New car - destination charge

[ERD50]

I have been monitoring True Car for a used vehicle and I think it has great potential. It's like an enhanced buying service with more data like a sales price bell curve and days on lot/ price changes for used cars. The PenFed buying service is run by true car. I plan to speak with a dealer I trust to see how they feel about true car but of course expect they will say they can meet or beat.

Here's what I have not figured out about "True Car" - they say these are prices reported by customers, but I think they say this excludes dealer installed/offered options.

So what if one person reports getting a 'great deal', say $24,000, and another reports a 'good deal' of $25,000, but...


What if the one who reported paying $24,000 bought $2000 'worth' of near-useless, or at least questionable value, but high profit margin, dealer installed options (pin stripe, clear coat, rust proof, maybe extended warranty, etc). The dealer is looking at the whole package, and probably made more profit by dropping the price $1,000 if he could tack on $2,000 of extras. Who got the better deal, $26,000 ($24,000 reported) or $25,000 out-the-door? And I don't think we know any of this.

That makes it questionable to me. At any rate, I did check it, and often the delta of 'good' to 'great' was just one or two hundred dollars? I'm trying to avoid a major ripoff, $100 or so isn't exactly a screw job, through of course we'd all like an extra $100 in our pocket.

-ERD50

 

[ERD50]

I live about 60 mi from San Antonio and 100 from Austin, True car would not include Austin dealers which had the car I wanted while the San Antonio ones did not. There was no way to tell true-car the radius to search for dealers, they just assumed the nearest metro.

Enter a different zip code? -ERD50

 

[Taxman59]

About 10 years ago. I walked into a dealership, and told the salesman the make and model I wanted, the colors I would accept and told him to give me the best price. He responded $279. I told him I would go to the ATM across the street and get the cash, he could get the car ready to drive off the lot! He responded that there was the loan paperwork to complete. I explained that he gave me the cash price and I accepted it. He responded that I didn't know how to buy a car. I gave him a second chance to give me the cash price, and he said $21k. I said thank you, I would get another quote from another dealer and let him know if he got the sale. Again "you don't know how to buy a car! You have to counteroffer!" I told him $279. As I got up to leave, the manager came over (the salesman was somewhat loud) and asked what was wrong. The salesman said I didn't know how to buy a car, and I responded that he needs to learn to listen to the buyer before he speaks, and left.

 

[aja8888]

I understand, but cannot verify, that TrueCar is funded by the auto dealer networks. If so, isn't there the possibility of a conflict of interest in the price reporting? No where that I can find does TrueCar explain what's "in" the shown prices.

I'd use CarGuru's scatter graph tool as REWahoo indicted above that is available for historical pricing trend analysis.

Let's face it folks, car buying is still a "slight of hand" trick, even with the always believable internet as another tool.

Incidentally, last December when I was new truck shopping (I finally gave up), I signed on with Costco's "supplier" pricing scheme. At that time, Costco was offering a $700 cash card from them if you bought a vehicle (GM) before 12/31/16. The pricing I got from a GM dealer on a new GMC Sierra full size pickup under that Costco program was $XX,XXX, less TT&L. Moving to another local GMC dealer and pricing the same truck, same options, etc, the non-Costco offer (I didn't mention it) was $3,000 less (not including TT&L) than the "supplier" price I received from the previous dealer.

Of course, at that time (end of year), it was evident that one could EASILY get an offer of several thousand dollars less than a "program price" offered by Costco, PenFed and others. There were some truck dealers that were offering 33% off MSRP as a "come on" to get you inside the dealership. I have no idea if anyone actually bought a truck at 33% off MSRP though.

Let the buyer beware is the message. here.

 

[Bamaman]

The level amount destination charge is an average cost of delivery all over the country for a specific model of car. Factories didn't think it was right penalizing someone that lives in Seattle over someone living in Detroit, MI.

The destination charges are a specific line item on the dealer's invoice on every car and they're not negotiable.

When you purchase a car and get down to negotiating the destination charges, the dealer will not think too highly of you for zeroing into something they have no control of. Go after them on the MSRP vs. selling price or Documentation Charges or other fees they can do something about. But leave the destination charges alone.

Beware on some import dealers adding destination charges on a secondary window sticker--along with those rip off paint sealants, overpriced floor mats and spoiler on the moon roof. Sometimes import dealers will try to charge twice for destination fees.

 

[Midpack]

Let's face it folks, car buying is still a "slight of hand" trick, even with the always believable internet as another tool.

Though it is a "slight of hand" transaction in many respects, you can get the lowest price at any given time by pitting several dealers against each other, not falling in love with a particular car (even if it is exactly what want), and being patient/willing to walk.

It's been four years since my last purchase, and the internet tools have been very helpful to me for the last several car purchases. Before I set foot in any dealers showroom - I go online and get the best price on the internet department, either through several dealers internet sales, or through a service that polls several.

With the lowest online price in hand, I go to the other dealers and if they have what I want, I ask for their best price. It's never low, but I tell them the price I have in hand. They either come down to beat the price I have, or I go on to the next dealer.

Often they tell me they will match what I have in hand, but I tell them I don't think that's fair to the first dealer, and tell them they have to beat that price (say $200-300).

They'll also say, go everywhere else and then come back and we'll beat/match the best price, but I tell them I'm definitely going to buy a car but I am not going to go back to dealers repeatedly, give me your best price and if you're the lowest I will be back to buy. I leave my phone number if they want to make a better offer, but I tell them I'm ready to buy today. Sometimes they do, but not always.

If no one beats the internet price I started with, I go buy from that dealer.
It's worked very well in the past, the next best price has been $800 more in one case, and almost $2000 in another.

Going at the end of a month, or a quarter, often helps, especially in winter when foot traffic is slow.

How much of a discount you can get, will depend on how popular and/or scarce the vehicle is. If it's a model that's piled up on dealers lots you should expect a big discount. If it's a model that your having a hard time even finding, you may pay close to full MSRP - even above in some rare cases (usually exotics in high demand).

And you have to play this game each time. I bought my wife's Camry from a local dealer who beat everyone else even though they had to do a dealer trade to get the car we wanted. When I bought my Prius, that same Toyota dealer was way off the mark even though they knew I had a better price elsewhere. IOW, don't assume a dealer that's been competitive in the past, will always beat the others - not true.

Best of luck...

 

[kimcdougc]

My DH is a buyer of cars....! We have bought well over 125 in our 38 years of marriage. We only buy "lost leader" cars when we buy new. This is the car they advertise as "only one at this price". We have 30 to 40% equity when we drive off the lot. We have learned the way to do this is to look at the s/n or stock # in the advertisement and go and ask for that specific vehicle. When they start him hawing around we tell them we can go look on the lot for that car.

We then tell them we will be paying cash and do not want to talk to the Finance person. (Thus not having to listen to all the extras they try to sell you).

There is no negotiating, the price that is advertised is what we pay since it is already so great.

Works like a charm. Think the best deal we got was a brand new red Ford 150 4x4 super cab truck for $20,600. The truck had running boards, sync, power door locks etc. That truck can be sold today for way more than we paid for it.

 

[RobbieB]

I couldn't do the internet thing or the phone thing. I want to sit in the car to see how it "fits" me. Yeah pure comfort. If I'm going to put hundreds of miles per day on the thing I want it to be comfy. I want to be able to put my feet in different places, rest my arm and be able to move my butt a bit.

So, I'll go to the dealer and sit in a lot of cars and drive a few. Then I'll buy the car from him because he worked for it.

 

[jazz4cash]

I understand, but cannot verify, that TrueCar is funded by the auto dealer networks. If so, isn't there the possibility of a conflict of interest in the price reporting? No where that I can find does TrueCar explain what's "in" the shown prices.

I'd use CarGuru's scatter graph tool as REWahoo indicted above that is available for historical pricing trend analysis.

Let's face it folks, car buying is still a "slight of hand" trick, even with the always believable internet as another tool.

I don't know about funding, but True Car is a public company (TRUE). I think I confused some features of CarGurus with TrueCar. CarGuru popups have been stalking me for a few weeks.

I don't agree with the "sleight of hand" as a generalization. My experience has been that it really depends on the dealer...buyer beware. Also for the 4th time or so, the destination charges are not just another way to extract more money from the customer but the manufacturer could easily include the average cost in the base price and it would not be an issue. If you're in doubt ask to see the dealer invoice which is as close as you'll get to dealer cost.

 

[Sunset]

I don't know about funding, but True Car is a public company (TRUE). I think I confused some features of CarGurus with TrueCar. CarGuru popups have been stalking me for a few weeks.

I don't agree with the "sleight of hand" as a generalization. My experience has been that it really depends on the dealer...buyer beware. Also for the 4th time or so, the destination charges are not just another way to extract more money from the customer but the manufacturer could easily include the average cost in the base price and it would not be an issue. If you're in doubt ask to see the dealer invoice which is as close as you'll get to dealer cost.

They might show you a fake one, no way they would show the real one, and regardless it does not show the manufacturer kickbacks, quantity reimbursements, basically credits paid to the dealer based on the month's sales numbers (which can be $1,000's per vehicle).

 

[Bamaman]

They might show you a fake one, no way they would show the real one, and regardless it does not show the manufacturer kickbacks, quantity reimbursements, basically credits paid to the dealer based on the month's sales numbers (which can be $1,000's per vehicle).

I worked for an auto manufacturer and managed a department processing sales incentives and low APR programs. For all practical purposes, dealers pay the same price from a factory in the lower 48 states. There are no volume bonus' in the auto world.

"Kickbacks" are commonly referred to as the "2% dealer holdback" and they're a line item on every factory invoice. There are few businesses as competitive as the automobile dealerships. To get a sale, a competitive dealer will do just about anything--including selling the vehicle less than their fixed and variable expenses per vehicle sold.

The manufacturers "2%" holdback funds are paid out toward the end of the year. That way dealers will have the funds to pay federal income taxes (if profitable) or state advalorem taxes on their year end inventories. It's also funds that can be withheld if the dealer's delinquent on their parts account and other obligations to the factory.

You can often get a better deal the last 3 working days of the month--especially if the dealer's not making his sales goals. Regional sales managers often have funds budgeted to to push dealers to make a deal on slower selling vehicles. And if sales have been slow and the budgets have not been used, the sales region may throw a "bounty" on more popular vehicles toward the end of a month--or end of a quarter.

But despite a customer's hard driving attempts to make a deal, don't think that you'll commonly be buying a vehicle that's really less than their cost. Dealers couldn't stay in business doing business that way. And you as a customer are never going to beat auto dealers at their own business.

 

[brucethebroker]

They might show you a fake one, no way they would show the real one, and regardless it does not show the manufacturer kickbacks, quantity reimbursements, basically credits paid to the dealer based on the month's sales numbers (which can be $1,000's per vehicle).

Had a friend who sold new cars for an American co. back in the 80's. Used to brag about how they had 2-3 fake invoices for each car and would size up the buyer to decide which one to show him.

Things may have changed since then......

 

[Bamaman]

Had a friend who sold new cars for an American co. back in the 80's. Used to brag about how they had 2-3 fake invoices for each car and would size up the buyer to decide which one to show him.

Things may have changed since then......

I have dealt with hundreds of auto dealers, and had access to all dealership bookkeeping including invoices.

I've never seen any car dealer that had time to bogey up factory invoices for any reason. They're ultra fast moving businesses and too understaffed to do such things.

 

[Texas Proud]

Our approach has been to negotiate the out the door price and make them stick to it at delivery. I did walk one time over a less than $100 option that they added without agreement. They wanted to know how I could walk away from a deal over such a small fee and I agreed that it was odd that they would lose a sale over such a small amount. I did later buy another car from that dealer and no idea whether they remembered that almost transaction.

How they want to move the fees and charges around is mostly a non-issue to me at that point. The "documentation fees" are the ones that used to bug me but once I get to the point of working to a final price, I felt better, lol.

Now that is strange.... when I bought my Acura, they put on tint and mud guards... they said they did it with every car that comes in but forgot to not do it on mine.... (I refused to buy it during the negotiations).... so, they just wanted to know if I would take it as is or would I make them take it off!!!

Nope, it is good to go.... I got them free... the dealership knew they screwed up and never tried to put it on me... now, when they started the conversation I thought they were going to try to have me pay... I was surprised then they did not...


Also, our Honda was negotiated with the internet guy and we came to a price based on the sticker... when we got there we both found they had added a few things on such as paint sealant, door guards, interior something or other... you know, the usual... he looked at the sticker and said 'well, I guess you get those free'....

 

[scrabbler1]

When I bought my first car by myself 25 years ago, I had bought this little paperback book called, "How to Buy Your New Car for a Rock-Bottom Price," by Dr. Leslie R. Sachs. Dr. Sachs wrote about the tactics the car salesmen and their dealership managers use to get more money from car buyers. He wrote about the destination charge and dealer invoices and all the little mind games they play on the car-buying public.


Another thing I bought was the annual April car issue of Consumer Reports. It described and rated the cars along with ratios for dealer cost on the options and base car. I also bought the Edmunds car guide for that year to give me some more details about the cars. All of that was very helpful when dealing with the car salesmen. I had to walk out of one dealership when they played games with me and wasted my time in a lengthy negotiation.


In 2007, when I bought me next car, I used Consumer Reports car-buying service in which I paid about $7 for all the pricing info about a specific year, make, and model of a car. Armed with that and all the prior info I had from the last time (i.e. Dr. Sach's book, which I reread), I went into the car dealership. The salesman tried to force me to pay lots of money for overpriced dealer-add-ons shown on a second sticker on the car. I told him I wasn't going to pay for them and he backed down.


Armed with my dealer cost data and a calculator, I figured out what I was willing to pay for the car and he went for it. The dealership, the salesman told me, was under pressure to sell cars before it got taken over by a larger conglomerate. They had stopped local advertising because of the upcoming takeover (which was true). And within a week after I bought the car, the dealership was under a new name.


In Dr. Sach's book, he writes that the destination charge is a fixed charge which is part of the full invoice price.

 

[travelover]

Now that is strange.... when I bought my Acura, they put on tint and mud guards...............

I had this happen back in 1983 on a new Escort. They undercoated it against my direction (the car had been ordered specifically for me) and wanted me to pay. Salesman asked me not to make a squawk as he could be fired. In the end, I paid and the salesman send me "referral reward" checks monthly until it paid off the undercoat cost. I never knew if he actually screwed up or this was some kind of an internal scam. I did not ever buy another car there.

 

[Texas Proud]

I understand, but cannot verify, that TrueCar is funded by the auto dealer networks. If so, isn't there the possibility of a conflict of interest in the price reporting? No where that I can find does TrueCar explain what's "in" the shown prices.

I'd use CarGuru's scatter graph tool as REWahoo indicted above that is available for historical pricing trend analysis.

Let's face it folks, car buying is still a "slight of hand" trick, even with the always believable internet as another tool.

Incidentally, last December when I was new truck shopping (I finally gave up), I signed on with Costco's "supplier" pricing scheme. At that time, Costco was offering a $700 cash card from them if you bought a vehicle (GM) before 12/31/16. The pricing I got from a GM dealer on a new GMC Sierra full size pickup under that Costco program was $XX,XXX, less TT&L. Moving to another local GMC dealer and pricing the same truck, same options, etc, the non-Costco offer (I didn't mention it) was $3,000 less (not including TT&L) than the "supplier" price I received from the previous dealer.

Of course, at that time (end of year), it was evident that one could EASILY get an offer of several thousand dollars less than a "program price" offered by Costco, PenFed and others. There were some truck dealers that were offering 33% off MSRP as a "come on" to get you inside the dealership. I have no idea if anyone actually bought a truck at 33% off MSRP though.

Let the buyer beware is the message. here.

As to the question of do they sell the teaser car or not... when I was in a dealership looking for a car, the sales manager was in trying to close the deal with me... it was late and close to closing time... someone came over and said something about the ad priced car.... seems that the person who was going to buy it had the deal fall through... mgr was upset as they had told others it was sold.... so I think that they do try and sell it since there are laws about bait and switch.... and mgr did not have to act that way in front of me since I was not looking to buy that kind of car....

Maybe someone with dealer knowledge will chime in and set it straight...

 

[mystang52]

Alluded to earlier, I found my best negotiating tactic was stating I was also interested in a competitor's model (e.g., while shopping for my Audi Q5 I told them I was also due to visit the Volvo dealer and look at the XC60). I feel that it's too easy for the dealer if they think I'm just shopping price for the same car at another dealer.
I think I'm a good negotiator, but I also recognize that this is what dealers do for a living, so to think I can beat them at the negotiation game is naive. I just want to be sure I pay a reasonable price. In the end, if I "overpay" by a $100 or even $200, give the price for a new car that is small potatoes.

 

[Texas Proud]

Though it is a "slight of hand" transaction in many respects, you can get the lowest price at any given time by pitting several dealers against each other, not falling in love with a particular car (even if it is exactly what want), and being patient/willing to walk.

It's been four years since my last purchase, and the internet tools have been very helpful to me for the last several car purchases. Before I set foot in any dealers showroom - I go online and get the best price on the internet department, either through several dealers internet sales, or through a service that polls several.

With the lowest online price in hand, I go to the other dealers and if they have what I want, I ask for their best price. It's never low, but I tell them the price I have in hand. They either come down to beat the price I have, or I go on to the next dealer.

Often they tell me they will match what I have in hand, but I tell them I don't think that's fair to the first dealer, and tell them they have to beat that price (say $200-300).

They'll also say, go everywhere else and then come back and we'll beat/match the best price, but I tell them I'm definitely going to buy a car but I am not going to go back to dealers repeatedly, give me your best price and if you're the lowest I will be back to buy. I leave my phone number if they want to make a better offer, but I tell them I'm ready to buy today. Sometimes they do, but not always.

If no one beats the internet price I started with, I go buy from that dealer.
It's worked very well in the past, the next best price has been $800 more in one case, and almost $2000 in another.

Going at the end of a month, or a quarter, often helps, especially in winter when foot traffic is slow.

How much of a discount you can get, will depend on how popular and/or scarce the vehicle is. If it's a model that's piled up on dealers lots you should expect a big discount. If it's a model that your having a hard time even finding, you may pay close to full MSRP - even above in some rare cases (usually exotics in high demand).

And you have to play this game each time. I bought my wife's Camry from a local dealer who beat everyone else even though they had to do a dealer trade to get the car we wanted. When I bought my Prius, that same Toyota dealer was way off the mark even though they knew I had a better price elsewhere. IOW, don't assume a dealer that's been competitive in the past, will always beat the others - not true.

Best of luck...

I agree.... I hate the sales people who say 'come back with a price and we will match it'.... well, screw you.... give me a good price NOW and I might buy from you... why should I do all the work and come back and tell you what some other dealership if offering ...


The only time I came back was when I got a great offer for a new car from a Dallas dealership... I did take it to the local one and after a bit of hemming and hawing they did match the price... it was $3,000 less then what they wanted to sell me the car...


BTW, it is not only car dealers who do this... my sister is getting prices for some home improvements and she is getting the same spiel.... but I hear.... sorry that we tried to screw you and you found out, but can we still get the job from you

 

[aja8888]

Well, soon we will have the ability to buy cars at Walmart:

The world's most profitable company is dipping its toes into car sales, Automotive News reports. Wal-Mart is partnering with CarSaver to introduce car sales in 25 Wal-Mart stores across the southwest.

There will be staffers on hand to help buyers through the process, but the experience will happen at a CarSaver kiosk. Wal-Mart shoppers will be able to peruse their options, apply for financing through Ally and shop for insurance.

Linky:

Wal-Mart is going to start selling cars - Autoblog

 

[REWahoo]

Well, soon we will have the ability to buy cars at Walmart...

I'm looking forward to the day Amazon starts offering new cars - and delivers them by drone. Bezos has some trials aready underway...

 

[MichaelB]

I'm looking forward to the day Amazon starts offering new cars - and delivers them by drone. Bezos has some trials aready underway...

And this time the destination charge will be legit.

 

[REWahoo]

And this time the destination charge will be legit.

Amazon Prime members will get free two day delivery.

 

[powerplay]

My DH is a buyer of cars....! We have bought well over 125 in our 38 years of marriage. We only buy "lost leader" cars when we buy new. This is the car they advertise as "only one at this price". We have 30 to 40% equity when we drive off the lot. We have learned the way to do this is to look at the s/n or stock # in the advertisement and go and ask for that specific vehicle. When they start him hawing around we tell them we can go look on the lot for that car.

We then tell them we will be paying cash and do not want to talk to the Finance person. (Thus not having to listen to all the extras they try to sell you).

There is no negotiating, the price that is advertised is what we pay since it is already so great.

Works like a charm. Think the best deal we got was a brand new red Ford 150 4x4 super cab truck for $20,600. The truck had running boards, sync, power door locks etc. That truck can be sold today for way more than we paid for it.

Oh my goodness, that's 3 or so cars per year. What do you do with all of them? You and your DH must be real pros with the sales tactics and such at the car dealers.

 

[travelover]

I agree.... I hate the sales people who say 'come back with a price and we will match it'.... well, screw you.... give me a good price NOW and I might buy from you... why should I do all the work and come back and tell you what some other dealership if offering ...

In my last purchase, I had a dealer say they would beat any price by $250. I said fine and emailed a competing quote. They said, no so fast you have to come in in person or no $250. You can read all about it in Yelp, Google and Angie's List.

I don't need that high pressure crap, especially when other dealers accepted an emailed competing offer.