Out The Door (OTD) Pricing questions

bobst · July 2003

When we traded in our 1987 Taurus to get a new 1995 Honda, I offered to give them our Taurus and $13600 for the Honda. They did not accept.

I went somewhere else and offered $13750, and they accepted. I wrote them a check for that amount and drove the new car home.

Even if you are doing a trade, if you only discuss the final amount, it makes things much simpler.

mikefm58 · July 2003

I see your point now and agree with you. OTD is the price that really counts but it is difficult to compare OTD prices from 2 geographically different areas.
.
One more point I'd like to make is to be real careful at contract signing time since the paper work does not mention "salesman and I agreed on an OTD price of $xxx". At my last purchase the dealer figured the sales tax wrong and "could have" come back at me for more money. The contract basically says "Price agreed on is $xxx". Then goes on to list the various state fees and says "if the dealer estimates these wrong, then dealer has the right to go back for the difference." Well if they made a mistake in figuring OTD price (on purpose or not), the customer could be stuck. Luckily for me, I was able to convince the dealer to honor the original OTD negotiated price.

mikefm58 · July 2003

<<you still have to pay sales tax on the price of the car...your trade-in comes after.>>

I think each state is a bit different. Here in Florida I don't pay sales tax on the dollar amount of my trade-in. So if my purchase price is $25K and my trade in is $10K, sales tax is figured on $15K.

manamal · July 2003

The thing with out the door, is (ideally) it should be the final number, including tax/tags/fees, etc. On one car, I made the mistake of negotiating the cost at 'car cost before tax'. I figured I knew what the tax rates were. Wel, the dealer added a $100 dollar fee which was 'tax administration fee'. I figured it was part of the tax. Nope.

This was 12 yrs ago.

mirth · July 2003

blane - I disagree that '$xxx above invoice' is useful in the forums. In that case I want to know the actual price paid on the car (the number). It's relatively impossible to understand what a particular poster's idea of 'invoice' is. Is it the number that Edmunds pops out? Is it the Edmunds number plus the manufacturer advertising costs added in? Did the dealer tell the customer that the doc fee was part of the invoice? You can't know, so when someone posts 'I got $xxx above invoice!' it means nothing to me.

I agree with you that the OTD price wouldn't mean much here either as a research tool because of local variables. But I definitely use it when shopping.

blane · July 2003

mirth:

"Invoice" should be something very specific. The Edmunds "Invoice" price should equate to the actual price that a dealer pays, as invoiced to him by the manufacturer. This is also referred to as the "Tissue" price. It's the price printed on the tissue, or invoice.

The advertising costs that are incurred by the dealer are not "manufacturer advertising costs". Rather, they are the regional costs that a dealer pays to a local dealer group to participate in regional radio, TV or print advertising. Such costs vary significantly by geographic market.

If the dealer refuses to show you the actual (or photocopy of the) invoice for a specific vehicle, I'd recommend that you say "Thanks for your time, goodbye."

mirth · July 2003

Blane - mostly I agree with you about your definition above (not 100%, but mostly). I'm just saying that when a person posts on these boards about "invoice", I have no idea what definition they are using - yours, invoice with ad fees, invoice with ALL fees, etc. So when someone posts "$XXX over invoice" it doesn't tell me anything because not everyone has agreed to your definition.

And by the way, there are indeed "manufacturer" ad costs for some makes, which vary from region to region, not just regional dealer groups (like Toyota's SET). Those belong on the invoice. But it doesn't matter because if you don't want to pay them then don't include them in your offer.

blh7068 · July 2003

"but it really doesn't mean much from one buyer to the next,..."

So an example of what you are saying would be comparing buyer A's purchase in California to buyer B (same car)in Texas?

Well in that case, what you say concerning an OTD offer would apply.

The educated consumer will/should find out all applicable fees that are added to the agreed price of the car. He or she will do the math and come up with an OTD offer. He or she will also know that comparing OTD's in different geographic areas(in your example)is not useful due to differing tax structures, dealer fees, market adjustments, etc.

"...even though some may believe otherwise"

Arming oneself with the correct knowledge will take care of that.

isellhondas · July 2003

Who thinks it's RUDE to ask a merchant, any merchant to show them a copy of their invoice?

I'm shopping for a hot tub...

" I would like to see a copy of your invoice"

" Sorry sir, we don't do this"

" Well, thank you for your time...good bye"

I mean, all of this information is readilly avaliable anyway.

Maybe I grew up in a different time or something...

landru2 · July 2003

If a deal is at the point where the customer needs to be "proven" what invoice is, the deal is as good as dead anyway. I gave up doing that long ago. No one ever believes what the invoice says anyway. All it does is set the guy up to buy at a competitor where he won't have to lose face by admitting that what thought was invoice was wrong.

isellhondas · July 2003

I'll hear..." Well..I know you guys get kickbacks, etc"

Or..." How do I know that's the REAL invoice"

By this time, I've usually lost interest anyway.

These are the same people who give the lousy surveys. No thanks!

mikek37 · July 2003

Here is my take. If you walk out with a car, and the total price inluding all TTL and whatever things they may charge is less than or equal to MSRP then you got yourself a good deal.

jratcliffe · July 2003

If you're buying an MDX or a Pilot, damn right you got a good deal. If you're buying a Cavalier, and the grand total including TTL, ad fees, mop&glo, and a prom dress for the SM's daughter doesn't come out to WAY less than MSRP, you got hosed.

winbro · July 2003

better throw in a date with the SM's daughter for a cavalier deal

blane · July 2003

isellhondas:

I have no problem asking an automobile dealer ANY question that I'd like. After all, I'm the customer, and if he wants to make a deal he'll be upfront with the requested information.

In a previous life I worked for a couple of months selling Fords. My management had no problems showing a prospective buyer the invoice if it was something that would close the sale.

landru2 · July 2003

Sold Fords for a couple months? It doesn't sound like the 'showing the invoice' routine was a super-strong strategy.

isellhondas · July 2003

You answered my question.

We are all different, I suppose...

blane · July 2003

landru2:

Yup, I sold Fords for a couple of months after a bit of Aerospace industry downsizing... until a REAL job came along.

Job timing clearly had nothing to do with "showing the invoice".

mikefm58 · July 2003

I gave up asking for the invoice long ago, not because dealers wouldn't show it to me, but that it's so easy to find it on the net. Also, it's usually not an item a dealer tries to hide anyway, at least here locally. My current way of negotiating is to first do my homework thoroughly and I do mean thoroughly (I drove my wife nuts with our last purchase), to find out what they're selling for. Then visit dealers and offer them a firm OTD price. It usually takes a walk out the door for them to call me back with a closer offer. I will be more careful though in the future with the signed paper work (see one of my previous posts).

audia8q · July 2003

if the consumer asks for a copy of the invoice....is it fair for the dealer to ask for a credit report to prove his ability/qualifications to buy something?

I don't mind showing an invoice...but I only do so if the consumer is a qualified buyer and not a windmerchant.

isellhondas · August 2003

But that's me...

KCRam · August 2003

My Dodge salesguy knows I work here, so when I took my dad there 2 years ago for a Grand Caravan, salesguy didn't bother with invoice paperwork - looked at me and chuckled "you work at Edmunds, you know the numbers." And they were dead on.

kcram
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michaellno · August 2003

...I don't know how long you've been around here, but the comment "...until a REAL job came along..." is sure to incite some bad feelings.

There are many professional car salesman who have posted on this board for many years -- they take THEIR time to patiently answer questions posted by folks. They try to set the record straight about how the automobile sales business works. Not everyone agrees with their opinions, but they are quite committed to the work they do. They are quite proud of their professions. Perhaps you had a bad experience -- hey, we've all probably held jobs we'd rather not have had.

My point is, a good salesman is someone you can trust, and refer friends and family to, and do business with again and again. Not someone to antagonize, argue with or generally berate.

BTW, I am not in car sales myself, but have a huge amount of respect for those folks here who are.

blane · August 2003

michaell:

I have no problems with any of your comments. However, at least in my limited experience with working for only one dealer, it was the attitude of management that required the sales people to do things that I found distasteful. That's why I left for a REAL job as soon as it came along.

michaellno · August 2003

I understand, and sympathize with, your point that working under conditions you disagree with would cause you to look for a job in a different field of endeavor.

My point, however, is that there are many people who sell cars, some of whom populate this board, who would tell you that what they do IS a real job. Salary (plus commissions), benefits, etc.

Just different perspectives, I suppose.

isellhondas · August 2003

Thank you. I caught that too but elected not to respond.

You see, I do have a REAL job. I work for a friendly, family owned dealership. We sell our cars mostly to repeat and referral customers.

I am well aware of the "other" types of car dealership. I wouldn't have to drive very far in order to find one.

It can be an ugly marketplace out there!

hondasellertx · August 2003

I have only been in the car business for a couple of weeks however it is long enough to confirm that I do in fact have a REAL job. My REAL job is multifaceted and basically involves assisting my customers in whatever way is needed and generally being their new friend. My REAL job also involves REAL work at times and makes me come home dead tired at the end of the day some days.

My REAL job is also a GOOD job and one I take pride in. During delivery of a car yesterday, which took place about 18 hours after first meeting my customer the previous evening, my customer told me she had given my name to four of her friends because I treated her respectfully and fairly.

I treat every customer the same, just the way I want to be treated. My goal is to have them want to share my name and return to see me. If they buy a car during the visit that's a bonus and if not they'll be back another time and/or one of their friends will be in. I've met people in all lines of work and never imply to any of them I don't believe they have a REAL job, even the aerospace snobs.

dbgindy · August 2003

You do have a real job and even better you sound like you are doing it in a way to last awhile (or a lifetime:-). I've got an enormous amount of respect for people who do their job with respect and integrity and their are several of them that frequent these boards. Folks like audia,landru,isell,mackabee,rroyce to name just a few are great examples of longevity in the business by doing things right. Continue to do those things that you've already started and hopefully you also will have a successful career in this REAL job. :-)
Lastly before some of you bashers jump on me for not knowing how those salespersons actually operate save your keystrokes. :-) I'm going by their postings which I believe is the way they operate in their professional life.

jspata4a · September 2003

gpdriver1 · September 2003

I bought an 03 lx a few weeks ago, 17900 (about 600 under invoice) for the car, $300 for fees, (dealer prep, registration) +NYS sales tax 8.25%.

bcarter3 · November 2003

My last purchase was based on OTD or "bottom line". I called and made an appointment with the salesman and showed up on time. I gave the salesman a paper describing the vehicle that I wanted to order including the options. His first figure was MSRP. I presented my OTD figure and the Dealer countered with a price three hundred above mine. I suggested we split the difference and the deal was done. Did I pay more than the next guy? DON'T CARE!!! Did I pay less? DON'T CARE!!! Were there any fees? DON'T CARE!!! I got the vehicle that I wanted for a price within my budget and no heartburn or stress in the process. Life is just too short to worry about how much a dealer is making in profit on any particular vehicle. I would never make it in sales as I have a very low tolerance for inconsiderate people and they are running rampant in this country!!

bobst · November 2003

Bcarter, I 100% agree totally, completely, and whole-heartedly. We did the same thing a few weeks ago when we bought our new car. In our case, we didn't negotiate at all from our OTD offer, but they accepted it as we were leaving. Other than that, our experience was like yours.

Like you, we did our research to compute a price. I am sure you and I could have saved some money, but it doesn't bother me at all. We truly enjoy the whole car-shopping experience, and it sounds like you did too.

You say you have a "very low tolerance for inconsiderate people". I have a very low tolerance for people who whine and complain.

In fact, we raised our children the same way, and now our daughter is raising our grand-daughter like that. When the little kid starts to complain, my daughter says very nicely, "What are you doing?"

My grand-daughter: "I'm whining".

My daughter: "What are you supposed to do?"

My grand-daughter: "Stop it".

amazon · December 2003

The dealer asks me for private information (income, etc) to qualify me as a buyer. Why is it then rude if I ask to see the invoice to qualify the deal? Would it be rude if I asked the salesman how much (s)he makes from this sale? Probably....

audia8q · December 2003

remember, your the one who is buying something and for the dealer to ask if your qualified to buy the car isnt not rude....of course the timing of the questioning is important....
The amount the salesperson earns on the sale plays no role in your ability to buy...so asking the salesperson his income is indeed rude.

The samething would apply if your selling your home....you have every right to ask the potential buyers to show proof they have the ability to buy your home....what you earn from the sale plays no role.....see the difference?

amazon · December 2003

So, the seller can ask questions about the buyer, but not the other way around.
I guess the main point is: Is the question relevant?
- Seller asking buyer about income- Yes
- Buyer asking seller about income- No
- Buyer asking to see the invoice to validate a deal- Yes

The company I work for ensures that the vendor we choose is financially viable. So in this case, the seller has to cough up some information. Not exactly the same thing as the purchase of a car, but the principal is the same.

bobst · December 2003

When we bought a car in October, we gave the dealer a piece of paper and they gave us the keys to a new car.

I think they had the right to ask us questions that some people might think were personal.

prodigalsun · December 2003

verifying a vendor is viable (ooh, I like aliteration) is different from buying from a retail outlet. Since there are multiple outlets for a manufacturer, perhaps you should evaluate the financial health of the manufacturer instead of the individual dealer.

If you're paying in cash, you can tell the salesman to pound sand when it comes to questions about your economic viability. Otherwise, if you're financing through them, you need to provide that info. In my business, we will run a Dun and Bradstreet check on our customers to make sure they have a good history as it relates to buying big ticket items and overall economic health. No difference there.

I still don't get why you need to validate the deal by seeing invoice. If you're hanging out here, don't you already know what you should be paying?

landru2 · December 2003

You have been asked to reveal your income before being allowed to buy a car? Or do you mean you were asked before someone could lend you the money to buy a car?

amazon · December 2003

I agree with both of you. I'm just speaking in general. I never gave the salesguy a hard time about this when I financed a car. If you hang out here (which I do almost daily), there's no need to see the invoice. I'm speaking more in general terms. Isn't it funny that the dealer can ask the buyer for income, when it's rude for the buyer to ask for the invoice?

bobst · December 2003

It doesn't seem funny, weird, unusual, or unfair to me.

Personally, I would be embarrassed to ask the dealer for the invoice price. It means I was too lazy to do my homework before going to the dealer.

audia8q · December 2003

you say..."It means I was too lazy to do my homework before going to the dealer. "

I never thought about it that way....but your right.

rroyce10 · December 2003

...... I can see you being a little "hesitant" on the information issue ..

        But unfortunately, there is bunches of folks out there and some could probably be your neighbors, and they owe $23,000 on $15,000 vehicles .. some could have big Fat Daddy job's, large homes, big boats, nice jewelry and the problem is, some can't even "pay attention", their broke or perhaps close to it ..

           I'm not picking on any market or social status, but you would be surprised on how many folks come driving in, whether it's in a Benz or a Buick and they can't buy "steam off a hotdog", let alone a new or used this or that ... do dealers like to know who their speaking with .. aah Yeah, but it's nothing personal.

           What has always baffled me is, the Real Estate industry ... thousands of folks wondering around the streets looking for a home and 80% don't know if they qualify for a $150k or a $300k house, thank goodness for computers .l.o.l..

                      Terry.

eharri3 · December 2003

Told the dealer, here's my trade, here's the difference I want to pay, I know what the rebates are. Can you arrange all this to meet my number before taxes, tags titles, and anything other than just the price of the car itself?
Didn't hide the trade, didn't hide the fact that Id be financing my purchase, whether through him or elsewhere.

He quoted me my price.

Then I said "I can get X percent financing elsewhere. If you cant do the same Ill use someone else's money and you wont get to make any money on my financing. If you can get me to the same neighborhood Ill use YOUR lender's money."

He got me the financing I wanted.

And that was that.

IT was very helpful to take things one step at a time, but at the same time let him know that I was giving him other opportunities to make money on the deal, so I could get the maximum flexibility on price of the vehicle itself. He probably made more off me this way than if I got rid of my trade and got my financing elsewhere, but he gave me a better deal on my trade and just as good of a deal on my financing as anybody else. So the cost to me was the same either way, just more profit to him I guess.

amazon · December 2003

I never had a problem sharing requested information to a dealer for the purposes of loan qualification. My questioning was strictly on a philosophical level.

I agree, just because you have ROlex watches, drive luxury cars, and live in big homes doesn't nean that you're not one payment from the repo man. I.E. we're all poor. Granted- on different levels, but still poor.

jd5014 · December 2003

the dealerships im dealing with say they can find the truck i want, but that it has to be transported in...one dealer says it costs $100--the other says $400.
also, they they cant come off any of the holdback, like the ones on their lot, since the truck isn't 'theirs'...
i thought dealers shipped to each other and that the cost was minimal, and that holdback could still be negotiated. also, does anyone know what happens if their is a cost and i find i dont like the truck for some reason?

thanks

landru2 · December 2003

Holdback stays with the dealer that originally ordered the truck from the manufacturer.

As for the transportation cost, are both dealers transporting in the same truck? From the same place? Dealers do ship to each other all the time. The dealership's cost to do so is whatever shipping companies charge the dealership. Your cost is whatever the dealership wants to charge you. Considering this topic is OTD prices, who cares what the individual shipping charges are as long as the total adds up to an acceptable amount?

For the dealer to bring in a truck they must actually purchase it from the other dealer. Unless it was one I knew I could sell easily to someone else (these don't involve discussions of holdback), I would not bring it in unless I had a non-refundable deposit from the customer. The only reason I would accept for not taking it would be if it arrived damaged.

txallstar210 · January 2004

great stuff people, im a newbie, but i feel that otd does matter. as far as invoice, i believe you should ask to see it because you can compare what fees are on the invoice and what extra fees or maybe being charged double on the contract. i hear that usually whats on the invoice is pretty much non-negotiable but who knows. for me i start negotiations from what might be the approx. true dealer cost (invoice-minus holdback-minus any other factory to dealer incentives + 200) at the same time i have my otd price i will not go over. just go straight to the salesmanager forget dealing with the salesman.

rroyce10 · January 2004

.... >>(invoice-minus holdback-minus any other factory to dealer incentives + 200) at the same time i have my otd price i will not go over. just go straight to the sales manager forget dealing with the salesman<<...

Nothing like putting yourself in the sand trap in the 1st hole .. starting back of holdback makes it very hard for the Salesman or the Sales manager to even take you seriously ...

Terry.

txallstar210 · January 2004

why wouldnt they take me seriously? it shows im educated, did the research, and serious. if i wasnt serious why the hell would i do the research and go in the 1st place. thats just where i start my negotiations do i tell the dealer how i got my figures no, do they suspect ive inlcuded holdback maybe. do i expect to get that much for the car no. but its a starting point and i increase little by little. every salesman knows people dont want to pay msrp so it shouldnt surprise them i start out real low just like they start out high then come down to what you may think is reasonable, but really isnt

rroyce10 · January 2004

....... I think you just answered your own question ~ an educated buyer wouldn't be starting in the holdback ....

Terry.

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