Dealer Invoice, Hold Back, and Factory Incentives

[LoneRanger]

Been in the market for a truck as my recent posts portray. So the other day I get shown the top secret invoice sheet on a GMC Canyon w/ MSRP @ $33,480. It showed like $32,215 or something. Can't remember and wasn't allowed to be alone with it or take it home.

I have a knee jerk reaction that the figure shown is not the full story. They have to have more margin than that (?...) Apparently they rely more on factory incentives. I am aware that GM hold back is 3% of MSRP but I didn't bring that up in the negotiation.

I was given Supplier pricing which brought it down to $32,008, and qualified for $2968 in rebates, but as far as *dealership* money all they put in was $400 and wouldn't budge. That $400 was in the form of giving me $400 above Kelly Blue Book trade-in value on my Forester.

All this brought the price of the truck down to $29,000. Truck was only 2WD and only an ext cab not a four door crew. I felt this deal was not good enough and turned it down. This would have been dealer-to dealer 1:1 trade since my dealer didn't have it and would have to trade another who had it in stock (they located what I wanted), so this is likely why they were so tight with no add'l discounts off their own bottom line.

 

[eljefino]

I share your suspicions.

 

[sloinker]

The best price is usually between 10%-20% below MSRP depending on incentives. Check a couple of the national dealerships known for pricing. Not familiar with the Chevy but Mopar's can be had for cheaper in North Carolina, Texas and Idaho. I'm sure there is a GMC dealer that you can use for price leverage. Here's a 4X4 extended cab in Idaho for less than $30k.

https://www.davesmith.com/new/GMC/2019-GMC-Canyon-e7bde45a0a0e0aea042ff3df4afd09ab.htm

 

[ArrestMeRedZ]

Now that invoice prices are available on the internet to virtually everyone, they have become meaningless. In the example above, the difference between list price and invoice is under 4%, when it used to be 18% for Chevy trucks. You don't think dealers would be screaming if their margins were cut by over 75%?
Besides holdback, there are a number of other areas where money is being funneled back to the dealer. IMO, the current pricing scheme cheats the buyer who is getting a terrible deal, and the salesman, whose commission is based on a false profit number.

 

[DuckRyder]

According to Edmunds, that wasn't a bad deal.

Of course, I've beat Edmunds prices, but I'm just saying it wasn't an bad deal if you want the truck...

 

[Leo99]

I'd assume that if you were shown, it's a marketing trick. But none of those numbers matter anyway. The dealership will sell the truck at the best price they can get for it. They do this everyday and they are very good at it. Don't think you're going to beat them at their own game. You just try to do the best you can.

 

[mrsilv04]

If you don't mind a GMC Canyon, look at Laura GMC on the Illinois side of St. Louis (Collinsville).

Here's one with an MSRP of $38,140... for $30,585..... discounted around $7500.

https://www.laurabuickgmc.com/Vehic...eel_Drive_SLT-Collinsville-IL/3443740863

Many others to choose from.

 

[benjy]

more truck for less = nissan frontier + no worries as its still port injected!!!

 

[JustN89]

You are right- we had less wiggle room when we didn't have the vehicle in stock. It's kind of convoluted and I still struggle to understand the goings on of dealer trades (and probably will never understand it now that I've thankfully left that field), but I believe it has something to do with how the dealership owns their inventory. The dealership I worked for financed their floor plan (not uncommon), but for trades, we had to purchase the incoming vehicle outright from the other dealership, which meant, as I understand it, that we had less room to negotiate because we were fully bought into the car instead of the other vehicles on our lot.

Hold backs can get interesting. Manufacturers usually offer a certain amount per car sold, but it can go beyond that. They can offer more money back to the dealership for moving certain models/color/trim levels, as well as offer money back once the dealership reaches certain sales goals. For instance, when I was selling Hondas, there was a $400/car hold back from Honda, as well as $150/Fit sold after selling 5, and the money back increased as you sold 5, 10, 15, etc.

This is why many dealers are willing to make better deals towards the end of the month- it's not necessarily every salesmen just trying to cram every car sale into that paycheck, but it's because the dealer knows which sales goals are within reach and has a better idea of how much money he has coming back to him if he makes this deal. Moving the extra $400 to your trade-in was just a way of allowing the dealership to allocate the money onto your trade, meaning that they felt good about the price they were getting your trade at.

 

[ARCOgraphite]

L.R. - You absolutely HAVE to sell the nice Forester yourself. You are loosing at least 2 grand right there, And, no, it's not that much of a pain for 2 grand and likely a few hours work.

What are the National rebates and what does Edmunds calculate for invoices and factory to dealer incentives.?

Also If that the truck hasn't been on the lot long, most of that transportation money on the Monroney is yours for the taking.

This "We'll show you the invoice" is the oldest fake- out trick in the book. Forget it.

- AlleyCat from SubaruForester.org

 

[64bawagon]

I found years ago that establishing a long term relationship with a sales person was the best way to get the price and service I wanted. I believe that the more of the sales persons time you take up the less likely they are to work hard for you. They gain a sense of who the tire kickers are.

 

[RhondaHonda]

As mrsilv04 said, Laura Buick/GMC just outside St. Louis is a good place to get an idea on pricing. They don't give you top dollar on trade-ins from my experience and what a few friends have told me so you'd probably do better at Carmax or selling yourself. I beat their pricing at another St. Louis area dealership when buying my wife's Yukon but it's worth a look for sure. Good luck.

 

[JTK]

Originally Posted by LoneRanger


...All this brought the price of the truck down to $29,000.


You have to be careful with some of the incentives. Some apply after tax, AKA "customer cash incentives".

Like said, you are never going to know how much profit a dealer makes on the sale, but you can guarantee their profit is greater on a truck or SUV these days over a new car.

All I do is try several dealerships online. Which ever responds with real numbers on both the trade-in and new purchase gets my business.

 

[K20FA5]

Originally Posted by JTK
Originally Posted by LoneRanger


...All this brought the price of the truck down to $29,000.


You have to be careful with some of the incentives. Some apply after tax, AKA "customer cash incentives".

Like said, you are never going to know how much profit a dealer makes on the sale, but you can guarantee their profit is greater on a truck or SUV these days over a new car.

All I do is try several dealerships online. Which ever responds with real numbers on both the trade-in and new purchase gets my business.


Agreed, the last three vehicles I've bought have been online. Old Nissan Frontier, the 4Runner and my Silverado. Just show up to test drive and make sure it has what we want and sign the papers.

 

[Elkins45]

The most I ever paid for a new car (straight cash purchase) was 92% of the sticker for my 2007 Corolla. The least was somewhere between 75-80% for my 2017 Nissan Titan. That's the "on the road" price including KY sales tax and any fees.

My experience is that the slower a particular model is moving the less bearing the sticker price has on the final price.

 

[P10crew]

I wouldn't trust to many dealers after buying my last truck from Dave Smith motors. I was trading in a mint 04 dmax with 112000 miles for a new 2500hd. Went to 4 dealers in my area Chevy and gmc. It's like they called each other to tell them that this sap is buying a truck today. I had the gm build sheet in hand so I could compare apples to apples. Went home that day and called Dave Smith and he whipped these local guys [censored] by 11999 dolla. The babe and I had a nice little 852 mile one way trip to beautiful Kellogg Idaho. They even threw in a full set of weathertech mats,visors and bed liner. The following Monday a good friend of mine did the Dave Smith fly and drive deal and beat the local clowns by 10 grand on a 1500.
I think the 100 over invoice is total smoke and mirrors.

 

[TiredTrucker]

I always spare myself all the nonsense. I simply ask the sales guy what price to drive it off the lot and take it home. if it isn't reasonable, I leave. Even if i have a trade in, that is a separate negotiation and not part of the negotiation on the price of the new vehicle. If I leave the lot, I leave them my phone number in case they have a change of heart. I could care less what discounts, rebates, and whatever offers are out there. Means nothing to me. I know that MSRP numbers are grossly overinflated, the dealer does too. I have no problem with them making a reasonable profit. They are a business. But I have my limits as to how much profit they are going to make. The starting point for me to even consider a offer is 15% off of the MSRP. My last two vehicle purchases, I averaged 18.75% off the MSRP in the window.

One thing to also keep in mind, and I tell any dealer this..... there is maxim in the legal community that a fair deal is when both parties feel equally screwed over.

 

[02SE]

Dave Smith in recent years has different owners from what I understand, and are not as good at dealing as they used to be.

After getting a distinct lack of interest in wanting to sell me a truck from a local dealers, I sent emails out to dealers around the country. The best offer was from Dennis Dillon in Idaho. I flew in, they picked me up at the airport, drove me back to the dealership, there were no surprises, and I took the long drive home in my new truck. They beat the second closest offer by a substantial amount.

 

[LoneRanger]

Looks like a local Ford dealer is offering $10,000 off MSRP on F150 XL 4x4 SXT ext cab (not crew) w/ the ecoboost 2.7 V6 and 10-speed transmission. They've got a couple MSRP'd @ $42K, advertised @ $31.9K.

SXT is an appearance pkg that up-scales the look of the otherwise basic looking XL entry level model. 20" alloys, sport grill, etc.

I may go have a look, I think.

 

[sloinker]

Originally Posted by 02SE
Dave Smith in recent years has different owners from what I understand, and are not as good at dealing as they used to be.

After getting a distinct lack of interest in wanting to sell me a truck from a local dealers, I sent emails out to dealers around the country. The best offer was from Dennis Dillon in Idaho. I flew in, they picked me up at the airport, drove me back to the dealership, there were no surprises, and I took the long drive home in my new truck. They beat the second closest offer by a substantial amount.


I've bought a couple vehicles from Dennis Dillon. The only nonsense was a $300 charge for some "etching" that was supposedly already on the van and couldn't not be charged for. I was happy as the next best price was $4k higher out the door. They also gave me top dollar on my trade the first time I bought a van from them. They gave me low retail out of the KBB. I was actually going to sell it privately for less on craigslist. No hard sell either! Highly recommended! I know many happy Dave Smith customers too.