aponyfan

Wow, and I thought Hawaii was bad with a 4K premium on any GT at one dealership here on Oahu...

future9er24

$3K over MSRP on a V6 (actually all stangs) but it also had $6K in "mods" (my hiney they did)

anyone want a V6 for $31k? how about $28K (the other "modded" one)?

didnt hink so. even Mr Desperate himself is pissed off at them. its a pity, the salesmen/women know my face now too

Juice

The dealer will make $1500 selling a GT at invoice, plus commision on the financing, plus 25% profit on the trade. Anything over invoice is pure gravy. If people weren't so dumb as to pay out the nose, (MSRP+) the dealers would stop marking them up. Remember, it is a free enterprise economy and as long as they can find a stinker to pay the price, they will charge it.

doulos4JC

Finally! Someone who gets it. You are absolutly right Mike, way to go If the masses understood that dealers make a decent profit selling @ invoice, a 1-5k "market adjustment" would be unheard of.

Grantsdale

Finally! Someone who gets it. You are absolutly right Mike, way to go If the masses understood that dealers make a decent profit selling @ invoice, a 1-5k "market adjustment" would be unheard of.
[/b][/quote]

If people will pay it, then people will charge it.

Say you had 3 oranges.
10 people want the oranges.
Price of the orange is $1.00.
Two people offer you $1.75 for an orange.
Would you not take the $1.75?

Sure some dealerships only charge MSRP no matter what. Good for them. However, if a person is willing to pay more, its fine for them to charge it. Welcome to capitalism.

doulos4JC

Thanks for the sermonette on capitalism...if one wants to over pay thousands of dollars for a product thats thier business. I suspect most of those are either naive or they just have to have it now, no matter the cost. Personally I will be paying under invoice. Viva capitalism!

Grantsdale

Your right, it is their business. The car is a hot commodity, and hard to get, especially GTs. So if paying a couple thousand extra gets you your car, and you can afford it, whats wrong with that?

You aren't paying extra for your car, so why do you care what someone else pays? Please explain, I'm genuinely curious.

doulos4JC

I suppose I care because, if more people understood the true cost/profit margin for a new vehicle the result would be more competition for that business, better customer service, and lower prices for everyone.

Grantsdale

Not true. They have the same number in stock regardless. And MSRP and dealer invoice are set by Ford, so the dealer markup is not influencing that pricing in any way. A dealer charging a premium isn't increasing prices for everyone, only the people that choose to pay it. Remember, the markup clearly appears on the window sticker along with MSRP.

doulos4JC

Juice nailed it...anything over what the dealer pays for a car and it's cost to sell it is profit for them. Lower prices will come when people negotiate from what the dealer cost is, not MSuggestedRP or higher. Dealer makes a decent profit, you get a reasonable price for a car. Over paying thousands of dollars for a car is unreasonable, unless of course you want the car bad enough and don't mind over paying.

Grantsdale

Exactly. If the person doesn't mind over paying, the dealer can charge said person what they will pay. It effects no one else besides the customer and dealer doing the deal.

mcomb

Thats not really true. The more people pay over MSRP the more dealers will charge these market adjustments and the harder it will be for the rest of us to find a fair deal. You are right that it is just capitalism, but it does affect people besides those willing to pay the extra fees.

Grantsdale

Thats not really true. The more people pay over MSRP the more dealers will charge these market adjustments and the harder it will be for the rest of us to find a fair deal. You are right that it is just capitalism, but it does affect people besides those willing to pay the extra fees.
[/b][/quote]

Ok, agreed. It does take away from your prospective "pool" of places you can purchase from. However, like doulos said, all he had to do was look around and he paid below invoice. Don't know if its getting harder or easier to do this now.

doulos4JC

Thats not really true. The more people pay over MSRP the more dealers will charge these market adjustments and the harder it will be for the rest of us to find a fair deal. You are right that it is just capitalism, but it does affect people besides those willing to pay the extra fees.
[/b][/quote]
A point I was trying to make, thanks mcomb Finding a Mustang below invoice took a little extra work, it's actually out of state for me. Even with the extra cost of getting the car myself I am still way ahead of the game. The free market system, it's a wonderful thing! Thanks for the input gentlemen.

sharkstang

Mike,

Are you saying that the dealer invoice which on the Mustang GT is in the ball park of $2500 less then the MSRP is not the dealers actual cost? Interesting....

KUcurt

$3,500 over sticker. This is in the Kansas City area. Thanksgiving weekend was when we decided to do a test drive and we were sold on the car. The dealer in Overland Park wanted $3,500 over sticker for the exact car I wanted. So, I ordered it from a small town dealer who is making me pay just $500 over invoice. So, we had to order and WAIT, and WAIT, and WAIT! Still c / u as of 3-28-05.

graphicguy

Mike,

Are you saying that the dealer invoice which on the Mustang GT is in the ball park of $2500 less then the MSRP is not the dealers actual cost? Interesting....
[/b][/quote]


Well, that statement isn't quite true. Invoice (not MSRP) is what the dealer paid Ford for the car up-front. They, the dealership gets a 3% holdback from Ford to cover floorplan charges, interest paid on inventory, etc. In general, it's usually enough to cover the dealer's cost of doing business to have a franchise to sell THAT CAR (with the exception of paying the sales staff. On and invoice deal, the salesman will only make a "mini" commission....or about $50-$100. So, let's say sticker is $25K (which is probably the average sticker on all Mustang sales, including V6s). The holdback to the dealer would be $750 (not $1,500). If a car stays on the lot for a while, that 3% holdback will be eaten up by the dealer's finance charges, the amount of money the dealer pays to keep the doors open, the "greeters" salary, medical benefits for staff, etc. In the case of the Mustang, where they hit the lot and sold immediately, it's true that the finance charges from the bank to the dealer for that car are nil, so the dealer keeps a good portion of that money. No matter, a 3% margin won't sustain any business for any legnth of time.

Mustang sales, being so strong, makes up for all of those "below invoice" deals the dealer has to make to move duds that are slow movers...like the Thunderbird.

Ford does offer bonuses to dealers for hitting total units sold, too. We don't know what that amount is, but you can add that in, too.

Needless to say, if any dealer only makes hold back on every vehicle they sell, they won't be in business very long. It's no secret that new car dealers make more money on their used car sales than new car sales.

The service dept is also a profit center. That exteneded warranty also carries a hefty commission for the dealer and the salesperson.

Most dealers charge some sort of "doc fee" to prepare all the mileage docs, title transfers, etc. I've seen some doc fees at high end import dealers be as much as $1,000. I've seen them as low as $50. I think anything over about $50 for a doc fee is probably pure profit, too.

In the finance dept., the dealer gets a kickback from the banks. Plus, if the F&I person can get you to accept a higher interest rate than what you can get yourself, they'll get that amount of money as profit, too. But, the dealership has to pay the F&I person's commission (yes, the finance person makes a commission on the profit for a finance contract just like the sales people do).

Then there are things like "value gard, teflon coating, perma shield", or whatever the dealer calls their fancy wax (which is no better than what you can buy at PEP BOYS). That's a huge profit center (and great commission generator for the sales person....probably between 33%-50% commision). I've seen those range from $250 (still a rip off) to $1,000 (a major rip-off). Add-in things like pinstripes, etching ,etc and it's easy to see that there's a lot of money to be made there.

This means that it's true, that the dealer makes some money on invoice deals, it's probably a "wash" when compared to what it takes to sell the car. When a hot car like the Mustang comes out, the dealer uses the profit there to make up for the lack of profit in the other cars that aren't so popular.

Want to make the best deal possible? Get one of the Ford plans (usually X plan for us non-Ford employees). Using one of the Ford purchase plans also cuts out the doc fees, since they aren't allowed on the plans. Decline all the fancy wax treatments, etching, pinstripes, stripes, etc that the dealer offers. Get your financing yourself at your local credit union or bank. If the dealer can get a better interest rate than you can, no harm in letting them use their sources for financing....better yet, pay cash.

This next part I can't stress enough. Check and double check all of your dealer's numbers. Give you an example, my deal was X plan. I declined any and all dealer wax, etching, stripes, extended warranty etc that the dealer offered. I had financing set-up before I took delivery through my credit union (which the dealer couldn't match). Dealer, knowing this was a real skinny deal, tried to "fudge the numbers". I found mistakes in the numbers, not once but twice when I did the numbers myself. The mistakes were always in the dealer's favor. Of course, they always said that they were honest mistakes (maybe, maybe not), but I thought it odd that those mistakes were always in their favor.

cabobrian

Bob Allen in Overland Park, KS has a GT Vert for $6000 over MSRP. The salesman asked if I was interested and I said "Not with a 6K markup!". He's only response was "They're going for 15K over MSRP on eBay." That still doesn't make it right.

KUcurt

cabobrian, that is the dealership I was alluding to. I believe they are kinda slimy. The exact car I wanted was on their showroom floor - black GT Coupe, 5-speed, air bags, IUP, dark charcoal, leather, Bullit wheels. Alas, no way was my wife going to OK paying $3,500 over sticker. We wer very discouraged after that, especially after driving one that day. So, we ordered the same car froma small dealer in a more rural area. They don't get much allotment, they sell mostly trucks. So, we wait. I can't cancel with them, they've been good to me and my brother-in-law has a very good relationship with them. The car will get here eventually. I WILL NOT have anything to do with Bob Allen. I will take my car to Extreme off 135th street for service when needed, not Bob Allen!

Mustang Ricky

Capitalism = an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market .

I'm fine with individuals paying whatever they feel is acceptable (private decision).
I also commend those of us who are willing to take the extra steps to get the most favorable price.
Profit is necessary to make the system work. At the value represented to the general public, this car is relatively underpriced as is evident by the the customer demand.

I'm personally happy to see this situation. But then again, I took the money that I was saving for the mustang and bought Ford stock at a little over $7/share in early January 2003, and sold it in 2004 at $12.

My option as a consumer would have specifically been to finalize the purchase agreement that I had on a 2002 WRX (there, I confess it). But I DIDN"T!
Why?Because the deal wasn't good enough (for a couple reasons, not just monetary), and I decided to demand more by waiting for this specific mustang. I'm glad that I waited - real glad. I paid much less than I was willing to, and I feel good about buying American (okay 65% USA and Canada - vs 2% on that Subaru). Giving the Ford supply chain my business helps commerce at home.

...No wonder I smile so wide when I'm flyin in my stang!