We've all been that guy at least once and thanks to FTE for the extra education on matter of negotiating and such.

My current dealer is the highest volume dealer in the area now. They simply will not be undersold and it helps that their service department is the best in the area. They just built a brand new dealership around the corner on a busier road and they now have two new off site quick lanes.

If your service experience was less than perfect, you get an immediate call from the owner of the franchise offering a remedy to your issues.

So, the sale is extremely important but the service after the sale is more so.

 

You can't judge all dealers alike. I've been impressed at the number of "one price" dealers in recent years.

In the past I've used TrueCar to guide me on sale price, and KBB to guide me on trade-in. Meeting or exceeding both can be a challenge with most dealers, and I treat that as a goal.

The place I bought my current F150 from beat KBB by $4,000 and TrueCar by $3,000 without any haggling whatsoever. They also beat every other dealer I walked out of by $3,000 on the sale price without even looking at my trade. I imagine their business model depends on them selling warranties and accessories as part of the sale, to which I declined.

 

That's fair enough. I work in commercial department so I set all my own deals other than trade values. On Trades I just take the "ACV" (Actual cash value), which is how much we figure it will go for at auction if we sell it. Lower than some, but it lets me give everyone a good price on my trucks whether they trade or not and any of my customers could have beer together and talk about their deals and walk away feeling good about them. I make money on every deal, that's why they employ me, but it's a fair profit and I wouldn't feel bad showing any of my customers the commission slips. Retail said we always start at full MSRP. Selling by payment does help us, but after everything else, the consumer should also look at payment. When I see post about "10k off before rebates" then I'd love to compare payments because I can almost always promise it wasn't what I would call $10k off when talking to a customer of mine getting the same deal. There is a ton of smoke and mirrors. Frankly if you follow the process and show interest in really buying the car, no matter what process is used you'll be able to walk out with a great deal. The process is to help hold gross (which isn't a bad thing), but the number one goal is to sell a unit, and sell it today. "Thinking about it" will never get the last $50 as well as "I want to buy it today" if you are good at negotiating from my experience at two different dealerships over the years. That's the same working directly with me today as when I had to get my numbers from a sales manager.

 

Can you elaborate the difference between your customer saving 10K before rebates and someone else's customer doing the same? Why would you not call it 10K and rather than comparing payments, wouldn't comparing the final out the door price be a better indicator of the type of deal you got?

 

From a customers perspective, there's two ends to the deal if one uses the dealer to arrange financing. The front end is where you negotiate the price of the unit and the back end end is where you negotiate your terms.

The dealer can knock off 10K and come back at you with a 7.9% rate from Ford or another bank, to which you agree to, negotiate or walk away. I'd run like hell and find my own financing then come back for the 10K off sticker.

 

Some of the things I often see are this:

Some states allow to not include "destination" as part of the unit cost. On the F150 that's $1195. You will be paying this, just depends how it's shown on the paperwork.

There are package discounts, for example there is one for the 302A for $1805. This is significant for leasing figures, but I don't ever reference it unless we are looking at ordering packages. It's not a rebate, it comes off "High MSRP".

Dealer packages can be another point. The "Rugged Package" being commented on is MSRP at $9999. What's the real cost? I don't know, but lets be generous and say $7500, there is $2500 discount that is there, but I sell most of my accessories simply rounding up to the nearest $100, so that's certainly a difference.

There are other cost. Here in Pa doc fees are capped at $134. Some states are even less. X-plan caps them. 60 miles south of me there isn't a cap. Common doc fees are $599. So they save you $500 on selling price and instantly make it right back up.

Some places have prep fees. I fill up all my units out of my deal cost, and have the cars washed. Other dealerships charge prep fees, which I've seen as high as $1000.

Then there is rate. Generally we mark up our rates by 2%. This is kickback for getting banks business. Now don't think we're ripping you off, if you go to your bank they'll do the same thing to you. The smart way to shop rate is to get approved and then let the dealership try and beat the rate. You save money and you help us make a living. Unless you really like your bank or something. Some states allow for pretty crazy rate increases. If the customer agrees to a 10% rate hike then it's legal to do (not in Pa, but other places). If they talk 7 out of 10 people into a significantly higher rate they can afford to sell a few people super low prices that no one else can touch. You might be savvy enough to not get that, but do you really want to do business with them?

Those are just the most common ones I see on almost a daily basis when looking at other deals. Lowest selling price is no better a guide than payment for someone who doesn't know what they are looking at. At the very least, with payment you're dealing with the end equation, frankly it doesn't matter how the number are put together to get there, two people paying $600 for the same truck at 72 months are paying the same true price.

Also, Out the door works okay but you have to stay in your state. I can sell a vehicle to someone from MD and not collect sales tax. They are out my door for much less than a dealership in their home state. Some states actually allow for you to sell "out the door" that requires money down prior to hitting that number. Maybe they've cleaned that up a bit, but I've seen it before. Out the door doesn't protect you for predatory rate structuring, and it may not be the best deal for you payment wise or may include rebates you won't end up qualifying for.

 

All different equations but still you only need to know #payments × $payment = otd ......as I see it..... $15 over 72 months is lil over a grand, actually $1,080 to be exact so it's easy to see why your pushed on payment so much as such a seemingly insignificant amount really adds up.....and as someone mentioned I agree with prearranged financing

 

Yes.

The the only thing to really watch here is that everything is included. When shopping online it's rather hard to be sure. We fight quite a bit to not give payments over the phone. It's not because we don't want to be honest, but generally the folks who lie the best get the business since it's assumed we all lie equally. It's a catch 22. Hense I always push to just build a relationship with a local dealership. If you want to shop different dealers then payment DOES help get rid of the other smoke an mirrors. Since the consumer doesn't generally see the amount of profit in a deal, it's irrelevant anyway. As I showed, there are tons of ways to hide what otherwise seems like a "best price". You can't hide math though. That's what payment is. Knowing your "worst case" rate (aka what you get approved for at your bank) will be the figure to work with, then like I said, see what payments you can get.

 

When I was selling back in 1989/90 we were taught to do the "pre qualification" after the intro. That included employment questions, family questions, and payment preferences among other tidbits of info.

Based on all of this, we would steer them towards a particular vehicle that met all of their verbal requirements and might meet the payment requirement.

We always showed the customer the most bare bones vehicle in that body style that we had then allow the customer to pick a better equipped model. You'll n ever sell them on a top of the line model and then have to tell them that they can't afford it. They typically walk.

So now as the consumer and having all this training from my past, I approach every deal in the opposite direction as the salesperson, hence I control the deal and the salesperson follows me around.

 

My sales experiment was in '96/'97 and I wasn't very good at it we were trained to never prequalify people on the lot rather to get them locked in on vehicle, test drive , look over their trade etc.... then get em into a booth

 

Just got back from the dealer and looked at a 2015 Screw xlt 4x4 with the 302A package. Dealer discount was $ 10066. Ford discounts were $4750. Price was $32540. They wanted to low ball the trade. They couldn't get close to what I needed so I left without a deal.

 

So you got the best price ever and they low balled you on your trade and you didn't come to an agreement? That makes those numbers as real as just making them up even without looking at any of the things I listed as things to look at.

 

Granted, my trade number was about 2k high but they came back at 8k under that. The only thing I can say is they offered their advertised discounted price. If I came with all cash I don't think the dealer would say, "That's our trade and finance price. Our cash price is higher."

 

What were you trading and what did they offer?

 

2012 F150 XLT Screw 4x4 Ecoboost with 72.5k miles. They offered me $16k.