Almost funny------Buying a truck

[Gary Max]

We are home from a week long outdoor show. Now I know what a cooked lobster feels like, temps around a 100 every day. So it's time to hunt for a truck. We spent yesterday driving and shopping. One of the big dealerships we went into told me---Sorry we don't sell anything under $20k. I was floored that they could even stay in business with that kind of sales approach.
Today starts another day of hunting------I am also looking at a few on Ebay.

[Tim Boger]

Good Morning Gary .....

Check out this link (http://www.trucktrader.com/)to Truck Trader.

[Rich Engelhardt]

One of the big dealerships we went into told me---Sorry we don't sell anything under $20k. I was floored that they could even stay in business with that kind of sales approach.
Something most people aren't aware of is that dealerships don't have access to an endless supply of vehicles.
Their vehicles are all allocated to them.
A certain percentage of vehicles are ordered as floor stock, some are ordered for conversions and/or fleet and some are used for special orders (if you go in and can't find what you want on the floor and have to order it).
Once the allocation is used up for the year, they can't get any more product.

When I sold Chevys back in 1984/85, the dealership I worked at used their entire year's allocation of short wheel based vans w/in the first few months of the model year.
We were out of "shorties" around Thanksgiving.
By Christmas, the entire NE Ohio market was out of them.
Same with the K Blazers. New ones might trickle in until late January, but, anything ordered after Thanksgiving was iffy as far as a delivery date.

Another thing that comes into play is the markup on vehicles. There's a whole lot less markup on them than people think.
A basic "work truck". like a half ton Chevy, w/out any frills may only have a few hundred dollars markup.

KBB.com lists the invoice for a Colorado Work truck @ $17,269.00 and a MSRP @ $17,995.00.
That's not a lot of wriggle room - especially if there's a trade in involved.

Also - most if not all dealeships have what is called a "pack" figure. "Pack" is a certain dollar amount added to the invoice that becomes the minimum price the dealer will charge. Depending on the market, "pack" can be $50.00 to $200.00. Then on top of the "pack", a small advertising charge is addedd per vehicle. Typical in a large market is $50.00.
Bottom line is that a basic Colorado work truck, in most markets, is going to have a "cost" value of $17,519.00 assigned to it. That's the figure the salesperson's comission is based on. If they sell it for sticker, there's only $476.00 of gross in that product.

Going back to the orginal $20k figure, that's really not out of line at all for anything with a few creature comforts or with an engine upgrade or auto transmission instead of 5 speed.
It's extremely rare for a basic no frills anything to sell.

We always ordered our stock pickps w/power brakes, power steering, HD springs front and back and a painted bumper.
Those simple basic options added about $1200.00.

Having said that - if the staff/sales "broomed" you by just saying they don't carry anything under $20k, w/out explaining why and/or going into detail - then you've got every right to be floored. That's not a real good use of advertising dollars....

[Greg Portland]

Having said that - if the staff/sales "broomed" you by just saying they don't carry anything under $20k, w/out explaining why and/or going into detail - then you've got every right to be floored. That's not a real good use of advertising dollars....Poor salesmanship! Of course they'll sell you a truck for $20k... just be prepared to get screwed over on the trade-in and financing.

Gary, do you know what truck you want and are just trying to find a good deal? Our Highlander was cheaper to buy in TX and ship to Oregon versus buying locally. Obviously I would only recommend this method with factory certified or new stock!

[Gary Max]

Greg I had already figured out the trade in finance part and became a cash buyer. You are 100% correct about jumping on a plane if I can't find what I am looking for around here.

[John Pratt]

Then on top of the "pack", a small advertising charge is addedd per vehicle. Typical in a large market is $50.00.


This is one charge I never agreed with and have never paid. The last dealer told me that that is a standard charge and part of the cost of the vehicle. I argue that it is part of the cost of doing business. If you want to pass that cost onto me, then I wont advertise for your dealership with the dealer "badge" on the rear of my vehicle. Why should I pay you to drive around advertising for your dealership. Either eliminate the badge or eliminate the charge. So far it has worked everytime.

[Matt Meiser]

I told one dealer that I wanted their ad removed before I'd take the car. He said they put it on all their cars, so I told him that's fine, but I charge $50/mo with a 5 year prepaid commitment for advertising space that size and that they could just deduct from my total. They decided to take the sticker off. :)

[Gary Max]

I guess that Old school doesn't apply any more------------ I offered a dealership with-in 10% of window price and they looked at me like I was nuts. Yup sticker wasn't a bad price , but a offer within 10% ain't a insult either
So we are still hunting.

[Dan Hintz]

I offered a dealership with-in 10% of window price and they looked at me like I was nuts. Yup sticker wasn't a bad price , but a offer within 10% ain't a insult either.
So for an $18k truck you believe $16.2k is a fair price for new? No wonder they looked at you funny. That kind of number should be bandied about when the truck has been sitting on their lot all year and the new models are coming in... $17k would have probably been a more fair bargaining point, IMO.

[Gary Max]

It was a 5 year old truck and a offer with-in 10% of window ain't bad.

Bottom line----they didn't sell me a truck but the next guy did.
They are fixing a couple of small things and I pick it up Thursday afternoon.

[Brian Kent]

Under $20?

[Dan Hintz]

It was a 5 year old truck and a offer with-in 10% of window ain't bad.
Ah... 5 years old... I'd be down with 10%, then.

[Bill Cunningham]

We can get hosed pretty good up here.. I just bought a 2011 GMC Canyon Extended Cab SLE (same as the Chevy Colorado) four banger/5spd for 23k plus 13% in taxes.. They tell me this has a MSRP in Canada of 30555.00 (Canadian).. I just drove it to Sudbury Ontario and back this week, about 400 miles round trip, and it got 35 mpg (Canadian Gallon) Abt. 29 mpg (U.S. Gal).. This is the first pickup I've bought in over 40 years..I was surprised they now come standard w/air and Cruise.. Made great use of both this trip.. Nice little truck, I'm happy..

[Ole Anderson]

We can get hosed pretty good up here.. I just bought a 2011 GMC Canyon Extended Cab SLE (same as the Chevy Colorado) four banger/5spd for 23k plus 13% in taxes.. They tell me this has a MSRP in Canada of 30555.00 (Canadian).. I just drove it to Sudbury Ontario and back this week, about 400 miles round trip, and it got 35 mpg (Canadian Gallon) Abt. 29 mpg (U.S. Gal).. This is the first pickup I've bought in over 40 years..I was surprised they now come standard w/air and Cruise.. Made great use of both this trip.. Nice little truck, I'm happy..

Wow, that is some kind of gas mileage for a pickup. How does it compare with the EPA mileage sticker? And while a Canyon isn't a full size truck, it it close to it, not like the old Chevy Luv.

[Rich Engelhardt]

This is one charge I never agreed with and have never paid. The last dealer told me that that is a standard charge and part of the cost of the vehicle. I argue that it is part of the cost of doing business. If you want to pass that cost onto me, then I wont advertise for your dealership with the dealer "badge" on the rear of my vehicle. Why should I pay you to drive around advertising for your dealership. Either eliminate the badge or eliminate the charge. So far it has worked everytime
Actually, there's no connection between the advertising charge and the sticker (badge)(or licence plate frame or whatever) that the dealership puts on the vehicle.
The advertising fee charged against every vehicle goes to the Automobile Dealers Association that the dealership is a member of.
The ADA pools the money from all the dealers and buys ad space in the papers, radio/TV spots, insurance, legal "slush fund" and a whole host of other things.

Pens, post it's, stickers, licence plate frames, etc. come out of the individual dealers pockets in the form of a cost of doing business.


I guess that Old school doesn't apply any more------------ I offered a dealership with-in 10% of window price and they looked at me like I was nuts
If by "Old School" you mean offering "cash on the barrle lhead" or something like that, then that tactic hasn't worked (for the buyer) for decades - it didn't work in 84/85 & probably for some time prior to that.

If works quite well for the dealer though when it comes to settting or getting the maximum profit out of the sale.
When you negotiate the price of a vehicle with a dealer, a "cash offer" will always - 100% of the time - no excpetions - be met with the higest price.
(BTW - to explode another popular myth about dragging a trade into the deal at the last second - that tactic doesn't work either.
The dealer is always going to hold back some part of the profit on a "no trade" deal. That's how they cover themself.)

You will pay more. 100% gaurenteed when you offer "cash", be it in the form of actual cash or in the form of outside financing. I could have told you that days ago - but - I doubt you would have listened.

A "cash deal" cuts off any and all possibility for the dealer to "turn" you at the F&I office. You can say no to extendes warranties, "special fininacing", credit life/credit health and all the other extras - but - only if the dealer gets a (reasonable) shot at presenting them to you.
If you cut out that profit avenue for the dealer, believe me, they will make it up in some other way.

A financed deal is always the surest way to negotiate the best possible price. Period. Always. 100% of the time.
How you work around the finance charges is a whole different matter.
I/we always negotiate the best financed deal, then either shift or pay off the note before the 2nd payment is due.
Matter of fact, the last two financed deals, it was/is to our benefit to stay with what the dealership arranged.
It's a few points below what they wanted at my wife's credit union or that we could find on our own.

[Gary Max]

Rich by the time you figure in the charges you out smart and the interest you are paying over the term of the loan, cash and carry will win. I really wish I could of waited a couple months before replacing my truck. I think there are going to be some real bargains in the near future and not enough buyers.

[Rich Engelhardt]

Rich by the time you figure in the charges you out smart and the interest you are paying over the term of the loan, cash and carry will win
Gary, "over the term of the loan" is the operative.
If you have the cash - just make sure you arrange a loan that won't penalize you for an early payoff & pay the whole loan off after the first payment.

[Gary Max]

Here she is-----and I bought it at the price I wanted to pay. Yup I spent three days hunting, but for the coins I saved it was well worth it.

[Jim O'Dell]

Dealerships can be funny, and I work for one that is pretty straight forward and honest. Back in 1987 when I was shopping for a new Mazda B2200 PU, I went to a dealer close to work. Now I had already done my homework, and shopped some so knew the pricing. This particular dealer pulled all the factory stickers off of the PUs, which was legal at that time to do. I saw a price on the window about 1,000 higher than I knew it stickered for. Salesman came out and greeted me and the wife, a minute of chit chat, asked what we were looking for. I pointed to the truck and asked the price, he pointed to the price on the windshield, I counter pointed with what I knew I could by the same truck for elsewhere. He didn't say another word, just turned around and walked away.:confused: I was dumb founded for a moment, looked a my wife, and said, "I guess he doesn't want to sell a truck." And we left. I ended up getting the exact truck I wanted for less than sticker in Sherman. Bought it over the phone. And it was a great truck for about 15 years. Only got rid of it to get the current van I drive. Jim.

[Greg Cuetara]

Gary glad that you found a truck that you like.

Sometime I would like to understand the whole dealership thing. It all seems obscure to me because it is always said that dealers don't make too much money over invoice but then my question is how can the dealer sell a vehicle for $500 or $1,000 under invoice? Also, there is dealer holdback and other items where the dealer will still make $$. I bought a new vehicle a few years back and at the end of the deal and 4 dealerships later I knew they would not budge on any pricing. I wanted them to take a $300 processing fee off the cost and they wouldn't budge. It seems to me that typical businesses work costs into just doing business but car dealers charge for everything and make it known that they are trying to screw you. It also seems to me that the days of haggling for a car deal is no more. The price is the price and if there is a rebate they can give that to you but you can't get any other reduction in cost.

[Gary Max]

Dealer Invoice------- I think that just another sales pitch---- heck they will even show you the invoice-----to me--- it's bull----once called the shell game.
Dealers around here buy lots of their stock at auction------ I think that's their big money makers.

[Harry Hagan]

I told one dealer that I wanted their ad removed before I'd take the car. He said they put it on all their cars, so I told him that's fine, but I charge $50/mo with a 5 year prepaid commitment for advertising space that size and that they could just deduct from my total. They decided to take the sticker off. :)

Matt,

I share your sentiments about “free advertising” on my personal vehicles. Upon returning to pick up my new vehicle at the dealership, I discovered the salesman and detail man had ignored my instructions to not install the dealer’s advertising stickers on the trunk lid and their plate on the front bumper. The salesman’s big smile turned to a frown when pulled out my phone, called the police (pretended to), and reported that my new vehicle had been vandalized.

I left a half hour later with $500 cash in my pocket and the advertising %#@%%$# removed from my vehicle.

[Bill Cunningham]

Wow, that is some kind of gas mileage for a pickup. How does it compare with the EPA mileage sticker? And while a Canyon isn't a full size truck, it it close to it, not like the old Chevy Luv.

The energuide says City: 11.7 L/100 Klm (24 mpg) and Hwy 8.1 L/100klm (35mpg) and what I'm getting is almost exactly that.. City (or normal around town driving) averages 10-12 L/100klm and Hwy is 8-9 L/100 klm
and that's with the 'air' on (it's been hot lately), and virtually all of my hwy driving is in 5th gear overdrive. At 60 mph (100 kph) the engine is at 2000 rpm, at 50 mph(80kph) the engine is a 1500 rpm in 5th gear. A Canadian Gallon is 4.55 ltrs, and a U.S. Gal is 3.78 Ltrs..(A mile is the same US or Canadian;))

I looked at a lot of trucks, and the Canyon was the largest of the small trucks. I don't know why they even put jump seats in the back of the Ranger, no one but a very small child could fit in there, and I sure wouldn't want them riding with their backs to the 'sides' of the truck doors..

[Rich Engelhardt]

It all seems obscure to me because it is always said that dealers don't make too much money over invoice but then my question is how can the dealer sell a vehicle for $500 or $1,000 under invoice?
Greg,
The price on the invoice is the actual price the dealership pays for the vehicle.
That's the figure the bank pays the manufacturer for the vehicle. The dealerships don't really own their stock. They floor plan it.
That's one reason I say a financed deal is always the best money saver. In a one hand washes the other sort of way, the dealerships will all try to steer buyers to the bank(s) they do business with:the bank(s) that floor plans their inventory.
The longer product sits on the lot, the more it costs the dealership in monthly finance charges.


Going back to the invoice, the manufacturer also gives the dealership a percentage of the invoice (typical is 3%) back to the dealership in the form of a credit towards their parts stock.


Another item the end consumer may not see is factory incentives given to the dealer. GM for instance, may give a dealership X amount of dollars towards a particular item they wish to promote. One I know of for sure, was a $1500.00 credit to the dealership. over and above the advertised incentives o a 6.2liter diesel engine back in Fall of 1984. The customer got a $500.00 rebate on that engine. As a salesperson, I got a check from GM for $500.00 & the dealsership got a $1500.00 credit from GM.
None of that was reflected on the invoice. I still made my normal comission, based on the invoce plus pack and advertising.

Another area the dealership makes money is from charges back to the manufacturer for prepping the vehicle. Each new vehicle was prepped by the service department prior to being put on the lot. That was an automatic hundred to two hundred dollars the dealership got for every new vehicle.

Then there's demo money. The dealership gets x % of the base invoice back on a demo. They also get a huge percentage (IIRC, 20% - maybe 30%?) back on all the options. Options are a huge profit center for both the dealership and the manufacturer. The factory want to promote them as much as possible. That's one reason a demo is usuallt a vehicle that's "decked out".

I'm sure there's a lot more - those are just the few that I recall.


It also seems to me that the days of haggling for a car deal is no more. The price is the price and if there is a rebate they can give that to you but you can't get any other reduction in cost.
Somewhat - everything still remains negotiable when buying a vehicle, even today. Early on in this thread, someone mentioned buying at one location and shipping the vehicle to another. That's one way.
Another is to "bite the bullet" and compromise on what you're buying.
Eg: When I traded my 2004 Honda van in Fall 2009, I shopped it all over town & no one wanted it. It had a book value of $17k based on condition and miles.
The best offer I had was $12.5k. I wanted at least $15.5k - which I knew to be a fair expectation. The problems were the miles - 98k and the condition - excellent and the model year - 3 model years old.
The dealers weren't trying to screw me. Matter of fact, just the opposite, they were actually quite honest about it.
Anyone with the cash to buy a van of that model year would demand lower miles. Anyone that would accept the miles, would not have the cash & wouldn't be able to qualify for financing.
I "bit the bullet", called my salesman Pete, and we negotiated a model year close out (2007) Accord, for quite a savings off retail - plus they allowed me $15k for my van.

I drove the Accord for 2 years, then traded it on the van I'd wanted. I got "my price" on the van & over what I expected on the trade of the Accord.

Establishing a reputation as fair but firm "serious buyer" with a good agressive salesperson (like Pete) is also an excellent way to "haggle".
The deal I made with Pete on the 2007 Accord is a good example. I did that deal over the phone in about 10 min.
Prior to that though, we'd spent a few hours face to face going back and forth over a deal on a 2008 Honda van.


Dealers around here buy lots of their stock at auction------ I think that's their big money makers.
Sometimes - mostly though auctions are just a way for a dealsership to move or acquire inventory that's suitable for their particular customer base.
Jeeps were death on wheels at the dealership I worked at. For whatever reason, no matter what condition they were in, no matter what the price was - they just simply didn't move. On the rare occasion one did come in on trade, it went right to the next auction. Jeeps weren't "hot items" at the auctions either - but - most of the time they brought more than they would have sold on the used lot. Plus they didn't sit on the lot and tie up funds.

[Ken Fitzgerald]

One thing that has always bothered me is that the two highest priced items you will buy in your life were the ones most difficult to get a complete picture of what they were worth BEFORE you bought them........and the process of buying them is the biggest circuses.

Cars and houses.