Help with Invoice Pricing...
10-26-2005, 06:53 PM
#1
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Help with Invoice Pricing...
I am looking for a invoice price on this configured car. Can anyone help me out?
A4 2.0 T Avant 6-speed manual quattro
Price as configured: $41,985
Exterior: Brilliant Black
Interior: Ebony leather seating surfaces ($1,400 w/package)
Packages:
Sunroof package $1,400
Premium package $1,850
Technology package $1,775
S line sport package $3,000
Cold weather package $400
Individual options:
Destination Charge $720
Audi Navigation plus* with glove box 6-CD Changer $1,950
Headlight washers $150
A4 2.0 T Avant 6-speed manual quattro
Price as configured: $41,985
Exterior: Brilliant Black
Interior: Ebony leather seating surfaces ($1,400 w/package)
Packages:
Sunroof package $1,400
Premium package $1,850
Technology package $1,775
S line sport package $3,000
Cold weather package $400
Individual options:
Destination Charge $720
Audi Navigation plus* with glove box 6-CD Changer $1,950
Headlight washers $150
10-26-2005, 07:15 PM
#4
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Carsdirect has the most dependable I'm aware of...they tend to be on top of....
...port and/or ad charges for all of the OEM's, unlike some of the other info. sites. That's where I'd start.
10-27-2005, 08:04 AM
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You pay them on every new car...some just bury it (Honda, for example), others line list it...
(Mercedes, BMW and Audi). It's a component of invoice cost, so you're paying it just the same.
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10-27-2005, 10:34 AM
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Incorrect
Ad fees are generally reimbursed by the manufacturer post-sale, as is the holdback. If you pay for it, the dealer is earning it twice. No reason to allow the dealer to double-dip at your expense.
10-27-2005, 11:26 AM
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Okay, well let's walk through this then.....
Volvo Dealership X, down in your neck of the woods. Numbers as of today:
Holdback reimbursed in full, less these expenses:
Flooring (currently Prime Rate plus 1.5%)
Dealership Maintenance, including utilities....a non-fixed cost, but an expense just the same.
Sales commission(s)
Advertising fee from Volvo N.A.: $350.00 on all new vehicles, regardless of sales price or monroney. Payable on every sale to Volvo N.A>, who upon receipt cuts a check to NADA (Dealer's Association running point on national advertising). Anything left over out of the pot from all dealer's WOULD be returned to dealer's, were that ever to be the case (which it's not). Gross profit for dealership X currently at -$350,000.00 for the year. Point is, no one's getting rich here on the sales side.
Audi typically reimburses for local ad, though the national ad fees (the majority of that ad cost included in invoice) are retained by Audi N.A.
BMW, well..... ; )
Holdback reimbursed in full, less these expenses:
Flooring (currently Prime Rate plus 1.5%)
Dealership Maintenance, including utilities....a non-fixed cost, but an expense just the same.
Sales commission(s)
Advertising fee from Volvo N.A.: $350.00 on all new vehicles, regardless of sales price or monroney. Payable on every sale to Volvo N.A>, who upon receipt cuts a check to NADA (Dealer's Association running point on national advertising). Anything left over out of the pot from all dealer's WOULD be returned to dealer's, were that ever to be the case (which it's not). Gross profit for dealership X currently at -$350,000.00 for the year. Point is, no one's getting rich here on the sales side.
Audi typically reimburses for local ad, though the national ad fees (the majority of that ad cost included in invoice) are retained by Audi N.A.
BMW, well..... ; )
10-27-2005, 11:47 AM
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Re: Okay, well let's walk through this then.....
The dealer's flooring costs and overhead are not relevant to determining invoice price. The use of inventory financing improves his return on equity and reduces his exposure, so the debt is a benefit to him, not the buyer.
Like any business, he needs to pay some sort of overhead to survive, but the amount of that overhead not is pertinent to the invoice.
Chain of events:
-Dealer purchases car, with options and delivery. That purchase is financed. Adding "PDI fees" and "advertising fees" to the invoice allows dealer to borrow more money against the value of the asset, improving his return on equity.
-Customer buys car. Dealer pockets excess above borrowed amount, less interest + holdback + reimbursements + any dealer rebates.
When I purchase a car, I pay for (a) the car, (b) its options, (c) its delivery, (d) applicable sales tax and (e) allowable doc fee, plus a small margin that may or may not be above invoice, depending upon the market, less any rebates that I calculate are being paid to the dealer or myself. I will not directly pay for the dealer to advertise the car or to remove the plastic off of the seats.
If the dealer isn't profitable, then he's a bad operator or else is selling a poor marque, but either way, that isn't my problem. The dealer isn't running a charity, and it isn't my job to invent excuses to pay more than I have to.
Like any business, he needs to pay some sort of overhead to survive, but the amount of that overhead not is pertinent to the invoice.
Chain of events:
-Dealer purchases car, with options and delivery. That purchase is financed. Adding "PDI fees" and "advertising fees" to the invoice allows dealer to borrow more money against the value of the asset, improving his return on equity.
-Customer buys car. Dealer pockets excess above borrowed amount, less interest + holdback + reimbursements + any dealer rebates.
When I purchase a car, I pay for (a) the car, (b) its options, (c) its delivery, (d) applicable sales tax and (e) allowable doc fee, plus a small margin that may or may not be above invoice, depending upon the market, less any rebates that I calculate are being paid to the dealer or myself. I will not directly pay for the dealer to advertise the car or to remove the plastic off of the seats.
If the dealer isn't profitable, then he's a bad operator or else is selling a poor marque, but either way, that isn't my problem. The dealer isn't running a charity, and it isn't my job to invent excuses to pay more than I have to.