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Dealer Holdback questions
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I am in a situation where a dealer in NC has the car I am looking for and the local dealer here in GA found it. The local dealer said that they would charge me only $500 over their cost to acquire the car from the other dealer. The price quoted is $29,238 but the invoice is $28,038. Did I miss something or is the dealer trying something?
Thanks
Shawn
Thanks,
Shawn
or lets say the other dealer says he wants a Focus back in trade...which has $300 in holdback. Now your dealer has lost out on alot of money. There are way to many variables involved in a swap to assume the dealer gets the holdback
rich
1. Is the 2% from the MSRP, the base invoice, or the total invoice?
2. Why is it 2% + 1% of total invoice? Shouldn't it just be 3% of the total invoice? I'm confused as to how it is presented on the list.
3. What is the floor planning fee?
4. Do ALL dealers get a holdback from the manufacturer?
Thank you in advance for answering my questions.
Its' where the inventory of a dealership is put on a line of credit and not paid for until sold. However, inventory can rarely be "floored" for more than a set amount of time, and interest is due on it.
Bill
You have to go through the process at more than one dealer and compare the total deals together side by side and do what's best for you and your family -- learn the "Steps of the Sale".
Am I really expected to pay the holdback? Doesn't the dealer already get this? What the heck is the "Whsl finacial reserve"? The dealer told me that they pay the manufacturer the holdback then get it back from the manufacture when they sell the car. $400 over invoice doesn't sound like such a good deal when its
Here is the fees portion of what they e-mailed me:
Destination Charge .......................... $ 485.00
TDA ......................................... $ 402.00
Gasoline .................................... $ 6.00
Dealer Holdback ............................. $ 445.00
Whsl. Financial Reserve ..................... $ 222.00
--------- ---------Total ....................................... $22218.00
sounds fairly preposturous to me...so does the
Reserve...
Terry.
By the way, did receiving a copy of the invoice help or hinder the deal? After receiving the invoice did you have more questions about cost than you did prior to receiving invoice? Who's idea was it to send you the copy?
first of all.. make an offer based upon what you want to pay for the car. Do you really care if they sell you the car for $10 and the mandatory ad fee is $20,000 and your target number is ,$20,010?? what is the difference?
It seems your trying to haggle every line item. I can promise you this will make your car buying experience BAD!!!...
I agree with Frank and Terry...it looks like you got a $400 over deal and its pretty good! Don't screw things up worrying how they got to the number..who cares as long as you get to the number you want to pay.
Rich
The TDA is a legit charge.
I agree, make an offer based on what you want to pay. But it sounds like a good deal to me.
Bill
I disagree with audia8q, you don't set a target price and buy a car. The smart shopper finds the car he wants at the price range he is looking in and then finds the dealer who will give the best price and the least bull dookie.
My time is worth something to me, but so is $400. More important to me than the money is that I don't want to feel like I'm being conned.
Anyway it turns out that Toyota really does charge the manufactures holdback and fin res. and if you check the Edmonds Inv price it is equal to the Inv price they gave me + the hold back and reserve. Edmond and other car manufactures don't break it out. So this is in fact a legit charge and I feel alot better about buying the car now
How much does the dealer really make for $400 over invoice?
Invoice + $ 400.00
Destination Charge $ 485.00
TDA $ 402.00
Gasoline ..... $ 6.00
Dealer Holdback . $ 445.00
Whsl. Financial Reserve $ 222.00
Proc Fee $ 287.00
-----------------
Total: $2247
Not bad for them.
One of the other dealers was going to give me a "great price" of $700 over invoice which magicaly turned to $900 and another $200 for a dealer exchange + all of the above when I asked him to break out all the charges and explain them to me. When I declined the offer he said I was doing this the hard way. Yep but saving $700 by shopping around, not bad for a hard days work.
Actually this whole process has been both educational and kinda fun in a stressfull kind of way. It's fun to walk out in the middle of a deal, try it sometime
Good luck everybody!
Yes I had a lot of questions they all got answered.
My first car buying experience 9 yrs ago was completly different, I had no idea what I was doing or how much I ended up actually paying. It was 10 time more stressful and I had buyers remorse for a year afterwards. That WILL NOT happen again.
BTW, current car: '93 Chrysler Concorde 187,000 miles.
I just found this site the other day and it's great!
So that's actually $893 less than that.
Bill
Bill "
Bill is right, sorry. Can a dealer make money selling cars for $1354 profit? I have no idea, I hope they do. But hey nobody complains when JC Penny's sells sweaters after christmas for 75% off.
One of the other cars I'm debating on is a '01 maxima. I will make an offer and if they sell it to me they will lose money guaranteed, but they are already losing money so I'm thinking they may just want to cut their losses. I think it's fair to offer less then Inv on this one because if I buy it I have already lost a year of value on it's resale value, plus I don't like the color.
Don't have a Anxiety attack over it, it's 4 bucks over FAC, so buy it..enjoy it ..and have some fun --- this, is not fun..
Terry.
Since your money is important to you why don't you submit a quote to priceline at 200 over - and be willing to drive an hour or two to get your car. How long could it take to submit the quote? 15 minutes?
Also - setting a target price is THE best way to buy a car. Note I didn't say the way to get the lowest possible price.
It is not exactly $1,354 in profit, but Im not gonna have that conversation again.
But new cars arent terribly profitable for most dealers.
On to the Maxima... Umm, why buy a car you dont like?
Bill
The dealership has expenses that need to be paid out of that $1354 before they find any profit.
Sorry, I ranted. It'll never happen again.
All in all, he was being very smart
And, his deal is for $400.00 over invoice - are you really ranting about $100.00? Just curious.
Jackie
PAID and RETURNED...That is crap...The same is true with *RESERVE*...That is an ADDED F & I charge...
Invoice is Invoice...The Base Price of the car,
Ad fees, Gas, Destination...
A *Procurement Fee* sounds like something a pimp
charges...
Just drive down the street where the Toyota dealer is, and let him show you a invoice ... once you see one, you will get the hang of it..
I think you have been around those Vdubs too long l.o.l.
Terry.
I'm sure I'll get slammed for this remark, but to explain my position: I can't count the number of "no trade" deals I wrote while at a Chrysler dealer in Texas. Dow Chemical's credit union had great rates and never allowed consumers to pay over $200 - 300 over invoice on new cars. With only $300 profit, a $250 administrative pack and $75 for the salesman, the dealer was already $25 into the holdback. Let's figure this on a Neon where there's only $300 holdback and take out a portion for the other dealership costs and there's little or nothing left. Even if the 40 - 50 new cars deals at no prfit are offset by a few good ones, the bottom line isn't pretty. That's why the concept of someone automatically thinking they're entitled to the holdback is goofy. Most dealers don't even give up holdback on a dealer trade!
Give it a rest! On a loaded up $18,000 Neon, a $300 profit is only 1.6%! I'll bet the guy wouldn't beat up Wal-Mart when they're making 110% on a pair of jeans, and most people pay retail for clothes, jewelry and electronics without a thought.
Even if Toyota did this, why should I pay it if the dealer gets it back? The dealer then gets it twice. Once back from the dealer and then from me. If anything the dealer should be subtracting holdback since by selling you the car he is getting it back from Toyota. He should only charge you holdback if you don't buy the car (which makes as much sense as charging you for it) since he won't be getting it back. You sure the invoice didn't show the holdback as a credit that should be subtracted and not added to the price?
Edmunds lists Invoice of a Toyota Whizzbang at, say, $22,075.
ABC Toyota's Invoice may look like this:
Base Whizzbang XLE V8 AWD NAVI: $21,500
Holdback: $ 575
Gasoline: $ 6
TDA: $ 430
TOTAL INVOICE: $23,011
(TDA Is Toyota Dealer Advertising and covers Toyota's ads that they run. They basically charge their dealers for that but that;s a separate discssion)
So in this case, the car has an invoice to the dealer of $23,011. Even without the extra charges for Gas and the "Oh What a Feeling" commercials..
Its' $22,075. But Toyota itemizes the Holdback.
Bear in mind that theoretically a dealer isnt even supposed to show invoices to the public (Its burined somewhere on page 8769859875698765 of the franchise agreement) so they may not be totally spot-on to what you see on the internet and are designed to be seen by the dealer and the manufacturer/distributor. I.E. They may be confusing, like any other internal corporate document, to an outsider.
Bill
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I do agree with frank that a lot of people make it very difficult for a person to transact with them in a car deal. I mean, come on - you've already got more info than the dealer does about his own inventory and cost factors - why walk into a dealership with a robber's mask and a chip on your shoulder?
We all want "a good deal" - isn't getting a 1-3% over invoice deal good enough without demanding the $6 the dealer was invoiced for 8 gallons of fuel? You DO get the fuel, you know. The dealer doesn't take the gas out and make you pay anyway!
Yeah...
Something like that
Bill
Who promises to behave!
Nobody is wanting to deny the dealer a profit. Nobody is even wanting to deny the dealer the largest profit he or she can legally make. But if you want to open the J.C. Penney/Wal Mart analogy, you've got a lot of explaining to do.
No, nobody complains about sweater sales at Penney's. Nobody complains that Wal Mart marks up a TV by 100% (though I'd be surprised if it was that high). Because at least I know the next guy who buys the 21 inch Sony at Wal-Mart is going to pay the same markup as me.
What the dealerships and manufacturers have done is set up this byzantine system of invoices that really aren't invoices and retail prices that really aren't retail prices and thrown in holdbacks and ad fees and useless undercoatings and on and on. And there's nothing but the buyer's own persistence and tolerance for sales pressure to keep him or her from paying thousands more than the fellow in the next office who's buying the exact same vehicle.
And what's this nonsense about ad fees?? I'm supposed to pay you an extra itemized fee to advertise your product to me??? You show me any other industry that tries this b.s. and THEN we can start comparing apples to apples.
It's an inherently dishonest process, and yet some of you seem to be wondering why the consumer quibbles over $400. Thank goodness for the Internet - it gives us poor lemmings a fighting chance.
I could say more but we just got rid of a piece of garbage otherwise known as a Kia Sephia so I'm in a pretty good mood this morning.
Exactly what other industry's invoicing systems are you comparing to when you describe the car business as byzantine? Have you ever seen how a grocery store operates? Have you seen the invoicing structure for electronics? Computers? Appliances? Pharmaceuticals? Could it be that you consider it confusing because not being in the car business you just don't understand it? Your indignation over ad fees illusrates this. You're happy to see a dealer's invoice for the car itself but you won't acept seeing what other expenses they are invoiced for.
Competitive market forces have caused the situation where ad fees must be itemized. I'm sure dealers everywhere would much prefer it if they could just raise their selling price by the amount of the ad fees and have no need to mention them. These competitive forces make it possible to buy a car at lower mark-ups than ever before yet buyers still want it for less. But that's how a free market works. You may consider it dishonest but I think most North Americans prefer it to a system where everyone pays the same for everything regardless of the buyer's effort or the seller's mark-up.
I like an earlier poster's analogy: If I'm willing to pay $20,000 for a car, it doesn't matter to me if I pay $10 for the car and $19,990 for the advertising. Just set your final price in a fair and equitable manner and the market will take care of the rest.
And I don't buy your "invoicing" argument either. I as a consumer have no reason to inspect the dealers invoice. I shouldn't care about anything but final price. This whole concept of "showing the customer the invoice" is also a tool of the auto industry. It gives the consumer some false notion that they're getting a good deal because it leads him to believe that he's getting the car for $1 over invoice, or whatever, implying that the dealer only makes $1 on the sale. I call b.s. You want to show me a TRUE invoice, that being what the dealer REALLY has to pay for the car he's selling you, maybe I'll listen. But because of all the secret holdbacks and unpublished incentives, us poor unwashed masses out here have no way of knowing. THAT'S why it's deceptive.
btw, an insurance company most certainly can NOT charge different premiums to two people with the same car and same driving record.
I didn't realize that sites like edmunds et al were run by the auto industry. Their main drawing point is that they present "dealer invoice."
And you're right, you shouln't care about anything but the final price. So what's with your worry about "true" invoices and "secret" incentives?
Your kidding .... right ...?
We just kinda throw in the "holdbacks" and manufactor the invoices ....
Gheeez, it 2002 .... not 1942 ... Maybe we could all chip in and get you a Time Magazine subscription for your birthday ...l...o...l....(and yes, we have put men on the moon)
Terry.