Any Questions for a Car Dealer?

sdawson713 · December 2001

It all depends on the situation really. There are so many factors in quoting a price, for example....

A. Where you live: If you live by my closest competitor we will price it based on how they price cars.

B. What you told me on your test drive: maybe you just totalled your car, maybe you're lease ends in two years, whatever.

C. Time of the month: You will ALWAYS get the best price at the end of the month.

D. Whether or not you have bought here before: If you have, odds are we wont have to do a headstand and a jig to get you to agree to a fair price.

Basically, any question we ask you is to determine what kind of price we are going to give you. We are just trying to gauge how much you like the car, how much you want to spend, and how much you like the dealership. However, I should note that I have never tried to "screw" a customer. Even the most gullible people will get quoted no more than 700 or 800 above invoive.

Thats about it. For the most part, I would say that on a given car, everyone would get a similar quote plus or minus 500.

Sid

biscayne · December 2001

When I was purchasing my truck, I made my offer to the salesman. He said he would have to check with the manager to see if he would "do the deal". He leaves the cubicle and disappears around the corner. After a few minutes of waiting I got up to see where he had gone off to. To my surprise, he was changing the channels on the TV in the service department waiting room. After buying the truck, I later found out that he was a senior salesman that had the authority to do deals and that the sales manager was on vacation for the week.

postoak · December 2001

When I go into a dealer ready to buy, the salesman will always ask a question something like "What kind of price did you have in mind paying (for this car)?" What do you hope to learn from my answer? What IS a good answer?

PS: Let's assume that I've already let the salesman know I'm not a payments shopper, just interested in the price. Also, (not that I tell the salesman any of this), that for the car I'm looking at, I know that, say, $200 over invoice is a good price and $700 over is pretty bad. IMO, people that were paying over $700 were real suckers. I'm hoping for $200 over and probably won't deal at anything worse than $400 over.

nyccarguy · December 2001

To not buy an Odyssey because the dealer makes so much profit off of it is ridiculous. Why do you care so much that the dealer is making so much money? It is the best MiniVan on the market (arguably) and you shouldn't deprive yourself or your family (I assume that's the reason you're buying a MiniVan) of a better vehicle just because you can't get a "good deal" on one. If you want a deal on a MiniVan, head down to your local Chrysler/Dodge dealership and I'm sure you'll find them blowing MiniVans away at invoice (or $100 above or below). Bill is right, you should look into total cost of ownership including depreciation. Yes, your Honda will cost you more up front, but what about 5 years down the road when you go to trade it in or sell it privately? Odds are that you'll have to put oil and gas into an Odyssey, can you say the same about a DC MiniVan?

landru2 · December 2001

If you know that you want to pay $200 over then give the salesman that figure and tell him you'll buy it right now. Just to clarify, do not offer "200 over" but the actual price this represents, e.g. $22,580. This will give the dealer some idea that you actually know what you're talking about and not just "fishing."

The reason you are asked the question is to weed out the huge number of people that believe that dealerships have a $10,000 mark-up in a $30,000 car.

When someone actually has some knowledge of invoice amounts it seems to me that the easiest and most direct route is just to offer the amount you want to pay. Believe me, the dealership isn't going to volunteer a price less than $200 over.

postoak · December 2001

If I give the $22,580 figure, doesn't that become the amount they start trying to get me to come up from? If I say "I have to have it for $22,580 or I won't do the deal." won't they realize I'm probably bluffing -- that I may walk out, but will probably call back later? Also, I thought I heard some salesmen on here (maybe not this particular forum) state that they HATED "take it or leave it" buyers -- that they immediately went into an adversarial mode with such buyers.

landru2 · December 2001

Well, speaking for myself, if someone says to me, "I've done a lot of research on this car and I will buy this car today for $22,580 which I've determined to be $200 over invoice," I will take him much more seriously than someone who offers me $2000 below invoice hoping they'll end up at $200 over.

I would not recommend making a take it or leave it ultimatum. Personally, when a customer treats me well and makes it easy for me, I definitely make it easy for them. If someone wants to fight, then I'm going to make it worth my while. Of course, that's just human nature - people like to do business with people they like.

postoak · December 2001

Thanks, my initial inclination was to start at invoice (for a car with no incentives, cashback, holdback, special financing deals, etc.), just to show that I knew what a ballpark good figure was.

abtseller · December 2001

get indignant if the dealer offers to sell you the car at an invoice number that doesn't match what you find on line.

Ed

tboner1965 · December 2001

If the saleman asks you what you want to pay, just turn it around. Tell him you "think it costs them about X, so what do you want to make on this deal?"

TB

postoak · December 2001

Of course, what do I do when the salesman tells me he wants to make $2000 on the car? I don't really want to know what the salesman WANTS to make! lol

tboner1965 · December 2001

You can't go that high. Tell him you what you would pay and if he takes it, you got yourself a deal.

If not, you just cut to the chase.

Do you think he really cares what you really want to pay, other than checking if you are in the ballpark.

You have just as much right to see if they are in the ballpark since the money is coming from your pocket. Maybe even more, again it's your cash.

I'm not advocating being beligerent. Just turning around the questions and pointing out how silly some of them seem.

One of my favorites is when I'm told the dealership is making any money on the deal. Guess what, if you are buying, you're probably not making any money either 8^)

I'm a bit of a smart @**, but I try to have fun with it 8^)

TB

jonbgood · January 2002

In general, what is the minimum amount of profit a dealer wants to make on a used car transaction? Lets say you are buying at month end and you have a pretty good idea what a vehicles trade in or auction price is. Would a dealer settle for a $500 profit on a $18k (his cost) vehicle? If not - what is reasonable for the dealer to pay everyone, cover overhead, and make a fair profit?

rroyce10 · January 2002

...... Knowing the what a vehicle "might" do at auction really doesn't help much..

There is a lot of variables here. Let's say a dealer pays $16,000 for a vehicle at the block, there is an auction fee depending on the auction site, of "around" $250. There's a transport fee of $125, a service will run "around" $250 and a clean and detail will run "around" $125 .....

So by this time, they will have around $16,800 in it (not including tires, any blem repair, etc.) -- So when you add a pack of around $400, the vehicle hit's the deck at .. let's say $17,200.

Depending on the vehicle, if the dealer can't make at least $1,000 over that... they will just wait til the next buyer...

I hope this helps..

Terry.

bobst · January 2002

Determine the out-the-door price that you are willing to pay for the car. This price includes everything, including sales tax and tag/title fees.

Offer that price to the salesman. If they accept, then write a check for that amount and drive the car home.

If they decline, then leave and go somewhere else. After a couple dealers do not accept your price, then you have proof that your price is too low, and you will have to increase it if you want to buy the car.

The salesman will ALWAYS turn down your initial offer. When you get up to leave, they will often ask you to stay for a couple minutes while they talk to their sales manager. After they 'consult' with their sales manager, they will tell you that your offer has been accepted. At least that is how it has been for us.

You can't tell that your offer has truly been turned down until you drive away from the dealer and they are not hanging onto the bumper of your car.

jonbgood · January 2002

I've seen this referenced on this board but have no idea what "pack" is. I'm assuming its the cost to get the car lot ready. Thanks for your help.

rroyce10 · January 2002

..... It's a lump sum that a dealer will apply to each vehicle on his lot --

It can range from $150 to $2,500+ depending on the vehicle. On all the high end stuff, like Carrera's, Benz's, etc. they can be more than that...

Terry.

rbrenton88 · January 2002

Are you working out of Flemington by any chance?

raybear · January 2002

That may be the case. It happened when I sold BMW's in the past.

jonbgood · January 2002

to think that if a car was taken in on trade and the consensus trade-in value for the car is $18,500 and its a very clean late model car - very little (if any)prep work is needed - its month end - could an aggressive buyer get it for say $19,500 even if thats $1000 less than the consensus retail price for the car? It makes sense that if it was picked up at auction you might have to allow for some more of the costs you mentioned. Of course I guess it could've been purchased at less than true trade-in values at auction. I guess what I'm looking for is a formula that I can apply when used car shopping that would insure a patient purchaser a REALLY good deal and still be reasonable with the dealership and not insult them with some low ball unrealistic offer.

abtseller · January 2002

at least a thousand dollar profit on a "common" used car. If you're looking for a high demand used car (4Runner, pickup, Sequoia, anything that is in high demand new) figure $2000 profit (minimum). Now, to figure out how much the dealer has in the car (not that its really any of your business) you have to add about $800-1200 over the auction price to allow for reconditioning, cleanup, brakes/tires, whatever the shop ticket is. If you're talking a 1-2 year old car still under warranty, you're likely more in the $600 recon number. You'd be amazed how many 1-2 year old cars need tires and maint items that aren't covered under warranty.

Hope this helps,

Ed

jonbgood · January 2002

today online - why isn't it my business what a dealer may have paid for a used car? I'd agree he has no obligation (nor should he) volunteer that information to me - but I have every right to develop an "educated guess" at what he has in the car and I have every right as an educated consumer to pay as little over that figure as I have to over that price to get the car. Your information is very helpful. If I was buying a low demand (high depreciating) domestic sedan, with 10 to 12k miles, say a 2001 model, I'm assuming there would be no conditioning costs other than a detail - would $1000 over trade in be the least you'd expect a dealer to accept? I guess I'm amazed when so many late model used cars sell for what a rebated new car might cost equipped the same way. Who buys these?

tboner1965 · January 2002

People who are more worried about getting approved for the finance than what they are actually paying.

Many don't care what the car costs, they just wanna know, "What's the monthly payment?"

Sad but true.

TB

rroyce10 · January 2002

...... An end of the month deal (EOM) really effects a new vehicle, but on certain circumstances it is possible on a pre-owned.

What effect's a pre-owned vehicle the most is, how long it's been on the lot ...

Let's say you drove by a dealers lot in November and saw this vehicle, and of course today being Jan 2, he want's it go ...Faaaasst! Any time a pre-owned vehicle has been on the lot for .. let's say, 5/6 weeks, it's time for a new home.

I hope this helps....

Terry.

jonbgood · January 2002

I always thought that end of month was the time to buy any car, new or used, because of salespeople wanting to hit quotas or bonuses or whatever. Rroyce10 explain to me why it mainly effects new car deals. Thanks in advance.

sdawson713 · January 2002

Yes I am. Hows everything over in Princeton?

rroyce10 · January 2002

....... New cars can be replaced with a .."click"..

Clean, low mileage, nice used vehicles are a commodity that's hard to find...

Whether you are lookin' at a clean 3 series BMW or a super nice Navigator ... will a dealer discount it.. Yes, will he give it away at the EOM.. No --- unless he has had for 5/6 weeks.

Terry.

abtseller · January 2002

You can certainly try to guess the markup on the car if you'd like, but the range will swing wildly from one identical car to the next. Since we all know that the dealers don't make much (if any) on new cars, you have to figure that used cars are where a dealer will try to hold some gross profit. Still, on a common auction car (like a 00-01 Camry) we'll let them go for a grand over without too much of a struggle, but a Sequoia/ Suburban/ Avalon/ 4Runner....no thanks. We have to earn those commission checks on something, and it isn't on mini deals. I never understood why some of the 1-2 year old cars were as expensive as new cars, and I certainly don't know how they sell, but many of them are used in specialty financing situations. Another thing to consider is that on certain certified used cars, the warranty on them is stronger than the factory warranty on a new car, so that may explain it also.

Ed

jonbgood · January 2002

No offense taken. I appreciate your insight. This is a fascinating industry to me. I sell insurance - it sure would be fun selling something people enjoy talking about. Too bad you can't sit in an insurance policy and smell the leather. I'm sure as I keep learning I'm going to ask a lot of stupid questions.

leomort · January 2002

Seen you mention a few hot used car sellers. What are some other hot used car sellers?

Leo

im_brentwood · January 2002

I agree with abtseller.

All I do are used cars. Will I do a quick deal to make $800-1K or even $500?

Depends. If the customer has cash in hand, gives me a deposit, and I can deliver it the same day? Sure.

As a rule, some cars I'll be a tad greedy on. Clean older Jags are just too darn tough for me to find to give away, ditto rare stuff... XJRs.. NICE 560SELs, 560SLs.. etc.

I usually shoot to make $2K a copy, but I just lost $1,500 on a Honda that had been in inventory WAY WAY WAY too long.

Right now I have a couple of vehicles that are 40+ days old. They GOT to go and I'll gladly take cheap deals on them.

Meanwhile, yesterday I bought a perfect 1988 560SL with 48K miles. No way will I give that car away cheap.. I may even keep it myself

Bill

abtseller · January 2002

Audis, VWs, Trucks, SUVs, (Toyotas, Xterras, Sequoias), Certified Corollas, Camrys, Wranglers, 4Runners. Generally, anything that is a hot seller as a new car will carry over to a hot selling used car (current body styles).

Ed

rbrenton88 · January 2002

Got private email? I have some stories for ya.

isellhondas · January 2002

How a retail customer can feel that knowing a merchant's costs of goods is any of his/her business.

Instead of concentrating on the VALUE of the car...to them, they instead will fixate on what is a "fair" profit over what the dealer paid. It drives some customers nuts because they can't find out what we may have paid for a car!

I mean...the car either represents a good value for the dollars paid or it does not.

I once had a customer admit to me that he had been looking for six months for the EXACT used car we had. He admitted that it was perfect. He even said he thought it was priced right. When I refused to tell how much we paid for it, he walked!

He did return two days later....alas, It had been sold. By me no less!

WHY??

rbrenton88 · January 2002

Maybe you have a mannerism that suggests you are about to clean up if the guy agrees to your price?

Maybe you grin wildly and make snuffling noises while rubbing your palms together...unconsciously.

The guy sees that and gets cold feet.

leomort · January 2002

no domestic named? LOL

Figure the 4Runner demands a premimum. Was thinking that the Tacoma would catch a break on the used market.

Leo

abtseller · January 2002

right about domestics...I'm trying hard to think of something here. I suppose a 1-2 year old Tahoe or Suburban could be a premium vehicle, but I think I've only seen a couple of them in the last 6 mos. I know that the trade in drops like a rock in that time frame. The Tacomas hold their own here, IF they're 4x4s. I can't think of a "hot" domestic used car. We sell Chevys new, but mostly trucks and SUVs. They're not beating down the doors for sedans, the Corvette is an exception, tho. Don't get many of those back used, either.

Ed

sdawson713 · January 2002

sdawson713@hotmail.com

im_brentwood · January 2002

THe other thing, as Isellpoints out...

Is what a good price for said car is.

Examples...

I have a 1995 Camry LE with 95K on it that I have over $6,500 in (PLEASE PLEASE dont ask..ugly story).

So.. what's a fair price for THAT car? IMO, fair retail for it is about $6,500 or so. I'll sure as heck never get $8,500 or whatever for it.

Another car I have... 1997 Jaguar XJ6. 65K miles, Jade Green,very clean, h/k sound, no paintwork..etc... I made a smartaleck bid on the car (I didnt need it) and I got it.

I own that car for just under $12,000

What's a fair retail price for that car? It isnt $13-14K.. car's just worth an awful lot more than that.

Point is, concentrate on what a good price is for the car you're trying to buy. If the dealer is beyond buried in it, too bad for him/her. If they own it for WELL under market, such as that Jag I mentioned, does that make it worth less?

Hope this doesnt come out as being a wisealeck...

Bill

amazon · January 2002

Does the Ford X-plan work for used Volvos?

im_brentwood · January 2002

Nope.. Not on any used cars...

Bill

jonbgood · January 2002

I'm semi interested in buying a new 2001 leftover Mazda Millenia Premium Sedan. I know Mazda is offering $4000 rebate on this model. My question has to do with how much under invoice (before rebate issue) should a 2001 car like this be bought for after 12-31-01? I've heard of people getting incredible deals on this vehicle even before 12-31. Any ideas?

audia8q · January 2002

Unless the dealer has a whole bunch of inventory I would not expect much under invoice.
The big incentives for the dealers to move the units ended on 12/31/01.
The Mellenia is great car and the huge incetive along with a dealer disount gives you alot of car for the $$$.

Rich

jonbgood · January 2002

'01 cars - suddenly end on 12-31 when there should be more incentive than ever to get any 01s left out of inventory? If anything - I would have thought the incentives would increase on the 01s.

amazon · January 2002

Thanks. Then, can you tell me what the price is for a base V70 with manual tranny under this program? All I know is that it's 4% over the A-plan price.

CarMan@Edmunds · January 2002

Jonbgood, what vehicle are you specifically interested in purchasing? Many manufacturers still have incentives on 2001 models or have paid their dealers for any '01s left in inventory as of a certain date. If you let me know what you are looking to get, I would be more than happy to fill you in on what I know about its current incentives.

Car_man
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jonbgood · January 2002

I'm specifically looking @ Mazda Millenias. I know the '01s AND the 02s have $4000 cash back. My question is that doesn't it make sense the dealers would do something in addition to the $4k back on the 01s? I would think that they would substantially discount the 01s more than that to get rid of them. Thanks.

dusti · January 2002

this car - like none other - is a black hole. Just look up the Millenia's resell value over the past few years. I'd reconsider buying this car, but if you dead set on it, i'd sure wouldn't make the first offer.

mvargo1 · January 2002

However if you plan on keeping the car it is a lot of car for the money

audia8q · January 2002

because alot of the incentives that ended on 12/31 were incentives that were not related to that car specifically but to sales and CSI as a whole for the year. The factory set objectives for the year are always high and the last week of the year can often make or break the bonus. Which can amount to tens of thousand. I'm not under that gun any longer and the incentive to take a really short deal or even a loser vanished. In december I was taking deals below invoice.

BTW:...here in the northeast the 2001 and 2002 millenia have the same cash incentive as of yesterday.. One is dealer cash and the other is customer cash

Rich

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