The person who gives a number first is the loser in the negotiation.

I consider the advertised price (the internet price) to be about what will be spent, considering it does not include all of the dealer's extras ($400 floor mats, delivery fee, dealership paperwork fee, Kahu enrollment, upholstery protectant, etc.) that will be added to it to get their "out the door" price. But that amount represents about the amount that I expect to pay (my "out the door price") after they give me some sort of discount. So the short answer is, about 10% on a model that is not selling like hotcakes at the moment.

Lots of good advice out there on the web about "dealer invoice" (there really is no such thing), holdbacks, negotiating techniques, etc. The best advice I ever got was from my Dad, who said: "be willing to walk away" after you make your offer. I'd add, be polite, but don't try to be friendly, towards the minion who is trying to sell you the car!

Oh, one other thing we find effective, once you get close to the price then say OK if you'll include the following options. That might be mud flaps, wind cover for a moon roof, etc. On my wife's Rogue we had them add a 2" hitch receiver so she could transport her bike.

They wouldn't budge $1 more on price but was no problem when we wanted asked for the hitch. Go figure.

quote:

Originally posted by Aeteocles:

Me? I want the dealer to lose money on my particular sale. They'll do it too, if you come in at the 11th hour to buy a car that they have on the lot and if they are close enough to reaching the next tier of sales incentives for the dealership.

A lot of really good points and it reminded me. A guy I use to shoot with sold cars for a while. He said if you're not super motivated it never hurts to toss out a ludicrous number. He said a sales manager really needed to make quota at the end of a quarter and told salemen to bring him any number. Salesman asked what it would take for the customer 'to buy today.' It was a pick up truck with lots of options. Guy tossed out a number that was like $10k less than dealer cost.

Once the deal closed the sales manager told the staff - no more deals. Stick to pricing.

Start at 100% and work your way down until they say yes.

I think trying to negotiate "down" is the wrong tactic. There are several web sites out there where you can learn the COST, the add ons, etc. Once you learn the cost, you are in control of how much you WANT to pay....I did this last year when dealers were begging for trade-ins. Quick example. I was looking for a 2020 Tundra. Found the exact model I wanted. Looked at the same truck at three different dealers and found the truck 1 hour away for $6,000 cheaper than the other dealers. Which just happen to be about $600 over their cost.

I had a saleman try to explain that it was the dealership's money. I explained to him that it's my money until it leaves my pocket. I also explained that the dealer's price was $8,000 of the mark as I had three dealers in three states willing to sell me a truck at my price. He said I should do it, so in 30 minutes I had planes tickets booked. I bought my truck in Tennessee and broke it in on the drive home. The truck wasn't exactly what they advertised as it had a bedliner and chrome steps which I had planned to install, so I saved another $800.

Thanks everybody! Helpful stuff

quote:

Originally posted by BigJoe:
There are several web sites out there where you can learn the COST, the add ons, etc.

I have been retired from accounting for a while, but I don't see how this is always true. It used to be that the manufacturer will offer the dealers discounts to move some particular model based on assembly line conditions, or on certain regional inventory levels. I would be surprised if internet sites have access to that info.

quote:

Originally posted by BigJoe:
I think trying to negotiate "down" is the wrong tactic. There are several web sites out there where you can learn the COST, the add ons, etc. Once you learn the cost, you are in control of how much you WANT to pay....I did this last year when dealers were begging for trade-ins. Quick example. I was looking for a 2020 Tundra. Found the exact model I wanted. Looked at the same truck at three different dealers and found the truck 1 hour away for $6,000 cheaper than the other dealers. Which just happen to be about $600 over their cost.

You have NO idea of the cost. That is the cost the day it is dropped off at the dealers door step. Then they may be paying monthly interest on it, pay to have it washed weekly, maintained, air put in the tires, gas for it, security guard in some areas, insurance, electricity, salesman commission, finance guy commission., and on and on etc. etc. Find the invoice price (and whatever rebates apply) and get as close to that as possible. Every business has to make some money......I find it ironic that people think that a business selling a $40,000 product shouldn't be entitled to a 10% gross profit....there is about that much at sticker price.

I will be buying a new truck in the future.
But I can't afford a $47k truck. (New) .

I have found several used trucks locally that appearance wise are new. At a good price too, these range from 2013-2015 year models full size pickups.

Then I look at the details on these trucks 200-230 k miles. They are priced under $18,000, I am just hesistant to purchase a vechicle with that many miles on it.

I needed to buy a vehicle in mid October of 2019. I decided on a Honda Ridgeline RTL-T AWD and it stickered out at $38,900. I did some research, and numerous web sites said dealer cost was about $35,500. A web site called Truecar offers sales data from your area showing a bell curve with high\low\average prices paid for the vehicle you're researching. You have to register and agree to be bombrded by dealers to see the sales data, but its free.

There are about six Honda dealers in the radius I'd buy from, so what did I have to lose? The dealer I ended up doing business with gave me an internet price that was $1,500 less than anyone else. Why work harder than you have to? I ended up paying a little over $35k for my Ridgeline, although they got me for the whole $600 for the heated steering wheel.

And now a word on the hold back. It's not there for you, it's there to protect the dealer. The dealer typically doesn't pay for the new vehicle, they pay interest on the loan value of their invintory. These are short term 90 day loans that usually correspond to the amount of time it takes to sell the vehicles in question. If a vehicle doesn't sell on time, the hold back helps protect the dealer from loss. If a vehicle proves to be that difficult to sell, the dealer may decide to discount it further by dipping into the hold back. A vehicle off the books and free of interet payments is sometimes worth 'losing' money over. Bottom line is the information is out there, and there are tools and services that can save you money.

quote:

Originally posted by jimmy123x:

quote:

Originally posted by BigJoe:
I think trying to negotiate "down" is the wrong tactic. There are several web sites out there where you can learn the COST, the add ons, etc. Once you learn the cost, you are in control of how much you WANT to pay....I did this last year when dealers were begging for trade-ins. Quick example. I was looking for a 2020 Tundra. Found the exact model I wanted. Looked at the same truck at three different dealers and found the truck 1 hour away for $6,000 cheaper than the other dealers. Which just happen to be about $600 over their cost.

You have NO idea of the cost. That is the cost the day it is dropped off at the dealers door step. Then they may be paying monthly interest on it, pay to have it washed weekly, maintained, air put in the tires, gas for it, security guard in some areas, insurance, electricity, salesman commission, finance guy commission., and on and on etc. etc. Find the invoice price (and whatever rebates apply) and get as close to that as possible. Every business has to make some money......I find it ironic that people think that a business selling a $40,000 product shouldn't be entitled to a 10% gross profit....there is about that much at sticker price.

You just admitted to me knowing that I DO have an idea of what the cost is. As a buyer, I am entitled to pay whatever I want to. I do have an idea of the cost I want to pay. Your kind of thinking is exactly why people pay too much. That putting the air in the tires, etcc is BS. Go sale that to someone else. That sounds like the same dealer who wanted 38k for the same vehicle located south 1 hour who would sell it for 32k. And is doing a ton more business.

Costco member?

See what prices you can get through them

For those who recommend Truecar, it’s funded by the auto dealers. FYI

quote:

Originally posted by BigJoe:

quote:

Originally posted by jimmy123x:

quote:

Originally posted by BigJoe:
I think trying to negotiate "down" is the wrong tactic. There are several web sites out there where you can learn the COST, the add ons, etc. Once you learn the cost, you are in control of how much you WANT to pay....I did this last year when dealers were begging for trade-ins. Quick example. I was looking for a 2020 Tundra. Found the exact model I wanted. Looked at the same truck at three different dealers and found the truck 1 hour away for $6,000 cheaper than the other dealers. Which just happen to be about $600 over their cost.

You have NO idea of the real cost of the vehicle. That is the cost the day it is dropped off at the dealers door step. Then they may be paying monthly interest on it, pay to have it washed weekly, maintained, air put in the tires, gas for it, security guard in some areas, insurance, electricity, salesman commission, finance guy commission., and on and on etc. etc. Find the invoice price (and whatever rebates apply) and get as close to that as possible. Every business has to make some money......I find it ironic that people think that a business selling a $40,000 product shouldn't be entitled to a 10% gross profit....there is about that much at sticker price.

You just admitted to me knowing that I DO have an idea of what the cost is. As a buyer, I am entitled to pay whatever I want to. I do have an idea of the cost I want to pay. Your kind of thinking is exactly why people pay too much. That putting the air in the tires, etcc is BS. Go sale that to someone else. That sounds like the same dealer who wanted 38k for the same vehicle located south 1 hour who would sell it for 32k. And is doing a ton more business.

Then WHY didn't you buy the vehicle for $32k??? The only way a dealer could sell a vehicle for $32k is if there were a lot of factory incentives or they were taking a huge loss. Margin in a vehicle is generally right around 10%, on cheaper vehicles or ones without options it's much less. Something like a base model Toyota corolla has $600 between sticker and invoice. Incentives are also regional or state by state, so dealers in one state might very well have better prices (which are set by the manufacturer). Sticker price is different state by state too as the destination charge is different.

What I am getting at. Is the moment a vehicle arrives at the lot it starts accruing expenses. Longer it sits there, the higher the cost is to the dealer for all of the reasons I already mentioned. The dealer also has to pay monthly interest on the vehicle (it used to be 1%). Only the dealer knows the true cost of THAT vehicle. And yes, they pay a mechanic to check all of the air in the tires of every vehicle once a month and that costs money to pay an employee drag an air compressor around a giant car lot. The cars don't stay clean all on their own sitting outside next to a busy road either,so they pay a company to wash them monthly, all of that stuff adds up...... There are also factory incentives to both the dealer (which nobody knows about except the dealer, like a volume discount this month) and factory incentives to the customer which one can look up. Some dealers will take a huge loss on that 1 vehicle that just won't sell that they've had on the lot for 6 months. It's irrelevant what the dealer paid for the vehicle, only thing relevant is what the dealer will sell you the vehicle for. If you email several dealers in your surrounding area, you'll probably find a very good price. Just got to Edmunds.com and look up the vehicle with options, it shows the invoice amount and the rebates for your area.

That being said, every business is entitled to make a profit, they have to to stay in business. Really, what is too much profit for a business to make??? Do you go into the grocery store and ask what their cost is for the gallon of milk you're buying? Dealerships have huge overhead, usually a very large piece of real estate on a prime location, huge insurance costs (there's millions of dollars sitting on each lot), employee costs, electric costs, and on and on.

While it was almost 2 decades ago. I worked directly for the owner (Jim Moran) of the Toyota distributor of the entire Southeastern United States (at the time he told me he made $600 per car as the distributor on average)....and also sold cars at a dealership prior to that for 9 months...so yes, I know a little about how things operate in the automotive world.

I don't sell cars anymore and don't care what you do. But it seems like everybody wants to beat up on a car salesman that's just there trying to make a living to provide for his own salesman and talk about it like every salesman is trying to rob you. The salesman has NO control over the price, that is entirely set by the sales manager. Being a car salesman is the crappiest job I've ever had. Tons of people come in there, treat you with disrespect, rather than with respect and simply being honest and offer a price they're willing to pay (if they're even a real buyer) have you run around the lot getting 3 different cars to test drive, and 95% of them are either in no position to even be able to buy the car, or have no intention of buying the car from you, or even within a month or two, and then go home and shop for the lowest price possible and will buy it from someone else who 2 hours of your time with them to save $50. I've always gotten really good prices on vehicles, but I'm upfront.

I'll usually email several dealers ahead of time with the particular vehicle/options I want that they have in inventory. Generally the internet prices are very good as they know you're shopping price. Then, I'll go to a local dealer and test drive the car, offer a number to the salesman and tell them that's what I'm willing to pay and will buy it right now from them if they arrive at that number and don't want to spend an hour going back and forth bartering prices.

Correct. The dealer was up front with this info and I should have included it in my OP.

quote:

Originally posted by PowerSurge:
For those who recommend Truecar, it’s funded by the auto dealers. FYI