Yup. I'm see a LOT of manuals available at MSRP.
I hope they don't make you pee in a cup.
Oh wasn't knocking the guy for treating it as an investment I just hate to see fine machines being garage queens. 100% understand why he's doing it.
I'll throw some math out. Prime lending rates are now 7.75%. That's the best rate a dealer can get. Interest rates are still going up. They have a car costing them $50,000 on the lot. So the dealer borrows $50,000*.0775/12= $323 every month the car sits. They also need to maintain the vehicle, which cost them money. Eventually, they need to cut a deal and sell.
Lightning prices have crashed. My boss just passed on his order (Lightning Lariat ER) last week.
I was watching that one. Went to $60.1k, reserve at $69k.
I'm waiting to replace my familytruckster for the prices to come back down to reality on used cars. I've reached out to a few places on some Expy Max's but they didn't want to move on price. So I declined, a few have reached out to me about it. I am just going to sit tight until I find exactly what I want. Several of these used cars have been listed for a while.
This is not bashing electric cars, but the real world usefulness and how ford marketed the new Lightning is horrid. They look to be a great fun toy but as a replacement for a gasser F150 for real world use? Not even close.
I closed my deal end of December, my rate was under 5%. I did have to look around but I did see quite a difference from credit unions to dealerships to national banks.
Dealers don't pay for the cars they get, at first. This is what holdback is for.
I think you’re right about the mechanics, but it all boils down to working capital management. Dealers are incentivized to push vehicles so that Ford doesn’t have borrow more money. The example I was using was more of the “slightly used” vehicles they have bought to resell. Time value of money always exists. We have been in fairy tale land of 12+ years of absurdly low interest rates due to Fed policies. Now that interest rates are back to historic norms, sitting on inventory is really costly. I think the dealers can wait 6 months to find a Raptor buyer @ $30K over MSRP. Other models just aren’t that scarce.Dealers don't pay for the cars they get, at first. This is what holdback is for.
The manufacturers front the dealers a percentage of the total vehicle cost to cover the holding cost for six months. This is cover dealer costs like advertising and whatnot. It's called holdback. The dealer owes the MFR the cost of the vehicle upon sale.
When you custom order a car, you should NEVER pay MSRP. You SHOULD pay TRUE dealer cost. Something like ~ MSRP - Dealer Invoice - Holdback - Incentive + Profit. You and the dealer should ONLY negotiate on the profit amount. You have to decide what is a fair and reasonable profit for a 50k vehicle. a 30k vehicle. a 75k vehicle. etc. Models, markets, and demand affect your offer too. You also have to know how long the car has been sitting on the lot and then adjust the holdback amount correctly. I'll get back to this below.
Here's an illustration of how you should negotiate. Dealers HATE this. But, I assure you, I've done this with MOST of the cars I've purchased (Jeep Grand Cherokee, Audi S5, Toyota Highlander, Camaro 1LE, Silverado 2500 HD). Exception: Saturn and Bronco. When done correctly, firmly, politely, without showing your cards, the SELL SELL SELL mode of your dealer's sales rep turns into TRANSACTION mode. They treat you differently. They talk differently. The move briskly.
Aside from the finance manager who tries to sell you the moon, they whisk you through the mechanics of buying super quickly. I've bought most of my vehicles in less than 2 hours from the test drive to leaving the lot. I've bought using a Fax machine sending a canned letter from the Bay Area down to L.A. up to Santa Rosa and East to Nevada. BUT, YOU have to do HOMEWORK beforehand to figure out the dealer invoice, holdback percentage for the manufacturer you're buying from, the incentive and to know the market conditions.
Holdback -- Look at the date code on the inside of the car door. If it said 8/22 that means it was manufactured in August 2022. Look at your watch. If it says Nov 2022 and it's, say, end of Nov calculate how long that car has been sitting on the lot and, therefore, consuming the holdback. Sept + Oct + Nov equals three months. Three months is half of the holdback period, six months. Now, calculate your holdback. In the illustration above it's 2% or $877. Half that. $439. In your offer, don't use $877 but use, rather, $439. Why? The dealer already spent half of the holdback.
Summary: for a car listed at MSRP of, say, $47,208, you should offer no more than ~ $43,500. Your "negotiation" should be on the $500 only but you don't have to explicitly state that. Know your bottom offer number, your top offer number, try and land in between. Dont' go higher. Walk if you have to.
For this illustration, depending on how much I'd want the car, I'd offer $40,500 ($200 profit), expect the dealer to ask for $51,500($800 profit) and try and land the negotiation at $43,449 ($500 profit). Just DON'T start at MSRP; if you do, you're leaving serious money on the table.
CAVEAT EMPTOR: given the Bronco market "today", none of this may work.
