Price Check Negotiating a price at the dealership

[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.