Don't believe the dealer invoice price

[FL4x4]

This ^

My dealership added Nitrogen filled tires for $899. I didn't even bother to fight it, despite it's uselessness (dealer filled the tire to 50psi). These dealer added options are basically straight profit for them and an easy way to jack up the price.

The air we breathe is 76% Nitrogen. You're literally paying for air.

 

[melvimbe]

I've heard salesmen even convincing people to pay over MSRP before. Not exactly sure. I suppose they just convince you that another buyer is going to grab it if you won't.

Regarding the dealer add-ons. Sometimes they can be mutually beneficial for both sides. If it's not too overpriced and something you were going to do anyway, then you can now roll the cost into the loan rather than pay full price for it elsewhere. Of course, if you don't want it and are paying a signficant part of price of front...nope.

 

[911 Crazy]

I've heard salesmen even convincing people to pay over MSRP before. Not exactly sure. I suppose they just convince you that another buyer is going to grab it if you won't.

Regarding the dealer add-ons. Sometimes they can be mutually beneficial for both sides. If it's not too overpriced and something you were going to do anyway, then you can now roll the cost into the loan rather than pay full price for it elsewhere. Of course, if you don't want it and are paying a signficant part of price of front...nope.

Did you not see this? I'm going to give Kevin your address!

 

[eleven24]

You’re forgetting the gigantic fact that they get a volume bonus and its tiered

Oh, I completely understand that. I was just putting the MSRP vs invoice in a vacuum to show how the "dealer invoice" price really mean nothing when negotiating. You know the deal, the salesman says "Hey, I'm selling you this at $500 over my cost and I'm not making anything here". IF the dealer's profit were solely based on that MSRP vs dealer invoice ratio, then yes... it's true. BUT it clearly isn't.

Of course they then attempt to **** you on the trade-in, the add-on warranties, and the financing. All because 90% of buyers can't bring themselves to walk out of a negotiation because they want the new car/truck so bad.

 

[eleven24]

We figure out what payment we can afford and then he helps us pick out a car." I bit my tongue so hard that it bled.

I've shared many of those cringe worthy moments when sitting at a salesman's cubicle listening to the people one desk over.

Sadly, most people would be perfectly content with $300/month for 10 years over $500/month for 5 years. Who cares that it cost $6k more over the course of the loan!

 

[Jorge]

I've shared many of those cringe worthy moments when sitting at a salesman's cubicle listening to the people one desk over.

Sadly, most people would be perfectly content with $300/month for 10 years over $500/month for 5 years. Who cares that it cost $6k more over the course of the loan!

It all depends on if there is a pre-payment clause in the finance contract. I rather take the $300 and pay more some months to reduce the principal than to be force every month to pay the $500. Some months will be good and you can send more money and some month will be bad and you can only pay the minimum.

 

[TannerK17]

As mentioned, there is bonuses for hitting certain numbers of vehicles sold. There is also what is called “hold-back”. For every vehicle sold, the manufacturer gives the dealer a certain dollar value for that vehicle. I remember when I worked at a powersports dealership when going to college, side by sides had a little bit of profit it them (I’m talking less than 10%) but the dealer also got around $1,200 for each unit sold directly from the manufacturer for a specific vehicle. I won’t name this vehicle or manufacturer, but it’s a thing. Hence why some dealers will dig way below MSRP when they have low overhead, because they know they have the hold back money plus the volume bonus. I almost bought an F-150 back in December the sales manager mentioned that they were into their hold back to try and move the truck, so I’d assume this exists in the vehicle sales world too and probably exists on Raptors too. Just food for thought!

 

[GordoJay]

It all depends on if there is a pre-payment clause in the finance contract...

I've financed trucks to get an extra $500. I make sure there's no prepayment penalty. Then I pay it off right away. The salesman is happy and I'm happy.

 

[FordTechOne]

Historically, there has always been a lot of misinformation and speculation regarding new vehicle prices. Let me start out by saying that the Invoice price is, despite what many will argue, the price that the dealer actually pays the manufacturer for the vehicle. It is not a fabricated value and it's not negotiable. Dealers are not - despite what many think - buying Raptors for $50k and selling them at $70k for a $20K profit. However, with the variances in prices of new vehicles between dealers that has existed for decades, it's certainly fair and understandable that many consumers are confused and skeptical of the entire process.

As mentioned earlier in this thread, dealers sustain new car sale profitability through hold back. That is the kickback that the manufacturer provides to the dealer for selling the vehicle, and it can be anywhere from a couple hundred to a couple thousand, depending on the vehicle being sold. Manufacturers also offer internal dealer rebates and incentives that the buying public are not privy to. This is of course by design, and allows the dealer to either profit the incentive/rebate or pass it on to the customer for the sale. When you see any vehicle advertised below invoice price without any documented consumer rebates, you are most likely seeing the discount due to a manufacturer incentive. These are most common at the end of a model year when the dealer is looking to clear the lot for the new inventory. The dealer I bought my truck from in London, KY already had it advertised below Invoice. I wasn't about to insult them by trying to negotiate a lower price; clearly they were offering internal incentives to move inventory.

That being said, dealers make the most profit through their fixed operations. Meaning parts and service, where the profit margins are massive compared with new vehicles sales.

Of course, there will always be the dishonest dealers that try and up sell anything they can...undercoating, window etching, anti-theft systems, fabric protection, wheel locks, paint protection packages, etc. They typically rely on the finance manager to sell these add-ons and pad their bottom line as much as possible. If they try and pressure you into any of those up sells, push back and walk away if necessary. If I had a dollar for every single aftermarket alarm I've had to "un-install" I'd be able to buy more than just lunch. They use quick splices (scotch locks) to install these devices, and all they do is damage the factory circuitry. They do not prevent theft; bypassing the module hanging under the dash by connecting the two matching wire colors will still allow it to start (with a programmed key). The dealers buy these "anti-theft" modules from Chinese companies for $5 and sell then for $699 to unsuspecting consumers; it should be criminal.

Another dealer scam is "special editions" or "custom" packages. This includes "Shelby" (aftermarket), Hennessy, SCA Performance, Roush, and Saleen in addition to no-name companies that install cheap modifications for the dealer with the premise that they'll profit tens of thousands on the sale. These are nothing more than cheaply engineered aftermarket modifications with non-Ford approved components that do not perform to OEM standards, are not warranty compliant, and will only cause the owner massive headaches in the future.