Truck4fun

Getting close to pulling the trigger on either a new 2013 Lariat or Platinum. Have found a dealer willing to go invoice plus dealer prep (about $500). Nice folks and they have pulled the invoices for me on a couple of trucks. The invoices show an advertising surcharge from Ford (about $700) and a gas charge, I guess for the fuel in the tank from the factory. I know they have to make a profit but I’m going to push a little harder to at least make the dealer prep go away. Just want to have my facts straight so my questions are:
1. What is their holdback – 3%?
2. What kind of kickback do they get if I finance through Ford?
Any other pearls of wisdom with the buying process will be appreciated. Thanks for any responses!

Sitedrifter

Right now you are $500 under invoice then you add in all the rebates and you are doing great. If the truck has been on the lot a long time the hold back means nothing. If it has been on the lot for < 45 days you can sure negotiate that number.

PHX 150

I just bought my truck through the Costco program.
The dealer had to show the invoice, and it was a set deal at $450 under invoice.
Sales guy shows me the invoice, which also had his hold back amount, which was $1536. So, they made a little over $1000 on the truck.
The "set price" aspect of the Costco program made the purchase a pleasant one by eliminating negotiations.

JimTX

At Invoice minus all incentives, you're doing great if you just eliminate the destination & prep charge.

Going after holdback might sound like a sharp deal to you, but it's how dealers find themselves out of business, too. If you want to see every incentive the truck has, including non-published "factory to dealer" incentives, ask to see the "VINCENT'S" report, which is a VIN specific document to every unit in stock.

For what it's worth, I think that Invoice, less incentive and any "Dealer Cash" (as found on the VINCENT'S), is a fair enough deal. You've got a salesperson busting *** to make a living there, and you've already got him down to a "mini" commission. You want that dealer and salesman to still be there when you need service, or your next deal? Don't demand that they become a Non Profit Organization!

I'm not in the business anymore, but I did sell 'em for a solid decade. (yes, Full Ford Sales Certification as late as 2008) And while I'd be happy to make a deal such as you seek, I also found that I often had to work twice as hard to make gents like you half as happy, as I did a regular retail customer who was looking for a good and fair deal, but who wasn't expecting to break the dealer down to a bare handful of dollars above "breaking even" on a deal.

The factory puts the destination charges on the sticker, because the dealer really DOES have to pay technicians to make the vehicle ready for the lot. There is a long checklist of inspections, tests and final fitments of things like hubcaps and such that are shipped in the cab of the truck, so as not to be lost while on rail cars and auto transport trucks.

Not to mention all the cost of the weekly washdowns and occasional battery charges that trucks on the lot get while waiting to be sold. Oh, and the interest the dealer pays on any "floor plan" for his inventory. Vanishingly few dealers buy their inventory outright, most pay a rotating line of credit to float that inventory out there.

It costs real money to keep that inventory there to be shopped.

So, if you're a loyal Ford customer, treat your dealer the way you want them to treat you. Meet somewhere in the middle, be as fair to them as you want them to be with you.

Or, skin 'em down to nothing, and then don't complain when the dealer's "Fixed Operations", i.e; service department, skins you alive without a moment's hesitation.

So? Don't be a fool and pay MSRP. But don't be JERK and scalp every dollar of profit from the deal, either.

All in all, I enjoyed selling cars n' trucks. But, I hated the hours, and I ended up hating the arrogant jerk know it alls who felt themselves entitled to the living I was trying to make for myself, there.

My time as a Salesman was worth more than the $125 minimum commission that most dealers pay on sub-invoice sales. Still is, which is why I'm not automotive sales anymore.

Oh, yeah. Do please try to shave your M.D. down to his raw costs the next time you see him, too? Let me know how that works out for you.


Jim
Sunk New Dawn
Galveston, TX

sdreefsurf

I too purchased through the Costco auto program putting it at $500 OVER invoice plus all applicable incentives. So, pretty good deal but it's the CA sales tax (8%) that stings.

Franchi Motorsports

iTrader: (9)

Is Costco program cheaper then x plan pricing usually? And just required a Costco membership I assume?

PawPaw

Don't think any dealer is really going to let you know what they really make off these vehicles.

Truck4fun

Thanks for all the replies. Guess I struck a nerve with somebody – not quite sure what I said to deserve that tongue lashing. I didn’t mean to give the impression I wanted to rip anybody off; I guess more than anything I’m trying to figure out just what is a fair profit for the dealer. Is it a thousand dollars or two or three thousand? Guess I wasn’t clear enough - when I said “invoice plus dealer prep” I meant the dealer is planning to keep that $500 so if it makes you feel better I’m down a grand over what you were giving me credit for. Sorry if I gave the wrong impression.

JimTX

@ Truck4fun,

My apologies if you took that as a tongue lashing, or direct personal attack. I didn't mean it so much against you, individually, than as against the whole profile of "customers" who came into the showroom with that "not one damn red cent" attitude.

And, while of course the dealer would LOVE for you to pay MSRP, no one expects you to. Hell, they want you to get a fair deal, one you can brag about and bring 'em more business!

Here's a good view of "FAIR" deal.

Screw MSRP. Negotiate upward from INVOICE, minus all RETAIL incentives, and POSSIBLY into any "funny money" (properly known as "dealer cash" in the VINCENT'S report. Holdback, if you're negotiating with some sense of honor, should not be on the table, all else being equal.

Here's why. The salesman, with damned few exceptions, is NOT paid commission on the holdback profit margin. Fact is, most dealers have a "hard pack", which is a set $ amount of profit above invoice, which must be reached before the sales commission becomes "percentage based", instead of a fixed amount (often $125) known as a "mini".

Believe it or not, $100 above invoice will move most deals, and $500 above will make your salesman a friend for life. Think that doesn't matter? I've gone back to service and raised hell for my GOOD customers (doesn't need to be highest profit, just good value, low hassle, cooperative, mutually beneficial ones!)

Down the road, when you need a good hook up for a trade-in, a dealer-locate and transfer to find you the EXACT unit you want.......a good salesman in your corner can help you quite a bit.

Dealers RESPECT THE HELL out of customers who do truly play fair, both ways. And they'll show that respect in many ways, not the least of which is (sometimes) giving full value on trade ins, not always holding back $500 or $1000 off of the appraised value. (ask me sometime what a checkmark or star mean beside the written trade appraisal from the Used Car Manager?)

A good approach is to build a long term business relationship, not a one time, "zero sum game, I win, they lose" hatefest.

And, it makes the time in the dealership a hell of a lot more bearable, if not even a bit of fun, now and then.

Okay, that's tonight's lesson on the front of the store. Later, I can tell y'all how not to get reamed in the Finance Office!

I do hope you get a great deal on your new 150 !



Jim
Sunk New Dawn
Galveston, TX

Bieradler

[MENTION=138389]JimTX[/MENTION],

Seeing how I just ordered my F-150 and have negotiations done but haven't yet taken delivery, I will be staying tuned in for the Finance Office lesson.