Did you recently take on (or consider) a loan of 84 months or longer on a car purchase?
A reporter would like to speak with you about your experience; please reach out to PR@Edmunds.com by 7/22 for details.
A reporter would like to speak with you about your experience; please reach out to PR@Edmunds.com by 7/22 for details.
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Advertising Fees
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INVOICE DOES NOT REFLECT DEALER'S ULTIMATE COST BECAUSE OF MANUFACTURER REBATES, ALLOWANCES, INCENTITIVES, HOLDBACK, FINANCE CREDIT AND RETURN TO DEALER OF ADVERTISING MONIES, ALL OF WHICH MAY APPLY TO VEHICLE.
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My question is: Does the manufacturer (GM) always reimburse the dealer the ad fees after the vehicle is sold, like he does the holdback. In my particular case, the dealer and I agreed on a price of $900.00 over his "final or true cost" of vehicle. He then faxed me a copy of the invoice which confirmed he did not charge me the ad fees. My "driveout" price was the invoice total, minus ad fees, minus holdback, plus $900. This was a GM invoice on a 2002 Tahoe and I am specifically inquiring about GM invoices. I realize that all manufacturers probably do things differently.
You paid no holdback, no ad fee's .. and the dealer sold it too you for net, net, plus $900 for a Tahoe.
What type and what was the MSRP of the vehicle..?
Terry.
So the Dallas deal is better but not that much better than I could get here. I have a son who just moved to Dallas and that is why I decided to try the dealers there. I got that price with little haggling and 2 of 3 dealers faxed me the invoice.
Never have to pay ANY adv.fees or dealer
co-op adv. fees. And somebody in my family
is always buying a new GM vehicle and
they don't have to pay it either ?
The dealer whips out the invoice amd the
GMS price is right there...Only add ons
are sales tax, 75. DOC free, 15 NYS inspection
fee and the difference in lisc. plates (if any)..Geo
Ed
2) GM Employee pricing is based on a set dollar amount irrespective of what the actual invoice amount of the vehicle is. I.E. "GM Employee price on a 2002 Chevrolet Biscayne is $18,650 plus destination and invoice for options" versus Ford's A X or Z plan pricing where it is a percentage of actual invoice. This sort of stuff is prenegotiatied with the UAW.
Hope this helps!
Bill
made...But lets not forget they might
still get "back side money" or something
like that. I have been DROOLING over a new
CTS to replace my 96 Deville. Mr Dealer
WILL NOT DO GMS pricing on it either !
Gave me a new Deville to ride for the
week and will do GMS ! Remember mr dealer
DOES NOT have to do GMO-GMS if they don"t
want too on a hot model GM.......Geo
BTW: they make most of the $$$ on your trade !
I traded a 97 chev xcab 4x4 27k miles . Dealer
gave me 16k trade on A new 01 chev. pu. using
GMS deal.....97 sold next day for 18,995...wow
Ed
However, if this charge is listed on an addendum sticker or is being disclosed with the bill of sale, the red flag should go up - not legitimate.
Ask for a total, or 'out the door', price; then compare that price between dealers. If you're cross shopping dealers in different states, ask for an 'out the door' price not including tax, title, and license.
Sure, the dealer incurs costs for advertising, processing the documents, etc.; but itemizing that stuff when quoting you a price is sales hooey intended to confuse the buyer.
I sell cars in about 5 surrounding states, I know the tax and tag fees for ALL of them. It isn't rocket science, despite how hard it is for Edmunds to figure out the regional fees.
Ed
Asking for a price 'out the door not including tax, title, and license' worked great for me, even with the in-county dealers, when the spirit was no haggle. The dealers that didn't understand that I just blew off (with a polite e-mail thanking them for the quote) as simply unwilling to deal straight.
Getting caught up in semantics or sales hooey just wasn't necessary.
P.S. Ask a straight question; get a straight answer. Or, NOT!
Ed
Now, if you live in one state or county and buy in anoter, don't bring that into the equation because all it does is confuse people.
Most people buy in the state they live in, for the most part, the majority of the time.
LOL, I did get some "I need more info" replies, too. Some were legit (like about color preferance, for which I had none); others were simply ducking the price request (tranny type on a car available only with manual). It was easy to tell which dealers were trying to haggle and which were just doing business straight.
What was the Edmunds TMV? Was it close to the invoice plus $800? If so then Edmunds factored it in on their TMV.
Just focus on out the door price...
db - thanks for the plug, my self-esteem gets a shot in the arm.
with afk_x, it's best to negotiate your total price without worrying whether the different contributors to that price are called ad fees, doc fees, destination fees, etc. fees, greens fees, bees fees, whatever fees.
Even if you do that, however, don't be surprised if the dealer attempts to add still another fee just before you close the deal; so decide ahead of time whether or not you'll go for it.
If you're concerned about dealer cost, get the Consmuer Reports report; it's worth the money once you've narrowed to make and model.
Edmunds has all the same information in an easier to use format.
I also found out that Suzuki provides dealers with both a 3% holdback and 1.5% floorplan allowance (whatever that is).
So I spent $12 to find out there was additional an additional $700 on the table for negotiating room. Edmunds, KBB and Autosite all had only the factory-to-consumer rebate listed.
I have used CU's New Car reports for years... CU's information has always been at least equal to other free sources, and often had additional items listed (regional incentives, for example) that were missing from the free websites (who seem to report on national programs only).
IMO, very well-worth the $12 spent.
Advertising fees may be legit, but like anything in a car deal, everything is negotiable.
I mean when I buy anything else - a tube of toothpaste, a television set, whatever - I know I'm paying shipping and advertising and any number of such things but they don't spell it out on the receipt. In the case of the television it's even frequently a negotiable price (we'll beat any competitor).
Odd thing car buying...
Way back when, consumer action groups wanted car invoices broken down so consumers could see how the money is divided, giving them disclosure.
The problem is, most people haven't a clue as to how to read an invoice if they saw one, given the "A" plan, "Z" plan, advertising, holdback, transportation, etc. You can't just pick the lowest number on the page and assume that's a good price to buy the car for...
Thank goodness they didn't deicide we needed to know the individual costs of the parts!
We had customers who wanted our BOM on the products they bought from us. We never supplied it to anyone (only sr. execs had a copy) as we thought our customers would analyse it and use the info to negotiate a lower price while at the same time using it against our competition to demand the same thing.
I struggled with reading the BOM on products I knew very well. I'd think a consumer would have an aneurysm if they ever saw a BOM of their car.
I think we are using the term invoice too loosely here. The invoice price is what one is expected to pay. Generally, that means the price for materials, labor, overhead and shipping & handling charges. Contrary to popular belief, the dealer does not actually pay that amount to the manufacturer. He pays something much less.
The so-called invoice price, is merely the standard cost of the items listed. The standard cost is the estimated or budgeted cost, not the actual cost. So using the standard cost is a good proxy of the true invoice cost though it is always higher than the net invoice cost to the dealer. That is why the dealer can sell below cost and still make a tidy profit.
An invoice, which is a piece of paper, billing for goods is what you pay for services. You get your car worked on, they tell you it'll cost $200, and you see an invoice for $200.
"Invoice" cost on a car, with the exception of holdback, which doesn't count, IS what the dealer pays, unless there's dealer cash.
No dealer is making a "tidy" profit by selling at invoice, unless you get the trade for 2 grand back of book!
When I mentioned the buy rate for my loan on my camry purchase the F&I guy made the comment "I do not know why we are giving you this good a rate AND losing so much on the sale. We are not making anything on this rate."
The best I can figure I got the new car about $300 below edmunds invoice price. This excludes SET fees, TDA, etc, if the dealer had to pay those. I had no trade so they made no money there. They gave me 2.99% for 60 months on my loan. They charged a $389 doc fee and $100 loan fee, but they backed this into my offered price for the car.
They had to make some money somehwere or they would not have done the deal. They are not in business to give me charity. I know you have been out of the business a while but maybe you can look at this deal and figure out where their profit is. I think it is in a factory to dealer incentive. I was told there was $1500 on the LE model. Mine is the XLE but maybe they had it on the XLE too.
It's a shame when a salesguy or F&I guy is so weak they have to whine like that.
Making nothing on a rate is very possible - when there are incentivized rates from the manufacturer, the F&I guy usually doesn't get a flat fee ($100), like when selling at "buy" rate with normal financing.
Still he should be happy to have the sale, put on his selling shoes, and hook you up with choke and croak, gap, mop n glo and a big ol' warranty!!
They will analyze or try to analyze it down to the penny!
These same people don't think about the massive OVERHEAD that it takes just to open the doors.
I don't want or expect them to care about that either.
I mean, the car is either a good value or it's not!
It boggles my mind that people will pay three times as much as something else costs ($1200 necklace, $400 cost), but will hack over $20 on a $25,000 car.
Zue: again, it is easy to understand. If every one in town selling the necklace for $1200 then that's what we have to pay if we want one. In addition, is there any place we can look up the invoice for the necklace? That's the main difference between buying nacklace and buying car.
What is a fair price and how do you determin a fair price based solely on profit?
Do you know the cost of everything you purchase? There are alot of items that people haggle price. Boats, furniture, bedding, hotel rooms, certain kinds of clothing, jewelry, etc.. where do you find "cost" on these items? you don't pay the full asking price for these items do you???
A $42,235 GS300 has a very similar markup in it to a $43,318 RX330 with Nav.
Want to buy the GS? Discount...
Want to buy an RX with Nav? MSRP. Period.
However, the car industry has determined that as PT Barnum quoted "There's a sucker born every minute" and they traditionally make more money using this negotiated sale's technique.
The following web site outlines some of the notorious scams that some unethical car dealers try on their victi..uh I mean customers...
http://www.carbuyingtips.com/
I'm not saying all of them are like this but historically car dealers in general have a bad reputation for taking advantage of customers. They continue this sales method because they make more money wheeling & dealing vs. post the walk out price.
If dealers used the full disclosure method (take it or leave it approach) then customers could more easily determine the value of the car vs. their competition. But the industry set this practice, not the consumers. So you have to haggle for 3 hours to find out the so-called price.
If the dealers chose not to, they would not have to reveal their invoice price information to anyone including Edmunds. However, you can find invoice information in all types of car publications.
Don't get me wrong, I understand the industry's dilema of supply and demand setting the price and hey that's why this is the Good Ol' US of A. Most cars are simply not worth the MSRP. That's why I want to be the most educated consumer that I can be. Just don't blame the customer for trying to play the game that the car industry designed. If the industry doesn't like it, change the rules.
Thats just it, the consumer who is educated doesn't HAVE to play that game.
The educated consumer can "get up and walk out" if they dont like what they are hearing.
If dealers used the full disclosure method (take it or leave it approach) then customers could more easily determine the value of the car vs. their competition. But the industry set this practice, not the consumers."
Most, if not every dealer, imo, would have to do that for it to work. The ford dealers in my area became one in the same and initally went to a one price structure. It didnt work because local customers were going to nearby towns to purchase from the mom n pop stores(and getting better deals) because they still would negotiate.
"So you have to haggle for 3 hours to find out the so-called price."
I for one have never, and will not negotiate for hours. I also have felt that I received a fair price as well on every car I have bought.
For my other company I buy a fair amoutn of cars. I can usually get a realistic price within 20 minutes and I do about 10 minutes of research.
And 90% of the time I do it over the phone. I also rarely worry over $2-300 on a $20-70,000 purchase.