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Question about how much is too much for the "Out the Door" Price?

cablekmccablekmc Posts: 5
edited December 2014 in General
I'm looking to buy a new Mazda3 2015 Hatchback. Sorry, if this sounds like a broad question....but I'm trying to figure out how much above the negotiated Price of the car would be "too much" when it comes to the Taxes, Fees, etc that the Dealership will tack on for the "Out the Door" price?

I don't know if there is a "rule of thumb" when it comes to a certain amount ( like $3000 to $4000 ) or a certain percentage of the cost of the car ( like 10 to 15% of the price paid for the car ) for a car that I'm pricing out to be about $26500 MSRP is too much or not.

I'm guessing that there is some minimal cost that would have to be paid ( like State Taxes )..its the other fees that I am trying to get a better understanding of ( and suspect that I can get some leeway ).

I guess I can just go to the dealer and say that I want "Car W with X, Y and Z features and am looking at an 'Out the Door' Price of ????? dollars" but I'm not sure what is considered too low for the Dealer to meet or if its higher than I should consider.

Answers

  • steverstever Posts: 52,462
    edited December 2014
    This is probably too broad a reply for your "broad" question. :)

    Focusing on out the door numbers, one technique is to use True Market Value for your baseline car price. Typically TMV falls somewhere between Invoice and MSRP (you can find all those numbers here - just go up top and drill down with the Make/Model/Year tabs).

    So you get the TMV for the style car you want. Now add in your taxes. Then see what fees the dealer charges (you may have to email or call for this info). You can double-check with the DMV for "TTL" fees. If the "doc fee" is more than $50, whack your OTD number to take that into account.

    Let's assume you're going for the s Grand Touring with a TMV of $25,684. Five percent sales tax would get you close to $27,000. Add in another ~$100 for doc and miscellaneous fees and you're at $27,100 OTD.

    Now you can go to the dealer and say you're ready to buy this car today for $25,500 or $26,000 out the door (unless others posting here are getting good deals further below invoice than that). At some point the dealer may show you how the costs are broken out, but you really don't care so long as they meet or beat your bottom line price of $27,100.

    If the dealer agrees to your OTD price and then says, oh, we have to charge this fee when you go to pay, then say no thanks, go home and regroup.

    I don't recall a rule of thumb one that says you should pay x% over the price of the car for fees, but there must be some formulas out there.

    Don't worry about low-balling the dealers. They are pros and have heard it all. If the number is too low they'll (eventually) let you walk. But your number may be just fine at another dealer. If not, you'll have to rethink your bottom line or look at a different trim level or brand.

    What New Car Fees Should You Pay?
  • cablekmccablekmc Posts: 5
    edited December 2014
    Stever, thanks for the response.

    I was thinking that with a $26500 price tag that I'd be paying up to $29500 OTD.

    I'd think that there would be a lot more "required" miscellaneous Dealer fees for them to "ding" me with. I'd assume that they would want to hit me with everything that they can when it comes to fees and such....but is $100 to 200 considered "really low" for such fees?

    or

    Is anything more than $200 too much?

    If it's not and considered, reasonable....that'd be great.

    Also....I'm in the San Franscisco Bay Area.....isn't the Sales Tax higher than 5% ( like everything else in CA, I'd think that it would be higher :) :'( )

    EDIT - I went to the California DMV and calculated the California Taxes and it came out to $2602 for a car priced at $2650. For California...I guess I'm looking at 10% for Sales Tax and DMV registration ( which has nothing to do with the Dealership ? ) :s

    If that is the case...I guess that for a $26500, the best I can hope for is a car $29100 before any fees are calculated?
  • kyfdxkyfdx Posts: 131,225
    That's a good rule of thumb for California.. 10%-11% of selling price. Doc fees in CA are restricted to $80...

    So, take your selling price and multiply it by 1.11 and that should get you very close...

    But, I'd still ask for a line-by-line item of all charges.

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  • steverstever Posts: 52,462
    edited December 2014
    @cablekmc, I just picked 5% for easy math, not knowing where you were. Doubling the tax for California seems to be another good rule of thumb, lol.
  • kyfdx said:

    That's a good rule of thumb for California.. 10%-11% of selling price. Doc fees in CA are restricted to $80...

    So, take your selling price and multiply it by 1.11 and that should get you very close...

    But, I'd still ask for a line-by-line item of all charges.

    Thanks, yeah.....it's great to live in California :disappointed:

    It sounds like I should try to aim for 8 over the Price of the car ( as a lower starting point ).....or ( as you suggest )....multiply the Price of the car by 1.08 percent ...and likely negotiate up to no more than 1.1 percent?

    So for those that have purchased a car in California...if you think that you've gotten a good price.....does that sound about right?


  • kyfdx said:

    That's a good rule of thumb for California.. 10%-11% of selling price. Doc fees in CA are restricted to $80...

    So, take your selling price and multiply it by 1.11 and that should get you very close...

    But, I'd still ask for a line-by-line item of all charges.

    Thanks......Are there other fees ( other than Doc fees ) that I should expect from the Dealer?

    As you are suggesting....what is going to kill me is the nickel and diming by the Dealer. But if I am looking at an OTD price of no more than 1.1 of the asking price ( as a good percentage of the total price )....then I probably shouldn't care about what the line items are as long as I'm not going over my price limit.

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