Dealer Wont Deal???

Hi-TecDesigns

Barely any difference? The difference is nearly $2k for the base and $2.5k for the touring. Tack on another $400 difference if you want the sport package. Decreasing the cost of a car by 8% seems worth the fight, don't you? Well, maybe not you, as you already said MSRP would have been fine.

A $40k car costs around $133/month in interest on a 4% loan (and that's assuming a top of the line touring model with all gadgets). We're talking a 370Z, not a fully loaded GT-R.

And it's difficult to have sympathy for a salesman/manager who refuses an offer that nets them $1k in profit from holdback, not to mention what they'll make from financing, because it's not $150 over invoice like they wanted. Fine, I'll come back in a month, that car will still be sitting there. My price point hasn't changed, but the dealership just lost $150 in interest. If they sell it at invoice now, they lose $300 off of what they wanted... had they sold it to me last month, they would only sell it for $150 less than what they wanted. If they're unlucky enough to have a car that no one wants for several months, they can take a real bath in the loss department... sometimes it's better to sell at a known (and decent) profit than take the chance on getting a much smaller one months down the road.

If I go through USAA's car buying program, the dealership has pre-negotiated $825 below invoice (for the model I was looking at), and they're STILL making a profit off of that sale, so why bicker about invoice at all? It's called risk. The dealership is taking a risk that they can make me cave and buy the car for their original asking price before walking out and losing the sale entirely. Some dealerships are bigger risk takers, and the size of the risk will depend heavily upon their sales for the month. Dealers don't like guys like me... I'm willing to walk away (and have been for the last two months) if the deal doesn't strike me as good enough. When I was shopping for the Cube, I finally found a dealership willing to accept my price (invoice, since I knew it was a popular car that had just come out less than 3 months before) after 2-3 minutes... and they got my business. The car had just come in a day or two before, they made the sale, lost only a few dollars to interest, but most importantly they made almost their entire holdback as profit (not to mention helping increase their allotment). It cost them a few hours of paperwork, improved their business standing, and made them a tidy profit...

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FricFrac

OK markup on my car is about $3,400. My friend bought an '09 Mustang convertable and got $13,000 off of sticker. Both cars are around $40K. My point is where the American cars have a crazy mark up - the Z doesn't.

I'm just as eager to get the best price I can and I did my homework and negotiated. That's why I got $800 off instead of paying MSRP. Not sure if you know anything about running a business but making $2500 on a car is jack not a tidy profit. Add to it the cost of keeping a dealership open - staff, rent, utilities, insurance, etc, etc, etc.

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Hi-TecDesigns

Considering I've been running my own business for over 7 years, I'd say I have a decent grasp. When you consider almost every dealer within 150 miles of me (D.C/Baltimore area) is willing to accept at (or near) invoice (and still make around $1k in profit in doing so), making an additional $2500 over invoice with MSRP is a tidy profit, IMO... but your definition of "tidy" appears to be different. If your idea of a good deal is $1,300 over invoice, cheers to you, but it's not the best deal you could have gotten with hardly any extra work on your part by a long shot.


EDIT: Okay, I went back and read this reply before posting and it read aloud as being very harsh... definitely not my intention, so I've tried to modify it appropriately.


<chuckle> Sorry, not DavidYan, though I do believe he posted in one of my first threads here. You have written several long posts extolling the virtue of your beliefs, but when someone disagrees with you in a similarly long post it's superfluous? How am I displaying a thin skin? How is what I said extraneous (other than trying to make my point using a comparison about the waiter)? Or were all of those comments meant towards me only if I was DavidYan in disguise?

You stated numbers, and I stated numbers. The difference between what you and I posted is mine was based upon real-world figures, not what a friend told me as an off-the-cuff figure. Take two minutes to come up with some way, any way, you think a small dealership can use $400k/month... once you're done with that, explain how you came up with those numbers. No, I'm not the auditor, but common sense tells me those numbers don't add up, and I explained my reasoning why. The simple questions is, do you know many small dealerships that sell 7+ cars a day at MSRP? If so, then I would love to invest in them (and possibly steal away some of their sales team as they're GOOD). I will certainly admit that a 1%/month figure may have been possible in years past when rates skyrocketed, but I was speaking of the here and now where anything over 6%/yr would be a bad deal... Lou has already stepped in and admitted to a 5.5%, so we were both a bit off.

I worked in a bakery for a year, doesn't make me a pastry chef (though I do make a mean Napoleon)... you worked at a dealership for a few years, doesn't mean you understand where the money comes from or goes to (though you certainly may and just have a difficult time putting it into words). The "direct" experience I have is determining what a product costs the reseller, giving me useful information on what kind of margins I have to work with in making a deal... I don't have to read anything special on the net to understand that concept, I do it every day as part of my business. Sure, it helps to read some of those articles to learn the lingo and know where the money might be hidden, but I don't base my information just on Google, I also apply a healthy dose of common sense.

I'd say we would agree to disagree and leave it at that. I'm not suggesting everyone gouge the dealer for everything they can and expect the dealer to survive, but any less-than-ideal profit they make from an invoice sale should be compensated by the MSRP sales people chuckle about on here. We're lucky in that we have the internet these days, and we have each other to provide useful information. And I intend to use everything I can to get the best deal possible.

Where's the beer icon so we can share one...

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