aggiealum

Anyone else encountering this or please feel free to comment about my thoughts. Here's a hypothetical situation (altered numbers for easy math):

MSRP $60195 / Invoice $56048 / no trade or any discounts

Dealer offers $589 over invoice = $56637 before TT&L; confirmed only additional fee is the (reasonable) doc fee.

I break out my SPP certificate AFTER I get the initial offer.

SPP price $56637 (ie $589 over invoice) plus TT&L, but dealer gets $1186 rebate.

Since the dealer originally was happy with $589 over invoice, I think the dealer should just sell me the vehicle at $56637 (SPP price) minus $1186 (2% rebate) = $55451. When the dealer gets the $1186 rebate, their profit is $589, exactly that of their original offer. My initial offer was even to share a couple hundred of the rebate so they make a little more (eg SPP price minus $900: my price $55737 / their profit: $286 + $589 = $875). But now that SPP is in play, the dealer's offer of $589 over invoice suddenly changes:

new offer = SPP price - rebate + initial profit
$56637 - $1186 + $589 = $56040

Sure I want $55737 and am being offered invoice ($56040), but I see the rebate as an employee benefit and don't feel I need to give another $300 to the dealer when I've already given what they wanted initially plus another $286.

I think it's BS as it's like I went into a store, get rung up for an item, break out my coupon, and now suddenly the original price of the item has gone up.

Thoughts?

B8 S FOR

Their profit is more than $875! Try thousands! Invoice doesn't mean squat to a dealer. It's just there for the customer to think they are getting a great deal!

stactum

I was using the same logic as you. I spoke to about 11 dealers in IL/WI area and most of them won't give you SPP rebate (2%) as discount, however I was able to negotiate with 2 of them who would.

In one of the dealerships I chatted to a GM he was cool and since I wasn't going to buy car there, so we just had honest conversation. His point was that 2% rebate that they get from AoA takes a while to get back so they are initially loosing money on sale, so he said if dealer willing to give you that 2% he is desperate to sell the car, but they wouldn't do it since S4 sells well and allocation numbers are low.

So, it is possible, but not easy. Also from what I heard it's easier to do on ordered vehicle rather than the one they have on their lot. With ordered vehicles they have less overhead, basically there is no additional work for them, just modify it to customer's specs and wait.

Keep us updated on your process.

May I ask you what are the specs of the car?

aggiealum

Hi Stactum,

I can understand the lag time for the rebate, makes sense. I'm leaning towards an S5 now, but I posted in the S4 forums b/c I've been trolling this section and saw that there seems to be more activity. I'm looking to get a P+, MMI, B&O, sports diff, and advanced key. Some of my friends are suggesting that most of Audi's clientele just walk in and spend. So when someone like me who goes in armed with info and knowing what I want to pay, they go into stereotypical dealer mode (ie sleezebags) b/c it's not going to be an easy sale. Thanks for your response.

isles1

Invoice is the only reference point available to the general public. I assume there are tons of variables that determine what a dealer actually pays for a particular car. If anyone knows some secrets, please share.

So far, I've seen reports of sales for $500 over invoice for an in stock S4, to opinions that $1,000 over invoice for an ordered S4 is fair. Edmunds.com estimates that the fair selling price in my area is ~$750 over invoice. So far, the best quote I've received is $1,000 over invoice. I'm trying to get closer to the $750 number.

If the dealer is going to try and sneak in extra profit for doc fees or something else, I am able to flesh that out by saying I want $0 down with first month's payment, tags and title due at signing. Everything is rolled into the monthly payment. Then if I know the MSRP, bank fee/acquisition fee, sales price, residual, interest rate for the lease term and sales tax rate, I can calculate the monthly payment down to the penny. Then I ask the dealer to itemize everything I am writing a check for when I pick up the car.

You cannot just go in there asking what is this going to cost me per month. You have to know how the dealer is getting to that number. I will not work with a dealership that will not tell me the sales price, interest rate/money factor and residual value that they use to calculate the quoted payment. Luckily I found a salesperson that has been 100% transparent re: those figures, at least so far. If I go forward with an S4 and this dealer, we'll see if they try anything sneaky. It would not be the first time I cross out the doc fee line item.

legbend

My understanding is that it will be easier to make a deal with a car on the lot as well. The longer the car is on the lot, the more it's costing the dealership.

Not sure if that still holds true for all dealerships though.

doobs41378

If I was the dealer I would let you go to the next dealer if your going to argue over $250.00 on a $60k car.. Not worth the energy as they will sell the S5 to the next guy, not like they have 30 of them sitting on the lot.

isles1

Perhaps you are right. But the flip side to that is a sale is a sale, quotas are quotas, and most customers come back the next time they need a car. Am I going to walk away over $250? No, but why not try to get the best price?...negotiating and asking for the bottom line price is not arguing.

snagitseven

I agree. The Incentives after invoice usually average hundreds, not thousands per car and are based on lots of variables, i.e. meeting quotas, etc. While it's perfectly fine to negotiate to the best price possible, there's a point at which it's not worth arguing. The dealer was probably not happy the OP didn't disclose the SPP as they were negotiating the price. Also, the dealer is not there as a non-profit Audi museum- they have to cover their considerable overhead and try to make a profit like any other business. In any case, a negotiation is a give and take and requires compromise by both parties. If the final difference is $250, I pay more than that for my utility bill (which I can't negotiate) or a couple of nice dinners (which I can't negotiate either). The dealer is no more a crook than the buyer for trying to achieve their goal in the transaction. Both parties will reach a point where you take it or leave it. Agonizing over a relatively small amount on such a large purchase makes little sense to me if you really want the car.

aggiealum

OP here: My negotiations weren't over $250. That was another poster. Mine was over $1200, and that's on top of the profit over invoice already offered to me. Not disclosing I had SPP was not intentional. They made their first offers after I filled out a web form. Then I was looking thru work perks and found the SPP. So I brought that up and want to hold them to their original offers. Like you said, they have to run a biz and are not a charity. I did not haggle one bit on their initial offer (all were pretty competitive anyways: <$1K over invoice). Although if I had to do it all over again, I'd do the same thing: I would see what they offered first and then present the SPP. I know the dealers probably weren't happy that they made offers so quickly, but they probably knew I emailed multiple area dealers and no one wanted to lose the sale. I see the SPP as I see Audi Loyalty's $1K rebate: It's for me to use after I negotiate an offer. The dealers were comfortable with the offers they made and I feel I can challenge their integrity if they want more bc I have a rebate. I'm not a charity either. There will be one dealer that I think will have the integrity to accept their offer and give me my rebate. I'm still waiting to get clarity on one offer. I think I am getting the original offer minus the rebate, but I am waiting for them to spell it out before I commit.