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Mcc

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KurticusRex

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You may be correct but either way I don't understand the advice/strategy. The residual value is fixed so not even worth mentioning. The goal in the negotiations is to get the lowest price for the vehicle since that is used for the cap cost/financing. Whether you go about that by working down from MSRP or up from invoice price it makes no difference. Many people recommend working from invoice as it gives some idea of the possible discount amount.
So my intention with the comment was to use the MSRP as the starting point for negotiating a discount (rather than Dealer Invoice which is a completely garbage number) since lease residuals are calculated based on the MSRP. Specifically, the point I was aiming at was a purchase-process negotiation tactic. If two competitive cars (i.e. BMW 340 vs G70 3.3) have wildly differing residual value PERCENTAGES for the same terms, it can be used as a negotiating tactic with the dealer.

Example: Competitive Car A and B. Car A sells for 60,000 MSRP with a 57% residual after 3 years/36K miles ($34,200) because it has higher brand value. Care B Sells for 50,000 MSRP has a 50% (less brand value) residual, same terms ($25,000). I would make the argument to the dealer of Car B that the percentage discount to purchase Car B must be higher than Car A because I see no reason to prepay accelerated deprecation on Car B just because Car B has a lower MSRP. I would argue (negotiate) to Car B dealer that in order to move vehicles and compete with the more established brands, they must incentive-ize me as a consumer because the value of my money isn't just about "how much is the sticker price for what you get in Car A vs Car B", but more importantly what I end up with after spending X dollars over Y term.

This is overly simplistic, but hopefully the idea comes through. My primary point in all of this is the Dealer Invoice is a completely, 100%, absolutely arbitrary number that dealers use to get people to pay more than they should (value) based on a comparison of the MSRP to "Dealer Invoice", rather than MSRP to depreciation over time as a percentage of MSRP. Only in a rare case would I think it is acceptable to pay MORE than 10% under the MSRP for a new vehicle. I think 10% is the bare minimum MSRP discount any consumer should be willing to pay for a mass-production vehicle.

For Genesis, if they want to compete with Alfa Romeo (15% off MSRP on a new Guilia any day of the week), or Jaguar or BMW or MBenz, thinking that a 2K discount on a fully loaded $53,000 USD G70 Sport on a car that will depreciate faster than it's competitors is not going work long term. Just my opinion based on 7 years working for Toyota/Lexus Financial Services USA.
 

TurtleBoy

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^ So you don't think you shouldn't negotiate off of an invoice number because it is a made up number but you recommend using the residual value as part of the negotiations? Residual value numbers are also "made up", they are manipulated in order to try and attract consumers to lease the vehicle.

Not saying your method won't work, just see no advantage to it. Actually probably a disadvantage throwing a lot of numbers into what should be a fairly straightforward process.
 

KurticusRex

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^ So you don't think you shouldn't negotiate off of an invoice number because it is a made up number but you recommend using the residual value as part of the negotiations? Residual value numbers are also "made up", they are manipulated in order to try and attract consumers to lease the vehicle.

Not saying your method won't work, just see no advantage to it. Actually probably a disadvantage throwing a lot of numbers into what should be a fairly straightforward process.
Yeah I get what you're saying, but the difference with residuals is there is a lot of actuarial accounting going into residual % determination. There is a very specific and important incentive for the OEM (and financing companies) to have a reasonably accurate residual value calculation. Accurate residuals impact the used car market significantly, and the used car market is critical in supporting and justifying new car priciing.

If the calculated residual is too low relative to actual market value, it is harder to lease new cars because the inflated depreciation makes a lease payment unattractive against a competitor with stronger residual %. If the calculated residual is too high, the lease payments will be attractive and will sell new cars, but the financing company will lose tons of money when the lease is turned in and sold for much less (actual value) vs. the residual value - which means the OEM will be leaving money on the table.

The individual residual is less important than the comparison of residuals on like terms between competing brands. A car (Car A) that isn't expected to hold it's value as well as a competitor (Car B) makes Car A more expensive to own relative to it's MSRP than Car B. To me, it isn't about the monthly payment. It's about Total Cost of Ownership (TCO). TCO is not calculable unless you factor in how much value a car will lose over a given period of time.
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TurtleBoy

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^ While there is some actuarial component to it, many manufactures will alter the residual amounts as a way to subsidize the lease. No manufacture is losing money on the total deal as all of the different components are taken into account when the MSRP, residual amounts and money factors are calculated,

One problem with your comparison idea is that you are leaving out the initial value proposition of the cars involved. When comparing the BMW to the G70, you are already way ahead on the TCO/value proposition because of the initial price difference.

Another would be that you are ignoring market factors that determine the discounts available for a specific model. Given how "hot" the G70 is right now due to all of the press, awards, limited dealers, etc., most are being sold around MSRP. Trying to compare with other brands to try and get a discount, or get the minimum 10% discount you recommend, would probably not be successful.

Again, not saying your method wouldn't work. Just would be way too complicated for the majority of consumers and sales people. Much easier, and probably more effective, to determine a discount amount you feel comfortable with and go from there. As we have seen from members here, that amount may be 0% and they are very happy with that because they have the car they want.
 

KurticusRex

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Agree across the board on the value prop, and market factors such as the G70 being "hot". I'm a value buyer, not price. So for me, I won't be making an offer yet on a G70 (which I'm completely enamored with) until the inventory levels are higher locally and/or until the 2020 MY G70 is hitting the showrooms so the playing field (competitive vehicle negotiation) is more level.

All that said, this is just how I approach car buying. The only car I've ever paid sticker for was a 2014 FR-S. Scion had a no-haggle price model and it was the first month of the car being for sale in the US and I was nuts for the car - so throw out all my fantasies about sticking it to the dealer and getting a good deal! But that car was cheap by comparison to the G70 (roughly 1/2 MSRP of the 3.3 Sport).

I've only recently found this forum and I really enjoy those who are active on these boards. There's no better way IMO to get real, genuine input from owners and enthusiasts so directly.
 

TurtleBoy

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I've only recently found this forum and I really enjoy those who are active on these boards. There's no better way IMO to get real, genuine input from owners and enthusiasts so directly.
Welcome aboard, I think you will find that just about any question you have on the G70 will be answered by someone here.

Not sure where you are located but in case it helps, here is the thread that keeps track of the dealers/states that have the G70 or getting it soon.

Dealers with 2019s
 

KurticusRex

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Welcome aboard, I think you will find that just about any question you have on the G70 will be answered by someone here.

Not sure where you are located but in case it helps, here is the thread that keeps track of the dealers/states that have the G70 or getting it soon.

Dealers with 2019s
Thanks man, much appreciated. I'm in Chicago, and I have found several local Genesis dealers with inventory. However, most of them only have a few cars. And finding the *exact* configuration I want has been difficult. I've found numerous instances where they dealer advertises the car with incorrect trim (when comparing to the window sticker). I know I want the 3.3 Sport but only with the black/grey piping seats, not the black/red piping seats. I wish the 3.3 Sport was available with another interior color than black/red or black/grey. But, I really love all the car has to offer otherwise.
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TurtleBoy

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Thanks man, much appreciated. I'm in Chicago, and I have found several local Genesis dealers with inventory. However, most of them only have a few cars. And finding the *exact* configuration I want has been difficult. I've found numerous instances where they dealer advertises the car with incorrect trim (when comparing to the window sticker). I know I want the 3.3 Sport but only with the black/grey piping seats, not the black/red piping seats. I wish the 3.3 Sport was available with another interior color than black/red or black/grey. But, I really love all the car has to offer otherwise.
You are fairly lucky as there are a number of dealers in your area, more than in some entire states. It probably wouldn't fit into your negotiation plan but you could ask the dealer to request your specific configuration in their next allocation. Of course that would put you into the "I really want this" position and possibly eliminate some discounting.
 

Beefer

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Thanks man, much appreciated. I'm in Chicago, and I have found several local Genesis dealers with inventory. However, most of them only have a few cars. And finding the *exact* configuration I want has been difficult. I've found numerous instances where they dealer advertises the car with incorrect trim (when comparing to the window sticker). I know I want the 3.3 Sport but only with the black/grey piping seats, not the black/red piping seats. I wish the 3.3 Sport was available with another interior color than black/red or black/grey. But, I really love all the car has to offer otherwise.
What exterior color are you looking for...and AWD ?
 

TurtleBoy

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KurticusRex

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Unfortunately I just checked their site and don't see a car with that stock number. I guess their inventory could be off but more than likely it has sold. May want to shoot them an email.
Yeah i couldn't find it on their website either. However, I did find this at another local dealer. They're advertising it as Red exterior, but the photo shows white, and the window sticker link says blue.

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TurtleBoy

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Yeah i couldn't find it on their website either. However, I did find this at another local dealer. They're advertising it as Red exterior, but the photo shows white, and the window sticker link says blue.
It came up with red for me but maybe a different link. Couldn't find any others close to you. If I stumble across anything I will post. Good luck.
 

nsyedhasan

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KurticusRex

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I just got an "eprice" (internet inquiry) offer from this dealership on a 3.3 Sport (Mallorca Blue with Black/Gray). MSRP $51,560. Offer price from dealer $46,432. Nearly 10% under MSRP - not bad from what others have shared to date. According the the dealer, the car has 2,215 miles on it. Meaning this car was a most likely dealer demo / hey-let's-take-it-for-a-spin loaner. I personally don't mind as long as I'm getting a good deal as the warranty is same as new, but my main concern is that I have no idea how the car was driven those 2,200 miles. The chances that the dealer actually followed the recommended 800 mile engine break-in period is probably zero, right? So long term I would be concerned those initial 2,200 miles, not being under the consideration of an owner, might impact long term reliability. And I don't want to have an engine issue down the road and the Genesis denies a warranty claim because of "misuse" or "failure to follow factory recommended break in" or the equivalent.

I'd be ready to move on this car this weekend at this price, but I'm leaving to Japan tomorrow and not back until the weekend after next, so if anyone is looking for a good deal on a new Genesis in Chicagoland in the next two weeks, this offer and this dealer might be worth checking out!

Thoughts anyone?
 

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