Topic: Below dealer invoice price?

[trueno86]

Hi,

I'm in the market for a 2005 Cobalt LT.  I found one dealership that has a lot of this car in stock still and from what I hear, they're trying to clear them out quick.

So my question is, would it be possible to negotiate a price that's below the dealer price?  Would I also be able to push for heavily discounted options such as sunroof, chrome trim, leather seats, etc... since I'm buying last year vehicles off their lot?  I was considering using carcostcanada or apa to purchase this vehicle but I want to if it's even worth using since the dealership may offer more incentives for clear-outs.  Does anyone know the invoice price for this vehicle?  Anyone else purchase this car?

Thanks for your help!

[The Mighty Duck]

I doubt they'll go below dealer cost (barring any GM discounts).  No one wants to sell product at a loss...  it doesn't make financial sense.  If they have one on the lot with the options you want, you can probably bring them down pretty close to cost...  but below?  Doubtful.

[agivant]

If you consider holdback, dealer volume discount and freight (what a rip-off, everyone still pay it), it could be possible. At least, try to make your offer and see what is coming from it. You have nothing to loose.

[AVToller]

Just out of curiosity, do you work for no money? Why do you think it appropriate to buy a new car at below invoice price? I guess car salespeople and dealership owners aren't entitled to make a living since they are just parasites on society.  Oh, and I do not and never have sold cars for a living.

[ovr50]

 

[sirAQUAMAN64]

I'll bet it's possible to.

$2,000 margin in the vehicle, but GM always has huge incentives. It's not out of the question.

An LT with leather and chrome trim is near top-o-the-line tho, so I doubt there's many in inventory configured that way. And at the price that car fetches, they'd better want to get rid of it and odds are it would qualify for quite a discount. A Malibu or Impala would be overlapping it in price, offering much more in way of power and room.

[hondasalesguy]

I agree too, but then again I DO sell cars for a living. There are people out there whose goal in life seems to be trying to buy cars at or below dealer cost. Why they feel that way about cars, when it is obviously not the case when they buy a new home from a builder, appliances, clothing, food at a restaurant, etc. boggles my mind to say the least.

Maybe it is the fear of getting taken, because it is tough to know 110% for sure that you are actually paying cost, with holdback, (dealer uses this to defray his interest costs on stocking hundreds of vehicles, sometimes for months at a time) dealer trading dollars (internal credits - used to move product late in the model year), 0% financing (which usually is a fallacy, unless you can get the same price as if you paid cash, AND the 0% interest rate) and other variables.

Instead, if you go through someone like APA, who tells you what a fair price is, and you go to a dealer and are treated with respect and courtesy, isn't that ever enough to earn your business and make you happy? Point is, if you want to torture yourself, you can probably find somebody, somewhere who paid less than you did for the same car as you bought. So what? He may have dealt with an "assembly line" dealer and didn't enjoy the buying process in the least, he may get shite after the sale service, and all for what? to save a couple hundred bones on a $30,000 purchase? It seems silly relative to the overall cost of the transaction how obsessed some folks are over a couple hundred measly dollars. And don't give me the crap about how that may make a difference to somebody, if money was that tight to them they would be buying used or taking the bus...

That being said, I find in my business, dealing with literally hundreds and hundreds of people year afte year, very few expect to pay cost for a new car. They just want to feel that they were treated fair on price. Fair means fair to both the customer AND the dealer...
Ahhh.. that felt good... Need to vent once in awhile...

[safristi]

Why can't dealers just stock a half dozen "test" cars on the LOT and a few spiffy ones in the show room(if they MUST) we ain't talkin' womens fashion here...then when we are sold order up the lil darlin'...IF THE COMPANIES ..can have JUST IN TIME..why CAN'T WE...and if I happen to be near the factory pick it up with a minimal $100  charge...it ain't a pair of pants (dollar WISE) we are talkin' here...
   Soon enuf Internet BUYIN' WILL BE HERE and a few TEST SHOWROOMS will be all that is needed.......

[trueno86]

Just out of curiosity, do you work for no money? Why do you think it appropriate to buy a new car at below invoice price? I guess car salespeople and dealership owners aren't entitled to make a living since they are just parasites on society.  Oh, and I do not and never have sold cars for a living.

It's nice that you like to give as much of your money to salespeople/dealership owners.  It would be so much better if car sales were just like any other retail sales where the price you see is the best you can get and haggling is not necessary.  Unfortunately that's not the way it works.  Tell me honestly, do you pay full MSRP or more for the cars you purchase?  Do you avoid retail sales event because you always want to pay full price?  I don't make the rules of supply and demand.  I'm merely following them.

Anyways, the reason why I ask is because I've never negotiated a clearance vehicle before.  Normally I'd offer somewhere between $300-$500 above the dealer invoice price for a vehicle.  I'd then negotiate with the salesperson to get to an agreed upon price that would make both sides happy.  But that's what I would do for a current year vehicle, not a previous year clear out.

If they don't want to sell the vehicle to me for a loss or at cost, then that's up to them.

[sterling]

If they don't want to sell the vehicle to me for a loss or at cost, then that's up to them.

Sounds like you have all figured out. What do you expect to find here?

[JSCC]

At our dealership, if you ask a salesperson to summit an offer at $500 above invoice, the answer is NO!
Not one of us would do that for you.
I accept and would summit offers at invoice + $1000 but my other coworkers think it's not worth it.

I once had a customer trying to summit an offer of 14000 on a used car listed for 16999.
I said to him that, it won't happen. I can try 16000, and it might work.
He goes, "14,500"
I tell him I need at least 16,000.
He says, "15,000"
The customer says. "I find it funny that your dealership is very different than the others that I have been to."
I ask "How is that so?"
He says, "The other dealers always take my credit card and offer, and try to keep us in to sell us a car. But your dealership doesn't seem to want us to buy a car"

LoLz, it was kind of funny and interesting.

I heard, if you ask "what's your best price?" at BMW or MB dealers, the sales people look at you like you are aliens or outcasts of some sort!

[toolatecrew]

Were I offering 14000 for the used car and you said it won't work my question would have been are you saying NO to my offer?

You said 16 K might work so if I offer 16 K can you say yes?

The point is that why am I even talking to you? You are telling me an offer of 16 K MIGHT be accepted. Why would I want to take your advice when you are telling me you are GUESSING?

How do you know it won't happen if you won't let me TRY? You can say NO to 14 K but you can;t say YES to anything less than 16999? If I did offer 16 K and you come back with 16250 from the manager how much credibility do you have? Let me guess "well I though he would take it but we need you to give just alittle more. I was wrong about 16 K but if you just come to 16125 I think I can get him to crack" RIGHT

Its certainly not reasonable for people to offer thousands below cost or below wholesale. Someone who does that is obviously either delusional or simply is uneduacted and has not done their reasearch into what the actual cost of the vehcle is and what kind of profit and rebates are avaulable to the dealer.

If he'll take 16,00 then why did you put 16,995 on the car? If he'll take 16K then why won't he take 15900?

Its like the story about the guy who asks the flight attendent: "will you sleep with me for 100 million dollars and she says "sure"
He says will you sleep with me for 10$

she says no way what do you think I am?

His answer "we already know what you are my dear now we are just haggling over the price".

I think if you have evidence (from car cost Canada etc) that the dealer can make a profit at "below cost" due to rebates etc. then its fair to make that kind of offer. I ahd a freind that bought a dodge colt for what I calculated to be below "invoice" because he had a doge rebate, a famility loyalty rebate and a grad rebate that were all allowed to e combined. ecen though the selling price was less than the car cost the dealer the rebates were more than the actual "profit" in the car and they still made money.

The sales person is going to try to "justify" the MSRP why the car is worth the money the features and benifits that make it worth the price. Its only reasonable that you would have evidence and reasear to demonstarte how they can make some profit selling you the car at your price.

If the dealer has l alot of Cobalts in stock and there are rebates or incentives to clear it out that would enable them to sell it below their cost and still make a profit then i think its not unreasonable to try. if you dodn't have any evidence to support that assumption then you are basically barganning on an assumption that may have no basis. Its basically impossible to know if the dealer is telling the TRUTH about what price they can sell you the car at and make a profit.

They will likley give the same answer at an 18K offer as a 19 K offer. One answer may be true and the other may be false but they you'll get the same answer all the time.

Do your reaserach pay your $ to get the best ifo you can get on cost and rebates and deal from FACT. Put black and white paper in front of people and if they want to disprove you then ask for comperable proof of why you are wrong. You need to be fair and reasonable. But if you have your facts straight and the proof there then I think its fair to expect for thr dealer to treat you with equal rspect.

Unless someone here has gone to the trouble of actually getting the cost and rebate info on the car in question I don't think anyone can give you a fair and definitive YES you can or no you can't answer to the question. Only suppositon.

i certainly wouldn't presume to say yes you can or no you can't. I don't know the FACTS. Get the facts arm yourself and then and only then can you be confident that you got a deal you can feel good about.

[sterling]

If he'll take 16,00 then why did you put 16,995 on the car? If he'll take 16K then why won't he take 15900?

Do you really think that is a legitimate argument? Do you really think that a pricing situation should be so cut and dried that if $16000 is acceptable then $15900 should not be? Where do you draw the line? If you are selling your car privately and you tell a guy that lowest you'll go is $10,000 will you really tell him to get lost if he says he'll only pay $9950? Are you gonna be a stickler on principle and forego the sale over $50? Maybe you would. But what if making that sale was how you were paying your mortgage that month? What if your livliehood depended on you selling that car today? Not so easy to be cut and dried then is it?

Would the reverse of your argument be that if the buyer doesn't want to pay the $16,995 price on the car they should just leave? If the seller can't sell for a price less than window sticker why should the buyer bother offering less?

Do you actually think that when someone asks, "What's your best price," that after hearing a number the only acceptable responses should be "OK,I'll take it," or "Oh, that's too much, bye?" Is there really a price that couldn't be lowered by $10? Is the customer a liar for saying he won't pay more than $10,000 and then buying for $10,100? Is the seller a liar if he says he can't go lower than $10,000 and then sells for $9,900?

That kind of thinking works great for computer programming. Not so well when dealing with humans.

[toolatecrew]

The argument was directed to the sales person refusing to submit an OFFER. Not to the manager actually taking the offer.

I tell him I need at least 16,000

I'm not the one suggesting that if 16,000 is acceptable then 15,900 should not be. The SALES person is telling the customer that. If you offer 16,00 I'll take it to the manager if you offer below 16,000 I WILL NOT.

The sales person is seetting the minimum "bottom line" price yet actually has no power to accept it.

I'll offer 15,000 NO I won't take that offer to the manager. ..So you are rejecting my offer of $15000..NO I'm saying I won't take it to the manager .

OK I offer 16,00 as you suggest can I buy the car now...WELL NO I said I'd take an offer to the manager at 16,000 I don't know if he'll accept it.

If you were selling a USED car privatley and someone offered you 16,000 cash but the wife told you she wanted to get 16,100 at least for it would you say no I have to go beg my wife to consider your offer?

See the thing abiut this scentence If he'll take 16,00 then why did you put 16,995 on the car? If he'll take 16K then why won't he take 15900?
 Is that the sales person can't answer it.

He's not rejecting the offer of 15,000 with an answer of "I reject your offer of 15 K becuse we paid 15,500 for it" He's refusing to take the offer to someone who can actually reject it.

He seems to bable to say with 100% certainty that $15000 is NOT ACCEPTABLE because he refuses to convey the offer to the manager.

BUT he cannot say with 100% certainty that $16,00 IS acceptable because if he could he's be able to say we have a DEAL.

How can that be. How can he know for sure an unacceptable price yet not know what an acceptable price is?

The sales person is somehow a 1/2 decsion maker? He has the power to reject offers but not accept them?

I would not tell a guy that lowest you'll go is $10,000 will you really tell him to get lost if he says he'll only pay $9950. But the dealer will tell me the lowest I'll go is $16,00 but if you offer 15950 I won't take it to the manager so in other words get lost?

The negotiation process is what it it but you have to negotiate in good faith. If you make an offer you have to either accept my offer or make a counter offer that's how it works. But In this case I'm saying is $15,00 an acceptable offer you say no. I say is $16,00 an acceptable offer you say MAYBE let me check??


The "What's your best price," tactic is useless. Simply becuse the person you are talking to has no idea or autority to give you a bottom line price.

16,995 is too high.

Ok Make me an offer 15,00

Toolow

15,500

Toolow

16,000

(Pause)

Deal?

Well let me take it my manager now

Wait wait wait

He says too low 16, 250

But you kept telling me too low but when I said 16,000 you stopped saying too low. I thought we had a deal?

Well no I really thought he'd go for it but we just need a little more...


I've BEEN in that mangers office. I know what has been said to me. "we are close we've almos got him lets just see if we can bump him. We know he'll go for 16,000 lets get an extar $100 and if he starts tp walk I'll come out and we'll make the deal at 16.

Its a game they play on customers. Good cop bad cop. Its there to get more money from you plain and simple. He already bumped you from 15  to 16 just by refusing to take the offer to the manager.

For the record I had a vehicle for sale. I advertised it at $3500 the guy aksed me what my bottom line price was. We talked and we agreed that I would not take less than $3. he asked me 3 times if I would go any lower. I told him no 3 times. He agreed to come see it and if it was what I siad it was then he would pay 3K and that he would bring cash.

he came saw the vehicle agreed it was what I said then he pulled out a wad of cash and said I've got $2800 right here will you take that.

I told him to take a hike.

[hondasalesguy]

Simple observation: the guy you tried to sell the $3500 car to was a WEASEL. No shortage of them out in used car buyer land...

It is comical when you have a customer who says he wants your "best" price, and if he likes it, he will buy "today". If you take him at his word and give him a no haggle price, 90% of the time he will then make you a counter offer. (Which means that if you accept a lower offer, that your "best price" really WASN'T your best price...)If a customer does that to me I politely tell him that I am not prepared to go any lower, that he asked me for my best price and I already gave it to him. It is a matter of principle, if he wants to play games I tell him the negotiation is over, thanks for the opportunity to do business and send him on his way. Sometimes these people, when realizing that your best price really WAS your best price, say OK let's do the deal. Others, being the haggling type, and maybe not wanting to "lose", just up and leave. Sometimes you just have to stick to your guns, preserve the little bit of integrity that still remains in this business of ours...

[sterling]

The negotiation process is what it it but you have to negotiate in good faith. If you make an offer you have to either accept my offer or make a counter offer that's how it works.

That's how it works? The guy made you an offer of $2800 and you didn't give him a counter-offer. So according to your rules you negotiated in bad faith?

And since you seem a bit hung up on semantics, asking, "will you take $15000?" is not an offer. That's a question. An offer is saying, "If you will take $15000 I will buy it right now." And yes, if one of my salespeople said no to an offer I'd be upset. They can say no to questions all they want.

[safristi]

..Semantics+ scheming Antics...!!!!! will you take $15,000 IS the same as "my offer is $15,000"...I YOU, we IT can back out of..UNTIL A SIGNED OFFER IS ON THE TABLE....the Time has come said Alice...to grabble & fabble  NO More..I'd rather slip down a Rabbit Hole...than dance wif anuffer Merengue Salesperson..I.T takes two to TANGO..but at least we are hand in hand.....!!!!!!!! I'm Late ..I'm Late fer a very Important date........

[toolatecrew]

The negotiation process is what it it but you have to negotiate in good faith. If you make an offer you have to either accept my offer or make a counter offer that's how it works.

That's how it works? The guy made you an offer of $2800 and you didn't give him a counter-offer. So according to your rules you negotiated in bad faith?

And since you seem a bit hung up on semantics, asking, "will you take $15000?" is not an offer. That's a question. An offer is saying, "If you will take $15000 I will buy it right now." And yes, if one of my salespeople said no to an offer I'd be upset. They can say no to questions all they want.

Actually he made an offer of $3000 ..when we spoke on the phone and through an email I said I will sell you this vehicle for $3000. I will not go lower..I put it in writing. If you want to buy this vehicle you will pay $3k he agreed that if he would bring cash to buy the vehicle. I thin after sating no less than 3 times to him in writing I will sell this vehicle for 3000 that an agreement was implied.

We were talking about THIS:

I once had a customer trying to summit an offer of 14000 on a used car listed for 16999.
I said to him that, it won't happen. I can try 16000, and it might work.

The customer tried to SUBMIT an OFFER. The sales person said NO I will not submit your offer. So I can assume you would be "upset" with this sales person? But since it is not your sales person the manager was not upset with him and he likley continues to do it. As have other sales people I have met.

Yes some managers might get upset and stop them from doing it. I have not encoutered the situation yet but it would be unfair to say it doesn't happen anywhere.

If you try to SUBMIT an OFFER then you should expect either an acceptance or a counterproposal even if that counterproposal is the MSRP. However in the situation discussed here in this thread his offer was not not met with a counterproposal he refused to take it to somone who could reject it.

If you want to play with semantics you could eventually say a counter proposal was given 16,000 but its not much of acounter proposal if the guy says OK 16,000 and the salesperson says "well wait I didn't say we'd have a deal just that if you offered 16 K I'd take it to my manager who MAY OR MAY not say yes.

Most of the sales people we read about on this board (with the exception of HSG) or have met if confronted with An offer saying, "If you will take $15000 I will buy it right now."  wouldn't respond with a yes simply becuse they don't have the power to.

What'st the point of making an offer if it can't be met with YES? It could be the 1st or 10th offer. The point of making it is to hear the word YES we have a deal. Why make offers to someone who can't say yes?

What's the first rule of sales when someone throws up the objection"Well I have to check with so and so to say yes?" Get in front of that decison maker.

In my experience on both sides of the selling process its pretty common to hear "I have to check with the wife before I can buy the car". So wht do you do? get the wife in the showroom. Take the car to their house for a test drive. get that wife where you can see her so "check with the wife" is no longer a valid objection.

http://changingminds.org/disciplines/sales/objection/objection_handling.htm

Are just some examples of the objection handeling techniques used to get you to take the DEALERS price. A common theme is COMMITMENT . Since its fair for them to use these techniques its also fairfor the BUYER to use them to to overcome the objection of you're offer is TOO low. But obtaining COMMITMENT from someone who has no power to COMMIT really is a waste of time.

I went though the Automtive Profit Building training which is like an extreme version of the objection handeling coupled with techniques to wear the customer down, keep them in the dealer and make them a TODAY buyer.

If these techniues which dealers PAY to have taught to salespeople are fair then its just as fair to use them as a buyer.

Heck I went through Dimensional sales training which is the soft core version of the same stuff when I worked in Packaged goods. I wnet through some other sales training (can't rember what they called it) at another company and its all variations on a theme.

Did it for 10 YEARS. Its all the same at its core. Identify objections, elimanate and overcome them, get commitment ASK FOR THE SALE.

Works in reverse too as a buyer.

[JSCC]

The argument was directed to the sales person refusing to submit an OFFER. Not to the manager actually taking the offer.

I tell him I need at least 16,000

I'm not the one suggesting that if 16,000 is acceptable then 15,900 should not be. The SALES person is telling the customer that. If you offer 16,00 I'll take it to the manager if you offer below 16,000 I WILL NOT.

The sales person is seetting the minimum "bottom line" price yet actually has no power to accept it.

I don't have the power to accept it, but I do have the power to reject it.

I'll offer 15,000 NO I won't take that offer to the manager. ..So you are rejecting my offer of $15000..NO I'm saying I won't take it to the manager .

Yes, I reject that offer of $15000. And my boss will not yell at me with "What the hell are you doing, rejecting MY customer! Get your a$$ out there and bring them back in here or you are fired!"

OK I offer 16,00 as you suggest can I buy the car now...WELL NO I said I'd take an offer to the manager at 16,000 I don't know if he'll accept it.

Correct, 16,000 is only an offer, it is the starting point.

If you were selling a USED car privatley and someone offered you 16,000 cash but the wife told you she wanted to get 16,100 at least for it would you say no I have to go beg my wife to consider your offer?

See the thing abiut this scentence If he'll take 16,00 then why did you put 16,995 on the car? If he'll take 16K then why won't he take 15900?
 Is that the sales person can't answer it.

Because some customers need a sense of saving. I know a lot of people who tell me, they bought this item for $50 when the original price was $100, they feel so happy for saving $50 but the cost was actually $30. So in some sense they over paid for $20. I ask them if the list price was $1000 and you bought it for $50, would you be even more happy? They say, "how could this thing be worth $1000?", I ask "How could that thing be worth $100?" NO answer! LOLZ.

He's not rejecting the offer of 15,000 with an answer of "I reject your offer of 15 K becuse we paid 15,500 for it" He's refusing to take the offer to someone who can actually reject it.

He seems to bable to say with 100% certainty that $15000 is NOT ACCEPTABLE because he refuses to convey the offer to the manager.

BUT he cannot say with 100% certainty that $16,00 IS acceptable because if he could he's be able to say we have a DEAL.

How can that be. How can he know for sure an unacceptable price yet not know what an acceptable price is?

The sales person is somehow a 1/2 decsion maker? He has the power to reject offers but not accept them?

I would not tell a guy that lowest you'll go is $10,000 will you really tell him to get lost if he says he'll only pay $9950. But the dealer will tell me the lowest I'll go is $16,00 but if you offer 15950 I won't take it to the manager so in other words get lost?

The negotiation process is what it it but you have to negotiate in good faith. If you make an offer you have to either accept my offer or make a counter offer that's how it works. But In this case I'm saying is $15,00 an acceptable offer you say no. I say is $16,00 an acceptable offer you say MAYBE let me check??


The "What's your best price," tactic is useless. Simply becuse the person you are talking to has no idea or autority to give you a bottom line price.

16,995 is too high.

Ok Make me an offer 15,00

Toolow

15,500

Toolow

16,000

(Pause)

Deal?

Well let me take it my manager now

Wait wait wait

He says too low 16, 250

But you kept telling me too low but when I said 16,000 you stopped saying too low. I thought we had a deal?

Well no I really thought he'd go for it but we just need a little more...


I've BEEN in that mangers office. I know what has been said to me. "we are close we've almos got him lets just see if we can bump him. We know he'll go for 16,000 lets get an extar $100 and if he starts tp walk I'll come out and we'll make the deal at 16.

Its a game they play on customers. Good cop bad cop. Its there to get more money from you plain and simple. He already bumped you from 15  to 16 just by refusing to take the offer to the manager.

For the record I had a vehicle for sale. I advertised it at $3500 the guy aksed me what my bottom line price was. We talked and we agreed that I would not take less than $3. he asked me 3 times if I would go any lower. I told him no 3 times. He agreed to come see it and if it was what I siad it was then he would pay 3K and that he would bring cash.

he came saw the vehicle agreed it was what I said then he pulled out a wad of cash and said I've got $2800 right here will you take that.

I told him to take a hike.

No wonder you don't like to be a car saleperson!
You have not mastered the Art of Tai-Chi.
In the car business, there is no absolute price.
The customer will always want to pay less, and the seller will always want to sell for more.

[toolatecrew]

The argument was directed to the sales person refusing to submit an OFFER. Not to the manager actually taking the offer.

I tell him I need at least 16,000

I'm not the one suggesting that if 16,000 is acceptable then 15,900 should not be. The SALES person is telling the customer that. If you offer 16,00 I'll take it to the manager if you offer below 16,000 I WILL NOT.

The sales person is seetting the minimum "bottom line" price yet actually has no power to accept it.

I don't have the power to accept it, but I do have the power to reject it.

Why on earth would anyone want to offer to buy a car to a peron who can't sell them the car?

IF you only have the power to say NO and what I want to hear YES I'm obviously talking to the wrong person.

Basically all you can say is NO. Please go get me someone who can say YES