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Invoice pricing explained


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47 replies to this topic

#1 OFFLINE   acdii

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Posted 26 June 2013 - 01:34 PM

From Hybridbear
 
Dealer invoice price is publicly available on sites like kbb.com or Edmunds. The dealer should also have no problem telling you this number. The dealer invoice printout will show you AZXD plan pricing, MSRP & dealer invoice. 

The dealer makes a profit even when selling you a car at dealer invoice. The dealer does not pay Ford the dealer invoice price for a car. They pay less. When dealers sell a car at invoice price they're still making money because every car has a "holdback" which on the FFH is somewhere between $500 & $1000. That is their margin even when selling at invoice price. Higher volume dealers are more likely to sell cars at invoice price because they also get volume rebates from Ford.

These numbers are purely for the purpose of illustration and are not necessarily accurate. My dealer explained this process to me because I asked about how they make profit selling at invoice (but I didn't ask this until after we had signed and paid that price for our car). He didn't tell me how much they get in volume rebates, he just said that they get volume rebates every month at their dealer. Say for example that Ford sets a target of 100 Fusions per month per dealer to get a volume rebate of $300 per car. If that dealer sells 110 Fusions in one month they would get a rebate from Ford of $33,000 or 110 x 300. That increases their margin on every Fusion by $300. This is why shopping at the end of the month is good for buying cars off the lot. The dealer might know on the 29th of the month that they need to sell 15 more Fusions to get their volume rebate so they'll sell those cars cheaper knowing that the volume rebate will make up for it. 

Buying cars off the lot is more expensive because the dealer typically doesn't pay cash up front to Ford when taking delivery for their lot. They have a finance company who pays Ford and they pay a fee for every month the car goes unsold, and then they pay the full cost of the car once they have received the money from the buyer. This is another reason why they sell cheaper at the end of the month. Because every car still on their lot on the 1st of the next month costs them another fee to the finance company. 

When you order a car the dealer doesn't go through the finance company but instead pays Ford cash up front which is why you can order out at a lower price.
 

Edited by hybridbear, 27 June 2013 - 11:31 AM.

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#2 OFFLINE   bcrisp

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Posted 31 August 2013 - 01:32 AM

Thanks for posting this - it's a great topic!

 

Ford has a 3% holdback rate, based on MSRP minus destination.  I just priced a 2014 FFHyTi on ford.com for $36,675. Subtract $795 destination = $35,880, x .03 holdback = $1,076.  So, if you manage to negotiate invoice pricing on your sale (good luck, and please share the dealer's name if you do), they still get 'at least' $1,076.  There are numerous other incentives, too, such as Ford-to-dealer cash, volume incentives, and related.  Also know that invoice prices can also be inflated.  Holdback is typically released to the dealer quarterly.

 

There's a very good article on Edmunds that explains more details for holdback, including a table for holdback rates for all manufacturers:  http://www.edmunds.com/car-buying/dealer-holdback/   The FFH competes with Camry but Toyota only has a 2% holdback, and it's figured on base MSRP (before options); unlike Ford which is calculated on total MSRP.  Therefore, Toyota dealerships have much less wiggle room, so you clearly have an opportunity for lower pricing on a comparably equipped Ford.

 

Another item to consider is buying a current year model when new year models arrive.  Dealerships get another 1-2% holdback for selling prior year inventory on top of the normal holdback.  I've leveraged this info in the past by buying a vehicle in Oct/Nov when the newer model year cars are on deck.  I wouldn't consider making a purchase on a prior year unless I could get below-invoice pricing.  The dealership is extra anxious to rid themselves of prior year cars so that's about the only time (if ever) they'd be willing to dip under invoice.  Otherwise, negotiating into holdback territory is verboten.

 

The only real value in educating oneself on holdback rates is simply to know with certainty that if a dealer indicates they're not making any money on a sale (say, when you offer an at-invoice price), they're flat out lying.  Dealers and salesman don't make the money they used to because of much transparency provided by the internet and organizations such as Consumer Reports.  However, we all must be believers in a free-market capitalist economy and the dealer must make a profit.  So the question to the consumer is, how much over invoice are you willing to pay; nevermind the holdback.


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#3 OFFLINE   2014FordFusionSE

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Posted 16 February 2014 - 01:51 PM

Thanks. This is a great article.

I always assumed that ordering a specific vehicle would be more expensive than buying it off a lot.

 

I have a few questions related to this. Would the invoice price include all the other cash back incentives and Trade Assist cash?

eg. On kbb, the Fusion SE that I priced, shows up as $27k, which is a fair purchase price.

Would that include $1000 cash incentive and $1000 Trade Assist cash that Ford currently offers or should I be able to get my car for $25k?

 

Any opinions on trading in a car?

Usually, dealerships say that they will give you a lower price because they need to make money when selling it, but some colleagues at work say that they got a better price trading in their car.

(Please let me know if I should discuss this somewhere else)

 

Thanks in advance.


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#4 OFFLINE   murphy

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Posted 16 February 2014 - 02:11 PM

One thing to consider is sales tax.  In PA the 6% sales tax is paid on the price of the new car minus the price of the trade in car. 


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#5 OFFLINE   bcrisp

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Posted 16 February 2014 - 03:02 PM

Would the invoice price include all the other cash back incentives and Trade Assist cash?

     - No.  The invoice price is the invoice price.  Even Edmunds.com shows incentives separately.  Recall that incentives are year/model-based and of limited duration. Depending on the time of year, projected sales numbers, and whether consumer-A vs. consumer-B qualifies (college student, fireman, military, Ford loyalty bucks, etc.), the incentives vary, change often, and dealerships may offer additional incentives.  The MSRP (aka 'sticker price') may show either some Ford discount on a particular option package and the dealership may also have listed a discount, or more often, dealer-installed add-ons (e.g., paint protectant) or "market value" increases.  Sometimes a hot car (new Shelby) will be marked-up by the dealer.  When I viewed the FFHTi, for example, they had a markup listed, and quickly backed up when I stated I don't pay those things.

 

Trading a car.

     - Different thread but I'll offer you this.  Trade-in value is ALWAYS lower than Private Sale or Retail.  Retail is what a dealer expects to sell it for, and their profit is made from your trade-in price.  If you show me someone that got a way better price on their old car than trade-in value, I'll show you someone that paid closer to MSRP on the new vehicle.  NEVER tell a salesman you're trading until you've settled all costs on the new vehicle.  You're surrendering any leverage on pricing, as that little nugget is an ace in their pocket when they know it up front.  That is, you'll be led to believe you're getting a great deal on a trade-in, when in fact, they're making up the difference on the new vehicle.  I've had salesmen meet me at the car as I'm pulling in and "Hi, trading in today?" is one of the first questions they might ask.  A good salesman will work that question into general discussion while you're perusing the lot.  Whether or not I really am trading, my answer is always NO.  Once you're about to sign for the new one (i.e., final price agreed upon), put the pen down and say, "ya know, I was going to sell my old one myself, but what would you give me on a trade-in?"  Now you can assess the value of the trade-in offer without having them confuse you with the price value on the new one.  If you feel like you're getting robbed then on the trade-in deal (you can negotiate that offer, of course), then you have the option of walking out and trying a different dealer.  If you're not in a hurry and have the energy, you can alwyas get a better price selling the old one yourself.

     - Fact:  most dealerships make more money on used cars than new.  That's why they love trade-ins.  A good deal on a new car is somewhere in the neighborhood of $500 (or less) over Invoice (highly dependant on model demand, economy, etc.).  Now check that KBB source you referenced - there's way more than $500 difference between Trade-in and Retail on most cars.  Different dealerships use different sources, too (KBB is one, NADA another).  Look up those values BEFORE going in so you what to expect.  Then be honest about your vehicle, whether it's in "fair" condition, vs excellent, etc.  Those are highly subjective but decide on your lowest acceptable price so you can judge their trade-in offer.  Understand that a vehicle purchase and trade-in invokes an inherent adversarial prospect with the dealer (they want the highest, you want the lowest), and that's capitalism at its finest (as it should be), but trust me, they're not your friends.  Arm yourself with knowledge, and posting to this board is a good start. :)


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#6 OFFLINE   2014FordFusionSE

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Posted 18 February 2014 - 03:55 AM

Thanks for the help everyone.

 

Since I had approached the dealership via the internet, they had (what I thought was) a decent price.

It's a 2014 silver SE Hybrid with Nav and MFT for $26,960 + tax. They will get the vehicle from another dealer and so I haven't seen it yet.

I don't have too much faith in dealers and so I won't say much until I actually see the car and sign the papers.

 

A quick question regarding the negotiated price. Does it include the destination fee or not?

We never mentioned it but since the MSRP and invoice price include it, shouldn't the negotiated price also include it?

 

After we settled on the price, they offered me $300 for my Contour because they have $1000 towards the new purchase for trade-ins. My Contour should be worth $1500 and so I declined.

Not sure what the logic is regarding $1000 off my new vehicle while offering me $300 for the old one but something didn't seem right.

Anyway, bcrisp, it proves your theory of them giving me a good deal on the new car but wanting to make money off the trade-in.


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#7 OFFLINE   bcrisp

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Posted 18 February 2014 - 09:36 AM

A quick question regarding the negotiated price. Does it include the destination fee or not?

     - The way you describe it, not likely, but it should have been.  They also didn't include taxes, doc fee (several hundred $), etc.  If you said something like, "I want it for $nn,nnn on the road", that says you want all the fees included in the price you're offering.  Otherwise, if you didn't talk about it, the'll naturally tack those on to the sales price.  You should call and ask them, as there are no rules for that, so no one here can tell you with certainty about the destination fee when they weren't privy to the communiques with your salesman.

     - That $1k discount on the new vehicle looks like the FFH Customer Cash in lieu of accepting their 0% on financing.  Ford gives that to everyone (no sweat off your dealership's back), whether they sell that car for $10 or $100,000.  So it has nothing to do with your trade-in.  They're using that as leverage to push the paid price down for your trade.

 

We're not here to tell you that you made a mistake or did a great job on your negotiation shills.  If you're content with the terms, then that's all that matters, regardless of what anyone says.  Remember, the dealership is there to make as much profit as possible; that's their job.  You'd and I would do likewise if it were ours.  It's the consumers job to educate themselves (or not) but as long as you're happy with the deal, then congratulations are in order, you're the owner of a Brand New FUSION!!!  :)  You're going to love the car by the way.


Edited by bcrisp, 18 February 2014 - 10:10 AM.

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#8 OFFLINE   acdii

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Posted 18 February 2014 - 09:50 AM

What it all boils down to is if YOU are happy with the price paid. When all is said and done and you are ready to sign on the line, as long as the final cost put down on that document is what you are willing to pay for it, then you did good. It's that final line on the paper, what you pay in cash or finance thats important, that cannot be changed once you sign. Financing however is where you can get screwed after signing, read that one carefully, as it shows what you financed AND what you will have paid once you make that last payment.  They can also tack things on here that would not be on your Bill of Sale for the car, such as GAP insurance, or finance insurance(forget what thats called).

 

I now I am paying more for mine than I should be, but I had other underlying circumstances that caused it, but I am happy with the car, and dont mind paying a little extra to have it, and that is what matters the most.   I was a bit more upside down on the 2010 due to the drastic drop in value when the 2013 came out, so some of that rolled into the price of my HyTi, but when I got my Flex, the difference between what I owed on the BD and its value, and the deal they gave me on the Flex it worked out I paid MSRP on the Flex after taxes, so happy with that deal too. 

 

The bottom line is, I can afford both vehicles, and I like both vehicles, and happy with them both. That is how you should look at it. 


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#9 OFFLINE   hybridbear

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Posted 18 February 2014 - 10:12 AM

Thanks for the help everyone.

 

Since I had approached the dealership via the internet, they had (what I thought was) a decent price.

It's a 2014 silver SE Hybrid with Nav and MFT for $26,960 + tax. They will get the vehicle from another dealer and so I haven't seen it yet.

I don't have too much faith in dealers and so I won't say much until I actually see the car and sign the papers.

 

A quick question regarding the negotiated price. Does it include the destination fee or not?

We never mentioned it but since the MSRP and invoice price include it, shouldn't the negotiated price also include it?

 

After we settled on the price, they offered me $300 for my Contour because they have $1000 towards the new purchase for trade-ins. My Contour should be worth $1500 and so I declined.

Not sure what the logic is regarding $1000 off my new vehicle while offering me $300 for the old one but something didn't seem right.

Anyway, bcrisp, it proves your theory of them giving me a good deal on the new car but wanting to make money off the trade-in.

Get everything in writing. Ask them for the full break-down of the out-the-door cost. On that sheet you want to see the price of the vehicle including destination, sales tax, license fees, Ford incentives to reduce the price of the car, dealer Document Fee, any other dealer fees and at the bottom the Total Cash Price. Once you have that in writing you can make sure that things add up. When we bought our first black FFH the dealership "accidentally" put $500 less on the contract for our trade that we had previously agreed on. When we ordered our car we had them evaluate our trade and give us a price at certain dates since it was unknown when the new car would arrive. The had put that on 1/1/13 the price would drop by $500 and we were trading in on 12/17/12. I knew exactly what each number should be and had my paperwork from the day we ordered showing that the Used Car Manager and I had both signed off on those trade-in values. When something didn't match I mentioned it to the salesman and he apologized for the mistake and reprinted the contract. He didn't argue with it, but just changed the contract. But I was ready with my paperwork just in case.

 

Dealerships are very sneaky. Sometimes they'll even lie to customers to try to make more money. The most important thing is to be an informed consumer. Read the articles on MSN Autos, Edmunds, KBB and other websites about buying new cars.

This Edmunds page is an excellent comprehensive guide with details about each step of the process.

This guide is a simplified five-step version.

 

Reading these guides, and others, made us educated consumers and saved us thousands of dollars on our car purchases.


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#10 OFFLINE   bcrisp

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Posted 18 February 2014 - 10:15 AM

I agree 100% with acdii, and that's what I meant by If you're content with the terms, then that's all that matters. Same goes for hybridbear's post.


Edited by bcrisp, 18 February 2014 - 10:17 AM.

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#11 OFFLINE   larrylwill

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Posted 16 March 2014 - 12:50 AM

I found a Fusion Hybrid SE on Auto Trader from a dealer in Maryland, I live in Alabama.

 

The MSRP is $31,065, internet price is $26,835

The quoted me in email:

selling price /    $27,000.00

    freight         /      $795

     dealer proc /     $200

  taxes            /  $1,119.80,  I called my DMV here and they said the Tax was 2.5% if I buy a new car out of state. The salesman said its 4%, according to his boss.

 licence        /        $351.00, The last car I bought new 2011 in Alabama cost $16.50 for licence / tag / Last new car was 3% state, county, local tax.

          total        $29,465.10     

         rebate     - $1,000
out the door       $28,465.80  
 
My questions are: 

1: Is it normal to charge tax on freight and doc fees?

2. Is it normal to apply the rebate AFTER the tax? If I get a rebate shouldn't it be applied to the advertised cost of the car before adding the tax?.

3. What is licence fee? I was just going to bring my tag from my old car and transfer it like I did the last time.

 

 

Car = $27000

- $1000 rebate = $26000

tax = $650 @ 2,5% 4% = $1040

Freight = $795

Doc fees $200

tag transfer $16.50

Out the door $27,661  4% tax = $28,051

 

I will call my DMV again Monday to confirm the tax and tag transfer.

 

The reason I did not quibble about the price difference $26,835 vrs his quote of $27,000 is because the Auto trader add said

The PRICE shown includes rebates and FMC bonus cash, and he gave me the $1000 off again looks like.



#12 OFFLINE   bcrisp

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Posted 16 March 2014 - 08:35 AM

larryiwill,

 

I don't live in Alabama but your rates/fees should be applied per the State you're registering your vehicle.  Rather than provide my unqualified opinion (I'm not a tax attorney or legislator) as to what the charges are and under what conditions, I found some source data on your State's website that you can use in your discussion w/DMV and dealership. 

 

What Is The Tax Rate?

Source:  Alabama Dept of Revenue - http://revenue.alaba...estax/cutax.cfm

Automotive Rate - 2%

“If you purchased an automotive vehicle from outside the state and did not pay the casual sales and use tax when you purchased your tag, or if no tag is required for the vehicle, you owe use tax at the rate of 2% of the purchase price. Examples of items not requiring tags which qualify as automotive vehicles include off-road motorcycles, ATV's and self-propelled construction equipment.”

 

“General Sales Tax” = 4% (not motor vehicles!)

http://revenue.alaba.../staterates.cfm

 

Registration (Tag) Fee:  $23

Source:  http://revenue.alaba...feeschedule.cfm

Maybe the ‘transfer’ rate is $16.50 from your old car. I'm sure they used the new tag fee out of habit or didn't realize you want to transfer a tag.

 

Sales Price, as defined by Alabama Code, Section 40-23-60:

http://alisondb.legi...1975/coatoc.htm

(10) SALES PRICE. The total amount for which tangible personal property is sold, including any services, including transportation, that are a part of the sale, valued in money, whether paid in money or otherwise, and includes any amount for which credit is given to the purchaser by the seller, without any deduction therefrom on account of the cost of the property sold, the cost of the materials used, labor or service cost, interest charged, losses or any other expenses whatsoever; provided, that cash discounts allowed and taken on sales shall not be included and sales price shall not include the amount charged for property returned by customers when the entire amount charged therefor is refunded either in cash or by credit.

 

I'll also add that you should ask how the car is arriving in Alabama from Maryland.  Due to high transportation costs (freight train, truck), they're likely having someone drive it down. Understand that you'll be absorbing the depreciation on that many road miles before you even take possession.  You'll then need to be extra diligent about inspecting the car on arrival, before you accept it.  Did the driver spill a McDonald's drink on the way down?  Maybe he picked up a nick or two in the paint from rocks kicked up by a truck on the road.  Did someone bang the door with their door while he was at a rest stop?


Edited by bcrisp, 16 March 2014 - 09:57 AM.

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#13 OFFLINE   murphy

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Posted 16 March 2014 - 09:22 AM

I count 118 words in that runon sentence.



#14 OFFLINE   bcrisp

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Posted 16 March 2014 - 09:59 AM

I count 118 words in that runon sentence.

-- That's why you have to be a trained lawyer to understand it :)  Verbose language helps justify their fees.


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#15 OFFLINE   larrylwill

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Posted 16 March 2014 - 11:35 AM

Bcrisp: Thank you for what you found. I tried to find that info online and could not.

I plan to fly to Maryland with my wife, $149 each. We will visit her brother and sister in law for a few days. They will pick us up and take us to the dealer. Tomorrow he will drive to the dealer and check out the car for me before I buy the tickets.  Other wise I would just fly up alone. Then we will drive it back home. its about 10 hours. A nice little trip.

 

Since I'm less of a lawyer that you, please further explain this.: Should they apply the credit before or after they calculate the Tax.?

After reading the page you linked. It appears to me its my responsibility to pay this tax not theirs. Also this comes in AFTER I purchase the car so the discount should have already been applied.

 

(10) SALES PRICE. The total amount for which tangible personal property is sold, including any services, including transportation, that are a part of the sale, valued in money, whether paid in money or otherwise, and includes any amount for which credit is given to the purchaser by the seller, without any deduction therefrom on account of the cost of the property sold, the cost of the materials used, labor or service cost, interest charged, losses or any other expenses whatsoever; provided, that cash discounts allowed and taken on sales shall not be included and sales price shall not include the amount charged for property returned by customers when the entire amount charged therefor is refunded either in cash or by credit.

again thank you.

 

I believe the invoice should look like this:

msrp                            / 31,065.00

selling price                 / 27,000.00
   freight                         /   795
     dealer proc                  / 200
    rebate                       / - 1,000                                                                
Selling Price                   / 26,995                                                                                                                                   

     taxes                        /  559.9

licence (tag transfer)  /     13.42
 
                total              27,568.32 out the door
                            

Edited by larrylwill, 16 March 2014 - 12:06 PM.


#16 OFFLINE   hybridbear

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Posted 16 March 2014 - 02:59 PM

Bcrisp: Thank you for what you found. I tried to find that info online and could not.
I plan to fly to Maryland with my wife, $149 each. We will visit her brother and sister in law for a few days. They will pick us up and take us to the dealer. Tomorrow he will drive to the dealer and check out the car for me before I buy the tickets.  Other wise I would just fly up alone. Then we will drive it back home. its about 10 hours. A nice little trip.
 
Since I'm less of a lawyer that you, please further explain this.: Should they apply the credit before or after they calculate the Tax.?
After reading the page you linked. It appears to me its my responsibility to pay this tax not theirs. Also this comes in AFTER I purchase the car so the discount should have already been applied.
 
(10) SALES PRICE. The total amount for which tangible personal property is sold, including any services, including transportation, that are a part of the sale, valued in money, whether paid in money or otherwise, and includes any amount for which credit is given to the purchaser by the seller, without any deduction therefrom on account of the cost of the property sold, the cost of the materials used, labor or service cost, interest charged, losses or any other expenses whatsoever; provided, that cash discounts allowed and taken on sales shall not be included and sales price shall not include the amount charged for property returned by customers when the entire amount charged therefor is refunded either in cash or by credit.
again thank you.
 
I believe the invoice should look like this:
msrp                            / 31,065.00
selling price                 / 27,000.00
   freight                         /   795
     dealer proc                  / 200     rebate                       / - 1,000                                                                
Selling Price                   / 26,995                                                                                                                                   
     taxes                        /  559.9
licence (tag transfer)  /     13.42
 
                total              27,568.32 out the door


I think most of us understood the freight to be their cost to ship the car to you. But since you're picking the car up, that freight must be what Ford charges, right? The Ford destination fee should be included in the price of the car, don't let the dealer rip you off for another $800 by excluding it and adding it back in as a separate line

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#17 OFFLINE   larrylwill

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Posted 16 March 2014 - 03:24 PM

Good catch. Although looking at internet pricing I think that's the way they get to show a smaller price. Since I haven't gotten this far with any other dealer I cant be sure. I will call some tomorrow. I think even with the extra added freight a price of $26995 before tax is a good one. It includes the rear camera package, The Navigation package, the rear sensing package and the equipment group 501A (which I could care less about) Edmons true value is  $27,733

 

What do you think?



#18 OFFLINE   hybridbear

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Posted 16 March 2014 - 04:31 PM

The Edmunds price would be after the Ford destination fee but likely before any available incentives. If the Edmunds price is $27,733 before incentives and your price is $27,995 before the $1000 incentive then you should be able to bargain for a cheaper price.


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#19 OFFLINE   bcrisp

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Posted 16 March 2014 - 05:06 PM

 

Bcrisp: Thank you for what you found. I tried to find that info online and could not.

I plan to fly to Maryland with my wife, $149 each. We will visit her brother and sister in law for a few days. They will pick us up and take us to the dealer. Tomorrow he will drive to the dealer and check out the car for me before I buy the tickets.  Other wise I would just fly up alone. Then we will drive it back home. its about 10 hours. A nice little trip.

 

Since I'm less of a lawyer that you, please further explain this.: Should they apply the credit before or after they calculate the Tax.?

After reading the page you linked. It appears to me its my responsibility to pay this tax not theirs. Also this comes in AFTER I purchase the car so the discount should have already been applied.

 

(10) SALES PRICE. The total amount for which tangible personal property is sold, including any services, including transportation, that are a part of the sale, valued in money, whether paid in money or otherwise, and includes any amount for which credit is given to the purchaser by the seller, without any deduction therefrom on account of the cost of the property sold, the cost of the materials used, labor or service cost, interest charged, losses or any other expenses whatsoever; provided, that cash discounts allowed and taken on sales shall not be included and sales price shall not include the amount charged for property returned by customers when the entire amount charged therefor is refunded either in cash or by credit.

again thank you.

 

I believe the invoice should look like this:

msrp                            / 31,065.00

selling price                 / 27,000.00
   freight                         /   795
     dealer proc                  / 200
    rebate                       / - 1,000                                                                
Selling Price                   / 26,995                                                                                                                                   

     taxes                        /  559.9

licence (tag transfer)  /     13.42
 
                total              27,568.32 out the door
                            

 

 

I hope I didn't portray myself as a lawyer because I'm the furthest thing from it.  Okay, maybe not THE furthest thing, since I'm not writing you from prison.  I swear!  :)

 

From reading the highlighted text, I would interpret your State sales tax law to read that you're paying tax on the initial sales price withOUT consideration of any rebate/incentive.  Your credit then applies after taxes are levied.  That would be plausible, given that lawmakers generally make these laws to benefit the State's revenue, not the consumer's.  So the higher price wins (for them).

 

Note that Destination is also tallied in the sales tax levy.  Based on the itemized pricing you listed, "freight" = Destination charge.  Everybody pays Destination and it's listed on the factory sticker.  That accounts for hauling that vehicle on a train from Mexico to the original destination dealership lot.  That freight charge is not trucking it to Alabama from Maryland.  That would be extra but I see you're making a little vaca out of the deal, and any time spent like that with your family is absolutely priceless!

 

I grew up in Baltimore so say hello to the Ravens for me, and if you get time, pick up a crab cake or two (or three or four or five)!


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#20 OFFLINE   hybridbear

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Posted 16 March 2014 - 06:32 PM

 

I hope I didn't portray myself as a lawyer because I'm the furthest thing from it.  Okay, maybe not THE furthest thing, since I'm not writing you from prison.  I swear!  :)

 

From reading the highlighted text, I would interpret your State sales tax law to read that you're paying tax on the initial sales price withOUT consideration of any rebate/incentive.  Your credit then applies after taxes are levied.  That would be plausible, given that lawmakers generally make these laws to benefit the State's revenue, not the consumer's.  So the higher price wins (for them).

 

Note that Destination is also tallied in the sales tax levy.  Based on the itemized pricing you listed, "freight" = Destination charge.  Everybody pays Destination and it's listed on the factory sticker.  That accounts for hauling that vehicle on a train from Mexico to the original destination dealership lot.  That freight charge is not trucking it to Alabama from Maryland.  That would be extra but I see you're making a little vaca out of the deal, and any time spent like that with your family is absolutely priceless!

 

I grew up in Baltimore so say hello to the Ravens for me, and if you get time, pick up a crab cake or two (or three or four or five)!

In Minnesota you don't pay sales tax on the value of a trade-in vehicle or on any incentives that reduce the price of the vehicle. You do pay sales tax on any cash you put down toward your purchase. And the license fees are calculated based on the base price of your trim level of your vehicle, so more expensive vehicles cost more to license and cost more each year to renew the license tabs. The basic idea is that each state is different, and when buying out of state you will want to be well versed in your local requirements since the dealer won't be familiar with them.


Edited by hybridbear, 16 March 2014 - 06:32 PM.

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