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Invoice is the price listed on the document used by the dealer to buy the car from Ford. The dollar figure on the invoice (if the dealer won't show it to you) can be found on sites like Edmunds.com. Build your car and it will show MSRP (window sticker) and Invoice price. Ignore the Fair Market Price on Edmunds, that is probably set by local dealers to get you to feel good about an offer they give you.
The invoice price normally isn't what dealers really pay, they get unpublished factory incentives and support for financing too. I think starting negotiations up from invoice minus consumer cash back offers in effect at the time is a good start. Some dealers will sell you a car for $100-$300 over invoice, just remember to take the consumer cash back off their offer for your final cost.
Some dealers will give you a great number slightly over the invoice which makes you feel good then give you a $4000 to $5000 below real wholesale price low ball offer on your trade. Even if you get them up a little on the trade they still make much more on the trade then they do on the new car. I think the best way to value a trade is to search for your car with your number of miles on Cars.com in your area and see what dealers are asking for retail cost on your car. You will never get retail as a trade-in amount but you sometimes can get close to $3,000 to $4,000 below retail listings.
The third way dealers make money is originating the loan on new vehicles. They get a fee to write the loan and money for how high an interest rate they can convince you to sign for. Research loan rates at your bank or credit union and tell the dealer you will finance with them if they match the rate. This way they make some extra money from Ford Credit but it doesn't cost you anything.
So I order a car the way I want it. What price should I be paying? The MSRP - incentives? Or the invoice - the incentives?
My ideas about buying cars - I'm repeating what some have said as support of that idea!
The number a dealer will show you as being "Dealer's Cost" does not mean they make no money selling at the price as has been said. Every car I've bought in the last ten years has been substantially below the "so called" dealers cost! Give me a break! They'd happily sell you every car on their lot at Dealer's Cost if you could pay for it! Ask the dealer how much the "Hold Back" on the car is? They won't like that question! Often when a dealer finds a car for you at another dealer they will lose the "Hold Back" which is a discount for used for local advertising, etc. It can be more than you think! Likely more than what they say is their profit! Also, ordering a car should be easier to get a good price on because it usually doesn't come out of the dealership's allotment for a car that sells quickly.
Much of pricing is based on simple supply & demand which is why I'm not excited about buying low production Mustangs! Why should they consider dealing with me on a low production Mustang when some "Lay Down" buyer that's wetting his pants to get the cool car will pay much, much more likely getting it financed & adding even more profit to their sale! You've seen Dealer's add a big number on top of the MSRP because it's the 1st one & someone can't wait! Find out how many of the models a dealer has, & may have coming in soon! I got a great deal on a car once because a small dealer had four identical cars on the lot & a trailer unloading two more just like them being delivered! Tell them you want a different colored car & let them use a bigger discount to push you into the car on the lot you actually wanted! Showing you love a certain car on the lot doesn't help in bargaining! LOL!
Trading in a car is a mistake made by people that just can't wait to get their new car, or are willing to lose money just not to have to sell their car themselves! If you do trade in a car refuse to admit you have a trade in until you get your best price on the new car! Why? If they raise the price on the new car to give you a "larger trade in amount" guess who just payed more sales tax on the inflated price on the new car!
Shop at dealerships where you don't want to buy, & find out at what price they let you walk away & get rude! Then walk in to the dealer you want to buy from with pricing knowledge & tell them what you want to make a quick, easy purchase & make them an offer based on what you've learned by getting kicked out of other dealers!
I've never seen better service from the dealer you bought a car from! Service is based on what Ford will pay for, & the dealer having a decent service manager that believes in treating people honestly!
Good Luck & remember, "If you don't know who the sucker is in a poker game, it's probably you!"
And in the end the sticker or "MSRP" is a 'suggested' price. The dealer can ask anything they want. An example of this is a GT350 or GT500, Focus ST when they first came out, or the RS when it ever comes available. Right now the Mustang may be hot so the dealers may not be willing to drop down to 'invoice' or 'dealer cost' on them. They may not even be willing to trade from off their lot for stock at a different dealer. This spring should see a run on them I would guess.
The best plan is to go in with a pre-arranged A/X/Z plan in your pocket.
Now, a Focus 1.0L Ecoboost SE Sedan...well, that would be different. You could probably BEAT A-plan on one of those.
Last edited by wildsailor; 03-12-2015 at 09:29 AM.
My wife used to do books for a local GM dealer. So I know for a fact, the cars on the dealers lot are living on borrowed $$ the dealer borrows. They REALLY want to get rid of their inventory, way more then they want to order a car for someone. IMHO, The dealer is more likely to give you a better discount on one of HIS cars as to the car you order. However, with that said, you can still probably negotiate a pretty good deal by getting 3 quotes from 3 diff dealers on an ordered version. I was going to order but when I found one on the internet from a local dealer's lot w/exactly what I wanted on it, except the color, I figured...why order one & wait all that time?? I settled for a Race Red dealer discounted car, which was $1500 less then an X-Plan price, with all the options I wanted & I didn't have to wait the 2-3 months. Pretty easy choice for me.
My wife used to do books for a local GM dealer. So I know for a fact, the cars on the dealers lot are living on borrowed $$ the dealer borrows. They REALLY want to get rid of their inventory, way more then they want to order a car for someone. IMHO, The dealer is more likely to give you a better discount on one of HIS cars as to the car you order. However, with that said, you can still probably negotiate a pretty good deal by getting 3 quotes from 3 diff dealers on an ordered version. I was going to order but when I found one on the internet from a local dealer's lot w/exactly what I wanted on it, except the color, I figured...why order one & wait all that time?? I settled for a Race Red dealer discounted car, which was $1500 less then an X-Plan price, with all the options I wanted & I didn't have to wait the 2-3 months. Pretty easy choice for me.
Not to be argumentative, but of course dealers are working on borrowed money & if the cars sit too long they gave to start paying interest on their inventory. I would agree if you are buying a slow moving car that has been on the lot for a long period. As popular as the Mustang is today, & probably will be for sometime, I think you can get a better deal on an order. Why? What I have been told is that a customer order does not come out of the dealer's allocation. So giving you a low markup price on an order isn't giving away a "bigger profit" on hot seller car sitting on the lot, much like trying to get a big steal on a Shelby! Fat Chance! I've also been told that the dealers that sell more cars get more of the hard to get cars. I think it is all economics. If you walk into a few dealers & ask to see the manager of the sales dept. or internet salesperson with your printed out "Build Your Own Mustang description" & tell them you will order it this week from the dealership with the lowest & give them a good size deposit, you just may get a good price. When you get all your prices lowball them with a price that you will buy the car for & see what happens! Before I would do this I would do my research & fine out at what price the dealer's let you walk out the door! Buying a car is a poker game, but you need to know approximately the lowest price they can sell the car for! If you ask for a ridiculously low price they will know you are blowing smoke!
If you are wetting your pants & panting to get a Mustang yesterday you are in big trouble if they can see it! I sold big ticket items in my own 2nd business for 25 years & most buyers are pretty bad at negotiating. Talk as little as possible! Tell me where you saw a Mustang & likely I'll know what price you got! Remember they are professionals! Use the system against them, or they will use it against you!
Buying right let me drive this SUPERCHARGED MUSTANG for 7 years for a loss of only $6500.! Getting ready for a 2015!
Not to be argumentative, but of course dealers are working on borrowed money & if the cars sit too long they gave to start paying interest on their inventory. I would agree if you are buying a slow moving car that has been on the lot for a long period. As popular as the Mustang is today, & probably will be for sometime, I think you can get a better deal on an order. Why? What I have been told is that a customer order does not come out of the dealer's allocation. So giving you a low markup price on an order isn't giving away a "bigger profit" on hot seller car sitting on the lot, much like trying to get a big steal on a Shelby! Fat Chance! I've also been told that the dealers that sell more cars get more of the hard to get cars. I think it is all economics. If you walk into a few dealers & ask to see the manager of the sales dept. or internet salesperson with your printed out "Build Your Own Mustang description" & tell them you will order it this week from the dealership with the lowest & give them a good size deposit, you just may get a good price. When you get all your prices lowball them with a price that you will buy the car for & see what happens! Before I would do this I would do my research & fine out at what price the dealer's let you walk out the door! Buying a car is a poker game, but you need to know approximately the lowest price they can sell the car for! If you ask for a ridiculously low price they will know you are blowing smoke!
If you are wetting your pants & panting to get a Mustang yesterday you are in big trouble if they can see it! I sold big ticket items in my own 2nd business for 25 years & most buyers are pretty bad at negotiating. Talk as little as possible! Tell me where you saw a Mustang & likely I'll know what price you got! Remember they are professionals! Use the system against them, or they will use it against you!
Guess I didn't explain it too well. The way I understand it though, it's not long before the dealer is paying interest on them. My wife worked at a Honda dealership in Juneau, Alaska, & she told me the interest they pay is just like you or I. It hits right away. Of course, that was in the late 80's. Don't know if anything has changed in that world or not. I don't know if they get harder to get vehicles or not by selling their inventory but it sounds logical. You said it better than I did though but that's what I was trying to say about negotiating a better price, esp better than MSRP on a Build your own (BYO). Get some bids from 2-3 dealers w/BYO. You'll probably end up with a good deal. I don't know if low-balling them would work but you never know. I'm in a different situation. I'm moving to the lower 48 in June & wanted a ride waiting for me. Found what I wanted in inventory with what I thought was an extremely good price (after doing a lot of research) & put a hold on it. I'll go down & get it end of March here & drive it down there for 3 weeks, then park it in my daughter's garage. At present, it's sitting in the dealers back lot sleeping til I wake it up in 11 days. Now,if I can keep my daughter & son in law (esp him, he drools seeing new Stangs) out of it for a couple months....don't know if I'll be wetting any pants but I'll be heap excited to get back to driving it.
When I ordered my 2010, I shopped a couple dealers, gave them my specs, and had them work against each other. I didn't get a smoking deal, but I got about $3000 or so off if I remember correctly.
They will deal on ordered cars, perhaps not as much as one on the lot, but they will deal.
Your post was great Boomer! I bet you'll love your new Mustang! Be safe! The Old Guy, Mr. D
In my area Mustangs are flying off the lot so getting a great deal isn't so easy because another guy will pay more. As I said, if you order a Mustang it doesn't cost them that bigger profit by giving you a deal because it doesn't come out of their allotment of Mustangs. Also you can avoid a loaded car if you don't want a lot of options. I don't want Navigation, Sirius Radio, & a lot of other options that dealers seem to always load cars with. I've been told that few people will not buy a car because it is loaded with options because so many finance the car, but some people will pass on a car because it doesn't have an option they want. I just want a Mustang GT with automatic so I don't want to pay another $7K for what I don't want.... so I'll likely order a car! Unless it has changed, most new car & RV dealers don't have to pay for their cars for a period of time after delivery.
Example: the Mustang GT below cost me $31,500. "COMPLETE" with everything you see including a Roush Supercharger, shock tower strut, & Roush Badging & stripes back in 2008 which was a great deal back then! Get the "Most bang for your Buck" guys! Then it doesn't hurt so much when you sell it down the road!
In my long history of buying many new cars,only one was a factory order.(A 1983 Buick Electra wagon,fully loaded)
All others were bought off of a dealer's lot.
I remember last year,when I came close to buying a new 2014 Mustang GT.
A dealer that I purchased my new 04 GT from,had two virtually identical cars available.One was aok.The other had been test driven-more miles-plastic off the steering wheel.I also noted that one wheel had an excessive number of wheel weights on it.It was clear which one I would have picked.I decided to remain patient and wait for the 2015s,a decision made easier,when I went into the dealership to inquire about the car that appealed to me,and I was treated like the invisible man.At least five sales people,including the sales manager on his podium, looked at me-none could be bothered to come over.I even stayed longer than I normally would,just to see how long it took,but decided to take off.
.......when I went into the dealership to inquire about the car that appealed to me,and I was treated like the invisible man.At least five sales people,including the sales manager on his podium, looked at me-none could be bothered to come over.I even stayed longer than I normally would,just to see how long it took,but decided to take off.
I wish I could get that treatment! When I go to a lot to look at a car it's like a scene from "The Walking Dead"! I always want to start with the sales manager or the internet guy. Half of the salesman are lucky to be able to identify a steering wheel! So many of them will stand around all day BS'ing & never learn about the product they sell! If I need information I'll ask one of you guys!
03-11-2015, 01:31 PM
