New Vehicle Employee Pricing

[kidd]

Does anyone here have experience with how much a guy can successfully negotiate off of the Employee Pricing deal that the dealers have going on right now on their new vehicles? I'm looking for a new pickup.
They seem to be pretty stubborn with that price. Just looking for the best deal and every bit of info helps. Thanks.
kidd

[huntinstuff]

Employee pricing is a ploy of sorts. Yes it is cheaper but it is simply a small percentage off of the profit margin

You can definitely get the vehicle cheaper when you dicker. Just depends on how good you are at dickering

Dont ever believe they cant sell the vehicle for less

If you are prepared to sign papers immediately, your chances of a better price are increased dramatically. If you kick tires, you will be ignored. They are there to sell vehicles. Period

[Mhunter51]

Yes they certainly will come down from the so called "employee pricing". When I bought my new F-150 a couple years ago I went to one dealer who told me that was rock bottom price, no room to move. Went to the other dealer ( with some out of town adds in hand), told him I had no trade, I needed a vehicle now and I would like to buy local BUT ---. They came down about 8 or 9% off the price . Check the printed version of the offer BEFORE you sign it. There are costs on there that probably were not mentioned. Some such as eco fees and recycling fees for tires and battery that you must pay and can't get out of paying but then there are the ones like 'dealer prep' charges which I would not pay and they took them off.

[Dakota369]

The dealers will hate me for this, but here goes, pick the price you are willing to pay, (don't finance through the dealer go to the bank) then walk in pick the vehicle you want, make sure you know what options/trim package you would like, and then ask to talk to the general manager or the new car sales manager, say "I am an educated buyer, this is exactly what I want with this trim package, and this is what I am willing to pay". Do this in the last three days of any given month.(very important) When they try and negotiate, say thanks for your time maybe the next dealer down the road will want this deal and be fully prepared to walk out the door and never look back!!!! It also helps that when you talk to them take out an envelope full of cash, and let them know you have a 3-5 thousand dollar cash down payment in your hand.

Good luck and have fun, and expect to get some abuse from the dealers you talk too as they hate it when you know how to play the game..........


And you didn't hear this from me!!!!

[Bushmaster]

Bring your wife in, they'll dicker.

[Donkey Oatey]

Originally Posted by Bushmaster

Bring your wife in, they'll dicker.

Sounds like the starting to the Champ. I says PARDON? I lose it. Head fake the dummy with a clip board and BOOM one to the gas bag. How's that for "Bring your wife in, they'll dicker for ya" Ever since I've been THE CHAMP.

[cody c]

My brother got their escape through Milt at DK ford in Leduc.

He was very happy with Milt and their pricing. He seems to sell more at less, and makes more on returning customers. He said they looked at other dealerships and their price was much better than other ford dealerships.

I havent bought through them but if I was looking I'd call there and ask him for a quote.

Tell him, you know someone who bought through them and you might get better pricing...

[kidd]

Thanks these are all good suggestions. And, Don K, that was was hilarious!
kidd

[AbAngler]

We recently went through the new vehicle process. My wife wanted an SUV, so we made a short list through research on the web. After that, we just went to dealerships and test drove them. Lots of them. When she found the one she liked, we simply told the salesman what we were willing to pay. We went for 5% above cost. To find out wholesale prices, we used Car Cost Canada, which tell you exactly what the dealership pays for a vehicle as well as any other incentives the salesman "forgets" to tell you about. He kind of laughed at us, so we got up and left. Of course, he chased us down in the parking lot and accepted our offer.

Play hardball and be willing to walk away.

[rammer]

Originally Posted by AbAngler

We recently went through the new vehicle process. My wife wanted an SUV, so we made a short list through research on the web. After that, we just went to dealerships and test drove them. Lots of them. When she found the one she liked, we simply told the salesman what we were willing to pay. We went for 5% above cost. To find out wholesale prices, we used Car Cost Canada, which tell you exactly what the dealership pays for a vehicle as well as any other incentives the salesman "forgets" to tell you about. He kind of laughed at us, so we got up and left. Of course, he chased us down in the parking lot and accepted our offer.

Play hardball and be willing to walk away.

I hope you didn't buy a GM product at a 5% above cost as most GM dealerships average about 3% per vehicle.

[AbAngler]

Originally Posted by rammer

I hope you didn't buy a GM product at a 5% above cost as most GM dealerships average about 3% per vehicle.

Nope. GM vehicles were the absolute worst, by far. We ended up going foreign. 5% above cost (not MSRP, big difference) is a good deal on most vehicles these days. I actually got below cost on my 08 Ram a few years ago, but thats another story.

[avb3]

In a past life I was a manager at a dealership.

We would often sell new vehicles for very little over cost (as little as $100 over).

Where we made the money was in the "finance box". Undercoating (not needed and can void some warranties), extended warranty (expensive insurance and the most profitable after sales option), scotchguarding etc. etc. all are unnecessary.

Manufacturers DO often have good finance rates, better then banks or credit unions. Often managers will accept deals with less profit if you finance through them, but don't go for the "it's only pennies a day" for all the extras.

It's a fallacy to believe that a cash buyer is the most desirable one. Your not. And you won't get the best price that way. If you have a good trade, the dealership wants if for their used car department. If it is not, your better off selling it yourself.

Most dealers will try and steer you to what payment range you want to be in. As soon as you commit to that, the entire transaction will cost you more than it should. A small increase in payments can make a large difference to dealer profit, especially if the term is extended.

Deal on a dollar basis for the vehicle only. Suggest you will look at financing if it makes sense versus your own bank. Your holding out the carrot of potential profit. Use it.

The most successful dealers often make the most money per unit sold, but their "secret" is that they service the heck out of you. Many manufacturers have incentives to dealers that are entirely dependent on their customer satisfaction scores.

[ESOXangler]

Just bring a ukrainian along. I did! The misses had us playing two dealerships against each other and i ended up fully loaded GMC 1500 4x4 slt with spray in boxliner, chrome grill and a trip to vegas for 38500. Not bad considering the sticker was 54000!

[fordtruckin]

Originally Posted by ESOXangler

Just bring a ukrainian along. I did! The misses had us playing two dealerships against each other and i ended up fully loaded GMC 1500 4x4 slt with spray in boxliner, chrome grill and a trip to vegas for 38500. Not bad considering the sticker was 54000!

My brother in law is the same. He got a full decked out Ranger a few years back for only about 18K. Not bad since it was probably about a 28K sticker price. Its like yous aid, be prepaired to leave and mention other dealerships and their ability to give you the price you want. They'll deal if you don't fold!

[CaberTosser]

Originally Posted by ESOXangler

Just bring a ukrainian along. I did! The misses had us playing two dealerships against each other and i ended up fully loaded GMC 1500 4x4 slt with spray in boxliner, chrome grill and a trip to vegas for 38500. Not bad considering the sticker was 54000!

Sounds like my wife; her parents were Hungarian immigrants. When she gets bartering I feel genuine sympathy for whomever is across the table from her

[sjd]

Determine exactly what your specifications are and ensure you have a bank loan arranged or are able to pay cash or get 0% financing

Find the best listed "New employee pricing you can"

Fax 5 dealerships with your specs and best price, cc the other dealerships.

State you are a serious buyer, ready to buy immediately etc, and you will purchase a vehicle in the next 2-3 days based on specifications above, what is your final price, all inclusive taxes fees etc.

Do this about 3 days before the end of the month when dealers have quotas to be filled etc.

[huntinstuff]

Fyi

No dealer sells below cost
No dealer sells below a minimum profit
No dealer truly sells at "such and such above invoice"

They dont build and maintain those big showrooms, lots, and personnel on popcorn.

Parts departments are goldmines.

My uncle owned a Dodge dealership for years. I worked for him.

You can get a $50,000 truck for $41,000. Think about that one.

Shipping vehicles costs the same whether the vehicle goes to Waterloo Ont or Yellowknife.

Big businessmen like Koch or Don Wheaton didnt become multimillionaires buy selling " just above cost"

Parts markup is big. So is the profit margin on a new vehicle. Trade ins, if decent, will net the dealership 400%. That's why used car salesmen at most dealerships can only purchase a certain number of used vehicles off the lot per year. The profit margin is big. A salesman years ago could easily bank an extra $10,000 per month by curbing used cars he bought on the lot.

Dont ever feel bad for lowballing a dealer on a vehicle. What you consider a lowball is still probably within the minimum profit margin. If they say no, its not because they cant sell it for that price, its because they wont.

Salesmen answer to the beancounter

[ESOXangler]

Originally Posted by CaberTosser

Sounds like my wife; her parents were Hungarian immigrants. When she gets bartering I feel genuine sympathy for whomever is across the table from her

haha oh yeah! Shes a shark, here i am thinking man this guy sure is a real nice guy, and shes in my ear going hes a salesman, hes here to make money not be your friend. HAHA

[avb3]

Originally Posted by huntinstuff

Fyi

No dealer sells below cost

Actually, if the unit has been in stock too long, yes they will. The wholesale interest can kill a dealer. Seen it done many times, just to move it, especially if it is a poor selling model. Start paying wholesale interest on a $$45,000 cost unit, and any profit disappears really fast.

Dealers want turns. A good philosophy many use is 3 dimes are better then a quarter.

No dealer sells below a minimum profit

It depends; if there is a good trade involved the dealer can make money on, you bet he will take a minimum deal. Is finance, warranty etc. involved, again, see my previous posting, you bet he will.

No dealer truly sells at "such and such above invoice"

All day long. What most people don't realize is the holdback or other volume incentives that may be involved. Often even the sales manager may not be aware of them, as they may go directly to dealer owner only.

Parts departments are goldmines.

You bet. Small, fast moving items (bulbs as example) can have an 800% markup.

Shipping vehicles costs the same whether the vehicle goes to Waterloo Ont or Yellowknife.

True; manufactures average the cost of shipping and all dealers get charged the same.

So is the profit margin on a new vehicle.

It used to be close to 22%. On some models it is much lower. Echo's had a $300 markup... period. Dodge used to have the highest invoice to retail, hence the big discounts one saw.

Trade ins, if decent, will net the dealership 400%.

A dealer will pay premium dollars for a good trade-in. They will make a good dollar on it also. Not 400%. Think about it, a $12,000 wholesale unit that they can sell for $48,000? Not going to happen.

They might be able to sell a $100 unit for $400.

[cranky]

Originally Posted by avb3

In a past life I was a manager at a dealership.

We would often sell new vehicles for very little over cost (as little as $100 over).

Where we made the money was in the "finance box". Undercoating (not needed and can void some warranties), extended warranty (expensive insurance and the most profitable after sales option), scotchguarding etc. etc. all are unnecessary.

Manufacturers DO often have good finance rates, better then banks or credit unions. Often managers will accept deals with less profit if you finance through them, but don't go for the "it's only pennies a day" for all the extras.

It's a fallacy to believe that a cash buyer is the most desirable one. Your not. And you won't get the best price that way. If you have a good trade, the dealership wants if for their used car department. If it is not, your better off selling it yourself.

Most dealers will try and steer you to what payment range you want to be in. As soon as you commit to that, the entire transaction will cost you more than it should. A small increase in payments can make a large difference to dealer profit, especially if the term is extended.

Deal on a dollar basis for the vehicle only. Suggest you will look at financing if it makes sense versus your own bank. Your holding out the carrot of potential profit. Use it.

The most successful dealers often make the most money per unit sold, but their "secret" is that they service the heck out of you. Many manufacturers have incentives to dealers that are entirely dependent on their customer satisfaction scores.

You forgot the dock fee. The biggest rip off in any dealership. Was a time when there was no such thing. Someone figured how to make more money for the "time box" .The guy in there with the fancy title is just a ex car salesman with a fancy title period and on commission by the way.
Get your deal settled on the vehicle first and when you get to finance office/time box get them to drop the dock fee or tell them youll go to the bank for your financing. You at worst will get a break on the fee.
PS to those who think there getting car below cost,dream on. It dont happen. How are they going to stay in business. By the way you cant outsmart them either,they sell 100's of cars and we only buy one once in a while. They have heard it all. And no salesman can make a decision to accept or reject an offer thats the sales managers job.
The old saying in the dealership is its a good deal if the customer thinks it is. period

[blackonblackfx4]

Originally Posted by ESOXangler

Just bring a ukrainian along. I did! The misses had us playing two dealerships against each other and i ended up fully loaded GMC 1500 4x4 slt with spray in boxliner, chrome grill and a trip to vegas for 38500. Not bad considering the sticker was 54000!

"fully loaded" definition varries. I highly doubt you mean a platinum equivalent with air conditioned cow hide leather and navigation. Sounds like the equivalent of a XTR which with employee pricing goes from like 50,000 to 35,500 with Ecoboost engine.


Something everyone is missing on here is it's all the deal you Perceive. Not the deal you really got. With employee pricing the margins on cars are only a few hundred dollars. I honestly made $89 off a fiesta one time. and trucks arnt much more. Most around $1000 because of how far they've discounted. People think car sales is paved with gold.

[huntinstuff]

I bought used vehicles direct from the dealership at actual paid price. Most times I paid 25% of the asking retail sticker price. True, there were times I paid 50% but my resale was always minimum 100% profit, mostly 300%.

Lot space was an issue. We tried to lease them land but apparently it was cheaper for them to part with vehicles at that price.

Are there exceptions, sure. But it definitely isn't the norm.

The late season sales sometimes reflect this.

[Elk Chaser]

My uncle's favourite line was "best price driving down the road" and then he would play one against the other.

I remember him telling one salesman that he would across the province for a better price so you had better be giving me your best price.

[blackonblackfx4]

Originally Posted by huntinstuff

I bought used vehicles direct from the dealership at actual paid price. Most times I paid 25% of the asking retail sticker price. True, there were times I paid 50% but my resale was always minimum 100% profit, mostly 300%.

Lot space was an issue. We tried to lease them land but apparently it was cheaper for them to part with vehicles at that price.

Are there exceptions, sure. But it definitely isn't the norm.

The late season sales sometimes reflect this.

Haha300% yea for sure.

A 20,000 used truck lists out for 32,000. That's quite a push from reality.

[huntinstuff]

Originally Posted by blackonblackfx4

Haha300% yea for sure.

A 20,000 used truck lists out for 32,000. That's quite a push from reality.

I bought listed $10,000 vehicles for $2500-2700. Sold them for $9000-9700 regularly. That is 4x my money. Dozens of times.

Bought $12,000 vehicles that sold for $25,000. That is 2x my money. Dozens of times

Did that for a hobby for years. My buddy did the same with sleds and quads.

If a dealership pays $20,000 for a truck that lists at 32,000 id fire the guy who gave that much on trade

[avb3]

Originally Posted by huntinstuff

I bought listed $10,000 vehicles for $2500-2700. Sold them for $9000-9700 regularly. That is 4x my money. Dozens of times.

Bought $12,000 vehicles that sold for $25,000. That is 2x my money. Dozens of times

Did that for a hobby for years. My buddy did the same with sleds and quads.

If a dealership pays $20,000 for a truck that lists at 32,000 id fire the guy who gave that much on trade

Hmmm... you should hire yourself out as a consultant to dealerships with that type of performance. They obviously have a lot to learn on how to do it right.

I take it since the event of AMVIC your no longer involved in this?

[huntinstuff]

Originally Posted by avb3

Hmmm... you should hire yourself out as a consultant to dealerships with that type of performance. They obviously have a lot to learn on how to do it right.

I take it since the event of AMVIC your no longer involved in this?

Ever since I got busier hunting....... Lol

Why would I have taken a cut in pay to be a consultant? I couldnt give a rats arse whether or not a dealership does well or not. I work for me. If they didnt want to sell, I take the cash elsewhere. Rarely did I ever walk out

I definitely had a point in my life where money was everything to me


Any fool can buy low and sell high. Im proof of that.

AMVIC.... Lol. Isn't that interesting. I guess if I were a salesman, it might have concerned me back then...... but it didnt

[huntinstuff]

AMVIC makes you credible as much as APOS makes you a great outfitter. Regardless, I was not affected by it because it did not pertain to me. I operated a resale business.

Profit is not a dirty word. It's business. Business without profit is called failure.

Of all the vehicles, properties, etc etc that I have ever sold, never once did I hold a gun to anyone's head to get them to sign on the dotted line. It's called a deal.

[avb3]

Originally Posted by huntinstuff

AMVIC makes you credible as much as APOS makes you a great outfitter. Regardless, I was not affected by it because it did not pertain to me. I operated a resale business.

Profit is not a dirty word. It's business. Business without profit is called failure.

Of all the vehicles, properties, etc etc that I have ever sold, never once did I hold a gun to anyone's head to get them to sign on the dotted line. It's called a deal.

I'm sure that you know that AMVIC is a DAO under the Fair Trading Act, and specifically requires licensing of both dealers and salesmen. It also requires certain specific disclosures of vehicles that are sold by a licensed dealer.

One can discuss shortcomings that AMVIC has (there are many), but that is irrelevant to the requirements of the Act.

But you already knew that. And no, one can't cloak selling vehicles or curbing by calling it a "resale business". Sell two vehicles a year that were registered to you, there won't be an issue. Sell 25, it's an issue.

And profit *is* a good word, in case you thought I might feel otherwise.

[huntinstuff]

Originally Posted by avb3

I'm sure that you know that AMVIC is a DAO under the Fair Trading Act, and specifically requires licensing of both dealers and salesmen. It also requires certain specific disclosures of vehicles that are sold by a licensed dealer.

One can discuss shortcomings that AMVIC has (there are many), but that is irrelevant to the requirements of the Act.

But you already knew that. And no, one can't cloak selling vehicles or curbing by calling it a "resale business". Sell two vehicles a year that were registered to you, there won't be an issue. Sell 25, it's an issue.

And profit *is* a good word, in case you thought I might feel otherwise.

Perfectly said. Salesmen and dealers need to be licensed. 100% correct. No doubt about it. AMVIC was designed for them.

And I never doubted your positive outlook on profit.

I find that, in business, if the customer and Revenue Canada is happy, thats all that matters.

But really, the thread is about these so called " incentives" that get thrown out every week. Trip to Vegas, Employee pricing ( which insinuates they screw evrryone else), $5000 in Free Gas, etc etc...........

My friend, who makes $275,000 peryear as a loans mgr for a dealership, is here with me right now having a good laugh about this thread. Yes, at certain times, poor selling cars get blown out cheap. You are right. As for profit margins being tight, he tells me "110"..........Lol

(draw a line from the top of the first "1" to the bottom of the second "1")

If cars are selling for $100 over cost, how in the hell can they afford to pay this gentleman $275 grand a year?

Answer: because they dont sell like that
(did i really have to type that? Really? Really! )