QuestionHi Jeremy. I'm thinking about buying a new 2008 Santa Fe. Of course, I want the best possible price. The invoice price on the vehicle is 21,906. Does that mean that's what the dealership paid for the car and it's the lowest price they can accept; just to break even? If not, how far under can I reasonably go?
The car lists for 28,000; they've got it marked down to 24,000 after a 3500 rebates. They are also offering an additional 3000 rebate.
I've never bought a new car before. Since it's a 2008, in a month or so, the car will be a year old, so I would think they would take less. Plus, I think most people, fearing high gas prices, are shying away from the SUVs, so I would think they would take less.
What do you think? Any advice? Thanks in advance.
AnswerKerry,
Thanks for your question. The invoice price is somewhat close to what the dealership paid for the vehicle. There are other credits that the dealership gets called Holdback that do not go to the cost of the vehicle in most stores. It is money given to the dealership by the factory. Now, with that in mind, sure they can probably take less on the vehicle, but the question is will they. Most dealerships are not selling cars under cost right now. They simply don't have the volume to justify it right now with the economy. With that being said, wouldn't you agree that it is also ok for the dealership to make some amount of profit?? Profit is not a four letter word, and it should be fair for the dealership to make money on the vehicle. It should also be fair for you to get the best possible deal. The fact that the vehicle is a 2008 is not a big deal to the dealership. Yes, they want to sell it, but they will eventually sell it, and will sell it for a profit so they aren't in panic mode on the 2008's just yet, now if March 2009 comes along and they still have that vehicle, then they will go into panic mode and take less on the unit than what they have in it.
Simply go into the dealership and negotiate your best deal, and see what the dealership is going to do. Make an offer that you think is fair, and be prepared to move a little as they will be prepared to move a little. Remember the "best deal" is where the two parties can come together and you can buy a car, and they can sell a car.
Now, lets talk about this invoice price that you have. I have been in the auto business for quite sometime, and have never seen an invoice for 21,906 and the vehicle marked up 7000 to $28000 from the factory. The manufacture sets the sticker price, not the dealership. Now, I am not telling you it isn't true, but I would question where you are getting that invoice price from. In these days on a 30,000 priced vehicle the average markup from the manufacture from invoice to MSRP is $2500 to $3500. Manufacture's just aren't marking up the vehicles very much anymore. They can't in this competitive market and still sell units. I would think that the invoice price on that vehicle would be somewhere in the neighborhood of $25,000 then minus any rebates. Rebates are not dealership profit and are not controlled by the dealership. They are programs set buy the manufacture and advertised nationally by them. The invoice amount does not change based on rebates. The rebates are refunded to the dealership by the manufacturer. There are a lot of websites out there that claim they have the invoices on vehicles from the manufacturer. That is simply not true. The manufacturer does not release that information to anyone but the dealership. They may have a good idea, but they don't always take into account different equipment and options that add money to the invoice and the MSRP of the vehicle. Unless you got that invoice figure from the dealership themselves do not believe that is the actual invoice, because it is impossible for it to be exact. Those invoices online are simply a guide for you, and usually only take into account the BASE invoice without any options, or features that might be on the vehicle.
I know this is a lengthy answer and I apologize for that. I just want to give you all the information that you might need to make the best possible decision, and I want to make sure that you have accurate information rather than bad or false information.
If you have any questions after reading this, don't hesitate to send a follow up question.
Thanks again.
JB
