FYI-New 350Z's at $3k to $4K Off MSRP
02-21-2003, 04:02 PM
#21
Re: from edmunds.com
Originally posted by spextar
Many consumers don't understand what the dealer holdback is, what it is used for and what the holdback's role is in the deal-making process. Let's try to clear up some of the confusion.
Dealer holdback is a percentage of either the MSRP or invoice price of a new vehicle that is paid to the dealer by the manufacturer to assist with the dealership's financing of the vehicle. The holdback itself can't really be used as a negotiating chip. However, knowing about it might help you get a better deal on a new car. How? Well, first, here's a little background:
The total invoice cost of the car is payable by the dealership to the manufacturer when the vehicle is ordered, not when it is sold. Since car dealerships must have an inventory on hand through which the consumer can browse and ultimately select a vehicle, the dealership must borrow money to pay for that inventory. The manufacturer pays for financing and maintenance for the first 90 days the vehicle is on the lot in the form of a quarterly check called a holdback. After 90 days, the dealership has to dip into its own pocket, and into its own profit, to finance the car. Fortunately for dealers, most cars don't stay on the lot for three full months.
This holdback amount is "invisible" to the consumer because it does not appear as an itemized fee on the window sticker. If the car sells within 90 days of arrival on the dealer's lot, the dealer is guaranteed a profit even if the vehicle is sold to you at cost. Because of the holdback, the dealer can advertise a car at $1 over invoice and still make hundreds of dollars on the sale.
For example, let's say you're interested in a Ford with a Manufacturer's Suggested Retail Price (MSRP) of $20,500, including optional equipment and destination charge. Dealer invoice on this hypothetical Ford is $18,000. The cost of the car includes a dealer holdback that, in the case of all Ford vehicles, amounts to 3 percent of the total MSRP. (The $500 destination charge should not be included when figuring the holdback.) So, on this particular Ford, the true dealer cost is actually $17,400. Even if the dealer sells you the car for the invoice price, which is unlikely, he would still be making as much as $600 on the deal when his quarterly check arrives. That is profit to the dealer only; the sales staff doesn't make a commission on that amount.
So, if you offered the dealership a nominal profit (3 percent over invoice, in this example) for this Ford, or $18,540 plus the destination charge, the dealer is making as much as $1,140 and you're still getting a good deal by paying $1,460 less than the MSRP. (Remember that this price doesn't include destination or additional fees, tax or license plates.)
However, the true "profit" of holdback money depends on how long the car has been on the lot. If our hypothetical Ford had been sitting there for 45 days before you bought it, the dealer's holdback profit is only half of what it could have been, or only $300, cutting total profit on the deal to $840. At the 90-day mark, holdback profit has disappeared. So, if you buy a car that has just arrived on the lot, the dealership will keep all the holdback. But it's difficult to find out exactly when the car arrived. This is one of the problems of including the holdback into your negotiations. However, if you order a car, the holdback is pure dealer profit — and knowing this should guide you to make a lower offer.
Dealer holdback allows dealers to advertise big sales. Often, ads promise that your new car will cost you just "$1 over/under invoice!" Additionally, the dealer stands to reap further benefits if there is dealer cash offered on the car you are considering. Generally, sale prices stipulate that all rebates and incentives go to the dealer.
Almost all dealerships consider holdback money "sacred" and are unwilling to share any portion of it with the consumer. Don't push the issue. Your best strategy is to avoid mentioning the holdback during negotiations. Mention holdback only if the dealer gives you some song-and-dance about not making any money when you know that isn't true.
So how can you benefit from holdback information? Well, if you are ordering a vehicle, you could tactfully remind the dealer that you know he will be keeping the entire holdback and your offer is lower as a result. For example, if the dealership doesn't have that pretty green color you're interested in, and they can't find it at another dealership in the area, they have to order it directly from the manufacturer. If that's the case, make sure they know that you know about the holdback. If a vehicle is special-ordered, holdback money is pure profit, and you will need to factor this into price negotiations.
Another issue regarding holdback is Ford Motor Company's attempt to boost customer service ratings by offering qualifying dealers a "rebate" on the invoice price. The "rebate" is 1.25 percent of the total invoice, and only Ford dealers who've earned Blue Oval status from the automaker qualify. The company estimates that only 70 percent of Ford retailers will gain Blue Oval certification, so when buying a Ford, take note of where you shop — a better deal might be available at a Blue Oval store. A similar program will be instituted for Lincoln products and dealers, but those that obtain certification will receive 2.5 percent of the total invoice back in the form of a check.
Many consumers don't understand what the dealer holdback is, what it is used for and what the holdback's role is in the deal-making process. Let's try to clear up some of the confusion.
Dealer holdback is a percentage of either the MSRP or invoice price of a new vehicle that is paid to the dealer by the manufacturer to assist with the dealership's financing of the vehicle. The holdback itself can't really be used as a negotiating chip. However, knowing about it might help you get a better deal on a new car. How? Well, first, here's a little background:
The total invoice cost of the car is payable by the dealership to the manufacturer when the vehicle is ordered, not when it is sold. Since car dealerships must have an inventory on hand through which the consumer can browse and ultimately select a vehicle, the dealership must borrow money to pay for that inventory. The manufacturer pays for financing and maintenance for the first 90 days the vehicle is on the lot in the form of a quarterly check called a holdback. After 90 days, the dealership has to dip into its own pocket, and into its own profit, to finance the car. Fortunately for dealers, most cars don't stay on the lot for three full months.
This holdback amount is "invisible" to the consumer because it does not appear as an itemized fee on the window sticker. If the car sells within 90 days of arrival on the dealer's lot, the dealer is guaranteed a profit even if the vehicle is sold to you at cost. Because of the holdback, the dealer can advertise a car at $1 over invoice and still make hundreds of dollars on the sale.
For example, let's say you're interested in a Ford with a Manufacturer's Suggested Retail Price (MSRP) of $20,500, including optional equipment and destination charge. Dealer invoice on this hypothetical Ford is $18,000. The cost of the car includes a dealer holdback that, in the case of all Ford vehicles, amounts to 3 percent of the total MSRP. (The $500 destination charge should not be included when figuring the holdback.) So, on this particular Ford, the true dealer cost is actually $17,400. Even if the dealer sells you the car for the invoice price, which is unlikely, he would still be making as much as $600 on the deal when his quarterly check arrives. That is profit to the dealer only; the sales staff doesn't make a commission on that amount.
So, if you offered the dealership a nominal profit (3 percent over invoice, in this example) for this Ford, or $18,540 plus the destination charge, the dealer is making as much as $1,140 and you're still getting a good deal by paying $1,460 less than the MSRP. (Remember that this price doesn't include destination or additional fees, tax or license plates.)
However, the true "profit" of holdback money depends on how long the car has been on the lot. If our hypothetical Ford had been sitting there for 45 days before you bought it, the dealer's holdback profit is only half of what it could have been, or only $300, cutting total profit on the deal to $840. At the 90-day mark, holdback profit has disappeared. So, if you buy a car that has just arrived on the lot, the dealership will keep all the holdback. But it's difficult to find out exactly when the car arrived. This is one of the problems of including the holdback into your negotiations. However, if you order a car, the holdback is pure dealer profit — and knowing this should guide you to make a lower offer.
Dealer holdback allows dealers to advertise big sales. Often, ads promise that your new car will cost you just "$1 over/under invoice!" Additionally, the dealer stands to reap further benefits if there is dealer cash offered on the car you are considering. Generally, sale prices stipulate that all rebates and incentives go to the dealer.
Almost all dealerships consider holdback money "sacred" and are unwilling to share any portion of it with the consumer. Don't push the issue. Your best strategy is to avoid mentioning the holdback during negotiations. Mention holdback only if the dealer gives you some song-and-dance about not making any money when you know that isn't true.
So how can you benefit from holdback information? Well, if you are ordering a vehicle, you could tactfully remind the dealer that you know he will be keeping the entire holdback and your offer is lower as a result. For example, if the dealership doesn't have that pretty green color you're interested in, and they can't find it at another dealership in the area, they have to order it directly from the manufacturer. If that's the case, make sure they know that you know about the holdback. If a vehicle is special-ordered, holdback money is pure profit, and you will need to factor this into price negotiations.
Another issue regarding holdback is Ford Motor Company's attempt to boost customer service ratings by offering qualifying dealers a "rebate" on the invoice price. The "rebate" is 1.25 percent of the total invoice, and only Ford dealers who've earned Blue Oval status from the automaker qualify. The company estimates that only 70 percent of Ford retailers will gain Blue Oval certification, so when buying a Ford, take note of where you shop — a better deal might be available at a Blue Oval store. A similar program will be instituted for Lincoln products and dealers, but those that obtain certification will receive 2.5 percent of the total invoice back in the form of a check.
02-21-2003, 04:07 PM
#22
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Originally posted by rodH
btw, that caresafe site is wrong on another account. I got a 3% holdback on my wifes jetts, yet they list it as 2%, do you really think the dealer my family owns is NOT ONLY going to FIND me and TRADE another dealer for a car, BUT also PAY me an extra 1% to take it off thier hands?? I didn't think so.
some of these sites are nice to get educated, BUT they are NOT 100% correct 100% of the time for ALL the vehicles.
btw, that caresafe site is wrong on another account. I got a 3% holdback on my wifes jetts, yet they list it as 2%, do you really think the dealer my family owns is NOT ONLY going to FIND me and TRADE another dealer for a car, BUT also PAY me an extra 1% to take it off thier hands?? I didn't think so.
some of these sites are nice to get educated, BUT they are NOT 100% correct 100% of the time for ALL the vehicles.
I have given you links to 3 sites that say otherwise.
BTW, what Nissan dealership does your family own? It should be easy for you , as the owner's son, to scan and post evidence to prove there is no holdback on 350z's.
02-21-2003, 04:08 PM
#23
Originally posted by walc
Are you really as stupid as you sound?
Many people have bought for close to invoice, as reported on this forum, and they didn't buy demos. Around 10% of 124 reporting ( https://my350z.com/forum/showthread....threadid=19241 )
BTW, do you even have a 350Z or do you just sell them?
Are you really as stupid as you sound?
Many people have bought for close to invoice, as reported on this forum, and they didn't buy demos. Around 10% of 124 reporting ( https://my350z.com/forum/showthread....threadid=19241 )
BTW, do you even have a 350Z or do you just sell them?
1. they can get the business for the SERVICE dept in the future
2. they make $$ on the financing
3. they want to TAKE away a sale from a rival/local dealer
4. sometimes there are dealer incentives that once you sell a certain amount of cars for the year (regardless of NET Profit), you get (trips, awards, recognition, etc....)
5. make $$ on accessaries
02-21-2003, 04:18 PM
#25
Originally posted by walc
Once again, refer me to an authority other than yourself.
I have given you links to 3 sites that say otherwise.
BTW, what Nissan dealership does your family own? It should be easy for you , as the owner's son, to scan and post evidence to prove there is no holdback on 350z's.
Once again, refer me to an authority other than yourself.
I have given you links to 3 sites that say otherwise.
BTW, what Nissan dealership does your family own? It should be easy for you , as the owner's son, to scan and post evidence to prove there is no holdback on 350z's.
the truth of the matter is that kbb.com has the EXACT pricing on teh Z, down to the penny, I payed that price plus $150 for the Doc fees and PDI. needless to say, I am happy.
02-21-2003, 04:18 PM
#26
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Originally posted by rodH
"close to invoice" and "below invoice" are 2 TOTALLY different things. something you may not know is that dealers sometimes will sell a car at invoice JUST to get the business so
1. they can get the business for the SERVICE dept in the future
2. they make $$ on the financing
3. they want to TAKE away a sale from a rival/local dealer
4. sometimes there are dealer incentives that once you sell a certain amount of cars for the year (regardless of NET Profit), you get (trips, awards, recognition, etc....)
5. make $$ on accessaries
"close to invoice" and "below invoice" are 2 TOTALLY different things. something you may not know is that dealers sometimes will sell a car at invoice JUST to get the business so
1. they can get the business for the SERVICE dept in the future
2. they make $$ on the financing
3. they want to TAKE away a sale from a rival/local dealer
4. sometimes there are dealer incentives that once you sell a certain amount of cars for the year (regardless of NET Profit), you get (trips, awards, recognition, etc....)
5. make $$ on accessaries
Now, what about documentation of your claim that there is no holdback on 350z's to refute the 3 reference links I posted.
02-21-2003, 04:22 PM
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There has to dealer holdback on this car. I can get the VPP price quote to confirm this.
The Infiniti G35 Coupe VPP price quote I have shows $1173.06 in dealer holdback/floor plan assistance.
I've been to Exton Nissan. They used to be Devon Nissan. They're about average for a Nissan dealer, which of course isn't saying too much. If you look closely on the autotrader.com advertisement, you'll notice that VINs and MSRP don't match up with the nissandriven.com website. What's up with that?
While we're on the subject of dealer advertisments:
My favorite dealer advertisments are the ones that show how you can get a low selling price by giving them $4,000 cash/trade-in first. Those are hilarious.
Cheever
The Infiniti G35 Coupe VPP price quote I have shows $1173.06 in dealer holdback/floor plan assistance.
I've been to Exton Nissan. They used to be Devon Nissan. They're about average for a Nissan dealer, which of course isn't saying too much. If you look closely on the autotrader.com advertisement, you'll notice that VINs and MSRP don't match up with the nissandriven.com website. What's up with that?
While we're on the subject of dealer advertisments:
My favorite dealer advertisments are the ones that show how you can get a low selling price by giving them $4,000 cash/trade-in first. Those are hilarious.
Cheever
02-21-2003, 04:24 PM
#28
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Originally posted by rodH
my dad is a "silent partner" so I don't feel real confortable just asking for "proof" that there is NO dealer holdback on the Z.
my dad is a "silent partner" so I don't feel real confortable just asking for "proof" that there is NO dealer holdback on the Z.
PS. "unwhined" is new to me. Please define.
02-21-2003, 04:32 PM
#29
Originally posted by walc
Why not? It would resolve the issue.
PS. "unwhined" is new to me. Please define.
Why not? It would resolve the issue.
PS. "unwhined" is new to me. Please define.
there are already a few people on this site that are varifying the NO Holdback issue, so why do I need to waist my time.
in the "unwhine", I will let you talk to your contacts to figure out what that is (maybe you got one
) since you seem to know so much.
02-21-2003, 04:35 PM
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Originally posted by Cheever
There has to dealer holdback on this car. I can get the VPP price quote to confirm this.
My favorite dealer advertisments are the ones that show how you can get a low selling price by giving them $4,000 cash/trade-in first. Those are hilarious.
There has to dealer holdback on this car. I can get the VPP price quote to confirm this.
My favorite dealer advertisments are the ones that show how you can get a low selling price by giving them $4,000 cash/trade-in first. Those are hilarious.
I know what you mean about those ads. I try to avoid those dealers, along w/the ones who have " dealer processing/documentation fees", of hundreds of $ or PDI fees.
BTW, I'll take a chance on having to grovel to rodH, et al, if you would be kind enough to resolve the holdback question via VPP price quote.
Thanks,
02-21-2003, 04:42 PM
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Originally posted by rodH
why, well, for 1, he is a silent partner and works 1 hr away, 2. I work over 1 hr away and work 6 days a week in a totally different industry (healthcare), so I don't want to drive that long just to prove to someone 3000 miles away, that I care NOTHING about a point that MEANS nothing to my bottom line.
there are already a few people on this site that are varifying the NO Holdback issue, so why do I need to waist my time.
in the "unwhine", I will let you talk to your contacts to figure out what that is (maybe you got one ) since you seem to know so much.
why, well, for 1, he is a silent partner and works 1 hr away, 2. I work over 1 hr away and work 6 days a week in a totally different industry (healthcare), so I don't want to drive that long just to prove to someone 3000 miles away, that I care NOTHING about a point that MEANS nothing to my bottom line.
there are already a few people on this site that are varifying the NO Holdback issue, so why do I need to waist my time.
in the "unwhine", I will let you talk to your contacts to figure out what that is (maybe you got one
) since you seem to know so much.
Thanks for your concern. My car is running fine w/o the problems many others have suffered from. If it doesn't, I have a warranty and we have lemon laws.
02-21-2003, 05:27 PM
#34
Originally posted by walc
You guys don't have fax machines or scanners? Or is it time for you to fold, since your bluff has been called.
Thanks for your concern. My car is running fine w/o the problems many others have suffered from. If it doesn't, I have a warranty and we have lemon laws.
You guys don't have fax machines or scanners? Or is it time for you to fold, since your bluff has been called.
Thanks for your concern. My car is running fine w/o the problems many others have suffered from. If it doesn't, I have a warranty and we have lemon laws.
You think I am lying about the holdback issue?? why would I want to lie about something as stupid as that??
02-21-2003, 05:31 PM
#35
btw, I wouldn't worry about the warrentee and lemon laws, the car is a great product, I seriously doubt that anything would go wrong, I almost bought an "unwined" since I was having a problem with allocation and ordering my car (nissan dropped the # of cars allocated DRAMATICALLY in Jan and Feb).
btw, and "unwined" is a car that was bought and the customer never got financed (something went wrong) and had to bring the car back.
btw, and "unwined" is a car that was bought and the customer never got financed (something went wrong) and had to bring the car back.
02-21-2003, 05:32 PM
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Originally posted by walc
You guys don't have fax machines or scanners? Or is it time for you to fold, since your bluff has been called.
You guys don't have fax machines or scanners? Or is it time for you to fold, since your bluff has been called.
I'd be interested in seeing the facts on whether or not there is a dealer holdback on the Z myself, as I'm sure, so would a lot of others. It actually means a difference of several hundred dollars of "negotiating power", helping you get a better price by knowing the truth.
For Pete's sake. just post the documentation. No one would know what dealership is involved. If there's no holdback, I'd sure like to see it in writing. I bet it's 3% though.
WayneTN
02-21-2003, 05:39 PM
#37
Originally posted by WayneTN
rodH,
I'd be interested in seeing the facts on whether or not there is a dealer holdback on the Z myself, as I'm sure, so would a lot of others. It actually means a difference of several hundred dollars of "negotiating power", helping you get a better price by knowing the truth.
For Pete's sake. just post the documentation. No one would know what dealership is involved. If there's no holdback, I'd sure like to see it in writing. I bet it's 3% though.
WayneTN
rodH,
I'd be interested in seeing the facts on whether or not there is a dealer holdback on the Z myself, as I'm sure, so would a lot of others. It actually means a difference of several hundred dollars of "negotiating power", helping you get a better price by knowing the truth.
For Pete's sake. just post the documentation. No one would know what dealership is involved. If there's no holdback, I'd sure like to see it in writing. I bet it's 3% though.
WayneTN
I was told BUY the VERY same people that handled my Jetta sale (and gave me the holdback there)(it is a Nissan/VW dealer) that there is NO holdback. They would have NO reason to lie about it.
I wouldn't doubt that at a later time there is a holdback, but as of the time that I bought my car, there wasn't
02-21-2003, 05:42 PM
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Originally posted by rodH
btw, and "unwined" is a car that was bought and the customer never got financed (something went wrong) and had to bring the car back.
btw, and "unwined" is a car that was bought and the customer never got financed (something went wrong) and had to bring the car back.
WayneTN
02-21-2003, 05:46 PM
#40
Originally posted by WayneTN
I wasn't familiar with "unwined" either. Sounds like it should be spelled "unwind" since you would have to back out all of the paperwork and unwind what you had previously done. Unwined would be when you spill your White Z.
WayneTN
I wasn't familiar with "unwined" either. Sounds like it should be spelled "unwind" since you would have to back out all of the paperwork and unwind what you had previously done. Unwined would be when you spill your White Z.
WayneTN