how much over invoice do you offer?

[hugh chung]

Hello everybody,

i am about to purchase an 2009 accord v6 exl automatic. I am wondering, how much over invoice is a fair offer? i know it varies, but what is the standard? i wanna be in and out of there faster than in the bedroom with the missus ;)

[newbieparadise]

Hello everybody,

i am about to purchase an 2009 accord v6 exl automatic. I am wondering, how much over invoice is a fair offer? i know it varies, but what is the standard? i wanna be in and out of there faster than in the bedroom with the missus ;)

i think 800 under invoice is very fair for the consumer

[pkfk13]

It depends on what incentives are on the car you are considering. You should think in terms of how much over COST you are paying, rather than how much over/under INVOICE you are paying, because the Invoice will vary quite a bit depending on factory incentives.

If there is a big factory to dealer incentive (check Carcostcanada) then you can likely get a below invoice price.

I think the question should be how much over "dealer cost" can you get the car for ? (dealer cost being variable according to any incentive programs that are available for your car in question).

CCC recommends 3-6% markup - but I think that is too rich - sure you will get a fast deal - but why not go for something better ?

If you take the dealer cost, and subtract any applicable incentives, and then add on about 500 bucks, then you should be in the zone to close the deal. Note that you still have to pay Freight/PDI + all taxes.

Do not take any etching / globali, rustproofing, fabric protection etc. as part of the deal unless you really want them, and are sure of your pricing - these items tend to be extremely overpriced at the dealerships.

BTW - 500 over cost is in the range of a "Fleet purchase" deal - not all dealers will go for this - especially on a sunny Saturday when people are lined up 3 deep to talk to the sales guys. You will likely do better on a rainy weekday with this type of offer !

That is my $0.02.....any others have suggestions as to what they think a rock-bottom deal is ?

[hugh chung]

It depends on what incentives are on the car you are considering. You should think in terms of how much over COST you are paying, rather than how much over/under INVOICE you are paying, because the Invoice will vary quite a bit depending on factory incentives.

If there is a big factory to dealer incentive (check Carcostcanada) then you can likely get a below invoice price.

I think the question should be how much over "dealer cost" can you get the car for ? (dealer cost being variable according to any incentive programs that are available for your car in question).

CCC recommends 3-6% markup - but I think that is too rich - sure you will get a fast deal - but why not go for something better ?

If you take the dealer cost, and subtract any applicable incentives, and then add on about 500 bucks, then you should be in the zone to close the deal. Note that you still have to pay Freight/PDI + all taxes.

Do not take any etching / globali, rustproofing, fabric protection etc. as part of the deal unless you really want them, and are sure of your pricing - these items tend to be extremely overpriced at the dealerships.

BTW - 500 over cost is in the range of a "Fleet purchase" deal - not all dealers will go for this - especially on a sunny Saturday when people are lined up 3 deep to talk to the sales guys. You will likely do better on a rainy weekday with this type of offer !

That is my $0.02.....any others have suggestions as to what they think a rock-bottom deal is ?

thanks for the advice! by invoice i meant dealer costs i guess, the profit to add onto the price after all incentives have been taken into consideration.

500 over cost is a standard thing?

i guess it will depend on the salesmen, if he/she is a pushy person then i wont have any problems trying to get as low as possible, but if he/she is nice, then i would like both parties to walk away semi happy

[ES_Revenge]

i think 800 under invoice is very fair for the consumer
Edit: I totally misread this as saying over invoice at first. Though I think $800 under invoice is a little too optimistic I don't think getting under invoice in some amount, is out of the question. At least getting a price very near to invoice should be more common than the standard Canadian screwjob.

It's sad that it is common of Canadians buying cars to be bargaining on MSRP "with invoice pricing in mind" rather than just straight bargaining on invoice pricing.

In the US, many customers walk out the door until they are talking $$$ under the invoice price. And of course MSRPs are already lower in the US to begin with. A person from the US once posted on RFD after moving to Canada about how they were shocked at how Canadian dealerships did "negotiations". He said it was like going back to the 1980s I believe, lol.

I think if the attitudes of Canadian consumers were a bit different, we would be seeing sales under invoice price as common as well.

That said, this is Canada, so I'd have to say $500 over invoice is a "great" deal on a lot of cars. Also depending on the make, you may not even be able to get anywhere near that either--again said, but just the way it is.

[ak1004]

It's sad that this is not only the general thinking of Canadians, but also common for this to be considered normal practice for dealerships as well. :(

In the US, many customers walk out the door until they are talking $$$ under the invoice price. And of course MSRPs are already lower in the US to begin with.

I think if the attitudes of Canadian consumers were a bit different, we would be seeing sales under invoice price as common as well.

That said, this is Canada, so I'd have to say $500 over invoice is a "great" deal on a lot of cars. Also depending on the make, you may not even be able to get anywhere near that either--again said, but just the way it is.


When you say “under invoice” I assume you take into consideration the factory rebates, otherwise it would be under cost (which would cause the dealer consistently to sell at lost). But it really depends on the rebate. For the car with $1000 rebate $800 below invoice is a great deal, but if the rebate is $2000, it changes the picture, right?

[malecoke]

its generally 500-750,but then if you're dealing with hot models thats not likely to happen.

For example you're dreaming if you want 500 over cost for a 2010 Camry, corolla, Mazda3 etc.
But getting 500 over or better is possible on a lets say Sentra, Altima, Lancer, one of thsoe "secondary" choices.

[ak1004]

its generally 500-750,but then if you're dealing with hot models thats not likely to happen.

For example you're dreaming if you want 500 over cost for a 2010 Camry, corolla, Mazda3 etc.
But getting 500 over or better is possible on a lets say Sentra, Altima, Lancer, one of thsoe "secondary" choices.

Actually my friend bought a Corolla few months ago for $500 over invoice including all fees (freight and taxes extra of course).

CR-V is considered pretty hot too, but I was offered $450 over invoice by one dealer and $550 over invoice by another. The best thing to do is sending an email to 20-30 dealers and ask for their best price.

[hugh chung]

its generally 500-750,but then if you're dealing with hot models thats not likely to happen.

For example you're dreaming if you want 500 over cost for a 2010 Camry, corolla, Mazda3 etc.
But getting 500 over or better is possible on a lets say Sentra, Altima, Lancer, one of thsoe "secondary" choices.

is the accord 2009 considered a "hot" choice though? its a secondary choice for me

[ES_Revenge]

When you say “under invoice” I assume you take into consideration the factory rebates, otherwise it would be under cost (which would cause the dealer consistently to sell at lost). But it really depends on the rebate. For the car with $1000 rebate $800 below invoice is a great deal, but if the rebate is $2000, it changes the picture, right?
Actually I totally misread the person's post that I quoted above, so I have to edit my own post to make it make sense now, lol.

As for under invoice, I mean under invoice, factory rebates aside. The dealer is NOT selling at a loss doing that in most cases. Again this is an error in the thinking of consumers. There's a reason it's called "invoice price" pricing and not "dealer cost".

[ak1004]

Actually I totally misread the person's post that I quoted above, so I have to edit my own post to make it make sense now, lol.

As for under invoice, I mean under invoice, factory rebates aside. The dealer is NOT selling at a loss doing that in most cases. Again this is an error in the thinking of consumers. There's a reason it's called "invoice price" pricing and not "dealer cost".

Sorry, I’m still not clear.
Let’s say the MSRP is 20k, invoice is 18k and the is 2k rebate. $800 under invoice is 17.2k or 15.2k?

[newbieparadise]

Edit: I totally misread this as saying over invoice at first. Though I think $800 under invoice is a little too optimistic I don't think getting under invoice in some amount, is out of the question. At least getting a price very near to invoice should be more common than the standard Canadian screwjob.

It's sad that it is common of Canadians buying cars to be bargaining on MSRP "with invoice pricing in mind" rather than just straight bargaining on invoice pricing.

In the US, many customers walk out the door until they are talking $$$ under the invoice price. And of course MSRPs are already lower in the US to begin with. A person from the US once posted on RFD after moving to Canada about how they were shocked at how Canadian dealerships did "negotiations". He said it was like going back to the 1980s I believe, lol.

I think if the attitudes of Canadian consumers were a bit different, we would be seeing sales under invoice price as common as well.

That said, this is Canada, so I'd have to say $500 over invoice is a "great" deal on a lot of cars. Also depending on the make, you may not even be able to get anywhere near that either--again said, but just the way it is.

haha, i was actually joking/dreaming. i would be happy with 500 over invoice, but just not with the current prices of the accord v6 coupe! i should offer 500 under cost just to get it back to march levels.

[ES_Revenge]

Sorry, I’m still not clear.
Let’s say the MSRP is 20k, invoice is 18k and the is 2k rebate. $800 under invoice is 17.2k or 15.2k?
$800 under invoice would be $17.2k and then you get the $2k rebate on top of that. That's my thinking of it anyway. However I don't think that $800 under invoice is that realistic anyway and certainly not going to happen in Canada very often either.

Furthermore lower cost cars (like one that would be $18k to begin with) don't usually have as much discount to be had either.

The thing is there are usually hidden manufacturer-to-dealer credits, incentives, and kickbacks that you never see. Plus not to metion all the things like freight, PDI, admin, etc., where the dealer grabs even more money on the sale; nevermind that a lot of dealers also sucker people into things like etching, rustproofing, overpriced tinting, add-on accessories, etc., all of which are relatively big profit centres for the dealer.

Virtually any dealer can sell almost any car, at invoice price and still be making lots of money once all is said and done. Then after the sale they'll be making a killing on service too as many people go back to the stealership for maintenance/service, but that's a bit outside the scope here.

[ak1004]

$800 under invoice would be $17.2k and then you get the $2k rebate on top of that. That's my thinking of it anyway. However I don't think that $800 under invoice is that realistic anyway and certainly not going to happen in Canada very often either.

Furthermore lower cost cars (like one that would be $18k to begin with) don't usually have as much discount to be had either.

The thing is there are usually hidden manufacturer-to-dealer credits, incentives, and kickbacks that you never see. Plus not to metion all the things like freight, PDI, admin, etc., where the dealer grabs even more money on the sale; nevermind that a lot of dealers also sucker people into things like etching, rustproofing, overpriced tinting, add-on accessories, etc., all of which are relatively big profit centres for the dealer.

Virtually any dealer can sell almost any car, at invoice price and still be making lots of money once all is said and done. Then after the sale they'll be making a killing on service too as many people go back to the stealership for maintenance/service, but that's a bit outside the scope here.

CCC and APA are usually pretty accurate on showing all factory incentives. I was offered couple of years ago a Dodge Caravan at invoice, but CCC showed 2% factory holdback, and this was the dealer profit (about $400). The profit on freight/PDI is very low since the dealer pays it to the factory, and if you refuse to pay all those etching, rustproofing and obscure admin fees, I don’t see how the dealer can sell at $800 below cost. He has no guarantee that you will come back for service, so he cannot count on that.

[pkfk13]

2% to 3% is the general range of holdbacks, and it is calculated as a percentage of either the MSRP, or INVOICE (depending on manufacturer - check this link for a listing - not sure of it's accuracy, but it gives you an idea).
http://www.dealershipdiplomat.com/deals&dickering/index.php?/archives/10-Dealer-Holdback.html

So yes, if you buy the car at INVOICE price, and subtract any rebates from that amount, then the dealer's profit from holdback allowance is this 2-3% of the MSRP or INVOICE (depending on the manufacturer's formula).

This profit in the holdback allowance on say a 30K car (MSRP) would be about 600 bucks, assuming a 2% holdback (imports seem to be 2% and domesics about 3% holdback).

Note that this holdback allowance is supposed to help pay for the finance charges to keep the cars in inventory for you to look at. Most Canadian dealers are not willing to let this holdback go to the buyer as part of the deal.

So back to my original post - if you offer say 500 over invoice, and the dealer is getting 500-600 in holdback, then they are making a cool grand on the deal.

However - many people are willing to only take a 500 or 600 reduction in the MSRP, and then pay $300+ for etching, etc.....and then the dealer is possibly making thousands of that one sale ! Just make sure YOUR deal is not one of those max profit deals !

[slowtyper]

As for actual negotiating, I would just decide on a price I would accept and then email various dealerships with your offer. Let them know which dealerships you are mailing and make your offer clear so they understand you already know what you want and how much you will pay. The advantage to the dealer is that you are showing you aren't a wishy-washy customer who may waste their time.

[ES_Revenge]

CCC and APA are usually pretty accurate on showing all factory incentives.
They are accurate at showing all the factory incentives meant for the end consumer, but not what goes on between the manufacturer and the dealer. Stuff like rebates are published by the manufacturers and meant for consumers to expect and therefore known to consumers, even if it's not on the CCC report. The report rehashing that doesn't mean anything. It puts it all in one nice place for you so you don't have to go looking for it.

For example where on your CCC report is it going to show you the money the manufacturer gives to the dealer when they sell x number of units of whatever model it is? Nowhere.

Where does it show you the percentage of freight the dealer gets back? Not shown either. All the reports I've seen show that Freight at invoice is the same as MSRP. I think that's a load. The dealer gets a portion of that from the manufacturer as well.

Where does it show you the rewards given to dealers for being the best customer service, highest rated, etc. in a given period? Again this information is not shown.

Also it doesn't show what they're making when they sell people on things like, rustproofing and accessories as mentioned above. (Of course not everyone buys all or even any of this, but still it's a profit centre for them.) Not to mention so-called "admin" fees many dealers charge.

Again, what you see on the CCC report is not the whole story. My point was not about there being rebates from the manufacturer intended for the consumer, it was about the stuff that you don't see (yes even on CCC reports) where they make money.

The profit on freight/PDI is very low since the dealer pays it to the factory
This is a myth. PDI is "pre-delivery inspection"--what portion of that would they have to pay back to the manufacturer? Surely the manufacturer didn't come down to the dealership to prep and inspect the car before they delivered it to you, would they? Freight, as I said, I don't buy that it all goes to the manufacturer. It doesn't. I've seen this admitted by car dealers on TV interviews before, so yeah I'm pretty sure they get a percentage of that as well.

and if you refuse to pay all those etching, rustproofing and obscure admin fees, I don’t see how the dealer can sell at $800 below cost.
Again the dealer is not selling at $800 below cost!!! You need to stop equating "invoice" and "cost". They are not the same! Furthermore I've said it about three times now, but I'll say it once more. I wouldn't expect $800 below invoice either, especially not in Canada. But something close to invoice would be reasonable IMO.

In review:

Though I think $800 under invoice is a little too optimistic...

That said, this is Canada, so I'd have to say $500 over invoice is a "great" deal on a lot of cars.
However I don't think that $800 under invoice is that realistic anyway and certainly not going to happen in Canada very often either.
...
Virtually any dealer can sell almost any car, at invoice price and ....

Nowhere did I say $800 under invoice should be expected, nor that it is reasonable or normal; in fact, I explicitly said it was not "especially in Canada".

Sure someone might not get any of the "add-ons" the dealer tries to sell but even if that person doesn't there's always someone else that will and the dealer can makes money there. I.e. I'm not talking about just indivitual cases here, I'm talking about the overall. That one set of prices you see on an invoice price report is never the whole story.

Anyway I hate to repeat the same thing over and over and that seems like that's all I'm doing here.

Last time:
Invoice pricing != cost.

He has no guarantee that you will come back for service, so he cannot count on that.
I already essentially implied that too, when I said that "as many people go back" (many meaning not all). Though they cannot be guaranteed profit from customers returning for service, you better believe they are counting on it. Otherwise they would not be in business to begin with.

[PMM1]

Hi

Hello everybody,

i am about to purchase an 2009 accord v6 exl automatic. I am wondering, how much over invoice is a fair offer? i know it varies, but what is the standard? i wanna be in and out of there faster than in the bedroom with the missus ;)

1. MSRP with Del& PDI 36500
2. CCC invoice 33876
Cash Back 3000 (was 3500 in Feb)
Dealer 30876
Then there is A/C 100 plus tire and battery so cost of 31,001

So start by offering 2% above cost or $31625 plus taxes and see if any dealer bites, you can always go higher, but never lower.

PMM

[Vladimir]

this is a confusing thread. People are using the term invoice differently... it seems like some are using it as MSRP and others are using it at dealers cost.

You should be focusing on dealers cost (what they had to pay the manufacturer for the car).

Say you have a 20K MSRP vehicle. There is a 2,000 manufacturer rebate. Dealers cost is 18.5K
Try to offer 500 above dealerscost, so $19,000 MINUS the 2,000 manufacturer rebate, which would mean $17,000 + Freight/PDI + some other small fees + Taxes

[hugh chung]

this is a confusing thread. People are using the term invoice differently... it seems like some are using it as MSRP and others are using it at dealers cost.

You should be focusing on dealers cost (what they had to pay the manufacturer for the car).

Say you have a 20K MSRP vehicle. There is a 2,000 manufacturer rebate. Dealers cost is 18.5K
Try to offer 500 above dealerscost, so $19,000 MINUS the 2,000 manufacturer rebate, which would mean $17,000 + Freight/PDI + some other small fees + Taxes

oops, i want to change the title of thread to dealer cost, but i dont know how.

[hugh chung]

Hi



1. MSRP with Del& PDI 36500
2. CCC invoice 33876
Cash Back 3000 (was 3500 in Feb)
Dealer 30876
Then there is A/C 100 plus tire and battery so cost of 31,001

So start by offering 2% above cost or $31625 plus taxes and see if any dealer bites, you can always go higher, but never lower.

PMM

thanks! that is a very to the point post. did the ccc invoice for the v6 go up too or is it the same as march? cause the cars sitting on the lot were probably paid for using the old price.

[PMM1]

Hi

thanks! that is a very to the point post. did the ccc invoice for the v6 go up too or is it the same as march? cause the cars sitting on the lot were probably paid for using the old price.

Actually went down $400.

PMM

[hugh chung]

Hi



Actually went down $400.

PMM

it did? the website price went up by 400, yet the ccc invoice went down by 400? that is strange.

[pkfk13]

this is a confusing thread. People are using the term invoice differently... it seems like some are using it as MSRP and others are using it at dealers cost.

You should be focusing on dealers cost (what they had to pay the manufacturer for the car).

Say you have a 20K MSRP vehicle. There is a 2,000 manufacturer rebate. Dealers cost is 18.5K
Try to offer 500 above dealerscost, so $19,000 MINUS the 2,000 manufacturer rebate, which would mean $17,000 + Freight/PDI + some other small fees + Taxes

Dealer's "COST" is a closely guarded, complex secret. The "cost" really has no relation to either MSRP or INVOICE.

MSRP = What they would love for you to Pay
INVOICE = Some attempt at describing the wholesale cost of the car (but it includes other "stuff" - see below

DEALER COST = INVOICE, MINUS the following items:
- Holdback allowance (2-3% of the MSRP or INVOICE - depending on brand)
- Quantity bonus (dealer sells X cars per quarter and gets an extra % rebate)
- Factory to Dealer Incentives (Not public, but CCC has this info)
- Other stuff we may never find out about

So.....the Dealer Cost is very murky.....however, if you know the Invoice Price, plus any Factory to Dealer Incentive info - you CAN haggle an excellent deal - such as: INVOICE MINUS FTD Incentives PLUS 500 bucks.
Add on Shipping/PDI/Taxes, and go home.

Just be sure to decline all the ADMIN FEES, ETCHING, Rustproof, Undercoat, Fabric Protection, Hot Air, Buckets of Steam, etc.....and you willl have a pretty damm good deal !! :razz:

[Tomato_1]

^

Make sure you read this too http://www.edmunds.com/advice/buying/articles/42962/article.html

Great insight and don't let the sales rep push you around. If you don't feel comfortable. Get up, shake there hands and leave. I also found too most rep. will demand you test drive a car before they even talk about price.

Frankly you are more than welcome to go with a get in and get out strategy. But my philosophy is if you are going to be spending **** loads why don't you give it to people you like rather than @SSholes who push you around.


OP: check your PM.

[torrentman]

Hello everyone, I have followed the auto forums for a while but this is my first post.

I have an offer from the dealer for a Honda Accord EX-L (2009) as follows:

MSRP: 31,290
Discount: 2190
Freight: 1410
Accessories: 154.00
Admin Fee: 388 (I know, I know)
Total: 30664

Down Payment: 5000
Residual Value: 12,830

Finance Rate: 2.90%
Lease Term: 48 months

Monthly Payment (before tax): 315.00

Good deal / Bad deal? Any comments / tips would be highly appreciated.

Thanks!

[HP_John]

Hello everyone, I have followed the auto forums for a while but this is my first post.

I have an offer from the dealer for a Honda Accord EX-L (2009) as follows:

MSRP: 31,290
Discount: 2190
Freight: 1410
Accessories: 154.00
Admin Fee: 388 (I know, I know)
Total: 30664

Down Payment: 5000
Residual Value: 12,830

Finance Rate: 2.90%
Lease Term: 48 months

Monthly Payment (before tax): 315.00

Good deal / Bad deal? Any comments / tips would be highly appreciated.

Thanks!

I believe they are selling you the car at roughly $150 over invoice, which is why they probably tacked on the $388 admin. Dealers have a certain bottom price, this may be their bottom price. They can twist it around & offer you less discount with no admin fee, but whatever their absolute bottom is, the final price will not be less than whatever their absolute bottom is.

[HP_John]

As for actual negotiating, I would just decide on a price I would accept and then email various dealerships with your offer. Let them know which dealerships you are mailing and make your offer clear so they understand you already know what you want and how much you will pay. The advantage to the dealer is that you are showing you aren't a wishy-washy customer who may waste their time.

This works in the US, but in general, in Canada, it doesn't work as well. Most Honda dealers in Canada will not give you prices other than MSRP via email. It is actually very rare for a Cdn Honda dealer to give you a great price via email.

Usually they think of customers who mass email as being very unlikely to buy from them, as it means they're "in a race to the bottom", that is, they keep having to beat someone else's price. They will think "if we're willing to accept this offer, then that means other Honda dealers will too, so then this customer is just going to keep asking for an even better price, until there's no money at all to be made".

[ak1004]

This works in the US, but in general, in Canada, it doesn't work as well. Most Honda dealers in Canada will not give you prices other than MSRP via email. It is actually very rare for a Cdn Honda dealer to give you a great price via email.

Usually they think of customers who mass email as being very unlikely to buy from them, as it means they're "in a race to the bottom", that is, they keep having to beat someone else's price. They will think "if we're willing to accept this offer, then that means other Honda dealers will too, so then this customer is just going to keep asking for an even better price, until there's no money at all to be made".

I can confirm that this is correct for Honda dealers. I sent a quote request for CR-V to about 20+ dealers and got only 3 quotes. Most of them just didn’t reply, and those who did said they are not giving quotes over email.

HOWEVER, those 3 quotes that I did have been in range of $450-$550 above invoice including all fees. So I think this method is still worth to try to get an idea how low they are ready to go and then continue in person.

Couple more things. From my experience, you usually should be able to eliminate all additional fees. However, one thing that is absolutely not negotiable is freight/PDI. I never heard of anyone who was able to get a discount on freight/PDI.

[HP_John]

I can confirm that this is correct for Honda dealers. I sent a quote request for CR-V to about 20+ dealers and got only 3 quotes. Most of them just didn’t reply, and those who did said they are not giving quotes over email.

HOWEVER, those 3 quotes that I did have been in range of $450-$550 above invoice including all fees. So I think this method is still worth to try to get an idea how low they are ready to go and then continue in person.

Couple more things. From my experience, you usually should be able to eliminate all additional fees. However, one thing that is absolutely not negotiable is freight/PDI. I never heard of anyone who was able to get a discount on freight/PDI.

Even if they discount freight/PDI, all they do is move the numbers around. For example, say the maximum they're willing to discount is $1500 (assume the consumer doesn't know this is the absolute most they will discount). They can say "oh, we'll give you $500 off freight/PDI, & $1000 off the car's MSRP". In the end, you didn't really get a discount off freight/PDI.

[mtseymourguy]

I dont understand why salesmen make so much more than mechanics. Id rather these intelligent guys become mechanics. id rather just buy the car off the net.

[DrXenon]

Any suggestions as to a fair percentage over CCC dealer cost for a 2010 Mazda3? 2.5-3%? It's just become available, so I'd expect dealers to be less flexible on the price.

[Jeff-TheBiz]

its generally 500-750,but then if you're dealing with hot models thats not likely to happen.

For example you're dreaming if you want 500 over cost for a 2010 Camry, corolla, Mazda3 etc.
.

Wrong... I can do $500 over on a Mazda3.

Any suggestions as to a fair percentage over CCC dealer cost for a 2010 Mazda3? 2.5-3%? It's just become available, so I'd expect dealers to be less flexible on the price.

Gimme a call..

[Penguinmobile]

is it usually a set amount like 500 or is it a percentage>? cause salesmen seem to like pushing for the more expensive trim cars dont they?