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ok, so I'm currently car shopping and have done a lot of research on how to get a good price. I know the MSRP ($36,870, includes destination), the dealer invoice ($34,469, includes destination), and there is a $1000 cust incentive and holdbacks of $733. So, true dealer cost is $32,749. My intention was to start my negotiations there and go up as far as $33,731 (3% above.)
So, imagine my shock when the first price they present to me is $32,528 ($32,029 plus a $499 processing fee.), which is $231 LOWER than (what I believe to be is) their actual cost. NO dealer is going to start the deal losing money, so I'm sure I've missed something. The dealer must be making money here somewhere.
So, I need some advice when I go back and start negotiating. How much lower should I offer? This is for a 2013 Toyota Highlander. I know the 2014 model (when it comes out early next year) will be completely redesigned, so I think I have some negotiating there, as I will take a big hit on resale value buying this model. Also, it appears they have over 20 of these (same trim line) on their lot, so they likely want to move them.
Of course the dealer is making money. That's why they're in business. If the price they are offering is better than what you were willing to spend, I don't see the problem.
Their cost has probably dropped since the info you have was made public.
Are you bringing a trade-in to the deal? If so, that's where they plan to make their money. That and/or on the financing if they can get you to do it in-house.
Are you bringing a trade-in to the deal? If so, that's where they plan to make their money. That and/or on the financing if they can get you to do it in-house.
Yes, I do have a trade in, but they have already offered $500 more for my trade-in than my other three trade-in appraisals.
How much will I lose in resale value buying a model right before a huge redesign?
In reality, there is no way you are ever going to know exactly what that car cost the dealer, after all incentives and unit sales bonuses have been paid, so you might as well determine what you think is a good value and either buy it, or don't buy it. Consumers can only rely on published per-unit or aggregated figures from other sales in the region, combined with invoice, holdback, and published incentives (cash back to dealer, for example).
What consumers don't have access to is the unit sales targets and bonuses. For example, the dealer could be at the edge of hitting a very lucrative stair step threshold which offsets the (apparent) loss on one or more vehicles as individual units. Or maybe they have incentives for assuming some excess inventory. You can't find these things out because they're not published, and change frequently based on response to market conditions.
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