How to Buy a Car for Invoice

How to Buy a Car for Invoice

1. Email a few dealers and tell them that you are ready to buy a
specific model, color, etc. Find out if there are any incentives.
2. If they respond that they have the one you want then tell them
that you want to pay $19,034 (or whatever invoice is) minus the
incentives (invoice price is available at Edmonds and Kelley’s).
3. If they say they can not afford to sell for that tell them that you
know that they will get holdbacks.( Hold backs are 2-3% that is always
returned to the dealer after he sells a car.) (Look up holdbacks on
the internet for a list of how much each company holds back.)
4. When you get the offer you want then call your local dealer and ask
them if they can match the internet offer that you got from Xyz
dealership.

I did this and it took about an hour to get two firm offers of invoice
pricing on my Honda CR-V. I only had to email three dealers but you
could easily contact dozens.

Warning: My dealer insisted that the body work on my trade-in was
noticable and that he would have to replace the parts. I think that he
was lying because the repairs were flawless and it was almost dark
when the car was inspected. Later I found out that dealers are able
to look up any insurance repairs that you have done to your car on the
internet.

 

Problem is, dealers NEVER pay those bogus "inv. prices" posted by Ed. or
Kell. Those are same as MSRP, BS! for stupid CONSUMERS only.
Congratulations! you just discovered America!

YOU THINK??!! With which organ? You obviously have no brains at all! OR!
maybe you are a car dealer!


because the repairs were flawless and it was almost dark

ANYBODY can do that, you dumb ass!

 

worst advice, ever!


....................
I do not killfile nor use do-not-call lists.

 

Ok this may be the bad advice but do you have a suggestion as to what
may be a better way of handling it? Don't just put down something
stupid like this without backing it up with facts.

 

I'm also quite skeptical that your advice would work. Let me past
some of it back it with comments.

specific model, color, etc. Find out if there are any incentives.
Most dealers won't give you a price, they let you make an offer. You
don't have a price from them until they accept your "firm offer". If
they do give you a price, it's some lowball that they will change
before you get it. Dealer's go way out of their way to make sure you
can't comparison shop. Carsdirect.com is the best "real price" you
can get just for the asking.

that you want to pay $19,034 (or whatever invoice is) minus the
incentives (invoice price is available at Edmonds and Kelley’s).
Nothing wrong with trying, but I doubt they will accept. They will
say "come on down and work out a deal". Dealers always impune your
integrity. "I thought you said you were a serious buyer." "I thought
you said you would buy if we gave you a great price." "I thought you
said you were ready to buy." Just smile. A car dealer impuning
someone else's integrity is the pot calling the kettle black. They
hope you will get flustered and give the game away.

you
know that they will get holdbacks.( Hold backs are 2-3% that is always
returned to the dealer after he sells a car.) (Look up holdbacks on
the internet for a list of how much each company holds back.)
I tried this a few times. Holdback is theirs and is never up for
negotiation. But heck, try anyway.

ask
them if they can match the internet offer that you got from Xyz
dealership.
OK, this is realistic.

Know the invoice, MSRP and rebates/financing. Start low, below cost
(here's where you can babble about holdback), and bump 2 or 3 times.
Most car dealers will make you bump your offer even if you start out
way over their minimum. Dealers will rip you off for $1,000, $100 and
$1.50. Fight every $14.50 charge. They will rip you off six
different ways for six different amounts. For every one you catch,
they have another one. Know the selling value of your trade. I
suspect they undervalued your trade and gave you your great price on
the car. Know the selling price of the car, every line item (sales
tax, registration, advertising, prep, destination, GM retirement fund,
security code, just because it's Tuesday etc.) and make sure the
addition is correct. Know how to calculate payments. Know the
interest rate. Know the term. Know the down payment. Do not "let
them figure all that stuff out" and assume it is legit. This is where
most people get murdered. Do not drive a car off the lot until your
financing is a done deal. Gee, we couldn't get you 2.9%, it's going
to be 17.9%, you already bought the car when you drove it off the lot,
ha, ha. Bring in a check today for the whole balance if you don't
like it.

You approach is appealing, I just don't think the average person could
make it work.

Roadie Roger

 

Just what is fair for a car dealer to make? 2-3% of a car's price, more,
less?
I'm a salesperson and I just want to understand. I'd like to make it easy
for my customers to buy a car.
A salesperson may make $100 selling a $25,000 car(this is a minumum deal
but it happens often) but would a real estate agent take $400 for a hundred
thousand dollar home?

My intentions are good. I just want to help folks own a Honda and make a
fair living.

As for a few of the statements below, they are a little exaggerated,except
in a few rare cases. We never try to "rip off" a customer.
How many in other occupations have their business costs published on the
internet and have to negotiate based on information that may either be
incorrect or misunderstood.
Don't get me wrong, there is a lot of great information about buying a car
on the internet
Here included.

See Ya!
David


(Roadie Roger) wrote in

 

Edmunds used to recommend that you make a 'fair' offer of
(invoice - holdback) * 1.05. This is basically 2-3% over
invoice. I think smart shoppers tend to pay less than this.
They have since eschewed formulas based on invoice in favor
of the "TMV" price, which appears to me to be higher in most
cases than prices based on the old formula. I think edmunds
doesn't want to anger its advertisers.

Andrew

 

Notice how flexible the truth is with car salesmen. He's implying
that car dealers only make 2 - 3% on sales. But he didn't actually
say it, did he? So when they make much, much more, it's not a lie.

My challenge. Anyone buying a Pilot or Odyssey without a trade in,
run on down to your local Honda dealer and offer 2% over invoice. If
David here is telling the truth they'll write up the order on the
spot. Get you that 1.9 to 3.9% factory financing too! Please report
back.

Re-sale homes can hardly be compared to new cars. Does a new car have
a termite inspection, home inspection, title search, repair
negotiation and escrow to deal with? No two re-sale homes are
identical. New cars are about as identical as you can get.
Personally, I think the days of 6% home sales commissions are
numbered.

But the point at hand is that you hoping people will confuse the car
salesman with the dealership. Dealerships only make $100 on the sale
of a car. Oops, you said the salesman only make $100 on the sale of
the car. Cheap jerk dealerships only pay their salesman $100. I'm
sure some only make that. But the "meeter and greeter" is only the
bottom of the food chain. Many dealerships have a "Take Over" system
where an experienced closer takes over after the initial salesman is
done. The Take Over guy is nice and fresh and the customer is
starting to wear out. How fair. He needs to be paid more than the
bottom guy. And the Finance and Insurance guy usually gets one of the
biggest cuts. And the Sales Manager deserves a cut. And the General
Manager deserves a cut. And the Owner of the dealership deserves as
much as everyone else combined. He takes all the risk, after all.

Well David, what's the biggest profit a sales(wo)man at your
dealership made this year? $101? Do tell.

I had a Honda salesman look me straight in the eye and say that MSRP
was a zero profit deal. They had to sell over MSRP to make a profit.
Is this true, David?

Cheers,
Roadie Roger

 

There is nothing "fair" about the price at which a car is sold. A recent
trip to a local Mazda dealer revealed that they still had numerous unsold
2002 Mazda 626 cars, some with less than 10 miles on the odometer. You
think fairness has any bearing on what that dealer can expect to make on
those cars? A dealer has a lowest reserve price it is willing to sell a car
at, and the buyer has a highest reserve price he is willing to spend. If
there is a positive bargaining zone between the two, the sale will take
place. Fairness has nothing to do with it.

A real estate agent making a sale on a house nets about 1 to 3% or about
1000 to 3000 in your example. But a real estate agent does a heck of a lot
more on a per sell basis than your average car sales man. And while a good
car salesman may deliver 1 to 2 cars a day, a real estate agent is in very
good shape to close on one sale every two weeks. The last car salesman I
delt with spent about an hour on me. The realestate agent has probably 40
hours invested in the house he found for me.

Everyone is free to try to make a living doing whatever they please. But if
on average you can't live on the car sales you make, perhaps your dealership
and Honda needs to evaluate why customers are valuing the cars so low.

Not "rip off", but all your preference for "fairness" disappears when you
are on the fat side of the equation. It is this lack of caring for the
welfare of the customer along with the pretense that you are working for the
customer that gives people the feeling that you are ripping them off.

Perhaps steps should be taken to guard against that. No one said Honda or
anyone else had to publish their costs. Besides, the true cost of a vehicle
in your dealership is not published. It is not even on your in-house
computer system. It is hand written in booklets tucked away somewhere in
the office of your regional manager or owner. Case-in point. I was offered
$15,995 on a '03 Civic Si, which is about $2000 below invoice. With only
financing incentives showing available, that dealer claims he is losing
about $1500 on the sale. I was even shown the in-house accounting system
with all the relevant figures. I didn't buy it.

Lee Cao

 

Thus spake Roadie Roger on 12/15/2003 2:31 PM:

One of my friends had this happen to them (sort of) when Crapsler had
their zero-down, zero-interest deal going. They let him leave with the
car before getting confirmation back from Crapsler's finance division.
They called him back two days later, told him he needed to return then
car or come back and sign the higher interest paperwork or return the
car. He told them he was just going to return it, and oh-by-the-way, I
put 500 miles on it, and it's been titled so you now have a used car on
your hands.

He got to keep the car and the zero down, zero interest payments.

Solid brass balls are never a bad thing.

-moitz-

 

1.> Just what is fair for a car dealer to make? 2-3% of a car's price,
more, less?

2. > How many in other occupations have their business costs published
on the internet.

3. >...and have to negotiate based on information that may either be
incorrect or misunderstood.

Hello David,

1. In general I think that the free market system is the most just
and efficient way to determine prices. However that presupposes that
both the buyer and the seller have as much information as possible and
that they both act in their own best interest.

2. But I see your point. I would not feel comfortable having all the
expenses of my company published.

3. I would be grateful if you would let me know what I have
misunderstood. I think that holdbacks are very consistant and that
there are probably other incentives such as the volume bonus that I do
not know about. I want to point out that the data I have given is not
meant to be used to calculate a just price but to apply pressure on
the seller so that free market forces will find the just price.

Although I feel some remorse at revealing industry secrets I also feel
that the current new car sales model is overly adversarial and may
have a significant negative impact on our society. (Would anybody
like to discuss this?)

If I had the power to change the current car sales model to a fixed
price model I would certainly do so. I like the Saturn sales model
and have purchase two Saturns partially for this reason.

Thank you all for your efforts to keep this a friendly and productive
thread.

Mark

p.s. It is more polite to place your posting after instead of before
the material it references.

 

Just a few points

(Roadie Roger) wrote in

I didn't imply, just trying to establish a basis. I think we all realize a
high demand, short supply vehicle shouls command more, some vehicles less.
I just want an easy way to help my customers get a vehicle and be happy in
the end.

The truth about what? I was asking a question.
BTW- In many cases I may. I sell Hondas.

You don't pay the real estate agent for those items. He or she may make the
arrangements for those items though.
You do pay a carsalesperson for his time, making sure the state gets all
the required paperwork,insurance verification with the banks, good delivery
and aftersale service and hopefully for the product knowledge. I think it's
unfair to compare that way. I'm sure that we all feel our jobs are
important and should be justly compensated.

I was just using a real estate agent as an example.

Again, that was not my intention. This is exactly the adversarial thinking
that makes it hard for a customer in many cases buy a car. You assumed I
tried to be deceiving. You don't even know me.
I'm not disputing that the dealership, overall, makes good money for
selling a car. A salesperson gets paid based on the "gross profit". In most
cases, the "gross profit starts + or - $400 over invoice and the amount
over that.

There are some that use "meeter and greeters" but not all. I don't like
that method. I want a personal connection with my customers and a "closer"
makes that difficult.

I have seen a salesperson make about $1000 for one car. It's rare and in
most cases, these are the happiest customers. Believe it or not, the most
unhappy customers seem to be the ones that pay the least. I've heard of
some that have made as little as $50

He didn't tell you the truth, but I think you knew that.

Thanks!
David

 

What does an "unsold" 2002 have to do with what I asked. That's not a valid
arguement. I do agree with the positive bargaining statement.
"Fair" refers to enough profit for a dealer to take care of expenses and a
price that will make our customers happy.

I'm not a real esate agent, but it's my understanding that if they list a
house and sell it they make about double that. Also, your average agent
sells 1 house every 2 weeks and the average salesperson sells 8-10 cars per
month. Most stores only have 1 salesperson who can sell a car a day and
it's very rare for a car salesperson to sell 2 cars a day for any lenth of
time.

I understand, I'm doing fairly well and if I couldn't cut the mustard, I
would leave and do something else. It's fun to help some own a car. Again,
I'm constantly learning and this seems to help. Asking questions.

I do care, and have spent many hours helping customers after the sale, when
I could have ignored them and sold another car.

That has been tried, but if one dealer changes, it spoils it all. Scion
will be doing the same.
Depending on when that was, there was dealer cash, so he wasn't losing that
much. This doen't mean that the salesperson intentionally told a fib. Many
salesmanagers don't let the salespeople know about the dealer incentives.
If you were in the market for that car, it was still a great deal.

Good conversation Lee

 

(Mark) wrote in

Agreed, however, we all read things differently and sometimes a little
information is more detrimental than none.

But such is the way and I live with it.

I didn't mean you. I was referring to customers that, for example, that go
to edmunds.com, read the base invoice price and don't bother to make the
next few required clicks to get true invoice.

A Honda will show the base invoice plus desination of $490 in 2004. I have
had many customers swear to me invoice is $490 less than what I tell them
and have even been called a liar.

Bargaining and negotiating has been going on a long time. I don't really
see it at all that bad. There are some people that are just not good at it
or have a fear of the unknown. I've had a few customers tell me they enjoy
it. I'm not always sure myself. Ha! Ha!

Just a final thought. If every manufacturer went to a fixed price model,
until our generations pass away, would we all feel like we paid too much?

Oops!

David

 

In my state, the car does not get titled until the bank funds the
transaction.

David

 

The unsold 2002s illustrates the point that what is "fair" is not up to the
dealer, but rather the market. The "fair" price on a car you sell may be
above or below what the dealer paid for the car, which is certainly the case
with the 2002s. Whether the dealer wants to be in the business of selling
cars at a loss is up to the dealer's owner, but that has absolutely no
impact on what is "fair".

I just bought a new Mazda 3 this past saturday. Getting home I noticed that
there are two small dents on the hood. I'll see how much help I will get
from my salesperson.

Lee Cao