MSRP vs Purchase Price for a 2023 RAM 2500

[bandtank]

I received the following quote for a 2023 RAM 2500. Most of the dealerships in the area are telling me they can't go below MSRP, which I don't believe obviously. One dealership offered the truck for $79,000, which is $2,280 or 2.8% lower than MSRP. Is that the best I should expect or can I do better at another location? I'm in Colorado, but I'm willing to go anywhere in the US if the price makes sense. Any information would be greatly appreciated.

 

[runamuck]

autnation near me has a few dsl 2500 laramies that they offer 4,000$ off from 81,000-82,000 msrp. they have a white one #NG372181 that stickers for 82,225 and sell for 76,996..so an even larger mark down on that one. woops..these are new '22s

 

[Billet Bee]

2.8% off, wow times shure have changed in just 2 years time when I got 17.5% off a new custom built online. No wonder why after 2 years of ownership why dealerships are constantly calling / emailing us offering $10k over what we even paid for it 2 years ago. Who would of ever thought that a pick up truck and a luxury rv would of been a good investment, not me.

 

[Docwagon1776]

If you are ordering, several dealers are doing more. Granger in Iowa is probably the closest to you. Mark Dodge in Louisana, Laura CJDR in Missouri, Koons in Virginia, Gupton in TN, all are doing somewhere in the neighborhood of 4-5% off INVOICE, not off MSRP.

 

[mtnrider]

There are several dealers doing ~4% below invoice so shop around. Grainger, Mark Dodge in Louisiana are 2 that come to mind. Check out the HD Forums, there is lots of good info there.

Edit: Looks like I was late to the party Docwagon covered it Lol.
.

 

[venkatesh]

For 1500's at least, Granger does 4% of Invoice, and the invoice is ~6% off MSRP. They used to pick you up at the Des Moines airport if you bought a truck from them, not sure if they still do. Bunch of non stop flights from about $100 from Denver to Des Moines, including SouthWest. You have to be present to pick up the vehicle (they don't ship any longer), but you can organize your own shipping (if you wanted). Their online team is very easy to deal with and super responsive. I just ordered with them.

 

[bandtank]

The response so far has been incredible. You guys are the best. Thank you for the help and information.

If you are ordering, several dealers are doing more. Granger in Iowa is probably the closest to you. Mark Dodge in Louisana, Laura CJDR in Missouri, Koons in Virginia, Gupton in TN, all are doing somewhere in the neighborhood of 4-5% off INVOICE, not off MSRP.

Pardon my ignorance. What is the difference between invoice and MSRP? I understand the words, of course, but not the details as they relate to car purchasing and dealerships.

 

[venkatesh]

The response so far has been incredible. You guys are the best. Thank you for the help and information.


Pardon my ignorance. What is the difference between invoice and MSRP? I understand the words, of course, but not the details as they relate to car purchasing and dealerships.

MSRP - is the Manufacturer's suggested retail price. That's the price you see on the website, marketing materials etc. from vehicle manufacturer. It used to be considered the highest price one should expect pay for a vehicle, if one were not inclined to negotiate. During the pandemic, due to shortages a lot of dealers were adding markups to this MSRP price. (I know people who bought Kia Tellurides at $10k over MSRP). This information is publically and easily available, on company websites, and also on the window sticker

Invoice - This is the price the dealer gets the vehicle at from the manufacturer, so is always lower than MSRP. Invoice pricing is harder to find, since it is between the dealer and company, but, is still available on forums and such, often dealers will show you their "invoice price". Most cars I have purchased, invoice was between 2-6% lower than MSRP.

Typically, there is something called 'holdback', which is an amount the car company will pay the dealer if they meet certain targets. Better sales equals higher holdback. So some dealers can sell below the invoice price, because they can make up the profit from the holdback. Hence, high volume dealers can go much further below invoice because of the holdback amount. Of course they also make money on trade ins and financing.

That's my understanding at least.
Edit : I had originally said MSRP was Maximum suggested retail price , it is actually Manufacturer's suggested retail price. Fixed.

 

[bandtank]

Thanks for the explanation. That was very helpful. I had heard the term 'holdback' in the past, but I did not know it could change from dealer to dealer. It makes more sense after learning the amount changes based on volume.

I would like to purchase from a dealer in Colorado, specifically because it will make maintenance easier, but it's not worth many thousands of dollars. The additional cost accumulates due to the increase in the price itself, taxes, and registration fees (in Colorado, the fee is based on the original taxable value/purchase price). The amount of money a dealership makes over the lifetime of earning the sale will eclipse the margin on the vehicle, but I guess they don't care about that.

Unfortunately, the dealership which is nearest to me (Colorado Springs Dodge) is consistently the least flexible and highest-price dealership. I purchased a 2016 RAM 2500 from them and the manager said "I'm ready to wheel and deal" regarding the price. He came down by $100 and he was surprised that I did not jump for joy at the discount. It was a weird experience. The latest interaction has been better and the sales person has been more transparent, but the dealership is still overpriced, especially compared to many of the alternatives in this thread. I could save upwards of $6,000. I owe all of you a drink.

 

[jejb]

You could save a lot more than that. I just got a new Limited Longhorn 2500 from Granger. Took almost exactly 6 months and I saved more than $13k off the MSRP price.

In your first post, you said you'd travel anywhere, but now you say you want to stay in CO. I have not heard of any CO dealers doing the 4% of invoice thing. Any dealer will service it for you, though, no matter where you buy it.

 

[bandtank]

You could save a lot more than that. I just got a new Limited Longhorn 2500 from Granger. Took almost exactly 6 months and I saved more than $13k off the MSRP price.

In your first post, you said you'd travel anywhere, but now you say you want to stay in CO. I have not heard of any CO dealers doing the 4% of invoice thing. Any dealer will service it for you, though, no matter where you buy it.

I will travel anywhere, but I prefer to stay in CO. The preference is not strong enough to light a few thousand dollars on fire, though.

Granger got back to me with a price that was even lower than I would have expected (4% below invoice). At this point, I believe I will move forward with that quote. The drive home will be easy as well, which seals the deal.

 

[jejb]

My drive was just over 400 miles from Granger to my house. Gave me a good chance to get used to some of the features of the truck.

 

[Docwagon1776]

Explanation of holdback: https://www.edmunds.com/car-buying/... percentage,manufacturer repays to the dealer.

So the truck I tried to order:
MSRP: $81,000
Invoice: $75,761
HB: $2,388

FFP: 75,078 (Friends/Family Price - affiliate pricing)
EP: 72,173 (Employee price)

Granger's price for me: $72,592.80

But Power Wagon order banks are closed, so I ended up not being able to do the deal.

 

[venkatesh]

Fantastic explanation of holdback. Thanks for sharing.

 

[fkingpsuce]

Look at Koons in the vendor section. I have done 2 orders through them, the just being a 3500 I picked up just a couple weeks ago. When I ordered in May it was 6% under invoice. Not sure what their current offer is.

 

[jejb]

Look at Koons in the vendor section. I have done 2 orders through them, the just being a 3500 I picked up just a couple weeks ago. When I ordered in May it was 6% under invoice. Not sure what their current offer is.

I had never heard of Koon's, so checked out their post in the vendors forum. 5% under invoice, which is great! But they have a $899 "processing fee". At Granger, I got 4% under invoice with the only fees being $180 "doc fee" and $45 for the temp tags. Remember to add those additional fees in to the deals you are quoted.

 

[Docwagon1776]

I had never heard of Koon's, so checked out their post in the vendors forum. 5% under invoice, which is great! But they have a $899 "processing fee". At Granger, I got 4% under invoice with the only fees being $180 "doc fee" and $45 for the temp tags. Remember to add those additional fees in to the deals you are quoted.

Granger was the better deal for me as well, but geography plays in. Someone who can drive to Koons but has to fly to Granger or arrange shipping will need to consider that as well. I would have had to fly to both and drive home, but I think our OP is much closer to Granger.

 

[jejb]

Granger was the better deal for me as well, but geography plays in. Someone who can drive to Koons but has to fly to Granger or arrange shipping will need to consider that as well. I would have had to fly to both and drive home, but I think our OP is much closer to Granger.

Great point. You need to add all of those kinds of costs into the bottom line number to do a fair comparison based on each of our individual situations.

 

[John Jensen]

Bandtank,
Attached is a redacted copy of my truck purchase POC. Any good dealer will give you a POC copy of the truck you are buying. The notes in red are mine to help you understand the abbreviations and my final price. Realize this was in 2020, dealers are currently not giving similar discounts but my POC should help you understand the lingo. Good Luck with your purchase.

 

[bandtank]

Bandtank,
Attached is a redacted copy of my truck purchase POC. Any good dealer will give you a POC copy of the truck you are buying. The notes in red are mine to help you understand the abbreviations and my final price. Realize this was in 2020, dealers are currently not giving similar discounts but my POC should help you understand the lingo. Good Luck with your purchase.

Dang. The prices have really skyrocketed since 2020. Thanks for the explanation in the PDF.