Rav4 choices are sparse in SoCal. I can't find more than a dozen 3.5L limited trims in the immediate area. The few in driving distance lack leather or are painted some god awful color.
The dealership said they could order one for me. Is this a legitimate way to buy a car? I heard some dealerships pretend to order and just wait/hope for the right inventory. The dealership wants $500 and a credit check, but no mention of final price. Seems like a pretty bleeping strange way to do business.
That dealer you called probably thinks he has a desperate buyer, since the cars aren't out yet and you are calling around to get one - of course he isn't going to talk price now, he figures you'll pay whatever he asks. (Ominous Music Sting: )
The credit check is to see how thoroughly they can pluck you, and I'll bet they'll try to find a way to make that deposit non- refundable - even if they don't, they still get the 'float'. But if you really need the first one off the truck that's how you have to do it, and expect to get nailed several grand extra for the privilege. You'll pay full sticker plus $2K to $5K in ADM, plus some "packs", take it or leave it.
Don't dance that dance, it's for suckers - *You* need to call the dance before it starts. Call another dealer's Fleet Department, put in your request (No deposit or much smaller, like $50 or $100), and be sure to say there's no rush. You let the "I'll pay any price, but I Gotta Have It NOW!" crowd have first dibs for a month or two on the new model year.
When the clamor dies down a bit and they can get the car you want and can do the deal at the right price for both of you, then they call and you can do a deal. Might not take that long, either.
I did a deal via Fax machine (this was long before "Al Gore invented the Interweb..." ;-) with Dianne Whitmire at
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while she was up north running sales atNovato Toyota, very honorable lady, No BS. Call or write, tell her Isent you, Talk cars, put in your request. And you won't have to fly to Nevada either - the cars are shipped into the ports in California, they have to pay more to truck ship them inland (which gets added into the price), then you have to spend on plane tickets and gas to get the car back to SoCal.
Remember that the Fleet people are like Joe Friday - "Just the Facts, Ma'am." ;-) They don't want to play back-and-forth with multiple offers and shaving $100 off the offer to beat the next dealer to the west, only to let the F&I Man sucker it back out of you (and more, much more) in the Closing Room...
They're selling to people who are ready to buy (as opposed to the "tire kickers" in the Showroom) and they are going to come out of the gate with a good number where they still make some money on the deal. (The "We lose money on every deal and make it up on volume" line from years past is total BS.) Their job is to move the cars in bulk without spending too much time on any one sale, and not wasting your time and theirs playing the "I'll have to talk to our Sales Manager..." game.
Just do your pricing research so you know whether the offer is real or not, and talk to your bank or credit union first to know whether any financing or extended warranties they offer are a real deal or not. Won't break their hearts if you have your financing pre-arranged and write them a check for the full amount right there - it's fun writing out five-figure personal checks.... (NOT. >_< )
Thanks for that great posting, Bruce. Very informative.
But I have a question. I thought the Destination Charge for a Toyota ($645 on the Rav4) is constant, whether you buy the car at a Los Angeles dealer or one in Kansas--or so I read somewhere on the web, maybe Edmunds. Would the Nevada dealer, for instance, eliminate the Delivery Charge //as shown on the Invoice// if the original poster picks up the car at the West Coast port or nearby?! If so, that would be great.
This is what Edmunds says about the "Destination Charge":
"A flat fee that the manufacturer charges to deliver a vehicle from the factory to the dealership. The fee is not negotiable and is generally the same amount no matter how far or near you live from the factory."
Yikes, Edmunds says the fee is "not negotiable," unlike pretty much everything else. But I hope they are wrong and you are right :-) Your expert postings are invaluable.
No, it is a buyers market today, walk away and find a dealer that has what you want or will get one for you from another dealer. If you can't find one look for another brand dealer that will.
Ordering a car from the factory is not unusual, any dealer should be able to do it. I ordered my 1992 Dodge Caravan from a local dealer. The nice thing is you can chose exactly what color and options you want.
However, the dealer should give you a final price. A down payment and a credit check are pretty standard. You might also want to know how long it will take for the car to come into the dealership.
Well, sites like Edmunds also say that there are other charges and fees that are "non-negotiable" - but with the creative accounting that they do on everything from Flooring Charges to warranty work to 'secret' Mfgr-to-Dealer rebates, they have to be negotiable *somehow*, or they give it back to the close-in dealers in other ways. It makes no sense to do otherwise.
I can guarantee you that the shipper (manufacturer or importer) pays the trucking company a LOT less to pick up and deliver a car from the port of entry (could be San Pedro, Long Beach or Port Hueneme CA) to Carson (10 to 100 miles) than they do from the same port to Denver or SLC (1,000 to 2,500 miles).
And if they rail ship to the general area and then truck them the last 50 miles, then they have to pay the railroad for their services.
If they paid out a true flat rate transportation fee per car, they'd have trucks lined up to make the local runs but never find a trucking company willing to deliver to the hinterlands... Either the manufacturer pockets the difference, or they're giving the dealers a break somehow.
If there was a really big money gap somewhere in the system I'm sure some dealers (the really close or the really distant) would think it makes financial sense to invest in their own car carrier truck(s), hire their own driver teams, pick up their own cars at the port, and pocket the difference between the "non-negotiable fee" and their actual costs. Or do it (even at break-even) just to thumb their noses at the Teamsters Union... But you never see it.
BTW, I don't claim to be an "expert" at this, I just try to be an astute observer with an ability to dig down to reality, and a fairly well-honed Bullshit Detector to know when I'm being snowed.
Having spent my first year at the SF POE and 3 years in the distribution department, I do have some background in how vehicles are ordered, allocated to dealerships and then moving the vehicles from the factory to dealerships.
Dealer cost on vehicles is FOB at the port of entry (POE) or inland port. The distributor (TMD or independents) pay the car carriers based on ICC mileage from the POE or inland port to the dealership. Some dealerships are literally 5 minutes away, while others are hundreds of miles away. The distributors average out the shipping charges and then charge the dealers an equalized destination charge so a dealer that is closer to the port does not have a cost advantage over one that is farther away.
Once the vehicle is in the dealer's inventory, then transportation costs between dealers are up to the dealer initiating the trade to either absorb or try to pass on to the customer. Of course, most customers would object to having to pay to trade, so dealers consider the inter-dealer transportation costs as a cost of sale and reduction of gross profit.
Actually, if you plug in different zip codes on the Toyota site you'll find that to be the case as well. Ie on the "build your own" car pages
I am in a similar situation. I want to get a model with options that are only available in the next state (Indiana). I am not sure if I will be able to drive there, so I may want to deal with my local dealer and have them transfer the car, but I don't want some speed daemon put on 200 or
300 high speed miles during the transfer, I'd rather have the car broken in properly. So my preference would be to have it trucked here. I assume they would charge me? Anyone have any idea how much that would be?
Otherwise, I suppose I might try to get Indiana and pick it up myself. In which case, I should probably just forget about the local dealer? (who has been nice to me so far?)
Also, does anyone have experience with Toyota financing? Can they offer good deals? I have excellent credit and am willing to put down a substantial down payment.
E-loan and capital one offerer 5.99% and 6.35% depending on time frame, that still seems high (though it's much lower than the local bank).
FWIW, my experience was with a Subaru. I wanted a specific color, Forester XT with certain options. As it turned out, with Subaru, the "factory" order only goes as far as the port. When the right color model came in, the options I wanted were port installed and the car was shipped to the dealer.. It was about 4 weeks. The car came in with less than 3 miles on it with all the shipping protective stuff intact. (Las Vegas, NV dealer). I saw the car the same day it came off the truck. Also, I dealt with the fleet manager, and had no hassles with going back and forth. I had my pricing information and preapproved financing (personal CU). The dealer offered his price which was an acceptable profit %, so we had a deal. Very pleasant way to do business.
I stand corrected - the distributor has the advantage and gets to pocket some additional cash, not the close-in dealers. I can almost guarantee that they round that averaged fee up a bit to be more in their favor, especially when you weight the numbers for sales on the coast vs far inland.
But I still wonder why there's no way for a close-to-the-port dealer to send their own transport truck to the port and not pay the (artificially inflated for them) destination charge at all...
Or just send over a van full of dealership employees with licenses, a pickup with a "Gas Buggy" gasoline dispenser in the back, and a stack of Dealer Plates. Put two gallons of gas in each car and a dealer plate in the back window, and /drive/ them the three or five miles back to the dealership... Oh, that's right - because it "wouldn't be fair" to the distant dealers.
Something certainly smells a bit gamy there, but I can't quite put my finger on what or who. ;-)
(The Teamsters Union might have something to say about it, in a "If it leaves the docks a Union Brother must be doing the work, or we'll shut the whole place down and Nobody gets their cars!" way, but we'll save that for another discussion...)
200 or 300 "high speed" miles duriing a dealer trade will not have a negative effect on the car. At the end of the assembly line, when the engine is first started, the cars are driven on to a chassis dynamometer and revved to redline for several minutes, and some random vehicles are driven on a lap around the test track. If you look at the odometer on a brand new car at the dealership, the first 2 or 3 miles were probably put on at very high RPM. The difference between 2 or 3 miles and what you see at the dealership is what is put on between the POE and the dealership lot.
I've picked up hundreds of new cars at the POE of entry and driven them right onto the highway for trips. None ever suffered any ill effects from putting 1,000 mostly highway miles a week, starting with about 3 miles on the odometer.
Trucking a dealer trade 200 or 300 miles away will probably cost in the neighborhood of $500 to $700 because the truck has to make a round-trip for a total of 400 to 600 miles. At that point, you are better paying extra for the accessories, because at least you will have some accessories for that extra money.
The distributor may pocket the additional cash from shipping to close-in dealers but then they have to fork it out for farther dealers. I have not seen the actual accounting for all of the shipping charges, but I don't doubt that it is rounded up. Toyota didn't accumulate net income of $11.6 billion in FY 2006 by short-changing themselves ;-)
Dealers are occasionally allowed to pick up vehicles at the POE but they still have to pay the destination freight charge, or DFC.
Automakers are heavily regulated by the FTC and ICC, particularly on pricing issues. I suspect that having equalized freight is a governmental body requirement.
You say you might be willing to travel, and you're not too far away from the Saint Louis, Missouri, dealership called Wolfe Toyota
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You seem to be extra cautious about damage to the vehicle--I mean you're worried some driver is gonna screw up your car by driving it 200 or 300 miles to your local dealer. It seems to me maybe a warranty might be something that's important to you? If so, you can't beat a 10-year 100,000 mile powertrain warranty currently being offered by Wolfe Toyota. It's like Hyundai's warranty, only you're buying a Toyota, baby!
Check out their web site mentioned above for more info if you're interested.
A Wolfe salseman told me over the phone that if something goes wrong with the car and it's covered under the 10-year warranty, they ask you to bring the car to their dealership if you're within 100 miles. But say you're in a different state, like Illinois, Indiana, or Ohio, the salesman told me no problem. Just take it to any Toyota dealership.
If you're a worry wart, this warranty may be for you. Good luck :-)
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