Toyota Dealer Ad fees & Dealer Holdback

[Martin8]

So, I was almost ready to drop some cash to purchase a much sought-after SE V8 when the sales rep faxes over the 'invoice' over to my office.

Yes, they get the invoice prices of the options and the SUV itself correct. However, then they tack on a) 'Toyota Dealer Advertising' of $600, b) 'Dealer Holdback' of $600 and some c) 'Whlsle Financial Reserve' of $315.

A. I understand that each dealer needs to advertise the car. But really, not only do dealers advertise as part of a cooperative in one region, they also have additional scale in advertising multiple cars at once. In the end, the car sits on the lot for consumers to check out, so talk about direct advertising with minimal cash outlay.

B. If memory serves me correct, the Dealer Holdback should be paid from the manufacturer to the dealer to help defray interest costs in borrowing funds to keep the car on the lot. For Toyota, I thought it was 2-3% of MSRP. If I read the invoice right, wouldnt the dealer effectively double-dip by receiving funds from both the manufacturer as well as the consumer?

C. I have absolutely no idea what the heck this cryptic Wholesale Financial Reserve is.

Seriously, it's because of these opaque financial disclosures that I really dont like dealing with car dealers. These practices just remind me so much of how some lenders add miscellaneous fees to your final closing costs when purchasing a house. After some further inquiries, a great number of these fees can either be reduced or omitted altogether as they serve only to inflate the profits due to the company.

Thanks, just had to vent. Any feedback is appreciated.

 

[OUTRNNR]

So, I was almost ready to drop some cash to purchase a much sought-after SE V8 when the sales rep faxes over the 'invoice' over to my office.

Yes, they get the invoice prices of the options and the SUV itself correct. However, then they tack on a) 'Toyota Dealer Advertising' of $600, b) 'Dealer Holdback' of $600 and some c) 'Whlsle Financial Reserve' of $315.

A. I understand that each dealer needs to advertise the car. But really, not only do dealers advertise as part of a cooperative in one region, they also have additional scale in advertising multiple cars at once. In the end, the car sits on the lot for consumers to check out, so talk about direct advertising with minimal cash outlay.

B. If memory serves me correct, the Dealer Holdback should be paid from the manufacturer to the dealer to help defray interest costs in borrowing funds to keep the car on the lot. For Toyota, I thought it was 2-3% of MSRP. If I read the invoice right, wouldnt the dealer effectively double-dip by receiving funds from both the manufacturer as well as the consumer?

C. I have absolutely no idea what the heck this cryptic Wholesale Financial Reserve is.

Seriously, it's because of these opaque financial disclosures that I really dont like dealing with car dealers. These practices just remind me so much of how some lenders add miscellaneous fees to your final closing costs when purchasing a house. After some further inquiries, a great number of these fees can either be reduced or omitted altogether as they serve only to inflate the profits due to the company.

Thanks, just had to vent. Any feedback is appreciated.

If I were you I'd do the same thing that you recommended with the lending company; call them up and tell them to omit the various fees, because in reality, they are really doing the same thing as your lender; profit inflation.

I'd call up the dealer and tell them you want the true invoice without the extra ~$1500 tacked on and that's the only way you're buying the car. Make it sound like you are annoyed with them for even putting those on the quote, like it is a huge inconvenience and it ruined your day.

Trust me, the dealer already has their share figured in to the "true" invoice price. This extra ~$1500 is just to make you think, "oh, well I guess they have to make money too...". I wouldn't allow it. Good Luck.

 

[toto]

Don't get into a debate with the dealer over the definition of "invoice". If you do, it means they don't want to sell you a car for that price, so just take your money to another dealer who will give you the deal you want.

But on the other hand, don't ever say to a dealer "I'll give you invoice" (or "x over invoice") or whatever. That's how the debate starts. Know what invoice is, with the help of Kelley Blue Book or Edmunds, and then offer the dealer an actual dollar number.

And to answer your question, yes, the holdback is money they get back, not money they should ever talk about charging you.

 

[sharp4runr]

Go to a different dealer if they won't remove those charges. Imagine if this is how you treat you buying your car, how will they treat you when you need service...

 

[Martin8]

Thank you everyone for your replies. I've started querying some of the regional LV dealers in addition to getting carsdirect involved as well.

Centennial is willing to "give me $500 off invoice" which essentiall offsets their incremental dealer holdback tacked onto the invoice. Yeah, whatever - I'm holding tight until the end of the week/month when leverage is more on my side and the dealers strive to hit those quotas. It'll be interesting to see how much more flexible they'll become.

I'll keep you folks updated...

 

[supwaz]

Martin,

When you get a hold of other LV dealers, make sure you contact only the Sales director or Internet Director. These are the only people that can give you the best price. Make sure it's the boss of all the salespeople. I would call up each dealer's phone number and ask for the name of the sales director or Internet director.

 

[MichaelD]

Martin,

I am also looking into purchasing a new 4Runner and have received some Vehicle Inquiry Reports (VIR) from the dealers. I had the exact same reaction when I saw the holdback listed, however, when I reconciled the numbers back to Edmund.com I realized that the base invoice at Edmunds agreed to the VIR which included the vehicle base model plus the holdback and the whsl. financial reserve (e.g., SR5 V8 4x4 per Edmunds Invoice = 28,508, VIR - Base Model 27,551 HB 638 WFR 319 - Total = 28,508) Edmunds.com, however, does not mention the TDA (Toyota Dealer Advertising) of 551.

I believe that the holdback, fin reserve, and TDA are all profit for the dealer so there should be room to negotiate on these items. My best quote so far is about 300 under "invoice" meaning the dealer would still make 1208 (551 + 319 + 638 - 300 = 1208). Not too great of a price in my opinion (sounds like others are getting better deals), but getting tired of talking with people at these dealerships. It seems like the industry as a whole just accepts telling consumers what ever they want. I have not had one salesperson give me a straight story yet.

Good Luck.

 

[supwaz]

I don't think TDA is profit. This is something that is set regionally and that all dealer's have to pay for. It basically pays for all the radio, tv, print commercials. For example, in southern CA, it is $300 for cars/suvs. The holdback and wholesale financial reserve are definitely profits since they get this back from the dealer. Toyota builds these two fees into the invoice price. You can use this for negotiation.

 

[Atomic 4Runner]

Dealer Prices

When I ordered my '06 4R, the dealer gave me his list of invoice and MSRP (retail) prices for the base truck and all options and packages. The prices they provided were idential to the invoice and MSRP prices that I got from Consumer Reports by subscribing to their new car buying service.

I have four Toyota dealers nearby; three within a 20 mile radius and a fourth one about 40 miles away. Supply and demand still plays a big part in making the deal, and Toyotas have enough demand that a dealer is not going to sell you a truck for $500 over invoice. At least not in these parts. Yes, I played the four dealers against each other to get the best price, but it wasn't a cake walk. (I'm getting a new Buick Lucerne for $500 over invoice, and no other markups, advertising, etc., but I'm paying about $1,500 over the invoice price for my 4Runner.)

I'm getting a Limited V-8 4WD. with almost all options, including X-Reas, Nav, etc., and I only ommitted the Rear Entertainment System, Air suspension, spoiler and DRLs.

The price came to $41,560 plus tax, tags and title. Two of the dealers had a $400 or $500 dealer "Service and Handling Fee" to pay for their fancy showroom, popcorn machine, etc., so I went with the dealer that didn't have any of these additional markups. The dealer I used is one of only seven dealerships nationwide that has won the Toyota Presidents Award every year since it's inception 17 years ago.

If you have a fax no., I'll be happy to fax a copy of the Toyota Price sheets to you if you like? Just let me know, or you can ask your dealer to provide you with a copy.

 

[Martin8]

Hi Atomic,

thanks for your reply. I appreciate your offer to fax the price sheets - I asked the dealer for them as well and have been reading them today.

At the end of a day, the deal is going to be around $1800 over invoice, incl $300 to transport the SE from Phoenix to LV. I guess that's reasonable. I'll be in LV next week and will let you know how it turned out.

Everyone have a great weekend and be safe.

 

[Atomic 4Runner]

Glad Things Worked Out

I'm glad you're getting your truck, and it sounds like you've worked out a good deal. These car dealers and salesmen are not in business of working for free, they have to make a profit. We as consumers don't want to pay any more than we have to, and somewhere between the two we come to an agreement. We know you're getting a quality item for your hard-earned money, so enjoy it. Sure, someone will tell you about a better deal that they got, but a lot probably paid more than you did as well.

Just don't bet the keys to your new ride on the craps table in Vegas! I'll be looking forward to hear about your new truck.

 

[Martin8]

hehe

Alrightie Kids,

just on a whim, I dropped by Longo Toyota last nite and found my little Sports Edition V8 4x2. Yes, it's missing the side-curtains, but given the hassle I would potentially have to overcome with the Las Vegas folks, I figure it's ok.

Moreover, I worked with an internet sales manager who made the entire transaction very smooth. No pressure, no upselling, and no BS. He knew what he was talking about and he mentioned that he bought his wife an SR5 after his Highlander was totalled in a rear-ender.

The F&I guy was a little more pushy, but immediately backed off when I told him to omit any extended warranty. He was asking for $1400 for a 7 year/100K, $0 deductible one. Seemed high to me, considering that I bought a Honda Care warranty for less than $900.

One side note, Longo is selling the FJ Cruiser at MSRP with no premium-I asked the manager after the guy before me just picked his up. Gotta say, those suicide doors are very cool. Ironically, the guy behind me flew in from SF to pick up a Prius. Here I am with a V8 SUV ...

Well, I will post pics when I return from Vegas this weekend. Thanks everyone for your feedback. The final deal was $100 over 'invoice'...