Buying your new 4Runner

[maxwbrad]

When I was in the market recently for my 2011 4Runner I stumbled upon a site called carwoo.com They send your request out to dealers in your area and those dealers start to bid for your business without knowing your identity. You can then play them against each other or take your prices to your local dealer and neg. with him.
It does cost $49.00 but I figured I saved at least $1000 on the deal due to this.
Another site I used was truecar.com which told me what the holdback was so I knew how much room the dealer had.
Wound up buying the 2011 Limited with running boards, remote start for what I think was a very good price....and by the way could not be happier with the truck.

 

[atomicbob]

Zag is another one to look at. I used the Zag service through my insurance company (USAA). I was able to negotiate $1000 below invoice.

 

[TC4Rnr]

smell like:spam2:

 

[cosmos7]

Yup... also who'd want a 5th gen...

 

[Johnny Utah]

is invoice and sticker price the same thing?

 

[Uneek]

No.

Invoice is what it supposedly cost the dealer to acquire the vehicle from Toyota. However, there is debate on what invoice is between the buyer and the dealer. The dealer's invoice will include additional costs such as Toyota Dealer Advertising fee (TDA), holdback, etc.

Sticker is the what's on the window and what Toyota say the vehicle should sell at, manufacturer suggested retail price (MSRP). The dealer would love for you to pay sticker plus license and tax. Unless the vehicle is in high demand, you should not be paying sticker.

 

[Johnny Utah]

No.

Invoice is what it supposedly cost the dealer to acquire the vehicle from Toyota. However, there is debate on what invoice is between the buyer and the dealer. The dealer's invoice will include additional costs such as Toyota Dealer Advertising fee (TDA), holdback, etc.

Sticker is the what's on the window and what Toyota say the vehicle should sell at, manufacturer suggested retail price (MSRP). The dealer would love for you to pay sticker plus license and tax. Unless the vehicle is in high demand, you should not be paying sticker.

thats what i figured. I got my 4runner for about $4,000 less than the sticker price.

I've read on this forum that people say they got their 4runner for 1,000 or 500 less than invoice. Well, if invoice is supposedly what the dealer gets the car for, why would the dealer sell the car at a loss? That tells me that the invoice price is really not the true cost of the vehicle. Make sense?

 

[Uneek]

thats what i figured. I got my 4runner for about $4,000 less than the sticker price.

I've read on this forum that people say they got their 4runner for 1,000 or 500 less than invoice. Well, if invoice is supposedly what the dealer gets the car for, why would the dealer sell the car at a loss? That tells me that the invoice price is really not the true cost of the vehicle. Make sense?

Like I said earlier, it's what it supposedly "cost" the dealer to acquire the vehicle from Toyota. The dealer presented invoice will include holdback along with other items that's pure profit.

For every person who's gotten a good deal, I'm sure there are a few who have overpaid as well.

Businesses have operated at a loss, so I'm not surprised by selling one vehicle or two at a loss. Now, if dealership happens to sell a brand that has nothing desirable, then it won't be around much longer. For Toyota, they have some popular models even though the brand as a whole has taken hit with the recalls.

Though I believe "invoice" or even true invoice for there is still an incorporated a profit margin. Only a dealership owner will trully know.

 

[vooduguru]

Like I said earlier, it's what it supposedly "cost" the dealer to acquire the vehicle from Toyota. The dealer presented invoice will include holdback along with other items that's pure profit.

For every person who's gotten a good deal, I'm sure there are a few who have overpaid as well.

Businesses have operated at a loss, so I'm not surprised by selling one vehicle or two at a loss. Now, if dealership happens to sell a brand that has nothing desirable, then it won't be around much longer. For Toyota, they have some popular models even though the brand as a whole has taken hit with the recalls.

Though I believe "invoice" or even true invoice for there is still an incorporated a profit margin. Only a dealership owner will trully know.

Here's some insight for you from 10+ years in the industry.

You have MSRP. This is the MANUFACTURERS SUGGESTED RETAIL PRICE.

It's not an arbitrary number, and is mostly based on what other competitor models with comparable equipment, direct competitors, and installed packages and options, along with destination charges, etc.

For example, if you look at a "Monronie" as it's called in the business.

Take some notes:

Ok, so on the left of the sheet, you'll see your standard features, like:

Engine, HP, Torque, safety, comfort/convenience, etc.
Then you'll have the EPA MPG ratings. These DO NOT come from the manufacturer *unless you're GM, then yes* (I'll splain later)

Then you'll see the vehicles origin, percentages of where certain parts came from and vehicles final assembly point. One hint is the VIN #

The first digit denotes final assembly.

1= US
2 = Canada
3= Mexico
4= US
5= US
9=Brazil
J= Japan
S= United Kingom
W= Germany
For some examples.

Then we get to the next field which is your BASE MSRP. This is the price of the car including any STANDARD features. Not options/packages. Now this can get confusing because some models that are not base models will have a lot of standard features built into the price. Oh and for the record, if you build your next car on __________'s website, it will have a 98% chance of being off by a few hundred bucks when you find the exact same equipment on the vehicle on the lot. But I digress

Now comes some variables.

Some regions will have specific options packages that may be standard in Colorado, but not be standard in say Miami Florida.

You probably won't find heated mirrors as a standard option in the Florida Market area, but you most likely will on the Rocky Mountains region.

Those packages are priced accordingly and the amounts are on the far right of the sheet.

Then you have destination charges. Now some manufacturers display true cost, some will average it out over the entire country, and charge the same from everyone. I can't remember how Toyota did it, I think they did the latter. Anyhow you'll see the destination charge.

This brings you to the TOTAL MSRP. High demand vehicles may have ADM or Additional Dealer Markup which most people hate, because they think that their respective "stealership" is already making a killing on them, so adding dealer markup is just salt on the wound. So to speak.

Now, what's "fair" to pay on a new car?

As a sales guy I've heard everything from "It's immoral for a dealer to make ANY profit whatsoever" to "I know that I can get this brand new Toyota Tacoma for MORE than 50% OFF MSRP INCLUDING TAX TITLE AND LICENSE.

Perhaps some background on myself. I was a master certified Toyota/Scion sales rep for 5 years. Currently I'm involved in Sales Staff training, dealer marketing, and occasionally sales for a local dealer.
Anyhow, I put this together for you so that everyone can win at buying a car.

Now we get to the "secret"

"Invoice"

Contrary to popular belief, there aren't 2 invoices, or hidden buyers orders from MFR's to dealers. Just about all the information you need is out there if you're willing and know where to look. That being said, if you look at 5 different sites, and build the exact same vehicle, you're probably going to get 5 different dollar amounts. Some vary by 10's to hundreds, and sometimes even more. It may even vary on brand selection. The point is, these are merely guides.

Here's an example of a Toyota invoice.

Note the 2 columns when it comes to pricing.

*continued next post*

 

[vooduguru]

Just like the "monronie" it has information on options, packaging etc.

It will show the MSRP and dealer invoice.

Now this may come as a shock to some of you (especially in Utah)
dealers are there to....

make a profit. :jaw drop:

It's up to you to determine how much. Ultimately it is YOUR money.

However, you should be wise about it.

When you see the invoice of a car, that is the TRUE cost of the car on what's known as "The Front end"

Meaning, an invoice (in many cases) won't show holdback, and performance incentives that change from month to month. What is holdback?

Holdback is simply a guaranteed minimum profit on a vehicle if a vehicle is sold at or slightly below invoice.

Holdback is marginal for most mainline brands, and it will vary based on the car. Higher MSRP, the higher the dollar amount for the holdback. It's usually a percentage and it usually is not much.

Then you have the "Factory to dealer incentives" this can be in the form of "dealer cash" which is kinda like a consumer rebate, but not widely (if at all) publicized. Then you performance incentives which in many cases come at year end to offer the dealer incentives to moved aged inventory. This usually comes in a lump sum at year end. For example if Dealer X sells 893 (insert struggling model here) they will receive an additional $300 per copy. That's 17 per week avg per year. If this goal is reached by end of business by 12/31, they can get an additional 265k in bonus money from the manufacturer. This is why SOME deals, if the dealer is selling you a new car for significantly UNDER the Invoice, it has to do with them hitting that objective

So, back to the invoice.

You see the invoice amount on the left side of the column? That's your TOTAL MSRP and on the right there's the same list of equipment, but that's the DEALER costs. Make note of some things that are not on the consumer column.

"Southeast Toyota Administration Fee"
In this region they called it "Toyota Dealer Association" fee.

This is a legitimate cost that the dealer pays for the privilege of being a major franchise. My understanding is that money gets paid directly towards the NATIONAL advertising campaigns for said manufacturer. It doesn't show on the consumer column.

Now, notice that there aren't the same costs shown in the consumer side, but are included in the dealer invoice. These are legitimate charges that the dealer pays to be a franchise, on a per car basis, along with other strictly vehicle costs when it comes to invoicing on the actual car you're considering. Back when I was on the floor selling, I would hear customers quote Edmunds, and/or Consumer Reports. This was met with varying levels of understanding, and in some cases sheer ignorance of disclosures that were included in their publications. That being said, regardless of whether or not Consumer Reports does advertising for any products, they still are are selling YOU the consumer. Now I use CR when it comes to electronics, safety and "unbiased" reviews on various things. However, when it came to their recommendations, there were CLEAR indications of bias in their reporting. For example, in 2004/5, they made a recommendation on the Honda Element and I'm paraphrasing here: "Despite the Honda Element receiving a 'POOR' rating from the IIHS side impact crash test, we will still recommend the Honda Element."


Now turn back a few pages to the Dodge Neon. "We are unable to recommend the Dodge Neon due to it receiving a 'POOR' in the IIHS side impact crash test" Now at the time, I owned an SRT-4 neon, and I did some digging, true, both cars did receive a 'POOR' rating. But, the Honda was worse, in some of the measurements. In effect, the Honda dummy showed more injuries than the Neon dummy. Taking in note that they were both dummies. :hello:
Regardless, the point is, don't always take the publications/websites as gospel truth because they should be used as GUIDES.

Anyhow, some publications will recommend to you that you should demand that the dealer give you holdback, and the adverting cost is something the consumer is entitled to.

Well, isn't a dealers primary purpose for existing is because that dealer wants to make a profit?

Bottom line, depending on the car, how well they treated you throughout your experience there, pay a couple hundred bucks over the dealer invoice. In effect, be fair. You'll find that you'll get a lot better service if the dealer can make a fair profit on the car. That doesn't mean go in unarmed, just know who's BS'n you and don't shop there :welcome:

 

[vooduguru]

Now on to the "Back End" of the deal.

Once you've got your price all figured out, then comes the dreaded segment of car buying, and that's "The financing".

This is a lot more complex, and frankly a large way for the dealer to make good profit to frankly make up for what should have been made on the car.

This is where you should be the most informed.

Of course we have banks, and we have credit unions.

They both do a LOT of advertising on very attractive auto rates. Different lenders have different guidelines as to what can qualify for their lowest rates. Some lenders may offer a SUPER low rate, but want you to provide TONS of information, get a blood sample, stool sample and your first born to get it. Typically Credit Unions will offer rates better than banks, but it never hurts to:

A: Know your credit score.
B: What kind of rate your personal bank/CU can offer.

Also, this seems to be a common problem with people, and can't say for certain that it's a local thing, or a national ailment.

*AHEM* YOU CANNOT EVER EVER EVER EVER EVER BUY A CAR FOR $200 PER MONTH THAT COSTS MORE THAN $10,000 MSRP.

Let's look at some simple math.

200x60 months pays back $12,000. Now, back out 5 years worth of interest
At a GOOD (not great) rate of 4.99% you're going to pay $1,410 on interest alone. That leaves you with $10,590. Tax amount is say a national average of 7% so back out 700 bucks before dealer fees, licensing, registration etc. So now you're at a pre-TT&L of $9,300. Now different states are going to vary but I'll use Utah as an example, since I've been here for over 10 years. Just the licensing, property tax, registration is just a hair under $300. So, all that being said, if you're looking at a $20,000 car, and you're dead set on putting ZERO down, you're going to be at best, about $400 dollars a month for a 5 year term. Even if you go 72 Months... you're still a hair over 350 a month, and many banks will raise the APR 1% to go the longer term. For the love of Pete, don't go more than 72 months.


So many times, I would see people come in, look at a $20,000-$25,000 car, and expect to pay 200-250 per month, with ZERO down, and $2,000-$4,000 of negative equity in their trade in. If you want to avoid being "Upside Down" in a trade, then put at MINIMUM 15% down payment, but realistically closer to 30% of the sale price.

Now comes the financing side of things. If the dealer can offer you a slightly better rate than your lender....take it....until your lender offers an incentive to get it. Here's an example:

Your local credit union is offering a 2.99% APR on a 60 month term for well qualified clients. Toyota Financial is offering a 1.99% APR for the same term. It's a no-brainer. Take the financing rate from Toyota.

When I'm not so tired, we can look into leasing, when to lease, when not to lease. Etc.



A common misnomer that I used to encounter with clients was:

"XYZ Bank/Credit union rate is X.X%, What's YOUR rate?"

Let's dive into this. This is frankly an impossible question to answer accurately ESPECIALLY when you're dealing with a sales person, who in most cases doesn't have all the latest rate offerings from their lenders, and their brands financing. So don't ask, yet.

The reason being is that YOU may not qualify for either the advertised bank/CU rates, or the brand financial services

 

[Jeff Kleb]

Buying A Car


Excellent comments and advice by all. Of course, the "stealer" is in business to make money (profit) - and that in itself is not a problem. The fact that they go into 'excessive' profits and are able to rip off so many customers is what is sad. Anyway, the average consumer buys a car every couple years or so. A dealership probably sells a few cars every DAY; so who do you think has the upper hand? They do!

With the Internet, we as consumers are able to level the playing field just a bit.....but it does require doing your homework and being prepared to walk away if the terms are not right. Remember; you are buying (or leasing) a vehicle - not the entire dealership. No need to pay for their overhead if you don't have to.

Keep your deal as simple as possible. If you can, pay cash. If not, secure your own financing AHEAD of time. Don't have a trade-in; or at least don't bring one into the equation until you get a firm price on the car or truck you want. This allows them less "wiggle room" on negotiating. A great price on a new car is not so appealing if they are low-balling your trade-in. Nor is a good price on that shiny new car very good if you are going to be paying 15 percent interest on the loan!

They make more money on service, parts and used cars than on new ones -- so keep that in mind before setting foot in a showroom. I prefer dealing with my credit union/insurance company (USAA), where I get a "pre-negotiated" price ahead of time and get an appointment with dealership management - instead of letting the vultures pick the meat from my bones when I drive onto their parking lot or walk into the showroom.
:gun6:

Good luck to those of you who can afford a new car right now!!
:moping: