New Corolla for $12079

[Dug]

I have to say most of you have no idea what you are talking about.

hagbag is right. The dealer is not your enemy. The reason people don't like car dealers is because they are uneducated. If you believe a salesperson can trick you, then you will probably feel like that no matter what he does.

I don't know what 'non profit organization' you guys work for, but you guys have no idea how much it costs for overhead and to have these cars on display. You have no idea what holdback is. It's different on each car. Generalizations like 2 to 10% mean nothing. If the dealer gets an incentive from the car manufacturer, so what. It's their money for selling the car. It doesn't mean you got ripped off because they didn't give it too you.

Banks do not know what invoice is on a car. Neither does consumer reports, or any of the other magazines. They only have a close guestimate. Advertising costs and port fees are not calculated into a "banks invoice". They are calculated and printed on a dealers invoice. If you don't believe the invoice a dealer is showing you, then you have a real problem. Any place that is somewhat decent size could be shut down for changing an invoice document and blatent misleading of consumer. Decent sized car dealers don't roll back odometers. Why would they? Do you really think they'll make more money. Never mind it's almost impossible because almost all odometers are digital.

Just because you paid $500 more than the next guy doesn't mean you got a bad deal. There are too many factors, including color, options, emmissions, where the car came from, etc.

And btw, when your talking prices around invoice, the salesman doesn't care how much the car is sold for. He will usually get a flat commission anywhere from $35 to $100. After averaging out how long he or she has to spend with you, that isn't exactely 'ripping you off' as some of you think.

If you think making 2 or 3% on car is too much for a dealer, then go take an economics class. Or better yet, open up your own store and see how long you'll last with that much profit.

If you really want to feel ripped off, go to a grocery store an buy some toothpaste. They usually have a markup of around 100%. But because it only cost $2.79 we don't think to much about it. It's funny how when comsumers start looking at bigger ticket items they start looking at profit margins. And think they've earned the right to cut into a business's profits. Try doing that at the grocery store. They'll just laugh at you.

 

[lepper boy]

which corolla did you get?? hate to tell you this, but a few corolla's have an invoice or around 11,500... and go as high as around 13,000 for upper end models..... and NO I'm not a car sales men..... just have access to a very nice data base that gives me the prices of cars at invoice........

 

[dysdys]

This isn't dishonest.

Dealers do not have to match the price. It's in their own intereste to determine if they want to have the business or not. That is exactly what comparision shopping is. One can certainly visit two different dealers and ask both of them to make offers and let them bid for your business.

There isn't anything different for carsdirect.com either. In theory that their asking prices have already had market conditions(demand/supply) and all other factors figured in. So it is kind of "fair" market price. Having such a price in hand when you go to negotiate for a price, will just help you to have an additional reality check besides MSRP and Invoice.

 

[hagbag]

Freebee:

New car franchised dealerships do not roll odometers. The sanctions for doing so are so severe i.e. loss of franchise, loss of dealer license ,ruination of name as to be suicidal. This is not to say that it does not occur. Usually done by a customer who is past their contracted miles on a lease. Even a small used car dealer does not roll odometers these days. It is the nclear bomb to your business.

 

[Johnny1Nut]

What are all you jackaster talking about, dishonest? Bullshit, if they want to sell you the car then they will do so at an agreed upon price. You didn't put a gun to their heads. Car dealers all suck anyway!

 

[hkchan]

The whole car-buying process breeds dishonesty on both sides.

Dug, I have seen Toyota dealers showing the "official invoices" with the official distributor logo, letterhead, etc with the holdback added as a cost. Is that correct? Holdback is a cost that's charged to a dealer?

 

[serzone]

If it's any help I purchased a top of the line model Corolla a year ago. My wife and kids were outside in the rental. I walked in and told the guy I wanted to buy a Corolla. We looked at about 8 of them parked on the lot and I picked one (LE, manual trans, side air, etc). The sticker price was close to $17k. I told the salesman I would pay $14k - not a penny more. He thought I was joking. I said take it or leave it (I could buy a Civic for that price). He spoke to some of the other salesmen and eventually agreed. He told me I should work there!

Remember - they want to sell you a car. You can always just get up and walk if you don't like the price. Don't be surprised if they come running after you!

 

[hkchan]

How did you pick $14K? Why not $13.5K or even $13K?

 

[solesen]

near shameless self-promotion (almost), I know, but I work for Edmunds.com and we give pricing info in terms of what the dealer pays, holdbacks, etc. We've also got a new database that will tell you what a fair price is for any car, by model, color, geographic region, etc. Though I work for the site, I'm not getting paid to post here. I do believe it's a good source for info...like kbb.com, but we give more info.

 

[hagbag]

soleson:
I agree. from my pov kbb, cars direct , consumer reports etc all are excellent sources of info when buying anew car.

As I sit here it just occured to me that some people may not realize that all dealers pay the same for cars. By this I mean that a ford dealer in boston will pay the same as a ford dealer in cleveland for the identically equipped mustang (there can be minor variations in things like dealer advertising fees and regional promotions)

Some large dealers try to create the image that because they are large they pay the factory less per unit. This is not true. There are franchise laws onthe books in all the states that prohibit this.

 

[badauss42]

The best price to get a car is to find the sales cars in the classifieds that are "1 only". Im not saying this always works. But I bought a brand new 1999 Toyota Corolla VE with auto and air in May of 99 for $9979. This is the resale value of the car more than a year later! but if youre not in a rush, check your paper friday morning and get there early. I was at the dealership before they opened!

 

[hagbag]

Dug:

Abreath of fresh air. Sounds like you have been around the block a few times.

Seriously, the worst thing the retail car industry can be blamed for is making what should be a happy experience and making it incredibly stressful.This is a byproduct of the ferocious competition that exists in the marketplace.

The bottom line is that no one is being forced to buy any particular car from any particular dealer.

 

[ranalli]

Hey Dug, I think we all know the dealer is not our enemy but he is not our friend either. If you've ever bought a car you would know what I"m talking about either that or you were cluelessly ripped off.

And so what about overhead? Once overhead is established, you sell one, you get one back in stock, its that simple. I don't care if overhead is a million dollars, once initial overhead is established its a done deal. It might take a while for the end of the year kickbacks to come and the cash flow might be a little tighter until then but so what? Go to a Circuit City, they have a huge inventory too, but they dont' go changing prices on people.

And don't think that just because odometers are digital doesn't mean they can't be rolled back. Anyone who thinks this is just plain naive and foolish. I'm not saying that new car dealerships do this but in the used car industry, it happens more than you think.

And don't give me this sh1t about the dealer charging more cause he or she had to spend more time with me. I would be out of there in 5 minutes and done with if he had not d1cked me around with prices and interest rates and trying to sell me stupid sh1t like life insurance.
And you can't compare selling toothpaste to cars. The price of toothpaste doesnt' change with every customer. I understand that dealers are under pressure just like everyone else and they have families too, but if he or she is going to try to screw me out my hard earned money, then I'm going to do whatever I can to get the lowest price I can.

 

[bigd480]

ranalli- word.

I've been to two dealers in the past month, the second time to go ahead and buy; he spent over 2 hours just talking and talking trying to wear us down until we finally got fed up and left... he could have spent a tenth of the time just being honest and he would have had a sale... stupid bastard... and this was the fleet manager not a salesman...

Next time I just wanna go in there with a piece of paper listing the car I want, the price I want to pay, and a phone number, and then leave... If they want my business they can come get it...

 

[mathprof]

Perhaps in Dug's neck of the woods, car sales people make a flat commission of "$35 to $100" per car but it is standard practice in much of the rest of the country to pay them a percentage of the "profit" from the sale. Of course, the dealer's profit is more than the "profit" that the share with the sales person. The exceptions are when the car sold is a "1 at this price" loss leader from an ad.

 

[LuNoTiCK]

What exactly is carsdirect.com???

 

[serzone]

duh, like why not type that into your browser and find out!

 

[Dug]

hkchan- the holdback is paid to the dealer at the end of the year, depending on car manufacturer. The holdback is used to pay for flooring costs. Most dealers don't own their cars, a bank will. So the dealer is paying interest on that car until it sells. Depending on the dealership and the popularity of the car, a car will sit for about 60 to 90days avg. Some banks give a grace period for the financing, so it's in the best interest of the dealership to sell right away. If they pass that grace period, then they have a huge bill to pay. That is why you will see adds with 1-10 at this price. Those peticular cars are getting to the end of the grace period and the dealer doesn't want to pay the interest. Another reason for cars on add, are one's that have sat for along time and the dealer is tired of paying the interest to the bank. This can easily amount to more than what the holdback is. An example- The dealer looses $200 on the deal to sell you a car. (net profit after expenses). It's better than loosing $700 in interest payments to the bank. There is no bait and switch. Those cars you see in the paper are real. The attourney general would close them down if they weren't. Smart shoppers usually are at the door first thing in the morning to get them.

ranalli- I speak from 10 years of experience in the business. You say 'so what about overhead'. There is no such thing as initial overhead. If you knew the cost of operations on a daily basis, you would understand. The cost of just getting a car delivered is immense. Electricity, gas, employees, insurance (a huge one!), dings and dents, muddy carpets, cracked glass, taxes, interest, etc. It's a huge nut a dealer takes into consideration when selling a car, and is changing on a daily bases. A dealer doesn't always pick and choose what it's inventory is going to be. A car maker doesn't just replace a car if it's sold. It sends what it has in it's inventory. A dealer makes requests, but doesn't always get what it wants. It may sell 30 white Corolla's and get 10 4-Runner's in the next shipment and be out of white Corolla's.
And yes circuit city does change it's prices on it's customers. You negotiate with them just like a dealership. I've seen the same item at 2 different price's at 2 different Circuit City's. And the price of toothpaste does change with every customer. The initial price may be the same or different from store to store. Plus each customer might have a coupon or might not.
If you don't like it ranailli, then pay the manufacturers suggested retail price. It's right on the sticker, no haggle, no hassle. That price stays the same for every customer. They are not trying to screw you as you say. Look at it from the dealerships point of view. They have a price set in the window, and you're trying to screw them by negotiating.
Any real dealership won't touch an odometer. Like it was posted earlier they would be shut down or loose their license and their franchise. I'm not talking about some little rinky dink lot in the mud. All used cars are run through carfax for odometer descrepencies just incase.
I don't know where you got the 'dealer charges more because they had to spend some time with me' from. I'm trying to say that the salesperson that is selling you the car doesn't necessarily care what the car sells for- he or she will get the same commission no matter what it sells for.

 

[hkchan]

Dug,
Are you saying that if the dealer sells the car within the grace period (let's say 90 days), the manufacturer would pay the interest? If so, what happens if the car is sold on day 91. Does the dealer owe the bank 1 day of interest? Or 91 days?

Like you said, the holdback is paid to the dealer by the manufacturer at the end of the year. Why did the dealer put it on the "invoice" as a cost, inflating the "invoice"?

Many salesmen do get paid a flat commission on some sales, but I would have to say it's a small percentage of the total sales. You mean to tell me he/she gets the same commision selling a loss-leader (one-at-this price) Civic as an Odyssey?

 

[KameLeon]

nm

 

[Tacoma99]

The best deal I ever got was in 96 I got a new 96 Nissan shortbed p/u 2 wheel drive for $6995. It had a sticker of $10,300 but had no options ( not even p/s ). The dealer had 2 truckloads that were fleet cancellations ( all white ). Just a basic truck which I used in my business but was extremely reliable ( 120,000 mi. and only replaced tires and brakes ).

 

[Dug]

hkchan-

There would be no interest in the 90 day grace period. Usually the grace period is only 30days. Yes on day 91 the dealer would pay 91 days of interest.

Holdback is listed on the invoice because it's different for each vehicle. The dealer does not put this here, the manufacturer does. The holdback is to compensate for extra costs. (Such as interest, cleaning the cars, gas, etc.) Sometimes the dealer comes out ahead with holdback and sometimes it doesn't. If manufacturers didn't offer holdback on their vehicles, then the consumer would either pay a higher price or you wouldn't see any selection for display.

Commission is different from store to store. The amount of the car doesn't make any difference. If I sold a $45,000 dollar car and made only $500 profit, my commission would be less than if I sold a $12000 car and made $1000 profit. Some stores do only pay their salesman flats because it takes out the arguementive aspect of the deal. (Saturn is an example) If the salesman doesn't care about the price of the car, he won't argue with the customer about it. It also depends on the competition. If you are competing against 7 other Toyota dealers within a 45 min radius, salesman aren't going to see big commissions, they just make a living by volume. It's funny to watch people spend days going from dealer to dealer to save just $50. They probably spent more than that just on gas. It would be different than if you are the only Toyota dealer within 200 miles. Sure the price is a little higher, but the dealership doesn't sell that much and needs to make more profit. Also local towns people usually don't mind paying a little more because they know it's good for the local economy.

One word of advice to people buying cars. Talk to your salesperson like he is trying to help you and you will be amazed at how much help you will get. Most people come in with their defences up (salespeople too) and end up hating the experience. If you don't have the take this price or leave it attitude you will get a better deal.

 

[chipchen]

About carsdirect.com and their pricing:

this is what i know for a fact... carsdirect.com will survey dealerships in the area, and they will price in the bottom 20% of what dealers are willing to sell that exact car for. Sometimes this is a really good price, sometimes they even lose money on it.

But here the thing, carsdirect.com is at the bottom 20%, which means, there is already another dealer in your area that was willing to sell the same car for cheaper. So it's worth shopping around a bit after you get that quote online.

Also, I've gotten many cars at dealer invoice... just takes the right salesman with the right attitude.

 

[hkchan]

The invoices I was talking about were printed by a Toyota distributor. Just as you've said, the holdback is money to be paid by the manufacturer to the dealer. On these invoices, it's put down as cost. Some even put down finance allowance as cost.

Now you say "some" stores pay their salesman flats, whereas before you said,


<< I'm trying to say that the salesperson that is selling you the car doesn't necessarily care what the car sells for- he or she will get the same commission no matter what it sells for. >>




<< And btw, when your talking prices around invoice, the salesman doesn't care how much the car is sold for. He will usually get a flat commission anywhere from $35 to $100. >>


Yes, the salesman will get a flat commission if the car is sold near invoice, but sales in that category is a small percentage of the total volume. Your argument is that since it's worth the same to the salesman no matter how much the car is sold for, he/she is the customer's friend.
My example of the barebone Civic vs the Odyssey was not to show a low-price car vs a high-price van. It was to show a small-gross sale (or even negative) vs a high-gross sale. They can't be worth the same to the salesman (in 95+% of the cases).

 

[fletch713]

Some people have discussed the ethics of fudging the cardirect.com price in order to get a deal on the car. Not being a philosophy major, I'm just curious as to what the difference is between the dealer's inflated sticker price (used to trick people into thinking that that's what the car's actually worth and that they're getting a deal if they buy below sticker) and the customer-deflated cardirect.com receipt. It seems that in both cases the actual numbers have no basis in truth, so why can't the consumer jockey for bargaining position just like the dealer. The consumer doesn't have to accept the sticker price, and the dealer doesn't have to accept an overly cheap quote. Call me a moral relativist, but I just can't bring myself to cast aspersions on either one of these tactics.