Interesting thread. It's entertaining to see the views and opinions of the truck buying public when I read the threads in this fourm. Seems like most of the folks want to buy the new truck at or near invoice.

aldridgec,

I agree with most of what you said. The larger dealers do get more allocation and can afford to sell their inventory at a smaller profit margin due to volume. The smaller dealer with less allocation finds it sometimes difficult to compete with the larger dealers, especially on price. The key to most small dealers is to have a good service department that makes people want to deal with the smaller dealer. Yes...any Ford dealer will work on your vehicle, but I'd rather pay the dealer that takes care of me a few hundred dollars more and give him the business. When you take the truck to your local dealer for service, they know if you bought it from a competitor. It shows up in the service computer system.

Most dealers offer loaner cars for warranty work, discounts on service and other perks for buying from them. I'd venture to say that the dealer you buy from would go to bat for you in a warranty pinch if you were a loyal customer. He/she might not if you bought it from a competitor. Service means a lot to some dealers, especially when you want that new franchise and the auto maker si looking to see who has the best CSI (customer satisfaction index) scores in your area.

I can see how some salespeople might have the attitude you mentioned above. They would not work in our staff if they acted like that. Most dealer pay their sales staff on what the dealer makes over invoice. The average salesperson might make 20% of the profit over invoice. So if you bought the vehicle at $300 over invoice, the salesperson made $60 of income. Salespoeple at most dealerships work 100% off comission...just like a realtor. It can be a challenging line of work to sell enough vehicles to pay the bills if all you dealt with were buyers at invoice or near it.

I'm just throwing this out for folks to consider. Then there's the trade-in. The customer usually wants to get the new vehicle at or near invoice and used retail for his/her trade. It's never retail versu retail prices for each. It's more like retail for trade and wholesale for the new vehicle. That's not a formula for long term survival for the dealer unless you have 100% service absorbtion (means the profit made from service department each month covers all the dealership bills, payroll, etc.).

I know dealers in Texas that sell Suburbans for $500 under invoice while I've got to have $700 over invoice as a rule. You still get the all rebates on top of the sale price. Everyone trys to get the same deal someone else got. If they don't, they'll find a dealer that will. That might mean driving a few hundred miles to get the vehicle. In the long run, what you spent going out of town to save a few hundred dollars might have come close to the expense of buying local. Just food for thought again.

The key to buying a new vehicle regardless of what you are getting is that when both the customer and the dealer are happy with the sales transaction...that's a great deal! Regardless of price.

Well, I've rambled on long enough, Happy Holidays all!!

SRAces
USAF (ret)

 

 

I give up, you still do not get it. The invoice is NOT what the dealer pays. And you are also making it sound like a large volume dealer cannot offer good service. Not true, I have a huge dealership that I deal with and I get great service, loaner, the works. Plus I pay $100 over invoice that I always tell the salesman that I will pay him outside the gate if he chooses. For the hour of his time that I take that is a good sales experience for him as far as I am concerned.

 

I've been selling and servicing cars for 18 years, and this is news to me. Ford pays/ penalizes us dealers based on service? Exactly where did you get this info?

 

quote:
--------------------------------------------------------------------------------
Originally posted by Cody1960
...Dealerships have incentives from the factory to provide you with the best service that they can give, regardless of where you purchase. They also have penalties to dealerships that do not give top rate service. Winning service awards are not just for the plaque on the wall, they mean more money from Ford...
--------------------------------------------------------------------------------

Agree 1956 Mark II!

I'd like to hear the answer to that one.

 

Since some of you seem to have to be hit in the head to see what is real and what is not, here is the thread that may help you see what I am talking about.
http://media.ford.com/newsroom/relea...m?release=7984

The thread does not say what the penalties are for not being Blue Oval Certified, but the incentives are clear and not having the certification is clearly not in a dealerships best interest. Whether you choose to not believe it is your problem, but dealerships ARE given incentives to achieve the highest level of customer satisfaction. Todays market is tougher than ever, and a dealership that does not conform to the corporate goals of Ford will not be in business. Poor service is not going to get any dealership return business.

 

For my new '04, the suggested retail price was $38,665, the invoice was $34,138.60, the X-Plan price (which I used) was $34,081.66 and A-Plan price was $32,626.60. They are all included on the invoice the fleet dealer provided me.

 

UH, ITS NOT? I don't think so. There is no magic number that the dealer pays under invoice, its INVOICE. What ford charges the dealer.

When you get your water bill, is there another price below it you pay? Doubtful. same here.

 

Ok, being blue oval certified is all good and fine.

What I am saying is a resounding complaint is new car sales unwillingness to answer questions, unknowledgeable staff, and no buy no care.

While I agree that this isn't good for long term business it seems to be a reality, regardless of what secret prices you seem to think there are. I am offering a suggestion. Like was pointed out, its great how someone thinks that their trade is worth retail, and the new/new to them car is worth invoice or wholesale. Sure I don't want to pay more for anything I don't have to, but we are beating ourselves up for what? Cars are not an appreciating asset. What i pay 30k for today will be worth 20k a year from now. They depreciate thats the way it is. You can't make up for that when you buy it.

Even my dad thinks this way which is kinda what put me here. Looking at a used windstar he was quick to point out the "trade in" or "wholesale" price KBB listed for the car. And thats what he wanted to pay, because thats what they probably paid for it. Lets lock our doors now because where is the profit. Finding the best price and best service is a holy grail. Its the American way.

 

I will make one last attempt to accomodate your hard head and explain it to you even though it is more than likely a waste of my time.

I will give you the price structure

MSRP
Invoice
Dealer cost

To determine the dealer cost,

Take the MSRP X 3%, and subtract this total from the invoice.

This is Dealers Cost

Example MSRP = 30,000
Invoice = 27,000
3% of 30,000 = 900
Dealer cost = 26100

This is not something that I have made up off the top of my head. The information is not hard to find, go to edmunds.com and look it up for yourself.

 

I think we've beat this thread enough...don't you. The original header was "A-Plan Pricing". That's great for folks that qualify for it (i.e. ford employees). I suggest that cooler heads prevail here and we keep in the holiday spirit, not beat each other up.

Cody1960,

You put a lot of faith in Edmunds. Let me point out to you that Edmunds is not the auto maker or the dealer. Edmunds does not get the the whole picture. I get Internet sales leads from Edmunds and Edmunds loves to state that the consumer can expect to pay a certain price for a vehicle based on his/her market area.

For example: I received a 2004 Chevroelt Colorado lead from Edmunds a few weeeks ago. It stated a price that the counsumer could expect to pay for that Colorado based on sales in his market area. Well, there were no Colorado trucks delivered yet in any of the dealers in my region. No basis for the pricing statement. Edmunds was missing the boat.

If you really want to know how to figure up "holdback". That's the amount included in the dealer invoice. Subtract the delivery destination charge from the total MSRP. Multiply by 3% and you'll have it. That formula applies to GM, Ford and Chrysler. It will not work on any other brand...just the big three.

I don't mind showing my customers the factory invoice, but if I have to have say $500 over invoice for a particular vehicle...that's my price. They get the rebates to apply against my price as well. No negotiations. It's what my dealership needs to stay afloat.

You seem so adament about trying to tell others that they're paying too much if they pay over invoice by any decent amount. Dealerships can't survive by selling vehicles at invoice alone. There's too much overhead (i.e. advertising, payrolls, rent, etc) and we would all go out of businees if all we did was sell everything based on your pricing guidelines.

As I stated before...what works for you will not necessarily work for others as there are over 3,500 Ford dealers (7200 GM dealers) and each has it's own financial needs. Bottom line is that if it works for you, that's great! I'm happy for you. But don't beat others up just because they don't see eye-to-eye with you. It's counterproductive.

Happy Holidays!!!

Warmest regards,

SRAces
USAF (ret)

 

Cody1960,

You put a lot of faith in Edmunds. Let me point out to you that Edmunds is not the auto maker or the dealer. Edmunds does not get the the whole picture. I get Internet sales leads from Edmunds and Edmunds loves to state that the consumer can expect to pay a certain price for a vehicle based on his/her market area.

For example: I received a 2004 Chevroelt Colorado lead from Edmunds a few weeeks ago. It stated a price that the counsumer could expect to pay for that Colorado based on sales in his market area. Well, there were no Colorado trucks delivered yet in any of the dealers in my region. No basis for the pricing statement. Edmunds was missing the boat.

If you really want to know how to figure up "holdback". That's the amount included in the dealer invoice. Subtract the delivery destination charge from the total MSRP. Multiply by 3% and you'll have it. That formula applies to GM, Ford and Chrysler. It will not work on any other brand...just the big three.

I don't mind showing my customers the factory invoice, but if I have to have say $500 over invoice for a particular vehicle...that's my price. They get the rebates to apply against my price as well. No negotiations. It's what my dealership needs to stay afloat.

You seem so adament about trying to tell others that they're paying too much if they pay over invoice by any decent amount. Dealerships can't survive by selling vehicles at invoice alone. There's too much overhead (i.e. advertising, payrolls, rent, etc) and we would all go out of businees if all we did was sell everything based on your pricing guideleines.

As I stated before...what works for you will not necessarily work for others as there are over 3,500 Ford dealers (7200 GM dealers) and each has it's own financial needs. Bottom line is that if it works for you, that's great! I'm happy for you. But don't beat others up just because they don't see eye-to-eye with you. It's counterproductive.

Happy Holidays!!!

Warmest regards,

SRAces
USAF (ret) [/B][/QUOTE]

SRAces,

The only thing I put faith in is my ability to make purchases the way that I told you and others that it CAN be done. If others choose to pay more than they have to that is their right and I don't care. I am only trying to help people by letting them know what can and cannot be done. I am NOT beating anyone up. If anyone is beating anyone up, it is the un-educated consumer beating themselves up for not having the knowledge that is so easily attained. You can't tell me that people who are un-educated about the pricing structure get as good of a deal as those that are educated about it. I am willing to bet that you have profited many times from a customers lack of knowledge about pricing, and I don't blame you at all. Edmunds is right on the money for the invoice prices, period. They are not the only ones that have access to invoice pricing. And the TMV that they tout is just a guideline that I never pay any attention to. Dealerships that do not, cannot, or will not sell for $100 over invoice will not get my business. I will make the comparison to Wal Mart, they have built the biggest shopping empire in the world with their volume sales, and ability to offer the consumer better prices than the store down the road. Refer to KMart for proof of that. Some people prefer not to shop at Wal Mart, and they have every right to do as they see fit, but they also know that more often than not, they will save money there.I have merely pointed out a FACT that purchases can be made as I say, it is not a matter of seeing eye to eye with me, and this is not just my opinion. Again, what I have stated in my posts on this issue are facts. I am fully aware that there are circumstances where certain vehicles will not be able to be purchased for the $100 over invoice, ie, the new Thunderbird when they first came out, but for new trucks and mass produced vehicles that are in abundant supply, they can, and are purchased in the manner that I say every day. The cost of a dealership doing business is not my concern, just as the dealership is not concerned with the cost of running my household. You state that if all you did was to sell the way I say that you would go out of business is not true at all. Most people when making a new purchase are trading in their old car, and when they do that, you are able to make profit on the sale of the trade in, provided you are wise enough to appraise their car correctly. I am also aware that sometimes a dealership will make a mistake and lose money on a trade in because the car was not what they thought it was. That is one of the risks of being in the car business, or any other business that deals with trading. Business's that are capable of keeping up with the demand of the consumers will succeed, and those that do not will fail. Your hard line attitude towards the posts that I have made concerning this issue are self serving to you and to your dealership because you would prefer for the consumer to be un-educated about the pricing structure of cars and trucks. I don't blame you for that, I would rather make more money as opposed to less as well. I am fully aware of figuring dealer cost as well, and have made numerous posts about it. This is part of capitalist system that we have in America. If I were a dealer, I would much rather have a smaller percentage of something, as opposed to 100% of nothing. No matter what anyone says about the car business, fair price is always what one is willing to give and another is willing to take. If a person is willing to pay more than they have to that is their business, I am only making an effort to inform those who may not be wise to the way it works.

You have a great Holiday too.

 

Wow, what a heated discussion..........

This is what happened when I bought my 150 in October.

Somehow I was getting the X Plan pricing when I was searching the various dealers for the truck I wanted.

I priced out my truck and went to all of the local dealers.

I told the salesperson that they have the truck I want and told them what I would pay.

Each one burst into tears telling me that they paid more for it. They each offered to sell the truck for 500 below sticker.

After going to nearly ten dealerships I finally said to hell with it.

The wife & I were in Wisconsin for a week and we passed by a dealer. What the heck, stop in and try again.

The salesperson said he will be right back. Came back 5 mins later and gave me the price of 200 above xplan. We stared at each other for about a minute or so, I asked why so high, he said it's his commission. I told him to start the paperwork.

Did I get a good price? Compared to what I went thru locally I feel that it was acceptable.

What burns me about the local dealers is their attitude. They knew I knew the xplan price. Yet they decided to let a sale walk out rather than negotiate. So be it.

 

Jim,

You got a great deal on the truck. I can understand the retail sales strategy of telling you that they had to have $500 below the MSRP sticker. I would assume that you could have negoitated that price down, but if you're like me...you hate the negotiating part of the vehicle purchase.

The thing about X-plan, A-plan, and D-plan pricing is that the dealer has to have documentation from the customer that he/she qualifies for those plans to get paid on seeling the customer the vehicle at that price. Otherwise, there's little or no profit involved for the dealer.

Only question I would have for you is...do you really qualify for X-plan or were you trying to get the truck at an X-plan price?

Merry Christmas!

SRAces
USAF (ret)

 

Didn't qualify for the xplan.

However I felt that if I could get near the xplan I would be OK.

When searching for the truck via edmunds they of course give you the "Edmunds" invoice. They also give you the "window." Never paid window, never will.

Dealerships have to make money, salesmen have to get comissions, otherwise nothing works. However when I walk into a dealership and it is nearly a city block square and they try to tell you that your stealing it, this reminds me of Maxwell street in Chicago. Nobody makes anything and they are all on welfare. At the end of the day they hop in their Bently and drive to their million dollar house.

I save a little they make a little. Life is good.