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Prices Paid: Buying & Leasing Experiences Toyota Tundra Prices Paid and Buying Experience
754 messages, Last post on Dec 01, 2009 at 9:33 AM
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Assuming that you qualify, Toyota's -0-% financing is more a marketing ploy than reality. What I find in my research is that "there are no free lunches", and that's goes for -0-% or low interest rates on auto financing. The additional fees tacked on at closing can be construed as "disguised prepaid interest" in the form of mandatory fees, cicumventing the "truth and lending" requirements set forth by FTC. "Substance over form" in dealing with "structured finance transactions." Assuming you are correct in your assessment of mandatory fees, it is not properly disclosed to the average "joe".
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Replying to: justbrowse (Apr 08, 2008 2:51 pm) You stated that you bought a few other vehicles at invoice, and since most manufacturers have holdback and a regional ad fee, you paid these and just didn't know it. Most hard copy invoices from the manufacturer don't itemize the fees - they're simply built into the invoice, just like you see here on Edmunds. The fees you saw on the vehicle inquiry report were itemized, but they tally up to the total invoice price the dealer was billed. Toyota can charge whatever they want for their products, and they did just that, and it's not a crime for a franchised dealer to pass on their costs to you - the consumer. This is where properly preparing yourself to make a purchase comes into play. As for financing, when Toyota offers 0% or whatever special rate, in most cases, if a consumer is Tier 1 and above ( 700 FICO or higher) and they opt for that financing, they get it - nothing shady about it. What research have you done that proves otherwise? A dealer can't mark-up special financing, in fact, they may have to pay into it to help subsidize the low rate since it's usually well below current rates. In most cases, when a rebate is available in lieu of the special financing, and a customer opts for the financing, the money that would be used towards the rebate is typically shifted to subsidize the low rate. The only thing that might make a customer balk is a possible pre-payment penalty. TFS has no pre-payment penalty after 3 months, but what's shady about that? That's up to the lender, not the dealer. In regards to the products/services a finance manager tries to sell you, it's not that hard to just say "no thank you" and move on. You can't take it personally if they mope (and who really cares anyway), and if they make you feel guilty, in essence, they've done their job.
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Replying to: ocautoseeker (Apr 08, 2008 10:33 pm) In the world of accounting for auto dealerships, costs paid and incurred by the retailer for such costs as marketing (advertising), bank financing (interest expense), salaries, rent, utilities are considered selling and overhead costs. In the real world, these costs paid or incurred by the retailer are not passed on to the consumer. The retailer, Walmart, does not charge the consumer for an additional mark up or "mandatory fees" in addition to the sale price of an item listed in sales ad, except for local sales tax (a true mandatory fee) or Oregon doesn't charge sales tax. The MSRP is a suggested retail price. It is not mandated by the manufactured; it is only suggested. The so called "dealer's invoice" is just a reference to a standard cost of a finished item; it is definitely not used in financial or tax accounting that is reported to the SEC or IRS or EU. In purchasing a car, the consumer negoitates A "price" that his willing to pay. He doesn't want to be nickled and dime; average "Joe" just wants "one -final -negotiated -price. " In the world of negoitations, one will often hear, "tax, license, complete" for 1-price. NOT,"or by the way I have to add marketing, interest, delivery to your final negotiated price. According to all the auto brochures, "dealerships MAY include an advertising fee on top of the MSRP." Who pays MSRP? the dealer MAY ,not must, not will ... Getting back to your comments. When a consumer pays in addition to his final negoiated price; he expects Tax, License and DMV fees. Not what the dealership demands that he pays (mandatory fees) in addition to. In the regulated world of the Federal Trade Commission for consumers, the fair market value of a product is determine between a willing buyer and a willing seller, NOT in addition to! That was my point. In my previous comments, I should have preface that I was coming from the world of accounting for tax and SEC. Your points are well addressed in your comments. I am coming from a consumer and tax accountant. Have a great day!
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Replying to: justbrowse (Apr 09, 2008 8:03 pm) Once again... Invoice is not cost, and I never said it was. For example, let's say you agree on a price $500 over dealer invoice for a Tundra, hopefully by now you realize that you didn't pay $500 profit. If you get a deal at $500 over (invoice less holdback and wfr), you still didn't pay a $500 profit. A dealer's profit margin involves a lot more than just what is paid for the vehicle and quite frankly, it's really not the customer's business. The sales staff isn't even aware of what the true dead cost is, nor should they. The customer should not be in the business of concerning him/herself with the financials of the dealership. Look, if the dealer started writing in a bunch of extraneous fees on your purchase order, then you'd have every right to question them, but on a true invoice from a manufacturer, those fees were paid, whether the customer wants to believe it or not. They are not "nickel & dime" fees. Holdback was paid upfront by the dealer (as part of the invoice), and yes, this money is refunded back to them, typically quarterly, as is the wfr, but they typically go right back into overhead expenses. The TDA was paid to the regional distributor and is never refunded (at least for Toyota). There is no doubt that the automotive industry has created a life-long negative stigma. It sucks, but it's the nature of the business. As a consumer myself, I may have a leg up as I worked in the business and currently still consult. However, as an independent consultant, I have zero allegiance to any dealer or the slimy tricks they may pull. This is why I post on this board - to help people, not to flash around my knowledge. Like I said, a consumer can offer anything he wants, but you let your emotions get the best of you because you simply had no clue that those fees were part of the invoice. And in regards to the advertisnig fee, if you think that products you buy at a retail store don't have that cost built in to their product, you're nuts. Besides, buying a truck is not the same as buying a TV from Walmart - nobody at Walmart has the authority to field a price offer from a customer. If a TV is on sale for $799, you don't walk in and say you'll give them $500 for it. You'd get laughed out of the store. Needless to say, shopping for a car is not to be compared with shopping for "other" retail items. It's a completely different way of buying. You are correct about the invoice being an arbitrary number though. It simply allows you to compare dealer A to dealer B. If you know what people are paying for this vehicle and you got a dealer to give it too you, I still don't see what all the fuss is about. If you don't want to pay the the holdback, financial reserve, and the ad fee - fine, offer them $2k below invoice. If they say yes, you've got an exceptional deal, if they say no - well, then you'll know that they're not as desperate as everything thinks. Despite what people are saying about high fuel prices, demand still varies in the truck market. For example, a Crew Maxx 5.7L is not nearly as distressed as a 4.7L Double Cab. Therefore, $1000 below invoice on the DC could probably be had all day long, whereas with a CM, they may not take anything less than invoice. BTW... I notice you live in Salinas, I have a fantastic Fleet contact at one of the Toyota dealerships in the bay area. If you give me the specs and color of what type of truck you're looking for, I'd be happy to set you up, or get you a quote at the very least. And no, I do not work for him or recieve a referral fee. He's just an honest, professional straight shooter who will tell you what he can and can't do. Depsite what you might think, I want you to get a truck, and I want you to get a great deal. But understand, no matter what Toyota dealership you go to, when you ask to see the invoice (on their computer), they will all have the same items the first dealer showed you. Why? Because they are costs billed from the manufacturer - simple as that. You just happened to see them in itemized form. Had they of shown you a hard copy, the price would have been exactly the same and you would have had no idea that they were included.
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Replying to: ocautoseeker (Apr 09, 2008 11:21 pm) The average consumer does not have direct access to the Dealership's books and records. The financial or cost accountants, internal and outside auditors have this knowledge. After all , we're paid to follow the cash. From my perspective as a consumer and accountant, I refuse to participate in the "marketing or sales tactics" used in the "closing game of the sale." The auto retail industry and the timeshare industry use the same selling and marketing tactics to "close the sale." They're job is to SELL; they have to eat. I, as a consumer, chose to participate or walk to another dealer. In my case, I am going to purchase the truck from Toyota USA. Knowledge is key to the consumer, especially when you examine numbers for a living and report these numbers to the SEC, IRS, State Franchise Tax Board, and the shareholder or dealership owners. My main point in all our discussions is the "marketing and sales game" used at the time of closing A "sale". The auto retail industry deserves the stigma as being "unethical" in using these marketing/closing tactics: -0-% or low interest financing, free this or free that-TO get you into the door. Timeshare selling 101. Your observations as a consultant to the industry are well taken. I am just coming from debits and credits and legal.
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Replying to: justbrowse (Apr 10, 2008 4:51 am) From a consumer, I expected to receive a competitve and fair price. For the average consumer, the Edmunds or KBB "dealer's invoice" is my reference for a fair and determinable (fair market price), not MSRP or what a dealership or retailer what's to sell. MSRP has not been mentioned, so that's never been the issue - but I have to assume that you researched invoice pricing on Edmund's, so how far off was their quoted price from what you saw online? Again, my guess is that it was off the few hundred bucks for the TDA? Edmund's also has a section that discuss' regional advertising fees. Dealership bread and butter profits comes from service, not from sales. The gross margins does not support the business. Agreed, the fixed and variable costs are built into the product or car or computer or any manufactured item. The dealership is a retailer; he doesn't manufacture any wigets; his job is to move the inventory at A "price". The retailer will incurred and pay selling costs, ie floor interest, advertising, salaries. The dealership does not "directly" pass these selling costs to the consumer; he adds a mark up to the (paid price of the manufactured item) to arrive at his "selling price." He may or will at times sell the car or truck above, at, or below his actual cost to "move the inventory." All retailers repond to the marketplace: demand vs supply. Fair enough, but this is simply repeating what we both already know. My initial point as a consumer is that at the "time of closing or signing", I don't want to be "nickled and dimed" by A "salesman" for so called "mandatory fees". The only mandatory fees are state and local taxes, NOT, some "marketing ploy" or "sales practice" to get the consumer to pay added costs (in this case-profit). Granted, there are additional fees or costs that the manufactured invoices to the retailer or the dealer incurs additional "bank flooring costs" or "inventory costs." Okay, fair enough, but as you stated, and I can only assume that you utilized this site for pricing comparison - so if you are to base a "competitive" price against what you saw here, and were not aware of the fees, you still thought you were getting a deal, so where's the problem? It's pointless to keep repeating what's already been covered. And once again, Edmund's and virtually all other third party pricing sites include the holdback and wfr (for Toyota) in their INVOICE pricing. So I guess technically they should be reported for "hiding" these fees too, right? C'mon! You knew what Edmund's invoice price was, so the question you still didn't answer was... how could you have been shocked when the invoice they showed you was almost identical to what your researched proved? This is the question I've been trying to get out of you, but 3 posts later and have nothing more than fancy verbage? Okay, I get that the fees were itemized, but they were/are already included in the Edmund's pricing that you researched online and claimed that you use to determine a "fair market value"? Now, if the dealer's invoice was "packed" a few grand over and above what you saw online, then by all means I'd have some questions! The average consumer does not have direct access to the Dealership's books and records. The financial or cost accountants, internal and outside auditors have this knowledge. Nor should they or to any business for that matter. In my case, I am going to purchase the truck from Toyota USA. How are you purchasing directly from Toyota w/o going through a franchised dealer? Only guess is that you're getting employee pricing from your family member? Does she work for a regional distributor? My guess is that you'll pay factory invoice minus the holdback and wfr (typical employee pricing). That would be an excellent deal. Knowledge is key to the consumer. Now this we can agree on!
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Replying to: ocautoseeker (Apr 10, 2008 11:50 pm) I applaud Edmunds and KBB in helping the consumer in his "due dilligence." One day, your auto retail industry will have to change to the "Ebay"/ "Amazon" way of marketing cars...click, click and pick up your car at a designated pick up point...get rid of the high pressured sales and marketing tactics. If Costco can sell high end manufactured products and be very successful at it; they can surely sell cars...one day... With the economy slowing down and consumer sentiment at a 1982 low, and dealerships flushed with unsold inventory, more power to the Consumer!
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Replying to: eric102 (Sep 13, 2007 5:22 pm) |
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Replying to: justbrowse (Apr 11, 2008 8:03 am) I still want to know how you're buying your truck directly through Toyota?
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