jadeboy

iTrader: (1)

I see that some people are getting their Lexus below Invoice price... Is the invoice price really the price dealership paid? If so why would they want to sell at loss.

rfx45

From what I understand, dealers doesn't pay invoice price on their vehicles. Invoice price is actually the recommended staring point when making a deal. MSRP is pretty much considered a mark-up for the dealers and when the car is on demand with a small production, they add even more as an additional mark-up.

Dealer's also has incentives in which they receive rebates from the manufacturer for each vehicle sold. The rebate could range $1,000-$5,000 each vehicle sold, depending on the dealership and the vehicle. There are also other incentives that deals with the dealserhips sale qouta. Manufacturers sets a qouta for the dealerships and if it is met, they receive rewards and/or bonuses.

Kurtz

iTrader: (1)

Lexus still offers 2% dealer holdback (basically a rebate to the dealer on a quarterly basis for each car they sell) so they'd still be making a profit even if it was exactly at the price they paid for the car... plus if they can talk you into any extras like extended warranty, wheel/tire warranty, prepaid service, dealer-installed options, etc... they make $ on that too.

ben_r_

Invoice it what they paid for it, however, there are other ways to make money... Everytime someone goes on the lot and pays full or near MSRP for a vehicle the "cost" of all the other vehicles they have on the lot goes down since they made so much profit off that sucker allowing them to sell other cars for a "discounted" price. On top of that there are kickbacks for moving cars quickly and up sales like extended warranties and paint protection and so forth. So believe be even if you bought a car for 3000 under invoice they are still laughing all the way to the bank. Now dont you feel bad for not paying less???

gsrthomas

iTrader: (1)

What I always wanted to know what is the ACTUAL price the dealer is paying for the car from the manufacturer???

Because when people start talking about "invoices" that isnt really the price what the dealer pays for the car. And LOTS of people think it is.

mrtrance

I agree with you 100%. That's why I don't even think twice about an offer I make to a dealer. They can say all they want about how they are losing money, etc. but I don't even listen to it. I go in with an offer I think that is doable (I wont' make an outrageous offer though) but something that is still decent. Like for the IS250with MSRP of $35,272 I will offer $29,000 (which is $1800 under invoice). I know some dealers are doing $1300 under invoice so it's not too far off.

rfx45

Just to give an idea on what the dealers might be paying for the vehicles, my friend bought a new '07 Pilot last year. MSRP is $30,240 and invoice is $27,443. He works for a bank that has those vehicle locators company but he got the Pilot for $21,000 before ttl. That's $6,000 below invoice and I doubt the dealership would take the loss on that or even if they do, they won't sell it to lose that much so that price is either what the the dealership paid for the vehicle or they're taking a loss of around $1,000 maybe less and just get it back from the incentive rebate.

Then again, I could be totally off base but that is how much he paid for it.

ben_r_

Boy youve got the right idea there! Dont listen to ANYTHING a dealership tells you, especially when they are telling it to you BEFORE youve bought a car!

Evitzee

True .... but it really depends on supply and demand. If the dealer is selling the product well at close to MSRP prices, and his stock is in balance, there is no incentive to sell a unit for way under invoice. Why would he? He doesn't need to give away profit as someone else will come along tomorrow and pay a higher price. It's a numbers game. If you are a GM dealer you just have to keep the stuff moving off the lots at almost any cost. If you are a Ferrari dealer you don't have that constraint as people are lining up outside the door to buy a Ferrari at the dealer's price. An IS is no Ferrari, but it's closer to a Ferrari than the latest Chevy Impala as far as marketing is concerned.

Sometimes the dealer is motivated at the end of the month to make the numbers, or if they have an internal goal to reach, it just depends. A dealer will not go out of business if he sells a car at below his own cost, but he's foolish to make a habit of it. And most dealers aren't stupid when it comes to the financials.

ben_r_

Yep, all very true too, I def agree.

fdelement

iTrader: (1)

also the price that each dealer gets for their cars can vary depending on their fleet size. Obviously a dealer who buys 100 IS350s a month will get a better deal than a dealer who buys 10 IS350s a month. This is one of the reasons why bigger dealerships on average sells cheaper cars.

mrtrance

Ok, first quote from Mission Viejo Lexus is the following:

MSRP: $35,341
Invoice: $30,892
Internet price: $31,485.

That's $600 over invoice. I thought in CA these were going for at least 1K under invoice and some mention Bay Area Lexus dealers doing $1250 under invoice. So I guess I need to move on to the next dealer since this quote is rather high. Any recommendations for SoCal dealers that are willing to deal on the IS250?

xinlee

Are there really dealers going under invoice on IS350's??

rfx45

They are but you still have to haggle. They won't give it to you straight out beause most of the time consumer's still haggle the price dealers give so they have to start high and work from there.

Someone in the msrp thread paid around $1k-$2k below invoice on his IS350 and he also explaine dhow he got it in that thread. It's pretty rare though and happens to a lucky few.

fdelement

iTrader: (1)

I personally don't understand why people go to the dealers and talk about invoice/MSRP/internet pricing. All you should talk about is your OTD price, period. Yes you can use invoice (more like what YOU think the invoice is because really no one knows except for the dealers themselves) to haggle with the dealer but ultimately OTD is what you're going to pay. The last 3 cars I bought I never really knew what the invoice was or MSRP. All I know is my OTD price.