gameson

i have a question about discount for ordered car vs car in lot

this is what i understand how a dealership works, but maybe i m wrong

To be a dealership, they have to order certain number of cars to keep their quota and maintain status. I know that manufacturer also give a dealer holdback (cost to keep the car in lot) up to 90 days usually. If you order the car, the dealership is already eating that holdback and also already guaranteed one car off their order quota number, that means less cars on the lot. In my opinion, that should give the buyer at least the same discount as the car on the lot if not more discount than the car on the lot as the dealership already get profits from the dealer holdback.

so why does the car on the lot can command more discount than ordered car? maybe i m missing something here

mooty

some dealers are full of BS.
my guy tells me if he gives me a price, it can be on the lot, ordered or something he has to dealer trade for. all same price. he just have to goto more trouble to trade or order.

gameson

well, what I want to know is that why most if not all dealers only gives more discount to cars on the lot. I have been to several dealers, and they dont have the options that I want. I want to order, but the discount is less than if i want to buy car today from the lot. It's not like if I will back out on my ordered car, I won't, since I am firm with what i want.

That's why I ask, maybe I am missing some important pieces.

sigh.. confused

CP

Gameson,

If you buy a car off the lot, that's a real sale with commissions coming immeditaely. An order is not a sale until you actually take delivery. That is not a 100% guarantee.

They are more motivated by a bird in hand. Wouldn't you?

CP

fxhomie

In the auto retail business, it's all about making the sale, and nothing else.

Dealers are more inclined to offer a discount on product ready for sale.

An ordered car doesn't qualify as 'ready for sale.'

gameson

oh i see it now. i thought ordered car mostly are at least 90% sale. why would u bother going to nego and everything and cancel at last minute? I wont do that, especially after I put deposit.

CP

That may be. But what if after you ordered, you found a car exactly as ordered on another dealer's lot, and they offer you a much better price than your ordered price. Wouldn't you jump and grab that right there and then?

This happens more often than you think.

CP

gameson

if that's the case, of course I would get the one on the lot, why would I wait? lol, however, the chance to have the EXACT car on the lot is slim, although my options list is shrinking now.

CP

It does not have to be the exact car. When I bought our Lexus RX330, I do not want Mark Levingston sound system or the rear entertainment system. The dealer's car had that on it. They offer to deduct those items off the price, so I took the car, with the upgrades of course. They deemed that acceptable just to sell that car on that given day.

If you are a willing and able buyer, and the car is not real hot (ala Prius), the dealers do a lot of things to seal the deals. It happens a lot more often than you think.

CP

gameson

so basically you get your mark levingston for free + discount on the car, right? hmm, that's interesting. did you deal with internet sales manager? or just floor salesman?

CP

gameson,

Correct, $4+k off and then free Mark Levingson and rear seat entertainment.

Internet Sales. I used cars.com for my initial search.

CP

Budget M3

Slightly OT, but related: I got $5800 off MSRP ($1000 over invoice) on my '06 Cayenne for just this reason--car was on the lot and ready for delivery that day. Statistics tell the story, and the dealer (and the salesperson) know that if a customer leaves their store without a car, there is an good possiblity that they will not return...even if they put a deposit down to order a car.

In my case, I ended up getting the color I wanted, but had to take a few "extras" I would not have ordered (aluminum trim and upgraded wheels). It sure made it easier to justify the deal in my own mind to know I got a killer deal!

YA911Fan

I was offered 6K off an "ordered" lightly optioned Cayman by more than one dealer in March. I doubt they would have given me much more off a car sitting on their lot.

I think a dealer would rather have you buy an ordered car through him than have you go searching for another dealer who just might have what you're looking for sitting on his lot. There's no shortage of Caymen...

A delayed deal is better than no deal.

perrys7342

Gameson,

None of the answers you got so far is correct. The reason you are going to get a bigger discount on cars on the lot is that each is accumulating what is called "flooring". Dealers pay interest on each car in stock after a specified period from delivery. Flooring is a current cost of doing business that must be included in the overall cost of goods sold and business for the monthly revenue period. Forget about negotiating on "holdback" which is normally paid by the manufacturer at the end of the model year based on total sales for the period. You can't pay rent, salaries, commisssions, interest, utilities, etc. with the future promise of "holdback". It just helps balance out the profit and loss monthly periods.

So if you see a dealer that has a large inventory that seems to be relatively "static" (visit on a Sunday after closing for several weeks and you get a pretty good idea), the Sales/General Manager better be pushing to drop the inventory level. Perhaps too many of the vehicles have nearly identical options, which is a characteristic of early-stocked vehicles like Cayman until the dealer determines what options/colors are likely the hot sellers.

However, if you find a dealer who has minimal inventory (either due to strong sales, or perhaps a "point" with a low overall allocation (rural or off-traffic area), you'll get a better discount on an ordered car...dealer eliminates potential flooring and still shows a "sold unit" on future allocations. If you want the very best buy, wait until February 21-27, with temperatures in the teens and snowing in snowbelt non-metro area of the country...that's the time that it's hardest in that environment to cover fixed costs and variable overhead.

Perry (44 years Porsche ownership, early years in the Automobile business)

CP

Perry,

True words of wisdom.

I will wait til February 2007 to hunt for my Cayman.

CP