Out The Door (OTD) Pricing questions
When you present a dealer with your absolute lowest OTD price (ha!)--what does that actually include? I need it spelled O-U-T for me: i.e. advertising fees, Title fees? Filing fes? etc etc etc....what? Do I include those all in my OTD price? or is that extra? how do I know what is a "reasonable" advertising fee? etc....Am I just spinning my wheels? Should I just find the Edmunds TMV and subtract $500 or should I spend all this time looking up these tedious details?
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the car that you want, rather than an OTD price.
Over and above the price of the car there should be the following: Sales Tax, DMV Registration, a
reasonable($45-$75)Document Fee, and any State
applied fees. For example, in California we have
a $5.00 *Tire Fee*, and a $6.00 Smog Fee.
This is it...no ups & no extras...
You can find out from your local AAA or DMV what
should be standard stuff in your state.
Ad Fees are Regional and can range from 0 to $300+, but
these are included in the price of the car, and should
not be added in afterward.
I think the bottom line is to compare "out the door" numbers between different dealerships, and if you find one $500 or so cheaper than the other, ask the more expensive one for a breakdown/explanation if you want to give them a crack at your business.
Ed
If you are shopping for OTD price. The TMV is only the starting point, you have to add the above fees, which are legit.
If the OTD price is higher than you like, look somewhere else.
For example, let's say you spend a half hour negotiating and the dealer's final offer is about $100 more than you wanted to pay. But you figure, $100 isn't so big in the scheme of things and it's not *too* bad a price, so you accept. Then, after an additional 30-60 minutes of paperwork stuff, they hit you with an additional $100 processing fee. Suddenly the okay deal is a bad deal. I know a lot of dealers would say that a customer was nickel and diming them over $100, but the fact is that the customer in this situation already went over their budget by $100, so now we're talking $200. So now, if the dealer won't budge on the deal, you have wasted about an hour of your time.
Sorry to rant, but I've been in this situation before and it just seems like an insult to my intelligence.
1) Car Price. If there's an advertising charge on the invoice, then it ought to be included in the sale price of the car. I.E. Say there's a $200 regional advertising charge and you're paying $500 over, then it ought to be, say, $700 over what you see on the net.
2) Any DMV/Tag/License/etc fees
3) State sales tax
4) County surtax if applicable
5) Any dealer prep fees.
I.E. "This car is $20,565, OTD it's $22,107.45
Or whatever. It ought to be the amount of the check you have to write.
Bill
brentwoodvolvo: Ok, I'll bite, what kind of dealer prep charges are you referring to? (#5 above)
Nah, I mean like doc fees.. dealer fees..whatever they call them.
Bill
After reading dozens of posts on this subject, I feel the biggest "miss-understanding" is when a consumer wants to be at .. let's say, $300 a month -- they have done their homework, studied the options etc, etc, .. let's say, in the consumers mind, they need to be at $15,000 TBF(to be financed).. that's the "point of payment".
What sometimes happens is, the dealer backs out the taxes and (real) fee's and such, and he is below cost -- that's the rub..! -- the buyer feels that $15,000 is the bottom line and the dealer is at $16,100 TBF, now the payment is, let's say $320...I think this cause's the biggest problem..A OTD price is meaningless unless it's in the "Strike Zone" of the payment you are trying to accomplish ...
Just about everyone is a payment buyer, whether you make $18,000 a yr or $800,000 a yr .. Save a lot of time and anxiety and just make sure that your OTD price, includes your "point of payment" .. it's very hard for a dealer to eat the Tax, The wax and the Roof racks..
I hope this makes sense..
Terry.
Ed
sales tax will vary obviously upon where one lives...DMV has to be paid, and this too will vary
based upon where you live...Everybody with me so far? Document Fees should vary once again, but
they are normally in the $45-$75 range...Ad Fees,
the real ones that is, should be included in The
Price Of The Car...Dealer Prep, Arctic Environmental Pkgs., Tire Preservatives, Carpet
Preservatives, and Key hole scratch protection should not be considered as even negotiable, and
are therefore, not part of the OTD price...
Only The Price Of The Car, and appropriate Taxes,
Title, & License make up the OTD Price. And of these, only The Price Of The Car is negotiable...
Also, what are realistic dealer prep fees? All they have to do is be sure the fluids are full, the plastic wrap is taken off the seats, a visual inspection, and carwash.
Thanks.
What most consumers forget about is that 1 little thing -- payment..!
90% of all consumers are payment buyers -- If the OTD price is exactly what they want --- can they afford the payment ....
If you haggle yourself silly ... and get what you want --- make sure you figured in the most important factor ......... your monthly payment..!
Terry.
for by VW...There should be no *Dealer Prep*
Charges...
Doc Fees typically refer to the processing of the
actual paper for DMV...not the DMV Fees themselves...so that when you leave in your new
car, all that you have to do is wait for the plates to arrive at your house...
Actually it is to process the HUNDREDS of DMV
papers that go through in a month...There are
people in Los Angeles that would pay you $500
to got to the DMV for them...:)
Eric
Ed
1) Dealer charges
2) State sales tax on dealer charges
3) Title and license charges
2 and 3 are set by the government. You need to find out what they are before going to the dealer, otherwise, I fear (but don't know if this is possible) that they might try to add some dealer profit into 3.
For example, suppose title fee is 15.00 and license fee is 80.00. Can the dealer charge more than $95.00 for "title and license"? I suspect they can.
You should only be concerned with how much above (or, even conceivably below) the dealer's invoice COST (not MSRP) at which you will be making your deal. (Edmunds has good links to enable you to make such calculations.) That is the real number to compare with other purchasers in other states and cities.
The taxes and fees, tradeins etc are locally variable and should not enter into your calculations.
1. $20k for the car, $6k for the trade, $1k in fees: Net $15k OTD
2. $21k for the car, $6k for the trade, $0 in fees: Net $15k OTD
3. $20k for the car, $5k for the trade, $0 in fees: Net $15k OTD
At the end of the day, it's that OTD number that really matters. Whether it's a "fee" or the price of the car itself, it's still cash out of your pocket. As for trades, locally variable numbers _do_ matter. If, for some reason, your trade is worth $2k more at a dealer in the next town, then, even if that dealer wants $1k more for the car they're selling you, you're still $1k ahead of the game (assuming that driving one town over is worth $1k to you - it's not for some people).
Don't let anyone fool you into worrying about XXX over invoice. This makes it way to easy to add a whole host of fees that will be sprung on you at delivery...
We offered that, they refused, we stated to walk out, and they accepted. The whole process took about 10 minutes.
We can all relate to a few basic, clearly ascertainable factors.
1) What is the MSRP (sticker) price of the vehicle as equipped by the factory? Never negotiate down from here.
2) What did the dealer pay (invoice) for the vehicle as equipped by the factory, destination charge included? Always negotiate up from here.
3) What is the amount of Dealer Holdback (2%, 3%, etc) that must be added to #2, that can possibly be partially deducted in negotiations?
4) What is the local dealer advertising cost that must be added to #2? Perhaps $200?
5) What is the minimum amount of profit ($100 to $400?) that a dealer will accept after adding #3 to #1 and then deducting #2?
Ask the dealer to show you his cost figures. These are the figures that EVERYONE should be using when discussing what they've paid. When you add all of the local gingerbread, you reach a only a personally meaningful OTD. But it should mean very little to anyone else.
Here's the primary reason I like using an OTD figure: It put the pressure to make the deal on the shoulders of the dealer.
I agree there are individual variables (not local, really, as each deal is separate unto itself). So there's no point in trying to compare your deal to someone else's, no matter where they are.
But by using an OTD price it forces the dealer to make the numbers work and seal the deal. As a buyer you just sit there, enjoy their free soda, and relax, knowing that you are in the driver's seat. If the salesperson comes back with a counteroffer, you again are in control: Take the offer, revise your original offer a little, walk out the door, whatever.
Negotiating up from invoice will work on SOME cars and SOME deals. But negotiating from an OTD price will work on ALL cars and deals. Doesn't matter where you are or what you're buying.
True-but thats not the point. The point that was made by Rich(audia8q)is why OTD is important- that is the amount you are writing the check for.
The educated consumer can do his/her own math. If you are prepared to make an OTD offer find out before hand what additional fees such as title, doc, advertising(and sales tax, if paid at time of purchase)the dealer charges- then include them in your offer. Your OTD offer will limit the ability for them to throw in items you may not want like the "mop and glow" and that extra insurance(choke and croak? LOL)when in the F and I office signing paperwork.
I echo what bretfraz says. Well put.
since there are many variables; in a market with many dealers i found it useful to use a spreadsheet to track all this stuff and for comparing a potential deal up against another. i couldn't juggle all those variables otherwise.
getting an OTD price tends to force all the fees and allows one to determine how the figure was arrived at.
as far as using a spreadsheet to help you is concerned, if you include a loan-payment-interest paid capability, now you can check out and compare various scenarios as to "what's it really going to cost"? if you finance some and cash some.
plus, you have a really good handle on being able to quickly notice discrepancies in any paperwork.
if you know how to use a spreadsheet program like Excel, it can help you even if you are dealing primarily with one dealership compare a few cars up against one another, say a few model/trims, extras, and as mentioned, financing / downpayment etc etc.
with it, you can also document the details of offers (potentially incomplete) and counters.
I can assure you that if your going to haggle 5 different aspects of the sale a good salesperson is going to win...
keep your eye on the bottom line!!! it's the only number that matters.
My point is that in using these boards, someone's personal OTD price based upon their personal inputs such as tradeins, options, local taxes, fees, etc, are useless to someone else for whom those numbers are quite different. In fact, those OTD numbers could be thousands of dollars different. However, they are being read by a possibly naive buyer who is searching this board for advice. Their personal situation will not be the same as yours. That could cost them big bucks.
That's why the BASIC costs that I've discussed previously are the only ones that are virtually identical for ALL buyers coast-to-coast.
When Joe Public wants to copmpare deals, he has a set budget (let's say $25K). Regardless of the cost of the car, the trade allowance, the fees, DMV, and sales tax, all Joe wants to spend is $25K total. When he shops various dealers, it's that $25K OTD price that makes or breaks the sale for him. No matter who he buys from, he will have to pay those fees and taxes anyway, even if he buys out of state - the TT&L applies from his home state, not the sale state.
If someone from the other side of the country asks him later, "what did you pay?" Joe can validly reply either his OTD total or his new car price. But only his OTD matters to him while he's shopping. Other people's OTD totals aren't as relevant because everyone's budget constraints are different.
In a nutshell:
- when researching, discuss purchase price
- when actually shopping dealers, discuss OTD including TT&L
kcram
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Smart Shopper and FWI Message Boards
At least WE are in total agreement here.
Since my county tax is different, I recalculated the numbers to show an adjusted $24.5k OTD, or roughly $900 below invoice.
I then let my dealer know that I can get the car out of state for $24.3k OTD or $24.5k OTD from him. They wanted to sell, so they gave it to me and included wheel locks, mudflaps, cargo net and sunroof visor.
What did it prove ? That doc fees, ad fees, prep fees, etc. are essentially profit boosters.
I would thus recommend that anyone wanting to get the best deal to reference the best OTD prices of other people, make simple sales tax adjustments, and ignore superfluous fees to arrive at their own OTD.
Combined with right timing (month-end, generally) and pre-approved financing (or at least knowing one's beacon score), a top-notch purchase value is at hand.
you still have to pay sales tax on the price of the car...your trade-in comes after.
maybe i have this wrong:
if you know my OTD, and you know my sales tax, you have just about EVERYTHING needed to compare my deal to yours...you should be able to assess those mysterious fees / "profit boosters". those doc / registration(?) fees can really be substantial, huh?
it won't be exact. there's title and tag (which in my area, they are allowed to tax). its funny because some dealers seemed to know this, and others didn't. some put this in the post tax portion of the lineup, and others didn't.
just my 2cents.
You have found the REAL problem with what some people refer to as an "Out The Door" price. Somehow, the term came into use fairly recently, but it really doesn't mean much from one buyer to the next, even though some may believe otherwise. I believe that most people who use the term are referring to the bottom line on the check that they end up writing. Tradeins are such a grey area (and meant to be so, by dealers) that they should not be used in comparisons between any two buyers' deals.