The dealers were going to charge me over retail of $5000 because of "set up fees"????
What gives? Can you even haggle on bikes?
What gives? Can you even haggle on bikes?
So I want to get a Ninja 500r
- Thread starter ballmode
- Start date
Ok I just got off the phone with a friend and he said that bikes come in boxes. A mechanic has to put the bike together...
JulesMaximus
No Lifer
- Jul 3, 2003
- 74,459
- 854
- 126
There's isn't a whole lot they need to do though. Put fluids in it, do various checks, etc. It's not as though they have to assemble the entire bike from a box of parts.
GagHalfrunt
Lifer
- Apr 19, 2001
- 25,297
- 2,000
- 126
It's not quite like a model airplane kit. Most of the bike is already assembled, but it needs to be finished. A set-up fee is standard practice on new bikes, but like everything else in the buying process it's negotiable. For a common bike like a Ninja there's no way in hell you should be paying full retail plus set-up. Get them to eat the set-up or dicker down the price of the bike. If they won't budge take your business elsewhere. Other than Harleys and some superrare and desirable models bikes can be haggled down just like cars.
yeah they come in boxes.
you should be able to get it a few hundered over invoice. find the invoice price on that bike. IIRC there is an edmunds like site for bikes that lists all the invoices.
sounds like they are trying to snag you.
you should be able to get it a few hundered over invoice. find the invoice price on that bike. IIRC there is an edmunds like site for bikes that lists all the invoices.
sounds like they are trying to snag you.
i remember a while ago someone posted a pic of his pic coming in from japan in boxes. awesome bike.
and as some people will tell you: buying a bike now is like buying a convertible... they won't bargain because it's the season. buy it during the winter.
and as some people will tell you: buying a bike now is like buying a convertible... they won't bargain because it's the season. buy it during the winter.
not sure how much it costs, but if it is 20 bucks and it saves you 800, then i think it is well worth the trade off.
when i went to the dealer and mentioned invoice, he told me that they never paid that much for it but wouldnt say how much they paid for
BillGates
Diamond Member
- Nov 30, 2001
- 7,388
- 2
- 81
Good info in here if you can make it through it all.....
Buying Tips and Strategies
Understanding the Purchase Transaction
Deciding on the right machine - Visiting the manufacturer's web site, browsing online forums devoted to the specific brand or model you are interested in, reading magazine reviews, and talking to salespeople are all helpful ways to learn strengths and weaknesses of different machines, and to narrow your search down to a few models. Buying a dealer invoice report and researching the dealer's actual cost plus any available wholesale or retail sales incentives can make the choice between several similar models easier.
Deciding where to buy your new machine - The "Best Deal" is typically a combination of selling price, purchase convenience, and support after the sale. Supply and demand will always be a large factor in the final selling price. A buyer usually finds it easier to get the right kind of deal when the dealer has their model sitting on the showroom floor, ready to sell.
If your model is not on the floor, ask the Sales Manager if they have any in inventory, or if any are available for order. Some dealers are very receptive to ordering a machine that they don't normally stock, for a small profit, if they have a guaranteed sale. This way, the dealer has very little risk of it setting on the sales floor accruing finance charges. Expect to put down a sizable, non-refundable down payment when asking a dealer to order a bike, specifically for you.
Purchase convenience and after-sale support are intangible factors that must be considered. If your local dealer has good parts and service departments, it is often worth paying an extra couple hundred dollars over the "cheapest price" to buy locally where your business is appreciated and rewarded with good service.
Paying for your purchase - Before making an offer on a machine, decide how you are going to pay for the vehicle. Will you need to arrange financing, or do you plan on writing a check or using a credit card? Do you have a trade-in?
If you need to finance your purchase, check financing rates and lending terms at your local credit union before you go to the dealership. This will allow you to compare the dealership arranged financing with what you can get elsewhere. Manufacturer subsidized financing can be an excellent value if the program parameters match your needs and qualifications.
Negotiating a selling price - Once you have decided which machine you want to own, and are ready to make an offer and take it home, ask to speak with the Sales Manager. Present your Dealer Invoice Report and tell him (or her) that you have done your homework and are ready to buy. Acknowledge that you understand that the dealership is in business to make a profit, but that their asking price is not acceptable to you. Present your offer for the machine as a total price including freight/set up fees, not including tax and title fees. We feel that most machines can be purchased for 5% to 10% over the ready to sell cost.
Example - 5% over the ready to sell cost - Ready to sell cost is $7442.
7442 x 105% = $7814. $7814 minus $7442 = $372 immediate profit plus dealer holdback to be paid at a later date.
MSRP is $8899 in this example. 8899 x 5% holdback = $445 holdback plus $372 immediate profit = $817 total gross profit after the holdback money has been paid to the dealer.
Keep in mind that the dealer will have to wait (up to 11 months for some brands) to receive their dealer holdback. Some expensive motorcycles have 10% dealer holdback! This can add up to $1500 - $2500 dollars in holdback profits! In these scenarios, it is often possible to buy a motorcycle for well under the dealer invoice price if you time your purchase correctly. Dealers are far more receptive to taking a short-term loss on a sale when they know they will be receiving their holdback check within 30 - 60 days.
Trade-in scenarios - Dealer "A" promises to give you full retail price for your trade-in. Dealer "B" says they will sell you a bike for $250 over their cost. Which is the better deal? The only way to compare these 2 offers, is by determining the "difference figure" for each deal.
Dealer "A" - new machine ($8499) plus freight/setup fees ($450) = $8949 minus trade-in value ($3000) = $5949 difference
Dealer "B" - new machine ($7299) plus freight/setup fees ($175) = $7474 minus trade-in value ($1800) = $5674 difference
Not only does Dealer "B" have the lowest difference figure, but sales tax and license fees will be calculated on the lower selling price, saving even more money.
Can't bear to trade in your old machine for such a low price? Sell it yourself and leave it out of the deal. Dealers need to average around 20% profit margin on used machines. Their working capital is tied up in that machine until it sells. The machine may need repairs prior to being sold or even after the sale to keep a buyer happy. If there is minimal profit in a used machine, no commission salesperson will even present it to a customer, since there is no opportunity to earn money.
Dealing with the Business Manager - You have agreed on selling price with the Sales Manager. Now it is time to deal with the Business Manager or "F & I" (finance and insurance) person. This person's job is to make more money for the dealership. They will offer to arrange financing for you, explain the benefits of extended warranties, present their dealership's "Pre-Paid Maintenance Program", and various other ways for you to spend money at the dealership.
Dealerships make money on financing. Most finance programs allow the dealer to add 2% - 5% to the interest rate and earn part of the finance charge for the dealership. This is known as merchant participation. Manufacturer subsidized "low-interest" programs typically do not pay any merchant participation, but are only available to well-qualified customers.
Extended warranties are like any other type of insurance. If you can afford to fix anything that breaks on your machine, you probably don't need an extended warranty. We suggest avoiding any extended warranties not directly underwritten by the manufacturer of the machine. Some warranty companies have been in business for a long time and have a good record of paying claims, but many others are not so good. Bottom line, if you buy an extended warranty for your Honda, underwritten by American Honda, any covered items will get fixed by any Honda dealership without any questions. Selling price for extended warranties is usually double their actual cost. Some dealerships mark them up even more.
Pre-paid maintenance programs offer a savings of 40% - 65% on regularly scheduled maintenance over a set period of time, if you pay for it at the time you buy the new machine. It can be a great deal, if you use it. The drawbacks are, you are tied to that dealer for the duration of the agreement, and it is your responsibility to remember to bring your machine in for service. If their service department sucks, tough luck. You have already paid the dealer and you will not get your money back.
Answers to common questions we encounter
How should I handle dealer/manufacturer add-ons? - ?Add ons? such as freight and setup charges have nothing to do with the manufacturer, but allow the dealer to start at a higher profit point, so a discount can be offered while still maintaining a desired profit level. We suggest that you focus on the total price before sales tax and title fees. Don't waste time arguing about whether they should charge for freight and setup. If the total price before sales tax and title fees is acceptable, then it really doesn't matter how it is broken down. ($6000 price + $0 freight and setup = $5000 price + $1000 freight and setup)
What is dealer holdback? - Holdback is a percentage of the MSRP that is literally "held back" and paid at a later date after receiving proof that the unit was sold and properly warranty registered. It is typically paid to the dealer in April and October for units sold by that dealer during the previous 6 months. Some manufacturers still pay holdback once per year.
This holdback money will be additional profit to the dealer principal when it is received, and is not normally shared with the sales department or included in commissions. As such, many salespeople are not aware of this additional profit.
What about rebates? - Retail and manufacturer-to-dealer rebates are used by a manufacturer to improve sales performance on models that may not be performing as well as anticipated on the sales floor. Dealers are required to "pass along" retail rebates to the consumer, while manufacturer-to-dealer rebates are incentives for the dealer and are not required to be passed along to the buyer. Retail rebate information is always available on the manufacturers web site. Manufacturer-to-dealer rebate information is contained in our Dealer Invoice Reports.
Why do some dealers have more of certain models than other dealers? - Most manufacturers use an allocation system to distribute models to their dealers and forecast future build schedules. Dealers do not usually have the option to "pick up the phone and order more" if they sell out of popular models. Allocating new product allows a dealer who has consistently done well with certain product lines to receive more of that model than a dealer who has ignored a market segment and now wishes to ?cash in? on a hot new model. It is not easy to increase a dealer?s allocations, but it can definitely be done over the course of a year or more by aggressively searching for extra inventory and then getting them sold. All in all, it is a fair system.
Do dealers costs change depending on their volume? - absolutely NOT TRUE! All dealers pay the same price for machines. Incentive programs are normally based on percentages of increased sales and allow the same opportunity to any dealer.
Unfortunately, motorcycle and ATV buyers seem to be willing to go through all the "talk to the manager" and "you gotta come in" games that are common practice in car buying. Why should the consumer purchasing a commodity (made in the 10,000's plus), spend their time and gas running around looking for a fair price (win-win) when it could be done by e-mail, by fax, or telephone? - No one can make you play games if you are not willing to play. Now that you know what an XYZ 400 costs, pick up the phone, ask for the Sales Manager, tell him (or her) that you would like to buy a machine today and that after doing some research, you feel that $xxxx is a price you are willing to pay today. Sometimes you will receive a counter-offer that will be close to their bottom line price on that machine. If the price is reasonable and acceptable, go in and buy the machine. Don't play games.
Unfortunately, many customers will then take that price and use it to start negotiating with the next dealer, and on and on. The Sales Manager then feels that it was a complete waste of time to quote a discounted price over the phone. The only way a dealer can normally sell a machine by quoting over the phone is by quoting such a low price that no other dealer is willing to beat it. It may help move a model you are overstocked on, but it is not a good practice for keeping a dealership profitable.
Realistically, rarely does a dealer who quotes a fair and reasonable price over the phone actually make the sale. The sale is usually made by the next dealer who says, ? wow, that?s a great price, but I?m sure I can save you some money. Come on down, bring your checkbook and I?ll talk to my boss ? "
Let the games begin ...... again.
Buying Tips and Strategies
Understanding the Purchase Transaction
Deciding on the right machine - Visiting the manufacturer's web site, browsing online forums devoted to the specific brand or model you are interested in, reading magazine reviews, and talking to salespeople are all helpful ways to learn strengths and weaknesses of different machines, and to narrow your search down to a few models. Buying a dealer invoice report and researching the dealer's actual cost plus any available wholesale or retail sales incentives can make the choice between several similar models easier.
Deciding where to buy your new machine - The "Best Deal" is typically a combination of selling price, purchase convenience, and support after the sale. Supply and demand will always be a large factor in the final selling price. A buyer usually finds it easier to get the right kind of deal when the dealer has their model sitting on the showroom floor, ready to sell.
If your model is not on the floor, ask the Sales Manager if they have any in inventory, or if any are available for order. Some dealers are very receptive to ordering a machine that they don't normally stock, for a small profit, if they have a guaranteed sale. This way, the dealer has very little risk of it setting on the sales floor accruing finance charges. Expect to put down a sizable, non-refundable down payment when asking a dealer to order a bike, specifically for you.
Purchase convenience and after-sale support are intangible factors that must be considered. If your local dealer has good parts and service departments, it is often worth paying an extra couple hundred dollars over the "cheapest price" to buy locally where your business is appreciated and rewarded with good service.
Paying for your purchase - Before making an offer on a machine, decide how you are going to pay for the vehicle. Will you need to arrange financing, or do you plan on writing a check or using a credit card? Do you have a trade-in?
If you need to finance your purchase, check financing rates and lending terms at your local credit union before you go to the dealership. This will allow you to compare the dealership arranged financing with what you can get elsewhere. Manufacturer subsidized financing can be an excellent value if the program parameters match your needs and qualifications.
Negotiating a selling price - Once you have decided which machine you want to own, and are ready to make an offer and take it home, ask to speak with the Sales Manager. Present your Dealer Invoice Report and tell him (or her) that you have done your homework and are ready to buy. Acknowledge that you understand that the dealership is in business to make a profit, but that their asking price is not acceptable to you. Present your offer for the machine as a total price including freight/set up fees, not including tax and title fees. We feel that most machines can be purchased for 5% to 10% over the ready to sell cost.
Example - 5% over the ready to sell cost - Ready to sell cost is $7442.
7442 x 105% = $7814. $7814 minus $7442 = $372 immediate profit plus dealer holdback to be paid at a later date.
MSRP is $8899 in this example. 8899 x 5% holdback = $445 holdback plus $372 immediate profit = $817 total gross profit after the holdback money has been paid to the dealer.
Keep in mind that the dealer will have to wait (up to 11 months for some brands) to receive their dealer holdback. Some expensive motorcycles have 10% dealer holdback! This can add up to $1500 - $2500 dollars in holdback profits! In these scenarios, it is often possible to buy a motorcycle for well under the dealer invoice price if you time your purchase correctly. Dealers are far more receptive to taking a short-term loss on a sale when they know they will be receiving their holdback check within 30 - 60 days.
Trade-in scenarios - Dealer "A" promises to give you full retail price for your trade-in. Dealer "B" says they will sell you a bike for $250 over their cost. Which is the better deal? The only way to compare these 2 offers, is by determining the "difference figure" for each deal.
Dealer "A" - new machine ($8499) plus freight/setup fees ($450) = $8949 minus trade-in value ($3000) = $5949 difference
Dealer "B" - new machine ($7299) plus freight/setup fees ($175) = $7474 minus trade-in value ($1800) = $5674 difference
Not only does Dealer "B" have the lowest difference figure, but sales tax and license fees will be calculated on the lower selling price, saving even more money.
Can't bear to trade in your old machine for such a low price? Sell it yourself and leave it out of the deal. Dealers need to average around 20% profit margin on used machines. Their working capital is tied up in that machine until it sells. The machine may need repairs prior to being sold or even after the sale to keep a buyer happy. If there is minimal profit in a used machine, no commission salesperson will even present it to a customer, since there is no opportunity to earn money.
Dealing with the Business Manager - You have agreed on selling price with the Sales Manager. Now it is time to deal with the Business Manager or "F & I" (finance and insurance) person. This person's job is to make more money for the dealership. They will offer to arrange financing for you, explain the benefits of extended warranties, present their dealership's "Pre-Paid Maintenance Program", and various other ways for you to spend money at the dealership.
Dealerships make money on financing. Most finance programs allow the dealer to add 2% - 5% to the interest rate and earn part of the finance charge for the dealership. This is known as merchant participation. Manufacturer subsidized "low-interest" programs typically do not pay any merchant participation, but are only available to well-qualified customers.
Extended warranties are like any other type of insurance. If you can afford to fix anything that breaks on your machine, you probably don't need an extended warranty. We suggest avoiding any extended warranties not directly underwritten by the manufacturer of the machine. Some warranty companies have been in business for a long time and have a good record of paying claims, but many others are not so good. Bottom line, if you buy an extended warranty for your Honda, underwritten by American Honda, any covered items will get fixed by any Honda dealership without any questions. Selling price for extended warranties is usually double their actual cost. Some dealerships mark them up even more.
Pre-paid maintenance programs offer a savings of 40% - 65% on regularly scheduled maintenance over a set period of time, if you pay for it at the time you buy the new machine. It can be a great deal, if you use it. The drawbacks are, you are tied to that dealer for the duration of the agreement, and it is your responsibility to remember to bring your machine in for service. If their service department sucks, tough luck. You have already paid the dealer and you will not get your money back.
Answers to common questions we encounter
How should I handle dealer/manufacturer add-ons? - ?Add ons? such as freight and setup charges have nothing to do with the manufacturer, but allow the dealer to start at a higher profit point, so a discount can be offered while still maintaining a desired profit level. We suggest that you focus on the total price before sales tax and title fees. Don't waste time arguing about whether they should charge for freight and setup. If the total price before sales tax and title fees is acceptable, then it really doesn't matter how it is broken down. ($6000 price + $0 freight and setup = $5000 price + $1000 freight and setup)
What is dealer holdback? - Holdback is a percentage of the MSRP that is literally "held back" and paid at a later date after receiving proof that the unit was sold and properly warranty registered. It is typically paid to the dealer in April and October for units sold by that dealer during the previous 6 months. Some manufacturers still pay holdback once per year.
This holdback money will be additional profit to the dealer principal when it is received, and is not normally shared with the sales department or included in commissions. As such, many salespeople are not aware of this additional profit.
What about rebates? - Retail and manufacturer-to-dealer rebates are used by a manufacturer to improve sales performance on models that may not be performing as well as anticipated on the sales floor. Dealers are required to "pass along" retail rebates to the consumer, while manufacturer-to-dealer rebates are incentives for the dealer and are not required to be passed along to the buyer. Retail rebate information is always available on the manufacturers web site. Manufacturer-to-dealer rebate information is contained in our Dealer Invoice Reports.
Why do some dealers have more of certain models than other dealers? - Most manufacturers use an allocation system to distribute models to their dealers and forecast future build schedules. Dealers do not usually have the option to "pick up the phone and order more" if they sell out of popular models. Allocating new product allows a dealer who has consistently done well with certain product lines to receive more of that model than a dealer who has ignored a market segment and now wishes to ?cash in? on a hot new model. It is not easy to increase a dealer?s allocations, but it can definitely be done over the course of a year or more by aggressively searching for extra inventory and then getting them sold. All in all, it is a fair system.
Do dealers costs change depending on their volume? - absolutely NOT TRUE! All dealers pay the same price for machines. Incentive programs are normally based on percentages of increased sales and allow the same opportunity to any dealer.
Unfortunately, motorcycle and ATV buyers seem to be willing to go through all the "talk to the manager" and "you gotta come in" games that are common practice in car buying. Why should the consumer purchasing a commodity (made in the 10,000's plus), spend their time and gas running around looking for a fair price (win-win) when it could be done by e-mail, by fax, or telephone? - No one can make you play games if you are not willing to play. Now that you know what an XYZ 400 costs, pick up the phone, ask for the Sales Manager, tell him (or her) that you would like to buy a machine today and that after doing some research, you feel that $xxxx is a price you are willing to pay today. Sometimes you will receive a counter-offer that will be close to their bottom line price on that machine. If the price is reasonable and acceptable, go in and buy the machine. Don't play games.
Unfortunately, many customers will then take that price and use it to start negotiating with the next dealer, and on and on. The Sales Manager then feels that it was a complete waste of time to quote a discounted price over the phone. The only way a dealer can normally sell a machine by quoting over the phone is by quoting such a low price that no other dealer is willing to beat it. It may help move a model you are overstocked on, but it is not a good practice for keeping a dealership profitable.
Realistically, rarely does a dealer who quotes a fair and reasonable price over the phone actually make the sale. The sale is usually made by the next dealer who says, ? wow, that?s a great price, but I?m sure I can save you some money. Come on down, bring your checkbook and I?ll talk to my boss ? "
Let the games begin ...... again.
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