Invoice Prices for 2015 Genesis for reference

[TOMMYJR9]

Okay Mark the debater let me give you this point of view to look at . I will start with my finance part of my career. I have doing the finance end for 18 years now & I have averaged approximately 60 to 70 customers per month so let's say 65x12 x18 yrs that's over 14,000 people who I have processed their loans for them not counting the ones that we did not make a deal on or could not process a loan on. So based on your limited experience about buying cars in your entire life what is the cars you have purchased 10 -15 cars? yes there are some sleazy sales people out there but usually not at the larger corporate dealerships it's not tolerated

 

[TOMMYJR9]

No Mark again the lenders will lend a certain percentage over an NADA clean trade-in they do not based loans on retail NADA only a credit union will use an NADA retail all I say all the other banks use an NADA clean trade-in. if not call any loan institution and see what they say excluding the credit unions.

 

[ksoze]

You people really make me laugh I'm in the business for such a long time and I'm telling you facts and a set of embracing the facts and getting an inside view and a view of the other side of the table you're debating with me go figure

The fact is the auto dealer industry has barely evolved from the Model T and has used it's lobbying might and dollars to keep themselves inserted in a modern transaction which does not need them as much anymore. Your inside view offers nothing to counter that.

The times of having to see an insurance guy to buy insurance, go to a bank to deposit a check, go to a store to rent a video or buy an album for one song is long gone. The traditional car dealership is a relic of the past and it's presence is due more to force than need. While there may be a place for that experience for some, the majority of us are forced to deal with a process which in no way is in step with todays consumer.

 

[Mark_888]

No Mark again the lenders will lend a certain percentage over an NADA clean trade-in they do not based loans on retail NADA only a credit union will use an NADA retail all I say all the other banks use an NADA clean trade-in. if not call any loan institution and see what they say excluding the credit unions.

Not sure what you are talking about. I was talking about when a dealer offers much less than wholesale price for a trade-in (based on condition of car). I don't understand what that has to do with lenders. Of course, dealers typically blend the trade-in with the new car price, so it is hard to know what one is actually getting for the trade-in.

 

[Mark_888]

Okay Mark the debater let me give you this point of view to look at . I will start with my finance part of my career. I have doing the finance end for 18 years now & I have averaged approximately 60 to 70 customers per month so let's say 65x12 x18 yrs that's over 14,000 people who I have processed their loans for them not counting the ones that we did not make a deal on or could not process a loan on. So based on your limited experience about buying cars in your entire life what is the cars you have purchased 10 -15 cars? yes there are some sleazy sales people out there but usually not at the larger corporate dealerships it's not tolerated

I will admit that I don't have a lot of experience financing cars, as I have paid cash since 1987 (when interest was no longer tax deductible). But I have only been talking about the car buying experience and the price offered/paid, which is independent of the financing. People who buy cars based on monthly payments are suckers.

 

[TOMMYJR9]

Because the dealer has to be in the car at a realistic price including all the costs associated then the lender will only loan a certain amount of percentage over the clean trade-in so they have to accrue for all of the cost and still on the car for approximately NADA clean trade-in

 

[Mark_888]

Because the dealer has to be in the car at a realistic price including all the costs associated then the lender will only loan a certain amount of percentage over the clean trade-in so they have to accrue for all of the cost and still on the car for approximately NADA clean trade-in

I am talking about wholesale price, not retail price. The wholesale price is a realistic price for a dealer to acquire a used car, and then mark it up a few thousand dollars for retail (part of which is for repairs/maint). People are talking about when a dealer offers far less than wholesale for a trade-in.

 

[TOMMYJR9]

Ok please for the last time. If clean NADA TRADE is let's say 10,000 but there is 500-1000 repairs needed then there is a 900.00 " pack" then detail your car etc you need to take the car in for about 7500 or 8000 then by the time you do the service ing etc you will own the car for about the 10k mark. Most cars are financed so the dealers have to consider loan-to-value issues when reselling the car.

 

[ksoze]

With the reduction in profit margin on new car sales, dealer are focused where the money is - in the service department.

Trades are likely only good for them if entangled in a new car sale, where the actual price can be buried within the two transactions. A dealer is not a good place for selling a used car as a separate transaction - they want little or no risk. Wise consumers will get a price from a large volume use car operation like Carmax,which will give a price on paper. Recent auction pricers can also give a clue what they trade for in the real world. That can set the bar - if the dealer wants to match it and it is more convenient for the consumer, then it is a good sale. If it gets mixed in with a new car negotiation, all bets are off.

 

[Mark_888]

Ok please for the last time. If clean NADA TRADE is let's say 10,000 but there is 500-1000 repairs needed then there is a 900.00 " pack" then detail your car etc you need to take the car in for about 7500 or 8000 then by the time you do the service ing etc you will own the car for about the 10k mark. Most cars are financed so the dealers have to consider loan-to-value issues when reselling the car.

Your math is wrong. Some of that money is supposed to come from difference between wholesale cost and retail cost of the used car (which is usually several thousand more than wholesale/trade-in value). The wholesale value takes in account any repairs needed, although some additional expense (detailing, etc) is necessary, but that comes out of retail markup.

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[TOMMYJR9]

The retail car business is based on NADA CLEAN TRADE IN NADA CLEAN TRADE IN NADA CLEAN TRADE IN. That is what loans are based off of most cars are finance so dealers have to use that as a benchmark how many times do I need to repeat myself to you.

 

[Mark_888]

The retail car business is based on NADA CLEAN TRADE IN NADA CLEAN TRADE IN NADA CLEAN TRADE IN. That is what loans are based off of most cars are finance so dealers have to use that as a benchmark how many times do I need to repeat myself to you.

Here is the bottom line. When NADA average trade-in value (adjusted for condition/miles of car, etc) is a certain number and a customer is offered far less than that, then customers are not likely to be happy when they are insulted like that.

Just like when I bought my new Genesis, the finance guy offers me the 10 year extended warranty for $3K, just to see if I will bite. When I say no, he offers it at $2K, and I say no again. Then he offers it at $1500, and by this time I am extremely insulted by this person who thinks I might be an idiot and actually pay $2K or $3K for something with dealer cost of $1050, and I don't care what he offers at the point, I just want to get the hell out the room because I so disgusted talking to this scumbag. This, unfortunately, is the experience that many people have with the auto business.

 

[TOMMYJR9]

The car business is a business just like any other business if you have a listing price and somebody's willing to pay wouldn't you take it if you were selling a house and the listing price was $300,000 and somebody offered you $300,000 would you say no or we can say to them it's overpriced let me lower it for you if you were the real estate agent with the homeowner?

 

[Mark_888]

The car business is a business just like any other business...

You sound just like Michael Corleone.

 

[akuma]

As to whether car sales people make a fair wage, I am sure that a lot of others work just as hard and make less (such as teachers). People would have more sympathy for car salespeople if they didn't do deceitful things like pretend to misplace the keys to your trade-in when you want to leave the lot without buying something (and all the other BS).

teachers on average actually don't work too hard or make too little. they only have about 180 working days a year, start at around 35k and can easily get over 55k with further education and/or tenure (they get even more at urban schools). the actual school day is only about 7 hours long which usually has an hour period free for them (they usually don't teach every hour they're at the school even factoring lunch). if they're working another 20-30 hours a week on top of that, then that's their own fault for assigning so much homework. they can retire with pension after 30 years and have full employer matching 403b accounts, and usually have full health/dental and vision insurance that they don't pay out of pocket and many schools also cover the spouse/children. there are also many teachers that just aren't very good at their job, but because they have tenure, they're just going to collect checks until they retire (and collect more checks). the teachers' union is one of the most powerful in the country; when they strike they usually get what they want. i don't feel to sorry for the plight of teachers in this country, although i do feel bad for the truly excellent teachers that are given little support and go over and beyond for their kids, but they are the outlier.

as far as invoice pricing and markups, cars (and any consumable good really) are ultimately worth what people are willing to pay for them; the MSRP just being a suggestion and even the invoice price is the dealer's problem. if the product is superior they should have no problem selling them for more than what they paid for.

 

[TOMMYJR9]

You sound like Bill Gates

 

[ksoze]

The F&I office is the last chance to make a profit for the dealer before the consumer rides away. Many a low margin sale can be salvaged by the F&I guy, who has an excited new car owner in his office ready to get into his shiny new car. A perfect time to capture back some lost margin and 1/4 of a point interest on a loan is a lot of money over time. Most F&I staff are also very disarming by being pleasant and matter of fact - they don't seem like sales people? That is when most consumers let down their guard and the result is high profit paint protectant, alarms, warranties and tire plans.

 

[Mark_888]

teachers on average actually don't work too hard or make too little. they only have about 180 working days a year, start at around 35k and can easily get over 55k with further education and/or tenure (they get even more at urban schools). the actual school day is only about 7 hours long which usually has an hour period free for them (they usually don't teach every hour they're at the school even factoring lunch). if they're working another 20-30 hours a week on top of that, then that's their own fault for assigning so much homework. they can retire with pension after 30 years and have full employer matching 403b accounts, and usually have full health/dental and vision insurance that they don't pay out of pocket and many schools also cover the spouse/children. there are also many teachers that just aren't very good at their job, but because they have tenure, they're just going to collect checks until they retire (and collect more checks). the teachers' union is one of the most powerful in the country; when they strike they usually get what they want. i don't feel to sorry for the plight of teachers in this country, although i do feel bad for the truly excellent teachers that are given little support and go over and beyond for their kids, but they are the outlier.

I never said I felt sorry for teachers based on their pay/benefits. But I think your numbers may be for certain parts of the country with strong unions and not everywhere. Likewise, I don't feel sorry for car salespersons.

as far as invoice pricing and markups, cars (and any consumable good really) are ultimately worth what people are willing to pay for them; the MSRP just being a suggestion and even the invoice price is the dealer's problem. if the product is superior they should have no problem selling them for more than what they paid for.

One thing I mentioned that upset Tommy is that dealers don't actually pay invoice price for the cars, since Hyundai give s 3% of MSRP hold-back payment to the dealer after the sale. But I agree that a dealer can sell a car for whatever they want to, and I don't have to buy it if I don't like the price. Back in the late 1970's and 1980's when Japanese cars had import quotas (and they were not assembled in the USA), I purchased a couple of cars at MSRP and don't regret it. However, at least I knew that everyone else paid the same price (or higher).

 

[akuma]

I never said I felt sorry for teachers based on their pay/benefits. But I think your numbers may be for certain parts of the country with strong unions and not everywhere. Likewise, I don't feel sorry for car salespersons.

i didn't mean to imply as such. i was just stating my own opinion about their pay/hardships as there seems to be a sentiment around the country that they are being underpaid for honorable, tireless, selfless work. i just don't feel they work harder/longer hours than car salesman or get less.

http://www.teacherportal.com/teacher-salaries-by-state/

there were 24 states with an average salary over $50,000 (10 states over $60k and 2 over $70k), another 21 states between $45k and $50k. only 2 states (Mississippi and South Dakota) were under $44k.

if an average teacher (high school) teaches six hour (usually a little under an hour) classes a day (many teach only 5), they're getting paid about $50 for each of those hours. in any other job, 50 bucks an hour translates to over 100k a year. and that's just base salary. but i've already said way too much on this irrelevant subject.

car salesman are kind of like fee based restaurant servers. do you really need them? i suppose, but should you pay an extra tax on the goods that increases with the price of the goods bought despite the same service? i'm sure the salesman and servers will feel entitled to it.

 

[ksoze]

if an average teacher (high school) teaches six hour (usually a little under an hour) classes a day (many teach only 5), they're getting paid about $50 for each of those hours. in any other job, 50 bucks an hour translates to over 100k a year. and that's just base salary. but i've already said way too much on this irrelevant subject.

Not to get into the fray here, but I think the time many teachers work is not just when they are in class teaching, anymore than someone who waits on people for their job is not working when no one is in line. Most good teachers I have known, work way beyond their stand up teaching time and for many, it can be close to equal in prep time and grading. Many also participate in other activities at school which may not be during their teaching times.