Automotive

New Car - Salesman gave me his cost price and "told me" to make an offer...what should i make him?

  • Last Updated:
  • Jan 13th, 2018 9:26 pm
[OP]
Deal Addict
Oct 17, 2010
1279 posts
110 upvotes
Gutty96 wrote:
Nov 4th, 2017 5:24 pm
OP you are playing a silly game with this guy. You don't make offers. They give you prices and you choose to buy or not.

Tell him to give you the best price he can sell it for and still make his satisfacory profit margin. Ask the same off the other dealerships and go with best one. Start negotiating from there with the cheapest dealership.

If you are willing to go out of town, I know someone that works in sales at the dealership in Cobourg. Sometimes a small town can offer better prices. PM me if you want their email.
kenchau wrote:
Nov 4th, 2017 5:38 pm
OP 2017 Highlanders are old. 2018's are already out. Definitely do not pay more than his so-called "showroom cost". Car has depreciated already.

Ask him to show you 2018 Highlander "showroom cost". It is afterall, only $650 more than the 2017.
bomber17 wrote:
Nov 4th, 2017 5:46 pm
The salesman is using a very good tactic. Show dealer cost upfront so that you have to decide how much profit to give him. I would offer $500 above invoice and let him counter $1000, maybe even $1500. He may not even budge though depending on their motivation to move inventory. Toyota's are hard to negotiate.
craftsman wrote:
Nov 4th, 2017 5:50 pm
The subject of invoice pricing has been discussed many times before. Basically, the invoice price is the cost to the dealership IF you don't count any discounts, rebates, incentives, bonuses, promotions or anything that will lower the price - it's the MSRP from the OEM to the dealer. In other words, no dealer actually pays that price for the car... they pay less and depending on their discount level, rebates, dealer incentives, and promotions, it might be a lot less - several thousands less than what you see.

The reason why they are showing you the invoice price is that they KNOW that the invoice price is already out there and other manufacturers are making a big deal about selling you at invoice so why not show you the invoice price and start from there?
MrWhiteCoffee wrote:
Nov 4th, 2017 5:56 pm
No incentives on Highlander

And what you said is already known... invoice price is always exclusive of factory incentives that change monthly and stack on top of discount from dealer as incentives are from manufacture
xjesterxx wrote:
Nov 4th, 2017 8:37 pm
The invoice is the invoice on the Highlander.. nothing hidden here and the sales rep sent the correct information in the more recent offer sheet.

It’s a starting point, but going upwards and not downwards like you suggest.
Thanks for your input guys! ITs a interesting sales tactic.

so best move is to reply back with what the sales guy think is a fair price and check others to see if it matches or is better. and assuming this guy offers the best price, go with him?
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Jun 24, 2006
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thatsnazzyiphoneguy wrote:
Nov 5th, 2017 2:17 am
Thanks for your input guys! ITs a interesting sales tactic.

so best move is to reply back with what the sales guy think is a fair price and check others to see if it matches or is better. and assuming this guy offers the best price, go with him?
Well, pretty much. If he had the best price, then you start negotiating with him to see if you can squeeze a little more.
[OP]
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Oct 17, 2010
1279 posts
110 upvotes
kenchau wrote:
Nov 4th, 2017 5:38 pm
OP 2017 Highlanders are old. 2018's are already out. Definitely do not pay more than his so-called "showroom cost". Car has depreciated already.

Ask him to show you 2018 Highlander "showroom cost". It is afterall, only $650 more than the 2017.
i looked att the 17 since its the exact car as the 18 so i thought i could save a few bucks.

i know they would ahve to source one from another deaerlship, not sure if that would change anything in terms of a "deal"
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Jan 27, 2006
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xjesterxx wrote:
Nov 4th, 2017 8:37 pm
The invoice is the invoice on the Highlander.. nothing hidden here and the sales rep sent the correct information in the more recent offer sheet.

It’s a starting point, but going upwards and not downwards like you suggest.
I agree with you - the invoice is the invoice. But that doesn't mean that they actually pay that price. According to various sources like unhaggle and carcost, there is only ONE invoice price for all dealers of a particular make/model/trim so if we follow your logic, then all dealers regardless of how much volume they do, how large they are, or the market that they are in, pay exactly the same amount for the car. That runs counter to even what dealerships advertise when they say that they are the largest dealership in the region and have the best buying power... how can a dealership have the best buying power when everyone pays the same? It also runs counter to basic retailing where large volume buyers/retailers get a better discount since they buy in bulk. Or how about the various reports here on RFD that members routinely get a deal that is a few hundred below invoice? Or how about when dealerships have their 'invoice price promotions'? Do you mean that they are loosing money on every car?

Let's not forget about the various articles and new stories about invoice pricing and how it doesn't represent the true cost of the car to the dealership.

The eye-opening truth about dealer invoice prices
Guide to Car Pricing Terms - Consumer Reports
Banned
Dec 28, 2015
614 posts
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Westmount, QC
thatsnazzyiphoneguy wrote:
Nov 5th, 2017 2:17 am
Thanks for your input guys! ITs a interesting sales tactic.

so best move is to reply back with what the sales guy think is a fair price and check others to see if it matches or is better. and assuming this guy offers the best price, go with him?
Highlander is an in demand vehicle so imo there's less room to negotiate. First thing in negotiating is knowing your BANTA and establish that. But definitely initiate an offer first knowing even if it's fair, dealer won't likely accept it off the bat. Offer token above invoice like $500 above invoice and see how they respond would be what I would do.

Note: if it wasn't an indemand vehicle like Highlander $500 over invoice would be closer to max I will pay but for high demand cars, it's different
Banned
Dec 28, 2015
614 posts
236 upvotes
Westmount, QC
craftsman wrote:
Nov 5th, 2017 1:44 pm
I agree with you - the invoice is the invoice. But that doesn't mean that they actually pay that price. According to various sources like unhaggle and carcost, there is only ONE invoice price for all dealers of a particular make/model/trim so if we follow your logic, then all dealers regardless of how much volume they do, how large they are, or the market that they are in, pay exactly the same amount for the car. That runs counter to even what dealerships advertise when they say that they are the largest dealership in the region and have the best buying power... how can a dealership have the best buying power when everyone pays the same? It also runs counter to basic retailing where large volume buyers/retailers get a better discount since they buy in bulk. Or how about the various reports here on RFD that members routinely get a deal that is a few hundred below invoice? Or how about when dealerships have their 'invoice price promotions'? Do you mean that they are loosing money on every car?

Let's not forget about the various articles and new stories about invoice pricing and how it doesn't represent the true cost of the car to the dealership.

The eye-opening truth about dealer invoice prices
Guide to Car Pricing Terms - Consumer Reports
True, just like invoice price is not true cost to dealer to sell the car, it's higher. As there's overhead like salaries, building, utilities, taxes etc that need to be added.

Bigger volume dealers have more cars to spread the fixed costs over which is why the urban areas get better deals on cars. Volume leads to lower per sale cost for overhead

Invoice is simply one cost the dealer has. Just like food cost is one component to meal cost in a restaurant
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Now I know why (incredibly) so many ppl have prbs negotiating. What ever happened to using the KISS principle? Just ask around for the lowest prices and go from there. Don't get confused by invoice, add-ns, deductions, etc, just ask for the out-the-dr price. It's pretty obvious the salesman is not 'stripping naked' in front of you and showing his real cost.
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Aug 29, 2011
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GTA
If you are only saving a few hundred dollars buying the 2017 then I would look at the 2018. There should be a $3K to $4K difference in price here.
That will be the loss when you trade in a 2017 vs. a 2018 down the road.
The Duke
[OP]
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Oct 17, 2010
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MrWhiteCoffee wrote:
Nov 5th, 2017 2:00 pm
Highlander is an in demand vehicle so imo there's less room to negotiate. First thing in negotiating is knowing your BANTA and establish that. But definitely initiate an offer first knowing even if it's fair, dealer won't likely accept it off the bat. Offer token above invoice like $500 above invoice and see how they respond would be what I would do.

Note: if it wasn't an indemand vehicle like Highlander $500 over invoice would be closer to max I will pay but for high demand cars, it's different
MrWhiteCoffee wrote:
Nov 5th, 2017 2:03 pm
True, just like invoice price is not true cost to dealer to sell the car, it's higher. As there's overhead like salaries, building, utilities, taxes etc that need to be added.

Bigger volume dealers have more cars to spread the fixed costs over which is why the urban areas get better deals on cars. Volume leads to lower per sale cost for overhead

Invoice is simply one cost the dealer has. Just like food cost is one component to meal cost in a restaurant
tranquility922 wrote:
Nov 5th, 2017 2:05 pm
Now I know why (incredibly) so many ppl have prbs negotiating. What ever happened to using the KISS principle? Just ask around for the lowest prices and go from there. Don't get confused by invoice, add-ns, deductions, etc, just ask for the out-the-dr price. It's pretty obvious the salesman is not 'stripping naked' in front of you and showing his real cost.
garytheduke wrote:
Nov 5th, 2017 2:51 pm
If you are only saving a few hundred dollars buying the 2017 then I would look at the 2018. There should be a $3K to $4K difference in price here.
That will be the loss when you trade in a 2017 vs. a 2018 down the road.
craftsman wrote:
Nov 5th, 2017 1:44 pm
I agree with you - the invoice is the invoice. But that doesn't mean that they actually pay that price. According to various sources like unhaggle and carcost, there is only ONE invoice price for all dealers of a particular make/model/trim so if we follow your logic, then all dealers regardless of how much volume they do, how large they are, or the market that they are in, pay exactly the same amount for the car. That runs counter to even what dealerships advertise when they say that they are the largest dealership in the region and have the best buying power... how can a dealership have the best buying power when everyone pays the same? It also runs counter to basic retailing where large volume buyers/retailers get a better discount since they buy in bulk. Or how about the various reports here on RFD that members routinely get a deal that is a few hundred below invoice? Or how about when dealerships have their 'invoice price promotions'? Do you mean that they are loosing money on every car?

Let's not forget about the various articles and new stories about invoice pricing and how it doesn't represent the true cost of the car to the dealership.

The eye-opening truth about dealer invoice prices
Guide to Car Pricing Terms - Consumer Reports
Sorry i ment the few hundred dollar difference in MSRP. i woul d expect a bigger discount on the 17 vs an 18 model since its a year old and they want to get rid of the 17s.

also, do you think the fact they would ahve to source the model i want in would effect how much of a discount i would get vs gettign a model already on the lot?
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thatsnazzyiphoneguy wrote:
Nov 5th, 2017 3:45 pm
Sorry i ment the few hundred dollar difference in MSRP. i woul d expect a bigger discount on the 17 vs an 18 model since its a year old and they want to get rid of the 17s.

also, do you think the fact they would ahve to source the model i want in would effect how much of a discount i would get vs gettign a model already on the lot?
Not sure why you quoted me but try to stay w/ the KISS principle and stop clouding yourself w/ all these scenarios lol. Just ask for the best OTD price to avoid getting confused/sidetracked.
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Aug 29, 2011
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thatsnazzyiphoneguy wrote:
Nov 5th, 2017 3:45 pm
Sorry i ment the few hundred dollar difference in MSRP. i woul d expect a bigger discount on the 17 vs an 18 model since its a year old and they want to get rid of the 17s.

also, do you think the fact they would ahve to source the model i want in would effect how much of a discount i would get vs gettign a model already on the lot?
The fact that they still have 2017’s left at this late date works in your favour. I was car shopping a month ago and most popular 2017 Honda models were gone. Keep in mind the 2017 stopped being Mfg in July. Which means at best the car is already a few months old if not older.
Dealer trades to get your model is very common and shouldn’t affect the price.
The Duke
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Jan 8, 2007
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If you just keep negotiating with only one dealership you're not going to get the best deal. Do some research, find the lowest price people have consistently paid in your area and use that or just below as the starting point. Also only use an out-the-door price or you're inviting the dealers to add bogus fees to make it seem like you're getting a deal on the pre tax and fee price. Use the email technique and don't fall for the "come in and we can chat" technique the dealers will use. They do that so they can wear you down and make you sign something just to get out of there.
[OP]
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Oct 17, 2010
1279 posts
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MadMonday wrote:
Nov 4th, 2017 1:04 pm
If you want to know on new cars by Toyota, xjesterxx knows what he is talking about.
Gutty96 wrote:
Nov 4th, 2017 5:24 pm
OP you are playing a silly game with this guy. You don't make offers. They give you prices and you choose to buy or not.

Tell him to give you the best price he can sell it for and still make his satisfacory profit margin. Ask the same off the other dealerships and go with best one. Start negotiating from there with the cheapest dealership.

If you are willing to go out of town, I know someone that works in sales at the dealership in Cobourg. Sometimes a small town can offer better prices. PM me if you want their email.
kenchau wrote:
Nov 4th, 2017 5:38 pm
OP 2017 Highlanders are old. 2018's are already out. Definitely do not pay more than his so-called "showroom cost". Car has depreciated already.

Ask him to show you 2018 Highlander "showroom cost". It is afterall, only $650 more than the 2017.
bomber17 wrote:
Nov 4th, 2017 5:46 pm
The salesman is using a very good tactic. Show dealer cost upfront so that you have to decide how much profit to give him. I would offer $500 above invoice and let him counter $1000, maybe even $1500. He may not even budge though depending on their motivation to move inventory. Toyota's are hard to negotiate.
craftsman wrote:
Nov 4th, 2017 5:50 pm
The subject of invoice pricing has been discussed many times before. Basically, the invoice price is the cost to the dealership IF you don't count any discounts, rebates, incentives, bonuses, promotions or anything that will lower the price - it's the MSRP from the OEM to the dealer. In other words, no dealer actually pays that price for the car... they pay less and depending on their discount level, rebates, dealer incentives, and promotions, it might be a lot less - several thousands less than what you see.

The reason why they are showing you the invoice price is that they KNOW that the invoice price is already out there and other manufacturers are making a big deal about selling you at invoice so why not show you the invoice price and start from there?
xjesterxx wrote:
Nov 4th, 2017 8:37 pm

The invoice is the invoice on the Highlander.. nothing hidden here and the sales rep sent the correct information in the more recent offer sheet.

It’s a starting point, but going upwards and not downwards like you suggest.
tranquility922 wrote:
Nov 5th, 2017 3:47 pm

Not sure why you quoted me but try to stay w/ the KISS principle and stop clouding yourself w/ all these scenarios lol. Just ask for the best OTD price to avoid getting confused/sidetracked.
garytheduke wrote:
Nov 5th, 2017 4:00 pm

The fact that they still have 2017’s left at this late date works in your favour. I was car shopping a month ago and most popular 2017 Honda models were gone. Keep in mind the 2017 stopped being Mfg in July. Which means at best the car is already a few months old if not older.
Dealer trades to get your model is very common and shouldn’t affect the price.
JC69 wrote:
Nov 5th, 2017 10:58 pm
If you just keep negotiating with only one dealership you're not going to get the best deal. Do some research, find the lowest price people have consistently paid in your area and use that or just below as the starting point. Also only use an out-the-door price or you're inviting the dealers to add bogus fees to make it seem like you're getting a deal on the pre tax and fee price. Use the email technique and don't fall for the "come in and we can chat" technique the dealers will use. They do that so they can wear you down and make you sign something just to get out of there.
Yes Im looking at 3 toyota dealers not just the one. thats interesting to know dealers sourcing a car from another place shouldnt effect the deal. one of the salesmen from another toyota place said i wouldn’t get as good of a deal as buying one they had already in stock on the lot.

ANYWAYS, so i took one of the RFDers advice and asked what his best price is and this was the response I got:

"I don’t know what to say you have probably gotten prices from other places. If I could do 800 over would you buy the vehicle. I am making this so simple for you! What number would earn your business and if I can do that how would you leave your deposit. We can do everything over the phone.
Thanks"

he seems a little agitated
Last edited by thatsnazzyiphoneguy on Nov 5th, 2017 11:32 pm, edited 1 time in total.
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800 over....but you should supply the figures with freight, PDI and tax and submit an out the door price. Otherwise you'll find that 800 over has morphed into something more like 1500 over after "etching" and "tire warranty" etc.
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JC69 wrote:
Nov 5th, 2017 11:35 pm
800 over....but you should supply the figures with freight, PDI and tax and submit an out the door price. Otherwise you'll find that 800 over has morphed into something more like 1500 over after "etching" and "tire warranty" etc.
Exactly, he's trying to cloud up things and confuse OP. Just ask him for the OTD price. If he doesn't want to do biz or is "agitated", he's not the only dealer in town and believe me there are MANY others that will play ball. If he's giving you attitude, I'd just walk, not worth it.

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