new car pricing

[gonefishie]

I believes there are a couple member that are in the car dealership industry. Where do I find info on holdbacks and factory to dealer incentives? The invoice price would be lower when holdbacks and incentives are figured in right? Example: if the MSRP is 31,800 and the invoice is 28,800. The dealer is actually paying less then 28,800 for the vehicle after incentives?

 

[aspeck]

Re: new car pricing

Very few incentives are unadvertised dealer incentives. The hold back, at least weith GM is 3%. However, the dealer does not get that back right away - the cost of the car to him is the invoice price. That is the price he has financed to have the vehicle on his lot. Most dealers do not even consider the holdback into the cost of the car because they look at it as part of the cost of advertising, floorplan, etc. That 3% covers the cost of those incidentals. If you are going to factor out the holdback, then you must factor in the interest paid for floorplan, clean-up, stocking, advertising, etc. So, keep it simple and let dealer invoice be dealer invoice.

 

[gonefishie]

Re: new car pricing

So based on your experience Aspeck. If my vehicle trade in value is 12,500, private party value is 15,100 and suggested retail value is 20,100. Can I get the dealer to take my trade in for 15,100 and sell his for the dealer invoice of 28,800 assuming his vehicle is not in high demand? He will still make a big profit even if he don't put my vehicle back on his lot and sells it at auction/wholesale right?

 

[aspeck]

Re: new car pricing

Not quite, but close.

Dealer invoice $28,800

Minus Used Wholesale $15,100 (Not sure which book the dealer uses - he will be looking at wholesale - what he can sell it at auction today)

Minus Incentives and Rebates

Plus Profit $ ? (What ever you negotiate)

Equals difference price.

I always liked it when people came to me and said, "Let's agree on wholesale for my vehicle, dealer cost for yours, and a profit of $500, or $700, or whatever - will depend on the demand for the vehicle you are looking for, how long it has been on the lot, etc. Then go from there. If everyone knows where they stand, everyone can walk away happy.

Hope that helps. Remember, you want to get the best deal you can, but the dealer and salesperson need to make a profit. So if you can agree on a fair profit, then the rest is easy and it is a win-win. Have fun and enjoy the buying experience, don't let it be a worrisome hassle.

 

[aspeck]

Re: new car pricing

Oh, and when determining wholesale value, ask the dealer to show you how they came up with that figure. Understand it will probably be a combination of used car report like NADA, Kelly Blue Book, or the Black Book, local auction reports, and experience. We had cars that would "book" at say $10,000, but experience told us if we put $10,000 in we would lose - because of our local market. There were times when a car was extra sharp, and desirable for our area and we would go a grand or two above wholesale book to get the deal done. So there has to be a subjective part in the value of the used car for your area also.

Does that help?

 

[gonefishie]

Re: new car pricing

Yep, thanks!

 

[jinx]

Re: new car pricing

In January, and perhaps still today, Durango 2006 and Jeep Commander (both overproduced and slow selling) had $7000 of dealer money on them.

It was not advertised as a rebate, but the info was widely available on sites such as edmunds.com.

Jinx