FFH deal benchmark?

[AptosDriver]

Although I'm not near ready to close any deals yet, the other day just for the heck of it I completed one of those online forms requesting dealer quotes on an FFH. A local Ford/Lincoln dealer got back to me within a day with an offer for a fully loaded FFH (with "502A Rapid Spec"): $31,559 plus tax, license and fees. Now as near as I can figure from my elaborate spreadsheet (based on Consumer Reports invoice data), that works out to $104 over invoice. Doesn't sound like very much, but then the dealer also gets $847 from Ford (dealer "holdback", per CR) for selling me this car, which actually works out to a $951 profit. So there oughta be some negotiating wiggle room in there. :shift:

Edited January 20, 2011 by AptosDriver

[CometFlash]

What color? Some colors, such as WP and RC cost more than the others. I'm assuming that's without remote start, if I recall on the FFH that's a dealer add-on and not a factory option, though I could be mistaken.

[eneg]

Although I'm not near ready to close any deals yet, the other day just for the heck of it I completed one of those online forms requesting dealer quotes on an FFH. A local Ford/Lincoln dealer got back to me within a day with an offer for a fully loaded FFH (with "502A Rapid Spec"): $31,559 plus tax, license and fees. Now as near as I can figure from my elaborate spreadsheet (based on Consumer Reports invoice data), that works out to $104 over invoice. Doesn't sound like very much, but then the dealer also gets $847 from Ford (dealer "holdback", per CR) for selling me this car, which actually works out to a $951 profit. So there oughta be some negotiating wiggle room in there. :shift:

Something is wrong with that figure ($31,559) and I think I might know what it is.

Invoice for that car (I am assuming it is a 2011) is about $30,200.

I have a feeling that CR is not showing you the automatic discount (about $1300) that Ford applies to the 502A package.

Two other things:

1. I wouldn't get my hopes up re Holdback dollars. Unless it's a car that the dealer is stuck with, I have never heard of a dealer giving any of those

dollars to customers. With most cars, especially the FFH, consider the Holdback dollars, the dealers. They are probably not negotiable.

2. You also said that the price quote was without "fees." You have to find out the cost of those fees. They can be lots of $$$$!

 

Good Luck,

 

Eneg

[jazztrumpet216]

Yeah, you're probably not going to get them to give up holdback money unless it's the end of a model year and they want to clear inventory. People don't work for free, and dealers need to keep the lights on somehow. I got my 2010 Fusion S at invoice and was quite happy with the deal.

[DR SAW]

Yeah, you're probably not going to get them to give up holdback money unless it's the end of a model year and they want to clear inventory. People don't work for free, and dealers need to keep the lights on somehow. I got my 2010 Fusion S at invoice and was quite happy with the deal.

 

The remote start was a factory installed option on my 2010 FFH

[akirby]

Yeah, you're probably not going to get them to give up holdback money unless it's the end of a model year and they want to clear inventory. People don't work for free, and dealers need to keep the lights on somehow. I got my 2010 Fusion S at invoice and was quite happy with the deal.

 

Isn't it amazing that people will buy a $3000 piece of furniture which is at least 40% profit and usually closer to 50% ($1200 to $1500) but they don't think a car dealer should make $1000 on a $30,000 vehicle?

[AptosDriver]

Something is wrong with that figure ($31,559) and I think I might know what it is.

Invoice for that car (I am assuming it is a 2011) is about $30,200.

I have a feeling that CR is not showing you the automatic discount (about $1300) that Ford applies to the 502A package.

Two other things:

1. I wouldn't get my hopes up re Holdback dollars. Unless it's a car that the dealer is stuck with, I have never heard of a dealer giving any of those

dollars to customers. With most cars, especially the FFH, consider the Holdback dollars, the dealers. They are probably not negotiable.

2. You also said that the price quote was without "fees." You have to find out the cost of those fees. They can be lots of $!

 

Good Luck,

 

Eneg

Per my spreadsheet (based on CR invoice data) at the dealer-quoted sales price, the out-the-door price for this fully loaded FFH, including all taxes, license, tire-recycling and "document" fees (what the dealer charges for doing the paperwork for the California DMV) would be $35,709. Good point about CR not factoring in the option-package discount, which according to the sticker is $1,375. That means that Ford has already dropped the price of "502a Rapid Spec" $664 below invoice, meaning the car actually costs the dealer $664 less than invoice, meaning it's a discount for the dealer not the buyer, meaning -- finally -- that there's even more wiggle room for negotiating. I have now factored this into my spreadsheet, which now shows that this dealer's actual profit at the quoted price of $31,559 is $2,462! Meaning it's not really a great deal for me! Thank you! . And you're probably right about the "fat chance" that a dealer would give up any of the holdback money. But that doesn't mean it's not worth trying to get some of it. :rant: I don't know if the dealer is "stuck" with this FFH. I do know that they got it on a dealer trade. Why they traded for it, I don't know.

 

In any case, I'm just testing the waters now and I won't be making any decisions until this coming fall at the earliest. :shift:

Edited January 17, 2011 by AptosDriver

[AptosDriver]

Isn't it amazing that people will buy a $3000 piece of furniture which is at least 40% profit and usually closer to 50% ($1200 to $1500) but they don't think a car dealer should make $1000 on a $30,000 vehicle?

Nah, it's more amazing that people don't consider negotiating for the furniture. :headspin:

[akirby]

Nah, it's more amazing that people don't consider negotiating for the furniture. :headspin:

 

No, it's more amazing that people expect car dealers to give away cars for free.

[eneg]

Per my spreadsheet (based on CR invoice data) at the dealer-quoted sales price, the out-the-door price for this fully loaded FFH, including all taxes, license, tire-recycling and "document" fees (what the dealer charges for doing the paperwork for the California DMV) would be $35,709. Good point about CR not factoring in the option-package discount, which according to the sticker is $1,375. That means that Ford has already dropped the price of "502a Rapid Spec" $664 below invoice, meaning the car actually costs the dealer $664 less than invoice, meaning it's a discount for the dealer not the buyer, meaning -- finally -- that there's even more wiggle room for negotiating. I have now factored this into my spreadsheet, which now shows that this dealer's actual profit at the quoted price of $31,559 is $2,462! Meaning it's not really a great deal for me! Thank you! . And you're probably right about the "fat chance" that a dealer would give up any of the holdback money. But that doesn't mean it's not worth trying to get some of it. :rant: I don't know if the dealer is "stuck" with this FFH. I do know that they got it on a dealer trade. Why they traded for it, I don't know.

 

In any case, I'm just testing the waters now and I won't be making any decisions until this coming fall at the earliest. :shift:

You're making this way too complicated!

Invoice on the car that you describe is-$30,269

MSRP on the car that you describe is - $33,095

 

There's your "wiggle room."

 

Both prices exclude taxes, license fees, and document fees.

 

Just remember, as oil prices rise, your wiggle room will decrease on hybrid vehicles.

 

BTW - Document fees, at least as far as I have seen, are completely different than what you have described in your note.

 

Best advice? When you are ready to buy, read forums like this one to see what people are paying AT THAT TIME!

 

Eneg

[AptosDriver]

No, it's more amazing that people expect car dealers to give away cars for free.

I don't expect any dealer to give me a car "for free." But the fact remains that car buying is about as close to a free-market transaction as the average consumer can come these days. Think about it: (1) multiple dealerships compete for our business; (2) thanks to the Internet, we can now easily find out which dealers have what cars in stock and solicit competitive bids for whatever vehicle we want; (3) again, thanks to the Internet and auto Websites like Kelley's and Edmunds, anyone can get a pretty good handle on the invoice costs of base vehicles and their options -- in other words, we can pretty much know what the dealers have paid for the cars we're looking for before we ever walk through their doors; (4) anyone who's willing to pay for Consumer Reports.org's car-pricing service can additionally ferret out the dealers' holdbacks for any new vehicle on the market, plus whatever manufacturers' incentives are currently available. All this ads up to transparent market in which car buyers willing to do some homework are afforded real leverage.

 

Now, does that mean that a buyer should expect a dealer to just sell him or her a car for no more than the dealer's actual cost, with no profit for the dealer? Of course not. The car dealer has to make money on the cars he sells, or he couldn't stay in business; he might as well be selling shoes (or furniture). :baby: But it does mean that it's up to us buyers to get the best deals we can, while it's up to the dealers to protect their profit margins. :finger: Essentially, the car market is a bazaar where the advertised price is meaningless. The final price is whatever the buyers and the dealers can agree on, and because both sides have accepted it, it's a "fair" price set in a true free-market transaction.

 

So, for example, if I walk into a Ford dealership one day, see a fully loaded FFH and offer the dealer, say, $30,000 for the car -- before destination charges -- and he/she takes the deal, it must be "fair" for the dealer, and who's to say it's not? What does the seller make on this deal? Even though the price is only $56 over the dealer's actual cost, which in this case is invoice minus the holdback, minus the option-package factory discount, the seller still nets $903 -- the $56 over the dealer's true cost, plus the $847 FFH holdback they're still going to get from Ford. Again, if a dealer is willing to accept that margin, it's "fair" as far as he/she is concerned. And if I'm happy with it, it's a "fair" deal for me. If the dealer won't sell to me at that price, then the dealer is signaling that he doesn't think the profit margin is fair. I can either raise my bid or, if I'm not willing to accept a higher price I can vote with my feet by walking right out the door. The bottom line is that it's every buyer and seller for him/herself. That's the way a free market is supposed to work. :drool: At the proverbial end of the day, the going market price -- what Edmunds calls "true market value" is set by the average of all these transactions. Buyers who haven't done their homework or aren't good bargainers will have paid more; buyers who've done their due diligence and are good at haggling will have paid less.

 

Retail furniture stores don't work this way because there's no transparency; the buyer has no idea what the furniture actually cost the seller. And by the way, have you tried buying a mattress lately? Identical mattress models are branded differently in different store so you can't even compare prices between stores -- a model of market opacity. :rockon:

 

Finally let me leave you with this question: Would you ever walk into a car dealership and ask the salesperson, "What do you think you should make on this car?" Would you? :shift:

[AptosDriver]

You're making this way too complicated!

Invoice on the car that you describe is-$30,269

MSRP on the car that you describe is - $33,095

 

There's your "wiggle room."

 

Both prices exclude taxes, license fees, and document fees.

 

Just remember, as oil prices rise, your wiggle room will decrease on hybrid vehicles.

 

BTW - Document fees, at least as far as I have seen, are completely different than what you have described in your note.

 

Best advice? When you are ready to buy, read forums like this one to see what people are paying AT THAT TIME!

 

Eneg

The MSRP for the car I was quoted, before the destination charge, and minus the option-package discount, is $33,085. The dealer's actual invoice cost, before the holdback, is $30,791, which reflects the $664 discount off invoice to the dealer for the option package. Consumer Reports recommends that you deduct the holdback (in this case $847) from the invoice cost to arrive at the dealer's true cost and your opening bid, which is what I've done to arrive at an opening bid of $29,944. But you have to keep in mind that the dealer will still get the holdback, on top of whatever price you both agree on, and that adds to their profit margin. So even if a dealer would sell me this car for $29,944 (plus destination charges), an admittedly doubtful prospect, he'd still make $847 -- the holdback -- on the deal. Thus what might look to the buyer like a no-profit deal is still a money maker from the seller's standpoint. It is complicated. The sellers do their best to make it complicated in order to befuddle us buyers. :redcard:

 

As for the $55 document fee, that's what the dealer told me "all dealers" in California charge. That's something else to check out.

Edited January 17, 2011 by AptosDriver

[eneg]

The MSRP for the car I was quoted, before the destination charge, and minus the option-package discount, is $33,085. The dealer's actual invoice cost, before the holdback, is $30,791, which reflects the $664 discount off invoice to the dealer for the option package. Consumer Reports recommends that you deduct the holdback (in this case $847) from the invoice cost to arrive at the dealer's true cost and your opening bid, which is what I've done to arrive at an opening bid of $29,944. But you have to keep in mind that the dealer will still get the holdback, on top of whatever price you both agree on, and that adds to their profit margin. So even if a dealer would sell me this car for $29,944 (plus destination charges), an admittedly doubtful prospect, he'd still make $847 -- the holdback -- on the deal. Thus what might look to the buyer like a no-profit deal is still a money maker from the seller's standpoint. It is complicated. The sellers do their best to make it complicated in order to befuddle us buyers. :redcard:

 

As for the $55 document fee, that's what the dealer told me "all dealers" in California charge. That's something else to check out.

No, I stand by what I had said: You're making it complicated, especially for yourself.

The MSRP number that you quoted is WITH destination.

Destination & Holdback fees are non-negotiable, but if you want to keep them on your spreadsheets, be my guest!

I'm telling you though, you are confusing yourself.

 

Your invoice figure of 30,791 is also wrong. As for your figure of 664, I have no idea of what that is.

The invoice & MSRP of the car is as I have quoted above. Very simple!

Adding numbers that have no meaning is pointless in your negotiations.

Maybe you should figure what the car actually costs Ford to build and add that to your numbers. . .

 

On another subject, and I could be totally wrong, this car may not be for you.

 

Eneg

[akirby]

Finally let me leave you with this question: Would you ever walk into a car dealership and ask the salesperson, "What do you think you should make on this car?" Would you? :shift:

 

Of course not. But then again I don't expect a dealer to go below dealer invoice either. Dealer holdback is the minimum profit level. I want the dealer to make a fair profit so they stay in business. If a dealer offered me a price below invoice i would be very suspicious that there were hidden fees somewhere or there was something wrong with the car. Then again I use X plan so I pay about $150 over invoice plus $100 doc fee and I'm guaranteed to get the right price and I get all rebates including dealer cash. I don't waste a minute trying to figure out holdback and discounts and all this other stuff you're doing. I know I'm getting a great deal and it's great for the dealer because they get an additional spiff check from Ford for a few hundred bucks. And the price is the same no matter which dealer you use.

 

You are making this WAY too complicated. I'm all for competitive bidding if that's what you want to do and if one dealer wants to sell it to you below invoice then go for it. But to go to these extremes trying to figure out every last dime of the dealer's cost is ridiculous.

[AptosDriver]

No, I stand by what I had said: You're making it complicated, especially for yourself.

The MSRP number that you quoted is WITH destination.

Destination & Holdback fees are non-negotiable, but if you want to keep them on your spreadsheets, be my guest!

I'm telling you though, you are confusing yourself.

 

Your invoice figure of 30,791 is also wrong. As for your figure of 664, I have no idea of what that is.

The invoice & MSRP of the car is as I have quoted above. Very simple!

Adding numbers that have no meaning is pointless in your negotiations.

Maybe you should figure what the car actually costs Ford to build and add that to your numbers. . .

 

On another subject, and I could be totally wrong, this car may not be for you.

 

Eneg

Wow! This discussion is becoming somewhat overheated. :stop:

 

First, I'll say that this car very well could be for me. I can afford it. I could afford an MKZH for that matter. I'm still trying to decide whether I want an FFH (or an MKZH). Cost is not a big problem for me; but if I decide to go this route, it'll be because I've decided that the FFH/MKZH is/are my best choice(s) in terms of driveability, performance, comfort and reliability. Cost will be secondary. Nevertheless, I'll be gunning for the lowest cost I can get. And why not? I'm not a charitable institution.

 

As for my cost calculation, I don't think I'm confused. Instead of laying it out in a narrative, I'll do it line by line:

 

MY COST

 

1. Consumer Reports base-model invoice: $26,696

2. CR 502A Rapid Spec invoice $4,759

3. Net option-package discount ($664)

4. Dealer cost $30,791

5. Dealer holdback ($847)

6. Dealer cost minus holdback $29,944 (The dealer gets the holdback at the end of the deal)

7. Destination charge $750

8. Bottom line (my best cost) $30,694

 

9. My opening bid $30,000 (Rounding up from $29,944)

10. Agreed-upon price $30,400 (Hypothetical)

11. Destination charge $750

12. Total price $31,150

13. License fees $430 (give or take a few bucks)

14. Sales tax $2,803 (9% in California)

15. Calif. tire recycling fee $7 ($1.75/per tire x 4)

16. Document fee $55 (dealer's charge for preparing DMV paperwork)

17. Out-the-door cost $34,445

 

DEALER'S PROFIT

 

18. Agreed-upon price $30,400 (line 10)

19. Dealer cost minus holdback ($29,944) (line 6)

20. Dealer's net over cost $456

21. Dealer holdback $847 (dealer recoups this on the back end)

22. Dealer's real profit $1,303

 

There are two line items in dispute here: Line 3 and Line 5.

 

The basis for Line 3, net option-package discount, is the "$1,375 502A Rapid Spec discount" on the sticker, which is taken off the MSRP option price. It's a factory subsidy for the dealer, not a gift to the buyer from Ford. I figure that the "discount" only kicks in when he actually sells the car (like the holdback). I don't knock the whole enchilada off the option invoice price, because I also figure that the dealer has already paid the invoice price up front. So my calculation on this discount, from the dealer's presumed standpoint, is as follows:

 

1. Option MSRP price $5,470

2. Factory discount off MSRP ($1,375)

3. Net option MSRP price $4,095

 

So, the factory-option discount actually drops the "MSRP" price $664 below the invoice price of $4,759 on line 2. And that's why I take $664 off the option-package invoice price in arriving at my actual dealer cost of $30,791, before the holdback.

 

Now, as for the $847 holdback itself, Consumer Reports says you should knock it off the invoice to begin with. Here's why: If you concede this to the dealer upfront, he'll be getting it twice: first from you going into the deal and then from Ford coming out of it. Would you really want to pay the dealer an extra $847 if you didn't have to? I wouldn't. :shift:

 

Finally, I would like to thank you for challenging me on this. Your sharp questioning has made me scrutinize my own numbers again and has given me more confidence in them.

 

In the meantime, vive la difference! :beerchug:

Edited January 18, 2011 by AptosDriver

[CometFlash]

Better to do too much homework, than not enough.

 

This FFH forum may be a LOT less active than the F-150 forum I visit every day, but everyone here is MUCH nicer. I'd hate to see people start fighting here over just a difference of opinion or whatnot. :redcard: On the truck forum I visit, the guys will rip you to shreds if you say anything that can even remotely be construed as against the F-150, as if it's the best vehicle ever made and the be-all-end-all of automobiles. Sure, I love it. But come on, everything has it's flaws, and can always be improved upon.

 

Anyways, for me personally I appreciate seeing all the info that is posted that others have done figuring out pricing and whatnot, as it helps me and I'm sure others as well to see what is currently going on pricing-wise.

 

Sure, I 100% agree dealers need to make a profit, but since auto's are one of the very few items consumers can actually haggle on, I say go get the best deal possible! In a way it stinks we can't haggle on couches or mattress', but then again, part of the reason people hate car shopping is because of exactly that, the haggling. :banghead:

[AptosDriver]

Of course not. But then again I don't expect a dealer to go below dealer invoice either. Dealer holdback is the minimum profit level. I want the dealer to make a fair profit so they stay in business. If a dealer offered me a price below invoice i would be very suspicious that there were hidden fees somewhere or there was something wrong with the car. Then again I use X plan so I pay about $150 over invoice plus $100 doc fee and I'm guaranteed to get the right price and I get all rebates including dealer cash. I don't waste a minute trying to figure out holdback and discounts and all this other stuff you're doing. I know I'm getting a great deal and it's great for the dealer because they get an additional spiff check from Ford for a few hundred bucks. And the price is the same no matter which dealer you use.

 

You are making this WAY too complicated. I'm all for competitive bidding if that's what you want to do and if one dealer wants to sell it to you below invoice then go for it. But to go to these extremes trying to figure out every last dime of the dealer's cost is ridiculous.

Using the X plan certainly simplifies matters, but ...

 

Suppose a buyer pays $150 "over invoice" for a base FFH ($24,766). Their price will then be $24,916 before destination, sales taxes, license and fees. Ford then gives the dealer the $847 holdback. Now the dealer's profit is $997 on this deal. I don't really have a problem with that, but if a buyer can get, say, half of that $997 "back" from the dealer by making an opening offer of invoice minus the holdback, instead of invoice plus $150, why not try it? $500 ain't chickenfeed. :headspin:

Edited January 18, 2011 by AptosDriver

[eneg]

Wow! This discussion is becoming somewhat overheated. :stop:

 

First, I'll say that this car very well could be for me. I can afford it. I could afford an MKZH for that matter. I'm still trying to decide whether I want an FFH (or an MKZH). Cost is not a big problem for me; but if I decide to go this route, it'll be because I've decided that the FFH/MKZH is/are my best choice(s) in terms of driveability, performance, comfort and reliability. Cost will be secondary. Nevertheless, I'll be gunning for the lowest cost I can get. And why not? I'm not a charitable institution.

 

As for my cost calculation, I don't think I'm confused. Instead of laying it out in a narrative, I'll do it line by line:

 

MY COST

 

1. Consumer Reports base-model invoice: $26,696

2. CR 502A Rapid Spec invoice $4,759

3. Net option-package discount ($664)

4. Dealer cost $30,791

5. Dealer holdback ($847)

6. Dealer cost minus holdback $29,944 (The dealer gets the holdback at the end of the deal)

7. Destination charge $750

8. Bottom line (my best cost) $30,694

 

9. My opening bid $30,000 (Rounding up from $29,944)

10. Agreed-upon price $30,400 (Hypothetical)

11. Destination charge $750

12. Total price $31,150

13. License fees $430 (give or take a few bucks)

14. Sales tax $2,803 (9% in California)

15. Calif. tire recycling fee $7 ($1.75/per tire x 4)

16. Document fee $55 (dealer's charge for preparing DMV paperwork)

17. Out-the-door cost $34,445

 

DEALER'S PROFIT

 

18. Agreed-upon price $30,400 (line 10)

19. Dealer cost minus holdback ($29,944) (line 6)

20. Dealer's net over cost $456

21. Dealer holdback $847 (dealer recoups this on the back end)

22. Dealer's real profit $1,303

 

There are two line items in dispute here: Line 3 and Line 5.

 

The basis for Line 3, net option-package discount, is the "$1,375 502A Rapid Spec discount" on the sticker, which is taken off the MSRP option price. It's a factory subsidy for the dealer, not a gift to the buyer from Ford. I figure that the "discount" only kicks in when he actually sells the car (like the holdback). I don't knock the whole enchilada off the option invoice price, because I also figure that the dealer has already paid the invoice price up front. So my calculation on this discount, from the dealer's presumed standpoint, is as follows:

 

1. Option MSRP price $5,470

2. Factory discount off MSRP ($1,375)

3. Net option MSRP price $4,095

 

So, the factory-option discount actually drops the "MSRP" price $664 below the invoice price of $4,759 on line 2. And that's why I take $664 off the option-package invoice price in arriving at my actual dealer cost of $30,791, before the holdback.

 

Now, as for the $847 holdback itself, Consumer Reports says you should knock it off the invoice to begin with. Here's why: If you concede this to the dealer upfront, he'll be getting it twice: first from you going into the deal and then from Ford coming out of it. Would you really want to pay the dealer an extra $847 if you didn't have to? I wouldn't. :shift:

 

Finally, I would like to thank you for challenging me on this. Your sharp questioning has made me scrutinize my own numbers again and has given me more confidence in them.

 

In the meantime, vive la difference! :beerchug:

OY!

Where do I start?

 

First, when I said that I felt that this car might not be for you, I wasn't speaking of $$$$.

I'm just not sure that you will be happy with the car iteslf. Just a feeling. . .

 

There are a few things above that "you figure." Based on what?

 

When it comes to the 502A package, you have the invoice number.

You want to figure it a different way. I have no idea why, but so be it.

 

CR is giving you general information. It will apply to some cars. The FFH isn't one of them.

Walk into a Chevy dealer today and tell them that you want to buy a Volt at dealer cost, minus the holdback.

Let me know when they stop laughing.

 

Here's the question of the day for you:

 

If you wanted to buy the car TODAY.

You head down to your dealer with all of your spreadsheets.

You haggle back & forth and the dealer says to you:

"Final offer before tax & license fees - $31,150" (I think that was line 12.)

 

Do you take it?

 

One other thing:

You quote a document fee of $55.

Some dealers call them document fees, other dealers call them dealer fees.

Your dealer may have both.

Sometimes, after you settle on a price and you get down to the paperwork, there all nice and

printed on the invoice might be a dealer/document fee of several hundred dollars. Just something to

ask any dealer about when negotiating.

 

Eneg

[akirby]

MY COST

 

1. Consumer Reports base-model invoice: $26,696

2. CR 502A Rapid Spec invoice $4,759

3. Net option-package discount ($664)

4. Dealer cost $30,791

5. Dealer holdback ($847)

6. Dealer cost minus holdback $29,944 (The dealer gets the holdback at the end of the deal)

7. Destination charge $750

8. Bottom line (my best cost) $30,694

 

9. My opening bid $30,000 (Rounding up from $29,944)

10. Agreed-upon price $30,400 (Hypothetical)

11. Destination charge $750

12. Total price $31,150

13. License fees $430 (give or take a few bucks)

14. Sales tax $2,803 (9% in California)

15. Calif. tire recycling fee $7 ($1.75/per tire x 4)

16. Document fee $55 (dealer's charge for preparing DMV paperwork)

17. Out-the-door cost $34,445

 

DEALER'S PROFIT

 

18. Agreed-upon price $30,400 (line 10)

19. Dealer cost minus holdback ($29,944) (line 6)

20. Dealer's net over cost $456

21. Dealer holdback $847 (dealer recoups this on the back end)

22. Dealer's real profit $1,303

 

I'm not sure about the option package discount but you made a huge error in your formula above.

 

Your line 20 (dealer's net profit) already takes the holdback into consideration. It was deducted already to get line 19, so you can't add it back on line 21. The dealer's real profit on this deal is $456 plus $55 doc fee. And that's assuming they're not adding other fees somewhere along the line - happens a lot, especially if you're negotiating hard. Sure, we'll sell it to you for $1000 below invoice, but this paint and fabric protection package is $2K.

 

If you want to spend half your life with complicated formulas which may or may not even be accurate just to try and save one month's payment then be my guest. But if I was doing it I would simply negotiate above or below dealer invoice. If you think the holdback is $847 then offer them $850 below invoice and negotiate from there. Have the dealer show you the invoice to verify - that way you don't have to guess about what is or isn't included.

 

But the point we were trying to also make is that a dealer would be nuts to sell you a FFH below invoice so you may be wasting your time. But hey - it's your time. We're just trying to make sure you understand how it works.

[AptosDriver]

OY!

Where do I start?

 

First, when I said that I felt that this car might not be for you, I wasn't speaking of $.

I'm just not sure that you will be happy with the car iteslf. Just a feeling. . .

OY! Maybe I am overcomplicating things because I'm having fun playing with my spreadsheet.

 

I haven't decided yet whether I would be happy with the car. I already like for the performance, comfort (with leather seats) and advanced technology (which my wife, who'll be the main driver, couldn't care less about.) My only concern about it is reliability long-term. Once I have more confidence about that, I'll be more ready to jump in the pool.

 

When it comes to the 502A package, you have the invoice number.

You want to figure it a different way. I have no idea why, but so be it.

OK, OK. You may well be right about this. But I have to ask, what does a buyer do to account for the $1,375 factory "discount" on the option package. It's right there on the sticker.

I see this as a discount for the dealer, not the customer. In that case, it makes sense to me to deduct the whole thing from invoice to arrive at a starting point for negotiations.

 

CR is giving you general information. It will apply to some cars. The FFH isn't one of them.

Walk into a Chevy dealer today and tell them that you want to buy a Volt at dealer cost, minus the holdback.

Let me know when they stop laughing.

Agreed. The current scarcity of FFH's on dealer lots would make them less inclined to deal, assuming they have lots of buyers clamoring for them. On the other hand, if they don't, they'll be more eager to move the cars. That's something I'll have to test when it gets time to buy. If a dealer laughs at my first offer and makes no attempt to keep me from walking out the door, then I'll know.

 

Here's the question of the day for you:

If you wanted to buy the car TODAY.

You head down to your dealer with all of your spreadsheets.

You haggle back & forth and the dealer says to you:

"Final offer before tax & license fees - $31,150" (I think that was line 12.)

Do you take it?

No. Assuming that I don't see a huge performance/comfort difference between the FFH and the Camry hybrid (the FFH has only four more "horses" than the TCH), I'd go to the Toyota dealer and haggle for a fully loaded TCH, because that would push my out-the-door price north of $35,000.

 

One other thing:

You quote a document fee of $55.

Some dealers call them document fees, other dealers call them dealer fees.

Your dealer may have both.

Sometimes, after you settle on a price and you get down to the paperwork, there all nice and

printed on the invoice might be a dealer/document fee of several hundred dollars. Just something to

ask any dealer about when negotiating.

 

I'd ask to see all the fees up-front, of course.

[oldschool1962]

Why not add a reply I thought.....so not to inflame anyone here but I think all the prices across the board are way too high. This is not a reflection of the dealer but of the industry and the way we have placed too much emphasis on cars. That said......it's relative to the cost of things and something I'd rather not get involved with right now. I think all prices are way to high for everything but.......for this I would say we got an exceptional deal when we first bought the car. With the dealer discount (the dealership we purchased used "no haggle" prices for the car) so we started out at 28,985.00. We added in the extended warranty, some negative equity from our 06 Odyssey, and all the little things you get hit with at close and we ended up around 32,896.for a 2010 with a 502a. Not a bad deal all things considered.

Edited January 19, 2011 by oldschool1962

[AptosDriver]

Why not add a reply I thought.....so not to inflame anyone here but I think all the prices accross the board are way too high. This is not a rflection of the dealer but of the industry and the wya we have placed too much emphasis on cars. That said......it's relative to the cost so I think we got an exceptional deal when we first bought the car. With the dealer discount (the dealership we purchased used "no haggle" prices for the car) so we started out at 28,985.00. We added in the extended warranty, some negative equity from our 06 Odyssey, and all the little things you get hit with at close and we ended up around 32,896.00for a 2010 with a 502a. Not a bad deal all things considered.

 

Was that your out-the-door price, or before tax, license, etc.?

[oldschool1962]

Was that your out-the-door price, or before tax, license, etc.?

 

$28,985.00 was the price before we added everything else. But please note this was a specific dealership and there have been a couple price increases since. We compared car for car with another local dealer and they were't even close in Sale price or Trade value. Given everything we experienced...all the good and the bad...... I am happy that we chose Haley Ford.

Edited January 19, 2011 by oldschool1962

[ralteredstates]

Isn't it amazing that people will buy a $3000 piece of furniture which is at least 40% profit and usually closer to 50% ($1200 to $1500) but they don't think a car dealer should make $1000 on a $30,000 vehicle?

:beerchug: I agree

[jazztrumpet216]

Isn't it amazing that people will buy a $3000 piece of furniture which is at least 40% profit and usually closer to 50% ($1200 to $1500) but they don't think a car dealer should make $1000 on a $30,000 vehicle?

 

I don't know... I think people see the word "profit" as a four-letter word these days. Everybody needs to make money.