Topic: CR-V SE offer reasonable?

[10thline]

Thanks for the replies to my previsou post. I got the invoice price from CCC and am ready to call the dealers next week and hope to finalize the deal before Dec 31. Below is the offer I am prepared to make. Can HSG and any others comment whehter it's reasonable or I can do better given the timing of the purchase? thanks.
Also I want the silver color, how long can I expect the delivery?

CR-V SE Auto: MSRP     30,500
Invoice:                       28,243
cash purchase incentive: (1,000)
Dealer Profit:                     500
Freight & PDI                 1,455
Air/Fuel Tax                      175
GST                              2,056
PST (Ontario)                 2,350
Honda Gift Cert.             (1,500)
Grad Allowance                 (500)
Total on the road:          31,779

[sterling]

Well, based on this post, http://www.cartalkcanada.com/forum/index.php/topic,42324.0.html, the CCC report indicates that the dealer has to pay $500 to offer the customer the $1500 gift certificate.

So, it would appear that your offer allows the dealer $0 rather than the $500 you intended.

[johngenx]

$500 left to pay the sales commision and overhead?  I'm all for getting a good price, but folks in business are there to make a go of it.  Seems thin to me, unless there's a decent holdback or incentive from Honda...

[10thline]

Sterling, I ran CCC price report before Honda Canada came out with the 1.5K gift cert. Can anyone confirm whether dealers really have to give away $500?

HSG said in one of his posts that he was willing to sell CR-V $500 over cost. Of course dealers make additional money on hold backs, volume incetive, the overpriced freight/PDI as well as from my trade-in (a 93 Camry with only 180KM. drove for 4 years and never had problem except the air failed this summer). Plus mine would be a clean cash transaction which would cost the dealer one hour time only. I don't see why any dealer won't want my business.

[sterling]

I don't see why any dealer won't want my business.

Lack of profit may be one reason. But you won't know until you make your offer.

The correct response to, "But you're going to make money on my trade" should be, "I sure hope so. Why do you think we show up here everyday?"

[johngenx]

... my trade-in (a 93 Camry with only 180KM. drove for 4 years and never had problem except the air failed this summer). Plus mine would be a clean cash transaction which would cost the dealer one hour time only. I don't see why any dealer won't want my business.

Your trade is typically far too old for a dealer to sell on their lot and would wholesale it off.  They don't care about cash deals as they make a spiff on the financing.

All things considered however, I'd offer very low to begin with.  It's called negotiating, and you might get the price you want.

[eax]

ya, $500 over in Dec. is fair if the truck is in stock.  The dealer has to pay an inventory tax so i'm sure he'd rather let it go.  you will have to pay an admin. fee as well.  Clean cash deals suck from a dealer point of view.  No profit from the business office, $500 over invoice on a 30k vehicle that cost the dealer at minimum $5/day to keep in stock...you do the math.  The dealer will take your business, but the store won't be jumping up and down about it...at least from a front end profit point of view.  On the flip side, you will likely service there for a few years so...it's not all about what's made up front.

[hondasalesguy]

10th line where your math is off is you are calculating the $1000 manufacturer incentive, then you are adding the $1500 Honda gift certificate. Dealers get $1000 from Honda Canada, then they contribute $500 on their own so that they can offer the $1500 discount from MSRP.

Try this math:

$28,243 cost - $1000 rebate + $500 profit + $1455 Freight/PDE + $175 Air/Gas Tax + $4405.95 PST/GST =$33,778.95 total on the road (excluding license)

That would constitute a skinny ass deal but at this time of the year I bet most dealers would take it on an in stock vehicle. You also have some aggressive finance rates (2.9% for 36 months, 3.9% for 48, 4.9% for 60) so you are getting a good deal overall.

[hondasalesguy]

I missed the part about the grad rebate. That would be deducted off your bottom line as well...

[10thline]

HSG, Thanks. I thought there is $1,000 bonus just for cash purchase. There's cost for Honda to offer 2.9%. Honda would be crediting that cost to customer if it's a cash transaction, I suppose.

I understand now that the 1,500 Honda gift certificate is actually 1,000 since dealers have to put in $500.

[FrostyCarbon]

Am I missing something here?
HSG, in your number crunching you took off the thousand rebate, then added $500 profit?  Wouldn't the dealer be just keeping their $500 they are not putting into the rebate.  This $500 profit plus the $500 not put into the rebate, and on top of that they make their PDI profit(+- $500)?.... .
So is $1500 a skinny ass deal to Honda?  To me, its more like a fat ass deal.
Enlighten me if I am missing something, as I just got back from Christmas shopping and I cannot think straight.

Oh, wait.... The $500 from the dealer was just put in out of the +-8% markup right? 
Going from invoice up, no extra $500.
Still, $1000 for the dealer can't be that bad, as the dealers here seem to be bursting with CRV's and Accords too.
 
Sorry.  Slowly coming out of the fog now.........   

[hondasalesguy]

I wasn't getting into any other profit sources other than the difference between dealer net and MSRP. Not everybody cares about the dealers making some money on the "back end" of the deal such as PDE. I'd say maybe 1 in 50 people I deal with will put that in the equation when trying to beat me down.