I have limited experience with purchasing new cars. My question is how much room does a dealer have to "play with" while negotiating with a customer. Here is my current scenario...
2010 Mustang GT Premium
MSRP $30,995
Invoice $28,471
I have no trade. The dealer is offering me $1000 Ford incentive, $1000 dealer incentive and $500 Military discount ($2,500). Here is my question, if the difference is $2524 between MSRP and Invoice and the dealer is offering $2,500 off. How much of the $2500 is out of the $2524? I want to see how much more I can reduce the the price... I don't want totally drive a sales price that leaves the dealer with little or no profit, but I would like to have an idea how much more I might be able to lower the price. Any advice would be appreciated.

Thanks!

 

Most dealers will sell GT's for a few hundred above invoice (maybe around $29K in your example above, or a little less). Then, subtract the rebates from that. $1,000 factory rebate, $1,000 Ford bonus cash, and $500 Military rebate would bring it down to about $26,500.

 

Here's a quick q for you Brian, how much money does a dealer typically make on a mustang?

 

Quick answer from me.
That few hundred over invoice (@ $500) + holdback (@$1000 ) more or less

 

Karman is correct, assuming the car is sold right when it arrives from the factory. Holdback is 3% of MSRP and serves to offset the dealer's interest paid to the bank while the car sits unsold on the lot. However, the longer the car sits unsold, the more of that holdback is spent "flooring" the car. That's why dealers really push to sell off their oldest vehicles.

Also, let's say the dealer sells for about $500 over invoice, and sells the car right away to pocket the $1,000 in holdback. They also earn a little money from the lender doing your loan (usually a few hundred bucks). They also make money selling extended warranties, prepaid maintenence, GAP insurance, death/disability insurance, accessories, etc. That's potentially a couple grand in profit on the typical new Mustang sale.

 

Also remember that most salespersons don't see ANY part of the holdback or extra spiff money from the lender in regards to floorplan cost savings. If I sell a car for $500 over invoice, I get 30% of that $500, or $150 before tax. If its A-Plan, or if the car is sold at about $300 or less, its a "mini deal" and that would be $75 before tax! THAT'S ALL!!! While a dealership may make alot of money, the person helping you (whether or not he's a good or bad salesperson) really isn't making a whole lot themselves. This is why I'm always saying that a $500 price over invoice is a fair deal.

 

Here is my offer...
Mustang GT Prem
Electronics Package, Trackpack, Security Package, HID
Installed Ford Racing (400HP) Supercharger $6639
MSRP $43,129
Invoice $40,002
Offer $41,494


There offer OTD $44,312 (after 2,500 dealer incentives (1000+1000+500 military discount)


My offer OTD $41,788 (after 2,500 dealer incentives (1000+1000+500 military discount) over invoice offer with 10% off the price of the supercharger $5,679 -10%= $5,111.


Here was there reply...

"Thank you for your offer of $41,788. Unfortunately we will not be able to meet that request. However, here is what I can do: $43,787 out the door."


They do have to transfer this car from another dealer.


Thoughts?

 

Dude why not wait until spring? You can have a 5.0 400hp car for less than that. That SC is not worth what they charge you for it. Yes the Warranty is nice on it but if you can wait until the '11's come out you should be able to save at least 5K. A few more grand and you could have a GT500.

 

I sold me 01 GT (new in 01) in Feb. 07. I test drove the 05/06's when they came out and did not really like them. I drove the 10 and was really impressed. I really miss having a Mustang. As for the GT500.. it is out of my price range (2010). I undestand about the 2011/400HP... I just don't want to wait anymore. I also though the car dealers would be willing to make deals with the current state of auto sales.

 

Dealers don't have 10% to discount off the FRPP superchargers. There is just no profit in selling those. If they quoted you $6639 and that included install, that's a bargain.

 

Thanks for the FRPP info, That will be helpful.

 

Can someone tell me if a 2010 GT Premium's invoice (with options listed above) is $33,363 (w/destination). The salesman said his invoice is actually $605 above that ($33,968)

 

You may also want to verify if "out the door" includes tax, title, and license.

 

Yes the OTD prices include tax/tag/title.

 

just ask them to show you the invoice sheet it will have the necessary information, negotiate a price w/o the supercharger, subtract the rebates. then add on cost of the supercharger. like was mentioned before there is not really much if any discount they can offer to having that installed.
Note if it is a track pak car it is job #2 so there might have been slight price increase plus the FDAF (advertising charge to dealers) which is stupid but its part of invoice. That's why its best to go online and use kbb to get your invoice info then walk into the dealer and review the invoice sheet for the actual vehicle and you can see exactly where the differences are.

 

As I work at a dealership, I dialed into the order banks to get that info for you....

2010 GT Premium Coupe with HID, TrackPack, Elec Pkg, and Security Pkg:

$36,490.00 = MSRP per Ford.
$33,968.34 = Invoice Total per Ford.

There truly is $605 for FDAF (advertising fund) and a couple gallons of gas that Ford charges the dealership on the invoice for each 2010 Mustang. This amount is not disclosed at 3rd party websites (i.e. Kelly Blue Book, Edmunds, etc.) as it varies by model and sometimes by region - so they mention it in a footnote or fine print.

 

I used KBB for my invoice reference. They told me there was a $605 differnce between "my invoice numbers" and there "invoice"

My offer was (speaking strictly invoice before taxes etc.) was $34,855... "there" invoice is $33,968 (KBB invoice is $33,363) That is $887 above "there invoice".

They came back and discounted there OTD price by another $525, they have not shown me "there" invoice number yet.

 

Thanks Five Oh Brian.

In your opinion what would be a resonable offer over invoice $33,968 I should offer?

 

I work at a dealership that charges no more than $600 over the invoice total for any new 2010 GT, and we actually will special order any new 2010 GT for just $199 over the invoice total. We're a "one-price" store that does not negotiate price and we set our markups based on the markups reported in our area so that we can remain super competitive and make buying super easy for our customers.

I guess what I'm trying to say is that a few hundred over invoice should make any dealership happy. You should be able to get your dealer down to $34,500 (or less) without much trouble. Then add tax/license and deduct rebates. Then don't forget the supercharger (which at $6639 is a really good price if it really includes parts & install). I'm assuming it's the black crinkle finish and not the more expensive polished finish.

Knowledge is power, and you're armed and ready to go.

 

Yes it is the Black finish.
$5679 + labor $960 = $6,636

Thanks for the information!