[QUOTE=Frantz;16691597]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. /QUOTE]

Frantz, as usual your insight is invaluable to us, and I appreciate your knowledge.

I am a Navy Federal Credit Union member and recently completed their car buying program search and they quoted me prices for Trucks a couple of hours away but nothing local. I called the local shop's Sales Manager and asked it they participate in the program, he replied that they don't pay the member ships fees to those programs but if I come in they can probably meet the price.

I was a little surprised that the dealerships have to pay to be members of these services, I assumed these prices were between Ford Moco not the local dealers. Are there dealer fees for True Car and others as well?

 

Frantz,

On several threads you recommend not shopping around and definitely don't tell the dealer you are shopping. You also stated that the actual price of the truck to the dealer is the same no matter what dealer you go to, and that we should find a good dealer and just work up a deal.

So here is my question (hopefully you didn't answer this somewhere else).

1. How does a buyer find a good dealer without going to the dealers and talking to them (shopping)?

2 If you personally are buying a new car, what are the indicators you look for when you walk into a new dealership?

3. What do you think about a dealer that won't show you any paperwork other than the salesman's scratch pad, until after you sign an agreement?

4. Is it considered a negative to request a Trade-in estimate before you actually start talking New Vehicle pricing?

Thanks for any insight/comments.
Dave

 

I will help Frantz out a little since he did kind of answer some of these.

1) Tell them if the price is right you will buy today, not that you are just there looking. If you say you are willing to buy today they will work harder. You can always say no in the end until you have signed legally binding paperwork. (A number on a scratch pad and your signature saying you are willing to do it wouldn't stand as legal in most court cases)

2)For me, it has to do with the pressure they apply, watching their attitude in the "special pricing room," and if they are willing to show me all paperwork on the deal. When I bought my 2017 they had the invoice waiting when I drove up (I made an appointment but didn't ask for this), they weren't pressuring me into buying, and watching them in their "special room," they seemed professional and it wasn't my salesman on his phone or laughing the entire time he was in there. I want to see him taking my $50k+ purchase seriously. When they are in that room and laughing and joking around I feel it is because they are screwing me over and will get up and leave. Joke time can be saved for after customer leaves or joke around with the customer.

3) No paperwork, no deal. Pretty simple to me. As Frantz and others have said, it is too easy for buyers to see invoice prices online now so why not just have it there and available for the customer.

4) You should know your rough trade in before even going to the dealership. I print or have on my phone all of the major online trade in estimators for my vehicles when I go. This is another one of those if the dealer low ***** me and it is well below fair market price, I'm out. I don't want the excellent condition but don't insult me on my vehicle when I am trying not to insult you on yours. If they offer around fair market value then I know we can work something out. (This is for normal, non-special edition vehicles as Frantz said). If you really want an in person estimate, take it to carmax and they will give you one.

 

Yes, these are entirely marketing programs between dealers and the services.

I don't disagree with what jdunk said, but will add my own thoughts:

1. I should be more specific. You should look at prices online and know the general market for the vehicle you're looking for. I don't consider that shopping, but rather research. Shopping is going to several dealers on the same truck to save a few bucks and not letting any salesperson actually sell you something. Also, I've always picked out the car or truck I was buying prior to shopping, so for me, vehicle selection is also part of research. I've actually never test driven any new car prior purchase. I ordered a 2010 Mustang in '09 while in Iraq without ever seeing the new body in person. I realize that doesn't work for everyone. So if you are comparing vehicles I'm not offended if you want to drive several. Actually I enjoy that, because Ford makes some great products (not perfect), but it's a company I honestly believe in. For a good deal, asking friends. It's not like you're looking for someone else who bought a Mitsubishi, Ford is the best selling brand in the US. Our dealership actually gives $50 referrals to our customers who send someone else in (so it's okay to name drop). Ask who their salesman was. I don't know how common it is, but I personally add an extra $50 for someone who refers a deal directly to me (writing a check this evening to a young lady who bought from me Saturday and sent her neighbor in, wrapping the deal up tonight.) Online reviews can be tainted, but personal reviews I think are pretty valuable. Go in for an oil change and scout it out.

2. Everyone has their own ticks. I'll be the first to say I don't care if I spend a few more bucks to work with someone I like. I am in far too many hobbies and tend to shop the same way. I find what I want online, and I go to a local store and say "I want this, I am not asking you to match this internet price, but help me out and you'll have my business". Sometimes they can match it and offer to. Other times their overhead has to be factored in. I can't think of any time I haven't gotten a discount, be it a car parts store, aquarium shop, equipment dealer, etc. So I like a salesperson who is attentive to me and looks out for my interest, and I'm willing to pay for that. Not full price, but I pay. Now if I really wanted to go in and crank down a deal to the last penny I probably could. It might take the going to several dealers to do so. To me, going to more than one though is a waste of time. So If you really wanted to, you could crank down a deal and if they rejected, soften up a bit and keep working it. Most people are uncomfortable with negotiating so they feel the best way is just to ask for numbers from everyone and hope it sticks. Generally, the lowest price is the lowest price for a reason. Even myself as an example. I am a very low priced sales person. Why? Well I'm still building up my business. I don't have enough repeat customers to keep me fully busy. If I get to that point, I'll keep giving my repeat customers the same price, but in order to throttle my work load, new folk will likely get a high price as an entry cost to my efforts. Frankly, that's why I have a job, the other guy I work with isn't interested in new business at all. He makes his living off old accounts. He's been selling cars since 1986, when I was 3 years old. Same dealership, but my prices are lower. It can be different with retail, because you're working with a salesperson to get to a manager. There you want an experienced guy, and you want him or her on your side. Long time guys know how to work the system, but they don't make a living selling cars at sticker price. It happens, but the bread and butter is the quick sales. Again, this is where asking for referrals can help. We all have different personalities, so finding a salesperson who will click with you and has the experience to make the deal happen can be good.

3. This question is mostly about process. I don't think anyone has ever walked in our doors and said "I want that truck for $500 under invoice. Show me the paper and I'll buy it!" Customers have this silly notion that if they hold their cards they'll somehow get a better offer. It might happen from time to time, but generally not. I quote invoice, so when someone offers X plan it's $100 higher or so, but otherwise it's rare to have a dealer undercut you secret wishes. These trucks cost more than any of us want! Some dealers show everyone invoice. Many dealers are advertising under invoice online for everything in stock. Not seeing the invoice doesn't' mean they are hiding something from you. If you're being reasonable and you're a buyer, I don't see a reason not to show you invoice. But it is in the dealers interest to share as little as possible when you're shopping. If you aren't buying today, we need to keep a reason for you to come back. This is why shopping doesn't get you a good return on investment for your time. With the online advertising, look at the prices. A majority of online pricing is sub invoice that I see. Here's what happens though. People believe that the online prices aren't that good or else we wouldn't be advertising them. So they either come in and expect thousands off, or else they ignore them and come in, and end up paying quite a bit more! If you look at a few local dealers in the same state, you'll likely see very similar pricing, and there is a very good chance these figures are extremely good deals. There is a really really good chance you might not qualify for all the rebates.

4. When to do a trade request.... some dealers insist on starting with that, others insist on doing it after the demo. Frankly it doesn't matter. While the process is designed to get you to sign a contract today, following that process can work in your favor. If you feel your savvy enough to know when to say you want a little more without looking like you're just shopping than the best thing to do is follow the process. Some of it seems silly, but it works. When I worked retail deals, the customers who I made the least (and most) money on followed the process. The difference is the ones I made the most money on said yes far too quickly. By saying no, sticking to your research, and begin reasonable, you can sit down with one person you like and iron out a deal. The longer you say no without leaving the better chance you have at getting a great deal. Depending on some conditions it could be 3rd pencil, or 6th pencil. When they start really justifying the pricing, you're probably in a good deal situation. It's about a 20 minute process I'd guess to negotiate, and it's 20 minutes to the next dealer, where you have to start all over again. Hence I don't think shopping is a good use of time if you are working with a good dealer. Some dealers will take a huge markup and make your trade look like its worth more than it is. Others give you actual cash value, or go under actual cash value trying to get a good deal. That's nothing to get offended by. After all, you're doing the exact same thing to us, and just like there is another dealer down the road, there is another customer with a better trade. IMO it doesn't matter when you get your trade appraised, so if you really want it first you can. Sometimes if you buck the process you can get right to deal a little quicker. Generally I find it a little more risky though. Sales managers are sometimes pretty stubborn folks, and they might just give you a horrible number to give you to someone else. Especially with the whole survey thing, I think it's generally best to follow the process and simply not let the process steam roll you. If they want to go off payment, that's fine. It won't beat you up if you do it right. You can ask to focus on the difference figure, but your deal will come in working the payment. Payments are what sells deals, even if we lose money. Difference figures are for shoppers, and often end up with the shopper spending more than they really have to.

 

Gentlemen,

Thank you for the detailed responses, there are a lot of nuggets of wisdom to absorb before my next purchase trip. There is only one local dealer and they don't stock what I am looking for so it will end up being an order visit.

In the past I have worked the price on the new vehicles first then started the negotiations on the trade, but around here the dealers push pretty hard to value the trade as soon as you walk in the door. Obviously they want to throw the trade value in the menagerie of numbers they are spewing out trying to confuse the issue. On a new vehicle order the process and trade value will be an interesting twist.

Thanks again for the information.

Dave