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Invoice Cost vs. Selling Price vs. MSRP – Advice?

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Invoice Cost vs. Selling Price vs. MSRP – Advice?

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Old 07-17-2018, 06:40 AM
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Default Invoice Cost vs. Selling Price vs. MSRP – Advice?

Starting to shop for a 2018 (or 2019) A5 SportBack. In the "Prices Paid for A5 SportBack” thread on this forum I see people paying about 10% off MSRP. But when I use the Edmunds website https://www.edmunds.com/tmv.html it tells me that invoice price is about 6.5% off MSRP. Are people really buying under invoice, or is the Edmunds calculator wrong? I expect the dealer to make a profit but obviously don’t want to overpay. Any advice on the buying process?
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Old 07-17-2018, 07:09 AM
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Ahhh, the wonder of the pricing on a internet forum. If someone post a discount of 10% off, there is always someone else who claim to be able to top it. As you know, one must take what they read on a forum with a grain of salt, sure, there are double digit discount to be had with these cars but most of the time, there are compromise made. It also depends on your location and the competition in your area and how much time you are willing to spend. I can safety say that in the Northeast, without much of an effort, one can buy a in stock 2018 A5 at about $500 to $1000 below invoice. The S5 might be discounted a bit more. I am sure if you spend days hunting for a bargain and you are willing to travel further out, you might save another $500 to $1000, but it really depends on how much your time is worth. My philosophy is that the price should reflect a small profit for the dealer, everybody walks away happy. I want to keep a good working relationship with my dealer after the purchase, In this day and age, they have your whole car buying history on their computer.
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Old 07-17-2018, 07:52 AM
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The price of the car is not where dealers make their money. If the dealer needs to sell a car they will go as far as they need to below invoice to do it.

My Q5 was 12% off MSRP, after including incentives from AFS in May. My S5 was 8.5% off MSRP out the door in Nov '17. 6.5% should be an easy number to hit.
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Old 07-17-2018, 09:14 AM
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According to the NADA, car dealers make 30% of their profit from new car sales, 26% on used cars and 44% on service.
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Old 07-17-2018, 09:22 AM
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Originally Posted by The G Man View Post
According to the NADA, car dealers make 30% of their profit from new car sales, 26% on used cars and 44% on service.
Yes, but not from the selling price, they make money from Audi for hitting sales numbers and money off of the financing terms. Profit from the actual sale of a new car is just gravy.

My audi dealer said the AVERAGE interest rate on a car they sell is 9% - americans have terrible credit!
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Old 07-17-2018, 10:20 AM
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Originally Posted by ArvX147 View Post
Yes, but not from the selling price, they make money from Audi for hitting sales numbers and money off of the financing terms. Profit from the actual sale of a new car is just gravy.

My audi dealer said the AVERAGE interest rate on a car they sell is 9% - americans have terrible credit!
One of my good friend is a Lexus financial manager, he told me that the back end of a car sale makes up for a good portion of a new car sale's profit. They get money from the bank for financing thru them and big profit items such as tire and rim insurance and extended warranty. I told him once I am his worst enemy when it comes to car buying, every car I bought in the last 20 years, I walk into the finance manager's office and buy nothing. I have excellent credit, therefore, If they don't give me a good interest rate, I can secure my own financing. If they sell a car at invoice, they are only making a thousand or two including holdback and bonus, If they are selling the car way below invoice, there has to be some sort of hidden factory incentive to the dealer.
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Old 07-17-2018, 11:25 AM
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Originally Posted by The G Man View Post
According to the NADA, car dealers make 30% of their profit from new car sales, 26% on used cars and 44% on service.
Dealers of what brand is the key.

All brands together? Maybe. You should see invoice vs MSRP on American cars.....double digits with ease. 15-20+%
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Old 07-17-2018, 11:27 AM
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Originally Posted by ArvX147 View Post
Yes, but not from the selling price, they make money from Audi for hitting sales numbers and money off of the financing terms. Profit from the actual sale of a new car is just gravy.

My audi dealer said the AVERAGE interest rate on a car they sell is 9% - americans have terrible credit!
That average is ridiculously high, unless he is etiher telling tales, or lumping used and new into one pot. On new, say, trailing 12 months, our average is under 4%
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Old 07-17-2018, 11:30 AM
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Originally Posted by SCarGuy View Post
That average is ridiculously high, unless he is etiher telling tales, or lumping used and new into one pot. On new, say, trailing 12 months, our average is under 4%
3.09% for me in early June, with 55% of the cost down, financing for 36 months and a TransUnion score of 826. Through US Bank. AOA wanted some stupid ridiculous rate.
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Old 07-17-2018, 11:31 AM
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Originally Posted by Nikon1 View Post


3.09% for me in early June, with 55% of the cost down, financing for 36 months and a TransUnion score of 826. Through US Bank. AOA wanted some stupid ridiculous rate.
Audi's rate is almost always higher than a traditional bank. Sometimes the incentives available more than make up for it, sometimes they don't
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