How much are the Options? Xenon and GPS in particular?

[VW Convert]

i will give you credit for your experience, but that is the single most important piece of information you can have, when purchasing something!

Then I must have been doing something wrong for the last 40 or so years. I've spent countless millions of my company's dollars on purchasing stock and have never known my suppliers costs. This has never stopped me from getting a good deal, the most important factors in getting the best deal are knowing what your alternatives are, what the sellers alternatives are, creating a perception in the sellers mind and keeping your emotions in check when negotiating.

A dealer will not look at what the cost of the individual options are, he will look at the whole deal and make a decision based on the profit margin, if it is within pre-determined parameters a deal will be done.

[kimmik]

I've spent countless millions of my company's dollars on purchasing stock and have never known my suppliers costs. This has never stopped me from getting a good deal, the most important factors in getting the best deal are knowing what your alternatives are, what the sellers alternatives are, creating a perception in the sellers mind and keeping your emotions in check when negotiating.

that's a lot of factors, not a Single Factor =P. i stand by my view that knowing the cost is singly most important factor, but its not often that you are able to find out such information.

if you were privvy to the cost to seller, you might've gotten an even better deal.

please dont mistake me - i never ever ever claim that the cost is the only factor. many other important factors exist, such as those you've just mentioned.

[VW Convert]

that's a lot of factors, not a Single Factor =P. i stand by my view that knowing the cost is singly most important factor, but its not often that you are able to find out such information.

if you were privvy to the cost to seller, you might've gotten an even better deal.

please dont mistake me - i never ever ever claim that the cost is the only factor. many other important factors exist, such as those you've just mentioned.

Have to agree to disagree on that one, if you knew the dealers cost on the car, what would you use as a benchmark to determine an acceptable margin to the dealer? To answer that would require you to have intimate knowledge of the costs involved in running a dealership, information that I doubt you would have. Also ignores the number one rule of price determination.......the law of supply and demand.

[VW Convert]

that's a lot of factors, not a Single Factor =P. i stand by my view that knowing the cost is singly most important factor, but its not often that you are able to find out such information.

if you were privvy to the cost to seller, you might've gotten an even better deal.

please dont mistake me - i never ever ever claim that the cost is the only factor. many other important factors exist, such as those you've just mentioned.

But the short answer to your original question is simple...........add half the price for the additional accessories to the price already quoted for the car and offer that, all they can say is no or make a counter offer.......don't ask, don't get.

[Corey_R]

Have to agree to disagree on that one, if you knew the dealers cost on the car, what would you use as a benchmark to determine an acceptable margin to the dealer? To answer that would require you to have intimate knowledge of the costs involved in running a dealership, information that I doubt you would have. Also ignores the number one rule of price determination.......the law of supply and demand.

Yeah, which is what I was saying... but he doesn't understand this point...

[VAG newbie]

I have to agree on the supply Vs demand. Tell you a few of my experiences.

I once negotiated a Camry, a stocked one, it was only $1000 difference between my offer and the salesman's offer, he just wouldn't give in. I walked away (it's very easy to walk away from a Camry).

Couple of weeks later, he called me again saying they were doing the once in a year sale thingy in their dealership on that weekend and he invited me to come. I asked him over the phone does that mean he would accept my offer. He didn't say yes at the time, just asked me to come as "incredible" deal could be made on the day.

Well, on the day it was packed with people (I couldn't believe there were that many people interested in boring Toyota!), that salesman didn't even want to talk to me. When I finally grabbed him, before I even asked the question, he just told me the offer couldn't be accepted! Then he walked away! Well, obviously the demand was way over supply, it was the salesman walked away, not me!

The other example would be, during the GFC in late 2008, almost every car dealer were selling the car below cost, simply there was no demand. I didn't even have to walk away, the sales manager offered me below cost price.

So from these 2 instances, you can see although cost price is important, the rule of supply Vs demand still prevail.

Now the EOFY sale is over, I suspect that deal won't be as sweet. But, never hurt to ask.

Ps. In case if you were wondering, why was I even talking to a Toyota dealer? It wasn't for me, it was for my sister's car.....

[kimmik]

Yeah, which is what I was saying... but he doesn't understand this point...

ok. if thats what you want to think.

[kimmik]

if you knew the dealers cost on the car, what would you use as a benchmark to determine an acceptable margin to the dealer?.

you mention supply vs demand. let me put this to you. does supply fluctuate over demand? yes. sometimes there will be more cars coming in than sold. sometimes less.

As VAG N illustrated, one day there was little demand, price plummets. the next day, there was high demand, and price soars. no problem with that.

Now, how much are they selling for, when the price plummets? I have no interest in competing with the mobs when purchasing. competition between consumers = dealer's gain. competition between dealer's = consumer's gain.

Let me ask you this. You are the dealer. You bought the passat for 40k. You want to sell it to me for 50k. (simplified example). I say 42k or i walk.

On a day when supply is low, lots of people come to see it - of course you'll say f off! you can sell it to someone else for 48k, and make 6k more than selling it to me. duh.

On a day when supply is high, and demand happens to be low - two people come in. one offers 48k, and i offer 42k. what do you do? you sell BOTH CARS! because you can choose between selling ONE CAR to earn 6K, or TWO CARS to earn 8K. this example hinges on the dealer having less restricted stock.

Only in the latter situation, am i actually interested in purchasing. When ever i hear a dealer say "its selling like hotcakes, cant discount", i say sayonara alligator call me when there's more stock.

Does it make sense, that you're correct, that cost to dealer doesn't matter, when demand is high? But it matters much more, when demand is low? Does the way i spend my money make more sense now?

Why does the cost to dealer matter - well, if i offered 40k, the dealer would say no in both instances! then i have no car. If i dont know the cost to dealer, i can only guess around the lowest offer. As you would know, dealers will make you think your offer is too low, no matter what you offer. So i realistically only have a couple of serious tries with each dealer, otherwise there's a lot of wasted time. if i knew the cost, and i found a time when demand is low, i have a very good chance of walking out with a 42k car.

You guys mentioned the cost to run business - yes i'm well aware of that... the business overheads, got it. this dictates the minimum average margin on all cars sold. you can sell one at above this minimum, then you can "afford" to sell one below this minimum when times go dry.

selling one below this minimum does NOT = LOSS. the minimum price still brings in the dough, but is not adequate over extended periods. thats why price fluctuates. during bad months, selling for a very low margin is better than not selling at all.

edit: i cant type out everything i think of, but another part of this discussion is what happens, if the dealer is already holding the wholesale stock, fully paid, instead of acquiring them on demand. this complicates the price further.

[DoggieHowser]

In businesses, there might be backend rebates or just a need to clear inventory.

One complicates the calculation or notion of cost. The other basically takes into account holding cost (interest charged on goods held, warehousing etc etc) which have no particular bearing on the cost of the car itself (Corey's point IIRC)

[kimmik]

But the short answer to your original question is simple...........add half the price for the additional accessories to the price already quoted for the car and offer that, all they can say is no or make a counter offer.......don't ask, don't get.

that will only partly work. its the standard generic method but here's why it wont work fantastically:

you offer 50% off - dealer says no way! margin's 10%, best i give you 5% discount

you offer 5% off - dealer says no way! margin's 5%, cant give you discount at all!


so where do i end up after asking for 50% discount? not much better off. because i cant tell if they truely cant sell for 50% off, or they're just pulling my legs.

if i knew the cost to dealer (and many other factors like SUPPLY and DEMAND at the time) and it was a slow day, i can offer cost price, and stick firm. they'll eventually counteroffer with maybe 10% above cost, at which point i'll say coolios where's my pen.