How much should you offer for a car? (What's a FAIR price to offer for a NEW or USED car)
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- เผยแพร่เมื่อ 17 พ.ค. 2020
- joinyaa.com
Stay connected with Ray and I here: / shefska & / rasisjaz
Today I asked Ray what a fair offer is when buying a car. Ray explains a rule of thumb you can use to come up with a fair offer that won't lowball a dealer and will also help you negotiate the best price possible.
If you like this video, please let us know in the comments below! - ยานยนต์และพาหนะ
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The dealer usually doesn’t have any problem insulting you with real money trade in offers.
NEVER trade in your car to a dealer...
@@stateniland actually its only worth considering in these scenerios.
1) You live in a state that gives you tax credit towards the purchase for trading the used car (IE you buy a car with a purchase price of 30k and you get 12k for your used car. You pay taxes of only 18k on the new purchase.)
2) The dealer does not negotiate the trade in value. its plugged into a computer based on KBB and general demand for the vehicle- and thats the number you or ANYONE gets in trade.
@@abprepboy33 sell privately.. or it's your lose
@@stateniland you get less money and if that the ONLY thing being considered..... you come out on the bottom. but if you can minimize the discrepancy by getting tax credit towards the new vehicle and getting actual blue book trade in on the used vehicle. (Providing your car isnt a classic car or extremely rare)...... the discrepency might be worth avoiding a lot of the idiots who buy privately.
In my experience- when you sell a sports car... you get a lot of people who want to just joy ride in the car. You get people who want you to go to their credit union 45 miles away to finalize the deal. (which means I have to go with someone else so I have a ride back). the trade in is so quick..... and you dont gotta worry bout dmv or smog certification.
Also if your vehicle takes a long time to sell then you are paying insurance on the vehicvle while the vehicle is depreciating and you are putting your time into meeting people and taking rejecting ridiculous offers.
What ever happened to the NADA book being the standard? Last time I got a vehicle loan it was standard when it came to the lender.
You guys are great father and son duo. We love your honest opinion. I found out about the internet price it's just a teaser price to get you in.
You guys always have the right videos! Planning to get a car soon but i have to learn the business first. Thanks guys
Great job guys. I really appreciate the information as I really HATE walking into a dealership to once again buy a car
Love you guys! Great father and son rapport, and very useful info. Your tightly focused topics are great, and the off the cuff, no editing format works! It’s genuine and refreshing. Mark my words, you’re gonna be at 100,000 subscribers soon, and you’ll be earning good money on You Tube. Maybe more than from the underlying business. Good luck and keep them coming!
More than once, I've heard the dealer person or someone talking on their behalf about the mark up in other industries, particularly furniture and no one complains or negotiates their profit margin (first lesson is, ALL sales are negotiable).
I first thought, that those guys don't pull some of the tricky, psychological and sometimes sleazy tactics to get as much of your money as they can. But, continuing to reflect, a few do! [Insurance salespeople have been known to sell people things, best for them not always you.]
Car dealers have made their bed, and sales in general have.
I decide to just be affable in my affairs, make reasonable profitable offers; but I still get offended and walk quickly away from the salesperson who starts with the shady talk and tactics.
Love your videos. They're so informative and helpful. Thank you
Best car content out there. Love it
These videos are great! Thank you guys. I would very much be interested in a video on what to offer on a used car. Thank you!
I have been binge watching your channel thank very much for all the advise. Recently became disabled and looking at a 2021 sienna, hopefully will get one by March 1st.
Live chat me here: yourautoadvocate.com/ If I (Zach) get overwhelmed, l'll follow up via email! Happy Monday!
That ray guy kinda knows his stuff! Plus he's got some personality, appreciate you're good work guys, thanks!
Ray? His name's Dad.
That green cannondale Is freeking awesome bro. Thanks for the info.
Good information. thanks to you two.
I enjoy watching the videos you guys put together. I just started the negotiating process and i'm using some of the things you guys talked about. I tried to get clarification on what discounts were all included in the displayed discount. The response I got back was something to the effect of 'Here are all the incentives we are offering for this car purchase. Give us a call to set up a time we can meet.' I smiled, thinking back to what you guys said. I wrote them back and asked them to kindly re-read my inquiry and actually answer my question. thanks for the valuable info you guys share!
Thank you guys so much!! i love yalls videos they are awesome!!!
Thanks for watching, Roger. We appreciate your support and viewership!
Didnt think U covered used cars much in this video, still enjoy your vids Thanks
Great job guys!
Keep up the good work. God rewards those who are honest
Love the content. And I have the same Cannondale in the same color. 😊
I am the one that asked this question the other day and as much as I appreciate all the info you guys give, you mentioned nothing about initial offer for a used car which was my original question 🤔
Yes, he basically suggested figuring the percentage between the invoice and the msrp and offer a portion of that percentage.
Did you listen? He is not the dealer, he does not have numbers on the car you want......he did answer your question.
Great advise, just in time need new truck.
Look at the dealer Monroney label, take off 20%…..theres YOUR start….goat the end of the month, do not fall in love with any car, do your homework, get pre approved somewhere else, do not discuss monthly payments, do not bump yourself ( ie, dealer wants you to split the difference ) DO NOT BE AFRAID TO WALK…be courteous, reasonable but firm…..if you walk, expect a new call the next day….with a better deal in your favor……
I love these two
As with any other commodity, supply and demand always enters in. If you want a popular model that is hard to keep in stock, then they will not discount much. Conversely a less popular, slow mover model could even be sold at a loss.
I think it’s funny Zach, sometimes it’s Dad and other times it Ray. Anyway, great videos. Sounds like you offer a great service that’s definitely worth the money.
As far as used car prices. I've heard that the used car pricing engines were not reliable because of business interests in selling those used cars. But I've heard from dealers that retail was too low and for trades they only pay black book.
Let's be honest here dealer is not out to loose money they will screw you anyway possible
The bike is awesome my friend
I think what’s most important is that trade value as most if not all beat you up on that as they know you know what invoice and rebates is on that new vehicle you want. So you think you have an excellent trade and they value it as fair or good and they won’t move. The usual statement is I’m giving you wholesale price on the new vehicle and to be fair we need your trade at wholesale value.
Ditto on the used car offers. 🤞
Lowkey flex with the cannondale in the back😅
It really depends on what you’re buying and how popular those vehicles are 10% in a $30,000 car shouldn’t be a problem the hold back alone is probably $800-$1000. i’ll give you good examples two years ago I bought a brand new 2018 Camaro one SAS at 8000 off MSRP granted I qualify for 90% of the rebates then just last year I bought a 2018 brand new leftover Corvette that sat for 14 months and I bought that at 13,000 off MSRP so it really depends on what you’re buying. People don’t know it but typically cars that are 30,000 or less don’t have a lot of wiggle room
Ray, you often say that customers live in fantasyland for expecting certain things, and I agree. But, Ray, you must also live there with them if you think dealers do the things you are suggesting here - asking a dealer to deduct their incentive from the price of the car. I know for a fact that, unless one enters a dealership having all the information, he/she’s getting no help from the dealer. Thanks for your insight, though. Keep them coming!
I hear you, but it really depends on the dealer. Yes knowledge is the key. Thanks for watching.
You guys are great! When I get ready for another car, I’ll ask you to do the negotiation for me. I do it so seldom, you’re certainly a lot better at it than me. Also, there are so many “fake fees” that dealerships try to add to the invoice, I refuse to pay those.
Question: I live in Scottsdale AZ - are you guys in AZ also?
We used to live in Scottsdale but moved east during the great recession of 08 -09.
Your Auto Advocate - Well, I guess everything is done on the internet anyway, so location probably shouldn’t matter. I used to live back East, Queens NY. But Scottsdale is so much nicer. Move back here guys!!! 😀
Thanks for some great insights- I really love how you guys cross-check each other and cover all basis in regards to car purchases. I think the pandemic has brought a lot of family members closer together and with you two guys- no exception at all. I was doing so much research on a Honda Civic Type R (both 2019 & 2020 model) and the one characteristic about this particular model is that many Honda dealers (especially around the Bay Area where I live) sell these vehicles with a huge markup over MSRP. One dealership justified this by claiming the vehicle is considered to be sold in a "Niche" market.
With the current economic crisis and struggles in car sales, how do they still justify this as still being a "Niche" market which we all know is a bunch of B.S. The markup is not regulated and some vehicles have been sold almost 10K markup. Granted, being in the Bay Area has a higher standard of living including many tech engineers/professionals easily fetching 6k figures so therefore some of these dealership I can tell are probably spoiled and feel secured knowing that someone will still come along and pay that markup (which I've seen some foolish people do which in turn makes it bad for everyone else trying to get one at a fair deal- they've pretty much set the market value for the area). I would like to someday get into this type of vehicle and I've seen many dealerships outside of California looking to move inventory on their 2019-2020 models well below MSRP. If I decide to go that route and buy outside the state, I would still need to pay a shipping company to deliver this car cross-state to me. Maybe overall after all the figures are calculated, I may save about 2K or so but that still gives me some peace of mind.
When you have a weak credit score the dealer really takes advantage of you.they make you feel lucky to get a loan but the interest is so high 18 to 20 percent.out of a 900 payment about 300 actually goes towards the principal of the car.wheres the protection of the consumer predortory lending
Msrp stands for manufacturers suggested retail price . That’s not what they have to charge you. So with the internet you should always find out what the real profit margin is on a vehicle. Remember it’s a depreciating asset.
5:18 I’m watching now and i completely agree but also watching this now after the way they’ve treated us all with the mark ups and now with the desperation, I have requested 5k off and told them I’m in no rush and can’t wait until they just need to get rid of a car to meet a bonus. He said, that’s a lot of money off… let me see what I can do because we just had a port hold….
Love your videos Gents. Would you say we have better pricing available to us when leasing or buying a new car ?
Great channel guys. My question is on Mini. They seem to be the only company that is not throwing up massive incentives during COVID-19. I keep my cars 10+ years and will buy. Is it all hidden in holdbacks or am I missing something
Worked with a guy that used to be a car salesman. He said get invoice price and go at end of the month and offer them 200.00 above invoice. Things may be a little different now though.
They never tell you the incentives. Other problem is they may not be honest with MF and residual on a lease either. Fun back and forth but the right way to get the best deal is to call around and have at least 7 or 8 dealerships make You an offer
An invoice deal less incentives is a fair deal for all. The dealer makes the holdback and doc fee, and you get a decent price.
Have you guys thought about having a two tier pricing model? The one you have now (obviously). Then, the other one is a cheaper model where the customer negotiates their own deal and calls you guys to think if it's a fair deal. Just a thought.
Thanks for the suggestion! We've had quite a few folks ask us to do that. We're happy to help pro bona with deal reviews. Email us at team (at) yourautoadvocate.com!
As much as I would like to see the dealer profit from a deal, I know full well the majority of their profits are made in Finance, via accessories (LoJack, tires, tint), and in the Service area. I see no issues negotiating a price to invoice because dealers really don't make much profit in sales anymore.
interesting how you said 40% at 8:08. back in sept '09 that's exactly what i did on a new leftover 08 f250 4x4. sticker $46180. test drove it on a saturday morning, they called me sat night, sunday afternoon, monday morning. decided i not to get truck, but emailed dealer on monday afternoon a crazy offer of otd $29647.56. 46180-40% + 7% tax. thursday they told me to come get it. still driving it today. :)
Timing is everything in life. You happen to have stumbled upon the right truck for you at the right time when the dealer found himself in a desperate time and wanted cash on hand as opposed to metal sitting and depreciating. Good for you, my friend.
If a vehicle is listed online with its price lowered by a rebate/customer cash, is it reasonable to ask for their invoice price THEN add the rebates/discounts? Also is it also acceptable to ask that a(additional) supplier discount be applied if you're a legitimate supplier discount code holder, and the dealership is advertising 'supplier pricing for all'?
Interested in a Silverado, MSRP is 52,600. In my logic, my legit supplier code gets me $2911 off, GM customer cash gives me $6000, (thanks to internet research)'invoice' gives me $3200 off, and dealer 'price for everyone' is $4500 off. Would opening offer of $36,000 be met with "here's the door, have a nice day" or "let me talk to my manager"?
Putting aside the caveats mentioned in the video, was the “net take-away” that 2% - 3% over dealer’s invoice - with dealer’s also getting all his/her holdback $ and the customer receiving any current manufacturer-to-customer incentives - was a reasonable offer? If so, was this intended to be an “initial offer” or a reasonable offer on which to “close”?
👉🏼09.21.21 MSRP on my AUDI Q3 was 4O.6 k. My OTD was 38.5 cash. It’s been one year now, I got a good deal. It’s still in mint condition one year later. Gray, loaded! I Love ❤️ my AUDI!!! My first brand-new car.
Test drove the 2021 “Stiff” Buick Envision 1st.
The Dealer wanted more for that Envision with ALL its EXTRAS, than my AUDI with all the Audi STANDARDS, which they are known for. My Audi is worth every penny to me one year later. 😄❤️
I was thinking this.. Start the haggle and when it goes back and forth say I pay MSRP if you pay the sales tax. that will put it on the to discount the vehicle a bit so they can decrease the tax. Because sales tax could be 8-10%.
I would argue that a dealer is not entitled to a reasonable profit just because they've built a dealership. To me, it's about the value that they are providing ("what is your value to the marketplace..."?) In 2021, it's a bit frustrating that the consumer can't purchase something without having to go through a middleman when it oftentimes provides little to no value.. This would include when there is no trade-in and no test drive required. It seems likely that this entire business model will be significantly different 10-20 years from now, although there are lots of headwinds working against any change (government regulations, etc.)
What I’d like to know is how should I determine an initial fair offer for a used car from a dealer? I can look up value on NADA/KBB but I don’t know how much they are into the used car for. Any tips?
How about asking to see the dealer invoice and starting from there? A buyer can’t factor in hold backs but maybe taking negotiations from invoice would disclose what the real (reasonable) profit might be.
Well, you can go in and low ball the price. But, you need to have an idea what your bottom line is. What will you be willing to buy. Your presentation today gives one the idea where the bottom is located.
Pretty hard to insult a car guy......!!! love that ...I think i like these guys.
I think many Americans wouid change cars more often but for the pain of dealing with car dealerships that are out to extract every last dolllar from the customer.
Your percentages are a good rule of thumb but you have to consider the time of year. Is it year end? quarter end? are we in a pandemic? Just closed a deal on a 2020 MB GLC for 20% off MRSP for a family member.
Would I ask for the invoice price for a used vehicle that was traded in? I seen the infamous “A” at the end of the stock number and “GRT” at the beginning of it. Thanks to you guys’ previous video...I take notes 😉
It sounds like you guys are talking about mainly new cars, can you cover used cars please?
Hi, its probably obvious, but when you say 8% off MSRP of 40k, is that the out the door price? Or is it 8% off, then adding taxes and registration/Tags?
I didn't quite get a solid rule of thumb from this video. I think that from this and other of your videos I think you are saying:
- Ask for a car with *exactly* what you want and nothing more. If that car doesn't exist you might accept one with a few extras but not pay a penny over the dealer cost for them, and definitely do not accept to pay for a single after market add-on.
- The goal is to give the dealer a reasonable profit composed of dealer invoice + manufacturer destination fee + a reasonable documentation fee of about $300-500 + dealer incentives (which are higher during the last week of the month and December) + plus a reasonable profit of X% of the dealer invoice of the car.
- If you don't know the dealer invoice start with a offer 3-10% below MSRP.
- If the dealer balks, ask him to show you the dealer invoice and make him the reasonable offer from above.
And of course, if you were able to get the actual dealer invoice information from one of the online sites... start with the accurate offer.
The only unknown remaining is what is the "reasonable X% profit in the formula above"? 5%? More, less?
As salespeople, we are trained how to see things from the customer's point of view. Having real empathy and understanding of the customer's motivation and way of thinking are imperative to making deals. Customers looking to make a fair deal should also employ at least some empathy and understanding for the car dealer. In the long run, it will earn them a better experience. Salespeople are just as susceptible to being sold as the customer. They will work harder for customers who are nice and not just about raw greed.
Also, keep in mind that the higher up the chain you go, the less important front end profit is to the person you are negotiating with. If the owner negotiated every deal, gross profit would be very low. He wants volume much more than profit. The salesperson, however, cannot survive on the small commissions that come from "mini" deals. If more than 10% of those deals are minis, he has a major problem.
Hi, I’m just curious! How much do you charge for negotiation?!!
That Cannondale looks to be a low mileage one owner.
How do you find all current rebates on a particular vehicle your looking at? My experience is dealers haven’t wanted to give out the rebates that I’ve seen on manufacture website.
I got my RAM at 19% off MSRP in March because it was a leftover from the prior year. I'll wait for another leftover deal rather than buy now.
Would you do 10% off it's halfway into the life cycle? Asking for an opinion
@@turkeychicken69 No
What is your opinion of no haggle car price strategy of dealer today. The posted price is the price plus fees extra; tags registration tax etc. I have had sales person say they do not negotiate any on price of car and what they offer is best price around. If you do not like it go somewhere else.Yet other prices of dealers are considerably lower and do not include fees also. Hard to know who to believe. I usually leave or go somewhere else if their initial price is out of say $750 to $1000 from what is offered by competitors.
Nice videos.
Im trying to buy a new 2019 car msrp 44,300 and Im offering 40,000 before ttt- tax, title, tag. And the dealer only wants to discount 2,500. Ive been keeping touch with them since December and through all this coronavirus crap they haven’t dropped their price a dime.
What about used cars? I got an appointment to test drive a used car wednesday and would like to know especially when factoring the current economic situation. The car I'm looking at was marked down $1500 recently probably due to corona and sitting on the lot for 60 days.
Great video discussion, what would you pay for a 2019 model in 2020 now? I'm able to find 2019 model still new and unsold. How much discount is expected to be fair?
Guaranteed that 2019 model doesn't exist in the dealers lot.
@@edsumil917 I saw a few dealers in my area still have new 2019 cars.
@@netman88 there is over 100 2019 fords f 150 various styles in my area and endless 2020s dust overed & 2021s on the way...
It’s crazy, cause I can’t even find a car for MSRP now with all these dealer adjustment rates
I’m interested in a Used Lexus GS 350 f sport 2016/2017 under 40,000 miles, but only interested in 3 colors only hard to find them in my state of Florida. I need a great price
Thinking about buying a used car through Carvana, should I buy from dealer instead. Regarding deals incentives etc.
wondering if these numbers are still realistic still with how supply and demand is and with manufactures shifting to a business that involves ordering cars from their factories.
Thanks for the great info,. But what about used cars? What is a good percentage? Especially now with the recession,. I still haven't seen much of a decline on pricing on used trucks.
20% on 1500s easily....on 2500s a bit tougher.....ram and chevy have huge rebates now and if your smart they have huge dealer discounts.....12-14k off msrp …..its totally doable and know people who have recently, be smart, aggressive and shop multiple dealers....throughout state and others as well
Right now. MSRP is the price. 22' K5 Gt-line premium $31500. Offered $30,000. No counter.
What website is out there were I can get invoice price before I ask dealership. For instance ram trucks
That's what I hate, they put all offers in, you go check it out and find out no offer available to me and price was a hoax, never visiting those places again
@9:55 Can y'all please make a video going more into depth with buying a car in December. Can I go in at 20% off msrp, how desperate are the sales people to get rid of 2020's, etc. I plan on buying a 2020 Camry during the last week of December. However I know exactly what color, trim and package I want. Should I be ready to compromise on one of those?
funny... on the last 4 cars I purchased I got between 4 and 6 K of MRSP the last 2 being over 5 OUT THE DOOR!!!! Cash and go on the these.
Wonder if you can ask for the same % off on all makes. Like VW, Toyota, or Honda. I would think the more popular cars will have higher mark ups.
Great video guys. I am sorry but I did not get where to get the dealership invoice pricing, can you please tell me?
Thanks
Just attempted to purchase a vehicle today, 9000 dollar loan ,payoff 26,500, wow, 15,000 dollar loan, 38,000 dollar payoff for 66 months, that's from my local Toyota, chevy,gmc,buick dealership, and they were above fair market price by 3000 and said they dont come off of their prices ,period, we were approved for 20,000 for a Toyota rav4
The car I want to buy is Honda CRV-EX. 30180msrp, 28408 invoice 581 holdback. Dealer cost 27792. What should I pay/offer on memorial day weekend?
6:33 but they do that with our trade ins lol
This is principally about new cars. Can you find the invoice price or its equivalent on used cars?
Since $4,000 seems to be the negotiating wiggle room for a $40,000 -$45,000 car, how about just offering to pay msrp for the out the door price?
This video did not really address used cars... What is a good rule of thumb on what to offer on a used car? Certainly it depends on the market conditions (supply vs. demand), but any general rules?
How do you factor in things like manufacturer bonuses, kick backs etc
Good stuff. I'm going to buy a new 4runner. This stuff won't fly on a Toyota 😢
Where can I find dealer invoices online?
I do have a question though does the consumer is responsible to pay Destiny charges !! when buying a car used or new on you and why ??
Please talk about used cars?
So...offer to pay an 8% discount off MSRP, go back n forth until you get to a 6% discount (which was the original target)?
How do you determine a fair trade in price if your car would retail for $13000 on a dealer’s lot? What could you really expect?
I remember buying a car and the salesman gave me his employee discount on top of all other incentives. My Question is how often can sales person use that ? Once per yr ? Or monthly?
Scott, it all depends. Sometimes dealer's have extra savings vouchers or certificates given to them by the manufacturer that they can use as they see fit on deals. So, perhaps each salesperson is given x-number of them for their use that month and your salesperson wanted to reward you and did. Stay safe, Ray
How would this apply to a HD truck as I've had friends pay full price only to find out that the dealer can buy them way cheaper wholesale when they tried to trade in?
Why does a consumer have to pay a destination fee for a car on the lot, not ordered by the consumer to start with? Isn't that a dealer cost?