Tips on Buying Cars: dealers commission, dealer invoice prices, vehicle invoice prices

Question
Hi we are buying a toyota kluger for $44,600 originally meant to be $42,600 but dealer upped it due to 2007 compliance plates however we were wondering how much commission do they make on this vehicle and are they allowed to do this after we signed the contract for the 2006 compliance plated vehicle at 42,600? We live in australia

Answer
Good Morning, Lisa,

Thanks for your question about dealer commission on your Toyota.

In the US, dealer invoice prices are a part of the standard disclosure, which I’m assuming is dictated by law. Knowing dealers, they certainly wouldn’t disclose this information if they didn’t have to. The more than can muddy the water the better for them, and they muddy it a lot the way it is.

Canadian laws are different; invoice prices are not required to be divulged, making it difficult to know if you are truly getting a good/reasonable/bad deal or not. I do know that, for a price, you can buy this information from a number of online sources. Australian law appears to be similar when it comes to divulging vehicle invoice prices, but unlike Canada, I have been unable to find any sites that offer this information. Some of the sites I looked at alluded that they were going to show the invoice price, but all they wanted was to get you to fill out the form so they could contact you and try to sell you that way.

Regarding the $2,000 increase after you signed the contract, I can’t comment on the Australian legality of this trick, which is exactly what it sounds like to me—a trick. In the US it would not be legal; the dealer would be obligated to fulfill the contract exactly as signed. What I can tell you is that, if car dealers are anywhere near the same in Australia as they are in the United States, this attempt at getting the additional $2,000 would be $2,000 more profit they’re trying to get from you, and that’s a lot of money to give away for absolutely nothing in return!

Well, I’d love to fly down and investigate the automobile industry in Australia to get more information for you, but I’m guessing that this isn’t going to happen anytime soon. So this will have to do for now.

It’s not a lot, but I hope this does help you somewhat, Lisa.

Regards,


Ron

Author of $ave Thousand$ Buying Your Next Car: Confessions of a Former Car Salesman.
Creator of the Make Me Smarter™ series.
Website: www.Make-Me-Smarter.com
Bio: http://www.make-me-smarter.com/about/bio.asp