Dealer Wont Deal???

FuszNissan

Floor is 5.5% and it's free for the first 60 days. I go for gross turns and credits.

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LouFuszNissan
ZDAYZ 2012

fly yellow

I basically paid invoice on mine, and so did a lot of people on this forum. If the dealer stuck it to me anywhere, then it was on my trade, but I basically went to 5 different Nissan dealers and 2 Infiniti dealers, and where I bought gave me the best price for the trade. They beat Carmax by 500 bucks. I had my own financing and I didn't buy any extended warranties or extras. The car had Lojack already installed. I told them I wasn't paying for it and they could take it out, but they just left it there and gave it to me.

I don't think invoice is hard to get on this car. Maybe it's different in SoCal, everything else is screwed up there, so why wouldn't buying a car be the same? Maybe your crazy emmision laws which make it impossible for you to buy out of state have caused some sort of colusion amongst dealers.

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edeeZee

Source: Dealer holdback at Edmunds car price guide

What Are Holdbacks For?
Dealerships must have an inventory on hand so that consumers can browse and ultimately select a vehicle. Dealerships must pay for this inventory when it is obtained from the manufacturer, and the amount the dealer pays is the price reflected on the invoice from the manufacturer to the dealer, the so-called "invoice price."

Now the twist: with the introduction of holdbacks some years ago, most manufacturers inflated the invoice prices for every vehicle by a predetermined amount (2-3% of MSRP is typical). The dealer pays that inflated amount when it buys the car from the manufacturer. But later, at predetermined times (usually quarterly), the manufacturer reimburses the dealer for that excess amount. This is the "holdback," so named because funds are "held back" by the manufacturer and released only some time after the vehicle is invoiced to the dealership.

Why the sleight-of-hand you might ask? Because holdbacks can benefit dealers in three ways:


1.Dealerships borrow money to finance cars based on an invoiced amount that includes the holdback. So the higher the invoiced amount, the more the dealership can borrow from its lender.


2.Inflating the dealership's "cost" can have the effect of increasing profit, since sales personnel are paid commissions based on the "gross profit" of each sale. Holdbacks have the effect of lowering the gross profit and thus the sales commissions.


3.Holdbacks enable dealerships to advertise "invoice price" sales and sell their vehicles at or near invoice and still make hundreds of dollars on the transaction.
Holdbacks Allow "Invisible" Dealer Profits
This holdback amount is "invisible" to the consumer because it does not appear as an itemized fee on the window sticker. For example, let's say you're interested in a Chevrolet with a Manufacturer's Suggested Retail Price (MSRP) of $20,500, including optional equipment and a $500 destination charge. Let's also say that dealer invoice on this hypothetical Chevy is $18,000. The cost of the car includes a dealer holdback that, in the case of all Chevy vehicles, amounts to 3% of the MSRP, or $600. (Note that the $500 destination charge should not be included when computing the holdback.) So, on this particular Chevy, the true dealer cost is actually $17,400. Even if the dealer sells you the car for the invoice price, which is unlikely, he would still be making as much as $600 on the deal (when his quarterly check from GM arrives).

Dealer holdback allows dealers to advertise attractive sales. Often, ads promise that your new car will cost you just "$1 over/under invoice!"

Almost all dealerships consider holdback money "sacred" and are unwilling to share any portion of it with the consumer. Don't push the issue. Your best strategy is to avoid mentioning the holdback during negotiations. Mention holdback only if the dealer gives you some song-and-dance about not making any money on the proposed deal when you know that isn't true.

However, the standard dealer holdback is not the only form of financial assistance provided to dealers by manufacturers. There are many other types of holdbacks and dealer credits that may be available from specific manufacturers at various times — some of which consumers may hear about and others of which are never disclosed to the public — but each of which can have the effect of reducing the net cost of a vehicle to the dealer. These include:


•Advertising credits


•Flooring assistance


•Floor interest reserve


•Floor plan allowance


•Transfer balance


•Wholesale reserve


•Wholesale credits
Negotiate Using Incentives, Not HoldbacksIn addition, the dealer stands to reap further benefits if there is "dealer cash" being offered by the manufacturer on the car you are considering. In many instances you can learn about dealer cash in our Incentives and Rebates section. However, unless you know all of these other fees (and who does?), establishing the dealer's true cost can be frustratingly elusive. It's for this reason that Edmunds.com has established True Market Value® pricing that accurately reflects "what others are paying" by taking into account all of these fees. The Edmunds.com True Market Value Price® is the "bottom line" and what you really need to know in order to negotiate a fair deal. Check it out at: New car prices, new car reviews at Edmunds.

In summary, holdback is nice to know, but is just one small piece of a complex puzzle.

alvinmathew88

Wow way to thread jack guys....

I think yal should make a section in this forum, for discussing how Dealerships should/do profit or run their business. Besides that i think yal should take this discussion elsewhere... even though i find your discussion very interesting...

edeeZee

It's OK Hitech, no offense taken. But it's humorous to see the time and toil you took to write out your superfluous post. Is that you Davidyan? I didn't know vindication and having thin skin is the way you demonstrated not being able to handle another's disagreement. You think extraneous fluff is validating?

Anyhows, I don't use "hearsay" to explain my points. I was in the car biz from '99-'02. You never mentioned whether you had direct experience, or if you read a lot of "how to negotiate a new car" tactic from outside sources. 1% per month to floor could've been likely during that era. The economy wasn't in shambles like today, and interest rates (controlled by the Feds) were probably a lot higher. Thus 12% a year then was probable.

The $400K/month figure was casually given to me by my friend. It doesn't imply that it is a detailed figure EVERY MONTH, it was ballpark instead. Seriously, are you the auditor for this dealer? Then how do you know. How many VW's, Hyundai's or Lincolns did we move. The profit margins on all 3 brands vary. FYI, we moved primarily VW Jettas and Passats; Jettas had less then $1,500 profit typically, and Passats had around $1,700 on average. And you know what? We blew every unit out at invoice because VW's don't pull like crazy. This store was good, they paid the salesman $200 flats because if it was 20% after $500 pack, then they couldn't retain sales people.

Like I said, there's nothing wrong with negotiating a deal. But trying to take all the meat off the bone is going to lead to dealer kicking you out. We live in a capitalistic society, if you don't like the deal, then you got the freedom to walk out, you're not under duress.

BTW, I don't tip waiters nor waitresses who cop an attitude. I literally pay the bill and don't leave no change.

ZCarMan

The numbers you had through USAA were great. I got a similar deal on mine through USAA. I worked through the internet dealers and was able to get mine for 36120.00 included the TTL out the door. Hopefully you'll be able to go back and make the good deal that it is. Good Luck!

DooDooBrown

Ok, so here is the update..... I called the dealer back up, and asked if they had any in a different color, and he told me they had one at another dealership, and they wouldn't give it up. So I go over to the other dealership (both cars are identical) (another 55 miles), and go through the whole test drive, etc... I then pull out the papers from USAA, and the written quote that the other dealership gave me. The sales manager wasn't too happy. As it stood with the other car, it was 16,984 out the door, in addition to my trade in. They responded back saying that they wanted 18250 and my trade in. I then explained I would take to car off the lot today for 17,500 , and kindly explained (as they saw), that an identical car was sitting 50 miles away for $1216.00 less, and that car additionaly had illumanated kick plates. I explained that I was willing to pay the extra 500 to them because I would prefer to have my first choice color, however, anything over that price, and it was just not worth it. They came back with 17989, and that was "their final offer". I spoke personally to the sales manager, and explained to him my reservation, and which point he stated to me that he could go down to 17750, and after that, he would have to explain to the owner why he let a car go for so cheap. I told him 17500 was my budget, and if he chose to accept it, I would have the cash in his hand by the end of the day. He was stuck on 17750, and I told him if he wasn't willing to come down $250.00, there would be no sale. I kindly excused myself, and left the dealership. I have no idea if they will call me back, probably not, but it kinda erks me that they wouldnt go down 250 to make a sale. That to me shows that a dealer would not want to work with you down the road if something where to occur. Am I just being stupid? Another night, without a Z!

mspeasl

Now you are willing to pay $17,500?? What happened to $16,500 at the other dealer?? You are not making much sense to me.

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Mspeasl - Central Illinois
2009 - Solid Red, M6 '370' Sport/Touring (Delivered 7 April 09)

Scott@FontanaNissan

And this is why I don't sell cars

Its a tough business...There is so little on the table sometimes that it just doesn't make sense for the dealer to let it go a certain amount. The last thing they want to see is you walk out the door without your new car, but it has to make sense from a business standpoint as well!

I'd say your best deal was at the first dealership...hopefully they haven't sold it already. I used to work in real estate and I can't tell you how many times I gave people a great deal on a new home...they decided to think about it (shop around for a bigger better deal) and by the time they came back it was sold. Then they'd get upset with me cuz it wasn't available anymore!

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DooDooBrown

Yes, they do have the other car at the dealership still, and they are still trying to locate me one in graphite. I was willing to pay the extra cash because the other dealership had the Z that had everything that I wanted on the car. It does surprise me that they wouldn't budge $250.00, and that one dealership can offer me the same exact car for nearly $1,000 less. Who knows, I am waiting from a call at the dealership saying they are willing to come down $250.00!

Additionally, the first dealership I went to has 3 other cars to chose from in that price, but none are in the color I want...

Pheonix

No offense, but it doesn't make much sense...if your trying to coerce them by using the threat that the other dealership is willing to sell at almost $1k below what they're offering, but your waiting on this dealership to call you back with another $250.00 reduction, and they haven't yet? They're not going to, they will assume you went to the other place and got your vehicle nearly a thousand dollars cheaper.

It sounds to me like you've gotten two really great deals, and you've rejected them both over what amounts to a pittance. If you really wanted the Z that badly, you've had dealt by now. If you really want that car, its time to quit playing the victim, and start playing the consumer.

theART

sounds like you've already spent $250 by driving over 200 miles and wasting ur time.

mspeasl

Gang,

After re-reading this thread I am beginning to think that we may be getting played. Just my thoughts. If I am wrong I apologize. But things just don't add up in my mind.

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Mspeasl - Central Illinois
2009 - Solid Red, M6 '370' Sport/Touring (Delivered 7 April 09)