Tony Hyundai experience

[joshuatree]

Re: Tony Hyundai experience

Look at the Maroni Sticker. That's the big sticker on the window of the car. On it you'll find the final price from the factory. Typically the manufacturer will list their MSRP. Yes it's "Suggested" however manufacturers really don't like it when a dealership sells below MSRP unless it's approved by them.

I'm gonna have to side with GeckoGeek on this one. Are you sure you're not thinking dealer invoice? MSRP is an inflated price on top of dealer invoice. Even at dealer invoice, dealers make money because there is holdback from the manufacturer around 2-3%. There's even more if there is a manufacturer marketing support.

If a dealer can't sell the car before interest kicks in, that is not the fault of the customer and doesn't justify selling above MSRP. Above MSRP only happens when it's a high demand car or if someone just really wants to be the first one on the block with bragging rights.

While most car sales folk work on commission, I'm sure certain dealer networks with a no haggle price policy don't.

[craigwatanabe]

Re: Tony Hyundai experience

I'm gonna have to side with GeckoGeek on this one. Are you sure you're not thinking dealer invoice? MSRP is an inflated price on top of dealer invoice. Even at dealer invoice, dealers make money because there is holdback from the manufacturer around 2-3%. There's even more if there is a manufacturer marketing support.

If a dealer can't sell the car before interest kicks in, that is not the fault of the customer and doesn't justify selling above MSRP. Above MSRP only happens when it's a high demand car or if someone just really wants to be the first one on the block with bragging rights.

While most car sales folk work on commission, I'm sure certain dealer networks with a no haggle price policy don't.

Nope MSRP is what comes off the manufacturer's pricing dealerships can start to sell a vehicle at. Dealer invoicing is what the local dealer adds on top of the MSRP.

And cars always sell after interest kicks in. All you have to do is check the car ads where a car is listed "Thousands of dollars" below MSRP and if you look carefully you'll see a select number of stock numbers that apply only to those certain vehicles. In retail the words: Inventory Clearance, Huge Sale, Price Reduced, BOGO all mean the retailer has to move old stock or unpopular stock. Special for Today typically means if it doesn't sell today, that hamburger or milk get's thrown out at the end of the business day because it's gonna rot.

When Manufacturers offer rebates on cars, it's typically a buyback where the manufacturer will cover that portion of the vehicle's pricing on qualified buyers. Auto dealer centers in our major banks also do buybacks on interest rates offering lower rates to customers if they put up more down payment.

It's all a nutshell game where costs are hidden under certain incentives. Take one incentive and the cost moves to another shell. In the end you get a lower monthly payment but at a slightly higher down payment or interest rate. Drop the interest rate and raise the downpayment or lose certain rebates. Take the rebate and lose the interest drop. That's what the four squares of selling focuses on. I try to be upfront when it comes to these pricing schemes because not everyone is a dummy when it comes to seeing a trick being performed. I'll tell a person bluntly the only way they can afford this car is by focusing on one of those four quadrants of pricing. I'll be upfront when I tell them that to ensure a lower monthly payment their interest rate will be higher or they'll lose that trade in value on their car.

Honda is known for adding dealer fluff to the price of their cars, typically anywhere from $3,000 to $4,000 is added and there is nothing the customer gets in features or options that account for it. It's pure profit. This is added on the dealer sticker (not the Maroni Sticker) and can be negotiated down to nothing if you want to drill it down that far. But remember part of that fluff profit goes to the salesperson (a fraction of that amount) as their commission.

No haggle policies mean the prices are at rock bottom already meaning very little commission available for the salesperson. I like that idea but most dealerships want to keep the highest "Gross" they can so won't encourage their sales force to offer the lowest price. When I sold cars I preferred that idea and instead wanted to go on volume sales to shoot for the end of the month bonuses. When you can sell the car at the lowest possible price you get that customer out on the road faster. If you spend too much time haggling over a price (sometimes several hours) you could have sold twice as many cars in the same time period. To the dealership moving metal (selling cars) in volume means more than gross profit on individual units. That means lower wholesale pricing schedules from the manufacturer when you can prove you can move more units per order.

[Nords]

Re: Tony Hyundai experience

She's the little old lady from west Makaha
Go granny, go granny, go granny, go.
(the Beach Boys)

I know they sound like the Beach Boys, but the song was done by Jan & Dean...
http://en.wikipedia.org/wiki/The_Lit..._from_Pasadena
http://www.lyricsdownload.com/jan-an...na-lyrics.html

[bueller555]

Re: Tony Hyundai experience

Maybe the semantics are tripping all of us up, but like the other two, I'm confused on MSRP. According to Wikipedia, http://en.wikipedia.org/wiki/Manufac...ce#Automobiles

Currently, the MSRP, or "sticker price" — the price of a vehicle as labeled by the manufacturer, is clearly labeled on the windows of all new vehicles, on a Monroney sticker, commonly called the "window sticker". This is substantially different from the actual price paid to the manufacturer by the dealer, which is known as the invoice price.

[emphasis added].

[cynsaligia]

Re: Tony Hyundai experience

there are certain cars where you pay what the dealership tells you if you want the car. in those cases, you can expect to pay MSRP plus whatever overpriced dealer add ons there might be. also, whether you buy off the lot or custom order is a factor.

that said, it's really unwise to go to a dealership with the intent of leaving with a vehicle without having done any research. there is so much information available, not only about the car itself, but different dealerships and what a consumer can expect.

additionally, it helps if you use your personal relationships. if your brother works for lexus, maybe the savings you get from the friends/family discount will be enough to sway you into purchasing the IS350 instead of 335i. or if your friend's dad is the second in command at nissan hawaii, maybe you'll pay only the base price for a truck that's fully loaded. or if your uncle is a good friend of the sales manager at MINI, maybe you get to pay less than most other buyers do, even if you make a custom order. that sort of thing.

[craigwatanabe]

Re: Tony Hyundai experience

Yes arming yourself with the right pricing information is paramount to getting the best possible pricing.

Get to know that dealer invoice sticker (the long skinny one) before you start to negotiate with the salesperson. This is they only place where you have room to drill down any price.

As for Kelly Blue book, make sure you have the current one. The new Blue books are published weekly now as opposed to monthly so prices vary week to week. Also there are Kelly bluebook wholesale prices which cannot be used against as a bargaining chip because those are based on what the car is worth if there isn't anymore cost involved (like forwarded loan value). There is also the Kelly Black book which is reserved for wholesale auctions to dealerships. You can't use that one either.

But despite the Kelly pricing index, you have to look at local market conditions or street value. Certain demographics across the nation and even down to the state will put a value differently on certain vehicles. Street value is very important in knowing what a good price is for a vehicle in a certain locale.

So why do used car lots owned by new car dealerships cost more? Several reasons but the biggest is the fact that in order to take in that 2006 Mazda as a trade, the dealership must buy the loan from the auto dealer center of a bank. That extended cost to the dealership is tacked onto the price of that vehicle when it is sold. Sometimes that cost is extended into the price of the new vehicle being sold as well so buyer beware.

Another reason why those prices are higher is because most new car dealers will certify their used cars and back up their brands with warranties. Those costs are added to the final price of the vehicle.

[craigwatanabe]

Re: Tony Hyundai experience

additionally, it helps if you use your personal relationships. if your brother works for lexus, maybe the savings you get from the friends/family discount will be enough to sway you into purchasing the IS350 instead of 335i. or if your friend's dad is the second in command at nissan hawaii, maybe you'll pay only the base price for a truck that's fully loaded. or if your uncle is a good friend of the sales manager at MINI, maybe you get to pay less than most other buyers do, even if you make a custom order. that sort of thing.

Cyn if your brother works for Lexus, chances are he already approached you to consider him for buying a car. Getting a discount may or may not happen. It depends on the dealership. But car dealers will use new hires to attempt to get more customers via their network of friends and family. Once those salespeople have exhausted their contacts, it's an uphill battle for them to get the sale thru those networks. Most leave discontented as it takes roughly five years to establish a repeat and referral customer base. For a new hire, they need to fill that gap with really sound selling techniques because their only choice for customers are the walk-in customers or "Ups" as they are referred to in the biz. One in five up's will buy a car so you can imagine how many up's you'll need to approach in order to make a minimum of 10 sales per month (typical quota needed by most dealerships).

[cynsaligia]

Re: Tony Hyundai experience

Getting a discount may or may not happen.

oh, sure, i wasn't saying it's a guaranteed thing. i was just making the point that if you know someone who works for the company that sells the car you're interested in, it won't hurt to see if your personal relationship can save you some money.

i would guess that most people in this town have the benefit of being one or two degrees away from someone who works in auto sales, in the same way that most people in this town are one or two degrees away from someone in the military.

as for your point that most who enter auto sales leave disgruntled, i wholeheartedly agree. it's a mentally, emotionally and physically demanding job on more levels than most people appreciate.

[Frankie's Market]

Re: Tony Hyundai experience

Nope MSRP is what comes off the manufacturer's pricing dealerships can start to sell a vehicle at. Dealer invoicing is what the local dealer adds on top of the MSRP.

To put it simply, this is incorrect.

Here are the definitions of MSRP and dealer invoice, as found on Edumund's website.

http://www.leaseguide.com/Articles/carprices.htm

Manufacturer's Suggested Retail Price
First, for new cars, automobile manufacturers decide the retail price that will be set on each model, each model variation ("trim"), and each option. Combined, these prices become the Manufacturer's Suggested Retail Price (MSRP). These prices can change from year to year for the same models, or can even change one or more times during a model year.

MSRP becomes the "sticker price" — the price shown on the vehicle's attached window sticker. There will also be additional charges for transport and preparation ("destination charge"), and distributor/dealer installed options. These charges are not technically part of the MSRP, but are part of what you pay.

Notice that the "S" in MSRP is short for "suggested," meaning that a vehicle's sticker price in only a recommended price. A dealer is perfectly free to charge more or less if he chooses. For hot-selling new vehicles in high demand, selling prices can easily be higher than sticker price. For slow selling vehicles in good supply, selling prices will almost always be less than sticker price.

Invoice Price
Dealers are independent businesses, not owned by car makers, which means they buy wholesale and sell retail to make money — like any other business. Wholesale price, sometimes called "factory invoice price" or "dealer invoice price," is the price that a dealer pays the manufacturer for a vehicle. All dealers pay the same price for the same vehicle. However, there are other factors that determine a dealer's actual cost. We'll examine those in a moment.

Dealer Profit Margin
The difference between MSRP sticker price (retail price) and invoice price (wholesale price) is a dealer's potential profit margin, assuming vehicles sell at sticker price — ignoring other costs, charges, or rebates he might receive.

You've got to be kidding. Anything below Manufacturer Suggested Retail Price is "unfair" to the dealership? I don't believe it. Anything above MSRP is either price gouging or a highly desired car.

Very true. For the vast majority of vehicles that are sold off the lot, only a babe in the woods would pay full sticker. OTOH, a buyer will have less bargaining power if he/she places a factory order with an oddball combination of options. That person should expect to pay closer to sticker. And in the case of particular cars where demand exceeds the available supply (like was the case when VW first revived the Beetle in '98 and the factory couldn't fill the orders fast enough,) then it is under those special circumstances where you would see a dealer markup added on top of the MSRP.

[craigwatanabe]

Re: Tony Hyundai experience

I stand corrected on invoice price as I mentioned. However it is where the dealer markup begins as you stated and that's where the bargaining begins. Anything below MSRP moves into the fair profit margins for dealerships. Like any business, if Walmart sold a product at near wholesale prices, they wouldn't make the necessary profit needed to remain operational. That profit margin pays for those operational and investor costs.

Likewise, there is huge overhead in a car dealership so the difference between wholesale and MSRP helps fill that gap. Anything above it adds some value to the vehicle such as trim packages, color packages and other dealer-added items. BUT there are some line items in that area that are are pure profit on top of profit. This area is negotiable.

[Frankie's Market]

Re: Tony Hyundai experience

I stand corrected on invoice price as I mentioned. However it is where the dealer markup begins as you stated and that's where the bargaining begins. Anything below MSRP moves into the fair profit margins for dealerships.

I don't know about you, but I've never paid MSRP on any new car that I've purchased. And any customer that uses MSRP as a negotiating "starting point" may as well let his pockets get picked.

The rule of bargaining is to start off with a figure that is lower than what you are prepared to pay,.... and to work your way up to somewhere below the seller's asking price. This is where doing your homework ahead of time and estimating the dealer's cost comes in handy. You don't go in there expecting to walk away with a new car with an initial offer that yields zero profit to the dealer. But by being patient, playing it cool, and telling the anxious salesperson that "you need time to think about it" everytime he or the sales manager gives you their "final offer," you'll end up getting a better deal than you would by starting the negotiating off at too high a price.

Getting a discount may or may not happen. It depends on the dealership.

I agree with this. Salespeople are folks whose time are just as valuable as anyone else's. They work at their job to put food on the table, and that is something that should be respected. If every relative, in-law, high school classmate, neighbor, fellow church member, etc. expects their "friend in the business" to cut them a deal that takes a bite out of their commission, then how do they expect their friend to pay the bills?

Interestingly, one of my best friends in high school has a father who now owns a Nissan dealership (among other businesses). I had always assumed that my friend could obtain a car "at cost." But I was wrong, as he recently told me that even immediate family members could not purchase a car for personal use at dealer invoice prices.

[GeckoGeek]

Re: Tony Hyundai experience

Correct me if I'm wrong, but isn't the usual negotiating tactic to haggle over the price and then all the dealer profit charges get tacked on after that?

As such a customer could well get a car "below MSRP" and gain bragging rights, and yet the final out-the-door payment could end up close to MSRP.

[Frankie's Market]

Re: Tony Hyundai experience

Correct me if I'm wrong, but isn't the usual negotiating tactic to haggle over the price and then all the dealer profit charges get tacked on after that?

As such a customer could well get a car "below MSRP" and gain bragging rights, and yet the final out-the-door payment could end up close to MSRP.

Well, certain fees that are tacked on by the dealer are negotiable, others are not. This guide gives you a basic outline on the different charges and what they exactly are.

http://www.autotropolis.com/wiki/ind...le=Dealer_Fees

Keep in mind that certain things like sales tax can't be avoided and are obviously not profit items for the dealer. Also, note the subtle (but very important) difference between "title, registration, and license" fees vs. "documentation" fees. Many people do not know the difference between the two and that the latter (which the dealer charges as a "service") can definitely be negotiated.

[cynsaligia]

Re: Tony Hyundai experience

and then there are instances, GeckoGeek, where just being able to walk into the dealership and afford purchasing the car is the bragging right. i mean, you can and should expect to play the game at any of the Cutter, Tony Group, Pflueger and some of the Servco dealerships. certain other brands? not so much.

[oceanpacific]

Re: Tony Hyundai experience

Common sense dictates that the buyer has to start a considerable amount below what he's willing to pay. After all, the dealer starts WAY ABOVE the MSRP figure with $4000-7000 of Additional Dealer Margin (ADM) that's on the "second sticker." Sometimes, that's listed as "Additional Dealer Mark-up," "Market Adjustment," with a ridiculous term like "Retail Value" representing the inflated total price.

Personally, I've NEVER paid even a single dollar of ADM and I totally ignore it. Car buyers have to learn "patience" - the dealer has the car, but you have what they want, your $$$$$.

Negotiations need to be firm, but you don't have to be unpleasant about it. It's counter-productive to call the dealers "thieves." If you don't like the negotiation process, go with the Costco or Sam's Club programs with pre-arranged no-haggle pricing. But, you still have to be on-guard for low-ball trade-in allowances and over-priced extended warranty plans. Three different dealers quoted trade-in values of $3000, $4000, and $5000 on the same vehicle for three similar new vehicles costing about the same.