Dealer hold back?

[Chomondely]

I am trying to buy a 4x4 Limited with feww accessories.

Some of the local dealers are trying to tell me that the dealer holdback is a cost that the dealer pays to Guflcoast Toyota and that I must include the dealer holdback when I am calculating the invoice price. They are telling me that Toyota handles the holdback differently from other manufacturures.
I told them that the holdback was [aid back to the dealer about 4 months after the sale. So, if I paid the holdback and then the dealer is paid, then it seems that thye are getting paid twice or about 4%.
Am I wrong?

 

[Sonic dB]

basically from what I understand...the dealer gets something like 2.9% actual holdback from Toyota on every car... which is an amount under the true invoice price that they get back on each car. This usually is not negotiable by the buyer.

The amount that the dealer is referring to you may be an additional holdback "pad" that they add to the invoice....its not really a true "holdback" but more of a pad. In the case of my TE, they did this for about $400 bucks or so on top of the invoice price and also added about a $440 regional advertising "charge"... IMO both of those were padded on the dealers part to build more profit in to the actual invoice...but I was ok with that because the dealer I dealt with disclosed that to me and explained what they were.

IMO their claim about having to pay Gulfcoast Toyota is BS... they dont pay them anything other than the invoice on the car...they just do an additional pad over the true invoice to build some profit in to the car no matter what. For example...if you go by Edmunds true invoice price... the invoice that 3 dealers in LA showed me on the TE with KDSS ($35282 or so) included the advertising costs and also the additional "pad" aka holdback which they are building in themselves... Toyota corp. doesnt do that...the dealer does to Cover their butts... hope this makes sense.

 

[WhiskeyCop]

Read this thread for a better understanding. Also here.

If I am not mistaken, the Edmunds 'invoice' includes wholesale financial reserve and dealer holdback but not advertising fees. I would work the angle of negotiating advertising out by making an offer based on the Edmunds 'Invoice' (be sure to include invoice pricing for options) as a 'this is what i'll pay you before taxes," instead of stating what fees you will or will not pay. In essence you will be paying wfr and holdback but not advertising, which should put you paying right at dealer invoice. Thier profit will be in whatever of the holdback and wfr they get back and a % of the financing if you go with TFS. Oh and if you can, you can also try to negotiate the doc fees down as well. Good luck.

 

[Sonic dB]

yeah Whisky those links make sense...the actual factory holdback is 2% but they have that wholesale thing built in. For an 10 Trail, I spoke to 3 dealers in LA and all had it at their "invoice" of $35282, and I figured that out to include the factory invoice + the destination, wholesale etc.

 

[zidaro]

PIRATES, but you knew that!

 

[Chomondely]

Thanks for the thoughts

I am probably now in the position of making an offer with no explanation.
I should be close enough to where they will not toss me out without a counter offer.
I have to admit that they seem to be sticking to their price. Pmressive show of face. One just gave me the sob story of how much they soent on electricity a month. I suggested that they turn off most of the lights at night. We will see what happens when I sit there with pen and check book in hand.

 

[mikeync]

You should ask them if selling Toyota's these days is going so great that they don't want you as a customer.........

Heard a commercial this morning (Chrysler?) about how these people choose that car because of safety. Then another person comes on in the commercial and says that they are the first in their family not to buy a Toyota, but they prioritize safety.

Had to laugh

 

[maine runner]

Dealers hire salespersons that know how to SELL. There is no punishment for them if they lie. There is a sucker born every minute.

Take the web information on true invoice + option invoice cost, then call DMV and find out the fees for title and tags. Add $200 for their processing and your state's sales tax. Done! Do NOT get suckered in with their moronic schpeel and excuses. Adv fee...NO, franchise fee...NO,

Offer $500 over invoice cost + the realistic fees and sales tax. Shop the dealers sales managers till you find one that knows what they are doing. Don't fall for the sales guy going back to the manager. They will do this dance just to wear you down. After 20 minutes, if you don't have a signed deal, WALK.

I did my research on my 4Runner and "other car". Had check in hand. In both cases it meant visits to 5 dealers.

By the way, bring a calculator and manually add their figures. They sometimes make a math error or add something that should have been deleted. 99% of the time it is in their favor. Bast%rds

 

[fxoffroad]

I should fly you out to Colorado and have you help me. Having purchased my last 5 vehicles successfully @ invoice via the internet - this is my first purchase of a Toyota and it has yet to be simple and straight-forward. I had heard the rumors... but damn there must be some angle I'm not aware of.

Luckily time is on my side and I don't have to participate in the...:vader:

Dealers hire salespersons that know how to SELL. There is no punishment for them if they lie. There is a sucker born every minute.

Take the web information on true invoice + option invoice cost, then call DMV and find out the fees for title and tags. Add $200 for their processing and your state's sales tax. Done! Do NOT get suckered in with their moronic schpeel and excuses. Adv fee...NO, franchise fee...NO,

Offer $500 over invoice cost + the realistic fees and sales tax. Shop the dealers sales managers till you find one that knows what they are doing. Don't fall for the sales guy going back to the manager. They will do this dance just to wear you down. After 20 minutes, if you don't have a signed deal, WALK.

I did my research on my 4Runner and "other car". Had check in hand. In both cases it meant visits to 5 dealers.

By the way, bring a calculator and manually add their figures. They sometimes make a math error or add something that should have been deleted. 99% of the time it is in their favor. Bast%rds

 

[SeattleMike]

I should fly you out to Colorado and have you help me. Having purchased my last 5 vehicles successfully @ invoice via the internet - this is my first purchase of a Toyota and it has yet to be simple and straight-forward. I had heard the rumors... but damn there must be some angle I'm not aware of.

Luckily time is on my side and I don't have to participate in the...:vader:

I was very impressed with Vicki from Larry Miller Toyota of Colorado Springs. If I lived in any of the 7 states bordering Colorado, I would buy through her. Unfortunately, our local "use tax" laws made buying out of state a major pain in the ass, so I had to go local. She quoted me a TE with KDSS/Nav and the convenience package for $38,500 + T.T.L. and I ended up using that quote to get the same deal with a local dealer. If you want her email, send me a PM and I'll send it.

 

[fxoffroad]

Hmmm... not feelin' it... that's about 2grand over invoice.

I've been quoted invoice prices out of state (GA, WI and TN)... though flying across the country or having the vehicle shipped to CO might defeat the purpose of a lower price.

I was very impressed with Vicki from Larry Miller Toyota of Colorado Springs. If I lived in any of the 7 states bordering Colorado, I would buy through her. Unfortunately, our local "use tax" laws made buying out of state a major pain in the ass, so I had to go local. She quoted me a TE with KDSS/Nav and the convenience package for $38,500 + T.T.L. and I ended up using that quote to get the same deal with a local dealer. If you want her email, send me a PM and I'll send it.

 

[SeattleMike]

Hmmm... not feelin' it... that's about 2grand over invoice.

I've been quoted invoice prices out of state (GA, WI and TN)... though flying across the country or having the vehicle shipped to CO might defeat the purpose of a lower price.

Where are you getting your invoice information? Edmonds' TMV has it less than $1000 over invoice which, when I consider the effort I had to go to just to get someone to find one in the color I wanted and with the options I wanted... in less than 30 days, I was happy to pay.

But hey, good luck!

 

[fxoffroad]

Edmunds TMV is pretty much BS, at least from my personal experience, yours may be different. I'm not interested in "What Others Are Paying" - which is an average. Whereas that might be a guide for some... I haven't paid over invoice on any of my past 5 vehicles, nor have I been taken for some bogus costs.

For me, its about the process - finding the non-BS dealer who will shoot me the lease numbers and be dead on accurate, like my currently leased vehicle. The Internet Sales Manager shot me a price - and its exactly what I'm paying - to the penny. It's disappointing that I haven't had that experience (yet) w/ a Toyota dealership.

eace:

Where are you getting your invoice information? Edmonds' TMV has it less than $1000 over invoice which, when I consider the effort I had to go to just to get someone to find one in the color I wanted and with the options I wanted... in less than 30 days, I was happy to pay.

But hey, good luck!

 

[SeattleMike]

Edmunds TMV is pretty much BS, at least from my personal experience, yours may be different. I'm not interested in "What Others Are Paying" - which is an average. Whereas that might be a guide for some... I haven't paid over invoice on any of my past 5 vehicles, nor have I been taken for some bogus costs.

For me, its about the process - finding the non-BS dealer who will shoot me the lease numbers and be dead on accurate, like my currently leased vehicle. The Internet Sales Manager shot me a price - and its exactly what I'm paying - to the penny. It's disappointing that I haven't had that experience (yet) w/ a Toyota dealership.

eace:

Leasing vs. Financing vs. Cash is going to present different options for the dealer. I've never leased any thing myself so I am not familiar with the process. I know that over the last couple of years leases have come back to bite dealers in the ass because people just turn them in rather than buy it out or lease something new. This is particularly true for SUV leases who got caught up in a perfect storm of higher gas costs, 401k evaporation, and the end of Mortgage Equity Withdrawal as a finance option; dealers were left with large inventories of used vehicles they couldn't move at any price. Combine all of that with a huge uncertainty in exchange and interest rates and finding a "great" lease deal on an SUV may be impossible in an industry that is gun shy.

For me personally, I couldn't get what I wanted locally because no one had ANY for sale, I had to drive to Portland, OR just to test drive a TE with the options I wanted, and every dealer from Bellingham to Medford told me "we can't get those". I had to provide proof they existed, pricing, and option package numbers before any of the 5 local dealers would follow through.

It wasn't a matter of haggling over price, it was a matter of getting them to bother working for the sale when they can't keep 4Runners on the lot. I told them what I wanted, and how much I was willing to pay, and they agreed to it. I had 4 other dealers who responded by offering MSRP and two of them refused to even discuss anything less. As far as I'm concerned, I got a deal!

 

[mikeync]

Edmunds TMV is pretty much BS, at least from my personal experience, yours may be different. I'm not interested in "What Others Are Paying" - which is an average. Whereas that might be a guide for some... I haven't paid over invoice on any of my past 5 vehicles, nor have I been taken for some bogus costs.

For me, its about the process - finding the non-BS dealer who will shoot me the lease numbers and be dead on accurate, like my currently leased vehicle. The Internet Sales Manager shot me a price - and its exactly what I'm paying - to the penny. It's disappointing that I haven't had that experience (yet) w/ a Toyota dealership.

eace:

Edmunds shows the invoice price as well as what others are paying so not sure why you have an issue with seeing the invoice price on Edmunds

 

[maine runner]

The following statement concerning dealers is typical and Mike's actions makes the point.

every dealer from Bellingham to Medford told me "we can't get those". I had to provide proof they existed, pricing, and option package numbers before any of the 5 local dealers would follow through

I got into a bit of heated argument on the showroom floor with 5 veteran salesmen who were telling me they was no such thing as a special order (for a 4th gen). After voices were raised, one of the "managers" came over to investigate. I asked him point blank, he said, sure you can, what do you want? The 5 sales people all melted away within 15 seconds without a word.

It is easier for dealers to say no, this is what we have take it or leave it then actually make an effort. I don't blame them totally, Toyota and the regional distributor system is totally back ashed and pre-determined to negate special orders on vehicles. Toyota's movement to a few large option packages has streamlined the choices even more.

If you read this board for a few years, you will start to see a cadre of dealers that actually provide fair prices, good service and stand behind their service work.

 

[fxoffroad]

I didn't say I had an issue w/ "seeing the invoice price"... I was merely saying I don't subscribe to the belief that Edmunds TMV is what I (personally) should expect to pay for a vehicle.

Edmunds shows the invoice price as well as what others are paying so not sure why you have an issue with seeing the invoice price on Edmunds

 

[SeattleMike]

I didn't say I had an issue w/ "seeing the invoice price"... I was merely saying I don't subscribe to the belief that Edmunds TMV is what I (personally) should expect to pay for a vehicle.

Perhaps I should have written that more clearly. Let me restate: I paid less than $1000 over what Edmonds says is "invoice" for my color and options, and more than $1000 less than their "TMV".

Still, you haven't indicated where *you* are getting your invoice numbers. While you've made your opinion of edmonds.com obvious, what are you using to indict their data?

 

[bradj]

I was very impressed with Vicki from Larry Miller Toyota of Colorado Springs. If I lived in any of the 7 states bordering Colorado, I would buy through her. Unfortunately, our local "use tax" laws made buying out of state a major pain in the ass, so I had to go local. She quoted me a TE with KDSS/Nav and the convenience package for $38,500 + T.T.L. and I ended up using that quote to get the same deal with a local dealer. If you want her email, send me a PM and I'll send it.

What was the MSRP of the 38.5 quote you got? All of the TE in my area have MSRP of around 41-42K so 38.5 is at least 2500 of sticker which I think is a pretty fare deal. You could probably get one a bit cheaper if you wait a while longer. But as some of the people on this thread found out, last month you would have gotten it for an extra 1k off if you had bought in FEB instead of waiting for a deal this month that never came....

 

[fxoffroad]

That 1K off wasn't available in all states.

...But as some of the people on this thread found out, last month you would have gotten it for an extra 1k off if you had bought in FEB instead of waiting for a deal this month that never came....