Whats the best way to find out dealer's invoice amount?

Keith T. wrote on 5/28/10 8:58 AM:

The invoice amount usually does not reflect the dealers true cost......there are "holdbacks" by the manufacturer to cover misc. costs by the dealer(local advertising, etc.) and other "incentives" to help him move slow-selling models, etc......... When a dealer says he will sell you a car at "invoice", he still has a profit built in........

Hey shit-for-brains,

He asked a simple question. He wanted to know the dealer's invoice amount. He didn't ask about the true cost of the vehicle. No wonder you can't purchase a vehicle on your own. You are an idiot.

That's correct. Holdback usually runs about 2% to 3% of invoice and is intended to cover dealer overhead. The idea is that if a dealer sells a car for invoice, they cover their costs and just about break even.

Dealer invoice prices can be found at:

Kelley's Blue Book

Edmunds

Keep in mind that:

-- some cars sell for invoice and others for well above invoice (or below invoice) depending upon how hot the sales are.

-- the best deals can be often be gotten at the end of the month because dealers count sales by month.

-- dealers often make more money on the car you traded in, than the one they sold you. You can usually get quite a bit more for your car if you are able to sell it on your own.

The best place the I've found to look for current pricing on cars are the discussion boards on Edmunds website. People discuss their buying experiences, what they paid and where.

I probably should have been more careful with terminology, when I said invoice I really should have said "I'd like all available data to know my exact position of negotiating leverage", but I think everyone who replied understood what I'm looking for, so thanks for all the feedback. I've seen a number of websites (Edmunds, Yahoo auto, etc) that say they have this info, but I wasn't sure if some of them are known to be more reputable or accurate than others. I would hate to spend half an hour reading everything a website had to offered then find out later it's info is biased through sponsorship from automakers or something similar.

But, you guys got it. Ultimately I care about dealers true cost.

Hijacking my own topic a bit, but along the same vein, how do you guys prefer to buy a car? Do you walk into the dealership impromptu after doing your research?

My last car I walked into the dealership after months of research for a test-drive, intending to only drive but also get a feel for what kind of deal I could scurry. I ended up buying and came out very well, but there were two reasons for that... the salesman was a nice, newbie-at-sales-type who had spent most of his career in IT and gotten laid off in the dot-bomb... he was clearly new to sales and wasn't skilled yet enough to really haggle so he sicked the dealship manager on me... manager was a slick dude in the sales sense, but we had a personality conflict, and while in terms of the sale itself I made out like a bandit, he made me feel like a real asshole for being so inflexible in my color/options choices and for leaving him with so little profit, effectively taking advantage of a down time for car sales The whole process took a lot of time and haggling, which I hate doing, and the manager giving me the evil eye and tone of voice made most of the experience unpleasant.

The car before that, I bought my car through a independent auto buying agent who I came across advertising his services online, where I only paid him his comission if I bought the car with the VIN he identified. He was just a guy working from home who was willing to go straight to the fleet manager and "talk the talk" on my behalf. This strategy worked fine, he got me an outstanding price and I think I paid him $125 as a finders fee (I saved that many times over), both in final car price and my time. Now, that was in the early days of the internet, even before the web was popularized. Now, I have no trouble finding websites that advertise skilled buyers' agents that go directly to fleet and relieve you from the negotiating and interaction with sales guys or guidos as they may turn out to be. But I don't know if they are all the same or how to identify a good one since its been about 15 years since I've worked with a car buying agent.

So... how do you guys buy your cars? I thought about just starting by sending them my "final offer" through the contact forms they have on dealer websites, and just sitting back to see if they bite. I'm in no rush to buy.

The first thing to do is to decide what model, color and options you want. Do your research, test drive, etc. If you test drive, tell them up front you're not going to buy today. If they want to make you an offer, that's fine. Just don't sign anything or pay them anything on that day. Expect one or more follow up calls.

Then look up the invoice price and find out what others have bought the car for using the Edmunds discussion boards and any other sources you can find. Decide how much you want to pay. When you're ready to buy, call a few dealers and make them an offer. Generally, if I haven't approached a dealer, I'll call and ask for the sales manager. My observation is that in order to get a good deal, you'll need to get the sales manager's approval. And in order to get a great deal, you'll need the owner's approval. So why start at the bottom?

A lot of people have success using the Internet. Email them an offer and see what happens. I suspect you will at least get a call.

Make sure you first negotiate the price without the trade in. Keep this as

2 separate transactions. As I said earlier, the dealers make a lot of money on trades and know how to confuse you with the 2 transactions. If you can sell it on your own, you'll probably save a lot of money.

One of the advantages of trading in is that you only pay sales tax on the difference in cost, rather than the full price of the car. That can be thousands of dollars.

Here's how you can sell your old car on your own and still save those dollars. Set it up so that the guy who buys your car picks it up at the dealer on the day you pick up your new car. Arrange the deal so that it's a trade in of the old car. That way you only pay sales tax on the difference between the new car price and what you sold the old car for.

One other thing. That "making you feel like an asshole" is just a game they play. Remember, they sell cars for a living. That's their "profession." That's all they do. They don't build the cars, they just sell them. They measure job performance in "yield." Yield is how much over invoice you pay. They are not your friend. They just play that role for the sale. If you want to make them very happy, pay sticker price. They'll be your best friend.

If you really want the inside story, there's a book or 2 written by ex-car salesmen (I forget the name). You'll have a very different perspective after you read it.

Thanks for the feedback. Yes, I like to withhold any notion of a trade until the last possible second. In my case the difference between private party value and trade-in is not so much (difference is literally like one grand because I drove my old car into the ground).

So what I've done in the past that worked pretty well, is go in and tell them no way in hell I want to trade, because I want to give the car to my _________ (fill in blank with dad, wife, mistress whatever).

Then when it comes down to the wire and its clear they can't budge anymore, I reluctantly say "well... I may get beat up for this by _______ (person) but if you can give me ________ (halfway point between tradein and realistic private party value) for my car, we can sign the paperwork right now"... Honestly I only did it a couple of times, but it was effective because usually the car I sell trade in that's worth $5k or so is going to be on someone's lot for $8k a few weeks later and sell for $7k, where really tradein is $4.5k and private party is $5.5k... so they look at it like a bird in the hand and another tick mark on the car-churn meter, profit on the trade-in and reduction in risk of me getting pissed and walking out.

Thanks for the link, I did read some reviews.. my takeaway from the first one "If you just want to buy a car using the "fax attack" then just get the information package. It has all you need. And it works. I used the fax attack and got a new car at more than $1500 below invoice, a price no other dealer within 50 miles could beat."

I'm pretty familiar with the fax attack (never called it that before though). One thing I think is important to remember is this book was published in 2004, and since document exchange over the internet has come a long way since then I think faxes are on the decline. Not that dealers don't have faxes, they surely do... I just think the usage and attention paid to them is in decline, so I will guess the principles in this book are sound (yet nothing I didn't already know), but perhaps dated from a technology standpoint?

The fax attack that I believe he is referring to is similar to what I alluded to earlier.... most of the luxury car dealers these days have a website with a contact form and a comments section, where I was thinking of either:

(A) making my final offer with a polite note to not even bother calling me without a pre-concluded comittment to my specified price

or

(B) making an obviously low-ball offer knowing the original offer is never going to fly, but using it as a leverage tool in appealing to the salesman that "enjoys the game more than the win"..

What I mean is that if it were me, being the analytical sort rather than the type that likes the art of the deal, I would tend to ignore the low-ball type-B offers, sending the e-mail to my trash bin. I would also ignore type-A offers if they were not in my grasp of possibilities, but I would follow up on type-A e-mails that sounded realistic.

So as someone that wants to save some money, is in no hurry to buy, and is gambling that the economy will see slow but steady growth over the next 2 years, I'm inclined to send some very conservative type-A e-mails. If no response, wait a month and sweeten the deal and send again.

Does that make sense? Maybe not... that's why I'd like input from as many folks as possible. Also explains why I started the thread with wanting to understand my position as well as possible (realistically) before the game began.

I think you have do develop your own style that you're comfortable with.

I don't bluff or lie. Nor do I say don't call me unless you meet my price. My experience is that it's a give and take. It's not easy to get a good deal. You've got to earn it. As I said before, these guys do this every day. They've got all kinds of BS angles that you've got to deflect and/or debunk. I wish there was an easier way, Perhaps the fax/email attack works better.

My situation is that there are only 3 Lexus dealers in my area. And 2 of them are owned by the same management. I don't think the fax/email attack would have added to my effort.

Your comments seem perfectly on target to me, I think everyones experience will differ. I guess as a car buyer I'm mostly fishing for "what different from the last time I bought". You're the only one to chime in yet, which I appreciate, but I'm getting the impression that buying a car is not that different in 1990 or 2000 or 2010. The more things change the more car salesmen stay the same :)

Well it's good news to me. Like I said I'd like to avoid spending even a couple of hours in a dealership if I can get an agreed upon price going in. That's not to say I'm looking for turnkey solutions on this forum as much as opinions, and I appreciate all.

"asshole" is an emotional position. There is, or should be, no emotion in a business deal. Business is business, not personal.

I guarantee you, this same sales manager would feel exactly zero if the roles were reversed--if you were buying a hot car from him, one in high demand, and you ended up paying over sticker for it. You couldn't make him feel like an asshole for "taking advantage of you" no matter what--because business is business.

Stop right there.

I know YOU don't think this way, but trust me when I say that too many companies, especially car sales do: emails and web site stuff are meaningless and are there just to make you, the consumer, feel good.

The ONLY negotiation they want is face to face. They can't put papers in front of you and have you sign them if you're not physically there, so that's what they want and that's what they're comfortable with.

Any talk over a silly web site or email is just that to them--talk. It's not concrete.

Some things have to be done face to face. The computer generation needs to get out and understand that. The sales guy won't waste his time on anything that won't generate a signature on a page, and that can happen only if you're there in front of him.

You think that's silly, but that's how they work. You won't get shit out of them unless you're there ready to sign.

The corollary of all that is, you also won't get shit out of them unless you're physically there ready to walk out. Back in 1988 I turned a Toyota salesman completely around by simply getting up and starting to walk out; in the end, he came down $3K and I went up $300, and all that happened within five minutes of my simply saying that I didn't HAVE to have a new car at all, and starting to put my coat on.

The only result he'll get from the internet and/or email is that someone MIGHT call him and tell him whatever it takes to get him physically in front of them, at the dealership, so they can work their magic on him.

They do this many times a day, he does this once every several years. They need him there to do their routine, and they need him there to sign the papers once they are successful with their routine.

They need him physically there. Everything else is just so much bullshit to the car sales department.

Well I always welcome all feedback, but as I said before this is not always the case. I remember calling a few people who were so old-school-dinosaur they said "come on in, you can't buy a car over the phone"... One of them I actually said "f*ck you" before I hung up and the other one I said "really? ok" before I hung up... I can't tell you why I did that but I can tell you I did not buy my car from either of them.

That was in the mid 90's... like I said in an earlier thread, I met a buyer's agent who seemed reasonable enough at what he did so I gave him a shot at getting me the exact model/color/options I wanted at far enough below dealor cost that I got something out of the deal, the agent got a few bucks out of the deal and the dealer got their hold back, rebates and other govment scams which prevent them from revealing their TRUE PROFIT MARGIN.

I did all that over the phone.

The point is that I will not even do business with anyone who is such a moronic dinosaur that they think they need "face-to-face" with me to sell a car. My professional time is worth something between 3-4 times what the average car salesan makes, and they need to respect that when I fax them my offer, or else f*ck off. Someone else will get my business plain and simple.

One thing to watch out for in purchasing a car is the way the dealer (mis)uses your time. If you've been in the dealership for a hour or more, he knows he's got you. It puts him at a negotiating advantage. The more time you're at their dealership, the less time you're talking to their competitor. Don't let them misuse your time.

That's why I call and ask for the sales manager. I don't always get him, but I try. The key to my approach is that I know what I want right off the bat. I don't waste their time and I don't let them waste my time. The first thing I say is something like, "I'm looking to buy a 2010 ES with Navigation in (fill in specific color). Do you have one in stock?" If they do, I say,"how much do you want for it?" And then the game begins...

For Toyota or Lexus, I call the owner of the dealership that I send referrals to, tell him what I want, he calls me when the vehicle is in, tells me how much the vehicle is, and I go pay and pick it up. In return for sending him a dozen or so referrals a year over the past 30 or so years, I pay a few hundred over his cost and avoid the hassle of going back and forth.

That may be what THEY want, but as I said before, it puts YOU at a disadvantage. Negotiating over the phone works to your advantage.

False. I have gotten all of my deep discounts by negotiating over the phone. As long as they know you're a serious player and that you'll be there as soon as they agree to your offer, you have all the leverage you need to close a great deal.

IF they'll let you do that.

THEY have the car, and lots of customers. If you won't play by their rules, plenty of others will. They don't have to chase you down.

I'm not saying don't try to play by your rules. I'm only telling you what their position is.

Very, very few car salesmen of any kind have any faith whatsoever that "you'll be there as soon as they agree to your offer".

I could do it with one Honda salesman in town, because we've known each other for years and my family has bought several cars from him. But if I wanted a Ford, for example, that shit wouldn't fly. "Yeah, just assure me you'll give me that price, I'll be right down." Either he won't give me a price, or that price (or car) won't be available should I bother to show up to take advantage of it.