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This is what the dealer tells me when I give a dollar amount. I feel guilty. Should I? This is especially when I asking for invoice.
Experts please tell me should I feel guilty.

Thanks
 

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I am no expert so I will tell you not to feel guilty. ;D

They still make money off of invoice. What is holdback on GM vehicles, something like 3%? So they are still making $1000 before any other hidden factory to dealer incentives. Tell him to politely cry you a river. Plus if you are trading in, then there is additional profit there.
 

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Like everything in life, it's a negotiation. The only time you should spend your hard-earned money is if the value exceeds the price you pay. The Enclave is a great value, even at "sticker" price. If the dealer will sell for less, good for you. Profit is not a dirty word, and if you want that dealer to be there years from now to service your vehicle, they have to make money on the deal. Dealers that sell all day at or below invoice do not last long.

Here's an example on a typical loaded Enclave:
MSRP: $45465.00 (loaded WDT)
Dealer Invoice: $42441.00
Holdback: $1341.00

If the dealer sells at invoice, he makes $1341 on the deal. Out of that, he has to pay advertising (anywhere from 0-2.5% depending on market, and going to 2% across the board starting April 1st), in this case $670. That leaves $672. Then he has to detail the car (figure $100 if done right). That leaves $572.00 on a $45465.00 sale. Out of that $572.00, he then has to pay commission and his fixed and variable expenses. Now all you business people out there tell me how long you think that guy will be in business? Yes, he'll make money on service and used cars (WAY more profitable, by the way), but most new car dealers don't make much on new vehicles. When they have a "hot" car, which the Enclave surely is, then they have every right to make some profit while they can.

Now don't get me wrong-this absolutely does not excuse dealers who act like jerks. You always have the option of going to another dealer, and at last count, you had about 2700 choices in the US. We still have to EARN your business. The bottom line is if you think the car is worth the price, buy it. If not, go somewhere else or choose another car. Hopefully those of you out there who have been driving one feel it was worth the money and/or wait.
 

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Tralfaz said:
Like everything in life, it's a negotiation. The only time you should spend your hard-earned money is if the value exceeds the price you pay. The Enclave is a great value, even at "sticker" price. If the dealer will sell for less, good for you. Profit is not a dirty word, and if you want that dealer to be there years from now to service your vehicle, they have to make money on the deal. Dealers that sell all day at or below invoice do not last long.

Here's an example on a typical loaded Enclave:
MSRP: $45465.00 (loaded WDT)
Dealer Invoice: $42441.00
Holdback: $1341.00

If the dealer sells at invoice, he makes $1341 on the deal. Out of that, he has to pay advertising (anywhere from 0-2.5% depending on market, and going to 2% across the board starting April 1st), in this case $670. That leaves $672. Then he has to detail the car (figure $100 if done right). That leaves $572.00 on a $45465.00 sale. Out of that $572.00, he then has to pay commission and his fixed and variable expenses. Now all you business people out there tell me how long you think that guy will be in business? Yes, he'll make money on service and used cars (WAY more profitable, by the way), but most new car dealers don't make much on new vehicles. When they have a "hot" car, which the Enclave surely is, then they have every right to make some profit while they can.
OK, if a dealer has advertising already built into the "invoice" price, is that really what they pay, or is that padded profit? I know dealers here in Mpls have LAM dealer and group fees added to the "invoice" price. Seems to me that the holdback truly is profit then, no?
 

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zman said:
OK, if a dealer has advertising already built into the "invoice" price, is that really what they pay, or is that padded profit? I know dealers here in Mpls have LAM dealer and group fees added to the "invoice" price. Seems to me that the holdback truly is profit then, no?
No, it's not profit. That money goes into a GM and Dealer Council-controlled fund used for local-area marketing. When you see an ad that includes all your local dealers listed at the bottom, or anything that includes actual pricing, it is paid for out of that fund. That's a common misperception regarding those fees on the invoice.
 

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Tralfaz said:
No, it's not profit. That money goes into a GM and Dealer Council-controlled fund used for local-area marketing. When you see an ad that includes all your local dealers listed at the bottom, or anything that includes actual pricing, it is paid for out of that fund. That's a common misperception regarding those fees on the invoice.
So we as consumers are then paying the dealers advertising fees, are we not? Then the only other costs out of holdback would be commissions and prep costs? If that is the case I do not feel at all guilty with a dealer making $1000 off of me while investing nearly nothing, assuming the vehicle does not sit on the lot long. They have my money before they even need to pay for the car.
 

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zman said:
So we as consumers are then paying the dealers advertising fees, are we not? Then the only other costs out of holdback would be commissions and prep costs? If that is the case I do not feel at all guilty with a dealer making $1000 off of me while investing nearly nothing, assuming the vehicle does not sit on the lot long. They have my money before they even need to pay for the car.
You're partly right-what the "advertising" fee pays for is any local GM or Buick "branded" advertising. Anything else, like print, radio or TV that is specifically for the dealer is paid out of the profit. Also, the other dealer expenses come out of the profit, too, so it's not just "commissions and prep costs". Also, when you say "investing nearly nothing", if you mean that, your dealer must have a really gnarly facility. BTW-they have to pay for the car when it's delivered; there is an "interest credit" they get if they sell it real quickly, but that offsets all the 100+ day-old LaCrosses and Lucernes they have on their lots. Keep in mind, most dealers are only getting 2-4 E's a month. With production at +/- 5000 a month and 2700 dealers, nobody's getting rich off Enclaves except GM, but that's a discussion for another thread..... ;)
 

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Thanks Tralfaz.

I meant to ask you in my last posting - is any of the advertising involvement optional? What I am wondering is if there are local dealers that would have the LAM added to invoice and then others not have it added? I have heard of some regions that have it and others don't. I am wondering if it is by region or dealer choice.

Thanks.
 

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Good question-my last post wasn't so clear. It is all optional until 4/1. After that point, all dealers will be charged 2%. That's why sometimes one dealer can have an invoice that's hundreds less than another for the exact same car, and they could leech off the advertising spent by their peers in the same market. Not really fair since they all benefit from the ads.
 

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So do you know if it will show up as "LAM" or whatever acronym on all invoices after 4/1, or will it be a hidden charge that the dealers get charged?
 

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zman said:
So do you know if it will show up as "LAM" or whatever acronym on all invoices after 4/1, or will it be a hidden charge that the dealers get charged?
not sure how it will show on the invoice, but it should be included in the bottom-line number
 

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jaimonj said:
This is what the dealer tells me when I give a dollar amount. I feel guilty. Should I? This is especially when I asking for invoice.
Experts please tell me should I feel guilty.

Thanks
Reply "No, I don't want you to make a single penny. In fact, I'd prefer you lose money."

Do not dignify a stupid question with a real question.

[The dealer is not required to sell you a car, so if they agree to sell it to you, they must be happy with the price.]
 

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Sorry for the hijack. Back on topic. :hijacked:
 

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jaimonj said:
This is what the dealer tells me when I give a dollar amount. I feel guilty. Should I? This is especially when I asking for invoice.
Experts please tell me should I feel guilty.

Thanks
Absolutely not.

I don't mind if you make money -- I just prefer it not to be from me :)

How much time(and therefore money) are you going to waste not selling me a vehicle?

If I drive your vehicle around and someone sees it and I have a good buying experience and you
get a good reference -- What is that worth to you?

If on average they are moving 2-3 of these amonth -- any profit they get they should be happy with.

m
 

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Sorry Tralfaz, but you're obviously a salemen or dealer (or such) and you're slant is CLEAR. Sorry, but you're "estimate" that the deal won't make money on an invoice sale is crap. First off, most dealers try to charge you "detailing" fees, which is you're cheapest 18 year old making 12 bucks an hour for 2 hours putting in fuses and plugging in stuff. It's monkey work but it needs to be done. The documentation is often charged as a fee, and that's a secretary getting all the paperwork done up and ready for signing...that's their job! And the advertising, most places try to charge a fee for that too, and I block on that WHOLE HEARTEDLY! I'm not paying for you to advertise to me. If you want to advertise, that's YOUR choice and YOUR expense. Frankly, only a car dealership would state that $1k isn't enough for less than a day's worth of work to be "profitable". Give me a break!

Not to mention all the other opportunities for the dealer to make more profit, on trade-in and financing, plus putting a good face on and getting servicing work from you for years. And most people getting Enclaves have to order their's special, so they're not sitting on the lots for a month or two taking up room and eating the dealerships credit they use to finance the cars on the lot. Frankly, dealerships make enough money they should NEVER finance crap, they should be financing THEMSELVES! Do you think Boeing does that? or any other major corporation? No, they finance THEMSELVES, basically being their own bank and reaping theri own benefits.
 

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Jimbobwae said:
Sorry Tralfaz, but you're obviously a salemen or dealer (or such) and you're slant is CLEAR. Sorry, but you're "estimate" that the deal won't make money on an invoice sale is crap. First off, most dealers try to charge you "detailing" fees, which is you're cheapest 18 year old making 12 bucks an hour for 2 hours putting in fuses and plugging in stuff. It's monkey work but it needs to be done. The documentation is often charged as a fee, and that's a secretary getting all the paperwork done up and ready for signing...that's their job! And the advertising, most places try to charge a fee for that too, and I block on that WHOLE HEARTEDLY! I'm not paying for you to advertise to me. If you want to advertise, that's YOUR choice and YOUR expense. Frankly, only a car dealership would state that $1k isn't enough for less than a day's worth of work to be "profitable". Give me a break!

Not to mention all the other opportunities for the dealer to make more profit, on trade-in and financing, plus putting a good face on and getting servicing work from you for years. And most people getting Enclaves have to order their's special, so they're not sitting on the lots for a month or two taking up room and eating the dealerships credit they use to finance the cars on the lot. Frankly, dealerships make enough money they should NEVER finance crap, they should be financing THEMSELVES! Do you think Boeing does that? or any other major corporation? No, they finance THEMSELVES, basically being their own bank and reaping theri own benefits.
Wow, having a bad day?
 

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No, not really. Just bugs me when dealers or salesmen act like we're trying to put them into poverty when we have the audacity to ask for a lower price.
 

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I'm sorry to say "Jimbobwae", but your idea of corporate financing is so far off base...you've been listening to too many politicians. The bottom line is this...go to a dealer, get a price. Go on line...get a price. Then, just like buying a gallon of milk, or can of paint, or whatever, buy from the guy with the best price, or reputation, or whatever. If someone is going to stay in business (including our bosses) they MUST make a profit! The companies that didn't...W.T.Grant, Woolworths, and so on, are just a fond memory. Yep, and so is my pension. Again, buy where you want, but don't dictate how much a person should make...any company is entitled to make a profit. If they don't, then you end up with a Yugo!!
 

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I agree with a lot of what has been said. I think Jimbobwae just came on a little strong as Tralfaz is a dealer who has been very helpful with several problems people have had as well as being open with his replies. I don't feel sorry for the dealers or buy into the "we aren't making anything on this deal" as I have never seen an owner of a dealership that wasn't doing well. In Minneapolis these guys own 7-8 or 10 different dealerships and are filthy rich. I always got a kick out of going to say a Chevy dealer and getting the buy american speech and then going to a Mazda dealer owned by the same guy and being told how great the Mazdas were.
 

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KCorey said:
I'm sorry to say "Jimbobwae", but your idea of corporate financing is so far off base...you've been listening to too many politicians. The bottom line is this...go to a dealer, get a price. Go on line...get a price. Then, just like buying a gallon of milk, or can of paint, or whatever, buy from the guy with the best price, or reputation, or whatever. If someone is going to stay in business (including our bosses) they MUST make a profit! The companies that didn't...W.T.Grant, Woolworths, and so on, are just a fond memory. Yep, and so is my pension. Again, buy where you want, but don't dictate how much a person should make...any company is entitled to make a profit. If they don't, then you end up with a Yugo!!
Precisely :thumb:

Everyone is always for getting the best price they can...but you can't be a dolt when it comes to understanding the plethora of bills, charges, and fees dealers must account for to be so nice to you, have the car you want, etc.

It's just like the advertising argument. No matter how many times it is clearly explained to people, that what they see is almost always a fee already built into the invoice and payed into a central account with GM for regional advertising, people still say "I refuse to pay that" and think it's some kind of a slime charge. It isn't. It could simply be rolled into the MSRP and invoice without noting it, but then someone would still complain.

Just as said, very few people even remotely get taken for a ride with cars and pricing in today's age (when you walk in knowing invoice, etc., that's a moot point), but dealers are a business and they want to give you the best deal they can to earn your business...but also make enough money off the deal so the salespeople can actually be paid, the dealership kept in operation, that service center friendly, etc.

Decide on a car you want. Shop for the best price--without putting up some kind of a dog and pony show fight "because"--and a dealer you like, and call it a day. It's not that hard, and understandably not fun for most people, but in the end is almost always worth it.
 
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