Some time in the next six months or so, I will buy a new car. The dealer tells me that because of my wife’s employer, I will be entitled to purchase the car at “invoice price,” which is maybe $2500 below MSRP (on a $42K car).
First question: what does “invoice price” mean?
Second question: since invoice price is non-negotiable and substantially lower than MSRP, how much room do I have to haggle for free accessories (splashguards, service manual, etc.)? Would I be pushing things to even ask for a discounted service manual, or am I likely to convince them to throw in $500 (or more) in extra goodies, like splashguards, deluxe floormats, trunk carpet, etc.?
Unless your wife’s employer is the auto manufacturer you’ve got room to negotiate.
Invoice price is supposed to be the cost that the dealer pays the manufacturer however due to a number of incentives and other bookkeeping juggling it’s not really. Negotiate all you want, they’re not going to give you anything unless you ask for it.
If you can stand to wait until the week after Christmas you can get the dealer in their tightest spot; depending on the state, they’ll have to pay tax on all the cars on their lot January 1st and depending on the brand, some dealerships are graded by the number of previous year’s model they have January 1st as well.
LONG STORY FROM HERE ON - I was able to get a deal ON TOP of getting Z Plan for Ford retirees on my 2010 Escape Hybrid by waiting until December 27, 2010 to go in w/ a blank check from my bank in hand. I knew which one the dealer had in their online inventory, test drove it and noted every little hiccup. When we got to the salesman’s desk he pulled out the four square and before he could start the chicanery and prestidigitation, I put the check in front of him, telling him exactly what I cared to pay for the Escape. There was much back and forth and additional men brought to reason w/ me (I was sitting in a corner chair and at one point there were 4 men btwn me and the cubicle doorway, including 2 whose apparent job was to stand and glower) but eventually I got them to discount for the mileage and a dash light that was on. I drove out w/ about 20% off the sticker (which was another grand off the Z Plan price they repeatedly explained to this poor dumb woman was non-negotiable).
My favorite part was the look on the salesman’s face when he looked at my offer, looked at the invoice and asked where I came up w/ this crazy number - I told him that after examining my budget it was what I was willing to pay for it. What kind of maniac buys a car they specifically know they can afford? Madness.
Unfortunately the car I’m interested in (Infiniti G37 Sport 6MT) comes standard with summer-only tires. I want to buy it in the spring (~March) so that I won’t have to buy extra rims and snow tires until about eight months after that.
Moreover, if buying from the local dealer (Michigan), they will not have one of these on the lot; they’ll only order it if you’re going to buy it (evidently most buyers up here don’t like stick shift + rear-wheel drive + summer-only tires :D). Dealers in southern states do sometimes have this car; I took one for a test drive there recently, and they informed me that if I buy from them they will deliver the car to my door at no extra charge.
Bottom line, I’m not likely to find a dealer in desperate circumstances to sell, but I’ll be able to make a couple of dealers compete against each other.
Dealers always have a built-in profit margin when they sell cars at the “invoice” price - as noted, there are things like incentives from the manufacturer that are for the dealer only, that make it possible to sell a car at invoice and make money.
Whether or not the dealer is willing to share some of that profit is of course another story.
If you buy the Infiniti, do get snow tires in time for winter driving. The tires that come with the car will have you sliding and getting stuck in minimal snow. And consider disengaging the built-in anti-skid control when driving in icy/snowy weather (there’s a button on the panel to do this). All the anti-skid seems to do is cut power to the wheels when the car senses it is starting to slide, which means no forward progress. Get good winter snow tires and drive intelligently, and you won’t need to use the nonfunctional anti-skid control.