Jul 10
8
GER YOUR FIRST CAR OFFER ?
You need to first calculate the cost of the car to the dealer and then make a reasonable offer if you want to get somewhere. You should also know that the dealer’s price is not the invoice price from the factory. The dealer’s cost is actually much lower than the factory’s cost. You may not get the new car for that price, but that’s why it’s called a negotiation. Make your offer and see what happens. Depending on how much they want to sell you the car they may or may not accept your offer.
If you are unwilling to pay more than your opening offer, let the salesperson know that your offer stands firm and how they will profit from the offer. As stated earlier, the dealer makes money from a variety of factory incentives including individual model incentives and factory sales quota incentives. In addition, since the factory charges the dealer interest on cars that sit on the lot, they save money by selling the new car. Lastly, the dealer makes money through ongoing service appointments. The car dealer will likely give you another price and ask you to meet them halfway. In the end you will get the car you want on your own terms. Here’s an example of this process.
You are hoping to buy a Toyota Camry. You do your research at and find that the invoice price is $19,922; MSRP is $22,385. You learned by researching that there is a $500 factory to dealer incentive. Based on the above calculations, the dealer’s cost is $19,922 (invoice) – $500 (incentive) = $19,422. This should be your first offer. Even if you go up by 5% you’ll still save more than $2,000.00.
