Gotta love Dealerships
06-01-24, 12:12 PM
#1
Lexus Champion
Thread Starter
Gotta love Dealerships
Regular Car reviews on the state of new car pricing
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AMIRZA786 (06-01-24)
06-01-24, 03:37 PM
#3
I think this will have a side effect on sites that show you a "fair price" for what you are looking for. Since they rely on actual sales, the more cars sell for, the higher the "fair price" will go up. It seems more and more people rely on "fair price" reports, which makes me wonder if anyone bothers looking for the invoice? Back in the day, a fair price for a new car was at or slightly above invoice.
06-01-24, 03:50 PM
#4
Lexus Champion
Thread Starter
I think this will have a side effect on sites that show you a "fair price" for what you are looking for. Since they rely on actual sales, the more cars sell for, the higher the "fair price" will go up. It seems more and more people rely on "fair price" reports, which makes me wonder if anyone bothers looking for the invoice? Back in the day, a fair price for a new car was at or slightly above invoice.
06-01-24, 04:21 PM
#5
Pole Position
And as dealerships and manufacturers realized that everyone negotiated based on invoice they lowered the margin between invoice and MSRP and started paying dealers more back end bonuses instead. Case in point - invoice on my Lightning was actually more than MSRP, dealer comp was entirely handled in other ways.
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UltraLux22 (06-03-24)
06-01-24, 04:33 PM
#6
Lexus Champion
Thread Starter
And as dealerships and manufacturers realized that everyone negotiated based on invoice they lowered the margin between invoice and MSRP and started paying dealers more back end bonuses instead. Case in point - invoice on my Lightning was actually more than MSRP, dealer comp was entirely handled in other ways.
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swajames (06-01-24)
06-01-24, 04:44 PM
#7
Pole Position
Yes even in the deepest depths of the pandemic, Ford Store of Morgan Hill maintained their no ADM policy and both my Lightning and my Bronco were at MSRP plus there was no finance BS and no compulsory addition of worthless products. The DGDG dealerships around here are ones I do my best to avoid and Capitol Ford, in my direct experience, is one of the worst.
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AMIRZA786 (06-01-24),
UltraLux22 (06-03-24)
Trending Topics
06-02-24, 12:38 PM
#8
Some dealerships do it to themselves being unreasonable with mark ups. Other times, it's the product. Sometimes, in the worst case scenario, it's both. As of now, there are still 3,500 NEW 2023 F150 Lightnings sitting around on lots. No way that should be the case.
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AMIRZA786 (06-02-24)
06-02-24, 04:58 PM
#9
Instructor
I must be careful here because I could write a dissertation on this subject. It pains me when buyers get taken advantage of or settle, leaving money on the table. I evolved my thinking over many years of trial and error and getting duped, so it pains me to read some posts about fairness and paying near invoice or even just below.
Yes, the market, along with a myriad of other factors, will cause variances in this, which is why I say there isn’t one best price or fair price. Forget MSRP and forget “fair” profit – the only cost that matters in the car-buying arena is the one you pay. It’s a financial duel where your sole focus is the lowest out-the-door number.
Dealerships are profit-hungry masters of manipulation, experts at maximizing their profits. They often employ tactics designed to extract the most money possible from the buyer. They are not your financial advisors. Their goal? Squeezing every possible dollar from your wallet. Whether leasing or buying, negotiating the best price for a new car is a strategic game where knowledge is power; the “right price” isn’t fixed but a dynamic target you aim to lower.
Remember, you are a key player in this high-stakes negotiation. While dealerships are experts at maximizing profit, you are responsible for leveling the playing field and ensuring your financial well-being.
Car dealerships are businesses, not charities. They’re not entitled to your hard-earned cash. You have the power, with the right to walk away if the price isn’t right. This isn’t about feeling bad for the dealership; it’s about prioritizing your financial interests.
They will have no sympathy whatsoever if they have managed to yank every last dollar they can from your wallet, but you’ll be made to feel like you are taking food away from their table!
**Skip getting quotes from TrueCar, Kelley Blue Book, Cars.com, Edmunds, Costco, etc. Their sales guys will hound you like vultures on roadkill. They’ll steer you to a few dealers in their pocket, who pay them handsomely. This cost is baked into your final price.**
These sites can be handy tools offering insight to get a general sense of the market. They can also help gauge the variances in region and demand, which impacts cost as well, but use them alongside other resources.
**The invoice price has not reflected a car’s true cost in ages. The auto industry pulled a fast one in the mid-90s, inflating the invoice price while barely touching the sticker price. This turned the invoice into a deceptive decoy. They want us to believe they pay that much for cars, but it’s a ruse. Stay vigilant, and don’t fall for these tricks.**
Remember: The invoice price is not the dealer’s actual cost. The manufacturer inflates a suggested retail price to create the illusion of a bargain. The dealer’s actual cost, or dealer invoice price, is typically lower than the invoice price, and it’s this figure you should aim to negotiate from.
But for decades, we consumers have swallowed—hook, line, and sinker—the preposterous notion that automakers have been telling us what their dealers pay for their cars. Automakers have never been transparent about the prices they charge dealerships. This lack of transparency has fueled the myth that they dictate dealer prices. But think about it: wouldn’t they have spoken up if dealerships were truly unhappy with these prices? The fact that they haven’t suggests that the prices are negotiable and favorable.
Look at the varying prices different dealerships offer for the same car. This demonstrates that dealers have some flexibility in setting their own prices. And what about all the recent and not-so-recent reports of dealer markups on high-demand vehicles?
Remember, during the pandemic with the vehicle shortage, it wasn’t the automakers charging ADMs on various in-demand models. I remember visiting a Genesis dealer, and several of their new SUVs had $15- $17,000 markups. The information I got from an insider said that the automakers were frowning on this because it puts the brand in a negative light, and not all dealerships did the sketchy practice.
During the pandemic-induced vehicle shortage, dealerships, not automakers, were primarily adding significant markups (ADMs— Additional Dealer Markups) to in-demand vehicles. My experience at the Genesis dealership is a prime example of this practice, which became widespread across various brands and models.
Automakers generally discouraged this behavior because it tarnished their brand image and created customer dissatisfaction. However, as dealerships are independent businesses, they had limited control over dealerships’ pricing decisions.
While some dealerships may have engaged in this practice due to the high demand and limited supply, it’s important to note that not all dealerships participated. Many reputable dealerships refrained from excessive markups and prioritized maintaining long-term customer relationships.
This further proves that dealerships aren’t just puppets of automakers when it comes to pricing.
The automotive industry is a complex landscape where dealerships are incentivized to maximize their profits. In the end, car buying is a game of strategy and negotiation. Arm yourself with knowledge, prioritize your financial interests, and remember that you hold the power to secure the best deal.
“Damn it, did I do it again? Did I do that? Yep! Tangent ramble city! Eh, sue me.”
Yes, the market, along with a myriad of other factors, will cause variances in this, which is why I say there isn’t one best price or fair price. Forget MSRP and forget “fair” profit – the only cost that matters in the car-buying arena is the one you pay. It’s a financial duel where your sole focus is the lowest out-the-door number.
Dealerships are profit-hungry masters of manipulation, experts at maximizing their profits. They often employ tactics designed to extract the most money possible from the buyer. They are not your financial advisors. Their goal? Squeezing every possible dollar from your wallet. Whether leasing or buying, negotiating the best price for a new car is a strategic game where knowledge is power; the “right price” isn’t fixed but a dynamic target you aim to lower.
Remember, you are a key player in this high-stakes negotiation. While dealerships are experts at maximizing profit, you are responsible for leveling the playing field and ensuring your financial well-being.
Car dealerships are businesses, not charities. They’re not entitled to your hard-earned cash. You have the power, with the right to walk away if the price isn’t right. This isn’t about feeling bad for the dealership; it’s about prioritizing your financial interests.
They will have no sympathy whatsoever if they have managed to yank every last dollar they can from your wallet, but you’ll be made to feel like you are taking food away from their table!
**Skip getting quotes from TrueCar, Kelley Blue Book, Cars.com, Edmunds, Costco, etc. Their sales guys will hound you like vultures on roadkill. They’ll steer you to a few dealers in their pocket, who pay them handsomely. This cost is baked into your final price.**
These sites can be handy tools offering insight to get a general sense of the market. They can also help gauge the variances in region and demand, which impacts cost as well, but use them alongside other resources.
**The invoice price has not reflected a car’s true cost in ages. The auto industry pulled a fast one in the mid-90s, inflating the invoice price while barely touching the sticker price. This turned the invoice into a deceptive decoy. They want us to believe they pay that much for cars, but it’s a ruse. Stay vigilant, and don’t fall for these tricks.**
Remember: The invoice price is not the dealer’s actual cost. The manufacturer inflates a suggested retail price to create the illusion of a bargain. The dealer’s actual cost, or dealer invoice price, is typically lower than the invoice price, and it’s this figure you should aim to negotiate from.
But for decades, we consumers have swallowed—hook, line, and sinker—the preposterous notion that automakers have been telling us what their dealers pay for their cars. Automakers have never been transparent about the prices they charge dealerships. This lack of transparency has fueled the myth that they dictate dealer prices. But think about it: wouldn’t they have spoken up if dealerships were truly unhappy with these prices? The fact that they haven’t suggests that the prices are negotiable and favorable.
Look at the varying prices different dealerships offer for the same car. This demonstrates that dealers have some flexibility in setting their own prices. And what about all the recent and not-so-recent reports of dealer markups on high-demand vehicles?
Remember, during the pandemic with the vehicle shortage, it wasn’t the automakers charging ADMs on various in-demand models. I remember visiting a Genesis dealer, and several of their new SUVs had $15- $17,000 markups. The information I got from an insider said that the automakers were frowning on this because it puts the brand in a negative light, and not all dealerships did the sketchy practice.
During the pandemic-induced vehicle shortage, dealerships, not automakers, were primarily adding significant markups (ADMs— Additional Dealer Markups) to in-demand vehicles. My experience at the Genesis dealership is a prime example of this practice, which became widespread across various brands and models.
Automakers generally discouraged this behavior because it tarnished their brand image and created customer dissatisfaction. However, as dealerships are independent businesses, they had limited control over dealerships’ pricing decisions.
While some dealerships may have engaged in this practice due to the high demand and limited supply, it’s important to note that not all dealerships participated. Many reputable dealerships refrained from excessive markups and prioritized maintaining long-term customer relationships.
This further proves that dealerships aren’t just puppets of automakers when it comes to pricing.
The automotive industry is a complex landscape where dealerships are incentivized to maximize their profits. In the end, car buying is a game of strategy and negotiation. Arm yourself with knowledge, prioritize your financial interests, and remember that you hold the power to secure the best deal.
“Damn it, did I do it again? Did I do that? Yep! Tangent ramble city! Eh, sue me.”
Last edited by UltraLux22; 06-03-24 at 03:26 AM.
The following users liked this post:
Margate330 (06-02-24)
06-02-24, 06:18 PM
#10
Lexus Champion
Thread Starter
I must be careful here because I could write a dissertation on this subject. It pains me when buyers get taken advantage of or settle, leaving money on the table. I evolved my thinking over many years of trial and error and getting duped, so it pains me to read some posts about fairness and paying near invoice or even just below.
Yes, the market, along with a myriad of other factors, will cause variances in this, which is why I say there isn’t one best price or fair price. Forget MSRP and forget “fair” profit – the only cost that matters in the car-buying arena is the one you pay. It’s a financial duel where your sole focus is the lowest out-the-door number.
Dealerships are profit-hungry masters of manipulation, experts at maximizing their profits. They often employ tactics designed to extract the most money possible from the buyer. They are not your financial advisors. Their goal? Squeezing every possible dollar from your wallet. Whether leasing or buying, negotiating the best price for a new car is a strategic game where knowledge is power; the “right price” isn’t fixed but a dynamic target you aim to lower.
Remember, you are a key player in this high-stakes negotiation. While dealerships are experts at maximizing profit, you are responsible for leveling the playing field and ensuring your financial well-being.
Car dealerships are businesses, not charities. They’re not entitled to your hard-earned cash. You have the power, with the right to walk away if the price isn’t right. This isn’t about feeling bad for the dealership; it’s about prioritizing your financial interests.
They will have no sympathy whatsoever if they have managed to yank every last dollar they can from your wallet, but you’ll be made to feel like you are taking food away from their table!
**Skip getting quotes from TrueCar, Kelley Blue Book, Cars.com, Edmunds, Costco, etc. Their sales guys will hound you like vultures on roadkill. They’ll steer you to a few dealers in their pocket, who pay them handsomely. This cost is baked into your final price.**
These sites can be handy tools offering insight to get a general sense of the market. They can also help gauge the variances in region and demand, which impacts cost as well, but use them alongside other resources.
**The invoice price has not reflected a car’s true cost in ages. The auto industry pulled a fast one in the mid-90s, inflating the invoice price while barely touching the sticker price. This turned the invoice into a deceptive decoy. They want us to believe they pay that much for cars, but it’s a ruse. Stay vigilant, and don’t fall for these tricks.**
Remember: The invoice price is not the dealer’s actual cost. The manufacturer inflates a suggested retail price to create the illusion of a bargain. The dealer’s actual cost, or dealer invoice price, is typically lower than the invoice price, and it’s this figure you should aim to negotiate from.
But for decades, we consumers have swallowed—hook, line, and sinker—the preposterous notion that automakers have been telling us what their dealers pay for their cars. Automakers have never been transparent about the prices they charge dealerships. This lack of transparency has fueled the myth that they dictate dealer prices. But think about it: wouldn’t they have spoken up if dealerships were truly unhappy with these prices? The fact that they haven’t suggests that the prices are negotiable and favorable.
Look at the varying prices different dealerships offer for the same car. This shows dealers have some flexibility in setting their own prices. And what about recent reports of dealer markups on high-demand vehicles?
Remember, during the pandemic with the vehicle shortage, it wasn’t the automakers charging ADMs on various in-demand models. I remember visiting a Genesis dealer, and several of their new SUVs had $15- $17,000 markups. The information I got from an insider said that the automakers were frowning on this because it puts the brand in a negative light, and not all dealerships did the sketchy practice.
During the pandemic-induced vehicle shortage, dealerships, not automakers, were primarily adding significant markups (ADMs— Additional Dealer Markups) to in-demand vehicles. My experience at the Genesis dealership is a prime example of this practice, which became widespread across various brands and models.
Automakers generally discouraged this behavior because it tarnished their brand image and created customer dissatisfaction. However, as dealerships are independent businesses, they had limited control over dealerships’ pricing decisions.
While some dealerships may have engaged in this practice due to the high demand and limited supply, it’s important to note that not all dealerships participated. Many reputable dealerships refrained from excessive markups and prioritized maintaining long-term customer relationships.
This further proves that dealerships aren’t just puppets of automakers when it comes to pricing. It’s time to expose this illusion and demand transparency in the industry.
The automotive industry is a complex landscape where dealerships are incentivized to maximize their profits. In the end, car buying is a game of strategy and negotiation. Arm yourself with knowledge, prioritize your financial interests, and remember that you hold the power to secure the best deal.
“Damn it, did I do it again? Did I do that? Yep! Tangent ramble city! Eh, sue me.”
Yes, the market, along with a myriad of other factors, will cause variances in this, which is why I say there isn’t one best price or fair price. Forget MSRP and forget “fair” profit – the only cost that matters in the car-buying arena is the one you pay. It’s a financial duel where your sole focus is the lowest out-the-door number.
Dealerships are profit-hungry masters of manipulation, experts at maximizing their profits. They often employ tactics designed to extract the most money possible from the buyer. They are not your financial advisors. Their goal? Squeezing every possible dollar from your wallet. Whether leasing or buying, negotiating the best price for a new car is a strategic game where knowledge is power; the “right price” isn’t fixed but a dynamic target you aim to lower.
Remember, you are a key player in this high-stakes negotiation. While dealerships are experts at maximizing profit, you are responsible for leveling the playing field and ensuring your financial well-being.
Car dealerships are businesses, not charities. They’re not entitled to your hard-earned cash. You have the power, with the right to walk away if the price isn’t right. This isn’t about feeling bad for the dealership; it’s about prioritizing your financial interests.
They will have no sympathy whatsoever if they have managed to yank every last dollar they can from your wallet, but you’ll be made to feel like you are taking food away from their table!
**Skip getting quotes from TrueCar, Kelley Blue Book, Cars.com, Edmunds, Costco, etc. Their sales guys will hound you like vultures on roadkill. They’ll steer you to a few dealers in their pocket, who pay them handsomely. This cost is baked into your final price.**
These sites can be handy tools offering insight to get a general sense of the market. They can also help gauge the variances in region and demand, which impacts cost as well, but use them alongside other resources.
**The invoice price has not reflected a car’s true cost in ages. The auto industry pulled a fast one in the mid-90s, inflating the invoice price while barely touching the sticker price. This turned the invoice into a deceptive decoy. They want us to believe they pay that much for cars, but it’s a ruse. Stay vigilant, and don’t fall for these tricks.**
Remember: The invoice price is not the dealer’s actual cost. The manufacturer inflates a suggested retail price to create the illusion of a bargain. The dealer’s actual cost, or dealer invoice price, is typically lower than the invoice price, and it’s this figure you should aim to negotiate from.
But for decades, we consumers have swallowed—hook, line, and sinker—the preposterous notion that automakers have been telling us what their dealers pay for their cars. Automakers have never been transparent about the prices they charge dealerships. This lack of transparency has fueled the myth that they dictate dealer prices. But think about it: wouldn’t they have spoken up if dealerships were truly unhappy with these prices? The fact that they haven’t suggests that the prices are negotiable and favorable.
Look at the varying prices different dealerships offer for the same car. This shows dealers have some flexibility in setting their own prices. And what about recent reports of dealer markups on high-demand vehicles?
Remember, during the pandemic with the vehicle shortage, it wasn’t the automakers charging ADMs on various in-demand models. I remember visiting a Genesis dealer, and several of their new SUVs had $15- $17,000 markups. The information I got from an insider said that the automakers were frowning on this because it puts the brand in a negative light, and not all dealerships did the sketchy practice.
During the pandemic-induced vehicle shortage, dealerships, not automakers, were primarily adding significant markups (ADMs— Additional Dealer Markups) to in-demand vehicles. My experience at the Genesis dealership is a prime example of this practice, which became widespread across various brands and models.
Automakers generally discouraged this behavior because it tarnished their brand image and created customer dissatisfaction. However, as dealerships are independent businesses, they had limited control over dealerships’ pricing decisions.
While some dealerships may have engaged in this practice due to the high demand and limited supply, it’s important to note that not all dealerships participated. Many reputable dealerships refrained from excessive markups and prioritized maintaining long-term customer relationships.
This further proves that dealerships aren’t just puppets of automakers when it comes to pricing. It’s time to expose this illusion and demand transparency in the industry.
The automotive industry is a complex landscape where dealerships are incentivized to maximize their profits. In the end, car buying is a game of strategy and negotiation. Arm yourself with knowledge, prioritize your financial interests, and remember that you hold the power to secure the best deal.
“Damn it, did I do it again? Did I do that? Yep! Tangent ramble city! Eh, sue me.”
But here's a thought. Don't buy from a dealership. I bought my last two cars direct, I knew exactly what I was paying out the door to the penny before I placed the order. And I did it from my smartphone sitting on my couch
06-02-24, 06:28 PM
#11
Lexus Test Driver
06-02-24, 09:35 PM
#12
I must be careful here because I could write a dissertation on this subject. It pains me when buyers get taken advantage of or settle, leaving money on the table. I evolved my thinking over many years of trial and error and getting duped, so it pains me to read some posts about fairness and paying near invoice or even just below.
Yes, the market, along with a myriad of other factors, will cause variances in this, which is why I say there isn’t one best price or fair price. Forget MSRP and forget “fair” profit – the only cost that matters in the car-buying arena is the one you pay. It’s a financial duel where your sole focus is the lowest out-the-door number.
Dealerships are profit-hungry masters of manipulation, experts at maximizing their profits. They often employ tactics designed to extract the most money possible from the buyer. They are not your financial advisors. Their goal? Squeezing every possible dollar from your wallet. Whether leasing or buying, negotiating the best price for a new car is a strategic game where knowledge is power; the “right price” isn’t fixed but a dynamic target you aim to lower.
Remember, you are a key player in this high-stakes negotiation. While dealerships are experts at maximizing profit, you are responsible for leveling the playing field and ensuring your financial well-being.
Car dealerships are businesses, not charities. They’re not entitled to your hard-earned cash. You have the power, with the right to walk away if the price isn’t right. This isn’t about feeling bad for the dealership; it’s about prioritizing your financial interests.
They will have no sympathy whatsoever if they have managed to yank every last dollar they can from your wallet, but you’ll be made to feel like you are taking food away from their table!
**Skip getting quotes from TrueCar, Kelley Blue Book, Cars.com, Edmunds, Costco, etc. Their sales guys will hound you like vultures on roadkill. They’ll steer you to a few dealers in their pocket, who pay them handsomely. This cost is baked into your final price.**
These sites can be handy tools offering insight to get a general sense of the market. They can also help gauge the variances in region and demand, which impacts cost as well, but use them alongside other resources.
**The invoice price has not reflected a car’s true cost in ages. The auto industry pulled a fast one in the mid-90s, inflating the invoice price while barely touching the sticker price. This turned the invoice into a deceptive decoy. They want us to believe they pay that much for cars, but it’s a ruse. Stay vigilant, and don’t fall for these tricks.**
Remember: The invoice price is not the dealer’s actual cost. The manufacturer inflates a suggested retail price to create the illusion of a bargain. The dealer’s actual cost, or dealer invoice price, is typically lower than the invoice price, and it’s this figure you should aim to negotiate from.
But for decades, we consumers have swallowed—hook, line, and sinker—the preposterous notion that automakers have been telling us what their dealers pay for their cars. Automakers have never been transparent about the prices they charge dealerships. This lack of transparency has fueled the myth that they dictate dealer prices. But think about it: wouldn’t they have spoken up if dealerships were truly unhappy with these prices? The fact that they haven’t suggests that the prices are negotiable and favorable.
Look at the varying prices different dealerships offer for the same car. This shows dealers have some flexibility in setting their own prices. And what about recent reports of dealer markups on high-demand vehicles?
Remember, during the pandemic with the vehicle shortage, it wasn’t the automakers charging ADMs on various in-demand models. I remember visiting a Genesis dealer, and several of their new SUVs had $15- $17,000 markups. The information I got from an insider said that the automakers were frowning on this because it puts the brand in a negative light, and not all dealerships did the sketchy practice.
During the pandemic-induced vehicle shortage, dealerships, not automakers, were primarily adding significant markups (ADMs— Additional Dealer Markups) to in-demand vehicles. My experience at the Genesis dealership is a prime example of this practice, which became widespread across various brands and models.
Automakers generally discouraged this behavior because it tarnished their brand image and created customer dissatisfaction. However, as dealerships are independent businesses, they had limited control over dealerships’ pricing decisions.
While some dealerships may have engaged in this practice due to the high demand and limited supply, it’s important to note that not all dealerships participated. Many reputable dealerships refrained from excessive markups and prioritized maintaining long-term customer relationships.
This further proves that dealerships aren’t just puppets of automakers when it comes to pricing. It’s time to expose this illusion and demand transparency in the industry.
The automotive industry is a complex landscape where dealerships are incentivized to maximize their profits. In the end, car buying is a game of strategy and negotiation. Arm yourself with knowledge, prioritize your financial interests, and remember that you hold the power to secure the best deal.
“Damn it, did I do it again? Did I do that? Yep! Tangent ramble city! Eh, sue me.”
Yes, the market, along with a myriad of other factors, will cause variances in this, which is why I say there isn’t one best price or fair price. Forget MSRP and forget “fair” profit – the only cost that matters in the car-buying arena is the one you pay. It’s a financial duel where your sole focus is the lowest out-the-door number.
Dealerships are profit-hungry masters of manipulation, experts at maximizing their profits. They often employ tactics designed to extract the most money possible from the buyer. They are not your financial advisors. Their goal? Squeezing every possible dollar from your wallet. Whether leasing or buying, negotiating the best price for a new car is a strategic game where knowledge is power; the “right price” isn’t fixed but a dynamic target you aim to lower.
Remember, you are a key player in this high-stakes negotiation. While dealerships are experts at maximizing profit, you are responsible for leveling the playing field and ensuring your financial well-being.
Car dealerships are businesses, not charities. They’re not entitled to your hard-earned cash. You have the power, with the right to walk away if the price isn’t right. This isn’t about feeling bad for the dealership; it’s about prioritizing your financial interests.
They will have no sympathy whatsoever if they have managed to yank every last dollar they can from your wallet, but you’ll be made to feel like you are taking food away from their table!
**Skip getting quotes from TrueCar, Kelley Blue Book, Cars.com, Edmunds, Costco, etc. Their sales guys will hound you like vultures on roadkill. They’ll steer you to a few dealers in their pocket, who pay them handsomely. This cost is baked into your final price.**
These sites can be handy tools offering insight to get a general sense of the market. They can also help gauge the variances in region and demand, which impacts cost as well, but use them alongside other resources.
**The invoice price has not reflected a car’s true cost in ages. The auto industry pulled a fast one in the mid-90s, inflating the invoice price while barely touching the sticker price. This turned the invoice into a deceptive decoy. They want us to believe they pay that much for cars, but it’s a ruse. Stay vigilant, and don’t fall for these tricks.**
Remember: The invoice price is not the dealer’s actual cost. The manufacturer inflates a suggested retail price to create the illusion of a bargain. The dealer’s actual cost, or dealer invoice price, is typically lower than the invoice price, and it’s this figure you should aim to negotiate from.
But for decades, we consumers have swallowed—hook, line, and sinker—the preposterous notion that automakers have been telling us what their dealers pay for their cars. Automakers have never been transparent about the prices they charge dealerships. This lack of transparency has fueled the myth that they dictate dealer prices. But think about it: wouldn’t they have spoken up if dealerships were truly unhappy with these prices? The fact that they haven’t suggests that the prices are negotiable and favorable.
Look at the varying prices different dealerships offer for the same car. This shows dealers have some flexibility in setting their own prices. And what about recent reports of dealer markups on high-demand vehicles?
Remember, during the pandemic with the vehicle shortage, it wasn’t the automakers charging ADMs on various in-demand models. I remember visiting a Genesis dealer, and several of their new SUVs had $15- $17,000 markups. The information I got from an insider said that the automakers were frowning on this because it puts the brand in a negative light, and not all dealerships did the sketchy practice.
During the pandemic-induced vehicle shortage, dealerships, not automakers, were primarily adding significant markups (ADMs— Additional Dealer Markups) to in-demand vehicles. My experience at the Genesis dealership is a prime example of this practice, which became widespread across various brands and models.
Automakers generally discouraged this behavior because it tarnished their brand image and created customer dissatisfaction. However, as dealerships are independent businesses, they had limited control over dealerships’ pricing decisions.
While some dealerships may have engaged in this practice due to the high demand and limited supply, it’s important to note that not all dealerships participated. Many reputable dealerships refrained from excessive markups and prioritized maintaining long-term customer relationships.
This further proves that dealerships aren’t just puppets of automakers when it comes to pricing. It’s time to expose this illusion and demand transparency in the industry.
The automotive industry is a complex landscape where dealerships are incentivized to maximize their profits. In the end, car buying is a game of strategy and negotiation. Arm yourself with knowledge, prioritize your financial interests, and remember that you hold the power to secure the best deal.
“Damn it, did I do it again? Did I do that? Yep! Tangent ramble city! Eh, sue me.”
The following 2 users liked this post by Bob04:
AMIRZA786 (06-02-24),
UltraLux22 (06-02-24)
06-02-24, 09:38 PM
#13
Lexus Champion
Thread Starter
