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Originally Posted by FricFrac
I'm just as eager to get the best price I can and I did my homework and negotiated. That's why I got $800 off instead of paying MSRP. Not sure if you know anything about running a business but making $2500 on a car is jack not a tidy profit. Add to it the cost of keeping a dealership open - staff, rent, utilities, insurance, etc, etc, etc.
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Considering I've been running my own business for over 7 years, I'd say I have a decent grasp. When you consider almost every dealer within 150 miles of me (D.C/Baltimore area) is willing to accept at (or near) invoice (and still make around $1k in profit in doing so), making an additional $2500 over invoice with MSRP is a tidy profit, IMO... but your definition of "tidy" appears to be different. If your idea of a good deal is $1,300 over invoice, cheers to you, but it's not the best deal you could have gotten with hardly any extra work on your part by a long shot.
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Originally Posted by edeeZee
It's OK Hitech, no offense taken. But it's humorous to see the time and toil you took to write out your superfluous post. Is that you Davidyan? I didn't know vindication and having thin skin is the way you demonstrated not being able to handle another's disagreement. You think extraneous fluff is validating?
Anyhows, I don't use "hearsay" to explain my points. I was in the car biz from '99-'02. You never mentioned whether you had direct experience, or if you read a lot of "how to negotiate a new car" tactic from outside sources. 1% per month to floor could've been likely during that era. The economy wasn't in shambles like today, and interest rates (controlled by the Feds) were probably a lot higher. Thus 12% a year then was probable.
The $400K/month figure was casually given to me by my friend. It doesn't imply that it is a detailed figure EVERY MONTH, it was ballpark instead. Seriously, are you the auditor for this dealer? Then how do you know. How many VW's, Hyundai's or Lincolns did we move. The profit margins on all 3 brands vary. FYI, we moved primarily VW Jettas and Passats; Jettas had less then $1,500 profit typically, and Passats had around $1,700 on average. And you know what? We blew every unit out at invoice because VW's don't pull like crazy. This store was good, they paid the salesman $200 flats because if it was 20% after $500 pack, then they couldn't retain sales people.
Like I said, there's nothing wrong with negotiating a deal. But trying to take all the meat off the bone is going to lead to dealer kicking you out. We live in a capitalistic society, if you don't like the deal, then you got the freedom to walk out, you're not under duress.
BTW, I don't tip waiters nor waitresses who cop an attitude. I literally pay the bill and don't leave no change.
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EDIT: Okay, I went back and read this reply before posting and it read aloud as being very harsh... definitely not my intention, so I've tried to modify it appropriately.
<chuckle> Sorry, not DavidYan, though I do believe he posted in one of my first threads here. You have written several long posts extolling the virtue of
your beliefs, but when someone disagrees with you in a similarly long post it's superfluous? How am I displaying a thin skin? How is what I said extraneous (other than trying to make my point using a comparison about the waiter)? Or were all of those comments meant towards me only if I was DavidYan in disguise?
You stated numbers, and I stated numbers. The difference between what you and I posted is mine was based upon real-world figures, not what a friend told me as an off-the-cuff figure. Take two minutes to come up with some way, any way, you think a small dealership can use $400k/month... once you're done with that, explain how you came up with those numbers. No, I'm not the auditor, but common sense tells me those numbers don't add up, and I explained my reasoning why. The simple questions is, do you know many small dealerships that sell 7+ cars a day at MSRP? If so, then I would love to invest in them (and possibly steal away some of their sales team as they're GOOD). I will certainly admit that a 1%/month figure may have been possible in years past when rates skyrocketed, but I was speaking of the here and now where anything over 6%/yr would be a bad deal... Lou has already stepped in and admitted to a 5.5%, so we were both a bit off.
I worked in a bakery for a year, doesn't make me a pastry chef (though I do make a mean Napoleon)... you worked at a dealership for a few years, doesn't mean you understand where the money comes from or goes to (though you certainly may and just have a difficult time putting it into words). The "direct" experience I have is determining what a product costs the reseller, giving me useful information on what kind of margins I have to work with in making a deal... I don't have to read anything special on the net to understand that concept, I do it every day as part of my business. Sure, it helps to read some of those articles to learn the lingo and know where the money might be hidden, but I don't base my information just on Google, I also apply a healthy dose of common sense.
I'd say we would agree to disagree and leave it at that. I'm not suggesting everyone gouge the dealer for everything they can and expect the dealer to survive, but any less-than-ideal profit they make from an invoice sale should be compensated by the MSRP sales people chuckle about on here. We're lucky in that we have the internet these days, and we have each other to provide useful information. And I intend to use everything I can to get the best deal possible.
Where's the beer icon so we can share one...