Quote:
Originally Posted by PhantomX
...not that there is much margin.
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If I had a nickel for every time I've heard that, I'd have a pretty high margin.
I have no doubt that the information you're given indicates certain lines of reasoning that the industry/manufacturers/dealers expect you to perpetuate. I don't fault you at all. But let's get a couple things clear:
* MSRP = Manufacturer's SUGGESTED *RETAIL* PRICE
They are SUGGESTING that a vehicle sold that that RETAIL price includes margin for everyone who gets their cut of the pie, and then some. Dealers who mark up beyond MSRP are fleecing.
* Dealers do not "pay" the invoice price for a car.
Selling me a car at or below invoice does not mean the dealer is losing money. That'd be a pretty silly way to run a business. I'm tired of hearing that one. All it means is that there's less pure profit padded in the transaction. The dealer still makes money on the car sale through numerous other channels on the back end.
* "Pure pricing" is a tactic that locks a set profit margin, it's not a favor to the customer.
Quote:
Originally Posted by PhantomX
It is the second (a house being first) largest investment a person will ever make, after all.
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While that may be true in many cases, it's not always the case. It might be a good general philosophy to follow, but it's a bit short sighted. Remember many people have different life situations... many people have far more invested in business ventures, real estate, stocks, etc., than they do in their personal vehicles. I've invested far more money in my education than I ever did on any one single car.
Quote:
Originally Posted by PhantomX
Unfortunately, I can't control the speed of the flow when it comes to signing final paperwork in financing. That's where the bottleneck occurs.
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That's also where the real fleecing often occurs. Upsells, warranties, service plans, etc. It's where the strongest persuader and psychological combatant sits behind a desk and commands you to comply. When I bought my BRZ, the finance guy was literally trying to tack nearly $10k worth of bullshit onto my deal, and he was getting visibly irritated that I wasn't biting on a penny of it. His anger may have worked on a lot of people, but when I told him that he could either calm down and complete the paperwork for the agreed-upon deal, no more, no less, or he could toss the pile of papers in the trash and I'd be on my way, he acted like I just kicked his puppy and peed in his gas tank simultaneously. The funny thing is, the only reason I was even financing was because I was able to negotiate a better value on the trade if I agreed to finance rather than pay cash + trade (go ahead, tell me about how financing kickbacks don't happen
), and at 0.9% it was almost free money. I came out ahead after letting the loan ride for 6 months and then paying it off vs. paying cash up front.