Invoice is what the dealer pays for the car - including shipping and other fees. It is just like if you buy something on-line - your bill (invoice) would include shipping and any other fees associated with the transaction.
No, I don't argue over destination charges, though when comparing different makes and models and brands of vehicles, an ultra high destination charge is like a hit below the belt... negative points. Not a deal killer... but it doesn't help.
'18 Porsche Macan Turbo, '16 Audi TTS, Wife's '19 VW Tiguan SEL 4-Motion
2.5 hours, that was a smooth deal; according to my friends in the carbiz, it's quite normal to see repeat offenders in the area of 1-3 hours per visit! and they still might not buy. i think that is why the sales people think "i'll make it up on the next guy" and they sharpen the grind, it takes two to tango, right?
i still don't understand the "1/2 hour or i walk" car buying process.
I don't pay for Vons' advertising fees on groceries. I don't pay for Jiffy Lube's advertising fees. I don't pay for Circuit City's advertising fees. Why must certain auto manufacterers insist that you pay all of their bills and costs of doing business?
What's next? Paying for dealership electrical bills?
'18 Porsche Macan Turbo, '16 Audi TTS, Wife's '19 VW Tiguan SEL 4-Motion
Customers shouldn't have to think about our expenses. That really isn't anything any business should even talk about.
But, customers really shouldn't know what we pay for cars either. That too, is none of their business.
But, since these numbers are widely published, shoppers do need to realize a business does have taxes and overhead to pay and that profit isn't a dirty word!
I did after about a week of "his" postings. I was just joking about the brother thing.
I really enjoyed reading his/their( ) postings though. Seems to disappear for several months before reappearing... think he's due back in early spring.
and you can't go to the manager of the grocery store and demand to see the invoice and offer him/her .01 over cost, either, so what's the use in trying? move on to finding the best price for what you want, and give the local dealer who will service the car the last shot. have you ever bought a diamond? hello!
Personally, I don't think it is anyone's business to know what a merchant paid for the product they sell.
The item either represents a good value to the buyer or it does not. Competition, supply and demand will always determine the price of commodity items!
... and some cars sell for thousands of dollars under invoice and you won't know *that* until you ... shoparound... sorry.
... and a friend of mine brought something up, those big dealerships with a lot full of cars that have guys/gals standing out on the curb and closers waiting in the shadows, those very dealers give informed buyers one heck of a *good deal* (low selling price), because they make it up on other buyers who aren't informed about best price (they have nothing to compare price to), walk in and fall in love. Check the full color page ads in your local paper, if you want the best deal, get informed ((3 online quotes, even if you need to send 25 purchase requests) plus 3 dealership quotes), buckle up and get ready to rumble, I'll bet you'll get the best deal at the big stores... you just have to stay cool, go with the flow and deal with it. I think it's worth the trouble because cars are a high ticket item, right next to buying a home.
I don't pay for Vons' advertising fees on groceries. I don't pay for Jiffy Lube's advertising fees. I don't pay for Circuit City's advertising fees.
Well, yes, you do if you buy anything from them. They call it overhead and the cost gets passed on to the customer or the merchant goes out of business. Jiffy Lube could just as well sell an oil change for $27 and add a $3 advertising fee as they can simply charge a lump sum $30. Of course, a $27 oil changes sounds so much better than a $30 one!
I faxed request for quotes to numerous sales managers and agreed on price via phone. took quick test drive during lunch time once the car came in from another dealership. Stopped by that night to sign the paperwork and take delivery. the paperwork and delivery only took 25 minutes start to finish.
There is no need to spend hours in a dealership. Why anyone would want to put themselves through that hassle?
I faxed 15 request to sales managers (sent to them by name as I called and got the information to personalize each fax) and received back 8 offers. You have to know how to do it right and when to send the faxes out.
Just here me out before you react. With the whole internet vs. traditional car buying process...I'd rather have 5 true internet clients set up in 2 hr appt. times in a day and be done with it...making the same amount as just having one uninformed loon who's "lookin to wheel and deal" and grinding him for the whole day.
I probably wont get a single refferal from the one guy and even though my commission will be higher...the 5 other clients who got an extraordinary deal were:
a) courteous enough to handle most of the information needed to complete the paperwork over the phone.
b) were sure as to which model and color they wanted and called me before hand to make sure I had what they wanted in stock or gave me enough advanced notice to get it before they arrived.
c) This is going to sound crazy, but the client was kind enough to shop around. I don't want any doubt when a customer arrives when it comes to price...unless it's just rounding off cents :)because once you get to the bottom line, there's not much more it will bend.
d) Due to their great experience, they will be more likely to even remember my name after 90 days and send a refferal my way before they buy again (from me because I sell Honda's and they hold an extremely high resale value).
The Internet Client is the preffered client nowadays. A retail salesperson see's the internet print-out and automaticaly thinks "DEAL" because they know and understand their profile...just like the add buyer from days past. The problem lies when the internet customer ignores the fine print at the bottom of the e-mail that says the offer is only valid with that particular internet manager and that specific internet department.
If you are chosing to go the internet route, be sure and see an internet rep. besides, they have spent countless hours and sent countless e-mails to over 200 prospects every month just to get 30 people to show up in a month and then sell 25 cars. If you take that e-mail and just have a regular rep. show you around and work with you in a traditional way...the salesman is not useless...you are. The retail process is used to help filter out those who will pay list price...and yes, they still exist. If you see a salesman and say or think to yourself "They are Useless" it's not really the case...you just need to be dealing with an internet or Fleet manager...you know...the guy or gal that gave you all that information even when you did not even provide a valid phone number, gave you all those figures and breakdowns and worked out all those payments for you so you could go to your local store and just get up'd and wonder why it's not so easy? Or even show up at their store and buy the car after a 4 hour re-negotiation dealing with cost and destination and added accessories, but because they never spoke to you over the phone, they are not entitiled to partial credit for the sale.
Just a thought as I sit here waiting for my 8pm appt...who by the way, has all his info printed and ready for signatures, their car is ready for delivery, I picked out a nice key chain for them and is bringing me a green tea frap from starbucks because I'm that pleasant on the phone and made his experience that much better....and yes, he's a refferal.
emacias - gbu, keep that attitude and you'll run the store someday. great job!
isellhondas - i understand, sort of.
andres3 - regarding public information, i've been told rebates to customers are known amounts, and incentives to dealers are unknown amounts; each store follows their own plan. but my point, sir, is how would anybody know what the incentives are unless they shop around?
dkarsch - awesome, you're the exception, not the rule. if you read these boards you'll see many dealerships still operate old school. why? could be more profitable? it's the short term vs long term trade off, i guess. anyway, great post.
I tend to agree. I have dealt with GM Buy Power for some time, and have found them to be right on the "money." I deal with a Chevy dealer in Southern California, and I walk in and tell him what I want, and it's right at $300 over invoice. No hassles, and the only thing to deal with is color, the right equipment, etc. I expect the store to make a profit, or it wouldn't stay in business. I have even negotiated the cost of an extended warranty. I just said to them, "you can do better than that." It worked.
There are some customers who "grind" the salesman down to the last penny. I don't go that route.
Are you in business in any way? Of course you paid all these fees. It's in the prices you pay. They just don't break them out separately.
Here's how a price is set. Purchase cost + inbound freight + financing/floorplan while the products sits waits for a buyer + preparation/stocking fees + advertising fees, documentation fees, duties, taxes, etc. + an annual estimated shrinkage amount ( food especially ) + Overhead / Fixed costs ( huge expense ) + labor to prep the final product This total is before any profit margin is calculated... In most businesses you never hear about any of this. It's only the retail auto industry where it's revealed. Why?
Margins vary from 100-200% of cost to 2% of cost. A $300 suit may have a $300 markup .. 100% A $400 ton of steel might have a $10 markup .. 2.5% A $20000 auto might have a $1500 markup .. 7.5%
Or even show up at their store and buy the car after a 4 hour re-negotiation dealing with cost and destination and added accessories, but because they never spoke to you over the phone, they are not entitiled to partial credit for the sale.
Are you saying the internet person doesn’t get partial credit for the sale because he never made phone contact? I would have thought an e-mail was more substantial than a phone call.
Just a little background:
The reason I ask is because when I bought my last car (June 2006) I bought via internet followed up with a phone call. I received a pretty good price via e-mail from the internet sales manager. The price was a little higher than what I wanted to pay but since it was close, I called to see if the internet sales manager could do better otherwise I was going elsewhere. However, when I called the next day he was out having some minor surgery and wouldn’t be back for about a week, so the receptionist connected me with one of their senior salesman.
I told him the story and he went to a higher authority and called me back in 20 minutes agreeing to my price but only if I would buy that day. Since I was ready to buy I didn’t have a problem with that. The deal went smoother than any other car purchase I have ever made and I have said as much here and on other Edmunds boards.
A week later when I past by the dealership I stopped in to say hello and to see how the internet sales manager was and to let him know that his efforts weren’t in vain. He was aware of my purchase and was going to call to thank me as soon as he caught up, a little, with his work. He said the way his store handles situations like this is that he and the salesman split the commission some way (as I remember, it was not 50/50, with him getting a little less than 50%) but at the end of the month when it comes time to count sales for credit towards bonus’ he gets to claim these types of sales.
He couldn’t thank me enough for my purchase and, like the salesman, gave me his card and said if I ever had a problem to come to him. It’s nice to know that in the event of a problem I will have two guys going to bat for me.
Just a thought as I sit here waiting for my 8pm appt...
I hope you are on Pacific time because when your post was logged in it said 10:55 PM (I’m on Eastern time).
Good post and because of guys like you, I plan to use the internet for my future purchases.
Keep up the good work, your profession needs more guys like you (and my internet and sales guy).
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
I love it when a company like BMW advertises free service during a lease. Of course, it isn't free but people buy into that and then they want me to do the same thing when they lease a Honda.
BMW wants people to maintain their cars and they know some people are so cheap they will forgo maintenance on lease cars because they know they are just going to walk away after the three years are over.
So BMW does the work for "free". They simply roll the cost of the services into the lease.
They roll it into the price of the car so you don't have to lease to get the free service.
We do the same thing but we don't include brakes like BMW does.
It is an interesting comparison if you are looking at two similar cars and one includes pre-paid maintance and one does not. If the cars sell for about the same amount then it is easy to see which one is the better deal.
Error.........,J. Always go back to the same salesperson. That way they don't have to split it. In fact, you may be able to grind, what would have been part of the split, out for yourself.
it doesn't take much slammin' to dilute the topic...
I use the http://www.zip-codes.com/zip-code-maps/washington-zip-code-map.asp "Free ZIP Code Finder" to find dealers to send purchase requests to. For example, in the State search box put WA and select search. It's important to remember that territories overlap and some dealers use multiple purchase request suppliers (lead providers). Why does using zip code locator matter? You may think you are sending out multiple requests to different dealers in your area when in fact you're using 2-3 online autobytel clones and all your requests are going to the same dealer! As we have seen on this board, it is common to send out 20-30 requests and get 5 replies. And those 5 replies will probably ask you in a polite way to call them. You need to keep searching untill you get a few bites. Buying a new car is expensive. Saving a $100-$2000 or more is worth the effort. Using zip-codes.com is an awesome shopping/buying tool.
Did you ever wonder how you could make 2 salesmen so happy with splitting only 1 commission?
Yes.... do you remember I purchased the car for my price so once they met that price that's all I cared about. If I left money on the table and I'm sure I did, who doesn't, (I've left the door open for you to jump in and say "me") I'm sure it wasn't much and like I said what more can I ask for than the dealer to meet my price?
Both the salesman and the internet manager knew it was going to be a mini but with almost no time invested in the deal they knew it was better than nothing so they took it.
I'm sure over the course of the month the two of them spent more time in the men's room, chatting with fellow workers, taking a longer than normal lunch break and oh yes lets not forget about grinding with customers who never bought after a 2 to 3 hour negotiating session for which they never received a thing compared to the small amount of time spent with me for which they did get payed.
I'm glad you brought this up, I can now see that I was dealing with a dealership that could recognize an easy sale and although it wasn't the price they would have preferred to sell at, it was good enough and they weren't about to let it get away.
Maybe because I was dealing with an intelligent dealership, explains why this was the smoothest car purchase I've ever made.
Thanks again for reminding me why I did it my way.
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
Spend a couple minutes browsing at autosbargain. You will see there that many Mercedes and Volvos models sell far below invoice. Certainly, there are manufacturer to dealer incentives involved.
The point is you will sell for msrp if the customer doesn't know any better. That's why were here at edmunds. To get the dealer cost etc. prior to going to the dealer. I don't purchase cars for msrp,period. I know better.
If you really wanted a Supercharged Range Rover the laws of supply and demand would come into play and you would either pay MSRP or settle for a lesser vehicle
Comments
i still don't understand the "1/2 hour or i walk" car buying process.
What's next? Paying for dealership electrical bills?
If a person wants to make an offer based on dealer cost + $XXX, then they can expect to see a lot of "costs" included in that amount..
regards,
kyfdx
(not the host here)
Edmunds Price Checker
Edmunds Lease Calculator
Did you get a good deal? Be sure to come back and share!
Edmunds Moderator
Customers shouldn't have to think about our expenses. That really isn't anything any business should even talk about.
But, customers really shouldn't know what we pay for cars either. That too, is none of their business.
But, since these numbers are widely published, shoppers do need to realize a business does have taxes and overhead to pay and that profit isn't a dirty word!
I did after about a week of "his" postings. I was just joking about the brother thing.
I really enjoyed reading his/their(
I agree 100%.
But, customers really shouldn't know what we pay for cars either. That too, is none of their business.
I disagree 100%.
How else does one know how much you are gouging them for and how badly?
I always like to know what the markup is on any product, though it is harder to find on other products, but general you can figure:
Electronics - marked up 100% (double the cost)
Jewelry - marked up 400%
Furniture - marked up 250%
Clothes - marked up 300%
Personally, I don't think it is anyone's business to know what a merchant paid for the product they sell.
The item either represents a good value to the buyer or it does not. Competition, supply and demand will always determine the price of commodity items!
Some cars sell for invoice to 500 over, and some command MSRP 2 to 3 K over invoice! Supply and Demand.
... and a friend of mine brought something up, those big dealerships with a lot full of cars that have guys/gals standing out on the curb and closers waiting in the shadows, those very dealers give informed buyers one heck of a *good deal* (low selling price), because they make it up on other buyers who aren't informed about best price (they have nothing to compare price to), walk in and fall in love. Check the full color page ads in your local paper, if you want the best deal, get informed ((3 online quotes, even if you need to send 25 purchase requests) plus 3 dealership quotes), buckle up and get ready to rumble, I'll bet you'll get the best deal at the big stores... you just have to stay cool, go with the flow and deal with it. I think it's worth the trouble because cars are a high ticket item, right next to buying a home.
Name 2!
Well, yes, you do if you buy anything from them. They call it overhead and the cost gets passed on to the customer or the merchant goes out of business. Jiffy Lube could just as well sell an oil change for $27 and add a $3 advertising fee as they can simply charge a lump sum $30. Of course, a $27 oil changes sounds so much better than a $30 one!
tidester, host
There is no need to spend hours in a dealership. Why anyone would want to put themselves through that hassle?
I probably wont get a single refferal from the one guy and even though my commission will be higher...the 5 other clients who got an extraordinary deal were:
a) courteous enough to handle most of the information needed to complete the paperwork over the phone.
b) were sure as to which model and color they wanted and called me before hand to make sure I had what they wanted in stock or gave me enough advanced notice to get it before they arrived.
c) This is going to sound crazy, but the client was kind enough to shop around. I don't want any doubt when a customer arrives when it comes to price...unless it's just rounding off cents :)because once you get to the bottom line, there's not much more it will bend.
d) Due to their great experience, they will be more likely to even remember my name after 90 days and send a refferal my way before they buy again (from me because I sell Honda's and they hold an extremely high resale value).
The Internet Client is the preffered client nowadays. A retail salesperson see's the internet print-out and automaticaly thinks "DEAL" because they know and understand their profile...just like the add buyer from days past. The problem lies when the internet customer ignores the fine print at the bottom of the e-mail that says the offer is only valid with that particular internet manager and that specific internet department.
If you are chosing to go the internet route, be sure and see an internet rep. besides, they have spent countless hours and sent countless e-mails to over 200 prospects every month just to get 30 people to show up in a month and then sell 25 cars. If you take that e-mail and just have a regular rep. show you around and work with you in a traditional way...the salesman is not useless...you are. The retail process is used to help filter out those who will pay list price...and yes, they still exist. If you see a salesman and say or think to yourself "They are Useless" it's not really the case...you just need to be dealing with an internet or Fleet manager...you know...the guy or gal that gave you all that information even when you did not even provide a valid phone number, gave you all those figures and breakdowns and worked out all those payments for you so you could go to your local store and just get up'd and wonder why it's not so easy? Or even show up at their store and buy the car after a 4 hour re-negotiation dealing with cost and destination and added accessories, but because they never spoke to you over the phone, they are not entitiled to partial credit for the sale.
Just a thought as I sit here waiting for my 8pm appt...who by the way, has all his info printed and ready for signatures, their car is ready for delivery, I picked out a nice key chain for them and is bringing me a green tea frap from starbucks because I'm that pleasant on the phone and made his experience that much better....and yes, he's a refferal.
isellhondas - i understand, sort of.
andres3 - regarding public information, i've been told rebates to customers are known amounts, and incentives to dealers are unknown amounts; each store follows their own plan. but my point, sir, is how would anybody know what the incentives are unless they shop around?
dkarsch - awesome, you're the exception, not the rule. if you read these boards you'll see many dealerships still operate old school. why? could be more profitable? it's the short term vs long term trade off, i guess. anyway, great post.
There are some customers who "grind" the salesman down to the last penny. I don't go that route.
Here's how a price is set.
Purchase cost
+ inbound freight
+ financing/floorplan while the products sits waits for a buyer
+ preparation/stocking fees
+ advertising fees, documentation fees, duties, taxes, etc.
+ an annual estimated shrinkage amount ( food especially )
+ Overhead / Fixed costs ( huge expense )
+ labor to prep the final product
This total is before any profit margin is calculated... In most businesses you never hear about any of this. It's only the retail auto industry where it's revealed. Why?
Margins vary from 100-200% of cost to 2% of cost.
A $300 suit may have a $300 markup .. 100%
A $400 ton of steel might have a $10 markup .. 2.5%
A $20000 auto might have a $1500 markup .. 7.5%
From this markup the sales staff gets paid.
Are you saying the internet person doesn’t get partial credit for the sale because he never made phone contact? I would have thought an e-mail was more substantial than a phone call.
Just a little background:
The reason I ask is because when I bought my last car (June 2006) I bought via internet followed up with a phone call. I received a pretty good price via e-mail from the internet sales manager. The price was a little higher than what I wanted to pay but since it was close, I called to see if the internet sales manager could do better otherwise I was going elsewhere. However, when I called the next day he was out having some minor surgery and wouldn’t be back for about a week, so the receptionist connected me with one of their senior salesman.
I told him the story and he went to a higher authority and called me back in 20 minutes agreeing to my price but only if I would buy that day. Since I was ready to buy I didn’t have a problem with that. The deal went smoother than any other car purchase I have ever made and I have said as much here and on other Edmunds boards.
A week later when I past by the dealership I stopped in to say hello and to see how the internet sales manager was and to let him know that his efforts weren’t in vain. He was aware of my purchase and was going to call to thank me as soon as he caught up, a little, with his work. He said the way his store handles situations like this is that he and the salesman split the commission some way (as I remember, it was not 50/50, with him getting a little less than 50%) but at the end of the month when it comes time to count sales for credit towards bonus’ he gets to claim these types of sales.
He couldn’t thank me enough for my purchase and, like the salesman, gave me his card and said if I ever had a problem to come to him. It’s nice to know that in the event of a problem I will have two guys going to bat for me.
Just a thought as I sit here waiting for my 8pm appt...
I hope you are on Pacific time because when your post was logged in it said 10:55 PM (I’m on Eastern time).
Good post and because of guys like you, I plan to use the internet for my future purchases.
Keep up the good work, your profession needs more guys like you (and my internet and sales guy).
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
I love it when a company like BMW advertises free service during a lease. Of course, it isn't free but people buy into that and then they want me to do the same thing when they lease a Honda.
BMW wants people to maintain their cars and they know some people are so cheap they will forgo maintenance on lease cars because they know they are just going to walk away after the three years are over.
So BMW does the work for "free". They simply roll the cost of the services into the lease.
Pretty smart on their part actually.
We do the same thing but we don't include brakes like BMW does.
It is an interesting comparison if you are looking at two similar cars and one includes pre-paid maintance and one does not. If the cars sell for about the same amount then it is easy to see which one is the better deal.
I'm surprised BMW covers brakes since they always seem to need rotors everythime they need pads.
I owned a 3er for awhile and what a money pit it was!
Thats why they stop so well. Sometimes you can get away with not replacing the rotors but the pads won't last long and they will be noisy.
Ever see a Volvo without the check engine light on?
I just don't like all of the constant trouble, that's all.
The people who buy cars like this are usually aware of the trouble and expense and accept that as part of the ownership experience.
I use the http://www.zip-codes.com/zip-code-maps/washington-zip-code-map.asp "Free ZIP Code Finder" to find dealers to send purchase requests to. For example, in the State search box put WA and select search. It's important to remember that territories overlap and some dealers use multiple purchase request suppliers (lead providers). Why does using zip code locator matter? You may think you are sending out multiple requests to different dealers in your area when in fact you're using 2-3 online autobytel clones and all your requests are going to the same dealer! As we have seen on this board, it is common to send out 20-30 requests and get 5 replies. And those 5 replies will probably ask you in a polite way to call them. You need to keep searching untill you get a few bites. Buying a new car is expensive. Saving a $100-$2000 or more is worth the effort. Using zip-codes.com is an awesome shopping/buying tool.
So does everyone else who buys them and that doesn't stop them. We sell everyone we can get every year for near full MSRP.
We also sell high end used cars, Mercedes, BMW, Audi, Jag etc.
Your whole idea of grinding away is flawed but please continue to live your life that unhappy way.
That you only buy cars that are given away?
Haven't you ever wondered why those cars are given away?
Yes.... do you remember I purchased the car for my price so once they met that price that's all I cared about. If I left money on the table and I'm sure I did, who doesn't, (I've left the door open for you to jump in and say "me") I'm sure it wasn't much and like I said what more can I ask for than the dealer to meet my price?
Both the salesman and the internet manager knew it was going to be a mini but with almost no time invested in the deal they knew it was better than nothing so they took it.
I'm sure over the course of the month the two of them spent more time in the men's room, chatting with fellow workers, taking a longer than normal lunch break and oh yes lets not forget about grinding with customers who never bought after a 2 to 3 hour negotiating session for which they never received a thing compared to the small amount of time spent with me for which they did get payed.
I'm glad you brought this up, I can now see that I was dealing with a dealership that could recognize an easy sale and although it wasn't the price they would have preferred to sell at, it was good enough and they weren't about to let it get away.
Maybe because I was dealing with an intelligent dealership, explains why this was the smoothest car purchase I've ever made.
Thanks again for reminding me why I did it my way.
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
Spend a couple minutes browsing at autosbargain. You will see there that many Mercedes and Volvos models sell far below invoice. Certainly, there are manufacturer to dealer incentives involved.
Jag had 10,000 dollars of marketing support behind the last Gen XKRs as well.