I was wondering this too. Ive always thought that if you special order a truck, you wouldnt get much of a deal, and if you get one off of the lot, you could get a better deal so they could move it and get rid of it. But if you think about it, ordering a truck would be easy money for them. They order it and as soon as it arrives, you pick it up and its gone. so i dont know maybe you could get a better deal. Maybe someone whos in the know will chime in.

 

Great info. They 350s and 450s are neck in neck on pricing. Don't know why I wouldn't want the 450 except for the 4.30 gears but I average 1k miles a month so the mileage loss shouldn't be to bad. They have some nice ones local for 73k, but I really want the led headlights and lane assist. My boy will be in a booster seat soon so the inflatable seat belts seem like a no brainier for $185.

I ordered a new tractor that'll be in around the end of February and will be using a batwing so to make it fit on my current trailer I have to put the loader over the neck. My 13 250 is great and pulls good but my wife wants it so I'll be trading in her 150. Any other reasons not to go with a 450? With the 14k gvw it's the same as the 350 so hopefully insurance will insure it as the same. 19.5s hold up to the weight and wear great too

Brett

 

LMAO!! Good find...

 

It's in a dealers best interest to sell whats in stock, so you have to sell yourself as an actual buyer to the salesguy and hope they have enough clout to get the sales manager to order. Or go to a commercial office. Some dealers will not discount on an order, but generally speaking we can, and it should be easy for everyone. But the dealer is assuming some risks in the process, vs selling you what they have today locks in a deal and lets them rotate in stock inventory.

 

Don't say: "I'm getting pricing information from several dealers"

Do say: "I'm ready to place my order today for the right deal"

 

How about an x-plan buyer Frantz. I'll only be negotiating my trade's value. Does your same advice still apply? I have a few dealers around me and in the past with x-plan, I just gave the deal to the one willing to pay the most for my trade. I guess I could do as you say but still shop it. Say I'm ready to sign today but when I get their price "head to lunch" and get the other guys best deal the same way.

 

YES! X plan isn't the best price, that's pretty well established. However, it is both a very good price, and protects you from excessive fees, which is more established by your state government than the dealers independent practices. X plan does provide a "commission" to the dealer, it varies by vehicle and amounts to a few hundred bucks at best from the ones I've seen. While a dealer is not permitted to give away free things in exchange for someone using a plan, it does affect the bottom line and that can result in a slightly higher trade figure (though the value itself is likely quite established by regional actual cash values). If you have X plan, use it. that locks up one half of the transaction so you only have to focus on the trade. It also removes the smoke and mirrors of fees, so you are less likely to think you're getting a better deal than you actually are.

 

Oh, I already planned to do x-plan. Have on my last two trucks as well and am well versed in it's details. What I was asking about was negotiation of my trade value. You said not to say you were shopping the truck's price. Since x-plan takes that out of play should one also not say they are shopping the trade's value?

 

Right. I mean trade is all you should really have to be focused on. I typically deal in ACV (actual cash value) of trades, but as I suggested, the X plan means there could be a slight incentive to get a little more. Where a dealer actually makes money on a trade is if ACV is $5k and we only give you $4k. If it's $5k and we give you $6k then we took $1k of profit out of the deal to make the trade worth more. Generally ACV should be awful close dealership to dealership, you're just unlikely to hear that figure. Frankly I find it to be near KBB fair condition trade value, that's what I use to ballpark and it gets me pretty close. Of course if your vehicle is already fair, take off reasonable deductions.

 

Frantz - You keep mentioning that figuring out price is too easy with the internet, but I think there is still some ambiguity with the numbers. If you don't mind, I'd like to work through a specific example vs continuing to talk in hypothetical terms. I think this would be beneficial to many people on this thread and forum.

Take this quick example I worked up from TrueCar for a F250 Platinum Ultimate, based on 99 local sales (the numbers actually go a bit lower when I view nationally, but the exact numbers aren't as important for illustrative purposes):



It shows that MSRP is 77410 and Invoice is 74182.

From my research (and please correct me if I am wrong), Ford holdback is 3% of the MSRP, so $2322 in this case. I couldn't find information on Factory to Dealer incentives/rebates, but is it safe to assume the cost to the dealer is 74182-2322-Factory incentives? So at most 71860, but presumably less?

The chart also shows that the average customer paid price is 73388, which makes sense as it's basically invoice minus a $1000 customer rebate, and still gives the dealer a minimum of a 3% profit (plus dealer incentives). But, what I'd like to know is where is the room to achieve the exceptional price of 71176? Given the low customer rebates since the truck was released, where is the remaining wiggle room? Is it all in the factory to dealer incentives that I didn't have numbers for?

I guess the point I'm trying to make is that while customers have access to data, that data isn't necessarily helpful. Using this as a basis, I would walk into the dealer with a target price of ~72k (given the current customer rebates - this would obviously change with a direct correlation to the current rebate). Would you make that deal? If not, what is the percent profit that you would have to make to do a deal?

 

I'll do my best. It's very complex and varies greatly by state laws on what is part of the sale price, and where expenses can be tacked on.

Invoice is the amount we do own the vehicles for. We get holdback for units as well, which is how we can sell under invoice and make profit. Hold back is not exactly 3%, but it's close enough to do math by for this truck. You can see what a few folks got price wise was invoice minus holdback (basically D plan or Z plan range). In order to hit numbers that low a dealer either had prep/doc fees to cover cost, or some folks may be using true car and then buying with A,D, or Z plans and it picks up the data. It's also possible (if this is a 2016) that it's an old unit. We use advertising money to dump old units at a loss without showing a negative sale dollar amount internally. Typically 1 year an older type units. Additionally some folks may be getting other rebates. You have to keep in mind that TrueCar and other buying services use all available rebates, as selected by the dealer. Some dealers advertise with military/college grade rebates. There is an extra $1000 if you buy a plow and have a company. All this data get's a bit washed out if you over analyze it. If you actually submit a lead with TrueCar you'll get real offers from dealers (it used to be you could do such without entering data, but those days are gone). Generally dealers have a figure they offset from invoice for TrueCar per model line.

For a real world example, I had a F350 2017 that stickered just under $75k. Our TrueCar price was $400 under invoice. I sold it with the $1k rebate for $68900 and that was $1k under invoice. I don't charge prep fees, destination fees are included, and doc fees are $136.

From the data you provided it looks like in your region the going good price is a few bucks over invoice and then folks are taking the $1k rebate. That would leave a dealer about $2400 gross profit before lot expenses, again, some places charge that to the hold back, others add on a prep fee that you get to pay. The spike you see in the great price column is likely dealers giving $1k under invoice or splitting the holdback and then taking the $1k rebate. Personally I print out and show most customers the factory invoice. The holdback is on the bottom right corner. Sometimes a customer asks what I make on the truck and I point to the holdback, outline lot expenses and say we get a kick from the bank for financing with them and still able to beat out rates customers bring us from the street. Most folks are fine paying invoice if you present it quickly. Some folks then treat this like the new sticker price and ask for thousands off (which you won't get). You should be able to determine what you find to be a fair profit and decide if you're looking at too much truck or not from that. If it's an in demand truck, you might not get as much leeway, but I'm not really a believer of limited edition trucks other than Raptors and stuff like that. I don't make more off selling a brand new 2017 than I do a leftover '16 the way I do it. Usually they can show you how to hit the crazy good numbers and it either requires taking poor rates, being eligible for added rebates or something to that extent. Since sales folks make a percentage of the percentage profit, you have to keep that in mind when understanding my perspective. I couldn't care less over a few hundred bucks, and it seems like an awful waste of time to haggle over 1% of the purchase price when there are bigger aspects. I literally save my customers thousands of dollars getting them better rates, the right truck, finding rebates etc. When they want to dicker over $500 bucks after all that, it's a bit of an insult.

 

BLUF: Exceptional Price = Invoice - aprx holdback - $1k rebate and $500 military rebate

That'd be $816 profit, or $316 without military rebate. That doesn't' account for lot expenses, so it's pretty much a net deal. They may sell em like that and make it up with higher bank/warranty/product fees, or just take the hit on the occasional guy that just wants the crazy good deal. Obviously holdback goes down when the price goes down.

 

Very helpful, Frantz. Thanks! And I think the deal you mentioned sounds pretty fair.

The more we all understand, the better the chance I think both sides can walk away from a deal feeling satisfied.

The reason I ask so many questions is because I see advertised prices like this (2016 GMC Denali), and it makes me think that there is a lot more room on prices, when maybe in fact that is an isolated instance.

While Ford to GMC is not exactly apples to apples, and I know this is a 2016 model, it still gets me thinking about how did they achieve that discount... If I take away the 3500 in rebates, that's still roughly a $9500 dealer discount. Now that advertised $9500 off of sticker is still $6500 less than invoice, and $4500 less than invoice minus holdback. So in cases like that, you're saying that the 4500 difference will be made up as a loss to the dealer (e.g., using advertising dollars) just to dump old stock, or by hoping to make up the difference on financing kicks, warranty, etc?

 

This is a GREAT post with a wealth of info!! Thanks Frantz.



biz

 

I can't speak for GM or other brands. I did sell Chryslers back in 08 but wasn't there long enough to ever see how stuff worked price wise. Their dates are a bit off (they show both 10/3 and 11/3 as deadlines). I would simply compare with other GMs and see if their pricing adds up, or if they might be doing something else. They have the same pricing structure on newer stock numbers, so it's unlikely using advertising dollars on every unit in stock. Doc fees are caped there, not sure if they have prep fees, but they don't have the "freight charge extra" disclosure you see in MD and VA often (the states I see more of). Could simply be that GM has more room to play.