markwill12

So, I am a bit confused with the whole notion of working with dealers through their Internet sales department. I am interested in either a Lexus ES 300h or a Lincoln MKZ. I have visited two dealers and the reception at the Lexus dealer was considerable "lighter" on the sales pitch I appreciated.

However, I have read numerous stories here how folks had great experiences (and less hassle) dealing with the Internet sales department. So, I wrote to each dealer and received interesting responses.

The first dealer (Lincoln) came quickly, thanked me for the contact - and then told me to come in to the dealership because "the customer always has the upper hand in that situation". Uh huh. Oh, he also provided a link to the car he had on the lot with the spec I had requested - with a price approximately $5,000 above MSRP! WHAT?!!! What's the point? Just wasting my time. I pushed back - and he came back with a revised quote (and the statement that "my sales manager appears to be having a good day" - these guys are SOOOO condescending!) of $1,000 over invoice.

So, that was my Lincoln Internet sales experience The Lexus dealer was a little more straightforward. After a little back and forth clarifying how options are packaged and what they had on their lot, he sent me details of a car that was close to my spec, plus another $1,500 of options I didn't request. He then sent me the window sticker obviously showing me the MSRP and also sent me invoice figures. He didn't state a price he wanted for the car, which I assume is a "tell me what you pay" approach on his part.

Neither is exactly the "great" experience I've seen others describe. But the Lexus experience was more straightforward and just seemed more honest. I like the salesman better too - just doesn't apply a lot of pressure and seems respectful that this is a big decision or me.

But he didn't actually state an asking price. Is it reasonable for me to expect to pay less than invoice (before TTL)? I see others here posting some pretty incredible deals - below invoice. As a round number, the invoice figure is around $45,000. Any guidance on a starting point would be of interest

Thanks.

gmanusmc

Mark - is 45k the msrp or invoice? That seems a bit high for invoice. Here in CA these cars are going for well below invoice (1500 - 2000 or more below invoice).

Bill G

markwill12

Hi Bill,

It is invoice and the numbers tally with the Lexus web site. As I mentioned there are a few extras on that car beyond what I wanted specifically. I guess it's fair and reasonable that a dealer might not have the exact spec I requested, so I am OK with that providing it's not a crazy amount of additions.

The options on this particular car are as follows (prices are MSRP):

Blind Spot Monitoring*: $500
Luxury Package*: $1,370
Navigation*: $2,625

I did not ask for the following but are included on the car (so, on reflection, this adds up to $3,340 more than the spec I requested):

Parking Assist: $500
HID Headlamps: $515
Power Rear Sunshade: $210
Pre-collision / dynamic radar: $1,500
Rain Sensing Wipers: $155
Leather trimmed shift **** and heater steering wheel: $450

(Note: I actually would like the dynamic radar but understand I can't get it without the pre-collision feature).

So, interested in the $1,500 - $2,000 below invoice thing. That's presumably because of holdback, etc. Are there significant variations between states? I am in Washington state and don't really know how to assess the reality of my local market.

Thanks again.

Mark

SW17LS

You have to understand that CA is a different world. You have a LOT of dealers, a lot of competition and money is made on volume, not per vehicle. In my experience, you can't replace a deal from CA anywhere else in the country.

Dealerships always want you to come in, because once they get you in the door they have control. When you are at home, you are in control. There is a HUGE difference in dealing with luxury car dealerships like Lexus, BMW, MB and mainstream dealers like Ford/Lincoln. When I bought our Jeep it was a terrible experience compared to the Lexus purchases I've made.

You also have to realize that you can't really spec these cars exactly how you want. The options come shipped to the dealer in a few different configurations, hence why the car on the lot has options you didn't want. Apart from a special order which is very difficult with Lexus, you're going to have to accept one of the packages that is closest to what you want.

The only place a deal $1,500-$2,000 below invoice on this car is going to happen is CA.

I would contact a few dealers through edmunds.com or cars.com, that sends the signal you are an internet buyer and they will quote you over email. You can also try truecar.com...

markwill12

Thanks Steve. Yes, I understand completely about finding the "perfect spec" and understand I need to be flexible here. I'm just not comfortable paying $3,300+ (MSRP, at least) beyond what I wanted. I am hoping if the dealer widens the net a little more, beyond his own lot, there might be something a little closer. We will see.

Fair point about CA. So, at a high level are you saying that I'd be looking at roughly invoice elsewhere? That's the issue - I am trying to determine what is roughly in line with the local market vs. what is just crazy talk

By the way, one thing I forgot to mention. The invoice price of the car I described is actually $45,459, INCLUDING a line item called LDA, which is $589. I did a quick Bing search and found the following comment:

"OK, I found out that the LDA fee is advertising fee. I'm OK with that."

To what degree is that negotiable?

Thanks.

Mark

SW17LS

Bear in mind if he dealer widens his net to other dealers lots he won't be able to get as good a deal. IMHO you're better off exploring different dealers yourself.

You also have to realize that its nearing the end of the model year. In general July is not a great time to buy a Lexus because:

1. Incentives tend to be poor
2. Current year delivery is winding down and they prepare for the next model year

Next month you will see incentives to move the 2013s, and then beginning in September you will start to see 2014s, on which deals won't be as strong for a while as they were on the 2013s.

If you are in a market where there are not several dealers within a reasonable distance, I think invoice is a pipe dream on this car. Bear in mind that without incentives, they have holdback beyond invoice. Lexus holdback is 2% of the BASE MSRP. So for an ESh its about $800. So, at $800 below invoice they are making $0, unless they are making something up on financing, your trade, etc.

The LDA fee is a cost incurred by the dealer, it is not profit for them. Its going to come out of their end regardless, so its not really something you can negotiate.

gmanusmc

Mark - Steve has offered a lot of good info and is probably correct about CA deals being a different animal as far as competition is concerned. Have you considered traveling here to save a few thousand? Between LA and Orange Counties, there are many dealers and there should be plenty of inventory, so you might be able to come closer to your desired options while getting a super deal. It might be worth the cost of a plane ticket and a night or two of lodging. Also, dealing with the Internet department is the best way to go - it simplifies the process and in most cases, results in the best deal.

Hope this helps!

Bill