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Karfuno

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Beg to differ.... after the deal I'll fax you the sale receipt.

 

I have never paid $200.00 above invoice and never traded less than KBB.. and now Edmund's.

 

Anyone that gets less than full trade and pays a few hundered above invoice pluse rebates to include dealership kick back is a fool and the dealership is a thief.

 

Even at full sticker (which is pointless, 'cause no one pays sticker!), ther is about 7% dealer profit in the deal. That is a shoot from the hip number, before anybody humps up and starts calling foul. Lokk at any other retail markup, and you'l see everything from 200% on jewelry, to 300% on furniture, but if we sell a $35,000 vehicle for a coulple hundred over invcoice and pick up $800 in holdback (which is used to write down depreciation while the car is on the lot, by the way. Another cost of business you don't understand), I "make" $1000 on a high ticket car... And I'm a thief!?!? Boy, somebody must have shoved it up your ass and broken it off for you to hate dealers as much as you do. This isn't the first time you've had the mouthshits about us "terrible, evil dealers". Guess what, I sell my fair share of cars and work my ass off to do it.... And I ain't rich.

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Even at full sticker (which is pointless, 'cause no one pays sticker!), ther is about 7% dealer profit in the deal. That is a shoot from the hip number, before anybody humps up and starts calling foul. Lokk at any other retail markup, and you'l see everything from 200% on jewelry, to 300% on furniture, but if we sell a $35,000 vehicle for a coulple hundred over invcoice and pick up $800 in holdback (which is used to write down depreciation while the car is on the lot, by the way. Another cost of business you don't understand), I "make" $1000 on a high ticket car... And I'm a thief!?!? Boy, somebody must have shoved it up your ass and broken it off for you to hate dealers as much as you do. This isn't the first time you've had the mouthshits about us "terrible, evil dealers". Guess what, I sell my fair share of cars and work my ass off to do it.... And I ain't rich.

I'm loaded.......mojitos look just like Lime juice at work.....

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this thread is still about trade in values.

 

and if the dealer knows they can't sell a certain car at a certain price, they will lowball it or just not take it. Period.

I never low ball trades....a pi$$ed off customer will never come back....real numbers are the best, similar numbers from several sources underline reality...that and telling customer to call for a buy bid....

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I never low ball trades....a pi$$ed off customer will never come back....real numbers are the best, similar numbers from several sources underline reality...that and telling customer to call for a buy bid....

 

 

that and a little bit of honesty in telling the customer "look, I just can't move that car in this area for the price you want"

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Dealer Holdback

 

 

Dealer holdback is a complex system of payments made to the dealer from the car manufacturer which enhance the dealer's ability to stock his inventory with lots of shiny new models. The dealer finances his forecourt purchases through a bank or his dealership's finance unit, while the manufacturer likely will pick up the interest charges for the first 90 days a vehicle sits on the lot (the holdback, which can work out from anywhere from a few hundred dollars to a thousand or more).

 

If a dealer sells a car within the 90-day period, often they can bank all of the holdback (the full interest charge has been wrapped into the invoice or MSRP price of the car). The dealer pays the price of a new car -- the invoice -- to the factory when they order it, not when they sell it. If a car stays on the forecourt for just a week, the holdback can add up to serious profit for the dealer. Also note that, if the car has been sitting 90 days or more, all of the holdback has essentially been exhausted by the interest payments on dealer's initial loan to acquire the car.

 

Correction: The term is Holdback, not kickback.

 

Additional Info

Edited by mettech
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Dealer Holdback

 

 

Dealer holdback is a complex system of payments made to the dealer from the car manufacturer which enhance the dealer's ability to stock his inventory with lots of shiny new models. The dealer finances his forecourt purchases through a bank or his dealership's finance unit, while the manufacturer likely will pick up the interest charges for the first 90 days a vehicle sits on the lot (the holdback, which can work out from anywhere from a few hundred dollars to a thousand or more).

 

If a dealer sells a car within the 90-day period, often they can bank all of the holdback (the full interest charge has been wrapped into the invoice or MSRP price of the car). The dealer pays the price of a new car -- the invoice -- to the factory when they order it, not when they sell it. If a car stays on the forecourt for just a week, the holdback can add up to serious profit for the dealer. Also note that, if the car has been sitting 90 days or more, all of the holdback has essentially been exhausted by the interest payments on dealer's initial loan to acquire the car.

sorry Metech...holdback is not, and never will be a KICKBACK...it is part of the profit Margin it doe NOT assist in flooring costs ( 1% of MSRP paid every month after an initial gestation period...could be your 90 days, but not 100% on that ), and where was that quote postedfrom TTAC?????....and lets even shine a light on something....say the BS you just quoted is factual....what about the cars that sit here for 6 months,,,and finance reserve and FDAf?.....LOL!....sorry, you just fell in the deep end....and sincerely, no offense...but I won't sit here as some so called armchaior experts tout absolute rubbish....

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Dealer Holdback

 

 

Dealer holdback is a complex system of payments made to the dealer from the car manufacturer which enhance the dealer's ability to stock his inventory with lots of shiny new models. The dealer finances his forecourt purchases through a bank or his dealership's finance unit, while the manufacturer likely will pick up the interest charges for the first 90 days a vehicle sits on the lot (the holdback, which can work out from anywhere from a few hundred dollars to a thousand or more).

 

If a dealer sells a car within the 90-day period, often they can bank all of the holdback (the full interest charge has been wrapped into the invoice or MSRP price of the car). The dealer pays the price of a new car -- the invoice -- to the factory when they order it, not when they sell it. If a car stays on the forecourt for just a week, the holdback can add up to serious profit for the dealer. Also note that, if the car has been sitting 90 days or more, all of the holdback has essentially been exhausted by the interest payments on dealer's initial loan to acquire the car.

 

Correction: The term is Holdback, not kickback.

 

Additional Info

ahhh, Edmunds...always accurate as hell....I like the "invisible" quote...actually holdback is listed in its own box on every single invoice...........and as i tell customers that wish to "participate" in holdback, they are quite welcome if they own a franchaised dealer....
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Even at full sticker (which is pointless, 'cause no one pays sticker!), ther is about 7% dealer profit in the deal. That is a shoot from the hip number, before anybody humps up and starts calling foul. Lokk at any other retail markup, and you'l see everything from 200% on jewelry, to 300% on furniture, but if we sell a $35,000 vehicle for a coulple hundred over invoice and pick up $800 in holdback (which is used to write down depreciation while the car is on the lot, by the way. Another cost of business you don't understand), I "make" $1000 on a high ticket car... And I'm a thief!?!? Boy, somebody must have shoved it up your ass and broken it off for you to hate dealers as much as you do. This isn't the first time you've had the mouthshits about us "terrible, evil dealers". Guess what, I sell my fair share of cars and work my ass off to do it.... And I ain't rich.

 

Some people do pay sticker on certain cars/trucks.

 

% is not the issue. If I don't like the price, I'm free to leave and find another dealership if my bottom line is not agreed to.

 

There are rebates on vehicles that "some" dealerships will not disclosed to the customer.

 

It's not about the money,,, it's about integrity.

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Some people do pay sticker on certain cars/trucks.

 

% is not the issue. If I don't like the price, I'm free to leave and find another dealership if my bottom line is not agreed to.

 

There are rebates on vehicles that "some" dealerships will not disclosed to the customer.

 

It's not about the money,,, it's about integrity.

unfortunately Mettech...also an awful lot of mis-perceptions.....

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Some people do pay sticker on certain cars/trucks.

 

% is not the issue. If I don't like the price, I'm free to leave and find another dealership if my bottom line is not agreed to.

 

There are rebates on vehicles that "some" dealerships will not disclosed to the customer.

 

It's not about the money,,, it's about integrity.

oh, and rebates cannot be swallowed by delaers...they are there for customers...theres just ONE mis-perception I was talking about....oh, and the we are still making finance reserve at 0% interest rates....( how bout THAT doozie )

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that and a little bit of honesty in telling the customer "look, I just can't move that car in this area for the price you want"

 

That's what pissed off the first poster, and now he's crying on an internet forum about it. What people say they want, and what they do want ain't the same. Just look at the Auto Collection's glorious "no hassle pricing".

 

Some people do pay sticker on certain cars/trucks.

 

% is not the issue. If I don't like the price, I'm free to leave and find another dealership if my bottom line is not agreed to.

 

There are rebates on vehicles that "some" dealerships will not disclosed to the customer.

 

It's not about the money,,, it's about integrity.

 

 

A dealer can not keep the rebates for themselves. You are once again horribly misinformed, or just bullheaded and ignorant in your assumptions. If a dealer has an extremely overaged unit on the ground, at a certain point Ford will get rid of all the rebates on the car and give the dealer a "final pay" write down. If the dealer had that final pay, they could keep some of it as profit. A rebate goes directly to the customer, and you actually sign a rebate authorization form when you pick the car up. That form will make the customer aware of all incentives on the car.

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That's what pissed off the first poster, and now he's crying on an internet forum about it. What people say they want, and what they do want ain't the same. Just look at the Auto Collection's glorious "no hassle pricing".

 

 

 

 

A dealer can not keep the rebates for themselves. You are once again horribly misinformed, or just bullheaded and ignorant in your assumptions. If a dealer has an extremely overaged unit on the ground, at a certain point Ford will get rid of all the rebates on the car and give the dealer a "final pay" write down. If the dealer had that final pay, they could keep some of it as profit. A rebate goes directly to the customer, and you actually sign a rebate authorization form when you pick the car up. That form will make the customer aware of all incentives on the car.

snicker....I have NEVER had anyone on the opposing side of my desk say "I'm sorry, thats just way too much for my trade, i need less for it....."

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snicker....I have NEVER had anyone on the opposing side of my desk say "I'm sorry, thats just way too much for my trade, i need less for it....."

How often do you find people wanting to buy a new vehicle are impulse buyers that come in

unprepared and with no research on either their trade in or the vehicles they want to buy.

 

It's almost like they want to use the salesman as a research tool and get cranky

when the figures don't match their fantasy expectations.

 

I find most dealers are helpful and if they cant offer reasonable money for a trade

will suggest a good figure for private sale and a no trade price offer on the desired car.

If you're not in a hurry, that's the bet way to fly - oh and buy a vehicle other people will want.

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How often do you find people wanting to buy a new vehicle are impulse buyers that come in

unprepared and with no research on either their trade in or the vehicles they want to buy.

 

It's almost like they want to use the salesman as a research tool and get cranky

when the figures don't match their fantasy expectations.

 

I find most dealers are helpful and if they cant offer reasonable money for a trade

will suggest a good figure for private sale and a no trade price offer on the desired car.

If you're not in a hurry, that's the bet way to fly - oh and buy a vehicle other people will want.

trades are always an issue...quite often we will give 10 days for the owner to sell their car for their "theoretical" #...and honor our appraisal...guess what, the first offer they get from Joe Shopper is usually 3-4 k less than their preconceived idea and rather than deal with the hassle come running back to hand over the keys.....

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trades are always an issue...quite often we will give 10 days for the owner to sell their car for their "theoretical" #...and honor our appraisal...guess what, the first offer they get from Joe Shopper is usually 3-4 k less than their preconceived idea and rather than deal with the hassle come running back to hand over the keys.....

Nothing like harsh reality to sharpen the buyers focus, bet that technique saves a lot of arguments too.

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unfortunately Mettech...also an awful lot of mis-perceptions.....

 

Is the following infromation true?

 

"...Holdbacks Allow "Invisible" Dealer Profits

This holdback amount is "invisible" to the consumer because it does not appear as an itemized fee on the window sticker. For example, let's say you're interested in a Chevrolet with a Manufacturer's Suggested Retail Price (MSRP) of $20,500, including optional equipment and a $500 destination charge. Let's also say that dealer invoice on this hypothetical Chevy is $18,000. The cost of the car includes a dealer holdback that, in the case of all Chevy vehicles, amounts to 3% of the MSRP, or $600. (Note that the $500 destination charge should not be included when computing the holdback.) So, on this particular Chevy, the true dealer cost is actually $17,400. Even if the dealer sells you the car for the invoice price, which is unlikely, he would still be making as much as $600 on the deal (when his quarterly check from GM arrives).

 

Dealer holdback allows dealers to advertise attractive sales. Often, ads promise that your new car will cost you just "$1 over/under invoice!"

 

Almost all dealerships consider holdback money "sacred" and are unwilling to share any portion of it with the consumer. Don't push the issue. Your best strategy is to avoid mentioning the holdback during negotiations. Mention holdback only if the dealer gives you some song-and-dance about not making any money on the proposed deal when you know that isn't true.

However, the standard dealer holdback is not the only form of financial assistance provided to dealers by manufacturers. There are many other types of holdbacks and dealer credits that may be available from specific manufacturers at various times — some of which consumers may hear about and others of which are never disclosed to the public — but each of which can have the effect of reducing the net cost of a vehicle to the dealer. These include:

 

Advertising credits

 

Flooring assistance

 

Floor interest reserve

 

Floor plan allowance

 

Transfer balance

 

Wholesale reserve

 

Wholesale credits

Negotiate Using Incentives, Not Holdbacks

In addition, the dealer stands to reap further benefits if there is "dealer cash" being offered by the manufacturer on the car you are considering. In many instances you can learn about dealer cash in our Incentives and Rebates section. However, unless you know all of these other fees (and who does?), establishing the dealer's true cost can be frustratingly elusive. It's for this reason that Edmunds.com has established True Market Value® pricing that accurately reflects "what others are paying" by taking into account all of these fees. The Edmunds.com True Market Value Price® is the "bottom line" and what you really need to know in order to negotiate a fair deal. Check it out at: http://www.edmunds.com/tmv/new/..."

 

:reading:

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Is the following infromation true?

 

"...Holdbacks Allow "Invisible" Dealer Profits

This holdback amount is "invisible" to the consumer because it does not appear as an itemized fee on the window sticker. For example, let's say you're interested in a Chevrolet with a Manufacturer's Suggested Retail Price (MSRP) of $20,500, including optional equipment and a $500 destination charge. Let's also say that dealer invoice on this hypothetical Chevy is $18,000. The cost of the car includes a dealer holdback that, in the case of all Chevy vehicles, amounts to 3% of the MSRP, or $600. (Note that the $500 destination charge should not be included when computing the holdback.) So, on this particular Chevy, the true dealer cost is actually $17,400. Even if the dealer sells you the car for the invoice price, which is unlikely, he would still be making as much as $600 on the deal (when his quarterly check from GM arrives).

 

Dealer holdback allows dealers to advertise attractive sales. Often, ads promise that your new car will cost you just "$1 over/under invoice!"

 

Almost all dealerships consider holdback money "sacred" and are unwilling to share any portion of it with the consumer. Don't push the issue. Your best strategy is to avoid mentioning the holdback during negotiations. Mention holdback only if the dealer gives you some song-and-dance about not making any money on the proposed deal when you know that isn't true.

However, the standard dealer holdback is not the only form of financial assistance provided to dealers by manufacturers. There are many other types of holdbacks and dealer credits that may be available from specific manufacturers at various times — some of which consumers may hear about and others of which are never disclosed to the public — but each of which can have the effect of reducing the net cost of a vehicle to the dealer. These include:

 

Advertising credits

 

Flooring assistance

 

Floor interest reserve

 

Floor plan allowance

 

Transfer balance

 

Wholesale reserve

 

Wholesale credits

Negotiate Using Incentives, Not Holdbacks

In addition, the dealer stands to reap further benefits if there is "dealer cash" being offered by the manufacturer on the car you are considering. In many instances you can learn about dealer cash in our Incentives and Rebates section. However, unless you know all of these other fees (and who does?), establishing the dealer's true cost can be frustratingly elusive. It's for this reason that Edmunds.com has established True Market Value® pricing that accurately reflects "what others are paying" by taking into account all of these fees. The Edmunds.com True Market Value Price® is the "bottom line" and what you really need to know in order to negotiate a fair deal. Check it out at: http://www.edmunds.com/tmv/new/..."

 

:reading:

You posts make it sound as if a dealer is not allowed to make money by selling you a car. Do you walk into the grocery store and negotiate your bill at the checkout counter? Or do you lowball the local gas station for a tank of gas? I think making $600 on an $18000 dollar transaction is an insult to the seller. Especially when most goods are marked up 100% or more.

 

THE SIMPLE FACT IS DEALERS DO NOT MAKE MONEY SELLING NEW CARS! Think about what a dealer has to do. Cars are sitting on the lot an average of 90 days at this point in time. During that time the car needs to be maintained and moved around by a lot person(who gets paid a salary), it has to be washed at least once a week (usually by a service that hands the dealer a BILL for his services) and then it has to be prepped. Last but not least the salesman has to be paid. (usually no where near what he should) After all is said and done the dealer invests $18000 and 16 weeks later (the dealer pays for the car when it is built before it is shipped) he gets to net around $450. If my broker came to me with that deal for a stock I would think long and hard about it, with the amount of risk involved.

 

In what other business is the cost of the item posted on the internet for all to see and use as a buying tool? In what other business has a myriad of books and articles on "How to buy" their product? NONE! In what other business can a person with no clue of the market conditions in thier area tell the seller what their trade item is worth?

 

Go into any other shop on your local main street and ask the sales person for thier invoice on the item you are buying and see what they say.

 

The cards are stacked against the dealer.

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You posts make it sound as if a dealer is not allowed to make money by selling you a car. Do you walk into the grocery store and negotiate your bill at the checkout counter? Or do you lowball the local gas station for a tank of gas? I think making $600 on an $18000 dollar transaction is an insult to the seller. Especially when most goods are marked up 100% or more.

 

THE SIMPLE FACT IS DEALERS DO NOT MAKE MONEY SELLING NEW CARS! Think about what a dealer has to do. Cars are sitting on the lot an average of 90 days at this point in time. During that time the car needs to be maintained and moved around by a lot person(who gets paid a salary), it has to be washed at least once a week (usually by a service that hands the dealer a BILL for his services) and then it has to be prepped. Last but not least the salesman has to be paid. (usually no where near what he should) After all is said and done the dealer invests $18000 and 16 weeks later (the dealer pays for the car when it is built before it is shipped) he gets to net around $450. If my broker came to me with that deal for a stock I would think long and hard about it, with the amount of risk involved.

 

In what other business is the cost of the item posted on the internet for all to see and use as a buying tool? In what other business has a myriad of books and articles on "How to buy" their product? NONE! In what other business can a person with no clue of the market conditions in thier area tell the seller what their trade item is worth?

 

Go into any other shop on your local main street and ask the sales person for thier invoice on the item you are buying and see what they say.

 

The cards are stacked against the dealer.

 

 

Thank you. Well put, but he won't grasp it.

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The cards are stacked against the dealer.

 

 

sadly, 50 years of every buyer paying a different price has led to a lot of distrust in consumers minds.

 

Given the amount of information available out there, it shouldn't be this way anymore, but consumers think it is.

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Reagrding the whole issue of "Holdback" and floorplan financing... It actually started years ago because so many Dealers were unable to run their business profitably. It was a method of withholding profits that a Dealership might not realize otherwise. As for the suggested 90 days free inventory, it doesn't exist for either Ford or Lincoln-Mercury Dealerships. When Ford or Lincoln-Mercury Dealerships receive vehicles the so called "free" floorplan allowance is for 15 days only! After that, the Dealership is subject to all floorplan interest charges for every vehicle in stock that remains unsold.

 

Every Ford & Lincoln-Mercury Dealership is under a lot of pressure to reduce their inventory, regardless of how profitable they are. The whole purpose is to protect Ford & Ford Credit's liability in the event a Dealership closes and they're forced to take back inventory. Their view is that the fewer vehicles in inventory, the less their liability. A Dealership agreeing to this line of thinking will actually be often placed in a non-competitive situation and out of business. Unfortunately, it's an example of the staff at Ford Credit not knowing or understanding the business which extends to their decisions for customer financing on a daily basis.

 

Last year our Dealership fought for months to get 2009 Fusion allocation in order to get enough Fusion inventory to support a Fusion TV campaign. We were finally able to get the inventory and outsold every other Dealer in our Zone for 7 months based on our TV campaign. We have a higher profile on TV than any other Ford Dealership in the state. In the meantime, one of our biggest competitors, a Ford Dealer for nearly 75 years, went out of business. We've sold a lot of 2010 Ford Fusion Hybrid vehicles and are yet faced with Fusion inventory shortages because our sales rate is so high and yet we can't get factory allocation enough to maintain our sales rate.

 

Hope that this information helps from a Dealership perspective.

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sadly, 50 years of every buyer paying a different price has led to a lot of distrust in consumers minds.

 

Given the amount of information available out there, it shouldn't be this way anymore, but consumers think it is.

 

You are 100% correct. Therefore, to remedy the situation everyone should just pay the sticker price.

 

In the early fifties Henry Ford II was trying to outsell Chevrolet. So he flooded his dealers with cars they did not order. In order to move inventory the dealers started discounting the cars. Before this, discounting was unheard of. Everyone paid sticker.

Edited by partsisparts
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You posts make it sound as if a dealer is not allowed to make money by selling you a car. Do you walk into the grocery store and negotiate your bill at the checkout counter? Or do you lowball the local gas station for a tank of gas? I think making $600 on an $18000 dollar transaction is an insult to the seller. Especially when most goods are marked up 100% or more.

 

THE SIMPLE FACT IS DEALERS DO NOT MAKE MONEY SELLING NEW CARS! Think about what a dealer has to do. Cars are sitting on the lot an average of 90 days at this point in time. During that time the car needs to be maintained and moved around by a lot person(who gets paid a salary), it has to be washed at least once a week (usually by a service that hands the dealer a BILL for his services) and then it has to be prepped. Last but not least the salesman has to be paid. (usually no where near what he should) After all is said and done the dealer invests $18000 and 16 weeks later (the dealer pays for the car when it is built before it is shipped) he gets to net around $450. If my broker came to me with that deal for a stock I would think long and hard about it, with the amount of risk involved.

 

In what other business is the cost of the item posted on the internet for all to see and use as a buying tool? In what other business has a myriad of books and articles on "How to buy" their product? NONE! In what other business can a person with no clue of the market conditions in thier area tell the seller what their trade item is worth?

 

Go into any other shop on your local main street and ask the sales person for thier invoice on the item you are buying and see what they say.

 

The cards are stacked against the dealer.

 

 

The question is:

 

Why is it stacked against the dealer?

 

How did the market allow this to happen?

 

The consumer and the car companies made it happen, Poor dealerships not only screwed the consumer, but they also made the car company look bad.

 

Internet sales will fix much of the problem. From four dealerships, they sent me OTD price on their product I requested. I then took the car I'm trading in for the true trade in price.

 

The dealership that won the bid ordered my car yesterday.

 

BTW, there are many business and products that have to summit closed bids for their services or products to the consumer,

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