Car MSRP - can all dealers go below it if you ask?

[StageLeft]

I was getting quotes on some cars and the dealer was giving me MSRP prices...what sort of leeway does a dealer have? Ie, if I'm paying $17,500 for a car how much can he take off if I ask nicely (but firmly)? Or alternatively what else can they give like extra options? Do most dealers really have much leeway on new cars?

 

[BDawg]

I don't know about Canada, but here you can order car buying guides from Consumer Reports and other places.

They tell you what the MSRP and dealer cost on each item is. It's much easier to negotiate a price with these.

 

[atom]

Ask for their invoice price. How much they can take off MSRP depends on how cheap they are getting the cars.

 

[fdiskboy]

Normally, if you pay MSRP, you're getting screwed. Check out edmunds.com or Kelley's Blue Book. They'll give you guidelines on what you should pay based on what the dealer actually paid for the car.

Of course, if you are deadset on buying one of the VW Beetle's, you can expect to pay OVER MSRP. Also true of some other very high demand, low supply cars. As a general rule, ask to pay about 3-5% over dealer cost. That's more than fair.

 

[BigSmooth]

Go to edmunds.com and look at the invoice prices of the car. This is what the dealer is paying for the car, so anything over that is profit for them.

BTW, for a good guide on car buying/negotiating, snoop around Edmund's or check out The Motley Fool's guide to buying a car. The Fool site is great, it explains a lot of tricks dealers use and how you can save money by getting more information on what the dealer is making off the sale.

 

[StageLeft]

Thanks guys I'll remember that...so if a car is costing $15,800 MSRP (a DX civic in Canada), what should I reasonably get the car for? I know you don't have the invoices in front of you but would asking $15k be silly?

 

[Hamburgerpimp]

Always ask for invoice (Plus maybe a couple hundred bucks) on cars that move fast, like Hondas, etc. They get bonuses at the end of the month just for certain numbers of cars sold. If the salesman refuses, ask someone else at the dealership. Someone their is always looking to make their quota!! It will work everytime. It works for cars that move fast because there is so much competition. It's harder on the more expensive cars because some dealerships may be the only one in the city that sells that particular line, so they have little or no competition and sell them for MSRP. Sometimes more if it is a high demand car like a $150,000 Porshe Turbo, that is on 6 month back order!!

 

[LemonHead]

NEVER EVER PAY MSRP!!! Sales scum make a killing on people who do not do any research when car shopping. I found this siteto be really excellent in "leveling the playing field" when I was car shopping. Check it out and don't let them screw you!

 

[bigbootydaddy]

no matter what people say, sometimes you dont have a choice. I wanted a Electron Blue Pearl Civic SI, and had a hard time to get him to stay at sticker cause they come straight from the plant...and in demand. then again if you get your hands on a Si this late with no miles on it, you can turn around and sell for 21k instead of msrp of 18k.

 

[LemonHead]

True bigbootydaddy....but I say that no car is worth paying MSRP just because it is soooo hot that everyone wants it. I just can't see paying so much more for something that will be so much cheaper in 6 months to a year from that point. Remember the Mazda Miata? That #&%@ car sold for so much over msrp when it first came out and then dropped like a lead turd after about half a year or so.

But, if you gotta have it then go get it, just bring the KY! :Q

 

[Passions]

Its great how honda enigineers found out the color of electrons!

 

[StageLeft]

Well I asked him how long it takes to order cars in and he specifically said that with the 2001 civics they either have it in stock or somebody else from another dealership locally can hook me up...so they are definitely interested in selling as many as possible.

You know what else? In canada we still have the civic SI its only got 127 horsepower instead of the standard 115 horsepower...so its not a "real" SI like the last gen.

 

[BigSmooth]

LemonHead is right, MSRP should only be paid if a car is in some SERIOUS demand and you just have to have it. When cars like the New Beetle and the PT Cruiser first came out and were in short supply, people were paying WAY too much for them, way more than MSRP. Was it worth it? Only if you're really into sacrificing a lot of money to be the first kid with the new toy.

 

[zOmbiebOy]

Check out Fighting Chance for some great information and some eye-opening tips. I sent for their info, spent 30 minutes faxing out bid requests to dealerships, heard from 9 dealers within 24 hours and went with the quote that was the least amount over invoice.

I got the exact car I wanted and never even stepped foot on a dealer's lot or wasted any time haggling with salesmen.

-z

 

[xochi]

The only car, or van in this matter i ever paid MSRP for was the 2001 Honda Odessy. (My wife wanted one) Its in demand, usually a waiting list, and dealers seldom go under MSRP.

My rule of thumb for a fair transaction for the dealer and the seller is Invoice + 2.5%. its fair, some say too fair for the dealer.

 

[dcdomain]

Got a question, when you ask for 3-5% over the invoice, is that for cars already on the lot? Because I can understand that, they would want to get rid of the car on the lot, but if you are ordering straight from the plant... what kind of negotiating can you do?

I'm a car later this year, and the TL is always pretty hot... well not that hot, but they move a lot, and I was wondering how much over the inovice would be good...

zOmbiebOy, I'd like to do what you did.. guess through email instead...

 

[vi edit]

If you are buying straight from the plant, then you have a little more leeway. Many dealers get what is called holdback. It's money that a dealer gets from a manufacturer automatically. The longer the dealer has the car on the lot, the less money they make off of the hold back because the dealer is paying interest on that car.

Most holdbacks are around 2%-5% of the vehicles invoice. It works out to be anywhere from $300-$1000. If a dealer orders a car straight from the manufacturer, that's straight profit ON TOP of what they make over invoice. The dealer doesn't have to pay any money in interest for keeping that car on the lot.

But, if a car has been on the lot for say 6 months or longer, that car is starting to cost them money. They have to pay on interest for having that car. The longer they sit on it, the more it eats away at their profit.

What this means to you is this - if you order straight from the plant, you can make an offer right at the invoice price. Assuming that this particular car manufacturer does holdbacks(some do not), the dealer is guaranteed money reguardless of how close to invoice that you are paying.

You need to watch out. Dealers will try to tell you that holdbacks are deficeits to them. They are not. They are only a "loss" if the car has been sitting on a lot for a while. They'll try and stick you with that costs....if they do walk out. It's not your problem that car hasn't sold. You shouldn't have to pay for their lack of business.

Head over to Edmunds.com. They explain it pretty well. Edmunds also shows you what particular models/vehicles are going for, and what is a reasonable offer to make on a car.

The biggest thing to look into though is financing.

Skoorb, will you be financing, or will you be outright purchasing? You really should make your purchase based upon what financing you can get. $200 difference on the price of the car between two different dealers is trivial if you have a .5%-1.5% difference in interest rates between two different places. That 1.5% could be upwards of $1000 dollars of difference over the course of the loan. Definitely do the math on the loan before agreeing.

 

[kumanchu]

you usually can, unless the car you want is in really really high demand, like the chrysler pt cruiser was a few months ago or something.

 

[xochi]

negotiating for 2-3% about invoice is always easiest if the car is on the lot. If you have to special order it from the factory with options or colors it complicates the deal. I have never done this but thats just my feeling.

 

[StageLeft]

It looks like I'll be financing for a buy. I could lease or do a "Royal buy back" (Non-canadians its just like a lease but a tad different) but I may be putting a lot of clicks on this car and a purchase seems the best deal. I will definitely be doing the math before hand. I'm going through carbuyingtips.com (nice link!) first and its giving me good tips but I hope I'm smart enough to see any scams and pull down the MSRP. I have two honda dealerships in this area and have no intention of buying a car until I've visited both

 

[gunf1ghter]

Skoorb

As others have said you really need to do some research into invoice prices on the car that you are looking for. Here are some additional things to keep in mind if they didn't get brought up already.

1) It's a supply and demand market, so even if someone in one part of the country finds that they can get a car for at or below invoice price, it doesn't necessarily mean that you can find the same deal...

2) Sometimes to get a good deal you might have to take the car in a configuration that is not ideal, in other words, a color you don't like or maybe an option you don't want (or lack of one you do want) etc.

3) Some cars have a "dealer holdback" or other incentive for the dealer to sell X number of cars in a given month... end of the month (or year) is often a good time to look at buying a car as the dealer might sell the car at a loss, or close to a loss to make their "bump" and get a good deal from the manufacturer.

4) If you can stand the stress, you can shop dealers against each other.... I have literally seen people take the final offer from one dealer and call another dealer up on their cell phone and say "these guys will sell me this car for x dollars, can you beat it".

Anyway, best of luck!

 

[dcdomain]

Thanks vi_edit, so ordering from the plant will be better than buying off the lot in negotiating terms...

 

[vi edit]

dcdomain. Yes, assuming that the dealer receives holdbacks. Not all car manufacturers provide their dealers with a holdback incentive.

Also, don't mention the holdback unless the salesman squirms at your offer. If he whines that he isn't making any money, only then mention the holdback providing that they receive one.

You have to check into edmunds to see if that manf. offers holdback to the dealers.

 

[vi edit]

Skoorb, have you checked to see if Honda offers a graduate bonus?

GMC gave me a decent deal. I got $400 taken off of my negotiated price, 3 months before I owed my first payment, and easier credit approval.

I'd check to see if Honda offers a college/university grad program. Most places give you up to two years after graduation to claim it.

If honda does offer you some $$, ONLY mention it to the dealer after you have negotiated a price.

 

[dcdomain]

Sweet, Acura offers a 2% holdback... now to find out about the graduate bonus. I'm afraid for something like the TL Type-S which is limited, I won't be able to negotiate much if there's a waitlist/lot of interest...