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Clearly, it is your choice as to how you want to go about buying a car, but, if you do what you are describing, you are virtually guaranteed not to come close to finding the floor of the market because dealers are not going to offer you prices close to that floor until they know that they have to do so because of competition from other dealers. And, when you make the opening offer, you are signaling to the sales person that he/she, in order to get your business, will be able to do so without making his/her best offer. Further, as I've said, you weaken your position when you walk into the dealership to do the negotiations. At that point, you turn over control of the situation to the dealer.
Again, the best way to create competition is to use the internet and phone to generate competition from various dealers, and you maintain maximum control because you are not in the dealership. As I've said, within a couple of days, this method will allow you to find the floor of the market.
Also note that there are always various unadvertised incentives that the manufacturer offers dealers, and those unadvertised incentives are constantly changing. Thus, the only way to find where the floor of the market is right now is by generating competition between dealers using a method similar to what I've described.
So, take your choice and do something similar to what I've described or do it your own way.
I've used your method a couple of times. The first time was for a new 2003 Honda Accord. I think I originally saw this method on Edmunds.com. They basically had a form letter you faxed (shows how long ago this was) to multiple dealers. The letter was very direct, seemed borderline rude. I thought I would not get any responses because of the tone of the letter. On the contrary, every dealer responded and I got prices that I didn't think were even possible. I'm a big proponent of the method you detailed above.
Do you think one could negotiate a better deal with salesperson if you were to lead them to believe that they will be able to profit off you (tire/hazard insurance, gap insurance, PPF, etc.) when you finalize the deal in the finance manager's office? I don't buy any of the those add-ons. In the past, I may have stated that I'm not going to buy any of those add ons and that I do my own maintenance. The next time I buy, I think I may try to give them the impression that they can make more money off of me on the backend of the sales deal.
1) They do this for a living, unless your excellent in your strategy you`re probably gonna come out on the wrong end of that play
2) I dont leave anything to be determined once I step foot on the dealers property; "snakes den" type of mentality. I`m there to simply review the contract, make sure everything is the same as what we agreed on over email, sign, take delivery and zoom on out.
Do you think one could negotiate a better deal with salesperson if you were to lead them to believe that they will be able to profit off you (tire/hazard insurance, gap insurance, PPF, etc.) when you finalize the deal in the finance manager's office? I don't buy any of the those add-ons. In the past, I may have stated that I'm not going to buy any of those add ons and that I do my own maintenance. The next time I buy, I think I may try to give them the impression that they can make more money off of me on the backend of the sales deal.
I think that a good salesperson knows, from the way the conversation/negotiations have gone, whether you are likely to be someone who will be willing to buy the add-ons that the finance manager is going to be trying to sell you. While the dealership and finance/business manager may hope that you buy the high mark-up add-ons, I doubt that it makes much difference to the sales person whether you are going to buy those add-ons or not. In any case, while I may attempt to use well-honed negotiations skills, I also make a commitment to myself to deal with integrity and honesty, and it would not be my choice to indicate to the sales person that I'm likely to buy something that, in fact, I'm not going to buy. I'm not sure that it makes any difference because, again, a skilled sales person is going to be able to figure out, well before you get to the business office, whether there is a chance that you will be buying any of the high mark-up add-ons.
I was checking out ES F Sports on various dealers' websites when I ran across this...
They have two navigation packages listed in their price. When you go to Lexus' website and build an ES F Sport, it won't let you pick Navigation ($1820) AND Radio:Navigation W/Mark Levinson Audio. It forces you to pick one or the other if you are selecting Navigation. Is this not double-dipping by the dealership?
1) They do this for a living, unless your excellent in your strategy you`re probably gonna come out on the wrong end of that play
2) I dont leave anything to be determined once I step foot on the dealers property; "snakes den" type of mentality. I`m there to simply review the contract, make sure everything is the same as what we agreed on over email, sign, take delivery and zoom on out.
You're probably right in your assessment and I totally agree on the "snake's den" anology. I bought my RX350 a year ago and did the whole deal over the phone in about 10 minutes. Thanks to this forum, I saw what others were getting for deals on carry over 2018s and basically called with the stock # of the vehicle I wanted and said I'm willing to pay $49k (just over $10k of MSRP). They called me back in 15 minutes and said, "deal". I negotiated putting $5k of my down payment via my credit card for bonus points (he had to call me back on this one). We emailed some paperwork back and forth and I walked into the dealership for the first time the next day to sign more papers and drive away. Least stressful car purchase I've ever had.
any recent DPs on 2020 ES purchases? I was offered 5% off MSRP, and I'm not sure how to get that down to 15%-18% range I've seen on here...
Looking in the Midwest at fully loaded Luxury Hybrid. ($55k MSRP) & will use .9% financing.
Thanks!
I see you're in WI. If in SE WI you won't get any good deals at the Napleton owned Lexus of Brookfield or Lexus of Milwaukee. Contact me via PM and I'll fill you in on where to go.
I believe it is hard to get "good deals" due to inventory. I'm not in the market, but looked at the inventory of the local dealer. They have 19 ES350 vehicles and usually have around 40. They have 1 ES300h vehicle and usually have 12-15. I know they have floorplan interest and other expenses, but they have few vehicles to sell.
Toyota is expecting a 29% reduction in production in North America. Apparently it's not all planned. They're having manufacturing and supply chain problems. I'm not sure how that matches with demand. I'm sure sales are significantly down as well.
Toyota is expecting a 29% reduction in production in North America. Apparently it's not all planned. They're having manufacturing and supply chain problems. I'm not sure how that matches with demand. I'm sure sales are significantly down as well.
When I test drove an ES-300H yesterday, I asked about production at the Georgetown, KY, facility.
That facility is only producing at 25% of its pre-virus levels. It is anticipated that it will not be back at full production until August.
You're probably right in your assessment and I totally agree on the "snake's den" anology. I bought my RX350 a year ago and did the whole deal over the phone in about 10 minutes. Thanks to this forum, I saw what others were getting for deals on carry over 2018s and basically called with the stock # of the vehicle I wanted and said I'm willing to pay $49k (just over $10k of MSRP). They called me back in 15 minutes and said, "deal". I negotiated putting $5k of my down payment via my credit card for bonus points (he had to call me back on this one). We emailed some paperwork back and forth and I walked into the dealership for the first time the next day to sign more papers and drive away. Least stressful car purchase I've ever had.
That's a great purchase.
The bonus points on your credit card is an interesting strategy.
There is a misunderstanding in what you are saying. And that misunderstanding is that the invoice price is the dealer's actual cost for the car. The reality is that the invoice price is far above the dealer's actual cost.
When the dealer buys a new car from the factory, there are various hold backs and other incentives that Lexus offers the dealers that reduce the dealer's cost to buy that car far below the invoice price.
That has always been the case, but, decades ago, the invoice price was, at least, somewhere in the ballpark of what the dealer actually paid for a car. That is not the case in recent times. At this point, the invoice price is, for the most part, meaningless and just a number that allows dealers to convince buyers into thinking that they are getting a great deal when, in fact, they are not.
Still another reality of today's auto market is that there are many opportunities for dealers to make a profit on a car sale beyond the profit that they make from the sale of the car itself. Dealers can make a significant profit when customers lease or when they finance through the dealership. And, if the dealer can sell the customer things like an extended warranty or a pre-paid maintenance plan or any number of other items, the profits that the dealer can realize can dwarf any profit made on the sale of the car.
If you are looking to find where the floor of the market actually is, check my posts earlier in this thread. In particular, check post #362 in this thread, which quotes one of my earlier posts and, also, post #363, in which I add more information.
I will likely do the 0.9 rate that Lexus is offering on 2020's.
When using the method that you have perfected, do the dealers ask you if you will be financing when they are responding with offers?
If they know that a customer is financing would that help get a better price since they will get a piece of the $$$ on the financing?
Or is there so little being made on the 0.9% does it matter to them?
Reading between the lines, it looks like the 25% production level will allow them to clear out 2020 parts in the pipeline and then in August maybe they are planning to go 100% on 2021 model year production.
When I send quote requests to the dealers, they will respond with detailed proposals that break down their offerl to include the MSRP of the vehicle, the discount from MSRP, sales tax, any dealer add-ons, doc fees, license fees, and any other fees, legitimate or not.
When I have proposals from multiple dealers, it is fairly easy to compare them by adjusting the offers to take into account minor differences on how the cars are equipped. If they are trying to include dealer add-ons, like nitrogen filled tires, I will make it clear to the dealer that, if they want my business, the charges for those add-ons will need to be removed. Similarly, if their fees for doing things like processing the title and license plates are out of line, I'll make it clear, again, that those fees will need to be adjusted down if they want my business. With the doc fee, most states have laws that require the dealer to charge the same doc fee for every car they sell, but, if a dealer has a doc fee that is out-of-line, while the dealer may not be able legally to lower the doc fee, what they can do is to add a further discount from MSRP to their offer to compensate for the high doc fee, and, if the dealer really wants your business they will do so because they don't want to lose a sale over a high pure profit doc fee.
Once I've sent the best offer that I got to the other dealers and given them the opportunity to beat that deal and when I have done that a few times and feel confident that I've found the floor for the market, I'll bring my trade-in into the negotiations. Until that point I do not want the trade-in to be a part of any discussions. By that point, I will have done some research to figure out what a fair trade offer would be for my trade-in. If the dealer tries to low ball me on the trade in, I would have to consider whether I should, at that point, go back to one of the other dealers who sent proposals.
After everything else that is a part of the deal has been settled, I'll introduce one last item into the negotiations, and that is a complete paint protection film package with a high quality film. Normally, whether you get paint protection film either through the dealer or from an independent shop, it is a high mark-up item. If a dealer realizes that finalizing your deal depends on whether the dealer is willing to sell you the paint protection film with no profit or with very minimal profit, the dealer is not going to risk losing the deal just to make extra profit on the paint protection film.
While the Kentucky plant is shut down, yes, that does mean that the dealers are getting no new supply, but, with the overall COVID-19 situation, the dealers are struggling to find anyone who is willing to buy their cars. Depending on the price of the car, a dealer is typically spending $10-20 per day per car in financing charges for all of the cars in its inventory. If a car remains unsold for multiple months, that $10-20 per day financing cost is going to add up and have a significant impact on the dealer's bottom line. So, the current situation should be a buyer's market.
Yesterday, I did step in a dealership to do a test drive on the ES300H. I was pleased with the car.
It will be the last time I step into a dealership before signing he papers.
As much as I liked the reviews, I definitely needed to test drive one in a city driving environment and on an interstate highway.
05-05-20, 05:54 PM
