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Comments
For a Honda CRV EXL:
MSRP: $26595
Invoice: $24637
Holdback: $780
Inovice - Holdback: $23857
I paid... $24837
$24837 (what I paid) - $23857 (Invoice - Holdback) = $980 (what dealer made in profit)
Even so, it's the market that determines pricing, not what some shopper thinks is "fair".
We don't have bunches of CRV's to sell, please try to understand that. It's frustrating!
If you take the holdback out of the equation as isellhondas suggests, then the dealer made $200 profit off my sale. According to what hyland told me I should do, the dealer would have made an additional $20 (hyland said I should offer $220 over invoice).
24637 (invoice) + $200 = 24837 (what I paid)
Granted, $20 isn't that big of a deal, but...
I understand isellhondas frustration, because of his messages, that shoppers think the dealer gets the holdback as profit when they need to use some of that money for overhead expeneses, etc. However, I think people are using the word "profit" in this case to mean anything above what the dealership pays to Honda for the car. Also, for a long time, people have generally viewed the car-buying experience as secretive (the fact that there is a holdback at all is evidence of this). If all dealerships were upfront about costs and profit margins, then I'm not sure the misunderstanding about holdback would exist.
Obviously, dealerships and sales people should profit; they need to make a living just like everyone else. I want a fair deal too though.
Brian
One of the most respected consumer magazines suggests taking the invoice, deducting holdback and offereing something like 2% over that amount on ANY car.
People read this, believe it and get very frustrated whan we turn these offers down.
I wish that magazine would stick to testing toasters instead of trying to educate people on how to buy cars!
I'm curious about what people are paying down here - TMV indicates that it is close to MSRP, which is more than I want to pay. I'd drive up to three hours away to get a good deal, though.
I want a glacier blue metallic EX-L with navigation, which I can't seem to find anywhere. Should I order one (and sacrifice my ability to negotiate, I assume) or wait? I would like to purchase by the spring.
I'm also torn because with 0.9% financing on the Honda Pilot (and deals due to upcoming redesign), it's not too different in price from the CR-V. But, I realize they are very different vehicles. We already have a Pilot and love it. I just hate thinking that I'm paying too much for the CR-V.
On the last day of December 2006, my mother bought a Civic for dealer cost. I don't know exactly why they were willing to sell it for nothing (assuming there is no other hidden way to make profit as isellhondas suggests), but they did.
Right now, I can get a Pilot EXL for 28500 + 3.9 financing for 60 months, which is under invoice and holdback according to CR, from a local dealer. Do you mean to tell me that they're willing to take a loss on that car? Perhaps they are. The point is that prices are driven by the market, and dealerships are about to go out of business for selling are car at "invoice."
As a consumer, knowing that there is such a thing as a holdback and knowing approximately what it is, gives me a fighting chance at negotiating a fair deal. As I said before, if dealers weren't so secretive, then we wouldn't even need to have this forum.
But, it does make for good sport!
There are certainly no "sales goals" hidden mpney on CRV's either!
All I am saying is what a dealer pays for a car means nothing. Cars sell for what the market dictates.
Today, no body said anything about wanting to buy CRVs that you don't have to sell them.
Are sales people paid on commmissions or just straight salary? Some sales people do more deals - that is accept lower prices, so do they get less commission for each vehicle that they sell. I notice within a dealership some are keen to sell and others not. Even when you enter a dealership some just head straight for the customer while others are just sitting on their tables.
Most car salespeople are paid on straight commission.
Some places pounce on every customer and other places are more laid back or maybe they sized up the customer and didn't want to deal with them?
How do you like the new (re-faced) "CITGO" sign on that building right next to Fenway Park? I didn't mean to bragg but I drew the baby with my own hands...
i'm sure dealerships look at all the sales as a whole, with certain models contributing more to the bottom line than others. i'm also sure there are certain slow-selling cars sitting on the dealers' lots they want to move just to get rid of the associated carrying costs (financing, insurance, etc.) off their books.
Some sales people do more deals - that is accept lower prices, so do they get less commission
it's not the sales people that do the deals...these days, that stuff is all turned over to the finance manager
I notice within a dealership some are keen to sell and others not. Even when you enter a dealership some just head straight for the customer while others are just sitting on their tables.
i think they rotate and take turns.
forget about holdback, that is the dealers cash for bills etc.
my advice to you is to work your price from invoice and forget holdback even exists
I think you're right, except that I don't believe I would have gotten the deal I got ($200 over invoice) if I hadn't first made an offer of below invoice. And I never would have thought to make the first offer below invoice if I didn't know about the holdback.
After a dealer said no to my first offer, we agreed that $1000 over what the vehicle cost them was fair, but this conversation would have never happend had I not first made the offer I did.
People don't care about our overhead and I don't want them to care. I just get tired of hearing about how holdback is pure profit.
I agree with a lot of what you say...I think a dealer can sell a car for whatever he wants or the market will dictate...if the car is hot the dealer would be stupid to give up whatever profit he can make on limited supply.
People that think they are owed a near invoice sales price on a hot new vehicle like the CRV are high.
The guy that got a deal of $200 over invoice must be in an area of the country or at a dealer where the CRV is not moving...but the bad thing is other people on this board in areas that are hot will think they should be able to get that price too.
I've never purchased an extended warranty before, but I've read that the time to buy one is for a remodel year. What is the convential wisdom? One of the reasons I'm buying a Honda is for reliability, but...
Actually, it does. Holback is really "contra cost of sales", meaning that the car manufacturer gives back to the dealer cash which offsets some of the dealer's initial car aquisition cost. From a finance P&L perspective, holdback will therefore increase gross margins and flow to the bottom line.
Dealers sometimes make the (false) argument that holdback is supposed to pay for inventory holding cost (e.g. interest the dealer pays on the cars)and is therefore not negotiable. However, since dealers on this board claim that CRVs apparently sell like hot cakes fresh off the lot, there is really no material inventory cost at all.
Also, here in the Bay Area CRVs are not in short supply and can be had close to invoice.
Too bad about the Bay Area market. No reason to cheap sell a great car.
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I would buy one, but get a good price. I recently saw about $1150 for an 8 year, zero decuctable, 120K warranty from college hills honda. Wherever you buy, be sure and get a genuine HondaCare warranty; other warranties are not directly honored by Honda.
If you drew it, I will look for it next time. We are not talking about the neon landmark I assume, but a painted sign, what building or street if you will...
Had a GREAT buying experience at Key Largo Honda, after being lied to and led on by both Ft Myers Honda and Tampa Hondaland.
I have done tons of research and found that no one is going below sticker in FL on a CRV with Navi...why should they when they are in such demand and so many people are looking for one?
A 2WD NAVI in beige would be a tough car to sell in my neck of the woods!
Your "neck" is in Canada, right? Man, that is two entirely different worlds.
However, in Florida I would opt for AWD; when it rains suddenly in the summer, the roads just ooze oil, from the sea shells used in the asphalt.
The vast majority of CRV's we sell are 4WD although once in awhile someone will want a 2WD for reasons I can't understand. People that will spend the extra money for a NAVI always want 4WD.
Also, that beige color isn't the best seller here. I can see Florida becaue of the light colored interior for the hot weather.
I suppose by "decent deal" you mean below MSRP...
Well, the fact that Honda always seems to be able to sell their new models at MSRP for a year or so (usually with waiting lines here in SoCal) indicates that a lot of people think they are worth MSRP. Personally, I think there are a lot of small SUVs that are up there in quality, but I vastly prefer Honda engineering over (for example) Toyota engineering: Honda engineers a firm ride and taut handling. Toyota engineers a softer ride and more lean in the corners.
It is a personal thing that every driver has to decide for him/her self. Drive 'em all and decide which fits your "decent deal" and personal choice criteria. Good luck in your search... :shades:
They will go buy "another car" that they can get a big discount on. They buy the deal and not the car.
Later, when they go to sell it or trade it, they discover that that car sold cheap because there wasn't much demand for it. Even less demand as a used car while the CRV held it's value much better.
Who wins in the end?
could you tell me which nj dealership you bought your car from? they seem to have a much better deal.
thanks!
MNF
Just to "save" a few bucks?
What about you? Did you get a delivery date or VIN number, anything that ties the vehicle to you?
I don't think this was an *amazing* deal, but it was a pretty good and fair deal, right? What do you all think? Anyways, I told her I thought it was a good deal (I hope that was the right advice!), and she put her deposit down yesterday.
The only downside is that the dealer doesn't currently have the color she wants in stock, so she'll have to wait a bit for delivery.