Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
New Car Deal - too good to be true?
Old 03-31-2012, 11:49 AM   #1
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,979
New Car Deal - too good to be true?

I have a deal pending on a new car. They have agreed to give me $9000 on my trade on (a 10 yo Honda Element). According to online estimates, it's worth about $5000, which means I am getting the new car well under invoice. It's a model that's in high demand, one dealer wouldn't offer any discount on the same model from their inventory.

I discovered that the car was originally delivered to another area dealer, so I assume it landed at the other dealer via dealer trade?

I am a little concerned I'm missing something!

It only has 37 miles, so it's not a demo. It looks fine. In my state, if it was damaged and repaired, they don't have to disclose it unless it's more than 4% of the value (that stinks IMO).

I don't want to falsely accuse anyone, but any suggestions? Thanks...
__________________

__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is online now   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 03-31-2012, 11:59 AM   #2
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,936
I think that getting a new car for $5K under invoice is a common enough occurrence that I wouldn't worry about it. You can always check on Edmunds.com to see what others are paying for a similar car in that zip code.

Enjoy your new car!
__________________

__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is online now   Reply With Quote
Old 03-31-2012, 12:14 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,979
Quote:
Originally Posted by W2R View Post
I think that getting a new car for $5K under invoice is a common enough occurrence that I wouldn't worry about it. You can always check on Edmunds.com to see what others are paying for a similar car in that zip code.

Enjoy your new car!
Salesman says I got it for $300 under invoice plus a $698 protection package (no choice) - on a Prius with gas prices up!!! Doesn't make sense to me. Edmunds shows others are paying about $2000 more, though with a trade in it's hard to sort out.
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is online now   Reply With Quote
Old 03-31-2012, 12:16 PM   #4
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,936
Quote:
Originally Posted by Midpack View Post
Salesman says I got it for $300 under invoice plus a $698 protection package (no choice) - on a Prius with gas prices up!!! Doesn't make sense to me...
Oops! Careless reading on my part. The price makes plenty of sense to me. Check edmunds.com to see what others are paying in that zip code.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is online now   Reply With Quote
Old 03-31-2012, 12:18 PM   #5
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,492
I too have used Edmunds to see what average prices are. You can also get a quote fron another dealer to see if the price is in the same ballpark or not.
__________________
MichaelB is offline   Reply With Quote
Old 03-31-2012, 12:36 PM   #6
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,936
Maybe you are just a really good negotiator! That would be my assumption. Pat yourself on the back, buy the new car, and enjoy your new Toyota Prius.

P.S. - - The invoice price doesn't really mean what they paid for it, as I understand it. There is some fudging room. My Toyota Venza was considerably discounted, and I didn't even do my best at bargaining. My only explanation is that I think the new model year was looming, and the salesman wanted to clear some room for the next year's Venzas. It has been absolutely perfect.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is online now   Reply With Quote
Old 03-31-2012, 12:43 PM   #7
Thinks s/he gets paid by the post
 
Join Date: Oct 2008
Location: Naples
Posts: 2,161
Not knowing anything about used Honda Elements, I checked on Edmunds and see that the first year they made the Element was 2003. Just guessing at how it's equiped and using 75000 miles on your car, the trade in value is about $7500 for one in fair condition to $9000 for excellent condition. New cars generally aren't discounted as much as they used to be and I think 10% off the sticker price would be a good deal. The dealer can jack up the used car to compensate for getting sticker price for the new one. By the way, you can also get new car values on the Edmonds web sire.
__________________
JOHNNIE36 is offline   Reply With Quote
Old 03-31-2012, 12:48 PM   #8
Thinks s/he gets paid by the post
73ss454's Avatar
 
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,378
Quote:
Originally Posted by W2R View Post
I think that getting a new car for $5K under invoice is a common enough occurrence that I wouldn't worry about it. You can always check on Edmunds.com to see what others are paying for a similar car in that zip code.
This is not common at all. Dealers are not in business to lose money. Sales Managers are paid on the bottom line and they are not going to let cars go out as loosers, as it comes out of their pockets.

You are correct that in most cases the dealer is getting other money back from the manufacturer, it's usually 3% of MSRP, but not with all brands.

Also the manufacturer can put out what's known as Retro money. How this works is the dealer may be offered to move a certain amount of a certain model. Let's use a Nissan dealer and say we use Altima. So the offer may be that if the dealer sells 50 of that model in one month they may get $600 for each one they sell if they hit the #. So at the end of the month, like today or this weekend, the dealer may be willing to lose a few bucks to get the retro money.

But to sell a car at 5K under invoice is not anywhere near the norm.
__________________
Work is something you do to get enough $ so you don't have to....Me.
73ss454 is offline   Reply With Quote
Old 03-31-2012, 12:57 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 18,291
Quote:
Originally Posted by Midpack View Post
Salesman says I got it for $300 under invoice plus a $698 protection package (no choice) ...
Maybe I'm not following, but if we assign a $0 value to the 'protection package' (probably what it is worth), isn't that effectively $398 OVER invoice? Or are you saying $300 under invoice including paying $698 for the package?

I'm not sure invoice means anything anyway, the dealer gets paid in different ways. My measure is - am I not over-paying compared to averages, and of course, getting a good value for my dollar (subjective, people place different values on different things).

Though I used the 'true-car' numbers when I shopped, I don't know if they tell me much. They say the prices reported are w/o any dealer add ons. So if Buyer A reported he got the car for $25,000, but bought a $2,000 package of crap dealer add-ons ($27,000 out of pocket, but $25,000 reported), and another guy paid $26,000 with no dealer add-ons that he didn't want anyway - which is the better deal? I'd say the $26,000 deal. The dealer is figuring those add-ons in their numbers, they are almost always close to pure profit for them. Money is money.

-ERD50
__________________
ERD50 is online now   Reply With Quote
Old 03-31-2012, 01:03 PM   #10
Full time employment: Posting here.
Lakedog's Avatar
 
Join Date: May 2007
Posts: 654
I have a 2007 Element and in the last few months I have had unsolicited offers from two dealers wanting to buy it. It seems that there might be demand for the Element now that it has been discontinued. Whenever a trade in is involved, it is hard to know what you are actually paying for the new one -- one reason I prefer to sell rather than trade in. Sounds like you are getting an okay deal on the Prius.
__________________
Lakedog is offline   Reply With Quote
Old 03-31-2012, 01:10 PM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 18,291
Quote:
Originally Posted by 73ss454 View Post
...
Also the manufacturer can put out what's known as Retro money. How this works is the dealer may be offered to move a certain amount of a certain model. Let's use a Nissan dealer and say we use Altima. So the offer may be that if the dealer sells 50 of that model in one month they may get $600 for each one they sell if they hit the #. So at the end of the month, like today or this weekend, the dealer may be willing to lose a few bucks to get the retro money. ...
Heck, if you are there near closing, and the dealer is at car #49, he could practically give the car to you and be ahead (50x$600=$30,000; minus his cost of car #50)!

So how does a clever LBYM retired guy with time on his hands find these opportunities? Let a bunch of dealers know you are ready to buy, but in no rush, and to give me a call over the next year if you need to make a final sale for the month, and I'll come checkbook in hand?

-ERD50
__________________
ERD50 is online now   Reply With Quote
Old 03-31-2012, 01:11 PM   #12
Thinks s/he gets paid by the post
73ss454's Avatar
 
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,378
The other day I brought my Camry into the dealer for a repair. While I was there I was listening to the salespeople calling old customers telling them how much they need their current car. They were trying to make appts with these old customers to bring them in to sell them another car. Nothing wrong with this tactic at all. Once the customer is in the dealership in front of the salesperson there is a greater chance of selling them something than if they were home on their sofa.

The car they were pushing was the 2011 Prius as they must of had a ton of left overs and need to move them. A dealer doesn't need your trade as they can go to the auction and buy what ever they need, it just sounds good to the prospective buyer and does bring them in.
__________________
Work is something you do to get enough $ so you don't have to....Me.
73ss454 is offline   Reply With Quote
Old 03-31-2012, 01:15 PM   #13
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,936
Quote:
Originally Posted by 73ss454 View Post
This is not common at all. Dealers are not in business to lose money. Sales Managers are paid on the bottom line and they are not going to let cars go out as loosers, as it comes out of their pockets.

You are correct that in most cases the dealer is getting other money back from the manufacturer, it's usually 3% of MSRP, but not with all brands.

Also the manufacturer can put out what's known as Retro money. How this works is the dealer may be offered to move a certain amount of a certain model. Let's use a Nissan dealer and say we use Altima. So the offer may be that if the dealer sells 50 of that model in one month they may get $600 for each one they sell if they hit the #. So at the end of the month, like today or this weekend, the dealer may be willing to lose a few bucks to get the retro money.

But to sell a car at 5K under invoice is not anywhere near the norm.
Well, if anyone would know I think it would be you. If I am not mistaken, you used to be in this business. Thanks for the information.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is online now   Reply With Quote
Old 03-31-2012, 01:16 PM   #14
Thinks s/he gets paid by the post
73ss454's Avatar
 
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,378
Quote:
Originally Posted by ERD50 View Post
Heck, if you are there near closing, and the dealer is at car #49, he could practically give the car to you and be ahead (50x$600=$30,000; minus his cost of car #50)!

So how does a clever LBYM retired guy with time on his hands find these opportunities? Let a bunch of dealers know you are ready to buy, but in no rush, and to give me a call over the next year if you need to make a final sale for the month, and I'll come checkbook in hand?

-ERD50
Well, yes and no. One of the things dealers do is report sales that they don't really have if they are close to the Retro #. Let's say they need 2 more cars at 11PM at the end of the month. Many of them will report the 2 cars and put them into rental service to get the money. Most dealers have a rental fleet for service customers.

Most times it's best to buy a car on the last day or weekend of the month, but not always. It's still buyer beware no matter when you buy. If you have some prices and know the real #'s and you're ready to buy then go to the dealer on the last day of the month and see what you can do.
__________________
Work is something you do to get enough $ so you don't have to....Me.
73ss454 is offline   Reply With Quote
Old 03-31-2012, 01:19 PM   #15
Thinks s/he gets paid by the post
73ss454's Avatar
 
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,378
Quote:
Originally Posted by W2R View Post
Well, if anyone would know I think it would be you. If I am not mistaken, you used to be in this business. Thanks for the information.
Yup, it's becoming a distant memory but I still remember a little.
__________________
Work is something you do to get enough $ so you don't have to....Me.
73ss454 is offline   Reply With Quote
Old 03-31-2012, 01:22 PM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 18,291
Quote:
Originally Posted by 73ss454 View Post
Well, yes and no. One of the things dealers do is report sales that they don't really have if they are close to the Retro #. Let's say they need 2 more cars at 11PM at the end of the month. Many of them will report the 2 cars and put them into rental service to get the money. Most dealers have a rental fleet for service customers.

Most times it's best to buy a car on the last day or weekend of the month, but not always. It's still buyer beware no matter when you buy. If you have some prices and know the real #'s and you're ready to buy they go to the dealer on the last day of the month and see what you can do.
OK, thanks. So it isn't the power of that incremental sale of one. But they are motivated to come as close as they can to avoid shelling out their own money to complete the count. So their motivation is limited by whatever their cost of owning those last few cars is, which could be minor if they sort of need a rental anyhow, or fairly major if they have to turn around and sell it (used/demo I presume, may vary by State laws).

-ERD50
__________________
ERD50 is online now   Reply With Quote
Old 03-31-2012, 01:25 PM   #17
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,936
Quote:
Originally Posted by 73ss454 View Post
Yup, it's becoming a distant memory but I still remember a little.
I would imagine! I just did a search and found this:

Quote:
Originally Posted by 73ss454 View Post
FD, working in a dealership for 7 years is more than enough.

I retired after 34 years working in a car dealership last friday. I think I'll also buy my cars on the internet because I don't want to go into a dealership ever again.

If you think you got a good then it's a good deal....
34 years is a long, long time. I just knew you were an expert on this.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is online now   Reply With Quote
Old 03-31-2012, 02:47 PM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,979
Quote:
Originally Posted by JOHNNIE36 View Post
Not knowing anything about used Honda Elements, I checked on Edmunds and see that the first year they made the Element was 2003. Just guessing at how it's equiped and using 75000 miles on your car, the trade in value is about $7500 for one in fair condition to $9000 for excellent condition.
It was a 2003 in fair condition, but it had 124,000 miles on it! The online estimates were all in the $5,000-5,400 range on trade. They gave me $9,026!!!
Quote:
Originally Posted by ERD50 View Post
Maybe I'm not following, but if we assign a $0 value to the 'protection package' (probably what it is worth), isn't that effectively $398 OVER invoice? Or are you saying $300 under invoice including paying $698 for the package?

I'm not sure invoice means anything anyway, the dealer gets paid in different ways.
$300 under invoice on Toyota MSRP excluding protection package. The protection package already applied was a $698 dealer add, though I realize the markup on those pkgs is astronomical, and I'd rather the car didn't have it frankly. So I got the car for $300 to $998 under invoice, closer to the former than the latter I am sure. Surprising given record high gas prices. Must have caught them wanting to reach some month/quarter closing target. Not all luck is bad...

Just left the dealer. The car was delivered 3/23 and then involved in a dealer trade. The sales guy assured me in no uncertain terms that the car had not been damaged in any way. I have no reason to doubt him, I checked the Toyota users site and only repair record was "pre-delivery prep" which sounds standard.

So I paid for the car, signed over my trade in title, and drove away. 54 mpg for my first 60+ miles.

Thanks to all who replied on short notice, much appreciated.
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is online now   Reply With Quote
Old 03-31-2012, 03:12 PM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 18,291
Sounds good, congrats! Enjoy the ride!

-ERD50
__________________
ERD50 is online now   Reply With Quote
Old 03-31-2012, 03:45 PM   #20
Thinks s/he gets paid by the post
73ss454's Avatar
 
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,378
Midpack, are you saying under invoice or under MSRP? Since they over allowed on the trade about 4K I would guess under MSRP. What dealers do is give you too much for your trade and charge you too much for the new car, it makes the buyer feel better.

But if you like the deal, then it's a good deal.
__________________

__________________
Work is something you do to get enough $ so you don't have to....Me.
73ss454 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
GPS Surgery - new battery? easysurfer Other topics 23 02-15-2016 08:50 AM
Vanguard's New Look easysurfer FIRE and Money 50 04-15-2012 08:16 PM
I am new here... Infinity Hi, I am... 7 04-06-2012 07:58 AM
Day one of a new adventure bison74 Hi, I am... 11 03-31-2012 10:10 AM

 

 
All times are GMT -6. The time now is 11:32 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.