Don't cry for dealerships. They don't make their money off the sale. Its off the service. The dealerships that make the most money are the ones that have really good service departments.

They typically don't care how much the car is sold for because they are going to make money....its the car salespeople that it matters to most. The more over invoice you buy it for....the more money they make.

And since I know a lot of car salespeople that make over 1000 dollars a sale....I'm not crying for them either. Get the car for invoice or as close as possible. Because dealerships are waiting for you to bring that ***** in to be serviced...esp out of warranty.

Warranty work doesn't pay as much as work done outside warranty.....kinda makes you wonder why dealership service dept.s are so quick to void someone's warranty. sometimes hunh (yes i do know there are people who abuse it).

 

I think you know a lot of car salespeople who are blowing smoke or else you are blowing smoke. The typical car salesperson has a "mini" of $100 and when most buyers are "getting the car for invoice or as close as possible" they are making $100 per deal. Now, if they are selling used cars then maybe they are making around $1000 but that's not too common either. A good deal for a salesperson makes $400-500 and that's a good one and not too common.

Yes, a dealership stays alive from the service department however that doesn't / can't carry the whole place. They still have to make a profit on car sales. I'm not suggesting any buyer should keep the doors open. I don't want to do that either however I also am willing to provide a small but reasonable profit on my purchase.

 

My car on edmunds says trade-in value of 15.5, that's what the dealers were using. After 1 day of being listed on a vehicle-specific forum I have a guy interested, and I am asking 18.5. I really think the dealer could pay 17 and make a profit. They didn't agree, so I'm selling it myself. I'm really glad they didn't take my offer, it's going to net me an extra 1500 =)

I have no reason to pay above invoice, especially on an 03 model year vehicle that has been on the lot since July. In fact I think I offered too much (27.5) for a new evo...they didn't even blink at that price. I would pay more for an 04-especially with the long warranty (not that I'll keep it that long).

Welcome to 2004. If you can buy something cheaper elsewhere, do it. Do you not shop online? I know a huge number of people do. Part of it may be convenience...but a big part is better deals. My in-laws just bought a brand new digicam for 250 less than best buy had it...same exact camera. This does hurt local retailers who CAN'T match these prices due to higher costs. The economy will evolve. I can live with the consequences. If I was in retail I would be really worried right now. The next decade or so should be interesting.



I still plan to travel to get my evo (or STi) if I can get a significanly better deal on it. I'll pay the local guys a bit more than I would elsewhere-I mean I WILL have to go there for service, don't wanna **** them off or anything. And I don't want them to go out of business so I have to drive an hour for service.

 

My bad, I wasn't very clear. I DO agree with you that at invoice the dealer loses. I'd also bet that unless the dealer has just received the car and the manufacturer is offering rebates (like last month), they always loose on invoice sales. Even if it's seems like a profit sale, after factoring the cost of running the dealership, it's a loss.

I suppose we probably agree more than I had thought. I don't mean to say that people deserve lower than msrp price, just that they shouldn't settle for a price until the dealer is ready to drop the deal rather than go any lower. I do believe many people settle to early. I've never paid more than $500 over actual invoice, including my lexus purchase, and my salespeople and service departments have treatetd me well regardless.

To get back to the thread, it seems to me that an 03, whether used or not, should have a substantial discount at this point. Mitsu may not be offering much, but the dealers are, and yes, that hurts them. Some of that blame has to go onto Mitsu for not helping when the cars are sitting on the lot in 04.

 

LDB,
After following the MSRP listing thread along with this one, I feel compelled to chime in. I have to ask you one question, "What is your opinion on the dealers that charge over MSRP?" I mean, depending on the marque and relative popularity of new cars, dealers regularly are able to sell cars over their company's stated MSRP. For me, I think it's a raw deal for consumers to have to pay more than what the company has determined to be a fair price.

If you walk into one of those dealers and ask for simply MSRP on a hot vehicle, they simply tell you, "Sorry, it's supply and demand." Well, at that point, you don't have much to work with if you don't want to pay their price.

On the other hand, the situation now with an overabundance of EVOs at several dealerships allow us as consumers to be picky and haggle for the last dollar. Is it so wrong considering what happened when the supply was severely limited in the beginning of production?

Also, what do you think happens to bland and blase cars that sit on lots past the new model year (e.g. fill in the most boring car you can think of...Kia? Oldsmobile? Chrysler? cars)? For some cars, dealers couldn't get people to pay invoice to buy the cars. Do the dealers sell for below cost? Well, maybe they do to cut their losses. Otherwise, they are subsidized by the parent company.

I belive that buying at invoice still affords the dealer a substantial profit on a deal (for an EVO ~$750-1000 with holdback, advertising, and flooring depending on geographical location). "Tiatoani" makes a good point in that there are more savvy buyers now with the information available online and between consumers. If dealers were really losing money or selling at a loss, they would likely refuse the deals offered them since many buyers don't go into dealerships with all the information that many of us as "hagglers" have. If consumers can get EVOs at or below invoice, then more power to them!

Eddie J.

 

I think it's hilarious that there are people that paid $40,000 for this car. I hope they are rolling in the dough, otherwise the are more upside down then a standup 69.

I can't fault the dealer for trying to get what he/she can. I asked a salesman about it they said they get 20% of the markup...pretty sweet.

That said it makes me feel even better about picking up my car new and fully optioned for 27.5k... Until I read somewhere that they are discounting the remianing 03's to 25k or something

 

25k

I think youve been reading too many "got mine for 18.5 out the door" threads.

 

Don't believe everything you read

 

I was exagerating, but you get the point

I think it's incentive enought to be able to snap up one of these bad boys for invoice...

 

I can't agree with you because you are not being even handed. You say it's a raw deal for a dealer to sell above MSRP which the company has determined to be a fair price. Then you turn around and say it's fine to buy below MSRP or even below invoice if you can grind the deal that much. It can't be both ways. Either it's fair to charge $X,000 over MSRP when it's hot and then expect discounts when it's not OR it's not fair to charge over or under MSRP.

No, you are wrong about the dealer making a substantial profit at invoice. If the vehicle was rolled off the truck this morning and sold this afternoon then the dealer, selling at invoice, makes at most 3% of the MSRP in holdback money. For every day the car sits on the lot the floorplanning cuts into that. You mention "holdback, advertising and flooring" as if the dealer is getting money on all these things. Welcome to the real world.

Floorplanning is the money the dealer pays his bank in interest for the money he uses to keep the cars on the ground. The cars are paid for the day they roll off the truck... not when they are sold. The flooring you mention isn't money to the dealer it's money out of his pocket.

Advertising is an expense the dealer can undertake and the manufacturer will subsidize it by matching spending up to a point. Beyond a set amount it's all out of the dealers pocket. Strike two.

Holdback is the one area that can be money in the dealer's pocket. Depending on manufacturer it is anywhere from 3% to zero, nada, zilch, nothing. That's rare but not every one will supply holdback to help with the flooring mentioned above. Sell the car the day it rolls off the truck and all the holdback is the dealer's. For every day on the ground out to 90 days it dwindles. On day 91 it's all used up by the interest the bank is collecting on the flooring mentioned above.

Now, supposing your sale at invoice is on day one and there is in fact $750 coming in. Out of that money the salesperson has to be paid, contributions go to the sp's insurance, taxes, soc. sec. etc. and then they start paying the receptionist, custodian, etc. etc. etc. so that $750 is not a "substantial" profit.

I know that you and everyone wants to justify grinding a deal for every last penny that hasn't been pinched. I'm not suggesting anyone go throw money out the window. I am suggesting people consider how they want to be valued for the work they do and treat their car salesperson similarly. If you get a bad one then go elsewhere or even ask for a different salesperson at the same place.

 

I think if you look around the internet you will find most places that talk about car buying (edmunds, consumer reports, etc) would say that $500-$1000 over invoice is a fair deal. That way the car dealer makes a profit you get a good price and everyone should be happy. I know I made a deal for my Evo at about $500 over invoice, the price was $28,611 with cf spoiler, me happy dealer happy. Did some people out there get better deals, yes, but in reality for where I am at I got a pretty decent deal. If there is an over abundance of Evo's in California then prices will reflect that and have to come down (supply and demand), or Mitsubishi will have to offer incentives to clear the inventory.

 

I would never leave dealership for say $200 to go and waste my time shopping.
As you guys are saying these days you know if you have a good deal or not.
When you buy a car for a couple of hundred over invoice IT IS A GEAT DEAL, unless there is money back on the car which you can still find out about.
Trust me if you are paying a little over invoice salesperson makes almost nothing.
I always tip them if they did a good job.($100)
Do you?
Also I think Evo at this moment should have at least $ 2000 back, but it does not.
I am on the market for 1 but do not see myself paying "good" price of $28500 and loose a thousands of $$$ if forced to sell within a couple of months. It is 2004 give me 04 car.
I will be glad to pay that price for 2004 which will definetely be doable.
It is just too late to get 03 with just the dealers discount.

 

LDB,
I would still like to hear what you think about dealers that sell over MSRP. Do YOU think that it’s fair to consumers? Would YOU pay over MSRP for a car?

When EVOs first hit our shores, you undoubtedly remember the outrageous mark-ups dealers were charging for these “hot” cars. Some asked for $20K (65%!) over the actual price of the car. If I walked into a dealer and offered to buy for $20K under sticker, then it would be having it both ways. More realistically, with dealers having set a precedent for charging over sticker price, I think it is definitely fair for consumers to fight for the best price possible.

As for what constitutes a “substantial” profit, that particular amount is rather subjective. It’s true that the dealers pay interest on their cars while they sit on their lots, THE CHOICE OF WHETHER OR NOT TO SELL A CAR LIES WITH THE DEALER. With all of their associated costs and potential for losses, they choose if they want to let a car sell to a potential buyer, for a loss or not.

It seems short-sighted to think of the situation from a dealership’s or consumers point of view. For a dealer, he/she could care less about the profit for the salesperson. Welcome to the real world—the turnover for sales staff is quite high, especially in car dealerships. How many times have people returned to purchase another car years later to find the same salesperson? As mentioned before, NEW car dealers make very little on sales but rather profit from the sales of accessories, parts, and service down the line. If a dealership looks at the big picture, they can take a hit on a new car purchase if they think you will likely come back in the future for parts and service.

As for the salesperson, unfortunately they may get a small amount of commission on the sale. BUT, in this case we’re only talking about EVO sales to thrifty and savvy consumers. Heck, if you can call me cheap if you want to. Are all customers and resulting sales likely to fall into the same category? Are all consumers as savvy as those on this board? I argue most will settle for mediocre deals and purchase unnecessary options—rust proofing, “fabric protectant”, polymer wax treatment, etc. for ridiculous mark-ups. What about the profit margin on those products/services charged to those consumers? Do you see car salesperson feeling guilty about taking that money from ignorant consumers? I think not. They try to load on as many options as possible.

So how about the consumer? As I’ve stated before, I feel that we have the right to fight for the best price possible. In the free economy, both dealers and consumers have the right to determine what constitutes a fair price. If I can’t agree on a good price for an EVO, I walk. The dealer can make their best offer as well on what they think is a fair selling price. IF they do sell at a loss, they bet on making it up on the backend.

You’re asking us to take pity on car salespersons and allow them to make some money on a sale. I would agree with that, except that there are enough ignorant consumers making mediocre deals to pay their paychecks. Are you in the car business? Do you sell cars or some commodity for a living? If so, then I can understand your point of view. Otherwise, as a consumer, I will look for the best deal possible, even if it means waiting some length of time.

Eddie.

 

A dealer near me has 11 Evo's in stock, many of which are sitting there since the original Apr 03 release date.
Just a small rant:
These have been sitting on a lot for almost a year, and gathering moss.
I'm thinking 25k for these is resonable, considering I have to go and spend ~1k for new wheels and tires to get through the winter.
The Evo will loose shed loads of money in the first few years, and all those who paid top dollar should have expected this.
The same dealership tried to get me to pay a 5k markup last year for the same cars. Told them they were nuts. Looks like I was right. With the impending arrivals of 04 cars, I'm thinking that 25k for a new 03 shouldn't be too hard to manage.

I shouldn't expect to get fleeced just because I am buying an evo, great car that it is, it is still just a car, and good deals are there to be had.

As for the sales people, you tried to screw me for a 5k markup last year, watch me screw you now. You should never bite the hand that feeds...........

 

Apologies to the author, but I laughed when I read this quote. I do feel special and I do feel entitled to dealer's cost. I do all my own research on the car I'm buying, and I find the car. When I walk onto a lot, all I need the salesman to do is hand over the keys, take my money, and keep his mouth closed. Why they feel entitled to a couple hundred dollars profit for that is beyond me.