Schpark Posted December 15, 2014 Share Posted December 15, 2014 (edited) @Schpark, no problems with that, me I'm more about the overall relationship, Ive got close to 30 year customers that I would crawl over hot coals for should they have an issue, if they decide to shop and get a better price, I do what I can, however $500 equates to $8.33 a month @ 0% financing, so like I have said, depends on what's important to the buyer...there's a HAPPY compromise somewhere, otherwise it can be one of the most painful self induced procedures known to man.... I had a relationship with a salesman that since retired so I had to find a new one. My method gave me an idea of how each dealership behaves and I am happy with my choice. I will give them the first shot for my next purchase. They did not try the monthly payment scheme or say come on in and lets see etc. They answered the question I asked and provided prompt responses to any clarifications I requested. They did not try to steer the exchange which was refreshing. All I need from the dealers is to give me their price. I can determine on my own whether to take the 0% or rebate etc. I understand not everyone is like this. For me $500 is not negligible. Edited December 15, 2014 by Schpark Quote Link to comment Share on other sites More sharing options...
Deanh Posted December 16, 2014 Share Posted December 16, 2014 you kinda missed my point, I just used the $500 as a hypothetical number. my point was how much do you value your time, if it takes you 1 1/2 weeks to save that $500 if its worth all that aggravation then so be it, its an individuals choice....and a major part of a vehicular transaction now is more about convenience than outright price....how quick can I get in and out?... Quote Link to comment Share on other sites More sharing options...
Schpark Posted December 16, 2014 Share Posted December 16, 2014 I had it worked out before I stepped into the dealership. And as I stated I went with their first offered price. Can't get any quicker than that. 1 Quote Link to comment Share on other sites More sharing options...
Deanh Posted December 16, 2014 Share Posted December 16, 2014 applause....I see way too many spending WAY too much time thinking theres something a few dollars better out there, and ultimately turn their experience sour.... 1 Quote Link to comment Share on other sites More sharing options...
ironhorse Posted December 16, 2014 Share Posted December 16, 2014 Many step over dollars to pick up pennies. A straight out vehicle purchases without trade in,payoffs,or bad credit are pretty cut and dry. When you involve variables like I mentioned above, it makes the water a little more murky. 9 times out of 10, when a car deal goes off the rails it's usually involves their trade,not the price of the new one. Quote Link to comment Share on other sites More sharing options...
akirby Posted December 16, 2014 Share Posted December 16, 2014 And people just don't understand wholesale vs. retail prices. If the dealer gave you retail value then they wouldn't make any money. And since you can go to the auctions and buy all the vehicles you want wholesale there is no reason to give much more than that for a trade-in unless it's a hard to find vehicle. 2 Quote Link to comment Share on other sites More sharing options...
ironhorse Posted December 16, 2014 Share Posted December 16, 2014 The retail vs wholesale issue is always a problem,and that is where the public struggles when purchasing a vehicle...that is when they lose confidence and become jaded with the process. I have lost car deals because the dealer down the street was "giving me more trade in"...even though my bottom line price was less. All they judged the deal on was what they are getting for their vehicle...that happens more times than you think. Quote Link to comment Share on other sites More sharing options...
akirby Posted December 16, 2014 Share Posted December 16, 2014 The retail vs wholesale issue is always a problem,and that is where the public struggles when purchasing a vehicle...that is when they lose confidence and become jaded with the process. I have lost car deals because the dealer down the street was "giving me more trade in"...even though my bottom line price was less. All they judged the deal on was what they are getting for their vehicle...that happens more times than you think. That also drives me nuts (but probably not as much as you for obvious reasons). They also completely ignore rebates and doc fees when they compare prices. That's why I prefer X plan - the only variable is the trade-in value and I don't expect more than wholesale. I also understand that dealers and manufacturers need to make a decent profit ( and deserve to as well) to stay in business. It's amazing that a car dealer makes less profit on the sale of a $30K vehicle than Best Buy makes on a $3000 TV. Quote Link to comment Share on other sites More sharing options...
ironhorse Posted December 16, 2014 Share Posted December 16, 2014 (edited) Amazing...not really....you know the cost of a $30,000 vehicle,you don't know the cost of a $3,000 TV. That drives the profit DOWN... Doc.fees,warranties,life insurance,trades is why dealers can be profitable on the new car side Edited December 16, 2014 by ironhorse Quote Link to comment Share on other sites More sharing options...
akirby Posted December 16, 2014 Share Posted December 16, 2014 What's your opinion on dealers selling new cars below dealer invoice with minimal doc fees and no extra fees or trade-ins? Are they making enough in holdback and other incentives to make money or are they just looking to make it up on service and used cars? I've always said that these dealers were making profit elsewhere either on the financing, trade-in, add-ons, insurance. Quote Link to comment Share on other sites More sharing options...
fordmantpw Posted December 16, 2014 Share Posted December 16, 2014 Doc.fees,warranties,life insurance,trades are the only way dealers can be profitable on the new car side You know, that is the big rub for me. I understand making a profit, but is it really necessary to completely rake the unsuspecting customer over the coals for the warranty, paint protection, interior protection, etc? When my mother-in-law purchased her new Escape, I negotiated a price of $14,xxx difference with her '09. I told her not to buy anything extra because I knew they would stick it to her. Well, they got her for extended warranty, life insurance (even though she told them she was going to pay it off after her first payment to FMC), paint protection, etc, all because they knew she couldn't understand what was going on (she's rather blonde, though she isn't a blonde). It added nearly $3k to the price...over 20% of the difference! So, I told her to call and cancel all that because the prices were outrageous! Over $2k for a warranty that I can buy all day online for < $600. They gave her the spiel about 'we won't accept that warranty' and I said, 'uh, yeah they will if they want any service business...it's an actual Ford warranty.' I don't have a problem with making a profit, but charging over 3x the cost I can get it for elsewhere is just ridiculous! That's the crap I have a problem with! They lost ALL the profit on the goodies because they got greedy and tried to make too much on them. Quote Link to comment Share on other sites More sharing options...
ironhorse Posted December 16, 2014 Share Posted December 16, 2014 Fees are a funny thing...the government requires dealers to protect customer information,put systems in place to identify potential ID theft or fraud, guarantee title,and handle bank payoffs...and many other things. Banks and real estate transactions have many fees...they charge fees to check your credit in ADDITION to other doc fees. What is a reasonable fee? Normally most other sales absorb it in their profit,but if the margins are slim,and known...they can't be absorbed. Selling below invoice without any help from other things is very risky...your overhead has to be low,low,low to even attempt below invoice pricing with no other ways to produce profit. Quote Link to comment Share on other sites More sharing options...
ironhorse Posted December 16, 2014 Share Posted December 16, 2014 I have a question...what is a fair profit on a Focus? What is a fair profit on an Explorer? What is a fair profit on a F150? Fair is between two parties that has some similance of trust. If we agreed on a $600 profit on a Focus,would you balk if another dealer called you and offered you the car for $500 less? Quote Link to comment Share on other sites More sharing options...
fordmantpw Posted December 16, 2014 Share Posted December 16, 2014 Fair is whatever is agreeable between the two parties. I think fair profit varies between model, based on demand, whether the vehicle is purchased off the lot vs. ordered, etc. It also depends on the customer. Some are much higher maintenance than others. Typically, when I purchase, I don't need anything from the sales person other than what is required to plug in the order and sign the papers. I don't need you to show me how to start the vehicle, use the A/C, MFT, etc. Not to mention, I normally know more about the vehicle than the sales person due to my extensive research. If I could order straight from Ford, I would. Fair for the dealer has to be enough to cover the costs for the time of the sales person, the overhead costs, the flooring costs, etc. If I'm shopping off the lot, I would expect the price to be higher since you have to cover your inventory. If I order, I would expect the price to be less since you know that vehicle is sold the moment it hits the dealership. If we agreed on $600 profit, then no, I wouldn't balk if another dealer called and offered it for $500 less. I may kick myself, but once we have agreed, a deal is a deal. I am true to my word. In reality, if we agreed, then I am probably happy with the deal and that's really what matters. If both sides are happy, then it's fair. 2 Quote Link to comment Share on other sites More sharing options...
Deanh Posted December 16, 2014 Share Posted December 16, 2014 @akirby....exactly how much profit in financing g is made at 0%, 1.9, 2.9......when if from the factory CANNOT be adjusted?....and believe me Ive seen consumers arguing we were making money at 0% Quote Link to comment Share on other sites More sharing options...
Deanh Posted December 16, 2014 Share Posted December 16, 2014 Ive lost a few only to call back and find out if they had just called the payme ts would be lower by $20 or so a month even though the transaction price was slightly higher....so whats cheaper paying $10000 for an item with payments of $250, or $10500 with payments of $225...? its ironic to me the hot-buttons on some transactions, most likely its always the "selling price" ( don't read the fine print ) but some are stuck on rate ( ie 0%, however sometimes theres $4000 in rebates with 3.99 or similar through Ford where the payment is cheaper ) some on trade in value etc etc.... Quote Link to comment Share on other sites More sharing options...
ironhorse Posted December 16, 2014 Share Posted December 16, 2014 (edited) Deanh, that is all caused by mistrust,perpetuated over years. The public, dealers AND the factory is culpable. everybody wanting an edge,and our cost of our product out there for everyone to shoot at. Pricing pressure is a DIRECT result in our cost(s) known and manipulated. As I said before trade values are usually at the root of most dealer/customer negotiations. Payments,rebates and payoffs figure into it. Buying a car is not like buying furniture,real estate, or most other high ticket items. You don't usually trade your bedroom suit that you are still making payments on to another bedroom suit or a dining room set. I rarely see people "trade" their house to Century 21 for another one. Edited December 16, 2014 by ironhorse 1 Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted December 16, 2014 Share Posted December 16, 2014 What is a reasonable fee? When people gripe to me about the doc fee, I tell them they'd be paying it even if they didn't know it was there. As far as a 'fair price'? In terms of used cars, something in the vicinity of retail. If you can't stay in business without trying to pressure me into your inflated list price ("this is really low miles!!" "one owner!!" "Super clean!!!!!") or tacking on a pile of worthless add-ons, then you shouldn't be in business. Quote Link to comment Share on other sites More sharing options...
Deanh Posted December 16, 2014 Share Posted December 16, 2014 that said Rich, what is being charged to get vehicles to Certified Pre Owned status, puts the vehicles costs above Retail Kelly Blue Book sometimes, FORGET about being in relation to wholesale... Quote Link to comment Share on other sites More sharing options...
pictor Posted December 16, 2014 Share Posted December 16, 2014 I recently investigated the purchase of C Max at a local dealer. Based on the listed price after incentives and the dealer linked Bluebook and Blackbook estimates for the trade estimates (roughly the same) my wife and I had a strike price in mind. Well, it turned out we weren't eligible for two thirds of the incentives (we never finance) and their trade in price for the car was half of the trade in value estimated by the links on their website. This is what causes the lack of trust on the car buyers side. I know it is complicated with the plethora of incentives out there but we were off by $10,000 based on the info I received from their web site. Caveat Emptor Quote Link to comment Share on other sites More sharing options...
ironhorse Posted December 16, 2014 Share Posted December 16, 2014 (edited) If you don't list all "available" incentives on your website,you are passed over in the buying process by the customers. Many incentives are available only to finance customers,or customers with competitive makes,or loyalty incentives...rarely a customer will qualify for all incentives. But what do you do? Do you only advertise the price using only the minimal incentives and risk being passed over because your internet/true car price is 4000 more than your competition? Now if you list all available incentives,and the customer inquires via email/phone or text...now you have to get down to the business of determining their "real" incentives....that unfortunately creates mistrust and credibility issues,because the customer expects that they should qualify for all the incentives..since it was on our website. Edited December 16, 2014 by ironhorse Quote Link to comment Share on other sites More sharing options...
Deanh Posted December 16, 2014 Share Posted December 16, 2014 (edited) @pictor, not to be devils advocate, but Ive yet to have someone stand up opposite my desk and state "Im sorry but that's WAY too much for my trade, you should cut that back ". I don't think ANYONE is happy when given a trade appraisal, because of that I regularly refer clients to CarMax as their first stop, that way at least Im NOT the first BAD guy..... Edited December 16, 2014 by Deanh Quote Link to comment Share on other sites More sharing options...
akirby Posted December 16, 2014 Share Posted December 16, 2014 Agreed on advertising incentives. It's not good but if one dealer does it then they all have to do it or risk being completely ignored by some buyers. Same with low lease payments with high down payments. There should be a rule that all leases should be advertised with either the same terms (mileage and down payment) or with at least a maximum value. Advertising a 36 year lease with $3600 down is like deducting $100 from the monthly payment (roughly). On a $199 payment it really means you're paying $299. The only issues I have with doc fees is that they are not named correctly since that money does not go directly to documentation preparation and filing but is simply additional profit AND the fact that they are not usually disclosed up front and are added at the end as an afterthought which most people just take for granted and assume they have to pay and that everyone charges the same like tag, tax and title fees. With such fees as high as $800 it makes a big difference in the final price and is misleading. Disclose it up front and keep it reasonable and I'm ok with it but still don't like it. As for reasonable profit - I start at actual dealer invoice as the bottom where the dealer still gets the holdback. $0-$500 over invoice is reasonable for low demand or high supply vehicles especially if they're ordered. $500 - MSRP can be reasonable for vehicles in short supply/high demand. But ultimately it's up to the dealer to set the bottom price and as I stated some seem to be willing to sell vehicles at a loss or break even just to get a sale so it's tough. I always use X plan so I never even discuss price with my salesman. Just tell him what I want and he gets it. We only negotiate the trade-in. Quote Link to comment Share on other sites More sharing options...
Deanh Posted December 16, 2014 Share Posted December 16, 2014 @Akirby, that would be great if all cars were ordered the same way and had exactly the same MSRP's...crazy convoluted business, A, X , Z , D plans I would take all day.... Quote Link to comment Share on other sites More sharing options...
silvrsvt Posted December 16, 2014 Share Posted December 16, 2014 A, X , Z , D plans I would take all day.... Whats the commission normally on those plans? I've always heard the dealer gets X amount back from Ford on each sale? Quote Link to comment Share on other sites More sharing options...
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