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How Much Profit Should A Car Dealer Make?

1024 messages,  Last post on Apr 04, 2013 at 3:40 PM

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What is this discussion about? Car Buying

Messages Page 103 of 103

#1015 of 1024 Re: Still Laughing [rickhassold] by bmmeup

Mar 30, 2013 (8:48 pm)

Replying to: rickhassold (Mar 30, 2013 8:09 pm)
Your perspective makes sense as I think back to the purchases that I have made in the past and the times when I passed on a car or truck because we just couldn't come to an agreement. Today I went back and test drove the car that I wanted to offer 40k for rather than the 48k that they were asking. I decided to just get their offer for their car minus my 10 year old BMW that I was offered $7500 by the BMW dealer just last week. I saw no point in insulting them by offering them 8k less than they wanted. They will trade me for 42k difference. Apparently they weren't as concerned about not insulting me.

#1016 of 1024 Re: Still Laughing [bmmeup] by blackbelt76

Mar 31, 2013 (5:46 am)

Replying to: bmmeup (Mar 30, 2013 8:48 pm)
"Apparently they weren't as concerned about not insulting me."
 
Apparently YOU have no problem going from dealer to dealer (testing) the waters and wasting salesman's time. You are known as "The Stroker" in the biz.
I'd love to see how many here make an offer on a home purchase w/o earnest money?
 
You don't think a pro can recognize your non-commitment to do business now?
 
People like you sir really believe you have the only check book in town. Secret: You don't.
 
..and to the ones who claim to know the value of a car at auction, you must have special access to Manheim. You must know exactly what reconditioning costs the dealership incurred. Surely you have done the title search yourself..no, not carfax.
 
Price control? You have no more control over vehicle cost than you do over the daily swings in gasoline cost. Yep; you CAN control what YOU spend on gasoline...just start peddling yourself to work every morning.
 
I know; you would love to think you do control the process. I will allow you your self deception..and I will continue to cash my commission checks.

#1017 of 1024 Re: Still Laughing [blackbelt76] by bmmeup

Mar 31, 2013 (10:01 pm)

Replying to: blackbelt76 (Mar 31, 2013 5:46 am)
My car was at the BMW dealership for service for something other than normal maintenance for the first time since I bought it 10 years ago and while I was there I told the salesman that I was contemplating replacing it. I told the Ford dealer who had the used BMW the same thing. To be honest, I am more interested in not wasting my time than that of the salesman but "testing the waters" is a necessary step in determining whether or not I will be buying a car.

#1018 of 1024 Re: Still Laughing [stillselling] by ken117

Apr 01, 2013 (3:35 am)

Replying to: stillselling (Mar 29, 2013 5:50 am)
An interesting insight into the thought process of sales people. Obviously no sales person has a requirement to sell a vehicle to any customer even those who make a more than fair offer. I do think it fair to consider what the owner would do if he or she new his or her sales people were turning down a sale simply because they don't like something about the customer?
 
I, as a buyer, do control whether I will buy or not buy. That is the essence of control!

#1019 of 1024 Re: Still Laughing [rickhassold] by karhill1

Apr 01, 2013 (4:32 am)

Replying to: rickhassold (Mar 30, 2013 8:09 pm)
I cannot speak for all customers. However, I can say no sales person controls me. Before I buy an auto, I have done my homework and I have reached a price which I believe is fair myself as well as to the dealer. I do not deviate from this price by more than a couple of hundred dollars. If I cannot attain my price, it is obviously not the right time for me to buy.
 
My car buying process starts early. Initially I identify several vehicles I would like to buy. I continually access Edmunds' Prices Paid forums to determine when those vehicles are selling at a discount. When I find a good time to buy I begin to develop a price.
 
I start at invoice for the vehicle I want to buy and work backwards removing any incentive, both to the buyer and to the dealer, as well as the holdback. I then add a few hundred for the dealer's profit. I research the interest rate or money factor for which I qualify. I then compute a monthly payment, which is most useful for the trip to the box, Finance and Insurance.
 
I access True Car to arrive at their target price. This confirms whether my selected vehicle is selling at a solid discount. I recognize the True Car price is overstated, at least by the $300 dealers pay for any sale through True Car.
 
I then contact several dealers via internet. I select one dealer which has provided a fair price quote to purchase. I try to reward the dealer which provided the most informative and responsive response to my inquiry.
 
I visit the selected dealer and begin the negotiation. Since that dealer has already provided a price, the first pencil, I tell them the price I am willing to buy. Knowing they will bump, I have offered a price which is a bit lower than my goal.
 
I have used this process for years and I have always been able to purchase a vehicle at my price or perhaps a couple of hundred higher. Surprisingly, this method usually requires very little time. Usually the longest wait is to get the vehilce ready for delivery.
 
And lastly, the only word I say in the dealer's box is NO! I refuse to allow a good deal to go bad in the Finance and Insurance office.

#1020 of 1024 After reading by dc_driver

Apr 01, 2013 (2:17 pm)

After reading through the last few pages of this thread now I know why I only deal with Internet sales managers when I buy a new car...
 
I do my research, know what incentives the dealer currently has, know the holdback numbers on said manufacturer, and then I email dealers within a 100 mile or so radius then only work with those high volume dealers that responded with the best price and seem the easiest to work with. And I go straight to the internet sales manager at this point.
 
And I don't buy any accessories or add-ons unless I heavily negotiate those, and have at least two finance deals lined up through local credit unions or bankrate.com
 
No paint protection, wheel locks, alarms, etc.. The dealer is most often than not fleecing you on those items too.
 
I also try to wait until end of month and end of quarter when many high volume dealers are trying to hit sales quotas. I just bought a vehicle and negotiated to the invoice price, minus the $1000 dealer marketing incentive, minus $600 of their $847 of holdback. I had 1.9% financing lined up but the dealer beat it with .09% financing. Zero accessories or add-ons (I can get those online for about 1/2 the price of what the dealer quoted for the exact same OEM parts). I also take the vehicle to my local mechanic for all maintenance that is not covered and they follow the owners manual for servicing. About half the cost vs the dealer typically and they don't do some of the ridiculous service that the dealer tries to push on you even though it is not outlined in the manual.

#1021 of 1024 Re: After reading [dc_driver] by ltllady

Apr 02, 2013 (10:57 am)

Replying to: dc_driver (Apr 01, 2013 2:17 pm)
Yes, as a few have posted, the simple key to a good deal is research, more research coupled with a bit of timing.
 
Know what incentives are available. Know your credit rating. Buy the right car at the right time, a car with manufacturer incentives. Buy a car with a solid reliability record eliminating the attraction of an extended service contract.
 
And always, say no to any and all overpriced products presented by the dealer's top sales person, the overly friendly one in the finance office. Regardless of how friendly that person may seem, that person has only one goal, to increase his profit and your cost.

#1022 of 1024 Re: Still Laughing [blackbelt76] by boomchek

Apr 03, 2013 (9:59 am)

Replying to: blackbelt76 (Mar 31, 2013 5:46 am)
I'd love to see how many here make an offer on a home purchase w/o earnest money?
  
You don't think a pro can recognize your non-commitment to do business now?
  
People like you sir really believe you have the only check book in town. Secret: You don't.
 
Lol, very true. 99.9% of the time I could recognize when someone in the showroom is full of it and has absolutely no intention of buying based on what's coming out of their mouth.

#1023 of 1024 Re: Still Laughing [boomchek] by bmmeup

Apr 03, 2013 (3:13 pm)

Replying to: boomchek (Apr 03, 2013 9:59 am)
I think one of the first hints might be when they tell you that they are not committed to buying a car at this time. So many state the obvious and act like it is a revelation. Why would anyone need to line up more than one source of financing before going to the dealer?

#1024 of 1024 Re: Still Laughing [bmmeup] by dc_driver

Apr 04, 2013 (3:40 pm)

Replying to: bmmeup (Apr 03, 2013 3:13 pm)
Knowing your credit score and what financing rate you can get is important as a consumer. I always know my credit score and get info from my local credit union(s), USAA, and Bankrate.com.
 
Dealers can make money on the finance deal. They say you don't qualify for the lower rate and get a kickback or incentive. I have seen this many times (most recently with my wife who has an over 800 credit score). People can leave thousands of dollars on the table by not doing their homework when it comes to financing.

Messages Page 103 of 103

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