heasyrider

The Edmonds 'True Market Value' price seems to be a pretty good deal, especially since it includes the transportation cost. I am hopeful I can negotiate a similar price on a purchase.

NewSpace

+1. Same here. Happy being the first and only owner of a new car.

I put a lot of miles on my vehicles and tend to keep them for a long time, so the 10% I could have saved 10 years ago doesn't much matter.

It's one of the few big investments that, I admit, is more heart than head...

larryinWA

I agree. I buy via email and just show up to get the car and sign the papers.

SW17LS

I too am a fan of negotiating via email. Lexus and other luxury dealers are very receptive to it...mainstream dealers less so as I have noticed with Jeep. They always try and pull out the hard sell, the alternate choice close...etc. I'm in sales myself so I see it a mile away.

Was the guy's education correct?

Part of a good salesperson's job is educating the consumer and helping to push the consumer into the best product and situation for them. So...if a salesperson thinks leasing is the best option for someone they should try and convince the consumer of that.

Issue is you have to build rapport with the customer first, and a good salesman has two ears and one mouth and uses them proportionally. Sounds like this salesman didn't do that, and because of that his message which was likely correct did not get across.

modthispny

my gs f-sport is a lease as well, after the first 3 cars i financed, i realized i was selling them right at the 2.5 - 3 yr mark, so my previous car(evo x), was a lease, and leased the gs too.

Gruu

I agree that the salesperson's job is to educate the consumer; that wasn't the issue. My problems with that dealer were (1) his condescending tone that has no place in a Lexus dealership; and (2) how aggressively he tried to push my friend towards a lease without even talking to him first. The dealer didn't take even a couple of minutes to ask what cars he was interested in, what his budget was, or how long he tends to keep his cars. The conversation went something like, "Hello, is there anything I can help you with?" "I'm looking to buy a car today." "You should think about leasing instead."

Given that context, whether leasing was right for my friend was beyond the point. (It turned out that it wasn't.)

SW17LS

Yeah he just went about it all wrong. Poor training.

cbaldwin

First time posting so please excuse any errors.

I just purchased a GS F Sport and the dealer kept mentioning a lease. I've always purchased cars and kept them for 8-10 years.....hoping to do the same with this car.

But the finance manager kept saying over and over that there's a $2500 financial lease incentive. Not wanting to leave anything on the table, I asked him to go thru the motions of explaining how it would work (hoping there's a $2500 discount somewhere) but he couldn't explain it well enough (or maybe I'm just a bit dense) and I didn't see the $2500 anywhere. Not familiar with leases so it was probably me.

He did mention one thing that made me pause about buying though. With a lease, if the car is in an accident (and get it repaired), you can simply turn it in at the end of the lease. No hassles. Since I now own the car, if it gets into an accident, the value is reduced which I now eat. Maybe I didn't understand this correctly, but that's how I interpreted it.

Anyways...didn't go the lease route even though I've been re-considering if I should have. I put a substantial down payment enough for the payment to be easy. Also, I did get the car right above invoice so that makes me feel good......not to mention taking a sharp corner in Sport S+ mode.

heasyrider

After my trade, discount off MSRP, and at most, a minor down paymeny (no more than what's typical in a lease), I am around 35% less than MSRP to finance for 5 years. I drive around 16k miles a year and keep it for 6 years.

NYKnick101

dealers only push leasing because then they make double profit on the car. Profit from your initial lease, as well as profit from the sale of a lease return. Yeah you can buy a car but thats why they push lease's

I took a class a few years back on becoming a car sales man for chevy and they were saying that prices are only markup. HIS WORDS NOT MINE "A chevy cobalt comes in brand new at $26.5k but really only cost the dealer 16k to make and ship to dealership so, sales man part is to keep as much money as home as possible!"

praetor

No way a $26K car is marked up $10K. That is insane!

I always read the opposite that new car sales don't make dealers much money. Used cars, parts and service is where the money is at.

NewSpace

first, congrats on the new car! leasing always seems attractive, but if they are pushing it that hard, and it's that complicated, you can be sure that the dealership is making a profit somewhere

SW17LS

This isn't true. The dealership doesn't automatically get the car back when a lease gets turned in. When you lease the car the dealer sells it to LFS/TFS. When you turn it in at the end of the lease...it belongs to LFS/TFS. The dealer may do the lease turn in, but then any dealer can whether they are a Lexus dealer or not. The car goes back to LFS and they allocate it to dealers nationwide depending on need or demand.

Its actually more likely the dealer will get the car back if you trade it in than if you lease it.

Also wrong. It may cost $16k to make a Cobalt, but that 10k difference is not the dealer's profit. The dealer's profit is the difference between invoice and the sales price, plus the holdback, plus the commissions on any financing or extras you buy (paint protection, etc). In something like a Cobalt theres probably $2,500 in profit.

Of course they want to sell it for as much as possible, thats just good business. Remember the dealer is not the manufacturer, dealers are independent businesses that are franchises of the manufacturer.

A lease is just a different way of financing the vehicle. There is a $2,500 incentive, it comes off the negotiated purchase price before the lease is calculated. So, if your negotiated price were $55,000, the amount financed would be $55,000. In a lease, the capitalized cost of the lease would be $52,500. Since a lease is essentially the difference between the capitalized cost and the residual financed over time plus interest, you want that residual as high as possible, the capitalized cost as low as possible, and the interest as low as possible. The GS is a good lease because you can get a killer sales price, residuals are good, and interest is low. This car is an amazing deal to lease.

Leasing is a little complicated. There are a lot of terms that you need to learn, and you need to understand the mechanics of a lease. Its very easy for a dealership to hide profit from a deal in a lease, which is why dealers like leasing. If you know how the numbers work though this negates that advantage for them.

If you're going to keep it 6 years you probably did the right thing by buying.

NYKnick101

That markup usually goes to many sources such as paying employees, commission, any bills to keep that dealer open, and then its profit but I wouldnt doubt that it cost a manufacturer more than 15-20k to make a chevy cobalt. depending on quality of parts and where they are getting from in bulk.

they probably really only see maybe 4-5k in profit, maybe less depending on how long the car is sitting on the lot but those were his words, not mine.

your GS/IS/LS what ever, I wouldn't think takes more than 25-30 grand to build our cars for them to sell for upwards of 40-50.

SW17LS

You don't understand. Yes there is a much smaller figure that is the actual cost of manufacturing the vehicle. However...the dealer has a cost for the vehicle too...and the manufacturer's profit is built into the difference between what the actual cost of manufacturing the vehicle is and the wholesale price they receive from the dealer when the vehicle is sold. So, how much it costs to manufacture the vehicle has nothing to do with what the dealer is making, what they can sell you the car for, or whatever. What the salesperson makes has nothing to do with what it costs to manufacture the vehicle.

Lets put it this way. I make widgets. It costs me $15 to make a widget. I am in the business of making widgets, not selling them to the end user. So, I need someone to sell my widgets in a store. So, you have a store...and agree to sell my widgets. I sell each one to you for $30, and suggest you sell them for $40 (the MSRP).

A customer comes in and wants to buy my widget from you. He says "I won't pay you $40, because it only cost $15 to make this widget. I will buy it from you for $25." Can you sell it to him for that? Sure...but you loose $5. I'm getting my $30 per widget from you, regardless of what you sell it for. If you're a savvy business owner will you loose money per widget? No. So, you cannot sell the widget for less than $30 or you will loose money. All of your costs of keeping your store open depend on your ability to sell my widgets for more than you bought them from me for. How much I make for making the widgets doesn't have any impact on your expenses.

Thats how it works. The invoice prices are out there, the holdback is out there, the available incentives are out there. We all know what profit is in what car. A GS has about $4k in profit before holdback. A cheaper car has less, a more expensive car more. What it costs to make a GS means nothing to you as the buyer, or to the dealership...because they didn't make it.