By accessing this website, you acknowledge that Edmunds and its third party business partners may use cookies, pixels, and similar technologies to collect information about you and your interactions with the website as described in our
Privacy Statement, and you agree that your use of the website is subject to our
Visitor Agreement.
Comments
F150
Mustang
Explorer
Expedition
All of them offered an above average profit with the exception of the F150. It had the Mustang close to list and an Expedition on like a $1400 deal.
TMV is based on what others are paying.
How do they know? A dealer certainly won't disclose this and most customers forget what they paid a week after the deal has been done.
You raise a very interesting point. The informed people here know that the TMV is the “average” price paid in a given area. So, what percentage of people at your store who negotiate a price, whether they have the TMV price or not, get a better deal than the TMV?
FWIW, I used the TMV when I bought in 05’ and 06’ and in both cases did much better than the TMV (hundreds of dollars better) but that 05’ deal, because it was the end of the month with two dealers fighting for a sale, I beat the TMV by about $1200. I doubt that will ever happen again (the 06’ deal pretty much proves this, only beat the TMV by about $425) but I’m glad I got lucky once.
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
farmer,
I'm with you here. In my younger day I can't imagine putting up with something like that.
If I ever decide to look before buying in Southern Cal., I'll be sure to take Mrs. jmonroe with me. I'd buy a front row seat (in the golf cart) to watch that one. :surprise:
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
Mack
Just like KBB, if a customer checks there trade and we are $500 less they start singing the praises of KBB and it says this and that, yet if we are higher then KBB they never tell us.
At the time, it was a great deal, which I lucked into thanks to an internet deal (from Mass.) for that price. For some reason, the local guy in NJ agreed to match it, with the stipulation that I didn't tell anyone about it! Actually they beat it, because they ended up throwing in the propack for nothing.
Also helped that my wife and I were there, the checkbook was out, and the exact car we wanted had just arrived on the lot (not even prepped yet).
I am sure that plenty of other foks bought at the same dealer areound the same time and paid a lot more, but hey, that's fine by me!
Very nice buying experience too (to keep on topic)
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
I’d like to clarify something about my use of the TMV. Although I said I used the TMV the last two times I bought, what I meant was, I got the TMV price as a guide as to what I would offer. I did not and I repeat I did not show the dealer the TMV printout or even mention it. This was for my information only. I don’t feel I have to justify where I get my price nor do I mention to the dealer that I know what the invoice price is.
The attitude I have when buying a car is that this is a business deal between two adults and the dealer knows what he is willing to sell at and I know what I’m willing to pay. By doing my research I’ve been successful in hitting a number that is doable. I’m sure it’s less than what they want but it’s doable. All the dealer has to do is say yea or nay. Since they know the number is doable they usually take it. The time I spend buying is never more than 30 minutes. The last two times it was a little less than that.
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
This may help: Edmunds.com How We Calculate New TMV
tidester, host
SUVs and Smart Shopper
That sound to me like those proprietary formulas that predict number of hurricanes each year while the weather could be predicted with any kind of acceptable precision for about 12 hours. When it works it works. Then of course you have seasons like last year when they predict more active than average season and miss La Nina completely from the picture.
2018 430i Gran Coupe
No it’s not, I’m too fearful of hanging around waiting to get bumped.
Always beware of the dealer that accepts your offer too quickly.
I say always beware of the dealer that wants you to stick around so he can bump you. There. :P :P
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
That would seem to be the most important factor and that is exactly what I was talking about.
How do they know? A dealer won't tell them and even if they were getting this from selected dealers it wouldn't be enough of a cross section.
The buyers won't tell them and if the do, chances are the numbers won't be that accurate.
I guess it's better than nothing but it is hardly empiracle data.
People will do anything for money...
Some dealers will even give you a written quote!!
Edmunds Price Checker
Edmunds Lease Calculator
Did you get a good deal? Be sure to come back and share!
Edmunds Moderator
The mooches print them and bring them to me!
I interrupt my Maui vacation for a comment. That is absolutely nuts. My negotiations are friendly 99% of the time, and short (5-15 minutes) 99% of the time. If you want a 3 hour marathon, you would be out of my store long before your time limit was up with a resounding "next" ringing in your ears.
Now get back to the beach that is an order Sailor.
This seems the common defense of many of the proponents of the, "take it or leave it offer"... that and, "My time is to valuable."
But, BUMP... is not a four letter word guys. If I start out lower on price, than I would on a take it or leave it offer, and allow the dealership a mercy bump or two to let them save face... then I am out nothing and most likely will have paid less. They try to do the same thing to we consumers. Play their game and leave them happy... though still holding onto a "mini". :P
I always wondered, do you get a better deal at an "Event", a "Sale-a-Thon", or a "Saleabration"?
2019 Kia Soul+, 2015 Mustang GT, 2013 Ford F-150, 2000 Chrysler Sebring convertible
Mackabee
Mackabee
Mackabee
So the dealer/salesperson probably made a nice little amount for not much hassle or work but I saved my time and sanity which is worth it to me.
(Plus, it's unlikely I was memorable enough to end up as a 'story from the sales frontlines' and that's a plus in my book.)
It was the last day of July and hotter than Jennifer Biel at Venice beach in So. California. I had just put a Camry back on the line that I had demo'd when I see a Mazda mini-van slowly drive by me and park on the side of the building. A man in his late thirties early forties gets out and a little boy around 10 jumps out of the side door. I welcome them to the dealership and offer my assistance.
"I'm here to see your sales manager." he says. "Which one? we have six of them." I respond. "Name them." he says. So I start naming them and of course it's the last one I name. "That's the one.!" He exclaims when I get to Louie's name. "Are you here to look at a vehicle?" I ask. "Yeah, I called in and they told me to ask for him." he responds. As we are walking to the showroom I explain how things work at this dealership. I tell him if he contacted us by phone an appointment setter will take down his info and when he comes in asks them to ask for a sales manager who will then turn them over to a salesperson. So in this case I told him I would be working with him. I get the sales manager and he's too busy working deals to come out and say hi so he tells me to go ahead and take care of him. I go back to the customer and ask him which vehicle he's interested in. "They told me you have a RAV4 with a third row seat and a sunroof. That's what I want to look at. I have a van that's paid of that I want $8800.00 for so that I only have to finance $20k. I already have the check from my credit union so if you can meet those conditions you have a sale." he finishes. "Sounds like you're ready to do business." I remark.
Every piece of the puzzle sounds great except I know for a fact that we don't have a RAV4 V6 with third row and a moonroof. We do have one with the third row but no moonroof that came off the delivery truck the day before. "We got one in yesterday but I'm not sure it has the sunroof." I tell him. "The girl on the phone said you did." he responds. We keep walking to the back lot and I spot the vehicle."There it is." I tell him as I point to a light blue RAV.
As we get closer to the vehicle I can see that it doesn't have a moonroof and tell him so. "It looks like it doesn't have a moonroof." He looks at me and I can see he's a bit ticked off. "Darn it! (or words to that effect!) I just left Charlie's Toyota because they pulled the same crap on me!" he exclaims. "I drove over there since they are closer to home and I get there and they didn't even have a Rav with a third seat to show me." he continues. "I hate to say it but this business has gotten so cut-throat they will tell you anything over the phone just to get you in. Unfortunately this store does it too. I apologize." I tell him. "Well, since I'm here let me at least look at the third seat. My wife carries the two kids and some of their friends to soccer games so we really do need it." he says. I open the vehicle and show him the third row seat. After he's satisfied with what he sees he says. "Well, sorry they wasted your time and mine. If that thing had a moonroof you would have had a sale."
As we are walking back I ask him for a few minutes of his time and tell him to let me look at our incoming inventory to see if there is anything coming in with the 3rd row and moonroof. I go to the sales manager and tell him the customer is pissed as they made him come in from thirty miles away for nothing. He calls upstairs and chews out the girl who told him the vehicle had a third row. I look at the incoming inventory and there is nothing coming in like that.
I go back to the customer and I go to buyatoyota.com and see what's available in our region. I find that only the Limited version is available with the 3rd row and moonroof right now. "I must have looked at that instead of the base model" he says. "Oh well. Thanks for your help anyway." I give him my card and say: "Here's my card if you change your mind." .....
To be continued..
No more than 15 minutes go by when I see them standing by the DMV window to pick up the registration. Lisa our finance girl is with them and she tells me to put a d-tag on the truck so they can go get their check. "Already did."
Fred and Suzy leave and are back within the hour after Fred has something to eat to control his blood sugar. He has the check and we deposit it and give him a receipt. As he's doing that I put the plates on his truck and come back to let him know he's ready to go. He tells Suzy he'll see her back at the house and I say bye to her. We start walking out to the truck and I tell him to wait for me there as I have a small token of my appreciation for him. I go into the sales office and get an umbrella and ask Louie to present it to him.
We walk outside as Fred is standing next to his new truck with a grin from ear to ear. "Fred this is Louie, he's one of the sales manglers." I tell him. "Hi Fred, I have a small gift for you in appreciation for your business. Please look the truck over inside and out and if you see anything wrong with it let's us know and we'll take care of it." he says. "Oh, it looks great, and Mack did an excellent job
I say "Thank you" to Fred and he buckles up and waves to me as he drives away in his new truck. I turn around and walk back in the showroom and I'm glad this one is over.
:shades:
Little is correct. At $250 over invoice the salesperson made a minimum comission. Hopefully you'll send him/her some referrals.
Mack
At all dealerships where I have purchased, the invoice price is the actual cost to the dealership for EVERYTHING to get the car delivered to the customer but does not include holdback, rebates, incentives for meeting sales goals, etc. Dealerships in this area charge "Documentary Fees" of $ 199 to $ 499 that also generate a profit.
I want the dealership to make a decent profit so he can remain in business to service my vehicle and probably sell me my next new one. The BIGGEST source of profit for most dealerships is the difference between trade-in and resale of the trade after cost to clean up the vehicle and pay a commission on the resale. :shades:
This was pulled on me the last car I bought. And after looking for the 'sales manager', I feel like an old softball being tossed off to a salesman.
Can someone give me a logical reason to do this?
Why not let me just be an 'up' to a salesman? And I supposed to feel 'special' walking on the lot, that I'm going to get a manager to deal with me? And then be quickly shoved off to a salesman. Overall, this wasn't a good feeling for me.
And another thing. I bought a car. Then, I start getting all these emails from the dealership. 'Are you still interested in the Zoomobile?' 'Here's hoping you are coming back'. 'We got great weekend deals on the Zoomobile you indicated an interest in'.
Dang right I'm interested, I've got a new one in my garage! Do you think I need two? I even responded to a couple of emails saying I had bought. They still came for a couple of weeks. Where's the coordination between sales and stopping followup emails?
What hidden money? The up to $1,000 per car (That you could NEVER find out about on Edmunds or anywhere else) that one European manufacturer gave us for having our showroom and signage look EXACTLY the way they wanted it to?
Oh wait, that's about $600,000 per year. It goes towards the $3,000,000 we spent on renovations and other program requirements. After 2-3 years, the money is no more.
Is that "Profit"?
Oh wait, there's Holdback! Ahh, let's clarify that. It's a credit towards floorplanning expenses. The same European manufacturer gave us about $300 per car. That's $180,000 per year or about $15,000 per month. Say we have an average inventory cost of $35,000 and if we sell 50 a month, we have about 100 on the ground or an inventory of $3,500,000. Figure prime is 6% and that's what we pay for our floorplan.
That's a half a point a month on $3,500,000 or $17,500 a month.
So is Holdback "profit"?
Then we have advertising, insurance to not only cover the guy who falls on a spilled cup of coffee, the lady who trips and falls in a drainage gate, the lot attendant who rear-ends a car on the street while gassing up a delivery, the $3,500,000 in just new car inventory, the $100,000+ in diagnostic scanners alone, the $800,000 parts inventory, $100,000 computer system, etc etc etc.
If a small used car lot pays $10k a year for insurance, what does a franchise store pay? Oh yes, the amount that is sales' share is huge.. probably 40%.. so figure that's $6k a month for new car sales.
So, we have $170 or so in insurance and floorplan alone expenses before anything else even happens. Per car.
Then we have to pay a salesman a mini, that's $100. $270 per car.
We have to pay a sales manager at least $100,000 a year. That's $8,000 or so a month. We're now up to $430 a car.
A title clerk adds another $50 or so to the sale, $480 per car. Figure the F&I guy makes $80k a year at least, that's another $130 per car. Now we're at $630 per car.
Now we have to pay for detailers, detailing supplies, someone has to keep the showroom clean, lights have to stay on, coffee machines are not free, an office manager needs to make sure the banks pay us, once in a while we spend $200 repainting a scratched bumper from lot damage, advertising isn't free, office supplies cost money, keeping the place warm in the winter or cool in the summer costs, training for the staff costs money, etc etc etc.
There are no true "hidden profits". Nobody ever seems to believe me when I say that we don't really make money on new cars. "$250 profit" is probably a net loss. If Macy's sold shirts for $15 and made 25c per shirt, they would go under VERY quickly.
Likewise, if we didn't have parts, service and used cars, we would go under very quickly. The costs are real, I've paid em.
My formula is pretty basic-10 to 15% off price less all rebates etc...Depending on the car. Makes the process simpler for me. If they bite great....if not they make cars every day.
It pays to have an eye on the marketplace and see what high volume dearerships coast to coast will quote. Why I would pay a local dealership much more completely eludes me.
I think there otta be a law that requires a new car buyer to pay MSRP + and/or new car dealerships should get a subsidy from the government so they can keep their doors open for when we need them.
Sad, just sad.
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
As for my $250 over 'invoice' deal, no trade was involved as we had already sold it elsewhere. And I didn't finance with the dealership or buy the F&I addons. But I am sure they'll get it back in the service department as I am not a very good do it yourselfer.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
See, that's what gives you guys in the biz a bad name...try to give you guys a hand and you grab for the whole arm ! :P
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
Joel0622, please don't use farmers as an example of a group getting rich off the gov't. This board doesn't need me going off on a 3 day off topic rant.
Needless to say this old farmer hasn't seen a penny from uncle Sam in the past 25 years.
2019 Kia Soul+, 2015 Mustang GT, 2013 Ford F-150, 2000 Chrysler Sebring convertible
We recovered by leasing herds of cattle and slowly buying back our land but it took awhile.
C’mon ‘snake’, these guys need help. If they’re not in business, where would us car buyers get a car? We couldn’t get one from their money making service department because those cars that are being serviced don’t belong to them. There are laws (boy, am I glad for laws) against selling something that doesn’t belong to you, but I bet a dealer would try it if they could make a buck and get away with it. :surprise:
Again, thank you Mr. Government for laws.
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
I am so sick of explaining holdback to people that I won't do it anymore. Some people seem to think there is all of "hidden" money and evil profit that somehow should all be returned to them. They have no idea what overhead is for a busy store.
The same people who will find a tiny scratch on their bumber that they "didn't notice" when the new car was delivered. The same car that they microscopically inspected for a half hour before nervously signing off on it.
Oh, yeah, this is a real racket!
Mack
You formula may work on most cars and not work on others. If they walk you, you'll know it didn't work. Pretty simple, actually.
I hear ya. You were far from alone. Just one quick thought and then onward: if you haven't, try to rent the film "Troublesome Creek." Independent, about one family during the crisis.
http://www.pbs.org/wgbh/amex/trouble/
And back to the car biz...