anyone getting MSRP (or below)

davidyan

I am a firm believer that businesses need to make a profit and have once been in the business of selling cars myself, getting paid based on a percentage of profit margin per vehicle. However, even from a business perspective, keep in mind, that the worst they can do is say no and send you shopping elsewhere. If they are willing to sell at invoice or below (trust me, they will), they obviously found the deal worthwhile for them and you shouldn't feel guilty. Both parties have the ability to walk from the deal at any point, at any price, for any reason. There's no shame in wanting to pay the lowest possible price and they will try likewise work you for the MSRP or even higher.

A car salesperson's greatest fear is that you will walk away from their lot without buying something. The reason is, there are so many dealers out there with essentially the same economic structure (costs, overhead, incentives, same models available) within a good 20 mile radius of each other. If you walk from one, and go to another, you will almost always get the deal. Therefore, by threatening to leave, they know right away they lost the deal and will try to do whatever they can to make it happen.

If you don't like shopping at 10 different lots and pitting them against each other, just go to one- tell them your price (I rec $500 - $1000) below invoice for the 370Z and stick to it. Tell them its your first place window shopping because you're bored and that if they want sell it to you right now without any further shopping, they have to give you that price. However, for anything more than your price, you will have to shop the deal and will get back to them next week. If they say its ridiculous, its not because many have bought the Z for that price- the market clearing prices for the 09's are already set in stone and they know it. There's nothing wrong or un-business like about the approach. Being the first time shopping for the Z, you either want that price now or, will shop more if they tell you its not doable just to be a smart consumer.

edeeZee

^I speak from 1st hand experience as a former car salesman on the line, and you make it sound way too easy. Easier said than done. I won't expound on this, because posts like yours plant too many 1/2-truthed and presumptuous seeds in people's heads and this misleads them when buying new cars.

The way you describe it nowhere as close as what really goes on.

davidyan

Ed- with all due respect, it is as close as what really goes on. Perhaps your dealer was managed very well to drive solid profit margins. I'm glad the business worked out well on your end.

The way I described is exactly how I bought my 370Z. I have also helped numerous friends and relatives the exact same way to negotiate for their cars getting very similar deals and on occasion, even better deals. The reason some don't get those deals is because they either give in to fast when the salesman / closer counteroffers with a "meet me in the middle deal" or, the customer wants a color or option that only that one dealer has and they make it known that they must have it that way. Or, its possible that the dealer you work at is doing so well that they don't have to sell at invoice. Look at the pricing threads and you'll see how many people have paid invoice or even below.

Car negotiation tactics aside, my primary point was to highlight that he (the previous poster) shouldn't feel guilty paying invoice. Because when the dealer accepts that type of offer, they are doing exactly that i.e, accepting that the offer is something that they can live with. It might not be what they were hoping for but its not un-business friendly by any means.

Finally, its a business owner or executive's responsibility to manage their company profitably. Corporate pushes dealers to stock large volumes of inventory. Dealers try to sell as much as possible. If market forces mean that they get low margins, thats the way it is. Generally speaking, when making a product of any kind, a manufacturer has strict cost targets and based on the nature of the product they hope to drive enough customer value or demand to sell for a price much higher. If they can, they should. If they cant do it, they either:

- produced / stocked too much inventory or too many dealerships - think about why GM and Chrysler forced many dealers to close. Very sad but fair if you believe in a competitive market.
- did not create enough value in the product for the customer to pay that high price (DOUBTFUL that this is the case with the 370Z)
- too low of demand
- were not aggressive enough with the cost targets resulting in low profitability even at "high selling prices." All manufacturers focus on this- think about why they didn't give us oil coolers for instance. They were thinking the increase in cost of car by installing the cooler would not justify a higher selling price or more units sold for the average consumer. Only a few would pay more for this. How many of us have installed aftermarket coolers even given how much we all complain about oil temps? Very few. They were right from a business perspective for not including it.

The market dictates the price and they have to live with that or better find a way to manage the business. GM, Chrysler and even Toyota is dealing with that right now. The competitive market is also the reason why people living in places like New York, SF Bay Area or LA have to pay $1M + for an average looking house when people in the Midwest can get a gated estate for that price. I don't mean to come off strong, but this is just the way business works. For those dealers that can find a way to charge MSRP with no grief from the customer, more power to them.

Hi-TecDesigns

I simply can't see this working, at least not with those figures. 2% holdback on a base/sport model is $640 (give or take). Unless that car has been sitting on their lot for 6 months and they believe they have no hope of getting rid of it any time soon (the interest is losing them money at this point), I can't see them saying "Sure, we'll let the car go for what we paid for it (or even less) and eat what we've paid in interest so far. We'll call it a learning experience" this isn't last year's Corolla that they need to dump because the new models have been on the lot for 3 months, this is a higher-end vehicle that is still in its current year (though fast approaching the end of it).

I certainly agree with the concept of what you are preaching, and if I was trying to buy that Corolla and knew what kind of leverage I had, I'd do it, but I don't think many would find themselves in a position to have that kind of leverage on a Z for at least another few months. I can imagine a dealer agreeing to $100-$200 below invoice if he is having a bad couple of months, but not below his holdback.

EDIT: I should add... I didn't mean to make anyone believe I had a problem with paying invoice... that's my target number, and I'm happy if I hit it. I'd only expect less than invoice in the case of the Corolla I mentioned. Would I take a deal at less than invoice if the dealer didn't bat an eye when it was offered? Sure, but I'm not going to brow beat the guy trying to get less than that.

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Cjanik

go for invoice then, you'll get it, and do remember - the 2010's are coming out in a couple months, they have inventory they need to get rid of in the next few months

davidyan

Invoice price is a great deal as well. However, what I suggested is not only possible but has been done. I got 600 below invoice which is right at their breakeven after holdback. One person here got 1000 below indicating a loss for the dealer. There are quite a few buyers within the 500 - 1000 below invoice range which is why I thought it would be helpful for you to know.

Do whatever makes you feel comfortable. All this talk of "hot car" = higher price isn't always true either. When I worked as a salesman at Dodge during college, we had two Vipers. We sold one Viper at $10K below invoice with no dealer incentives other than the std holdback simply because it sat too long. The owner would yell at us each Saturday asking us why it wasn't sold. For the second one, another person came by thinking that because it was rare that MSRP was a great deal and paid just that (we even had a $20K markup sticker on top of the MSRP). Good thing he's probably rich enough as a Viper buyer to not have been impacted by the lost savings he could have had.

My dad bought an S-Class Mercedes at a time when the dot com boom happened and people in the Silicon Valley (where I'm from) were making tons of money left and right from IPOs. There were Mercedes all over the road. Even then, they sold it to him for $4K below invoice. The car business (dealer side) just has very low margins. Its their structure. They make up for it and still profit by:

- Volume Bonuses offered to the owner of the dealer: For ex, if a dealer sells X number of new cars in a month, the owner of the dealership will get a huge check from corporate. This is different BTW than customer incentives that they pass on to you. This makes up for the $400 he lost selling you the Z for $1000 below invoice (after roughly 600 holdback) worthwhile if he is close to hitting that target and just needs to sell a few more units. This is why people buy cars for far below invoice all the time.

- Selling extended warranties, service packages, paint sealant, etc.

- Financing

- Used car sales where they buy from auctions for dirt cheap. Also, with used cars, the customer never really knows what the dealer paid. Its not like new cars where you can look it up online.

- Trade ins.

- This next one is not a incentive but, a dealership owner could actually lose its ability to sell that brand if they consistently miss volume targets. This almost happened to my friends dealer where he worked as a salesman. They sold few new cars and mostly relied on used cars for revenue. Finally Chrysler (it was a Jeep dealer) told their owner that they would cut his dealer if he didnt start pushing volume. This happened by the way a couple years before the current auto crisis.

Hi-TecDesigns

Well, David, I went into a dealership last night with a renewed vigor, due in part to your post of people getting deals for less than invoice. I saw exactly what I wanted, in chicane yellow... the color is my favorite, but I was simply not willing to pay $500 for a color choice. In a nutshell, I told the sales manager I was willing to pay $300 of that $500 (essentially $200 below invoice), but the full $500 was out of the question as I would be happy with several other colors (none of which they had on the lot in the package I want).

It was obvious they would have accepted invoice, but they started to piss me off when they wanted to play hocus pocus with the numbers, continually asking me how much over invoice I wanted to pay (I couldn't have been more clear I was not going to pay a dime over invoice). Let's take a look at the kind of price crap they tried to pull with me, shall we? (Note: I knew exactly how much this vehicle and every option cost them for invoice, not assuming any extra dealer-specific bonuses for good customer feedback to Nissan corporate and such, which only helps them)

1) Showing me invoice price plus destination, calling that invoice, and trying to convince me that price was what I was calling invoice in my original calculations, making it appear as if I undercalculated the vehicle's value by $700+.
2) Taking my "out the door price" offer and working backwards to what they claimed I was actually offering them (any astute person knows that 6% tax on price 'X' is not the same as 6% of price 'X'+tax, a mathematical sleight of hand which makes it look like I'm offering about $120 less than what I really am). I'm an engineer that calculates pi to 50 places in my head without breaking a sweat, so don't pull that BS on me.
3) Pointing to my offer price and showing how much lower than MSRP it is. Well, duh!
4) Throwing out multiple figures while I'm trying to calculate in my head what each option is worth, even after asking for a minute to do just that in peace and quiet. You may make me lose count, but that just means I'm going to start from the beginning again, and now you've succeeded in pissing me off.
5) Trying to tell me the dealership would be losing money on the deal, especially right after I finished telling them I knew exactly how much profit they were making in holdback and "processing" fees (about $550).
6) Telling me how "hot" this car is and how selling it at that price would be crazy for such a great-selling car, leading me to shoot back with:
a) 2010s will be on your lot in a month and a half
b) This car has been on your lot for a while now (costing you, I bet, about $25/wk in lost profit)
c) upcoming models are 40th anniversary, meaning new colors (like black cherry) and custom badging
7) Other minor crap not worth mentioning, but still annoying, nonetheless.

In the end we couldn't make a deal, so I shook his hand, thanked him and the sales guy for their time, and hopped back in our new Cube and drove home. The search will continue today. Current deals end August 3rd, none of which include the 370Z, so hopefully we'll see some incentives show up after the new deal cycle kicks in.

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edeeZee

I cringe at similar threads and posts like yours. They're unfounded and lack pragmatic steps. You never mentioned whether you ACTUALLY worked at a new car dealership. However, I did, and was friends with F&I and deskmen (salesmanagers). You digress too much with generalizations from simplistic "supply & demand" concepts from what econ classes teach--sorry bro, it's too vague and w/ all due respect, you don't know what you're talking about. I'm not here to flame.

So what's this contradiction w/ American cars being "oversupplied" thus leading to their heavy discounts i.e. "please buy me or else the big 3 will sink further," and your "doubtful this is the case w/ the 370"? This means 370's can't be whored out domestics can.

Writing superfluous posts like yours, especially, with a "scholarly" tone doesn't mean you're an expert at buying new cars. Those "for example, real estate in these areas" aren't analogous to the dynamics of car buying. Cars depreciate, real estate you aforementioned have an appreciative trend overall.

Sorry, your "expertise" isn't what really goes on, not even close. Too many generalizations and no specificity.

davidyan

Ed- I did say that I worked at a new car dealer in another post (Dodge). Also the best proof of what I'm saying is to look at the pricing threads. Why are so many people getting the prices I'm suggesting if its all false? I personally was at 600 below invoice for mine after only 30 - 45 min.

If you think I'm so ignorant which you came off as immediately after my FIRST post, then what specifically about it is wrong? I've also found other pricing posts you come off the same way. "I used to be a salesman, all false. Dealer wont sell below X. End of story" I do respect your input, but it needs to carry specificity as well.

I also don't mean to flame either but responded because you come off attacking rather than helping. Are you here to help him get a good price or just to defend your profession? No need to do that unless he comes to YOUR store. Let the Nissan dealer, whichever one he's shopping at defend their prices if you are helping him. If $500 - 1000 below invoice is too ridiculous of an offer for the 370Z, what price do you suggest he or others pay? What price did you pay personally using your experience as a salesman? Again, its the dealers job to manage profitably. No need to worry about his overhead, the sales guys commission etc. When salespeople sell cars do they worry about how many kids you have, your college fund, or your mortgage payment? That's why its the right thing to do to focus on the what others getting good deals are paying and try to do the same. Its the same reason why dealers try to figure out what their competitors are trying to sell the car for. If the offer is too low for the seller, they simply say no. If its too high for the customer, they do the same. What's the big deal? The customer should just focus on getting the best deal he can.

If they tell him NO, he can:

1) go somewhere else
2) just simply pay more if he doesn't like the hassle (some don't mind) and enjoy his new 370Z for what it is.
3) Play the back and forth game a little longer to get his price. He MAY succeed. He MAY fail.

ANYTHING TO LOSE HERE?? Nothings guaranteed of course, but the trends are again 500 - 1000 below. If someone others did it, why shouldn't he try too?

You are not any more specific either other than that you think its not possible and that you used to be a salesman. A lot of people do it.

It may not be any one of those factors but combined puts pressure on them. When I said "doubtful with the 370Z" relating to product value, there is no contradiction with the american cars. It means I didnt think it was that one factor affecting the Z, may have been others like the other points I made that you didnt quote.

YOUR dealer may have done very well but many are willing to sell below invoice (some significantly). The steps are specific and pragmatic. I wasnt trying to teach a course. I was suggesting to him the prices that people are paying are lower than he might intuitively think. Also see my other post (the one you didn't quote) where there were more specific reasons why a specific dealer would sell below.

The only thing simplistic is the car sales process. - Sales guy sits you down with the four square and quotes the MSRP presenting why that is what the car is worth. Also he asks for trade in, down payment if financing etc. Customer offers 1000 below invoice with no trade. He says NO WAY. You stick to your point. He brings in Manager and goes back and forth a little bit. Customer gets up tries to leave. They end up selling for 500 - 1000 below invoice after arguing for a while, IF THEY WANT TO SELL for that. To be a broken record, all i was pointing out is that many Nissan dealers are as evidenced by my own purchase experience and others here combined with how their business works. If I'm so ignorant, let me ask you what your F&I manager knows. He sells paint sealant signs the contract? I'm sure he sees a lot of prices but there are some below invoice.

Also, the analogy with real estate I made has nothing to do with appreciation/depreciation trends. I was stating that the market sets the prices. The point was that if the market price is high, then you pay a lot if its low, then you pay lower. Again, looking at the pricing threads, many people esp in the past 2 - 3 mos. have been at invoice or up to a $1000 below. Finally whats wrong with econ concepts, even if general, they drive what happens with prices and companies do use it along with their overall strategy to set product prices. In early 07 there was a debate on either CNN or NBC between the Century 21 (real estate brokerage) CEO and a Princeton Econ professor regarding how widespread the housing crisis was. The Century 21 CEO insisted it was related only to very small "pockets" or markets within the US whereas the Econ professor was arguing that it was widespread throughout looking at econ indicators and also he doesn't have the bias of being involved in the business. Look at what happened a year after that conversation.

Cjanik

sounds like the dealer tried to get you, maybe called your bluff. You should wait a couple days then go back to the same guy, he will now know your willing to walk away again and might just "want to get it over with".

Also wanted to mention, there is a factory charge called destination charge which the dealer must pay. it is not really negotiable - because thats the price it cost to ship it from japan.

Dont take their BS about how 370z's are selling like hotcakes, thats total BS, my dealer has only sold 1 370z in the last 2 months and they have 8 370z's

I gotta say it sounded like you did a good job negotiating. Dont give up yet!

Hi-TecDesigns

I intend to wait until after the 3rd (Monday) has passed... the current incentives (unfortunately on just about every car but the 370Z) are good until then, so hopefully starting with the 4th a whole new batch of incentives will be in place. It's their last chance to get older cars off of the lot before the new ones start rolling on.
If you notice in the first numbered item I mention the destination charge. I know it exists, that it's non-negotiable, and its exact amount. I'm sure to include it in my calculations.
I made a reasonable attempt given my level of patience and energy level that day. I'll keep this particular car in mind if I don't find another one I like, but I'm not holding it out as the only one left.



As far as negotiations went, this was the breakdown:
1) With available options and destination, invoice on vehicle was $33,179
2) Add tax, we're up to $35,170
3) I initially offered $34,900 out the door, which started the lesson in mathematics
4) I came up to $200 below invoice, adding another $70, mainly to keep the math simple and prevent any more mind games (it's easier to say "I'll pay $200 below invoice" than "My final offer is $xx, xxxx")
5) No deal.

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ZCarMan

I paid $36192.00 total including TTL for my Black 370Z, 6Spd MT, Touring, w/Sport Package, plus illuminated kickplates, front mats, cargo mat and cover. The only thing I didn't get was the nav system as I didn't want it. I purchased from Herb Gordon Nissan in Silver Spring, MD. Good Luck!

fly yellow

I wouldn't expect any incentives on the Z, and I wouldn't expect that many left overs either. From all reports the 2010's aren't coming out until November, not September like many other new car models. The production run of the 09 coupe is done. The Z may not be as hot as say the Camaro, but it is still a hot car, and the choices are getting a bit slim. Invoice is a good deal. Sure, you may be able to get it for 200 below, but you will probably go through a lot of time and aggravation to do so.

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rgolden90

Is that the final OTD price? Was the frieght amount of $720 included?

edeeZee

Bro, chill with the superfluous posts. This ain't the O.J. trial reopened. Sorry, I won't read all your blabber. I see at the bottom "CNN, NBC Princeton econ prof...blah blah blah"-->loquacious fluff and no substance

I didn't mean to strike a nerve with you. But I did read the snippet where you mentioned reading all my other posts in how I presented myself as a "know-it-all" with my hackneyed "I'm a former car sales..."

I didn't know you were that vindicative and always had to be right? OK davidyan, you're right.

I was on the line, called my ups, did my follow ups, got my be-backs, closed the deals, sent the vehicle to the wash rack etc. I slapped the RS on the lower right windshield, blah blah blah. I know how to structure the 4-square too my friend. The one with MSRP on the upper left corner, down payment, month payment an trade-in. I did the 5-liner credit app too bro. Then I remember the deskman saying, 'switch them to a used car, they're roaches.'

You remind of one of my coworker at a dealer. Loquacious, talked my ears off if he felt I snubbed him or didn't take his talk seriously, etc. Grow thick skin, you need it on the line.