2010 invoice pricing @ edmunds

Originally, in 1969 (or thereabouts), GST was really a dealer group. Think of it as the same owner, but with many dealerships. I think they had 10-15 dealers. As toyota grew in demand, they branched off and sort of took over the entire region by guaranteed purchase of the product through toyota and passing them to every dealer in the zone. In the many years since then, GST has become the middleman for toyota in the 5 states (TX, LA, AR, MS, and OK).

I learned this at one of the toyota meetings MANY years ago. The dates and numbers may be a bit fuzzy, but that is how it started.

 

the dealer invoice pricing is very interesting...

 

Toyota is actually very loyal to those that do them good. If you read the Wiki link from above it appears that Jim Moran taught Toyota a lot about marketing here in the US ( I wouldn't be surprised to find that the Wiki article was written by a JMA employee). In addition his SET region has boomed in sales and he along with GST are Toyota's two largest customers....by far.

As long as sales are increasing in the respective regions there is no reason for Toyota to go behind the backs of the two groups who put Toyota on the map in the South. This fits perfectly with Toyota's decentralized regional approach.

 

interesting, thanks.

 

I haven't had a chance to read this whole thread and all of jon_lancaster_toyota's posts yet, but Dealer holdback at Edmunds car price guide is an article on holdback that's been up for years. I was going to lookup Edmund's blurb on advertising fees and stumbled across this useful article that I'd never seen before: http://www.edmunds.com/advice/buying/articles/117494/article.html. It it also talks about registration fees (nothing you can do about that), doc fees, etc.

 

To second DeadPhish, yes, it depends and it depends on the car and supply/demand situation. zyonuf, it also depends on what incentives there are on the car, if any. For some (err... many cars now), there are incentives and if you take them (instead of taking say, special low interest financing), you can get those cars for below invoice and the dealer can still make a decent profit.

One can lookup incentives at Cars.com: New Car Rebates, Cash Back, Special Financing & Lease Rates and New Car Incentives and Rebates - Edmunds.com. (you'll need to change the zip code).

There are some that claim Edmunds TMV numbers are wrong, and in some cases, too high.

When I got my 06 Prius in January 06, there were multi-month long waiting lists everywhere. Paying MSRP back then was an ok deal. (I got mine for a few hundred under MSRP due to a some special pricing that the dealer had for employees of my company.) For most other cars, paying MSRP is foolish unless it's in super high demand vs. supply.

On a side note, as well all know, the US economy's in bad shape and US auto sales are also doing poorly. As background info, By The Numbers — Autoblog might help. Since Autoblog doesn't have April numbers up yet, see http://priuschat.com/forums/prius-h...-not-any-better-prius-sales-4.html#post841147.

 

According to that article, Toyota generally has a holdback of 2%. Does anyone know if that is accurate these days? I don't expect to pay at or below invoice, but I would like to know.

One thing that sort of bugs me is when the salesperson tells me what a great deal I bargained out of them. Of course, I doubt that they tell other buyers "Thanks for accepting such a lousy deal." Comments, sales people?

Roy

 

When of my personal favorites Roy. "Boy, you got such a good deal! You are taking food right out of my babies mouth!" That is one of the old salespeople that probably still wear plaid pants and a striped tie. Usually accompanied by a very bad toupee.

 

That 2% is still accurate. Toyota's holdback is 2% of base MSRP, not delivered MSRP.

 

Sorry I'm late on this one. I should read forward to see if deadphish has posted on this.

I remember the story being that SET & GST were the first distributoes and Toyota initialy needed them to get started with distribution in the states. As Toyota became successful they began distributing their own cars and wouldn't give out any additional private distributors. Since GST & SET were already in operation there was not way to remove them.

Certainly I wouldn't write this in a history book, but it's what I remember.

 

No offense to the good dealers on this site, but most of your fees are crap.

When I buy a new car, my offer is pretty simple. Invoice minus holdback minus incentives plus profit of a few percent plus destination charge plus tax/title/license. That's it. I don't play around with fees. If the fees are genuine, then the dealer won't make as much profit - but the dealer doesn't have to sell me the car. I shop around until I find someone who wants to sell me the car at the price I set. If no one is willing, I wait until someone will.

My no-haggle strategy also has some benefit to the salespeople. They don't have to waste any time trying to negotiate a deal. I make it real easy for them.

 

I LOVE this. LOVE.IT. This really is such a smart method. Someone either wants your business or they don't. The trick must be to wait until the model isn't *so new* and there is plenty of inventory and a desire/need to deal. And since you can find out all these numbers ahead of time you can pretty much walk in with the numbers you are willing to pay and save lots of time (or at least not waste your time or the sales person's time).

 

That is a great way of doing it. As long as you don't get mad at the dealership if they pass on your offer. Like you said, either sell me the vehicle or not. Simple matter of supply and demand to that particular dealer.

 

Perhaps one of the confusing points in the MSRP discussion is that some regions (or states within the same region) can differ on whether the universal destination charge of $750 is part of the MSRP. From Toyota's point of view, it isn't. From the perspective of the Attorney General of Illinois, it is. After all, if each car has that charge, and the dollar figure doesn't vary and isn't assigned to a state or municipal authority, then it is de facto part of the MSRP. Thus, in Illinois, at least, the Prius III may have to be advertised as having an MSRP of $22,750. This may also mean the destination charge could show on the sticker, but I don't believe it would show as an add-on to the MSRP.

Perhaps Jabber or other Illinois dealers could clarify. This could be a confusing point when folks are trying to say how much above or below MSRP they must pay.

 

When you say "holdback" here, do you mean the TDA charge?

That advertising/marketing fee is set regionally. In the Chicago region, it is set at 2%, with a maximum of $500 per car. The 2% is calculated from the "base model" for the car you purchase. That doesn't mean it is 2% of $22,000 or $22,750 for all Prius models, but only for the Prius II. If you are getting a Prius III, IV or V, then the charge of 2% is calculated by looking at the base MSRP for each of those models, leaving off the package charges and dealer/port add-ons. (BTW, no 2010 Prius has a base price high enough to cause the TDA to hit $500 in the Chicago region.)

If you ask a dealer for this information, they'll show you all of those charges as they appear on the invoice to the dealer. These charges have existed for a long time, but if you've never asked about it, you've never seen it.

 

Holdback and TDA are two different charges.

You are correct. TDA has the $500 cap, holdback does not. They both are 2%, but calculated in a different way. Holdback is calculated using the base MSRP before options and destination. TDA is base invoice before options and destination.

 

As Jabber noted they are two different items.

Holdback is what Toyota pays to the dealer principal to keep his store in business and to turn on the lights every day. It's normally a taboo subject to discuss on the sales floor. It's the owners money and it's often given up only on 'loss leader' vehicles in order to price them as low as possible.

The TDA fee is different it's a fee charged by the regional sales office to the local store to cover advertising both regionally and nationally. If you see a Toyota ad on TV that doesn't mention any dealer that's paid from the TDA fee. If you see the owner of a specific store on TV or on the radio that's paid out of his own pocket.

As noted above from two different perspectives the best way to buy a vehicle is to decide what price is acceptable for you personally and try to get as close as possible to that number.

But don't get mad if that price is not accepted. It's just business and the other side also wants to get a price that is acceptable. Realism needs to be injected here.

No one will get a giveaway price near invoice right after launch. At what point such a price might be available depends entirely on how the market reacts to the new model. In the case of the Gen 2 it was 2 years before near-invoice prices could be had!!! Then as fuel skyrocketed last year, the 5th year Gen 2's went back to selling for full MSRP. This is unheard of for a mass market vehicle in its 5th year of sales.

I sell them. Of my own choice I waited 3 yrs to get mine and then I had the choice of waiting in line like everyone else for the 2006's or taking the last 2005 on the lot.

 

Superlative concise input from an "insider".

It's difficult not to get into the "it's me against them" attitude when purchasing a car. But this type of information goes a long way to bridgebuilding.

Thanks so much - from a guy that will be on the Buyer side of the desk in a couple months....

 

Once again Deadphish, you are dead on.

I see too often that a customer has it set in his mind that he doesn't want the dealer to make a single penny. And is actually bragging that he won't pay holdback, TDA, or any other "BS fees" (heard that one on saturday). I asked him how he bowls. With a strange look on his face, I replied, "Because if we sold every car for no profit, we would have to convert the service department into a bowling alley." That made him chuckle a little, which was my point. After sitting down and talking to him, he agreed that it isn't a sin to have the dealership make a profit. But his mindset was, "Just don't let me get screwed". I showed him all the numbers, explained what every number was on the invoice, and told him that I would be making a small profit. $500 was not a lot of profit for a $30k vehicle. Especially when compared to his profit margin on his products that he sells.

Once again, the Me vs. Dealer reared its ugly head. But if both sides can sit down and calmly, logically, and ethically talk about the pricing, it makes it that much smoother. And everyone is happy in the end.

 

If you want a 2010 Prius, I would guess you'll be waiting for quite a long time, although maybe shorter with the deep recession we're in. And frankly, I'd bet you'll never get a Prius at a few percent over invoice minus holdback and incentives...