couple points as at one time I was on the dark side selling cars and trucks for several major dealers at a low point in my life and they wanted to make me management so they taught me the tricks of the trade.
1. Dealers pay actual invoice for the vehicle each and every time. But that is not how much it might actually cost them in the end so knowing dealer incovice pricing does not mean it helps you.
2. Mftrs track 60 and 120 day inventory in the field of every model monthly and adjust monthly what is called "holdback". They send every dealer a holdback sheet monthly with the new figures. Think of it as a rebate to the dealer when he sells that vehicle and sends the paperwork to the mftr. That is how you see dealers selling below invoice and still making money.
3. Holdback is always highest at end of model year, especially before a major body/motor change. They want to push out the old model before the new one is on the lot.
4. Very few ways to find what actual holdback is, but have seen it as has as $7000 at end of model year on ford pickups. Typical is $800-1800 for lower end and up to $2500-4000 for higher end vehicles but that will flucuate monthly depending on what the mftrs want the dealers to push. End of model years, those numbers can vary greatly
5. All dealerships run on numbers regardless of what they tell you. They set a quota monthly to hit. Every morning sales meeting starts with the weekly and monthly numbers count. First half the month, the sales manager works on max profit per vehicle. Last half he is looking at hitting his number. He is paid % commission on hitting numbers, so he can let a vehicle go for no profit, hit his number or a higher quota number and increase his overall sales commission big time by selling those last few vehicles. Salesman might znot be on commission, but guarantee that manager is on commission, and more numbers the higher his % overall. Best days are last three days of the month to buy
, that manager is working hard to hit is number and not worrying about profit.
6. The secret is to know their game is "what is your payment", how can they get you into a car at that payment, even if it means they move you down to a cheaper car. They want to know if a trade is involved upfront as that allows them to sandbag $2-4K profit. Do not play that game, Walk in state you are not a payment buyer, you have pre-approved % interest and not interested in a trade. You have thrown them off their plan and into your plan. You must stick to it and not fall for them to push you back into the payment game as they most certainly will try.
7. NEVER talk trade until a price is agreed upon THEN throw a trade in if you plan on trading. He is only going to give you "Blackbook" value no matter what anyway. That is relatively easy to find thru bank or CU or just stop at a lot and ask. Always better to sell yours outright anyway. Blackbook is the weekly book of what that car/truck sells for at the local auctions. Think about it, why is a dealer going to give you more "real money" for a vehicle than he can buy it for. If he knows you have a trade upfront he suckers deals the value of the trade often ending up making an extra $1-2K over no trade. they love you telling them up front you have a trade. Now later they act mad that you threw it in at the last moment AFTER you got an agreed price and they lost that extra money. They will will try to lowball the value by not giving you all the credit for the adds in the book. KNOW what your trade is worth before and then tell them that.
8. Go in with firm % financing approved or known. They get you to agree on "Payment" that has added warranty, and other goodies rolled in and finish the sale in the Finance and Insurance (F&I) office, where the real money is made. Know your FICA rating, tell the saleman/manager you have what level credit and NOT to add anything to the payment except principle and interest and tax even IF you are making payments. Their job is to put you into the highest interst loan, loaded with all the extras at your agreed payment or even a few dollars more. Focus on final price, not payments until then.
9. Even then, the first time he little sheet the salesman brings back to you will only show payment and not what all is rolled into that price. They are trying to put you into their plan on payments. Do not fall for it. He will act ignorant of the interets also. The sales manager will always try to use the HIGHEST interest he can to a payment buyer. If it does, take a quick look, tell the salesman that is not what you wanted, do not discuss, tell him to take back and have final price put on it and ask what % they are using. DO NOT discuss payment until final price is agreed upon. you should have idea what your payment will be if you have done your homework.
10. The F&I office farms your credit app to 30-40 places, selects the HIGHEST not LOWEST
interest that gets you to the "agreed payment" and makes more money selling a higher interest loan than lower ones. With approved rate ahead of time you can get them to give you a lower rate IF you want to finance with them. IF you are a payment buyer, and just a few dollars off, tell the F%I manager to pull out a "% off coupon" out of his desk to help you hit your payment. They get coupons for 1/4-1/2% off a loan from lenders as incentives in cases like this. They rathole them for circumstances to make the deal go thru and will never admit they have them unless forced to.
11. If a buying service is offered by your credit union, bank, USAA etc, get a price from them. I have told a manager he has to beat that price for me to NOT use the buying service. The dealer pays the buying service a fee, (usally minimum $500) so he just cuts it and gives it to you in a lower price.
You need to do your homework before you look. Call sales manager tell him what you are looking for, no time to BS, you want his best price. Tell him you are not a payment buyer even if your are. That takes them out of the payment game, which is what they want. You can easily figure your payment with online calculators or your bank can tell you that it will be X$ per 100 financed.
All large and major dealerships work this way. the local lot dealer might vary a lot at times.
Yes, some here will disagree with what I said and the sales manager loved to see them walking thru the door as they always had a big lollip stick hangin out of their rear end.