Buying a new car

<p>tom1944,</p>

<p>you will never get them to take destination charges off, because that is a real cost, but that’s the wrong way to negotiate anyway.</p>

<p>What you need to understand is that the true dealer cost is the sum of the following:</p>

<ul>
<li> invoice price</li>
<li> destination charge</li>
<li> floor charge (the interest the dealer pays to hold the car)</li>
</ul>

<p>less:

  • holdback (essentially a 1-1.5 percent rebate american mfgrs give the dealer after the sale)
  • factory to dealer incentives, which may or may not be public, but can be found.</p>

<p>No dealer will truly loose money on a sale unless the vehicle is a real dog and floor charges are killing them (but these dogs typically get extra factory help), and few will give up their holdback, so your goal is to get a price that is near to the dealer net - invoice + destination - incentives. </p>

<p>Normally, any price a few hundred above the amount above is pretty good. You should not begrudge them for “making” a few hundred because they need to pay for the showroom, floor charge, salespeople, advertizing and such out of that meager profit. </p>

<p>Most dealers never made much money on car sales. They made money on trades, service, accessories and such. </p>

<p>Final note - no need to pay someone (see link above) for information on buying. Lots of info is free on the internet. </p>

<p>One final note: you can view this as a game, where you are out to beat the dealer on price. Or you can view it as a business transaction where you understand that your counterparty - the dealer, is allowed to benefit from the transaction too (make a profit). If you view it as a game, just remember that your adversary has far more experience in this game than you do. How many cars have you bought this year? How many has the dealer sold? 'nuf said.</p>

<p>Thanks- I have no problem with dealers making a profit I just want to be an informed consumer.</p>

<p>I second what newmassdad (and I) stated.</p>

<p>Regarding the destination charge - this is a real cost charged to them by the manufacturer and I’ve never seen them actually drop it. If they think it’s some sticking point with you then they might reduce the cost of the car by that amount but it would just come at the expense of other reductions they could have made anyway. </p>

<p>This is the issue with trade-ins - they get a sense of whether you’re looking for a real low price on the new car or a higher offer price on the trade-in and adjust the deal accordingly. In the end you’ll really get less for the trade-in than you could selling it on your own albeit often at some inconvenience. </p>

<p>Also, as newmassdad stated, the dealer won’t lose money on the deal unless they just want to be rid of the car for some reason.</p>

<p>Speaking of deals, if anyone’s interested in a Dodge, Chrysler, or Jeep, I noticed that the dealers that are losing their franchises due to the bankruptcy have to sell the vehicles by June 9 or so since after that point they’re not permitted to sell them as ‘new’. There are some very good deals on those vehicles.</p>