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Comments
I was visiting my wife in Hawaii recently. In Hawaii, and I assume it is by law, all the ads had the doc fees printed on the bottom in large font (14/16 pt).
The doc fees were all $100-$150. Seemed like a good system to me.
The reason to do OTD offers is that dealers play games with the doc fee. On more than one occassion I've made an offer like "$20K - that includes everything, including fees, except TTL", and have the sales manager agree to it, only to have them try to add the doc fee in at the end. The fee is pre-printed on the final form and then I have to argue with them to drop my sales price by the fee. It's annoying - if you make an OTD offer you'll be less likely to have to deal with it.
mow - basically, it doesn't matter. Arguing about individual fees with a dealer is a waste of time. Just figure out what you want to pay out-the-door (bottom figure) and what your willing to pay out-the-door (top figure). Out-the-door (OTD) means everything - the sales price, taxes, title/license fee. If the dealer accepts an offer in that range, then you don't care how they arrive at the figure, like in these examples:
Ex 1.
Dealer sells you the car for $21,250, which includes $20,000 for the car, $1200 for tax, and $50 for title and license.
Ex 2.
Dealer sells you the car for $21,250, which includes, $19,500 for the car, $500 doc fee, $1200 for tax, and $50 for title and license.
In the second example, do you really care that they charged you $500 for a doc fee if the total price is the same? Save yourself some aggravation and make an OTD offer. You can use Edmunds' TMV, invoice prices, and the Prices Paid forums to work out what you're willing to pay.
That may seem to make sense, but that's a good way to overpay, because you miss the parts that comprise the whole.
Your OTD price should be based upon the lowest price available, plus whatever additional costs are reasonable or are unavoidable.
In other words, if you pay the lowest price possible, pay whatever taxes or DMV fees are required in your locale, and pay a doc fee if it is both reasonable and customary, etc., then the OTD price will be the lowest price possible. Do anything in that equation that isn't correct, and the OTD price will be higher than it should be.
Think of it this way -- if you received a long distance bill that wasn't itemized, you would wonder whether someone was trying to pull a fast one on you, because it's hard to judge the total if you don't know its parts. And if there are inappropriate line item charges on the bill, then removing the charges should also reduce the total (OTD, if you will.)
The same thing applies to car shopping. Get the pieces to be as small as possible (or zero, when appropriate), and the OTD will fall with it.
that 1 dealer has a $599. DOC fee posted in his
ad.........OUCH!!!!!!!!!!
No, you should not have paid any of the $700. Not one cent.
DOC fees run anywhere from $298 to $699 !!!!
I note the "import" dealers charge the MOST!
Funny tho. in NY the DOC fee is capped at $45
bucks............. :P
there are many posters on here just repeating the same thing over and over again.
How can anyone outside the business say what is reasonable and what is not.
For instance: I had a customer a few days ago on a lease that said he was not going to pay ANY fee what so ever. I'm talking dealer fee, TTL, aquision fee, first month payment, security deposit, etc.... Then while I was showing him back to his car he laughed and said "It was all a game man, I just wanted to see if you'd do it."
Give me a break.
The only way we buyers know that our offer has been refused is to get in our car and drive away. That's why we only make one offer each time we visit a dealer.
On our last three car purchases, our offers were refused until we got up and headed for our car. When we bought our Honda last March, we actually got to the car and opened the doors when the salesman came out to say they decided to accept our offer.
That's how the game is played these days, Bill. Better get used to it.
A manager will take an offer that is a little shore to roll one more unit today espesialy if it is towards the end of the month/quarter/year.
Most people that throw out an offer like that did not do enough research and it is just a stupid low ball one. We will let those walk and if they don't walk then we know they were trying to catch us sleeping and that is insulting. If they were really serioius about that number they would walk out when it was rejected.
That would be true, except that I already know the costs from online research. It's how I came up with my OTD offer in the first place. Why would I care how the pieces come together if the final price is what I want? You can argue the minutia if you don't mind an extremely long, drawn-out, needlessly confrontational negotiation that may or may not net you any additional savings. Personally, I have better things to do with my time.
NO, its not the way the game is played. You play the game. No one has ever attempted here what you say you do, and even if they did, we dont chase people out to their cars.
Here's a tip, dont go to any other country than the US and try to buy anything b/c you would not be happy with the process. LOL, you wouldnt have a single momento of your travels.
Actually, it is very necessary.
Before I make a second offer, I have to know my first offer has been declined.
How do I know my first offer has been declined? From my vast experience, the only way to be sure is to walk out and see if the sales people run after me.
Is there an easier way?
I enjoy being chased to my car. You really haven't bought a car until you have experienced this.
Oh, quick answer about doc fees -- they vary from location to location, and I personally wouldn't quibble with a dealer charging $50 or less. Yes, it is a form of profit or overhead coverage to the dealer, and it is fair game, but in a state with low (regulated) doc fees such as mine, I tend to let them slide and take my price reduction from the purchase price, instead. When you pay below or just a bit above invoice, you can live with paying a fixed $50 surcharge for the DMV paperwork.
Sit down and work it out like a man.
"Vast experience" I bet there are many dealerships in your area that want nothing to do with you or your method. Not just b/c they havent sold you a vehicle but b/c they dont want to.
"I have to know if my first offer has been declined".
EVERY FIRST OFFER IS DECLINED!! Havent you learned that in your "vast experience"???
I have to differ with that, it is possible to get a first offer accepted. But I would suggest that if it is accepted, then you probably paid too much.
I feel that making an offer and then getting up out of your chair at multiple dealerships over and over again until you get your way is childish and cowardly.
Sit down and work it out like a man.
I'll differ with the nasty tone, but this illustrates a good point about negotiation: people who like to negotiate (and unless you are allowing them to dictate the price and terms, dealers generally want to negotiate) feel ripped off when they are denied the process of the give-and-take that occurs during negotiation.
So I find that it is best to provide them with some give-and-take, if but to provide a warm and fuzzy that the game has been played appropriately, and that the deal ultimately involved some sort of mutual compromise, rather than a take-it-or-leave-it, in-your-face contest. You'll not only save money, but your opponent gets the benefit of saving face and the satisfaction that he got the most out of you that he could, even if you didn't pay very much.
let me tell ya something about the ole bobst method. It's a pretty good system for him and after reading his posts for a number of years now I know exactly where he is coming from. Quality retailers cope with and adjust to any buying method a customer opts to use....calling the guy childish and insulting his successful method of buying a car isnt going to advance the topic or debate...Since your the genius, why don't you tell us how we should buy a car....tell us why thebill way is better than bobst way. I'm on the edge of my chair waiting....
You describe negotiation like its a battle. In all my dealings, we can agree on a deal and start a business relationship or agree to disagree and shake hands just like we met.
His system describes a "take-it-or-leave-it, in-your-face contest" in which the dealer either accepts his offer and he retreats back to his vehicle hoping to get chased. In essence, it is a take it or leave it situation.
I love this business and I love the challenge of dealing with all types of personalities, however, I believe that there are people on these forums actually taking his system at face value and being misled as to a professional buying experience.
Actually, TheBill has done an excellent job of giving you insights about how the car sales process is viewed from his side of the table. Rather than fight it, I'd learn from that, and use it to your advantage in your next negotiation.
(For one, when a dealer uses intimidation tactics in an effort to get his way, as they often do whenever the customer fails to be sufficiently compliant, then you'll see that the tendency to be aggressive and dominant are integral parts of the business, and you'll better able to sidestep these tactics accordingly. Also, think about how good a first offer must be from the dealer's standpoint for him to simply take it without a fight. Good stuff.)
TheBill, believe it or not, I actually agree with you to an extent.
If his methods work for him, that's great, but I see two flaws in the Bobst strategy:
(a) he is the first person to name the number (a rule of negotiation: he who names the first number loses), and;
(b) like it or not, it is a position that the other side will interpret as being fearful ("take it or leave it" offers are generally perceived as exhibiting weakness, because the offering party is perceived as being frightened of engaging you), and in turn, weakness is a good way to be disrespected.
The art of negotiation is very much tied to human behavior, and "take it or leave it" tends to be interpreted negatively...unless the offer is so sweet that you want to grab it before the other guy comes to his senses. I really hope that Bob is getting a good price, but dealmaking doesn't generally work that way.
No, Bill, I never learned that.
Every time we purchased a car since 1987, the dealer who sold us the car has accepted our first offer.
Of course, there were quite a few times when a dealer did not accept our first offer, so we walked out. Then we knew we probably had to increase our offer when we went to a different dealer.
What does that mean to you?
To me, it means that I should be willing to pay the lowest price that you say you will accept.
I would suggest that you may have taken away the wrong lesson from that experience.
Here's one thing about negotiation: Prices are fungible, and vary based upon time, perception of the other party and motivations.
Another thing: The more time someone has invested in a deal, the more they tend to be inclined to close it, because they are seeking a return on their previous time investment. (This is the same impulse that causes many investors to take a losing investment and "ride it down" -- the impulse is try to recoup one's losses, even if it would be wiser to sell the loser, then put the remaining proceeds into a better deal. Not the best financial move, but a human reaction common to most of us.)
Your low but reasonable offer will seem more appealing if:
(a) the salesperson believes that he has gotten everything out of you that he possibly can, and
(b) there isn't a visceral conflict that prevents him from viewing your offer rationally, i.e. that he doesn't hate your guts and isn't willing to have you walk, despite the profit, just to spite you on principle.
Part A is accomplished by letting him work to get your offer. Offering a very low price (just slightly out of the range of a doable deal), and then working your way (slowly) up to the bottom of the acceptable range will provide far more satisfaction than would heading for that number in the first place.
Part B is achieved by not acting in a fashion that seems to "break the rules" that are customary to human behavior and the unwritten laws of negotiation. (Note: This doesn't mean that you have to be sickeningly nice, just that you don't breach the unwritten rules of engagement and combat that are inherent to creating deals.)
Time is a critical component of the former. A deal that doesn't look so great after a few minutes on the lot starts to look better after you have been spending time with the sales crew, particularly if they have sized you up (as they always do) and have concluded that they have done about all they can do. Time provides them with time to satisfy their discovery process, plus gets them invested in your deal and making it close.
Rather than go somewhere else and pay more, that would have been my cue to let them make the first offer, at which point you eventually counter with an offer at least $200-300 below your target price (notice that your counter has really nothing to do with their first offer; you'd offer the same amount, regardless). Following that, be prepared to "sweeten the deal" by eventually moving up a bit from your first counter. That dance allows the sales folks to feel that they've done their best, and that closing you at the low price was reasonable in this case. (They'll make it back from the next guy.)
Playing the game might have saved you a trip to the next dealer. Feel free to walk out, but walking out can come after a round or two, at which point you can use the walk to solidify your deal. Not only might you save money, but you'll probably actually make the salesman happier, even though you paid him less!
You hit the nail right on the head.
Whats the point of driving around and walking out of so many places just to have paid the same somewhere else.
You know, most of us enjoy doing things that we are good at but avoid things we don't do well, like cliff diving and alligator wrestling. I learned years ago that I am a very poor negotiator and that's why I avoid it.
Bob, I do believe that you are selling your self short, big time. You are obviously an intelligent guy who is well spoken and knows about the game, so I believe that you are far more capable than the credit that you give to yourself.
Negotiation isn't like alligator wrestling, because it's something you do every day of your life -- you have decades of practice under your belt. It's ultimately not about money -- the money is really just to help you keep score. It's about human behavior, and you've been behaving like a human since the day you were born.
Don't mimic someone else's tactics to a tee -- do account for your own style and personality when crafting a strategy and tactics. My goal wasn't to prescribe a specific roadmap to follow, but just to understand the dynamics of the sales floor and how to use them to your benefit. You can and should make adjustments based upon who you are (just so long that you keep enough of an open mind so that you are adaptable.)
And give Bill credit for being a good sport, he likes the thrill of the chase that he gets from sales, and the ability to turn prospects into deals. Believe it or not, I do respect the guys who succeed in his business -- anyone who can prosper in a highly competitive, commission driven environment deserves a bit of our respect. He's just playing for his side of the house, just as we're playing for ours.
Thanks!
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2015 Kia Soul, 2021 Subaru Forester (kirstie_h), 2024 GMC Sierra 1500 (mr. kirstie_h)
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That' s fine. My bag is proving math theorems, writing good computer programs, and figuring out the game of golf.
Have ya figured it out yet ......?
Terry :P
1. There is a local dealership that DOESN'T have what I want in stock and there is a dealership about 35 miles away who does. Does it cost me or the dealership anything to have the car brought here or should I just go the 35 miles and deal with the dealership there?
2. How long does it take to order just what you want from Nissan and what about the cost?
3. Is there a web site that shows the current factory rebate amounts AND the factory to dealer incentive.
4. When do most dealerships get a new batch of cars/trucks in each month--Thanks.
2. Who knows? Depends on what you order.
3. Yes, but it's for dealers only.
4. Whenever it's least convenient.
I'm sure that Raybear was just pulling your leg, because he must know that anyone can get a list of dealer and customer incentives right here at Edmunds, free of charge.
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2015 Kia Soul, 2021 Subaru Forester (kirstie_h), 2024 GMC Sierra 1500 (mr. kirstie_h)
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Yeah, but Edmunds isn't always up on the factory to dealer stuff.
Actually, Edmunds missed all the Subaru programs.
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2015 Kia Soul, 2021 Subaru Forester (kirstie_h), 2024 GMC Sierra 1500 (mr. kirstie_h)
Review your vehicle
In these parts, the dealers in Northern VA will charge whatever they can get away with. I've seen some as high as $299++ IIRC. MD caps it at around $100.
My strategy has always been to not pay it, but I don't tell the salesman that. As an example, if I figure out I want to buy a car for xxx (and the doc fee is 299) I will offer xxx-299 and see where it goes from there. I'll probably wind up paying some kind of doc fee, but not a lot. I try not to stress over it.
I've never understood why this is charged anyway. It's just another sore point in the process and I always thought it was included in the price of a car as a cost of doing business. After all, when you buy a couch at Macy's, do they charge you a fee to write the ticket up?
All in all, this is not something to get super worked up over. Do what you're comfortable with.
I strongly advise against keeping ANYTHING a secret.
Tell the salesperson upfront that you do not feel comfortable with some of the fees. I bet they will me much more flexible.
The alternative is much less professional and encourages playing games. And we ALL want to avoid games.
THE MORE HONEST YOU ARE, THE BETTER THE DEAL WILL FEEL!!!!!!
You think it is much? try $599 at your friendly Toyota dealer in Tampa (actually - all of them in the are - Scion website requires them to put it on, so all of them have exactly the same amount in the entire Bay area). I also saw some domestics in that neighborhood as well.
Actually when I think about it, $300 fee is alreadny "customary and reasonable"
Just another scam to make you think you are buying "at invoice" :mad: .
2018 430i Gran Coupe
According to Edmunds and Carsdirect, the truck I wanted should cost 24,392TMV and CD 24,323 respectively. Now you say take that deal and don't worry about the fees. Well the first dealer I called quoted me at 23,417---so using your logic I should have jumped and not worried about the fees.(BTW all dealers in the area charge 699 for fees). Next dealer said 23,200 same fees---last 1 I called said we'll beat anybody by 300-500---sure enough 22,700 for an invoice of 26,273 and MSRP of 29,135 for my Titan.
So what happens is besides the TMV and CD prices being high to start, they don't include the fees(which vary from 200-699 or more) but you guys say don't worry about the fees. Only good for the seller as it would have cost me about 1,600 your way--no wonder that is what you recommend! :mad:
Once you have determined what kind of vehicle you want, do some research and determine the OTD price you choose to offer. Then offer that amount and see if they accept.
There is no point asking a dealer how much their vehicle costs. Instead, tell them how much you are willing to pay out-the-door.
That isn't the case, as stated, all dealers here have a $699 fee--doesn't go into detail just a printed amount. Might be 299 in Texas or elsewhere. As I said the TMV was listed as 24,392--is that including fees? If not how much do you add on for that? If I would have gone for the TMV plus paid say $200 in fees, it would have cost me $1200 bad advice. Let's just say here in Fl. TMV for a Titan MSRP 29,135 is 22,700 + tax, tag, title and $699 fee. Now you have a TRUE, TRUE market value OTD price.
Websites such as Edmunds, Carsdirect and Consumer Reports give some good information but ALL have a flaw--the prices they state DO NOT include for dealer fees which vary by hundreds. In fact they don't even mention a roundabout price for fees on top of the TMV price.