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View Full Version : D & H Charges Dealer Gouging or Fair Practice



Bashed
Mon Mar 26th, 2012, 07:51 PM
The other thread about the superbike multipication got me thinking about this subject.
D & H Charges, or Delivery and Handling charges are an extra fee imposed by dealerships to incure more profit. They are not required by law and are not the same from dealer to dealer. Some dealers charge D & H charges and a Freight charge as well. They say it is what the manufactor charges them to get it to the dealers place of business. This fee varies wildly from place to place, from zero fees to over $800 dollars at a local motorcycle dealership.
So my question to you is this.
Is it reasonable to have a D & H charge?
What is a reasonable amount if in fact it is reasonable at all?
Is it reasonable to charge freight along with D & H fees?
Keep in mind the retail pricing on all vehicles has a built in profit for the dealer already. Also some states have a capped dollar amount, Cali is $45 on leased deals and $55 on buy deals. Texas is also capped @ $50.
What exactly are you getting for these fee's, extra care in the handling of the transaction, or just the warm fuzzy feeling for giving them your money for nothing in return?
Don't confuse this charge with any taxes that are due. That is a completely different issue.
These fee's are really just a way to increase a dealers profits IMO.
I feel it says if I am buying a vehicle and I agree to pay the fee's, that I am a sucker for the privelage for them to sell me that vehicle. In these times where money is tighter and purchases must be scrutineered, I think we as consumers should stand up and make a stand. I will activly seek out a dealer who would rather sell me a vehicle for a less profit rather than get greedy and stick me with these BS charges and fees.
Your thoughts?

vort3xr6
Mon Mar 26th, 2012, 08:18 PM
If we sell a brand new Toyota Tacoma at sticker price, the dealership makes $260. Couple that with dealers and competitors selling cars below invoice and D&H is the only thing that keeps our lights on. Consider it our markup from the manufacturer because they have shrunk margins exponentially.

I can't speak about motorcycles though. This is cars.

vort3xr6
Mon Mar 26th, 2012, 08:20 PM
We have never once not charged D&H either. When I buy a car, I have to pay it and I work for the company. The running joke in the company is that Jesus would have to pay D&H. That is where colorado law states we cannot discriminate D&H by charging somebody but not somebody else.

It is even worse for Chevrolet! A brand new Chevrolet Cruze only has $180 of profit. Not sure where you are getting your ideas of profit.

longrider
Mon Mar 26th, 2012, 08:49 PM
Also you can negotiate a bottom line price. Just be aware that as Brad stated if you charge a fee you must charge teh same fee to all customers. If you negotiate a bottom line of $8000 and there is a $100 fee then the sales agreement will be written up for $7900 plus a $100 fee

BC14
Tue Mar 27th, 2012, 07:56 AM
^ Yep, I always work on the Out The Door price, and do some numbers work to get it where I want to pay.

salsashark
Tue Mar 27th, 2012, 08:10 AM
Like BC... I figure out what I want to pay and let the dealership play with the numbers to make it work. If it does, great... If not, no worries. I'm not too concerned with a specific charge as long as the OTD is what I'm comfortable with.

That being said, it feels shady to advertise a car/bike at one price, then throw in these types of charges to bump up the final price. I was looking at F-150s a few weeks ago and every "invoice" I saw had all kinds of these additional charges. It pissed me off. I don't want the freakin undercoating! When I questioned them, the salesman instantly said they could be pulled off. It felt like a "Let's throw it in and see if he catches it" or "we'll add this to make it look good when we offer to take it off" kind of thing. It all felt somewhat underhanded... especially on a $46K truck!

BC14
Tue Mar 27th, 2012, 08:35 AM
Just like the "paint sealant", "carpet protectant", and a myriad of other things they love to tack on.

dirkterrell
Tue Mar 27th, 2012, 08:53 AM
Yep, when I'm negotiating I tell them that I don't care at all what the details are. Just tell me what I have to write on the check to take it home, and you figure out how it's divvied up. And I tell them that if they give me a number and then come back later and add other charges, I'll walk out the door, and I have. Just cut through the bullshit right from the start and things work out much better for everyone.

TinkerinWstuff
Tue Mar 27th, 2012, 09:05 AM
capitalist bastards! how dare someone make a profit and buy shoes for their kid or groceries for the table

TinkerinWstuff
Tue Mar 27th, 2012, 09:31 AM
Why else do you think a 2012 nice loaded vehicle costs almost $40k?

because manufacturers have got efficient at making lots of incredibly accurate and difficult parts efficiently? Any other machine of similar complexity and workmanship doing any other task besides shuttle fat ass socker mom's and their sugar fed children to McDonald's would cost a half million dollars or more.

Darth Do'Urden
Tue Mar 27th, 2012, 12:28 PM
If we sell a brand new Toyota Tacoma at sticker price, the dealership makes $260.

This is of course AFTER the owner gets his "pack", the GM gets his cut, the New Car Sales Manager gets his cut, and the salesman gets his "mini".


Couple that with dealers and competitors selling cars below invoice and D&H is the only thing that keeps our lights on.Is your New Car dealership connected to or working in conjunction with a Used Car lot? If so, THAT is what's keeping your lights on, not some D&H fee that is indeed a crock of shit.


Consider it our markup from the manufacturer because they have shrunk margins exponentially.Not the consumer's problem.


Not sure where you are getting your ideas of profit.

I have a very strong sneaking suspicion of where you're getting yours...and it's likely just as off-base (through no fault of your own...unless you actually run the whole place) as the general consumer's.

There's indeed much less markup on Toyota and Honda than domestic cars, but it's also quite true that the higher up the price bracket you go, the more built-in profit there is as well.

And just to clarify, I'm not accusing you vort3xr6 of anything. I reckon you're a salesman trying to be a very GOOD salesman with as much honor and integrity as possible. But those numbers you quoted, even if shown to you by a sales manager on some official "invoice", are simply untrue. There's "invoice", and then there's invoice. And not very many people are privy to the actual truth of which one's which.

McVaaahhh
Tue Mar 27th, 2012, 12:36 PM
:imwithstupid: If the dealership only made $100-$200 per car they couldn't afford to stay in business. There are many other ways they make money with financing, holdbacks, bonuses, etc.

The only thing that matters is if you "feel" like you got a good deal on your bike/car. The dealer is there to make money, that's his job, not to give you a good deal. Haggle with them until you're both happy and just go with it. It's not charity, it's business.

salsashark
Tue Mar 27th, 2012, 12:41 PM
^^ IIRC from college econ and marketing classes, dealerships profits primarily come from the back of the house, not the front. They're making the bulk of their money servicing vehicles and selling parts/accessories.

Ghost
Tue Mar 27th, 2012, 12:42 PM
Fwiw, D&H is illegal in several states, but not here.

It's a gouge, but so it goes--negotiate the OTD price and let the dealership back it out, it's all a numbers game. If you play it long enough you'll find someone willing to eat it.

TinkerinWstuff
Tue Mar 27th, 2012, 01:19 PM
I think it is hilarious that everyone of you believes he deserves another dollar an hour in his paycheck but the minute somebody wants a dollar out of your pocket he's a thief.

vort3xr6
Tue Mar 27th, 2012, 01:49 PM
I think it is hilarious that everyone of you believes he deserves another dollar an hour in his paycheck but the minute somebody wants a dollar out of your pocket he's a thief.

Amen.

I work in the corporate side of the dealership group so yeah I see our numbers. In our organization between our two Toyota stores, the average profit of ALL new cars is $825. That INCLUDES pack and D&H. With the higher end brands that is much larger. No wiggle room in Porsche and we make $8,000 a pop. Why? Because if you don't buy it, the next rich schmuck will.

I love how everyone thinks they know how "invoice" pricing works. I can show you exactly what Toyota takes out of our bank account for the car and you would still ask for $2000 off that. There is NO margin in new cars. We sell them to get more trade ins and increase our allocation. It is a volume commodity, not a gross profit generator.

Used cars is another story. We average $3500 per unit on used cars. Don't blame the dealer for that, blame the low supply high demand used car market. We sell them that high because the market dictates that is what they are worth.

Every price we put out on the internet or in paper, we say that D&H is INCLUDED, so it's not like we are hiding anything. Once again, we can show you all the paper in the world but you "the consumer" is going to believe whatever you want. Self fulfilling prophecy.

McVaaahhh
Tue Mar 27th, 2012, 01:51 PM
^^ IIRC from college econ and marketing classes, dealerships profits primarily come from the back of the house, not the front. They're making the bulk of their money servicing vehicles and selling parts/accessories.

Agreed, but do you really believe that $46,000 truck only has $100 profit in its sale? Don't salesmen get commissions? Where does that money come from? Parts & Service? I doubt it...

I may be wrong, but I don't think they operate the same as cell companies (Read: sell the phone at a loss but make it up in plan charges)

I do know they make more money on used vehicles. (That's why they're out front)

salsashark
Tue Mar 27th, 2012, 01:54 PM
I think it is hilarious that everyone of you believes he deserves another dollar an hour in his paycheck but the minute somebody wants a dollar out of your pocket he's a thief.

1st of all, I never called them thieves and I don't think they are. They're in sales. Some are better than others. Some are definitely worse. I challenge you to find someone who has never left a dealership feeling worked over.

To me, it's a game. They win if they get more money from me then the other guy who wants the same vehicle. I win if I get the vehicle for a price I'm happy with.

Like I mentioned in my previous post, I was looking at trucks a while back. The sales man offered to let me take one for a day and run errands with it. No way... I want no emotional attachment to something that's not mine. I knew what he was trying to do... and good for him. That's just another part of the game.

In the end, the math didn't work. He wanted to take more dollars out of my pocket then I was willing to let him.

CaptGoodvibes
Tue Mar 27th, 2012, 02:54 PM
I love how everyone thinks they know how "invoice" pricing works. I can show you exactly what Toyota takes out of our bank account for the car and you would still ask for $2000 off that. There is NO margin in new cars. We sell them to get more trade ins and increase our allocation. It is a volume commodity, not a gross profit generator.


What is the single best day of the year to buy a car?

Ghost
Tue Mar 27th, 2012, 02:57 PM
PVR is one aspect of the entire business model, there are also various corporate incentives, stair-step bonuses, marketing co-op funds, etc., etc.

vort3xr6
Tue Mar 27th, 2012, 02:57 PM
What is the single best day of the year to buy a car?


Tough question but I would say either the Friday before Thanksgiving, or December 31st.

Any time in the 4th quarter we usually start dropping grosses to move units for the next year's allocation.

Ghosty
Tue Mar 27th, 2012, 03:15 PM
I work in the corporate side of the dealership group so yeah I see our numbers. In our organization between our two Toyota stores, the average profit of ALL new cars is $825. That INCLUDES pack and D&H.
That's some good info to keep in mind, thanks.


because manufacturers have got efficient at making lots of incredibly accurate and difficult parts efficiently? Any other machine of similar complexity and workmanship doing any other task besides shuttle fat ass socker mom's and their sugar fed children to McDonald's would cost a half million dollars or more.
My age and George Constanza "cheapness" might be showing. When I was a kid you could buy a Condo for $40k, lol.

Bashed
Tue Mar 27th, 2012, 03:21 PM
I belive both the consumer and the seller will both tell lies to get the deal they want. I have heard salespeople outright lie to me about certain aspects of the deal when thru research I know it is BS. On the other hand I overheard a buyer talking to his wife about a aspect of the deal he was negotiating and then flipflop and tell the seller the exact oppisite.
I have also experianced dealerships who don't want to tell you the bottom line, until the time comes to sign the papers. To me this is a form of dishonesty, to not be upfront on all costs and try and hide the "out the door" price. Not giving info is as bad as telling false info. This is where I as a buyer makes the descision on weather or not to make the deal. If the person or people I am dealing with don't/won"t have the capacity to compromise the deal is off. No pricing/charges are set in stone, and if they are I will walk and take my money elsewhere. As others have said, I don't care how the # work, as long as the final outcome is amicable to me. I won't string the negotiations out till every last penny is squeazed out, but the sellers needs to meet somewhere in the middle to make it work. That is thier job and the game. It just bothers me that you have to do due digagence to not get screwed anymore, due to the greed in todays society. It didn't seem to be this bad even just 10 years ago.
I guess that is why I started this thread, to vent about the greed, thanks for listening.

vort3xr6
Tue Mar 27th, 2012, 03:41 PM
I belive both the consumer and the seller will both tell lies to get the deal they want. I have heard salespeople outright lie to me about certain aspects of the deal when thru research I know it is BS. On the other hand I overheard a buyer talking to his wife about a aspect of the deal he was negotiating and then flipflop and tell the seller the exact oppisite.
I have also experianced dealerships who don't want to tell you the bottom line, until the time comes to sign the papers. To me this is a form of dishonesty, to not be upfront on all costs and try and hide the "out the door" price. Not giving info is as bad as telling false info. This is where I as a buyer makes the descision on weather or not to make the deal. If the person or people I am dealing with don't/won"t have the capacity to compromise the deal is off. No pricing/charges are set in stone, and if they are I will walk and take my money elsewhere. As others have said, I don't care how the # work, as long as the final outcome is amicable to me. I won't string the negotiations out till every last penny is squeazed out, but the sellers needs to meet somewhere in the middle to make it work. That is thier job and the game. It just bothers me that you have to do due digagence to not get screwed anymore, due to the greed in todays society. It didn't seem to be this bad even just 10 years ago.
I guess that is why I started this thread, to vent about the greed, thanks for listening.

I admire where you are coming from, but 10 years ago was about 20 times worse than today. Car Dealers were SNAKES in the 80's and 90's. Back when the consumer didn't have information on the internet we were making 10k-12k PER car. Margins were high and the consumer had no idea.

We really have to work to make money in today's market.

For instance. 2 days ago this dumbass comes into our Toyota Dealership. He says he "knows" we have $10,000 in rebates and profit built into a brand new Sienna. He also says he "knows" Toyota gives us $5,000 in hold back. So he demands that we sell him a brand new Sienna for $15,000. The sad part is we get this ALL the time. Then the consumer goes online and BLASTS us for not being "up front" and lying to them.

asp_125
Tue Mar 27th, 2012, 03:46 PM
The profit is in used cars. The wholesale or auction price is probably 50-60% of what they can sell it for, even taking into account the reconditioning cost. I shopped my used car around before selling it privately: dealers, wholesalers, brokers all offered way less than blue book.

Kristian
Tue Mar 27th, 2012, 03:52 PM
There seems to be confusion between profit and margin(mark up).

I've been around the car business a long time. $20000 profits were a lot like Bigfoot. Everyone has heard about them, but no one has really seen them. Exceptions being one of a kind or exotic units.

vort3xr6
Tue Mar 27th, 2012, 04:04 PM
The profit is in used cars. The wholesale or auction price is probably 50-60% of what they can sell it for, even taking into account the reconditioning cost. I shopped my used car around before selling it privately: dealers, wholesalers, brokers all offered way less than blue book.


I wish you were right, but since supply shrunk so much in New Cars, Used Car auction prices are through the roof. A clean carfax vehicle will usually auction for about 90-95% of blue book.

Ghosty
Tue Mar 27th, 2012, 04:04 PM
For instance. 2 days ago this dumbass comes into our Toyota Dealership. He says he "knows" we have $10,000 in rebates and profit built into a brand new Sienna. He also says he "knows" Toyota gives us $5,000 in hold back. So he demands that we sell him a brand new Sienna for $15,000. The sad part is we get this ALL the time. Then the consumer goes online and BLASTS us for not being "up front" and lying to them.
Wow, now that guy has just thrown common sense out the window. I would hate to be a car salesman. I'd have to work at Saturn where there is no haggling, because I'm too nice, and I won't knowingly try to rake people, heheh.

My roommate went through the training program at Go Honda in Westy. She quit when it became apparent they were teaching all the new salespeople to knowingly deceive customers in any way possible to make profits. She said she just couldn't live like that, making money off people through deceptive practices. Even if it was totally legal. Plus she said most of her co-workers were your stereotypical "creepy sleazy used-car salesmen" types, lol!

salsashark
Tue Mar 27th, 2012, 05:28 PM
I wish you were right, but since supply shrunk so much in New Cars, Used Car auction prices are through the roof. A clean carfax vehicle will usually auction for about 90-95% of blue book.

Here is an example.

http://i106.photobucket.com/albums/m275/VoRt3Xr6/Clist/untitled.jpg

We appraised this 2006 Toyota Tacoma for trade in.
This tool tells us that the average Denver market price of this year, model, and trim level, is $20,904.
It also tells me the average blue book for this car is $20,375.
Below that it tells me the auction statistics...
The national auction average is $13,121, but the Denver Auction prices are $17,750.
Keep in mind we have to put an average of $2,000 in reconditioning, and attempt to make a profit.

So with the Denver market value, I would have offered this person $16,500 for the trade in, and if they started whining, I would bump it up to $17,000 to "cancel out D&H".

So, as a realistic and competent consumer, where can I go to get an actual idea of what I could get for trade ins? Obviously, I could go out to KBB, NADA or Edmunds. They give values for trade ins. When I read this, I would assume that I could expect to see a number somewhat close to this. Yet, go into a dealer and they come back with something quite different.

Looking at the screenshot you provided, it would appear that NADA states the trade in value to be 20sh, auction value being between 13 nationally and 17 locally. It also shows a retail value of 23. So, giving a 2K reconditioning (which blows me away because if the vehicle is in decent shape it doesn't cost 2K to shampoo the interior and do an oil change) and a 7% profit margin, I would think the trade in would be around 19. Yet, you stated you offered 16.5 with a bump of 500 (for the whining).

So for argument's sake, the owner says ok and you give them 17000, spend the full 2000 for reconditioning and sell it for the average retail of 23000. That's not 7%, it's closer to 21%. Now you've stated that used inventory is low, thus commanding a premium. Are you going to list at the average price or ask more to gain some wheeling and dealing room?

Now, I'm not going to fault the industry for trying to make a buck... Hell, it's capitalism. But I want to be an informed consumer and know what I'm getting into before wasting my and the salesman's time.

Darth Do'Urden
Tue Mar 27th, 2012, 05:35 PM
Reconditioning "should" involve more than shampoo and some upholstery cleaner, even if it's in fine shape. The dealer still has to put the vehicle through inspections, fluids change (as the new owner of said used car you'd expect the fluids to be fresh, right?), perhaps minor imperfections repaired, etc. And all that means a person has to do it, and they get paid, too. $2,000 can evaporate quite quickly even for a car that's truly in good shape.

I'm just sayin'.

Ghost
Tue Mar 27th, 2012, 05:39 PM
I'd have to work at Saturn where there is no haggling

Go for it. They've been out of business for a while...

There's an easy way to not haggle--just pay what they ask!

salsashark
Tue Mar 27th, 2012, 05:46 PM
Reconditioning "should" involve more than shampoo and some upholstery cleaner, even if it's in fine shape. The dealer still has to put the vehicle through inspections, fluids change (as the new owner of said used car you'd expect the fluids to be fresh, right?), perhaps minor imperfections repaired, etc. And all that means a person has to do it, and they get paid, too. $2,000 can evaporate quite quickly even for a car that's truly in good shape.

I'm just sayin'.


Fair 'nuff on the fluids, inspection, wash and wax. But what does that take? A couple of hours? A day? Dealerships aren't paying these techs hundred per hour, but they are paying them.

As for minor repairs, wouldn't that reduce the value of a trade in? I was going by the "clean" check mark, which I would assume to mean free from defects. If it did need repairs or touch ups, I would assume it would be of average condition, thus reducing the trade in value.

FZRguy
Wed Mar 28th, 2012, 02:24 AM
I bought a new Ford Ranger in January. I spent a number of hours at three Ford dealerships over two days. Same truck at each dealer, same rebate and financing available at each, same $ down, so I compared the amount financed at each dealer to roll it off the lot. I didn’t care how they arrived at that dollar amount.

Two of those dealers used some suspect tactics and made promises they could not keep. I bought the truck from Kristian at Courtesy Ford on south Broadway (CSC member and on this thread). He presented a straight-up deal with no BS. A number of CSC members have done business with him and I recommend you go there first if you want a Ford vehicle. I would have saved a lot of time.

Frankie675
Wed Mar 28th, 2012, 04:49 AM
Dumb consuming is the reason dealers are able to throw on d/h fee's and charge high prices.
Anyone who goes to a dealership and buys a car/motorcycle without doing any research deserves to pay d/h fees. Having patience will get you a better deal.

Last year I walked otd with my brand new triumph daytona (with $1500 performance package of exhaust, quickshifter, and levers sent directly from Triumph) for $8500. I was happy with keeping my gsxr750 but always wanted a daytona and seen Triumph was desperate to get rid of any 2010's that were lying around at the dealers.

My friends bf went out and bought a brand new 2011 zx6r for 13k(including financing), even though they were advertising the same model, a 2010, for 7k otd, which another friend went and picked up (he paid 7500 because that was the cheapest in florida at the time). They both got the same exact bike but the guy who bought the 2010 can ride longer because his ass still isn't hurting....

If consumers did their proper research, not just a day or two, but actually months of research before giving away their hard earned money, they should be able to eliminate d/h fees and find a desperate dealership that will give them a good deal.

FZRguy
Wed Mar 28th, 2012, 05:01 AM
A good deal is the only reason I’m driving a new truck. Ford no longer sells the Ranger in North America, so $5,000 rebate on remaining 2011’s (all gone by now). I figured a comparably equipped 2012 Tacoma would cost $11,600 more. Nice truck but I don’t have that kind of scratch for a new ride.

FZRguy
Wed Mar 28th, 2012, 05:07 AM
Speaking of Triumph, got the wants for a new Street Triple R.

gsxr6
Wed Mar 28th, 2012, 09:20 AM
This is a great topic.

Everyone thinks dealers price rape, but don't think twice about the 200% markup you pay for food, or the 80% markup on a new house.

I work for a small car dealership in a big group.

Our newest release car in the top trim line will all the equipment you can get has a difference of 951 dollars between invoice an msrp.

There is 286 dollars in holdback, and then if and only if I reach a certain number of new car sales for the month ( number given by the manufacture) do I get any additional support.

New car business is there for a name
On the side of the building and to drive service work. Service keep the dealership going, not new car sales. Used cars help as there is more money in them, but most of the time we have 60 days to turn your car you traded or
I send it to auction.

Say auction value is 17000 on your car and I spend 2000 reconditioning the car. The owner gets his part and "packs" the car 500 bucks. So that car I gave you 16,500 for I'm now in for 19000. I can sell at auction for. 17000. Or I try and sell it for 21000 and we make a deal at 19800. So I make 800 plus d&h which most dealerships the sales person, or managers aren't paid on d&h so I'm paid on the 800 dollars. Most sales people are paid 20-25% of that or 200 dollars. Sounds like good money for 4 hours of work right? Well now think about the national avg sales person sells around 8 cars a month.

Sales people aren't gouging you. Ecerything you buy (gas food ect) you get raped on.

vort3xr6
Wed Mar 28th, 2012, 09:20 AM
removed for self preservation purposes.

Ghosty
Wed Mar 28th, 2012, 09:27 AM
Go for it. They've been out of business for a while...
Yep I know, but they were the only ones I could think of with that policy off the top of my head.


There's an easy way to not haggle--just pay what they ask!
Never in my life have I. I learned from the best, my Mom. She practically brought the Glauser Benz salesman to his knees before she'd walk out satisfied, for her ML350 back in the day. Brand new from factory (had to be ordered or was on the order list), color she wanted, loaded, extras thrown in (step bars, HID's, etc.), all at "invoice". I walked in at one point, the guy said "Your Mom is killing me", with a distraught look on his face, hahahaa. Nizzzzzze.

Frankie675
Thu Mar 29th, 2012, 02:45 AM
"We offer a 3 month Guaranteed Salary while in training. The average first year salary is $50,000 but could be up to $100,000 for the truly determined!"

Taken from http://denver.craigslist.org/sls/2927037870.html

How are dealerships able to offer this much salary if they are only making around $300 per car? There has got to be a catch somewhere. Even if the dealer took $100 and $200 went to the salesman, the salesman would have to move 250 cars a year, or 20+ a month to get to the $50000 salary. Double that to make $100000 a year! I just don't see where all this adds up.

spideyrdr
Thu Mar 29th, 2012, 04:45 PM
The only time I will cry foul is when a business advertises something at one price then starts tacking on charges. Delivery, setup, advertising, etc. Don't tell me the price is $A when it's actually $A+B and B is significant. That goes for vehicles, airfare, anything.

I was buying my wife an FZ6R for our first anniversary. Grand Prix wanted MSRP + dealer prep + tax, title, and license. I tried to negotiate: "No, brah, that's a low as we can go." A phone call to Vickery that same week and they sold us the exact same motorcycle for $500 UNDER MSRP + tax, title, and license. And that was without a lick of haggling. It was around a $1000 swing on a ~$7000 motorcycle. Needless to say, Vickery had the sale.

I got my CBR1000RR by knowing what the OTD price for it could be at a competitor here in town. I walked in to Fay Myers, said if they could do it at that price, I would buy it that day. Sold!

The dealership may have a right to try to tack on stupid fees to inflate their profit, I have a right to walk away. Denverites are lucky to live in a town with about 3 dealers all within easy driving distance that will have the same exact new bike for sale. If the one you're working with doesn't want to play ball, be a man / informed consumer and take the business elsewhere.

As others have noted the OTD price is what you should focus on and if the dealer can make it happen, great for you both. If they can't, then try somewhere else and don't be a dick about it. They have to make money, I get it, but the smart ones will work out something. I think I read that MSRP -$500 as the OTD price on just about any new motorcycle is profitable for the dealer. They can stick to their guns and charge MSRP + setup + tax, title, etc. especially if it's a brand new model - supply and demand - but on a less-hot model, they ought to be able to get that down substantially.

One final point: It's only gouging if you HAVE to pay it. You probably never HAVE to buy a motorcycle. ie. charging $20 for a 4 pack of AA batteries during a catastrophe. That's gouging. It's your call on what you pay for a motorcycle though. And it's their call on what they want to try to charge you.

Ezzzzy1
Fri Mar 30th, 2012, 08:40 PM
"We offer a 3 month Guaranteed Salary while in training. The average first year salary is $50,000 but could be up to $100,000 for the truly determined!"

Taken from http://denver.craigslist.org/sls/2927037870.html

How are dealerships able to offer this much salary if they are only making around $300 per car? There has got to be a catch somewhere. Even if the dealer took $100 and $200 went to the salesman, the salesman would have to move 250 cars a year, or 20+ a month to get to the $50000 salary. Double that to make $100000 a year! I just don't see where all this adds up.

This was kind of touched on but this is more of a question than anything....

Is it because of the used cars? While a lot of cars are traded in at the trade in rate there are a LOT of cars coming from auctions and those vehicles are bought at a considerably lower price.

Lets say that a blob car is worth:

$23,000 Dealer retail
$20,000 Private party sell
$17,000 Trade in
$15,000 Auction

The dealer still sells a car that was purchased at auction for what they would sell it for if it was traded in. In other words, just because they bought the car for $2k less they dont pass that savings on.

Thats why when you buy a used car the first thing you should do is look at what the trade in value is. That gives you a good idea of what the dealer payed for the car. I use that number as my starting point for negotiations and generally you end up less than Dealer retail.

They still charge D&H on used cars right?

Lomax
Fri Mar 30th, 2012, 09:01 PM
This is all a very interesting read.

When I bought my FJ cruiser I went online and got the MSRP of the vehicle with all the options I wanted and then contacted my broker. He found me the exact vehicle I was looking for, shipped it in and the deal was done. He sold it to me for a bit below MSRP, no D&H, dock, setup, or paperwork fees. All said an done including taxes it came out to about $5K less than the best deal I could find at a dealer.

So I can only assume there is a bit of wrangling to be done. ???

Marc

Zanatos
Sat Mar 31st, 2012, 02:47 PM
The last few times I bought a new car or truck, I ordered them through Automotive Avenues (http://www.autoaves.com) and saved quite a bit of money over what dealers were asking.

I went to Stevinson Toyota, Go, and Groove Automotive. None of those places could get me a truck with all the options I wanted in the color I wanted for less than $42,000 out the door.

When I ordered the exact same vehicle from Automotive Avenues, they sent me a quote of $36,500 out the door. I sent them an e-mail accepting the deal. Then, I went to Groove Automotive to inspect it. The truck had just come in on a flatbed railcar and had all the factory plastic on the hood, seats, etc. I signed a few papers and picked the truck up from Automotive Avenues the next day - all cleaned up with a full tank of gas.

I am thinking of ordering a new Acura TL next year.