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  • Jan 21st, 2009 5:24 pm
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[OP]
Jr. Member
Nov 23, 2007
198 posts
19 upvotes

New Car Markup

What do you think is a fair markup (eg. over CCD invoice) to offer on a 25-30k car (eg. accord). I want to get a reasonable deal, at the same time like to see the dealer get fair compensation. This is my first new car. Thanks.
54 replies
Deal Fanatic
User avatar
Oct 25, 2003
8809 posts
112 upvotes
$0 to $500 over invoice imo.
it's me ramin.
Deal Expert
Mar 23, 2004
19892 posts
1520 upvotes
MichaelKnight wrote:
Jan 14th, 2009 10:04 pm
at the same time like to see the dealer get fair compensation. This is my first new car. Thanks.
Do not, do not, do not worry about the dealer. Dealer can take care of themselves, they aren't in the business of losing money, trust me.

Even if they sell you a car at invoice price, that doesn't mean they aren't making money on the sale. They get money from the manufacturer in various other ways, so don't think that the invoice price is "what the dealer paid" for the car, it isn't. Dealers get all sorts of kickbacks and incentives from the manufacturer. Not to mention if they sell cars to customers that bargain hard, they will just sell to other customers (who aren't smart enough to bargain as well) for less of a deal to even things out.

Make no mistake. They won't sell you a car where they think they will be losing money or not making enough money on the sale in the overall picture of things, so don't think you're going to send them to the poorhouse by striking a killer deal.
Sr. Member
Dec 12, 2007
762 posts
107 upvotes
While working out a deal last night the sales guy tried to give me the "we have to keep the lights on" poor dealership. I'm pretty sure I have bills to pay too, otherwise I wouldn't be looking for a better deal. Right now we're at about 2.5% above invoice. I'm wondering what extra accessories I should ask for. Any suggestions?
Deal Addict
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Nov 28, 2007
1782 posts
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Mississauga
mocha'n'me wrote:
Jan 15th, 2009 1:52 pm
While working out a deal last night the sales guy tried to give me the "we have to keep the lights on" poor dealership. I'm pretty sure I have bills to pay too, otherwise I wouldn't be looking for a better deal. Right now we're at about 2.5% above invoice. I'm wondering what extra accessories I should ask for. Any suggestions?
Tell them you'll go elsewhere because if they shut down how are you supposed to get maintenance work? xD
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Dec 2, 2003
2826 posts
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MichaelKnight wrote:
Jan 14th, 2009 10:04 pm
What do you think is a fair markup (eg. over CCD invoice) to offer on a 25-30k car (eg. accord). I want to get a reasonable deal, at the same time like to see the dealer get fair compensation. This is my first new car. Thanks.
Your question and statement shows that you're an intelligent, mature and a reasonable person to deal with. I wish every single person who walk in the door are all like this.

My manager said to me today, that people who come in with Car Cost Canada reports are generally realistic to deal with since they know what our cost is and so make a reasonable offer and therefore we do not have to lose money to sell cars.

I recently had a Car Cost Canada report. I'm going to quote it:

"Wholesale Price- Also, referred to as the Dealer Invoice Price, Dealer Factory Price or Dealer Cost. The price the Dealer pays for the car, before adjusting for any applicable Factory incentives. To start your negotiations, take this number, add a fair dealer markup/profit (3%-6% on most cars) and deduct any applicable factory incentive below"
:arrow: [url="merged-chrysler-dodge-jeep-questions-answers-897070/71/"[/u]Chrysler Dodge Jeep Ram Fiat Incentives [/url]


Tung(Tom)Nguyen
E-mail: tung@kawarthachrysler.com
Cell: 705-772-8847
[OP]
Jr. Member
Nov 23, 2007
198 posts
19 upvotes
T-Man wrote:
Jan 15th, 2009 10:04 pm
Your question and statement shows that you're an intelligent, mature and a reasonable person to deal with. I wish every single person who walk in the door are all like this.

My manager said to me today, that people who come in with Car Cost Canada reports are generally realistic to deal with since they know what our cost is and so make a reasonable offer and therefore we do not have to lose money to sell cars.

I recently had a Car Cost Canada report. I'm going to quote it:

"Wholesale Price- Also, referred to as the Dealer Invoice Price, Dealer Factory Price or Dealer Cost. The price the Dealer pays for the car, before adjusting for any applicable Factory incentives. To start your negotiations, take this number, add a fair dealer markup/profit (3%-6% on most cars) and deduct any applicable factory incentive below"
Thanks, and on top of that I should not expect anything beyond freight/pdi/air tax + tank of gas? (ie. no 'admin fee')

Much appreciated
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Nov 13, 2005
5670 posts
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GTA
ES_Revenge wrote:
Jan 15th, 2009 1:03 pm
Do not, do not, do not worry about the dealer. Dealer can take care of themselves, they aren't in the business of losing money, trust me.

Even if they sell you a car at invoice price, that doesn't mean they aren't making money on the sale. They get money from the manufacturer in various other ways, so don't think that the invoice price is "what the dealer paid" for the car, it isn't. Dealers get all sorts of kickbacks and incentives from the manufacturer. Not to mention if they sell cars to customers that bargain hard, they will just sell to other customers (who aren't smart enough to bargain as well) for less of a deal to even things out.

Make no mistake. They won't sell you a car where they think they will be losing money or not making enough money on the sale in the overall picture of things, so don't think you're going to send them to the poorhouse by striking a killer deal.

This is true for NA dealers but definitely not for HONDA nor Toyota. Why would Honda and Toyota offer incentives to the dealers when the vehicle sells for themselves!!!!!!

sk
Jr. Member
Oct 20, 2008
131 posts
4 upvotes
Burnaby
Hi
sunnybono wrote:
Jan 15th, 2009 10:44 pm
This is true for NA dealers but definitely not for HONDA nor Toyota. Why would Honda and Toyota offer incentives to the dealers when the vehicle sells for themselves!!!!!!

sk
If so, how come Honda is offer $3500 cask back on Accord EXL V6 and Camry $1500 on the XLE V6 from Toyota, (it was $3000 last month)

PMM
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Dec 2, 2003
2826 posts
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MichaelKnight wrote:
Jan 15th, 2009 10:35 pm
Thanks, and on top of that I should not expect anything beyond freight/pdi/air tax + tank of gas? (ie. no 'admin fee')

Much appreciated
As long as they can justify what the extra fees are, and you're getting value for it, then its up to you. Here are some fees I've heard/seen.

PDI or Pre Delivery Inspection:. We do not charge this. I'm curious to know what people have been charge for this and from what manufacturer.

PDE: Pre Delivery Expense, same as PDI, different name.

Registration Fee: I had a guy once bring me a quote on a Dodge Journey, detailing the price breakdown on this vehicle. Once we got to this part, I asked him what is this fee, and he didn't know.

DME ?

Loyalty Link:?

Admin Fee: This varies, In my opinion you should not pay more then $299. I've heard another Chrysler Dealership charges as much as $1400. I get people who come in sometimes, and they'll show me a flyer with that dealership advertising their exact same (Insert vehicle) for say 1K less then everybody else. Now I know how they do, its when they add on the fees.

Safeguard: $186. This is where if somebody steals your vehicle starting from the day you take delivery of your new car. On top of your insurance settlement check, the Safeguard programs gives you an additional $5000. They put an etching number on your window. Typically theives who steal your vehicle to say export it, or try to resale it, they have to take into account the cost of replacing the window glasses, so this is also another deterrent.

Nitro-Safe: $199.
Get the Facts: http://www.getnitrogen.org/why/index.php
FAQ: http://www.getnitrogen.org/sub.php?view=getTheFacts

You would get free lifetime refills.

Omvic: $5 http://www.omvic.on.ca/
:arrow: [url="merged-chrysler-dodge-jeep-questions-answers-897070/71/"[/u]Chrysler Dodge Jeep Ram Fiat Incentives [/url]


Tung(Tom)Nguyen
E-mail: tung@kawarthachrysler.com
Cell: 705-772-8847
Deal Addict
User avatar
Dec 2, 2003
2826 posts
219 upvotes
Oh and also, as much as you're trying to save money and get a great deal. Keep in mind too, that its the "whole buying experience", you're not just buying a price, or a number. So you and your salesperson should be able to work together to make it an enjoyable experience as oppose to a power struggle.

I find customers who right off the bat put in a reasonable offer, my managers usually accepts it and we're done.

I don't like having to go back and fourth for hours.
:arrow: [url="merged-chrysler-dodge-jeep-questions-answers-897070/71/"[/u]Chrysler Dodge Jeep Ram Fiat Incentives [/url]


Tung(Tom)Nguyen
E-mail: tung@kawarthachrysler.com
Cell: 705-772-8847
Deal Fanatic
User avatar
Oct 25, 2003
8809 posts
112 upvotes
sunnybono wrote:
Jan 15th, 2009 10:44 pm
This is true for NA dealers but definitely not for HONDA nor Toyota. Why would Honda and Toyota offer incentives to the dealers when the vehicle sells for themselves!!!!!!

sk
Believe me, Honda and Toyota dealerships get volume kickbacks from Corporate.
it's me ramin.
Sr. Member
Dec 12, 2007
762 posts
107 upvotes
T-Man wrote:
Jan 15th, 2009 11:06 pm
As long as they can justify what the extra fees are, and you're getting value for it, then its up to you. Here are some fees I've heard/seen.

PDI or Pre Delivery Inspection:. We do not charge this. I'm curious to know what people have been charge for this and from what manufacturer.

PDE: Pre Delivery Expense, same as PDI, different name.

Registration Fee: I had a guy once bring me a quote on a Dodge Journey, detailing the price breakdown on this vehicle. Once we got to this part, I asked him what is this fee, and he didn't know.

DME ?

Loyalty Link:?

Admin Fee: This varies, In my opinion you should not pay more then $299. I've heard another Chrysler Dealership charges as much as $1400. I get people who come in sometimes, and they'll show me a flyer with that dealership advertising their exact same (Insert vehicle) for say 1K less then everybody else. Now I know how they do, its when they add on the fees.

Safeguard: $186. This is where if somebody steals your vehicle starting from the day you take delivery of your new car. On top of your insurance settlement check, the Safeguard programs gives you an additional $5000. They put an etching number on your window. Typically theives who steal your vehicle to say export it, or try to resale it, they have to take into account the cost of replacing the window glasses, so this is also another deterrent.

Nitro-Safe: $199.
Get the Facts: http://www.getnitrogen.org/why/index.php
FAQ: http://www.getnitrogen.org/sub.php?view=getTheFacts

You would get free lifetime refills.

Omvic: $5 http://www.omvic.on.ca/
I think it's unjustified to make the buyer pay for something that is not requested. Sure some of the fees are necessary, freight, PDI, licensing, OMVIC. I don't agree with paying for the etching or nitrogen. Both of these should be additional options that are available. I don't consider etching to be a theft deterrent, after paying to have half of my windows replaced as a result of vandalism, I'd prefer for my whole car to be stolen rather than just broken into. After speaking with some others, I'm not convinced that Nitrogen is a good option either. Sure it's okay if I'm only driving around the area of the dealership and need to have my tires topped up. What happens when I'm driving in the middle of nowhere and can't find somewhere to refill my nitro tires? Something that is clearly an option should not be a required fee.
Deal Fanatic
Jan 18, 2004
5716 posts
697 upvotes
Here's a question regarding markups and profit.

Let's say a sales person sells a car for $500 over cost.
Where does that $500 go?
Does $250 go to Honda
$100 to the dealership
$150 as commission?

Cuz $150 commission seems quite low for a 'big' sale
Deal Expert
Mar 23, 2004
19892 posts
1520 upvotes
T-Man wrote:
Jan 15th, 2009 10:04 pm
and so make a reasonable offer and therefore we do not have to lose money to sell cars.
Oh give over. :rolleyes: You guys don't "lose money to sell cars". Selling cars is a business and it's certainly not a not-for-profit business or a lose-money business. Dealerships are in business to make money and the successful ones certainly do. There is no way that customers are going to make you sell vehicles to them such that you end up losing money. If that were the case the dealership management/owners would either be total morons or just really poor business people.
sunnybono wrote:
Jan 15th, 2009 10:44 pm
This is true for NA dealers but definitely not for HONDA nor Toyota. Why would Honda and Toyota offer incentives to the dealers when the vehicle sells for themselves!!!!!!

sk
I have a question for you. What's the point of posting totally irrelevant [and inaccurate] nonsense? :confused:
T-Man wrote:
Jan 15th, 2009 11:06 pm
As long as they can justify what the extra fees are, and you're getting value for it, then its up to you. Here are some fees I've heard/seen.
LOL as long as "they" can justify you getting value for it. How nice of Mr. Stealership to decide that for us :lol:
T-Man wrote:
Jan 15th, 2009 11:06 pm
PDI or Pre Delivery Inspection:. We do not charge this. I'm curious to know what people have been charge for this and from what manufacturer.
That's actually very admirable that you don't charge that, but it seems that you guys are making up some money elsewhere anyway (see below). PDI can be very expensive on some makes/models--over $1000 easily in some cases. Some cars a lot more is done in PDI than others. For example luxury cars often have a full detailing and waxing done prior to delivery, whereas lower-end makes often just wash the car prior to the customer coming to pick up the car.

Though PDI is money that goes to the dealer, it's often still set out by the manufacturer and often its true amount is "hidden" along with the frieght charge when it's stated as "Freight & PDI" as one amount.
T-Man wrote:
Jan 15th, 2009 11:06 pm
Registration Fee: I had a guy once bring me a quote on a Dodge Journey, detailing the price breakdown on this vehicle. Once we got to this part, I asked him what is this fee, and he didn't know.
Uh that's the fee that goes to the goverment to register the car no? That along with getting plates are usually called "License/Registration"
T-Man wrote:
Jan 15th, 2009 10:04 pm
Admin Fee: This varies, In my opinion you should not pay more then $299. I've heard another Chrysler Dealership charges as much as $1400. I get people who come in sometimes, and they'll show me a flyer with that dealership advertising their exact same (Insert vehicle) for say 1K less then everybody else. Now I know how they do, its when they add on the fees.
Admin fee should really be zero, but since you guys don't charge PDI, I would say $299 is fine.

The dealers that collect PDI and try to charge Admin, well they are the true stealers.
T-Man wrote:
Jan 15th, 2009 10:04 pm
Nitro-Safe: $199.
Get the Facts: http://www.getnitrogen.org/why/index.php
FAQ: http://www.getnitrogen.org/sub.php?view=getTheFacts

You would get free lifetime refills.
$200 for nitrogen tyre filling is excessive, plain and simple. Should be done for free or at least cost a lot less. So again while you may not charge PDI, you're "making it up" elsewhere IMO.

We've had a thread recently about nitrogen filling, and I don't think even the people defending paying extra for nitrogen would defend paying $200 extra.
T-Man wrote:
Jan 15th, 2009 10:04 pm
Omvic: $5 http://www.omvic.on.ca/
[/quote]
Stinkin' OMVIC, gotta take their cut eh? Underhanded, no good, grumble....
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