Dealer holdback
03-25-2013, 10:51 AM
#11
Senior Member
I've always bought at X-Plan. Its a price I know I can buy a truck for without the uncomfortable haggling, and back and forth "to the manager at the tower".
My particular dealer has ALWAYS printed me out the VIN # from the Vincent System showing me ALL the rebates and cash incentives (more than I even knew about).
This dealer does NOT charge a "dealer/doc fee", which is just a bunch of $$%$*$&$# added on to the final deal. I always felt like I got a fair deal.
Mabye I could have done better, but the "entire buying experience" has alot to do with the impression of the dealer.
I've never been insulted with a low ball value of a trade when I had one either.
Many other users march into the forums bragging they got some deal that's actually hard to believe (ex, $2-3,000 below invoice, etc etc), but they've never backed it up with real proof (lets see the deal scanned on paper).....
Holdback is a term mostly unknown to most of the buying public. If they seen it on an invoice, they would not know what meant. Holdback doesn't stay with a vehicle forever, and asking a dealer to dip into their holdback is almost like an insult.
My two cents here, your views might differ.
My particular dealer has ALWAYS printed me out the VIN # from the Vincent System showing me ALL the rebates and cash incentives (more than I even knew about).
This dealer does NOT charge a "dealer/doc fee", which is just a bunch of $$%$*$&$# added on to the final deal. I always felt like I got a fair deal.
Mabye I could have done better, but the "entire buying experience" has alot to do with the impression of the dealer.
I've never been insulted with a low ball value of a trade when I had one either.
Many other users march into the forums bragging they got some deal that's actually hard to believe (ex, $2-3,000 below invoice, etc etc), but they've never backed it up with real proof (lets see the deal scanned on paper).....
Holdback is a term mostly unknown to most of the buying public. If they seen it on an invoice, they would not know what meant. Holdback doesn't stay with a vehicle forever, and asking a dealer to dip into their holdback is almost like an insult.
My two cents here, your views might differ.
03-25-2013, 10:54 AM
#12
Senior Member
I could write my own chapter here...... "NO EXTRAS!"
[QUOTE=JimTX;2550947 Later, I can tell y'all how not to get reamed in the Finance Office!
[/QUOTE]
[QUOTE=JimTX;2550947 Later, I can tell y'all how not to get reamed in the Finance Office!
[/QUOTE]
03-25-2013, 12:22 PM
#13
Five-0 Ret.
@ 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
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
03-25-2013, 02:09 PM
#14
Senior Member
Actually, the OP would be paying $500 over invoice minus rebates, if he took that offer.
03-25-2013, 10:29 PM
#15
Junior Member
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Thanks everyone for the replies which have given me a good perspective on how this process works. I’m driving a 1998 F150 so it’s been a long time since I’ve set foot on a dealer’s lot. A big thanks to JimTx for your second post – really enlightening, and to gregsf150stx – also good information. So dealer holdback is off the table; guess I have to decide how stubborn I’m going to be on the dealer prep. If anyone is still following this, does it make any difference if the dealer has to trade with another dealer? I think they told me if they do that there is an additional charge (in addition to dealer prep) to cover the cost of sending their guys after the vehicle.
03-25-2013, 10:39 PM
#16
Senior Member
The dealer you're buying the truck FROM loses he holdback if you have it transferred from another dealer. Alot of dealers in this area won't do it.
And if you're trading, you better believe that amount they lose in holdback will be deducted off they amount they allow you on your trade. If you're not trading, expect your deal to have some added fee to cover the transfer.
In the dealers around here, yeah, they have to pay the guys who go retrieve the truck from another dealer. Here, they're retired guys they can rely on, so the truck is took very good care of in transit.
It would have been $600 difference in my trade if the dealer had to get my F150 from another dealer 150 miles away. I settled for the white on on the lot, and got 16,100 for my ranger.
And if you're trading, you better believe that amount they lose in holdback will be deducted off they amount they allow you on your trade. If you're not trading, expect your deal to have some added fee to cover the transfer.
In the dealers around here, yeah, they have to pay the guys who go retrieve the truck from another dealer. Here, they're retired guys they can rely on, so the truck is took very good care of in transit.
It would have been $600 difference in my trade if the dealer had to get my F150 from another dealer 150 miles away. I settled for the white on on the lot, and got 16,100 for my ranger.
Thanks everyone for the replies which have given me a good perspective on how this process works. I’m driving a 1998 F150 so it’s been a long time since I’ve set foot on a dealer’s lot. A big thanks to JimTx for your second post – really enlightening, and to gregsf150stx – also good information. So dealer holdback is off the table; guess I have to decide how stubborn I’m going to be on the dealer prep. If anyone is still following this, does it make any difference if the dealer has to trade with another dealer? I think they told me if they do that there is an additional charge (in addition to dealer prep) to cover the cost of sending their guys after the vehicle.
03-25-2013, 10:41 PM
#17
Senior Member
The dealer you're buying the truck FROM loses he holdback if you have it transferred from another dealer. Alot of dealers in this area won't do it.
And if you're trading, you better believe that amount they lose in holdback will be deducted off they amount they allow you on your trade.
In the dealers around here, yeah, they have to pay the guys who go retrieve the truck from another dealer. Here, they're retired guys they can rely on, so the truck is took very good care of in transit.
It would have been $600 difference in my trade if the dealer had to get my F150 from another dealer 150 miles away. I settled for the white on on the lot, and got 16,100 for my ranger.
And if you're trading, you better believe that amount they lose in holdback will be deducted off they amount they allow you on your trade.
In the dealers around here, yeah, they have to pay the guys who go retrieve the truck from another dealer. Here, they're retired guys they can rely on, so the truck is took very good care of in transit.
It would have been $600 difference in my trade if the dealer had to get my F150 from another dealer 150 miles away. I settled for the white on on the lot, and got 16,100 for my ranger.
03-25-2013, 11:01 PM
#18
Eric, a slight tweak to what you said.
The holdback always stays with the dealer who originally stocked the unit into inventory.
So, if it's a trade for an F-150, and our dealer is sending out an Expedition in trade, the holdbacks are comparable, and can be in play.
But, let's say the dealer who has the F-150 we want, asks our Inventory Manager to send over a certain Focus he sees in our inventory, as he has a customer wanting just that unit.
Our dealer's holdback on the focus will only be $200 or so, and that's the holdback our dealer will be retaining as our Focus heads over the hill to retrieve the F-150 we're getting.
Conversely, the dealer coughing up the F-150 for us will now have a +/- $1,000 holdback to attach to his Focus deal. Being holdback, the salesman won't (usually) get paid any commission on it. But the dealer will make one HELL of a gross profit on that Focus!
Dealer trades are a delicate dance. A talented Sales Manager or Inventory Manager can add tens of thousands of dollars profit per year to the dealer's bottom line, just by making skilled trades from inventory.
Or, he can lose tens of thousands of dollars, too. Explains some of the turnover at the management level, yes?
Jim
Sunk New Dawn
Galveston, TX
The holdback always stays with the dealer who originally stocked the unit into inventory.
So, if it's a trade for an F-150, and our dealer is sending out an Expedition in trade, the holdbacks are comparable, and can be in play.
But, let's say the dealer who has the F-150 we want, asks our Inventory Manager to send over a certain Focus he sees in our inventory, as he has a customer wanting just that unit.
Our dealer's holdback on the focus will only be $200 or so, and that's the holdback our dealer will be retaining as our Focus heads over the hill to retrieve the F-150 we're getting.
Conversely, the dealer coughing up the F-150 for us will now have a +/- $1,000 holdback to attach to his Focus deal. Being holdback, the salesman won't (usually) get paid any commission on it. But the dealer will make one HELL of a gross profit on that Focus!
Dealer trades are a delicate dance. A talented Sales Manager or Inventory Manager can add tens of thousands of dollars profit per year to the dealer's bottom line, just by making skilled trades from inventory.
Or, he can lose tens of thousands of dollars, too. Explains some of the turnover at the management level, yes?
Jim
Sunk New Dawn
Galveston, TX
The following 2 users liked this post by JimTX:
gregsf150stx (03-25-2013),
Wanted33 (03-26-2013)
03-25-2013, 11:09 PM
#20
Senior Member
Thanks JimTX, for the clarification. Your explanation was alot better than mine....but I knew there was a loss in the holdback somewhere in the equation.
in my case, it was F150 for F150....so I am not sure why the dealer said he's lose his holdback.
In a case a few years ago, it would have been a mustang for an F150...I am sure the difference would have been more $ there, this why the dealer didn't want to do it.
in my case, it was F150 for F150....so I am not sure why the dealer said he's lose his holdback.
In a case a few years ago, it would have been a mustang for an F150...I am sure the difference would have been more $ there, this why the dealer didn't want to do it.