Posted by 730d se on December 23, 2010 at 09:09:56 from (64.12.116.74):
In Reply to: Dealer invoice question posted by bobnikcorson on December 22, 2010 at 16:44:53:
All of the numbers that you see are inflated. They are there to begin the well proven process of establishing a price in the buyer's head. It is the tried and true "elevator" sales scheme. All of the TV infomercials use it. They start off at a price, then they drop the price or cut a payment. What they are really saying is that the item was never worth what they started at. Same is true with new vehicles. In order for you to feel like you got a "deal", you have to be convinced that it is worth more than you paid, in reality, it is worth less than your lower price that you worked so hard to negotiate. Want proof? Any reputable car person will tell you that the value drops about 20% as soon as you drive off the lot. That is simply the profit that the dealer and car companies place in their pockets. All of the drama about seeing if the boss will "approve the deal" and stuff is reheared. In some cases, the sales person leaves the room but never talks to the boss. They already know what to say. br>The MSRP is inflated beyond imagination. Anyone that ever pays MSRP needs to either have their head examined, or give some of their extra money to me. Dealer Invoice is just a reduced inflated number from the inflated MSRP. If a dealer paid that much for each unit, they would be under water in no time. It is games, games, games. They pay less than any number that they are going to show you. On top on that, based on the floor plan that they on and how many units they sell per period, they get even more money as incentive to move more units. They also get other funds such as co-op advertising money that they can use any way they wish. Even with the slow down, any dealer still moving units is making more than you would even imagine. Car dealers have one of the longer running sales schemes in the world. It has been exposed many times, and people still keep falling for it. Their dream buyers are ones that want to know "how much is it a month"? Are you kidding me? Or, the ones that want to "reestablish" their credit. Other dream buyers are the ones that are foolish enough to trade in a good vehicle. Trade in's make more money than new cars in many cases. They can show you inflated numbers on what they are "giving" for yours, because they just pull it out of the other side of inflated money. Some of them went out of business when the market dropped, not because they were not still making money, but because they suddenly had to try to live on a few less million a year. What a shame to have to get by on several million a year and have give up your private jet and a few homes. A starting point is to take Dealer Invoice with nothing added to it and deduct atleast 12%. It varies based on vehicle and options but this is a good rule. The dealer makes some profit (which they deserve) and you do not get raped like many car buyers still do. Just remeber, any company that will price pin stripes as a $150 add on is INFLATING the numbers. Don't pay for add on's such as paint sealer, undercoating, fabric protector, etc. These are extremely over priced and high profit centers that you did not order. If they are already on the vehicle, "HATE IT".
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