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"Selling This Car To You At A Loss" - Truth or Sales Tactic?

When a car salesman says, “We can’t go any lower, we’re already well below invoice, but we’re just giving you this price to move the inventory,” could this really be true or is this just a sales tactic? Buying a 2012 VW Jetta Sportwagen. The lowest they say they can go is $600 below their invoice. Thanks for any help!

What he is not revealing to you is the “holdback”, which is a payment to the dealer from the manufacturer a few weeks after the car is sold to a customer.

While it is difficult to find out exactly how much the “holdback” amounts to, it is most likely something in the range of $800-$1200. Ergo–the dealer can sell a car below invoice and still make a profit.

And then, those invoice prices are sometimes not legitimate either.

There are too many “programs” that mfg’rs offer to dealers so you really don’t know what the true cost of the car is to the dealer. It is possible the dealer can sell the car below “invoice” and still make a nice profit.

In this case you’re getting close to the lowest this dealer is willing to sell the car for. See if you can get a better price quote from one or two other VW dealers. You can shop on the web at dealer web sites, you can even see if you can get a price from a VW dealer on ebay. My guess is there is at least $500 to $1000 still available in a lower price, but you may have to buy from a different dealer to get it.

What you can’t see is the asterisk when people speak…if only we’d all use the phonetic punctuation of Victor Borge fame :wink:

The salesman says it’s below cost * ( kinda-sorta true under the given circustances )

*if I showed you the ledger where we bought the car you’ll see it to be more than the price I’m selling to you, but what you’ll never see are the incentives, credits, allowances and cost averaging that gives us profit.

Go to Edmunds.com and request quotes from multiple dealers in your area ( if you have more than one).

The OP should remember that there is more than one factor to consider when chasing down the absolute lowest price. For instance, a friend of mine hated the toil that her husband put her through last year in order to save $300 on their new car. She was interrupted at work multiple times with both e-mails and voice mails to the point where it made it difficult for her to do her job for a couple of days.

Yes, the price paid to the far-away dealer was $300 lower than if they had bought the car at the dealership closest to home, but…they wound up staying overnight in a motel, using up a full tank of gas, and essentially wasting 1 1/2 days. The car wasn’t even finished with being prepped after they had driven ~200 miles, and that delay is part of what necessitated an overnight motel stay. When you factor in all of those things…Did they REALLY save $300?

And, to make matters worse, the dealership closest to home gives free loaner cars when you come in for service, but the loaners are only available if you bought the car from them. When my friend takes her car to the local dealer for service, she either has to hang out in the waiting room for ~3 hours, or she has to pay for a rental car. The dealer from whom she purchased the car does give free loaners, but is she really going to drive 400 miles roundtrip for service?

Did they REALLY save $300?
I think not.

It is difficult to put a specific price on convenience, but this is an illustration of how saving a few hundred bucks can be offset by a whole lot of inconvenience.

Incentives depend on where you live. There are none near me for your car. The dealer holdback is 2% for VW. The MSRP for a base TDI Sportwagen is $25,658. That’s $513.16. $600 below invoice seems like a very good deal.

BTW, salespeople support their families on the profit they get from selling cars. But most of it goes to the dealer. Maybe you should let the poor guy put a meal or two on the table.

Well you have to think of 2 possibilities, you are the luckiest person in the world a merchant would take a loss just to get you to buy something, or they are still in business because it is profitable. Like any store selling below listed price does no mean a loss, only less profit, and from your post I do not see selling below invoice meaning they were going to give it to you for less than what they would pay for it.

When a car salesman says…

Question: How do you know when a car salesperson is puffing or lying?

Answer: Their lips are moving.

Let me pose a question; how long do you suppose they could remain in business if they weren’t making a profit?

How to make a small fortune in the car business- start with a large one and sell things at a loss…

twin I hear you, and I think after years of people getting ripped off in car deals, there is some desire to repay in kind. Not gonna happen.

 I have to wonder about the tone of the conversation.  That is, it is all about being cheated.  I doubt if they are doing anything more than allowing you to take 1+1 and coming up with three.  You are allowing them to make the simple complex.  

 Don't bother with any number the seller shows you except the total out the door number.  That is the only price that you pay.  Do you really care if they give you 14 pages of various cost or if they just say it will cost you $XXX,XXX.  

 Don't let them make it more complex by including trade in etc.  They will always have another car to sell you, you don't need the ONE you are looking at.

It’s a 2012. The 2013s are already in the pipeline. They want to move that car and every other 2012 on the lot. They are probably giving you the best price they can as of 7/28/12. Their incentives may get better when the '13s start arriving. If you want/need the car, go for it.

@JosephEMeehan “I have to wonder about the tone of the conversation. That is, it is all about being cheated” Not being cheated, but many people after the ordeal, and yes it can be an ordeal second guess they could have made a better deal. probably they could have, but hours playing the game takes it’s toll. What part of the dealer is trying to maximize profit do you not get?

I’m with VDCdriver. You work to get the best price you can reasonably, then either wrap it up or leave. Trying to squeeze the last nickel out of a deal just may not be worth it. Their job is to sell cars and try and get the best price. Your job is to buy a car and try to get the best price. You’re at cross purposes but there is a point in the middle. No one wins if the car isn’t sold.

When I was a kid, my neighbor went looking for new car. He had every dealer in town refusing to deal with him because he just nit picked every detail. Needed to know the thickness of the foam rubber in the Bel Air versus the Impala, and how many winds were in the rear springs of each. Finally he decided on the 63 Bel Air, but made them put springs from either the Biscayne or the Impala (memory fades) first. They did and he was the only guy in town that had a raked brand new Chevy going down the street. It was at least 2 or three inches higher in the back. He would never admit he shouldn’t have done that and no one since has changed the springs. I happened to see the car about ten years ago and wanted to tell the guy the story about why the rear end was up in the air so much.

I just refuse to waste my time with endless negotiations. You either are putting together a reasonable deal with reasonable people or just leave. Sometimes you are so close and just wrap it up with a set of winter mats, or one time it was the factory service manual (used of course).

Finally decided on the VW huh?

Tell them you’ll pay their price but see if they could maybe throw in a set of all weather floor mats to sweeten the deal. Or maybe the first oil change for free.

Enjoy your new car; just make sure you remember which nozzle to use when filling it up. :smiley:

It would take a building full of linguists to sort out the BS behind most transactions. As an old boss of mine used to say whenever someone pulled onto the lot: “Well, time to go dazzle 'em with BS”. :slight_smile:

It also wouldn’t hurt OP to call (or have OP’s SO call for a different voice) the dealership and ask for the fleet sales manager or the internet sales manager, tell him exactly what you want (color, options, etc) and see what price he’ll give you. Usually FSM’s operate on volume, so they won’t want to haggle with you for 4 hours, because while he’s screwing around with you, 5 sales just passed him by. They tend to give a much closer to bottom-line price right off the bat.

I would normally assume that almost everything that comes out of a car salesperson’s mouth is a lie, but my mother worked in the banking industry, and you’d be amazed how many dealerships buy their inventory with borrowed money, so there might be a grain of truth in it.

A dealer couldn’t sell cars at a loss and stay in business. Sometimes, they didn’t make the profit on the deal that they expected to make, but this isn’t a real loss.

The ‘best deal’ can best be determined with 2 dealers competing between each other. Only when you can ask one to meet the other’s bid do you get the best price. If you only have one dealer, then you’re just going to have to decide if the price is ‘good enough.’