Chevy Bolt EV Forum banner

1 - 17 of 17 Posts

·
Registered
Joined
·
21 Posts
Discussion Starter #1 (Edited)
Before I bought my Bolt, I wanted to know the invoice price. My search took me to one James Bragg.

http://clark.com/cars/eye-opening-truth-about-dealer-invoice-price/

His claims:
(a) Around 1995 (I think) auto makers started padding the invoice price, so the consumer can't really tell what the dealer's cost really is.
(b) There are a number of ways the dealer can make money on a sale that are not obvious to the consumer, most notably the holdback fee, which is what an auto maker will pay a dealer for selling a car, or for selling a certain number of cars.
(c) Edmunds, True Car, and even Consumer Reports have never addressed (a) and when Bragg confronted these entities with his claims, he says they fell silent and ignored him. That is, you can't really get a true invoice price using these services because they are allied to the car companies.
I will say that I never felt confident that I knew what the dealer's cost was, but even though the "employee discount" had expired on the day I bought the Bolt, I gave the salesperson a lower figure than she was going to offer me, so she went to the manager and tacked on the employee discount of about $2100.00 anyway. That shows you how much room a dealer has to still make a profit because I am fairly confident that the dealer made a lot more than the 4% or so that the aforementioned entities say a consumer should allow a dealer to make.
A few tips for negotiating:
(1) IGNORE THE MSRP. It's a fiction. Don't even look at it. In fact, just ignore anything that has a price on it. Every option you add is also inflated.
(2) If possible, have a competing offer from another dealer and play them against each other.
(3) Don't say you don't want to pay more than X over invoice since that just plays into the dealer's hand, since you don't know what the invoice price is and the dealer does.
(4) Find out more or less what the holdback fee is and knock that off your offer. (You can find what the approximate holdback fee online.)
(5) NEVER negotiate the trade-in first. In fact, don't trade in a car. Sell it yourself. Long gone are the days when a dealer can say it's a huge hassle to sell a used car. It isn't in the online world.
(6) Don't assume you'll get a better deal by paying cash. In fact, you might get a lower price on a financed deal because the dealer will make MORE money off of you that way. Of course, you'll ultimately lose by paying on time, and if you can pay cash, try this trick: pretend you're going to have the car financed. Then, once the price is set, say that you've changed your mind and you'll pay cash. If the dealer tries to up the price, resist or walk away.
(7) Buy near the end of the month when there are sales quotas to be made and perhaps more deals to be had in your favor.
(8) NEVER let the salesperson know that you are tied to one particular car. In fact, if you are tied to one car, it might be good to pretend you are interested also in a less expensive one also. With the Bolt, you could say you're more interested in the Tesla 3.
(9) Assume that you cannot win this game. They know more than you do, no matter how much you know. Instead, congratulate yourself on getting a few thousand knocked off the price, even if the dealer is making more off of you than you'd like.
 

·
Registered
Joined
·
369 Posts
How complicated. My salesman just shows me the factory invoice and we go from there.
Example: my Bolt.
MSRP 42530
Inv. 41243

Total less holdback and Approx Wholesale Finance Credit 39380.

OTD 38,900

At first glance it looks like I took his holdback and finance money then a couple of thousand more. But there are many incentive programs he can tap so I don't feel sorry for him.
 

·
Registered
Joined
·
21 Posts
Discussion Starter #3
For all my work, you ended up with a better price than I did. BTW, mine is an LT, not a Premier. Added on: DC fast charger and "comfort and convenience package, which means mainly heated seats, which we need here in Central Texas about as much as you'd need a garden hose in the desert.
 

·
Registered
Joined
·
3,822 Posts
Good list.

Before tip #1 , I'll mention that the best way to avoid all of the sales traps is to boycott dealerships in the first place. Buy private party.

Patience is a virtue. Those who are willing to wait will pay less. Don't buy on the day you visit the dealership, and certainly get other offers to negotiate from.

Don't let them draw out one of those dumb "foursquares". What you can afford or what you want your monthly payment to be is irrelevant to the sales price. Salesmen use your emotion to increase their bonus. Take your emotion out of the negotiation, and if you can't, find someone else who can negotiate impassionately on your behalf.

I can't wait for the private dealership model to go extinct. That and mattress stores. Buying cars and mattresses should be like buying milk. The price is as listed, and if you don't like it, you can go somewhere else.
 

·
Registered
Joined
·
862 Posts
Buying cars and mattresses should be like buying milk. The price is as listed, and if you don't like it, you can go somewhere else.
Any Chevy dealer will very likely be happy to sell you a Bolt the same way Tesla sells their cars - you pay MSRP. No haggling involved.
 

·
Registered
Joined
·
3,822 Posts
Any Chevy dealer will very likely be happy to sell you a Bolt the same way Tesla sells their cars - you pay MSRP. No haggling involved.
All cars would cost less if manufacturers sold direct to consumers using standard pricing. Those fancy showrooms, coffee lounges, and expensive salesmen watches aren't paid for by consumers who got a great deal.

The dealership model has maybe 2 decades of life if they're lucky. Mattress stores will have much less time.
 

·
Registered
Joined
·
21 Posts
Discussion Starter #7
Good list.

Before tip #1 , I'll mention that the best way to avoid all of the sales traps is to boycott dealerships in the first place. Buy private party.

Patience is a virtue. Those who are willing to wait will pay less. Don't buy on the day you visit the dealership, and certainly get other offers to negotiate from.

Don't let them draw out one of those dumb "foursquares". What you can afford or what you want your monthly payment to be is irrelevant to the sales price. Salesmen use your emotion to increase their bonus. Take your emotion out of the negotiation, and if you can't, find someone else who can negotiate impassionately on your behalf.

I can't wait for the private dealership model to go extinct. That and mattress stores. Buying cars and mattresses should be like buying milk. The price is as listed, and if you don't like it, you can go somewhere else.
Redpoint 5
Excellent point, and I agree that bypassing the dealership should have been my first point.
 

·
Registered
Joined
·
21 Posts
Discussion Starter #8
All cars would cost less if manufacturers sold direct to consumers using standard pricing. Those fancy showrooms, coffee lounges, and expensive salesmen watches aren't paid for by consumers who got a great deal.

The dealership model has maybe 2 decades of life if they're lucky. Mattress stores will have much less time.
This is but one of the reasons I'm rooting for Tesla and, I claim, all of us should be. Observing Texas dealerships circling the wagons to keep Tesla from selling directly here infuriated me. So-called capitalists champion its virtues until it actually affects them. Then they want government protections.

The comment about mattress stores made me laugh. Maybe someone needs to open Acme Online Car and Mattress.

The online revolution has transformed the taxi system, vacation rentals, and video rentals, to name only three big markets. Why it has not hit real estate as hard is a mystery. And I also suspect dealerships as we know them will have to change if they have any chance at all of surviving, but they will not operate as they do now.
Last night I checked out Carvana but read a number of bad reviews. Bad reviews can be misleading since they tell only one side of the story, but it gave me pause.
 

·
Registered
Joined
·
134 Posts
For all my work, you ended up with a better price than I did. BTW, mine is an LT, not a Premier. Added on: DC fast charger and "comfort and convenience package, which means mainly heated seats, which we need here in Central Texas about as much as you'd need a garden hose in the desert.
I live in FL and you would think that this is true. But when you get a cool/cold morning, there is nothing quite like the heated seats and steering wheel. They are one of those ridiculous luxury items that feel so decadent and yet, so perfect. Unlike our northern brethren, we only get to use them a few times a year.

So when the icy winds come sweeping out of Oklahoma, fire up those seats and that wheel and enjoy the ride.
 

·
Registered
Joined
·
334 Posts
I think playing dealers off against each other is the only way to know if you are getting a good deal. I contacted at least 10 dealers before I bought my Bolt. Some would play ball and some would not, but I'm confident that I got the best price I could get at that particular time.
 

·
Registered
Joined
·
862 Posts
All cars would cost less if manufacturers sold direct to consumers using standard pricing. Those fancy showrooms, coffee lounges, and expensive salesmen watches aren't paid for by consumers who got a great deal.

The dealership model has maybe 2 decades of life if they're lucky. Mattress stores will have much less time.
So you think a storefront with inventory, employees, a service center, etc would cost less if operated by the manufacturer instead of a franchisee?

Or are you of the opinion that all cars should/will be ordered directly with no local inventory available?
Test drive one similar to what you want, place your order and wait months for it to be delivered?
Service centers at separate facilities?

Dealerships make a small percentage of profit off of new cars. The vast majority comes from their service center, F&I, and used car sales.

Many dealerships have "No bull" pricing is not uncommon.
 

·
Registered
Joined
·
72 Posts
A few tips for negotiating:
That's a decent list, but I think you forgot two important ones:

a) Know the maximum amount you are willing and able to pay. If you need financing, know what that translates to as a monthly payment. If you can't get a price that's lower or equal, then DON'T BUY.

b) Don't wait until you need a car to start shopping for one.
 

·
Registered
Joined
·
3,822 Posts
This is but one of the reasons I'm rooting for Tesla and, I claim, all of us should be. Observing Texas dealerships circling the wagons to keep Tesla from selling directly here infuriated me. So-called capitalists champion its virtues until it actually affects them. Then they want government protections.

The comment about mattress stores made me laugh. Maybe someone needs to open Acme Online Car and Mattress.

The online revolution has transformed the taxi system, vacation rentals, and video rentals, to name only three big markets. Why it has not hit real estate as hard is a mystery. And I also suspect dealerships as we know them will have to change if they have any chance at all of surviving, but they will not operate as they do now.
It's a mystery to me why people who otherwise champion capitalism, oppose free trade. The free market tends to arrange things in the most efficient way, and any regulations by definition are a hindrance to efficiency. I can't see how anyone but dealerships would protect the Mos Eisley of the sales world. Flatten it and start over I say.

The mattress revolution has already begun. There are competitors like Casper who are taking advantage of the enormous markups on mattresses. The margins are so huge that they can afford to ship the mattress to you for "free", and they will ship it back if you don't like it. A mattress costs like 50 bucks to make, so how they get away with selling for a grand is beyond me.

Real estate agents will quickly go extinct too. They serve no purpose now that the internet allows for inventory to be accessible at hardly any cost. I don't need an agent to locate homes for sale, or to tell me that the room I'm standing in is the bedroom. There are sites like Redfin that facilitate sales at a low commission. 6% is absurd.

So you think a storefront with inventory, employees, a service center, etc would cost less if operated by the manufacturer instead of a franchisee?

Or are you of the opinion that all cars should/will be ordered directly with no local inventory available?
Test drive one similar to what you want, place your order and wait months for it to be delivered?
Service centers at separate facilities?

Dealerships make a small percentage of profit off of new cars. The vast majority comes from their service center, F&I, and used car sales.

Many dealerships have "No bull" pricing is not uncommon.
I think that old people who like buying things the old way will die out. If haggling were the best way to sell products, then everything would be haggled, just like it's done in 3rd world countries. Dealerships are among the last holdouts of a dying system.

Automobiles are undergoing commoditization, and this means as people increasingly value tangible benefits such as range, performance, or total cost of ownership, over intangible things like prestige, the market will begin to focus on reducing price rather than using salesmanship to push prestige.

Vertical integration (manufacturers owning sales centers) is a proven method of reducing cost. Every entity in a supply chain represents an additional cost. If outsourcing sales were beneficial, Tesla would have gone that route instead. Why pay the attorney fees to fight the dealership gang if it's a losing strategy? I have no sympathy for any gang, especially those whose interests are in direct conflict with my own.

I've always found it incredible that people would pay the premium of owning a new vehicle and not get exactly the one they want. Most will pick something off the lot, often times with extra features they don't want, or wrong colors, or different seats. The salesmen will talk the customer into buying it anyway. His motivation is to turn the liability of the inventory into a sales, not to give customers what they want.

To answer your question, most sales should be completed through an order, with very few desperate buyers choosing a demo model.

Service centers can be owned by anyone. EVs will need very little service, will eventually get advanced diagnostics that identify the problem part, and are dead simple to work on.

"No bull" pricing is a late response to the increasing trend of people to get quotes online, and yet further evidence of the transition of automobiles from expressions of personality, to appliances that serve a utilitarian purpose.
 

·
Registered
Joined
·
369 Posts
"I think that old people who like buying things the old way will die out. If haggling were the best way to sell products, then everything would be haggled, just like it's done in 3rd world countries. Dealerships are among the last holdouts of a dying system."

Dunno. I just haggled with Sirius. Got the 6 months for 30 bucks, with internet streaming, and got the paper billing fee waived so I didn't have to leave a credit card on file. Just have the right balance of sounding like "I could be talked into it" vs. "Sorry, no", till you think there's nothing left to squeeze out of them.

Back to cars, once I'm think I've hit the bottom price I try to haggle the perks or accessories. Toss in a set of all weather or Weathertech floormats. An extra round or two of free scheduled maintenance. Free trips through the dealer's carwash.
The 5 gallon pail stuffed full of the pro grade products the detailing crew uses. Whatever.

The Bolt all weather floormats will be looking good in mine, LOL. Dealer has them on order.
 

·
Registered
Joined
·
3,822 Posts
"I think that old people who like buying things the old way will die out. If haggling were the best way to sell products, then everything would be haggled, just like it's done in 3rd world countries. Dealerships are among the last holdouts of a dying system."

Dunno. I just haggled with Sirius. Got the 6 months for 30 bucks, with internet streaming, and got the paper billing fee waived so I didn't have to leave a credit card on file. Just have the right balance of sounding like "I could be talked into it" vs. "Sorry, no", till you think there's nothing left to squeeze out of them.
Haggling for services with close to no marginal cost makes sense. It costs Sirius almost nothing to allow your receiver to receive the signals that are already bathing us. If there were more competition, the price would already be nearly as low as they were willing to go.

Just now I called Comcast to tell them to lower my internet bill to under $50. Every year they increase the price. I told them my company only authorizes $50/mo for internet, and that payment will not be made for bills over $50. The lady asked if I was happy with my current speed. I said yes, unless she wanted to give me a bump up in speed while reducing the bill to under $50 and backdating to the 1st of the month. Of course she gave me all those things. I'd have switched to CenturyLink for $30/mo if she hadn't.

Vehicles have high marginal costs, as each additional unit consumes a vast number of parts and resources. The majority of the price you pay goes towards the actual cost to make the materials into a vehicle. There is relatively less wiggle room to negotiate price. It would be a fairly simple matter for a manufacturer to set a no haggle price to meet their sales volume and profit margin goals.

I've bought a used car at a dealership once in my lifetime, and that was only because it was a rare vehicle I was after that I couldn't locate privately, and the dealer hard a hard time moving the 6-speed manual (I named my price and let them lose money on it for 3 weeks before they accepted). My company just had a new Mazda built and shipped to a dealership that I recently picked up. That was probably the last time I will ever purchase from a dealership. Millennials like me are prone to researching and shopping from home. All of my other vehicles have been purchased from Ebay (truck, motorcycle) or CL (Outback, Prius). I've got no patience to play the haggle game; offer the best price right away, or I'll go to someone else who values their time and has the lowest prices.
 

·
Registered
Joined
·
1,418 Posts
The idea an individual is going to buy a new car once every three years or whatever and outsmart the guys who are standing there all day, every day, is just not happening. Bring in all the internet wisdom and it's still their game.

This brings to mind two similar experiences: Once I was walking down through the diamond district in Antwerp and another time the rug market in Morocco, with the idea I was in the best place to get a deal on a diamond/rug. There were a hundred small and large shops. In front of each, inviting me in for tea, was a merchant who had learned the trade from his father, who had learned it from his grandfather, et al. Generations of experience and training against one infidel who wanted one diamond/one rug/one time. Yeah, I'm gonna take these guys to their cost.

jack vines
 

·
Registered
Joined
·
4,803 Posts
Yeah, I'm gonna take these guys to their cost.
It's a game, and you get what you put into it. The more effort you put in, the better price you may get. Especially if you're willing to walk away.

But yeah, they're sure not going to take a loss on your account.
 
1 - 17 of 17 Posts
Top