negotiating sale price with post bail-out GM

[s--k]

Yeah it's really easy. Walk in there, tell the salesman - "Give me the car for $300 over cost. You still make money, you get your commission, and I come back and buy my next car here. If not, I'll go elsewhere." Never had to negotiate, just threatened to leave.

That always worked for me... even when I was 16. Maybe it's the way I present myself... who knows.

I don't think many dealers will accept the kind of profit margin that $300 over "cost" would yield. That would be their REAL cost that is. Even if service is what really pays the bills, $300 profit on a vehicle in the $40k neighborhood isn't good business practice.

And then...what is their "cost". It is not invoice. So unless you knew the variables of advertising fees, hold-back, etc it is impossible to really know their cost on any given vehicle. Salesmen do not know this info too. It seems in my experience that it is really only known by a limited number of people who really give the green light on the ultimate sale price.

In my deal I asked for 1% below invoice. They countered to $500 off preferred. We compromised to $700 and change off preferred, which I was told was a little below invoice. When I went down to do the deal I learned it wasn't as low below invoice I was led to believe. But that didn't matter anyway because the dealer ended up going back on their word and would not sell the vehicle much below preferred at all (prior to factoring rebates). With rebates it would have come to about $5200 or something off sticker. I'd settle for about $6000 off with current rebates/incentives for a vehicle that was equipped exactly like I wanted. But then again, time might be on my side in this meaning I can raise my expectations maybe.

I was thinking that incentives will increase as the year rolls on. 1) because the rebates should get better as the model year gets older to clear out inventory for 2012s 2) as fuel prices rise demand for these vehicles should decline resulting in increased incentives to move existing inventory. Ofcourse all of that depends on what their overall field inventory is. Like I said, there is not much out there within a 100 mile radius of me right now.

Time may indeed be on my side, I'm just hoping that the dealers get a little more willing to deal as we head into May and June and maybe even July at the very latest. Even if incentives jump to $3000 cash, I'm still going to look for something below invoice on the dealers end (prior to factoring GM rebates). I was thinking that is possible, maybe I'm wrong. I walked out of one dealer already when I was there specifically there to do the deal, so as of right now that one dealer and another who flat out told me preferred is as good as it gets, must not feel compelled enough to drop their prices.

If anybody knows how to source more pricing beyond msrp/preferred/invoice in terms of determining true cost chime in. Or any info on ordering cut-off dates.

 

[s--k]

Visiting another dealer and again was told that they can not go below preferred. This is 3 different GM dealers in my area and they are all singing the same tune. It really seems like they are following marching orders or some coincidence that they all draw lines in the sand at Preferred. Each and every one said that "GM doesn't let them sell lower".

Normally I'd call BS, but I have some experience in automotive retail sales in the merchandising and marketing departments and I know ways suppliers get their distributors to adhere to certain price levels. They do it through granting or withholding advertising co-op dollars, freight terms, quick pay discounts, etc. You can technically list and sell for whatever price you want, but if you don't follow their rules for pricing then you could lose out on ad dollars and other profitable terms and conditions. This is know as MAP, or minimum advertised price and many large aftermarket companies put MAP on their products.

The difference here is that while you have to advertise a certain price, the price you actually sell it for over the counter or over the phone is another matter, you can sell for whatever you want. A company like say Borla, isn't going to look at the your sales receipts and see what you sold the item for and what profit you made, all they care about is the advertised price. But in GM's case, they could "audit" (as one dealer called it) their transactions and supposedly if they are discounting below preferred they could get penalized.

And I think I do remember reading somewhere, that when GM is using a authorization number to obtain Preferred or Employee pricing they are prohibited to discount further. I say to hell with the auth number, just sell me the vehicle slightly below invoice without any need to use an auth number, but they aren't doing it.

They are all singing the same tune. And while I have not made formal offers with each dealer I spoke with, I already did have one dealer reject and allow me to leave empty handed even when trying to compromise to just slightly below preferred price.

So they are saying that roughly $5000 off (Preferred discount, plus current $2000 rebate) is as good as it gets. That isn't good enough for me. So I guess we keep looking.

The internet specials, the ones with $6-8k off, from what I have found, those are often demo type cars, ones with a couple to a few thousand miles on them that somebody at the lot has been driving. I haven't seen any vehicles with new type miles actually be advertised with anything more than a discount in the $5000 neighborhood. $5000 just doesn't seem like enough based on pricing I have bought at before. Cargurus just offers lists of used cars and Carsdirect hasn't seemed to offer much.

Still shopping, and still not encouraged by what I am finding.

---------- Post added at 10:09 AM ---------- Previous post was at 09:56 AM ----------

CNBC just reported GM has 5 straight quarters of profit and will be raising prices and cutting incentives in 2nd quarter.

 

[GM Customer Service]

Dealerships are independently owned and operated. Dealers determine the final retail price to their customers. While we strongly encourage our dealers to sell their vehicles at or near the MSRP, they own the vehicles in their inventory and by law have the right to set their prices according to the current market demand.

Caron, GM Customer Service

Visiting another dealer and again was told that they can not go below preferred. This is 3 different GM dealers in my area and they are all singing the same tune. It really seems like they are following marching orders or some coincidence that they all draw lines in the sand at Preferred. Each and every one said that "GM doesn't let them sell lower".

Normally I'd call BS, but I have some experience in automotive retail sales in the merchandising and marketing departments and I know ways suppliers get their distributors to adhere to certain price levels. They do it through granting or withholding advertising co-op dollars, freight terms, quick pay discounts, etc. You can technically list and sell for whatever price you want, but if you don't follow their rules for pricing then you could lose out on ad dollars and other profitable terms and conditions. This is know as MAP, or minimum advertised price and many large aftermarket companies put MAP on their products.

The difference here is that while you have to advertise a certain price, the price you actually sell it for over the counter or over the phone is another matter, you can sell for whatever you want. A company like say Borla, isn't going to look at the your sales receipts and see what you sold the item for and what profit you made, all they care about is the advertised price. But in GM's case, they could "audit" (as one dealer called it) their transactions and supposedly if they are discounting below preferred they could get penalized.

And I think I do remember reading somewhere, that when GM is using a authorization number to obtain Preferred or Employee pricing they are prohibited to discount further. I say to hell with the auth number, just sell me the vehicle slightly below invoice without any need to use an auth number, but they aren't doing it.

They are all singing the same tune. And while I have not made formal offers with each dealer I spoke with, I already did have one dealer reject and allow me to leave empty handed even when trying to compromise to just slightly below preferred price.

So they are saying that roughly $5000 off (Preferred discount, plus current $2000 rebate) is as good as it gets. That isn't good enough for me. So I guess we keep looking.

The internet specials, the ones with $6-8k off, from what I have found, those are often demo type cars, ones with a couple to a few thousand miles on them that somebody at the lot has been driving. I haven't seen any vehicles with new type miles actually be advertised with anything more than a discount in the $5000 neighborhood. $5000 just doesn't seem like enough based on pricing I have bought at before. Cargurus just offers lists of used cars and Carsdirect hasn't seemed to offer much.

Still shopping, and still not encouraged by what I am finding.

---------- Post added at 10:09 AM ---------- Previous post was at 09:56 AM ----------

CNBC just reported GM has 5 straight quarters of profit and will be raising prices and cutting incentives in 2nd quarter.

 

[Tonygxp]

i no longer have my SUV but i will give you the goose that layed the golden egg, two fold.

1. here is a site that you can buy your vehicle from a dealer that is willing to honor the price advertised.

2. if you click "see what others have paid" and then click "tables" on the right you will see everything.. DEALER HOLDBACK, DEALER ONLY INCENTIVES, REGIONAL ADVERTISING FEES, ETC.

you welcome...

the site: http://bankofamerica.zag.com/main.html

the link to an example of the "true cost", remember just click "table" and enjoy (anyone who thinks they got a "deal of a lifetime" hold on to your hat lol.
http://bankofamerica.zag.com/trueCa...0&total_incentives=2000.0000&partnerName=Your Price&partnerPrice=51391.5000

 

[Sheriff]

What really irks me about the Tahoe and the Suburban in particular is what appears to be an intentional act of price fixing nationwide. No matter where you shop, the prices seem as if they are preset with no room to move one way or the other. And this seems to be true on both used and new Tahoes and Suburbans.

I shopped from Virginia to Texas, the prices were all the same!

 

[skippy737]

i bought my 2010 yukon denali with sun and dest package with SBZA for 51250 with i think 2750 incentive thru USAA ( 2000 gmc and 750 usaa) and i had a 2006 yukon slt sun and dest with 100K miles they gave me 16K on trade in-- i did it over the phone ( i took pics with my iphone and sent them in and drove the next day and picked it up after they lot drove it-- i was in and out in 30 minutes.

 

[07Burb]

The circus around incentives and this, that and the other is why I will probably never buy a brand new vehicle. It's such a hassle and you lose so much money immediately due to depreciation. I like gently used cuz you'll get more bang for your buck and generally less hassle especially if buying from an individual....

 

[s--k]

Dealerships are independently owned and operated. Dealers determine the final retail price to their customers. While we strongly encourage our dealers to sell their vehicles at or near the MSRP, they own the vehicles in their inventory and by law have the right to set their prices according to the current market demand.

Caron, GM Customer Service

That is exactly the way I always thought was the case from previous purchases, but recent events had me questioning if "big brother" was influencing the final sale price. For 4 dealers in my area to essentially tell me the same story it seemed to me as if there was some centralized instruction for the dealers to follow in determining final sale prices. As I said above, in other industries retailers can sell the goods they buy from a manufacturer for any price they wish, however, if they choose to not follow certain set criteria in the retail sale process the manufacturer can withhold or reduce some fairly lucrative and profitable terms and conditions the retailer would otherwise have been entitled had said certain conditions been met in the sales process. My experience with this had me wondering if GM, post bailout GM specifically, was doing something similar with their dealers since I have never had such a difficult time reaching an agreeable price before. These dealers around here are not budging.

What really irks me about the Tahoe and the Suburban in particular is what appears to be an intentional act of price fixing nationwide. No matter where you shop, the prices seem as if they are preset with no room to move one way or the other. And this seems to be true on both used and new Tahoes and Suburbans.

I shopped from Virginia to Texas, the prices were all the same!

That is basically what I have run into locally. 1) Everyone is offering preferred price (supplier price) 2) plus current GM cash incentives 3) nobody is willing to deviate from those price levels at all.

So the playing field has been leveled. Normally, wouldn't that really big dealer that does all the volume be willing to drop their price in guarantee the sale instead of risking it go to their GM brand competitor, a smaller dealership in the next suburb over who can't afford to sell at the same price? I have a hard time seeing why the guys who used to give the deals aren't giving the deals anymore. Unless they know that everyone in x mile radius is playing by the same rules so they know they don't have to deal because you won't get a better deal somewhere else. This would only be the case if they were forced (or strongly encouraged monetarily from GM) to sell at a certain price point and not beat eachother up, pitting one GM dealer vs another GM dealer and eventually selling the car for such a small margin nobody makes money. Not that I am against these guys making money, they can sell their cars for whatever they want to, not what I want them to. That isn't the point in all this. The point is everyone I've visited and spoke with has the same price and nobody is going below a certain point, it just seems strange to me. Preferred + current rebates and that is it, end of story, nothing else to offer.

I am normally not into conspiracy theories, although I don't know if it is so much of a conspiracy theory if it is in fact standard operating procedure, or I could just have come to a totally wrong conclusion in this, but my experiences have led me down this path to think their is something going on. What am not seeing are dealers coming up with different numbers on the vehicles. It is basically, they all offer the same price, take it or leave it, 'you want to make an offer?' 'don't even bother because we can't sell it below preferred+rebate' That is what I have seen so far.

The circus around incentives and this, that and the other is why I will probably never buy a brand new vehicle. It's such a hassle and you lose so much money immediately due to depreciation. I like gently used cuz you'll get more bang for your buck and generally less hassle especially if buying from an individual....

That is definitely the best way to go in order to get the best value. You could even say that is what the smart money does. I admit I am a sucker for getting into that new car with like 5 miles on it and knowing every single aspect of that vehicles history from virtually the first time it was put on the road. Plus I have always actually enjoyed the process of negotiating a purchase price on a brand new car, I like the back and forth, kind of a game to try and get the most on my side of the table. But now this isn't fun. It is like they took their marbles and went home and I'm left at the table saying hey come back here we have prices to haggle over.

Actually I am going to a dealer across state line tomorrow who I spoke with on the phone. I am encouraged by the numbers they came up with. Don't want to jinx anything. I will post tomorrow or this weekend with a follow-up.

---------- Post added at 12:34 AM ---------- Previous post was at 12:00 AM ----------

i no longer have my SUV but i will give you the goose that layed the golden egg, two fold.

1. here is a site that you can buy your vehicle from a dealer that is willing to honor the price advertised.

2. if you click "see what others have paid" and then click "tables" on the right you will see everything.. DEALER HOLDBACK, DEALER ONLY INCENTIVES, REGIONAL ADVERTISING FEES, ETC.

you welcome...

the site: http://bankofamerica.zag.com/main.html

the link to an example of the "true cost", remember just click "table" and enjoy (anyone who thinks they got a "deal of a lifetime" hold on to your hat lol.
http://bankofamerica.zag.com/trueCa...0&total_incentives=2000.0000&partnerName=Your Price&partnerPrice=51391.5000

Good resource.

It is showing base 4x4 LTZ Tahoe dealer cost is $49,154 all things factored (holdback, destination, ad fees, incentive rebate).

I actually think dealer cost is lower than that report shows.

If you can get your hands on the pricing data that employee purchase plans can see, it shows same 4x4 LTZ base Tahoe dealer cost to be $49,113 before anything else. If we add destination $950 and you get $50,063. Subtract holdback ($1637 from BOA/TrueCar report) = 48426. Add ad fees ($1091 from BOA/TrueCar report) = $49517. Subtract consumer cash of 2000 and it is $47,517.

So on a base 4x4 LTZ Tahoe MSRP is $55,520 (with 950 destination).
Invoice is $51,700 (with 950 destination)
True dealer cost is $49,517 (with destination, ad fees and holdback factored).
Factor in current $2000 consumer cash rebate and all those figures drop $2000 lower.

 

[phileaglesfan]

I haven't found a GM vehicle that I would pay MSRP for to be honest. Even with the Corvette the MSRP is 10% above invoice which is about $8-10k above invoice before the dealer gets his incentives from GM. GM needs to be realistic with their pricing because having a too high sticker is a good way to have customers walk out of the dealership. GM screwed up by raising prices in 2008 and 2009 right when a lot of people was losing their jobs and watching their house value plummet.

 

[s--k]

Found our deal on an LTZ Tahoe.

Got $7895 off MSRP (including $2000 GM incentive) on a brand new unit (12 miles) by going across state line, which is about $2500-2700 more than any of my local Ohio dealers would do. Plus I probably saved another $100 since the doc and paper fees were less over there.

Pretty happy, wife is happy.

Originally Yukon SLT was target, but I really had a hard time accepting the front end styling of the NNBS Yukons. I don't think I would have been happy looking at it every day. I wish they would have made them more like the Sierra front ends, but this is just personal taste.

To think that I had a deal on a Yukon fall through at the very last minute only because the dealer renigged on their offer, I'm glad they did now because I saved more money and ended up with the Tahoe styling I liked better all along. Ended up getting the LTZ Tahoe for almost exact same money that a modestly equipped SLT Yukon would have got us.

Thanks for providing me an outlet to vent my frustrations.