Totesmygoats
Senior Member
- Joined
- Apr 19, 2016
- Posts
- 153
- Reaction score
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- Ram Year
- 2013
- Engine
- 5.7
First, a pet peeve. Stop telling people you "paid 10% under invoice" while including rebates in that and leaving out important details. This means nothing and is zero indication of how good of a deal you got. Someone who got "5% under invoice" also including rebates might have gotten a much better deal. (more on that later)
Lets define terms:
Negotiated sales price; This is the price of the vehicle you negotiated, before everything else. Before rebates, registration, dealer fees ETC.
MSRP; Retail price, duh.
Invoice; Price of the car and options on the “invoice” this is NOT dealer cost.
Holdback; Profit for the dealer under invoice price, typically it is 3% of MSRP. STILL not what the dealer actually pays.
Rebates; All Chrysler incentives.
CARP; Chrysler affiliate rewards program. Basically it's a code that lets you walk into any dealer and get 1% under invoice without negotiating and limits the dealer fees that can be charged. Note; negotiating does not stop here. Most salespeople will tell you there's no negotiating with CARP, that's 100% ********. CARP works by giving the dealership 2% of the invoice price, it's basically a coupon. So if you just stick with the 1% off, you are buying a car for 1% over invoice. That makes you a chump. No one with any skill at negotiating pays invoice let alone 1% over it. I've taken the entire 2% from dealers by bringing up I have a code after negotiating a sales price under invoice. Where can I get a CARP number? Either be an employee of a company that gets them, or join a charity called tread lightly at their higher levels, they give one out. It's $100 and you can save $800+ with it. No brainer.
Here is a standard invoice sheet, you and see the invoice price, holdback, and CARP (listed as FFP). If you didn't get one of these you can find invoice pricing various places, or on costcos website https://www.costcoauto.com/ and calculate holdback as 3% of MSRP
What should I be aiming for a negotiated sales price?
Well, we already figured out from the above that a dealers base “cost” is a bit over 3% under invoice, this is before they get their sales volume rebates (which is how high volume dealers make their money). We also know that if you have a CARP number, the dealers gets another 2% of the invoice price back as cash. So you should start by aiming for 3% under, and later on drop the CARP bomb to reach 5% BEFORE any rebates. High volume dealers often choose to sell a vehicle for what they purchased it for, choosing to make all their profit of manufacture sales volume incentives.
The trick is to be knowledgeable, KNOW these numbers, KNOW high volume dealers will sell cars for no upfront profit. If the salesman says “I'm losing money” say no, go through the numbers, and watch his eyes gloss over. At this point, you know more than the salesman. If you're at a high volume dealer and the salesman is not budging, tell him you want to talk to the sales manager and explain to him directly, the managers typically fold when they know you know everything. They want that sale to reach their volume incentives. Usually the salesman gets sidelined because he can;t make these decisions and just sits there with his mouth open as the manager agrees to a price he's never seen anyone come close to.
Don't forget about fees. Make sure you know what are legitimate state fees and what are pure dealer profit. My state has battery tire fees and registration, EVERYTHING else is pure profit. My state also happens to make it illegal to overcharge for registration, but check up on them anyway.
When a dealer says “I HAVE to charge this dealer fee” sometimes he's NOT actually lying. Some states if they charge it, they have to charge it to everyone. Make sure you get the full list of fees (on paper) BEFORE you start negotiating. If you want to be a real hard ass, just tell them they can charge the pure profit fees, but you will subtract it from whatever sales price you negotiate, otherwise just work it into what you ask for.
If you have a trade.
If the car is one the dealer will likely sell on the lot, don't take under KBB. If not, expect auction prices (Carmax quotes close to auction prices) My standard tactic is to go to carmax and get an appraisal, bring it with me. They might dare to offer you under that, if they do, walk. If you are ordering a car for later delivery and they wont lock in your trade value, get them to agree in writing that they will match a reappraisal at the time of delivery. If you take a camry to a dodge dealer, expect auction price.
How to share your negotiating achievements. A standardized way to brag.
Simple, tell us what you paid under invoice, BUT, in this way;
-Do not include rebates in your discount.
-Include how much in dealer fees or other profit fees you paid.
-If you had a trade, tell us what you were paid for it and the KBB on it as many are underpaid on their trade, and then they take that amount of the sales price of the car.
So we will use my last purchase as an example.
Invoice = $43,934
Sales price $41,785, +$199 dealer fee = $41,984
That's 4.4% under invoice. (wasn't the best deal but I was in a hurry)
I had a trade, KBB was 20k, I got 20k.
Lets say I only got 19k for my trade. My adjusted discount would be 2% under invoice. Because we would add 1k to the sales price. You don't have to do this, but at least include your trade information so others get the full picture.
This does not include the rebates I got or the free financing. As I said, rebates have nothing to do with how well you negotiated, everyone gets them, and it doesn't effect the dealers thought process one bit. But if you want to brag about the crazy 10k rebate you got for your big horn, feel free. Just include it separate from how much you paid under invoice.
Some final comments.
A lot of dealers will be very resistant to some of these things. Salespeople have no idea that CARP is a flat 2% rebate to the dealer, the sales manager might not even know! Tell them to look up and print out the program redemption instructions, that's where the info is. Be ready to buy and ready to leave. Salespeople don't like the idea of giving you what you want just to have you walk and bounce it off another dealer. Get *everything* in writing, clearly. Some dealers are shady as hell and ARE planning to cheat you. The one thing you didn't get in writing can ruin your entire deal. Use silence to your advantage. Saleman says something that's clearly BS, just stare at him with a arrogant look. Trying to push you into something? Just stare un-amused.
Too much for you?
Don't think you can negotiate a banging deal? Don't mind shipping a car? I know a dealership in Virginia that sells chrysler umbrella vehicles for 6% under invoice (used to be 7%) +$599, period. No stress, no haggle. I shipped a car (not the purchase I mention here) from there to me in Florida, cost me $500. That ate the 7% down to about 6%. Try getting that locally.
Lets define terms:
Negotiated sales price; This is the price of the vehicle you negotiated, before everything else. Before rebates, registration, dealer fees ETC.
MSRP; Retail price, duh.
Invoice; Price of the car and options on the “invoice” this is NOT dealer cost.
Holdback; Profit for the dealer under invoice price, typically it is 3% of MSRP. STILL not what the dealer actually pays.
Rebates; All Chrysler incentives.
CARP; Chrysler affiliate rewards program. Basically it's a code that lets you walk into any dealer and get 1% under invoice without negotiating and limits the dealer fees that can be charged. Note; negotiating does not stop here. Most salespeople will tell you there's no negotiating with CARP, that's 100% ********. CARP works by giving the dealership 2% of the invoice price, it's basically a coupon. So if you just stick with the 1% off, you are buying a car for 1% over invoice. That makes you a chump. No one with any skill at negotiating pays invoice let alone 1% over it. I've taken the entire 2% from dealers by bringing up I have a code after negotiating a sales price under invoice. Where can I get a CARP number? Either be an employee of a company that gets them, or join a charity called tread lightly at their higher levels, they give one out. It's $100 and you can save $800+ with it. No brainer.
Here is a standard invoice sheet, you and see the invoice price, holdback, and CARP (listed as FFP). If you didn't get one of these you can find invoice pricing various places, or on costcos website https://www.costcoauto.com/ and calculate holdback as 3% of MSRP
What should I be aiming for a negotiated sales price?
Well, we already figured out from the above that a dealers base “cost” is a bit over 3% under invoice, this is before they get their sales volume rebates (which is how high volume dealers make their money). We also know that if you have a CARP number, the dealers gets another 2% of the invoice price back as cash. So you should start by aiming for 3% under, and later on drop the CARP bomb to reach 5% BEFORE any rebates. High volume dealers often choose to sell a vehicle for what they purchased it for, choosing to make all their profit of manufacture sales volume incentives.
The trick is to be knowledgeable, KNOW these numbers, KNOW high volume dealers will sell cars for no upfront profit. If the salesman says “I'm losing money” say no, go through the numbers, and watch his eyes gloss over. At this point, you know more than the salesman. If you're at a high volume dealer and the salesman is not budging, tell him you want to talk to the sales manager and explain to him directly, the managers typically fold when they know you know everything. They want that sale to reach their volume incentives. Usually the salesman gets sidelined because he can;t make these decisions and just sits there with his mouth open as the manager agrees to a price he's never seen anyone come close to.
Don't forget about fees. Make sure you know what are legitimate state fees and what are pure dealer profit. My state has battery tire fees and registration, EVERYTHING else is pure profit. My state also happens to make it illegal to overcharge for registration, but check up on them anyway.
When a dealer says “I HAVE to charge this dealer fee” sometimes he's NOT actually lying. Some states if they charge it, they have to charge it to everyone. Make sure you get the full list of fees (on paper) BEFORE you start negotiating. If you want to be a real hard ass, just tell them they can charge the pure profit fees, but you will subtract it from whatever sales price you negotiate, otherwise just work it into what you ask for.
If you have a trade.
If the car is one the dealer will likely sell on the lot, don't take under KBB. If not, expect auction prices (Carmax quotes close to auction prices) My standard tactic is to go to carmax and get an appraisal, bring it with me. They might dare to offer you under that, if they do, walk. If you are ordering a car for later delivery and they wont lock in your trade value, get them to agree in writing that they will match a reappraisal at the time of delivery. If you take a camry to a dodge dealer, expect auction price.
How to share your negotiating achievements. A standardized way to brag.
Simple, tell us what you paid under invoice, BUT, in this way;
-Do not include rebates in your discount.
-Include how much in dealer fees or other profit fees you paid.
-If you had a trade, tell us what you were paid for it and the KBB on it as many are underpaid on their trade, and then they take that amount of the sales price of the car.
So we will use my last purchase as an example.
Invoice = $43,934
Sales price $41,785, +$199 dealer fee = $41,984
That's 4.4% under invoice. (wasn't the best deal but I was in a hurry)
I had a trade, KBB was 20k, I got 20k.
Lets say I only got 19k for my trade. My adjusted discount would be 2% under invoice. Because we would add 1k to the sales price. You don't have to do this, but at least include your trade information so others get the full picture.
This does not include the rebates I got or the free financing. As I said, rebates have nothing to do with how well you negotiated, everyone gets them, and it doesn't effect the dealers thought process one bit. But if you want to brag about the crazy 10k rebate you got for your big horn, feel free. Just include it separate from how much you paid under invoice.
Some final comments.
A lot of dealers will be very resistant to some of these things. Salespeople have no idea that CARP is a flat 2% rebate to the dealer, the sales manager might not even know! Tell them to look up and print out the program redemption instructions, that's where the info is. Be ready to buy and ready to leave. Salespeople don't like the idea of giving you what you want just to have you walk and bounce it off another dealer. Get *everything* in writing, clearly. Some dealers are shady as hell and ARE planning to cheat you. The one thing you didn't get in writing can ruin your entire deal. Use silence to your advantage. Saleman says something that's clearly BS, just stare at him with a arrogant look. Trying to push you into something? Just stare un-amused.
Too much for you?
Don't think you can negotiate a banging deal? Don't mind shipping a car? I know a dealership in Virginia that sells chrysler umbrella vehicles for 6% under invoice (used to be 7%) +$599, period. No stress, no haggle. I shipped a car (not the purchase I mention here) from there to me in Florida, cost me $500. That ate the 7% down to about 6%. Try getting that locally.
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