives big kickbacks to the dealer.

If you ever pay cash for a vehicle, never pay any where near the sticker. The guy who posted earlier, was screwed. That is an old tactic pulled on buyers. We use to do that a bunch to hagglers. We would wait for them to settle on the purchase price/payments, then one by one, very carefully come through mentioning how tough they were. In actuality, they were laughing behind your back. When you pulled out the cash, the dealership made I bet some where around $15K.

The dealer invoice is a hoax. These are all made up numbers. Cars are made for pennies on the dollar. Think about it. An average manufacturer can produce a hundred cars in a day, start to finish. Then ship them to a region. From there, local haulers grab them and disperse amongst the dealers. The cost for shipping is less than $150 per vehicle.

The best way to see what you should pay is to go on Autotrader or Cars.com and look for your vehicle with about 5,000 miles on it.

See Yah

Let me address a few of your points as there is some mis-information there.

1) Dealers do NOT make thousands on each deal. On some pricey vehicles, yes, but on your average car like a Accord/Camry they'll make about $500 to $1000 on each sale. (That does not include profit from financing or selling insurance/extended warranties.)

2) This sentence of yours is completely false: "Even if the buyer finances through a company other than the dealership, the financing institution gives big kickbacks to the dealer."

If a customer arranges their own financing a dealer gets NOTHING in 95% of those cases. There are always exceptions but the general rule is true.

3) You also make mention of making $15K profit on a deal? What were you selling? Aston Martins or Bentleys? That seems like a gross exxageration to me. A heavy truck dealer doesn't even make that much on a $130K dump truck.

4) Cars are not made for pennies on the dollar. A Ford F-150, on average, costs about $14,000 to make. Ford then sells the vehicle to a dealer for approximately $19,000. The average dealer sale price is about $21,000 on that vehicle.

5) Shipping, from the assembly plant to the final destination point, is far more than $150 per vehicle. It is at least 5-times that amount if not more.

Also, unless you are like Toyota who has regional "sales centers" such as Gulf States Toyota, etc, the vehicles are destined to a specific dealership right when they leave the plant. Some foreign based makers have middle-men "companies" between the home manufacturer and the dealers.
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Old 10-13-2007, 08:48 PM
 
53 posts, read 247,611 times
Reputation: 25
Your speaking from your opinion and not actual transactions in this line of work. I have many contacts through out the automobile industry.

Would you like proof that cars are more profitable than a $500-$1500 a pop? Go down to a dealership, look at the size of their facilities, the constant expansions, the sales man and administrative people, and the fat salaries they all earn. Duh, is all I can say. You keep believing a dealership makes $500 on a car. No one in any successful business would waste their time for $500 a pop.

When an automobile manufacturer can afford to pay their employees $30 hour and $8K in bonuses across the board, come on! You have got to smell the coffee and wake up big boy.

Cars do not cost $15K to make. Not most of the ones driven on US roadways. An average Toyota produces $15K profit.

Drive over to 64west and MacKenan drive and look at the dealerships. THINK<>
O Gee, those buildings are awfully big. They cost millions!!!! Not thousands to build and thousands to operate.

Cars are big bucks!

Think otherwise would be silly.

Cars are made for pennies on the dollar. It is called an assembly line. Some history for you, Henry Ford developed the first successful one! Ring a bell? Add the total number of vehicles made in an average work day. Multiply that number by the average selling price. Then take the hours in an average car assembly day, multiply that number by their hourly cost, insurance, etc. Divide the total number of selling price of the cars made in the day by the amount of cost for that average working day. Then you can obviously see the cars are made for pennies on the dollar.
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Old 10-13-2007, 09:33 PM
 
2,376 posts, read 2,907,475 times
Reputation: 2254
Quote:
Originally Posted by Localguywonderingaround View Post
Your speaking from your opinion and not actual transactions in this line of work. I have many contacts through out the automobile industry.

Would you like proof that cars are more profitable than a $500-$1500 a pop? Go down to a dealership, look at the size of their facilities, the constant expansions, the sales man and administrative people, and the fat salaries they all earn. Duh, is all I can say. You keep believing a dealership makes $500 on a car. No one in any successful business would waste their time for $500 a pop.

When an automobile manufacturer can afford to pay their employees $30 hour and $8K in bonuses across the board, come on! You have got to smell the coffee and wake up big boy.

Cars do not cost $15K to make. Not most of the ones driven on US roadways. An average Toyota produces $15K profit.

Drive over to 64west and MacKenan drive and look at the dealerships. THINK<>
O Gee, those buildings are awfully big. They cost millions!!!! Not thousands to build and thousands to operate.

Cars are big bucks!

Think otherwise would be silly.

Cars are made for pennies on the dollar. It is called an assembly line. Some history for you, Henry Ford developed the first successful one! Ring a bell? Add the total number of vehicles made in an average work day. Multiply that number by the average selling price. Then take the hours in an average car assembly day, multiply that number by their hourly cost, insurance, etc. Divide the total number of selling price of the cars made in the day by the amount of cost for that average working day. Then you can obviously see the cars are made for pennies on the dollar.

I'm sorry but I know exactly what I'm talking about and the information you provided is just plain wrong. An average Toyota making $15K profit - PUH-lease. That is not even remotely close to being accurate. (Especially if you think a dealer makes $15K on a Camry sale - dear lord.)

I worked for one of the three largest auto companies for 10 years after I got my MBA. My last job was as a product development supervisor for one of the largest vehicle programs on earth. I was personally involved with the negotiations on the cost of every single part on the vehicle.

After that, I decided to work in my family's auto dealer business where we represent 2 major brands. (1 domestic and 1 import.) I am putting together deals all day long.

The stores and buildings can be built because they make their money on volume sales. A dealer makes $500/$1000 per car on the sale, plus sometimes they'll get another $1-2K on financing and add-ons, plus additional money from the parts & service business you get from that customer long-term. Multiply that by hundreds of customers per month and that is how the dealers build their facilities, etc.

Last edited by iamweasel; 10-13-2007 at 09:34 PM.. Reason: typo
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Old 10-14-2007, 12:07 PM
 
53 posts, read 247,611 times
Reputation: 25
Believe what you want. One reliable source of mine works for a well known Leith dealership off of Capital Blvd in Raleigh. He personally deals with the net profits. On the low end, they earn $3K a deal, on the higher end, they make $10k-$15k a deal.

Please don't brainwash the consumers. We have heard it long enough. Once again, look at the overhead the dealership is paying, the overhead the manufacturer is paying. Plus, I know the trucking industry very well. We can ship any vehicle across state lines/across country for $150 or less. Shipping atleast six vehicles at a time and hiring a contract driver.

You may honestly be telling the side you have seen. However, I apologize if your profit margin is 4%~.

Don't even get me started with the used car market. Huge racket!!!

My brother-in-law's father runs a sales department for Ford on Capital Blvd. He purchased his used vehicle for $6K less than they had it advertised.

Most consumers never hear the truth because most car sales people never want them to know. It is an unwritten code of ethics. Don't ask, don't tell.

For instance, go price a '08 Highlander across the state. They will all be uniform. The manufacturer arranges agreements with each dealer on selling price. The dealer advertises their own way. Once the vehicle is purchased for that "set" range. The dealer makes they initial profit at closing and than huge discount on future models ordered. It is legal! The IRS can't track purchase prices, as well as an actual check written to the dealer.
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Old 10-14-2007, 03:18 PM
 
2,376 posts, read 2,907,475 times
Reputation: 2254
Quote:
Originally Posted by Localguywonderingaround View Post
Believe what you want. One reliable source of mine works for a well known Leith dealership off of Capital Blvd in Raleigh. He personally deals with the net profits. On the low end, they earn $3K a deal, on the higher end, they make $10k-$15k a deal.

Please don't brainwash the consumers. We have heard it long enough. Once again, look at the overhead the dealership is paying, the overhead the manufacturer is paying. Plus, I know the trucking industry very well. We can ship any vehicle across state lines/across country for $150 or less. Shipping atleast six vehicles at a time and hiring a contract driver.

You may honestly be telling the side you have seen. However, I apologize if your profit margin is 4%~.

Don't even get me started with the used car market. Huge racket!!!

My brother-in-law's father runs a sales department for Ford on Capital Blvd. He purchased his used vehicle for $6K less than they had it advertised.

Most consumers never hear the truth because most car sales people never want them to know. It is an unwritten code of ethics. Don't ask, don't tell.

For instance, go price a '08 Highlander across the state. They will all be uniform. The manufacturer arranges agreements with each dealer on selling price. The dealer advertises their own way. Once the vehicle is purchased for that "set" range. The dealer makes they initial profit at closing and than huge discount on future models ordered. It is legal! The IRS can't track purchase prices, as well as an actual check written to the dealer.
Which Leith dealer is he at? It makes a big difference whether you're selling Hondas or Rolls Royces.

We know, more than anyone outside of their building, what Capital Ford makes on their products. Not only do we sell some of the exact same vehicles and compete against them my family personally knows Tim Michael. (The owner of Capital.)

Manufacturers and dealers cannot collude on setting prices. That is illegal.

A trucking company may be able to physically ship a car for less than $150/each, but that is different than what they bill to the auto manufacturers. (They mark it up, too, you know...) Believe me - as I said before I worked for an auto manufacturer - and I personally had to authorize payments to the transport companies. We did not pay $150/vehicle - it was WAY more than that.
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