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and it's use as a negotiating tool...or lack thereof...
So, I would give $100 of the holdback to the dealer for their profit. The diff of $500 plus the $700 incentive equals $1200.
The MOST I would pay for that car is invoice minus that the $1200 plus tax and title. No more! Do NOT agree to pay their bs (excuse my french) fees such as tire, advertising, document, etc! You shouldn't have to subsidize their cost of business. You are giving your hard earned money away!
Be persistent and you will win especially in today's economy! Good luck!
I guess after all the years of abuse, they deserve it to some degree. It is very satisfying seeing them twist when you call "BS" on some of their ploys like "VIN etching" and "extended warranties for a lower APR". We are so lucky to be so well informed now.
Keep in mind though, that the local [non-permissible content removed] selling the cars is trying to make a living. If he adds value to the product by educating you, or facilitating your buying process, then he deserves something. Face it, Passats are hot right now - we're not talking about a Ford Explorer, after all. ;-)
I'll say this, the salesman at the local VW dealer was so pleasant and helpful, that even if I save $400 buy going through Carsdirect.com (buying at fleet prices) I will probably still send him a gift certificate for Banana Republic or something for his efforts. He really was helpful and added value to our buying process (so far at least).
We are in the awkward stage of being a mere few days away from buying, but we are completely unemotional about it. It will be interesting to post the final results.
I just got another quote from a local dealer (in San Luis Obispo, CA) for a 1.8T Tiptronic GLS Wagon, leather, monsoon for "$1,000 over invoice" which in this case means $25,798. However, since it is not local (he has to do a "locate and transfer" he wants an additional $375. Carsdirect.com price is $25,827 with ESP and Homelink in addition.
I think I will make my decision by interviewing the service managers and the head mechanics. ;-)
(Why does nobody ever talk about doing that?)
What questions would you ask?
Now the Incentive Dollars can be used with the rate...
am in sales myself (actually sales management, which is like being a cop with a desk job) ;-) and I know that when we are working a big deal, we always get the prospects to come to our office.
If I can get them in front of my people, meet our VP of Research & Development, our CEO, CFO, Customer Service Manager, etc., we can win the deal 90% of the time. The reason is that they understand what a difference it makes doing business with a quality organization. This is the key differentiator for us.
Let's face it, cars are a COMMODITY. In commodity markets, there are no product differentiators, only varying distribution methods and prices. Typically, naiive consumers will buy the absolute cheapest version of the commodity they seek, without regard to other factors.
I would submit that the competence of the service department and the attitude towards after-sale service on the part of the dealership could be powerful differentiators. Personally, I would rather pay an extra $400 for a $25,000 car if I could get it from a dealer with whom I enjoy doing business.
Car dealers seem to be getting better - I am getting very few "hard sell" tactics (yet), but I have not yet gotten down to "brass tacks" with any of them.
Interestingly enough, I just completed an analysis last night of all my offers so far (on an Excel spreadsheet - you can get a copy at http://members.cox.net/bpchristensen/Passat/Passat%20Pricing.xls )
and even CarsDirect.com is quoting about $700 *over* invoice. Makes me wonder if you really can get a car at invoice and still expect to get any service from the dealer during the process...
Brent
Does anyone know if VW dealers play all the monkey business with financing that other dealers do? (I assume that since they are using VWAG and not using an outside source that it is going to be legit).
I prefer to get my own financing, but it is running at about 5% - 3.5% would save a few bucks.
Ahh, now if my Vanagon Syncro Camper will only last until they release the new Microbus in 2005...
-Brent
Lets say I already agreed on a price with a dealer and want the vw financing. Do you think I'd get this rebate?
Car_man
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hawaii vw add fee 175.00
floorplan int. reseve.142.00
port prep 25.00 (all of these above off the "dealer invoice"
doc. fee 225.00 !!!!!!!!!!!!!!
I wont' even tell what my price was...but it was the "2001 costco discount" price...... you guys have it lucky over there......there is COMPETITION.
However; the only number that you cite that is not part of a VW Invoice would be the Doc. Fees.
These vary from State to State...in California it
is a State mandated $45.00
On the other hand, you are living in Paradise, and
everything is more expensive...
Good Luck
The local dealer agreed to match the best quote I had (from carsdirect.com) and was actually cheaper, once I factored in the delivery charge to the local dealer (the car was actually owned by another dealer about 150 miles away and cars direct quoted $250 transport fee).
The numbers:
2003 Passat Wagon GLS Fresco Green/Gray leather
1.8T/Tiptronic
Leather/Cold Weather
Monsoon
ESP
Homelink
Total price: $25,827 + $125 transport fee
I got the financing through VW Credit at 3.5%
I spent a grand total of 1.25 hours at the dealer signing paperwork, that was it! Did everything directly with the sales consultant (no "finance manager) which was very nice.
It would actually have been less time if they hadn't tried to slip in a couple of last minute <ahem> "changes" into the sales contract (like an extra point on the finance rate, and padding some of the other fees.)
I have to give them credit, they tried every possible angle to recoup their $300 or $400 in margin they normally get from a less informed buyer.
Overall, the experience was pleasant, and I am very happy to have spent my money locally. Not only for the relationship with the dealer, but also to put the money back into the community (something we forget about in our "Internet economy")
By the way, does anyone happen to know what the minumum credit score is to qualify for the 3.5% rate through VW Credit? They told me 750 and I called BS on them. After a brief "visit with the manager" they decided to "go ahead and eat the extra point" of financing. Yea, right. ;-)
Cheers!
BC
GLS Passat Wagon 1.8T
5 speed autumatic
color - Blue Anthrocite
leather package - Grey
Monsoon
ESP
Homelink
I got it at invoice for 24402 with total price out the door of 26,672. I financed 10,000 through VW (24mo @ 1.9). Dealer gets $500 cash back for financing through VW. Bought car at BroadwayVW in Oakland, CA. They were very honest in their approach. Found them through autoweb.com and they beat the pants off of every dealership I talked to in the bay area.
That invoice number sounds low, but the price you paid sounds very reasonable. According to several sources, the invoice should be $25,527 for that set of options and features. Are you including the $575 destination charge? (that still leaves over $500 unaccounted for). Hmm.
This is it:
2003 Passat Wagon GLS Fresco Green/Black leather
1.8T Manual
Leather/Cold Weather
NO Monsoon (Can't get it in Canada)
ESP
Homelink
Side Curtain air-bags
Wood trim package
3M hood protectant film
Passat Monster mats
Don't ask what I paid, the CDN numbers would have you in fits, although after US conversion, the car actually works out cheaper than the same car priced in US funds alone. Our VW finance rates aren't as good though - 5.9% / 5 years. Better than the banks are offering and I hope to have it paid off much sooner...that's the plan anyway
Thanks
I've never heard that you had to make three payments before you can payoff the loan. I paid off mine when I received the first bill (couldn't resist a no interest loan from the folks).
Anyway, I'm strongly considering making a deal on a GL Tiptronic this weekend to take advantage of the VW-sponsored financing. Am I correct that if I use this financing the dealer gets $500 back from VW? Therefore, combining this $500 with the usual holdback, the dealer makes close to $1000 on the transaction even if I pay invoice -- so an offer at invoice should be reasonable given that there are plenty of GL's around?
If my dealer has to trade or whatever they do with other dealers to get a car with the color and options I want, will the VW financing deal still apply?
A "Dealer Trade" should have no bearing unless it involves many hundreds of miles, and financing through VCI will still apply.
I would offer $1000 below invoice and see if he bites! Do not settle for invoice when he is making $1000 of your money for nothing!!!!!
What's a reasonable/customary amount for the floorplan and advertising fees? Do you think it would be realistic to back these out of my offer so I end up at invoice after they are added on?
recommend it as a part of the negotiation process.
If you offer Invoice as I suggested and finance
through VCI you will be getting your Passat at a
great price, the Sales person that you are dealing with will make a $100.00 and you should have a pleasant and smooth sales experience, or
you can select another more aggressive and offensive path...Your call...
Ad Fees can vary from $0-$250 depending, as you would suspect, on the
area...NY, LA, San Francisco, higher than Lincoln, Nebraska.
FloorPlan Interest Reserve is $142.00 and Port Prep is $25.00.
All of these numbers will appear at the left hand column under
*Invoice Amount*...Would be happy to fax you a copy...just go to my
profile here...click on *VWGuild*
As you said, the dealer will be making $1000 from the sale from holdbacks and financing incentives. This is free money for them!
Plus, as a consumer, there is no way to determine what other free money the dealer gets from VWOA. The dealer probably gets more $ based on sales volume and other manuf to dealer incentives. So - chances are that the dealer is making > 1000 off of your sale.
Another point - the 'invoice' price on the internet is not accurate at all! That # is just the average cost that all US dealers pay VWOA. Some pay more and some pay less. Again, dealers cost depends on several factors like how long they have been selling cars, how many they sale a month, etc.
So what I would do is go to Edmunds 'build' your ideal car or a car similar to what you have seen on the lot and determine the total (including options) invoice price.
Take that price subtract a 1500 (1000 plus 500) and that is your out the door price excluding tax and tag. The extra 500 I threw in is for negotiation room because you cannot buy at that low price and eventually will come up to invoice minus 1000. Give yourself room. That is your target! Remember the economy is super soft and this is not typically car season. Use these facts to your advantage!
Do not, I repeat, do not pay extra for bogus charges like ad fee, floor reserve, and port prep fees!!! These costs make me sick as the dealer is trying to make you pay for his cost of business! Urgh!!!
Anyway, sorry for the soap box. I just get irritated when I see dealers on this board giving advice that only benefits the dealer!
It's a game! Is it worth spending 1000 for a pleasant buying experience? The whole experience on average is 2 hours (for example) and then it is over and you have your dream car!! Imagine for 2 hours of work, you are saving 1000. Doing the math, you are making 500 an hour! By caving in to the dealer and not negotiating, you are giving them 500 an hour! Wow!
Good luck!
Now a fair profit and a fair discount is more reasonable tact to take...after all don't you get a paycheck......do you just take what they give you or do you NEGOTIATE on HOW VALUABLE YOU ARE....
I'm all for minimizing what I have to pay out but to expect anybody to go negative on a deal, well your in dreamworld.....and you better hope the place you work doesn't make that their policy.....guess who'll be out of work...
so cut the "oh gee the dealer's going to make a profit" whine. OF COURSE THEY ARE>>THAT's WHY THERE IN BUSINESS
Most consumers pay MSRP or near MSRP on their cars. Most consumers are not savy and research and negotiate; they are from the old school. Sticker says x $s so I must pay x $s.
As a result you can buy a car at an amount far below cost and the dealer still makes money!!
Take advantage of consumer incompetence. Do not needlessly give your money away! Maybe you are wealthy and your time value is low and can afford to throw out your money?!?
Anyway, cars can be bought well below cost these days.
My 2 cents...
Car_man
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Smart Shoppers / FWI Message Boards
I have no doubt this happens occasionally, when a dealership is desperate to get rid of a car for some reason, but I doubt it is typical, even in a slow economy.
Sure, I want to get a good deal, but I don't think it makes me an "unsavvy" [non-permissible content removed] if the salesperson makes a few bucks on the transaction -- just as I would want to do if the shoe were on the other foot. Call me old fashioned, but I still believe in the golden rule.
When I pull the trigger I intend to offer dealer invoice. If my local dealer won't bite, I'll use the fax method.
why should we have to pay for any of this stuff anyway??
everybody likes to make money off of other people but NOBODY wants anybody to make any money off of them..........I not a dealer but I own a business....
As if a righteous business would never try to do such a thing. I've said it before but I'll say it again. Customers pay ALL of a company's "costs of doing business." Plus they even pay more than that. They also pay the company a profit which is why the company exists in the first place.
Now, everybody likes to pay as little as possible but lets try to come up with a justification that makes a little more sense than the old, "I won't pay that because it's a cost of doing business."
Thanks
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