Price Check Negotiating a price at the dealership

[Jim in ICT]

JohnThomas is right. If you do your homework, you don't need to know their cost.

 

[gwdixon]

Does that help.
What someone pays for some thing isn't anyones business. If you buy something at a real deal and offer to sell it, do you feel compelled to tell what you paid for it? It doesn't matter what the dealer paid for it. He has it for sell and if he gets a great break on his purchase, does that mean he has to pass that savings on to you? That's the point. Why do you want to know what they paid? How much does McDonalds pay for meat? Who cares. That's my point.

Thank you for the clarification.

I care. Yes, if the dealer gets a break then I expect to get that break passed on to me. If the dealer won't show me the invoice I walk down the road. The haggling, back-and-forth, gamesmanship, lies, whatever you want to call it is taken out of the equation if the deal is based on a percentage of the invoice.

If the dealer won't show the invoice then the conclusion is that something is being hidden. I go into the dealership knowing what percentage I'll pay based on research and continue on until a dealership is found to meet those expectations.

Some may enjoy the bargaining process but others don't. I feel sorry for those on this forum that ask if they got a good price of $xxx for their new tractor. If they knew the invoice price and the profit margin there would not be the second thoughts and buyer's remorse seen too often.

Used tractors are an entirely different matter, of course.

 

[gwdixon]

JohnThomas is right. If you do your homework, you don't need to know their cost.

Homework such as what? Knowing their cost? Knowing what others have paid? Contacting several dealers to see what the market will bear? Finding out what fleet buyers are paying?

More details please. Others desiring to buy a tractor could use some information. That is what this forum is for.

My pitch is in.

 

[jimjdb]

Well, I always find it interesting when people start talking about beating up the dealers and how they are all liars and cheats and then detail their little tricks and lies to get a low price. Many years ago I invested in a boat dealership and you would be suprised at the truth about costs and making a profit with some manufacturers. My partner and I ran a tight ship, we made money and never to my knowledge cheated anyone. We were a little dismayed at first when we saw some customers making obvious mistakes like buying too small or buying new when they really could get a better deal going used or passing up on a good purchase by being stubborn over a few hundred bucks on a 50 thousand dollar purchase. In most of these cases we were accused of trying to get more money out of them which was not the case. I always remember one fellow with 2 or three children buying a very small new boat to see if they were going to like it. I suggested a larger used model because they would get a couple years use out of it instead of trading a new one in a season and losing 30 percent. Well, they would not listen and guess who was the bad guy when they wanted to trade up 3 months later?
Also, when you get a boat, tractor etc from the manufacturer you don't just turn the key and drive it away. The assembly and prep on a 30' boat from one manufacturer we represented took app. 35 hours. So who pays for that?
Labor rates in the Northeast are higher than down South as are general boat prices. You would think product prices would be higher where you could use a boat year round, but thats the problem-no urgency to buy. Today,tomorrow or next month, you can wait forever.
Another manufacturer out West would send list pricing to anyone that requested it, only problem was it did not include any freight or prep. So you had a list price sheet of which the dealer got 20% (that's right 20) on a 75 thousand dollar boat and freight and prep that would be around 18 thousand that the customer did not know of and they would run around for months trying to buy it for 50 or 60 thousand until someone would get thru to them.
And by the way, we only got a certain number of each model and could always sell more than we received. We made a fair profit on each and the "show me your costs" guys got the honest explanations of real costs and our profit was our business. Some went away and most came back after speaking with our previous customers, many of which bought from us several times. Everything above is true and you can believe it or not, I could care less. I may get taken for a little more on my major purchases because I pick who I will buy from first and don't assume I will beat them out of anything because they are the experts at what they do and they do it every day. Sure I can play the game a little when negotiating, but if I felt the dealer was a cheat and liar I wouldn't do business there. After all, if you lay down with dogs you get fleas-right? Next time you size up someone make sure you aren't scratching yourself. I bought my tractor from Barlow based on his customers on this sight, only spoke to him by email but I get a good feeling from them. Still, I went to my local dealers before I bought and asked them to come at least close-which they could not do. We are still friends and I would not hesitate to buy other things there. Final word, don't think the local dealers don't talk to each other-why do you think their prices are so close?

 

[jimjdb]

I have to get a couple more things off my chest, the guy who tells me he bought the 25,000 tractor for 15,000 because the dealer had to get rid of it. Usually it turns out to be 2 wheel drive or grossly underpowered or some other thing that makes it impossible to re-sell when you find out it won't work for them. And the worth 20,000 but i'll sell for 10 for quick sale. If it will only bring 10 it's worth 10. How many times did you ask a seller "how much for that" and they say "UUUHHH give me 2 or 3 hundred" ok sure i'll pay the 3 hundred given the choice.

 

[LarryRB]

Thank you for the clarification.

I care. Yes, if the dealer gets a break then I expect to get that break passed on to me. If the dealer won't show me the invoice I walk down the road. .

If the dealer won't show the invoice then the conclusion is that something is being hidden. I go into the dealership knowing what percentage I'll pay based on research and continue on until a dealership is found to meet those expectations.

Used tractors are an entirely different matter, of course.

If I was a dealer and you demanded the invoice,, you wouldn't have to wait for me to show you the road,, what you are doing is unethical in my mind. What do you do, when situations like my father in law did for many years being a Chrysler-Dodge dealer,who offset his floor plan by Chrysler by them keeping the hold back? Now, does his 4% hold back still equate to you not paying a fair price? Flat out, I wouldn't want you as a customer ever,, You want it at costs and them some more off and you sound to me, very unreasonable to deal with,. Also, we may have added "hidden" state taxes that your area does not... There is a lot that goes into selling besides the invoice.

 

[American Pit Bull]

Well, I always find it interesting when people start talking about beating up the dealers and how they are all liars and cheats and then detail their little tricks and lies to get a low price.

I am one of the people that posted about a dealer lying to me...

He did it with no provocation from me... While negotiating price he started quoting "his cost" and I listened. He lied and I just politely nodded my head. I didn't even call him out on it... I just thanked him for his time and went on my way.
-In a previous post, I related this action to why the cost is important...

You know as well as I do, that when it comes to making money, some (not all) people will lie to justify their price point.
No one made a broad generalization about "all" dealers.

 

[gwdixon]

If I was a dealer and you demanded the invoice,, you wouldn't have to wait for me to show you the road,, what you are doing is unethical in my mind. What do you do, when situations like my father in law did for many years being a Chrysler-Dodge dealer,who offset his floor plan by Chrysler by them keeping the hold back? Now, does his 4% hold back still equate to you not paying a fair price? Flat out, I wouldn't want you as a customer ever,, You want it at costs and them some more off and you sound to me, very unreasonable to deal with,. Also, we may have added "hidden" state taxes that your area does not... There is a lot that goes into selling besides the invoice.

You have it all wrong. My large equipment buying technique completely recognizes that the light bill has to be paid, the employees compensated, and the owner's family should live in comfort - aka "overhead".

Dealer holdback, wholesale financial reserve, dealer advertising charged by the parent company, and reasonable prep charges are all considered in the offer.

To pay a percentage over invoice, whatever that percentage might be, requires knowledge of the amount of the invoice. Plain and simple.

Most car/truck dealers have a profit embedded in the invoice. For Toyota, it is 3%. So the dealer sold the Tundra to me at invoice and was satisfied with the 3% profit since volume sales was his strategy.

Kubota doesn't have the profit built into the invoice so I paid 8% over the invoice plus some prep costs as can be seen on the Kubota website "Built Your Own" feature.

Vehicle service and repair is where the profit is in equipment. It is similar to buying a computer printer for a bargain price and then being charged high prices for the supplies.

 

[JOHNTHOMAS]

The sellers cost. I'd like to know that but it would just be a small factor to consider. Corvettes used to be limited to dealers based on selling other cars. They could sell every one they got for sticker so their cost wasn't a factor. A plain white unloaded car has almost no markup so selling slightly over cost is going to lose the dealer money unless he needs to sell 5 of them to get one Corvette. There is also hold back and I know that and only mention it when they say they are losing money or only making $100. If a Kubota dealer can sell every BX he gets and has people waiting on one then his cost doesn't matter he'll get MSRP.

Now moving on to today in tractors. We tell what we paid here. Most of us believe that Barlows sets the bar for a good price. If your local dealer gets at or close to Barlows then some here feel good laying down at night that they have gotten a fair deal and never see Barlows cost and never ask to see it. In this case, what does it matter what his cost is? His price is used to base a decision on how much is a good price.

I've also had dealers want to show me their invoice and how they are only making $100 on a sale or losing money on a sale. Let me tell you, they can't keep losing money and stay in business. I research Edmunds before I go to buy a car. I know what it costs so I don't ask them to see their invoice. If I don't trust a place I don't go there. I trust Barlows and I expect them to give me a good price and to make a profit. I feel that I've gotten 10 good deals from them. I checked prices with several Kubota dealers and Green and Blue before I bought from them the first and second time. No one was close. I'd never insult them by asking what they paid for it and I do think it would be an insult.

I've had customers that came in and acted like they didn't trust me up front and so I was ready to show them the door but didn't till I could see if they thought they were negotiating and that was their style. If they continued acting like butt holes then I did tell them the guy they felt they could trust was probably the better place for them to deal with and I wished them a good day, stood up and walked away. No hat.

I was the owner so their complaint was duly noted. I did well by working with people that acted like human beings and enjoyed working with them. Made it a pleasure to come to work most days and to want to do them a good deal that I could live with and still beat my competition. Some times I couldn't and told them the other guy had offered them a deal I couldn't beat/match but come back next time and maybe I could. Then gave them a hat or something.

Buyer or seller. We're all just people trying to make a living and get a decent deal or rather most of us. There are sellers that are crooks or trying to get rich and there are customers that want every deal to be a battle and want the seller to bleed and lose money. I had a man that worked for me that was like that. He bragged about his conquests and never understood his screwed up personality and it bled over into his whole life.

If things are selling good then a business does not have to discount. If business is down and very competetive then items can be bought at greater discounts. So, I go by what things are selling for and not what the seller paid for something.

 

[Red Beast]

1. know your budget and be ready to buy.
2. be well prepared, know exactly what you want including accessories, extra warranty.
3. get a price from more than one dealership, number of dealerships depends upon what's local or accessible, and have the price quote broken down into individual costings.
4. be firm, confident in your dealings, and honest, let them know you are getting several prices. Don't be an ar$e.
5. choose the best total package, combination of price, locality, service, gut feel.
6. push for a bit more, respectfully, ie if the best price you got was significantly lower than the others, there may not be much more room to move.

 

[JOHNTHOMAS]

You have it all wrong. My large equipment buying technique completely recognizes that the light bill has to be paid, the employees compensated, and the owner's family should live in comfort - aka "overhead".

Dealer holdback, wholesale financial reserve, dealer advertising charged by the parent company, and reasonable prep charges are all considered in the offer.

To pay a percentage over invoice, whatever that percentage might be, requires knowledge of the amount of the invoice. Plain and simple.

Most car/truck dealers have a profit embedded in the invoice. For Toyota, it is 3%. So the dealer sold the Tundra to me at invoice and was satisfied with the 3% profit since volume sales was his strategy.

Kubota doesn't have the profit built into the invoice so I paid 8% over the invoice plus some prep costs as can be seen on the Kubota website "Built Your Own" feature.

Vehicle service and repair is where the profit is in equipment. It is similar to buying a computer printer for a bargain price and then being charged high prices for the supplies.

As a business owner I'll make my own decision on my profit margin since I know all the facts of my costs and needs to live. I have never and never will let a customer make those decisions for me. That's where you and I will never be able to do business with each other. You will not want to deal with me and I won't want to deal with you. (Course I might if your willing to pay 8% over cost)

You take on the half a million to million dollar debt and then you can make those decisions. You believe you know the actual operating costs of a dealer but unless you've done it you don't and if you have then it would be based on the size of your business. The overhead for a 100 sales a year dealer over a 1000 sales a year dealer or the 50 sales a year dealer are different. The variables are limitless.

People that have worked as waiters/waitresses seem to want to leave a bigger tip, if they can afford it.

 

[radman1]

I don't have any problem asking a car dealer for an invoice. More times than not they show it to me without me asking. With the internet, finding the invoice cost is easy. Car dealers know that. Excluding the latest and most desireable cars/trucks, I believe most dealers will sell for invoice. I listen to their initial sales offer, and then tell them I will pay invoice or if the auto is still a good seller, I will offer $100 over invoice. I usually never ask for the invoice paper and they just show it to me. Buy a car/truck that is offering rebates and sitting on the lot, and they will always take invoice. My last 2008 F250 was $1000 below invoice, $10,000 in rebates, gave me the bedliner that was in the truck (I told them to take it out because I wasn't paying for it.) and 3 free oil changes on a diesel. My negogiations lasted 10 minutes. I will admit, they were begging to get rid of the big trucks at that time.

 

[jimjdb]

I guess the lesson is there is not an absolute formula for the best price. You have to take factors such as overhead differences and market conditions into consideration. If you go to three different dealers and get about the same pricing from each it's not hard to find the bottom without an invoice. Sure a lot of auto dealers will trot out the invoice without being asked-the manufacturers countered the customers years ago by giving holdbacks, rebates and incentives that you never see to the dealers. I was looking recently for an ATV and thought I would go on a forum like this one to see how people buy them. Well I have been to a half dozen in the last month and none will discount like the people on the forums claim. I'm seeing models that are 2 years old, have not sold and the dealer wants as much and more than new. I would guess the manufacturers heavily discounted the new models to get sales going and the dealer is now stuck with the expensive old product. Up to them how to run their business but I would be dumping the dogs and trying to make up with the new product. Also you can see features that have been added and improved on the new models so even with a steep discount is it a good deal or just a good price?

 

[Buster57]

"You take on the half a million to million dollar debt and then you can make those decisions. You believe you know the actual operating costs of a dealer but unless you've done it you don't and if you have then it would be based on the size of your business. The overhead for a 100 sales a year dealer over a 1000 sales a year dealer or the 50 sales a year dealer are different. The variables are limitless."



I deal with something called "SCM" all the time and it drives me crazy. "Should Cost Modeling". I don't go there when I purchase expensive equipment.

My cost structure and my overhead and profitability are my own business as is my decision to reduce selling price as I see fit. This decision will be based on contractual obligations, goodwill and history, promise for future business allocations, etc...however, not my cost and profit structure. That is my business and no one except the bank and the IRS get to see that.

When I purchase a tractor or attachment I shop hard on the internet checking the going prices locally or delivered price if out of state. I have purchased both ways so I do not waste the seller's time, example; Sweet, CCM... I try to do business with the same dealer or service centers as much as possible (two different companies I might add). I usually get the best prices from these businesses in return. My relationships go back more then 10 years and 5 tractors with both companies.

 

[crazyal]

Does anyone remember that web site for Kubota's that you entered the model and it would give you list, an OK price, a good price, and an excellent price?

 

[JOHNTHOMAS]

Does anyone remember that web site for Kubota's that you entered the model and it would give you list, an OK price, a good price, and an excellent price?

I don't but your screen name always brings a smile to my face from the memory of a man named Al Bischeo? that I met in Viet Nam. He was in the Army, a cook and the Green Berets/5th Special Forces Cadre who lived across the road from me needed a cook. Stepping off the plane at his arrival Al was informed he was now a member of the 5th Special Forces and he served ice cream from a machine for a year. We called him Crazyal. The ice cream was pretty bad but beat any thing else we had. Thanks for the name Crazyal.

 

[kozman]

WOW! I am new at this tractor thing and thought that I would post this new thread not knowing what I was getting into. Thank you for everyone's feedback!

I was out sick last week when I had time to do the research on a new Kubota. I got a price from my local dealer and called practically all dealers in ME, NH and northern MA. While doing this, I hooked up with this website and discovered Barlow in KY from a bunch of different bloggers. I had no idea who these people were and was a bit nervous doing business so far away. All the prices quoted to me in northern New England were about the same and what I thought was normal.

Within a day of not knowing a thing about what I was getting into, I used Barlow's "Priceline" type website and got a very competetive price back from them the next day. None of my local dealerships could come close. Last Wednesday, I never heard of Barlow and on Thursday afternoon, I am shooting the breeze with Brady Barlow about the two young kids we both have and other things in common, 800 miles away. I bought my Kubota from Barlow.

Anyway, when it comes down to dealer invoices, beating up the dealers and all the other stuff, I feel that I got a good deal and that's all that matters. We all have costs that are there to "feed the owners family" etc since I own my own business, but what is important is that it feels like a fair deal. This did and I am happy with my purchase.

The tough part is now waiting for it to arrive in 3 weeks!:licking:

 

[Red Beast]

Anyway, when it comes down to dealer invoices, beating up the dealers and all the other stuff, I feel that I got a good deal and that's all that matters.

The tough part is now waiting for it to arrive in 3 weeks!:licking:

Nice summary.
You did your research, shopped around, got a price you were happy with, and from a dealer that you felt good dealing with. Well done. :thumbsup:

3 weeks............ :confused2: I had to wait 3 months!!!

RB

 

[Cat_Driver]

I've negotiated a lot of deals and the funniest one was when I offered a price and the salesman refused and I said OK because I know I can get that price at another dealership.

He said wait I will check I said no that's OK and I had one foot in the dealership and one foot out side the dealership. The entire negotiation took place with me fading either in the dealership or out the door but never leaving the threshold.

I got my price and a free first oil change, a full tank of gas and floor mats before it was all done.

The toughest deal lasted almost five hours. I went to purchase one of those lost leader deals, you know the ones that are priced below cost with no option so they can advertise a super low price and them switch you over to something better. They flat out did not want to sell me that vehicle and argued with me and treated me like scum to make me leave and brought in several "closers" to get me to buy something else.

First time I almost had to take a lunch break on a negotiation.

Well it was a hard fight but I drove away with it - telling them as I was leaving that I got the vehicle so cheap ( about 15K less than any other in that model ) that I was going to put in on E-bay and make some money, just to rub it in.

See they never want to sell those cars because they can milk the ad for months getting people in and switching them to other vehicles. Example if I wanted the same vehicle but in a different color the price jumped 15K. If I wanted a radio added it jumped 2K, and on and on.

 

[JOHNTHOMAS]

WOW! I am new at this tractor thing and thought that I would post this new thread not knowing what I was getting into. Thank you for everyone's feedback!

I was out sick last week when I had time to do the research on a new Kubota. I got a price from my local dealer and called practically all dealers in ME, NH and northern MA. While doing this, I hooked up with this website and discovered Barlow in KY from a bunch of different bloggers. I had no idea who these people were and was a bit nervous doing business so far away. All the prices quoted to me in northern New England were about the same and what I thought was normal.

Within a day of not knowing a thing about what I was getting into, I used Barlow's "Priceline" type website and got a very competetive price back from them the next day. None of my local dealerships could come close. Last Wednesday, I never heard of Barlow and on Thursday afternoon, I am shooting the breeze with Brady Barlow about the two young kids we both have and other things in common, 800 miles away. I bought my Kubota from Barlow.

Anyway, when it comes down to dealer invoices, beating up the dealers and all the other stuff, I feel that I got a good deal and that's all that matters. We all have costs that are there to "feed the owners family" etc since I own my own business, but what is important is that it feels like a fair deal. This did and I am happy with my purchase.

The tough part is now waiting for it to arrive in 3 weeks!:licking:

Congratulations on your purchase. It will be worth the wait. The Barlows are not from China or the corporate guys out to destroy the American economy. They are my local dealer. A father and son that are trying to make a living and be nice while they are doing it. I've bought several from them and have never felt the first time that they were trying to sell me anything. I come in with my questions and they answer. I can say Steve has talked me out of buying things that won't do what I tell him I want done but he has never talked me into anything. Seems they know how much profit they have to have to make a living and price em to sell.
Again, congratulations on your purchase and buying experience, that's what it is a buying experience.