[goblue]

It is always best to buy common often used items in bulk from "warehouse" type operations than the supermarket. people do shop around between supermarkets rather than ask for "pricedowns"

Exactly. People shop around for lots of things. But according to some salesmen, we should simply "eat it" from whichever we go to first. So - if Safeway doesn't have it on sale, I'm not supposed to checkout Lucky's?

 

[goblue]

By dealer fees, I mean when the dealership charges you a flat rate for buying a car from them. Dixie Buick/Pontiac/GMC (I guess it's GMC/Buick now, huh?) and BMW of Fort Myers both wanted one when I was car shopping. This was a non-negotiable fee that they charged on every vehicle, new or used, bought through the lot.

Again, it doesn't matter. Just add up the total price and compare to other dealerships.

...

Let's put this whole thing a different way. People love to compare cars to homes in terms of negotiating. But - in most cases, no two homes are the same. Cars are a completely different matter - but lets go with it anyway and say you're buying a condo and there are 2 which are basically identical.

Who here would not pit the two sellers against eachother and take the lowest, all things being equal. That's what I thought.

 

[goblue]

1. The holdback is irrelevant to the purchasing/negotiations process.

Quit trying to determine what a fair profit should be for the dealer. You would have to open up the accounting books to find out what all of the dealer's real costs are (rent, inventory, salaries, expenses, etc.). And even then, why do you think you can dictate a fair profit?

2. Let the market decide

Get a good starting point -- find out what the invoice price is for your car and see what others seem to be paying -- look at TMV on Edmunds or similar. Then get several quotes from different dealers, but do your homework -- see if the car you are buying is common or in short demand, see if the dealer is struggling to make their numbers or is doing just fine, etc. All this will determine which dealer will most likely give you the best price and why some dealers will be higher than others.

3. This is a buyers' market.

It has been for a long time now. Except for a few high-demand cars or temporary shortages, manufacturers have capacity to produce more cars than they can sell,
so there's usually plenty of supply and dealers are eager to clear their lots or order
and sell a car to keep up their numbers, keep their service side busy, and take profitable trades in. Manufacturers discount many of their cars to keep their market share and to sell more parts in the future.
So it pays to shop around and get the best price.

The best price is determined by the current actual market -- cars on the lots vs. actual buyers, as well as the perceived market -- buyers' perception of popularity of certain models vs. dealers' and manufacturers' expectation of short-term demand.

Never negotiate based on invoice/holdback/fair profit. It all really comes down to the basic supply and demand. Just get a few quotes, figure out which one is the best option and go with it. You might get something below invoice and even below holdback if you find a dealer that needs to get rid of inventory. After all, there's something called opportunity cost -- what would the dealer's profit be if the car does not get sold and ends up sitting on the lot for another 2-3 months? Let's say it is a 2010 in September of 2011 when the 2012 models are already out.

Remember that no one should be mad or insulted because they did not get a deal they wanted, and everyone should be happy about a deal that was struck since both sides agreed to it.

Agreed. Great post.

 

[goblue]

The simple fact is, dealer holdback is not an incentive....and its not part of the negotiable price on the car. If a dealer choses to split holdback or sell you a car for net cost, that is their option but its not something to be expected. There is no reason to sell a product and be expected to lose money on it, when most products have a fixed price far above their real cost. When I was a car salesman I didn't do net cost deals, it does not make any sense to do ...the dealer loses....you lose...and that customer typically after fighting you for the right deal will give a you a bad survey. I would rather shake hands and part ways than have a triple failure all rolled into one.

Everything is negotiable in a car sale. It's up to the dealer, not you, how low they will go. I will gladly pay LESS for a car than the dealer paid if that's what they're offering. Again, by definition a deal requires both parties consent. Don't want to dip into holdback, don't. If someone else will, they get the sale.

 

[goblue]

Ehh, it's the age of the internet, and being able to ask 1000's of different people what a fair deal would be. I'll pay for a fair deal, but hold out against way too much mark up. People who expect dealers to make no profit in a sale? Shame on you. I'll gladly give a dealer some profit on a sale, but, as I said, anything over what's fair, will get me to haggle or walk.

Why worry about what's a fair deal for the dealership. Let them worry about that. It's not the customers problem. The internet has simply turned the tables on an industry that is made up of many a pathological liar who will say anything to make a sale. For the record, I'm sure there are some honest ones out there. But really, it doesn't matter what the salesman does because negotiating with a salesman is the first wrong move. Just deal on paper/email/fax. Request quotes. Conduct yourself in an honest manner, take the lowest and be done with it. If they don't deliver, go to the second lowest. It's what the professionals do.

Like I said before, just send out a bid request. If a dealer 50 or 100 miles away needs a sale, and they're willing to dip into holdback, fine. Do you go into Best Buy and slip the company a little extra because they're losing money on a product that's been sitting on the floor for 6 months and has excess inventory? Businesses sell at a loss for many reasons all the time. Sometimes, they sell for less than they paid for it, let alone all the other real expenses.

Nobody is holding a gun to anyone's head. Nobody is entitled to a "fair" anything. That's capitalism. If you don't make a deal, that's OK. The dealers are just upset that the false advertising and lies don't work anymore because we now have access to much of the info.

I'll close with this: Do you honestly think the salesman feels any remorse if you pay sticker and they sold the same car to someone else for less who held out for a better deal? Nope. And you shouldn't either if they only make $100 off you. They agreed to it. Your job is to try and get the lowest price, their job is to try and separate you from as much money as they can. That's the car business.

 

[goblue]

I think the issue is disingenuous advertising (surprising for a car dealer I know)

When a customer buys at invoice, they think they're getting it at cost. Which, I agree - wouldn't be a great deal for the dealership. The problem is the salesman tells the customer they are buying it for what they paid - which is a complete lie.

The best way to buy is to flip the power from the salesman to you. You do that by purchasing like the professionals do - requesting bids. All the high pressure, lies, and disrespect just goes away. Only consumers are stupid enough to walk into a store with a negotiable item sold in thousands of other stores and think they can make a deal.