2010 invoice pricing @ edmunds

I wonder, how much money is saved by doing this? If it's a few hundred dollars, some people would say it's not worth it and will pay the few extra bucks and be done with it. If you're talking about saving thousands, then you might be on to something.

 

In the end I have been happy with every car deal I have made over the past 20 years or so. I have had to walk several times, but usually we've come to terms without any fuss. The most I have paid is MSRP+Dest Chg for a hot new car with waiting lists (wife had to have an Audi TT when they first came out), the least was $150 over invoice (Volvo 850 Wagon) by buying as late as possible in a model year.

I'd be more than happy to buy a 2010 Prius IV at the midpoint between invoice and MSRP - more than $500 dealer profit.

What really puzzles me is how far apart $ dealers have been each and every time, all within 30 miles of each other. I am not at all confrontational no matter what the dealer does, I realize I'm not going to get the best deal by picking a fight. I usually go to about 3 dealers, fewest was 2, most was 4 (I am not going to every dealer within 200 miles). Last car they were $1,600 apart on the exact same car, just different colors. Before that $1,500, $500 & $800 respectively. And in each case the "high" dealer would not budge. I have never gotten a price without buying a car from a dealer (I don't negotiate with the intent of not buying from someone), but I have walked away several times thinking 'they must think I'm a tire kicker for some reason.' I guess I'll never know...

 

The logical reason for that (not saying it is the right way) is due to certain allocations and how the process is worked within toyota. If I know that I am only getting 5 prii in a given month, I better hold gross and risk the sale. The next dealer may be getting 15 prii, and therefore, can ease up a bit on the pricing. Because our allocation is based on the last 180 days of sold units, it takes a LONG time to build it up if you are not forgiving on your pricing. However, the long term, smart solution is to sell as many as you can, therefore you get more cars, therefore you can be lax on your pricing. That in turn will build up your service business, repeat and referral customer base, and in the grand scheme of things, make you much more profitable.

Tortoise or the Hare...

 

Interesting, never dawned on me, but it makes perfect sense.

 

I will go the extra mile and then some for a customer that comes to the table with this in mind. Call me in a year with a dent in the door? I'll pull it for free. Daughter needs to buy a Corolla? Invoice, no questions asked.

After 5 years of sales, there are customers like you that I will bend over backwards-for.

 

Deadphish, aren't you in the business?

And I agree Jon. The more cordial a customer is towards me and understanding that a dealership needs to make a little bit of profit, the more I will help them when there is a problem. Now or far down the road.

 

I've purchased 3 new prii since 2005, all the same way, and everyone seemed happy.
It should save you a lot of trouble/hassle.
After doing the research I email some local dealers with the pkg desired, the color or colors acceptable, and the price I will pay. Most importantly I let them know that I will come in immediately and buy the car (gave them my cell number).
Certainly not all respond. But I only need one.
In 07 we bought two that way a month apart. Interestingly when I called the first dealer/salesperson back saying I wanted another--everything the same except color, they would not do it. So I sent the email and another dealer did a trade and I bought the car. Was very happy with both stores.
Two things.
1. If no one responds your price is not right for the market.
2. Be ready and able to go purchase the car when contacted.

Hope this helps someone.
Carl

 

Malibu,

What % of profit have you typically paid in your scenarios (this is of course once you've derived the true cost of vehicle {invoice - tda - holdback})?

 

Just a point of clarification: TDA is a fee, not an incentive. You subtract incentives and holdback from the "invoice" to get the dealer's true cost. You don't subtract fees. In fact, many dealers will expect you to pay those fees. I ignore the fees altogether.

As for percent profit, it just depends. Some say 3% (a bit low in my opinion, because I'm refusing to pay any fees, some of which may be legitimate). Others say 5%. There is no magic number. It all comes down to what a dealer will accept given current market conditions. Float your offer to a lot of dealers. Don't take rejections personally. It's just business. Work with the internet sales people. Easier and cleaner for all involved.

 

Lottamoxie.
No set %. In 07 it was right around invoice price.
Obviously it's a very fluid situation.
I found an interesting document when I was researching the car. I clicked on a car in a dealers inventory and this is what came up. (see attachment).
Carl

 

side story - some dealers just unrealistic/crazy

Absolutely. Dealers have to make some profit otherwise they're all going to go under.

Although this wasn't for a Prius, back in ~June 03, I looked around for a new Nissan 350Z. It was near the end of the model year and pickings in terms of options were getting slim. One dealer kept trying to justify MSRP (ok at the very beginning of the 1st model year: 03 but NOT at the end), how profit was a good thing, how the car would go UP in value, blah blah. I couldn't believe it.

I called the dealer where I had a good experiencing buy an 02 Nissan Maxima. He told me that 03 pickings were slim and that if I wanted an 04 when they came out, it'd be the same price and he was willing to sell for $500 above invoice. This was well below Edmunds TMV, so you could guess who I went with.

 

GST and GET are useless middle-men. "Have to make a profit" my bu**

 

Jabber,

From my POV, the problem with your defense of dealer profit is that it is one-sided. You expect that each car sale will profit the dealership, but do not limit how much the dealership screws the unsuspecting customer.

Sorry, you cannot have it both ways. Live by the sword, die by the sword. Market adjustments are a two-way street.

 

Personally - I've felt for many years - wish purchasing a car was like buying an exclusive item at a chain store. A no-haggle set price. In general, same cost nationwide. Sure, sales (and possibly price increases) would pop up now and then, but be driven by the general national market. Since new vehicle prices are same, dealers would compete by quality of sales / service / reputation. And - the dealership / retailer would make a satisfactory profit from the fixed price sale, and still market their used car inventory.

So, customer satisfaction and volume would be key. Perhaps sales reps not commissioned (it's a pleasure going into a store like Best Buy knowing this and interfacing with the person on the floor). All this would reduce the stress and game playing -on both sides. I know...this was tried at Saturn dealers - and look where they are now. But before GM dropped the ball on them - this tactic was a hit with consumers.

All this said - perhaps this sea change will happen the day after world peace comes....

 

Yeah there's some great articles out there about why Saturn failed....it wasn't a bad concept...GM just didn't support it enough!

 

I can understand your point. However, the times of a customer walking in and not knowing a single thing about the pricing are long gone. Interesting statistic: 93% of everyone that walks into a dealership has done some research on the pricing before stepping foot on the lot. So the days of people walking in and getting screwed are fast becoming long gone. As a matter of fact, if I told you what the average dealership makes on new cars over the course of a month, you would be shocked at how low it really is.

 

I might be surprised, but it's not my concern. I care about dealer profit, about as much as they care about me getting maximum value for my hard earned money. When is the last time a dealership sat down and said: "let's make sure that our recommended maintenance schedule only offers the manufacturer proven high-quality items"?

Off-hand, I'd say never. I avoid the Toyota dealership in town like the plague. On the other hand, we only take our Subaru to the dealership because a fellow who works the service front desk understands the car intimately, and gives the best customer advice I can imagine. If the dealership knew they would probably fire him.

Frankly, dealers exist to push discretionary spending. To the extent that a car is a commodity, dealers are a useless extra expense. In a similar vein, dealerships for people like me offer little extra value. I bought my Prius through email, and the dealer function was to wash the car and take the check. How much is that worth ?

Glad to hear it. About time for the shoe to be on the other foot, eh ?

 

i think u guys are being a bit hard. we all work to make money, to keep businesses open. car dealers need to make money to pay the bills. they are not leeches, not all of them, just like all wine reps are not leeches, just some of them (me excluded)

Do your homework and get the best price u can respectively. There is one delaer here in wilsonville, oregon that has one price and I will look there. msrp. I am ok with that but not above. That is my comfort zone. Find yours but be nice. We all need to feed our families

 

I do appreciate your opinion. But, to say that dealers are a useless extra expense is a bit off. This applies to a vast majority of people lookking for a vehicle: Not everyone is as well informed as you may be about a vehicle, or their choices. Without salespeople that take the time to study the product, have an unending thirst for knowledge so when they open their mouths it makes sense to the customer, most people would be lost.

When you walk into Best Buy for a new TV, do you ask any questions at all? Do you study the picture quality (even though it will be completely different in your own living room)? Hell, I am a reasonably intelligent guy with an above average IQ. But I will never claim to say that I know everything about every subject. Not even close. There are times when I need to ask questions and can appreciate a good salesperson that has studied not only his own product, but can give factual information about the competition. Making sure I have made an informed decision is more important to me than making sure someone doesn't make an extra $100 profit.

But that is just my style.

Exactly. There are some real a--holes in my business as there are in any business. Do some homework, but understand that I am not going to give you 5 star service when you treat me with as litte respect as possible. But I don't only give 5 star service to the people that I have a nice commission on either. Example: Customer bought a 2009 Prius from me. She had a stroke a few years ago, and her short term memory was greatly affected. She brought the car back to me no less than 5 times to go over the operation of the wipers, headlights, etc. Very basic info that most people grasp after being in the vehicle for 15 seconds. But she had a problem remembering these particular items. No problem. She bought an expensive car (to her), and I spent at least 7 hours after the sale over numerous occasions to make sure she was comfortable. My total commission: $50. Break it down from start of her walking in the door until she was comfortable with her car and it would be over 10 hours. That means less than $5 an hour. Did I complain? Absolutely not. She still received the 5 star treatment. Have I had a customer walk in only to have them leave 1 hour later and have a commission of $500? Of course. I can tell you which one happens more often though

So not everyone in this business is a jerk looking to make a $1,000 commission on every sale. Not to say there aren't those people, but they are few and far between now. Like Winebuff said, we are just looking to make a decent living and have a comfortable life.