Buying a car through Costco, is it worth it?

[FoieGrasIsEvil]

@iamthewalrus_3

My experience, having bought a car a few years ago, is that the bullshit still exists to a tremendous amount.

I did all the things you’re supposed to do. I looked up values that the models I wanted were selling for online. I waited until the end of the month when the newer model year was out. I contacted multiple dealerships. It was all incredible bullshit from start to end.

Most dealerships I contacted via email simply failed to respond with anything more than trying to get my phone number or have me “come down to the lot to talk about it”. The remaining ones just gave me MSRP. Best they could do.

I put specific trim models into the TrueCar, and got a handful of dealerships come up with specific reasonable-ish prices. Sweet! I thought. I had to then give them my contact information, only to receive lots of attempts to sell me higher trim levels and an ultimate realization that it was apparently just a bait and switch. None of those dealerships actually had the model they had quoted me a great price for.

One dealership played the “take his keys to move his car” game and then conveniently disappear for a while so he can’t leave. Another one tried it, but I had learned my lesson.

Finally, after weeks of phone calls in which I eventually got a price a bit below the “fair” price that the internet suggested, we went out to buy the car.

It took hours. I showed up ready to write a check. We had to talk to like 4 people. They all of a sudden realized that they’d already put the tinting on the windows of the model we wanted. No, we weren’t going to pay $300 extra for that. They tried to charge us like $80 for the locking lugnuts. Don’t care, take 'em off. They insisted that I had to sign the thing called a loan application, which I was suckered into and probably dinged my credit. I had to spend something like 15 minutes sitting in an office being recorded on video as they asked me to agree to a bunch of upsold bullshit like seat treatment and undercoating and satellite radio and who knows what else (I did not).

I did eventually agree to pay like $35 that they assured me was a fee required by the state but which I later found out was not. So, good job guys. You got me.

Ultimately, I ended up saving something like $1000 for maybe 8 hours of “work” dealing with a bullshit system designed to extract money from people who hate every minute of it. And I’ll do it again, too, because I don’t have $1000 to waste on not doing 8 hours of shitty work in an inhumane system.

I wanna buy a car in the Magical Realm where FoieGrasIsEvil works. Or, even better, see self-driving fleet transportation on demand take over and never buy a car again.

Jesus Tapdancing Christ on a pogo stick. I can’t believe you went through all of that. I would have immediately bailed on the whole deal.

[Czarcasm]

@FoieGrasIsEvil

Jesus Tapdancing Christ on a pogo stick. I can’t believe you went through all of that. I would have immediately bailed on the whole deal.

Between the stories on this thread, the thread I started on dealer games and tricks, and the thousands of current similar stories easily found online, have you changed your mind about this statement:

@FoieGrasIsEvil

I am an auto salesperson and I can tell you a couple things:
One, the “games and crapola” you have to “deal with” when working with a salesperson are pretty much gone, excepting dealers that still cling to “the old way” (pre-internet) or when dealing with a buy here/pay here lot where if you’re there, you’re pretty much out of options anyway because your credit sucks.

?

[iamthewalrus_3]

@FoieGrasIsEvil

Jesus Tapdancing Christ on a pogo stick. I can’t believe you went through all of that. I would have immediately bailed on the whole deal.

I hope you recognize your car-salesman privilege

Honestly, I wanted to. If it had been just me I would have given them 10 more minutes to take the extra $35 off and if not, walked out, gone to CarMax and overpaid for a used whatever.

But it was August, my wife was pregnant, and we didn’t have a car with air conditioning.

And paying the $35 to be done with it was the right move. Which is of course exactly why this practice works and continues.

[markn_1]

@iamthewalrus_3

I hope you recognize your car-salesman privilege

Actually I’m curious about this. FoieGrasIsEvil, when you buy a car, do you let the saleman know you also work for a car dealer? Or do you just go incognito? Or do you always buy from your own dealership so it’s not an issue? I just wonder if salemen treat other salesmen differently.

[FoieGrasIsEvil]

@Czarcasm

Between the stories on this thread, the thread I started on dealer games and tricks, and the thousands of current similar stories easily found online, have you changed your mind about this statement:
?

I find myself in the unenviable position of being proven wrong, and it’s disheartening quite honestly. I HATE that bullshit with an undying fire. I wish I could stamp it all out. It makes my job that much harder just getting someone to trust me.

I suppose I was just basing my statement on my own experiences at the few dealers I have worked for, especially the Subaru dealership I am at now.

@iamthewalrus_3

I hope you recognize your car-salesman privilege

Honestly, I wanted to. If it had been just me I would have given them 10 more minutes to take the extra $35 off and if not, walked out, gone to CarMax and overpaid for a used whatever.

But it was August, my wife was pregnant, and we didn’t have a car with air conditioning.

And paying the $35 to be done with it was the right move. Which is of course exactly why this practice works and continues.

Yeah, but that sucks being put through that kind of nonsense. It’s completely unnecessary and perpetuates the stigma associated with car dealers and salespeople all being scummy douchebags.

@markn_1

Actually I’m curious about this. FoieGrasIsEvil, when you buy a car, do you let the saleman know you also work for a car dealer? Or do you just go incognito? Or do you always buy from your own dealership so it’s not an issue? I just wonder if salemen treat other salesmen differently.

Well, the last couple of cars I bought I sold to myself, so I was aware I was dealing with a salesperson…

However, my current ride, a 2007 Avalon Limited with 67,000 miles on it was a gift from my Dad after I turned in my last lease. No car payment is muy bueno. And then my Dad bought a Subaru Forester from me (for $1200 behind invoice) so it was a win/win.

However, if I went to a different dealer to buy a car, I’d probably tell them that I worked in car sales in the hopes that they wouldn’t try to pull any BS on me.

[Spiderman]

@FoieGrasIsEvil

No, but $1000 behind invoice is a really good deal.

Not if you’re getting $2000 from the manufacturer.

@FoieGrasIsEvil

Not sure about Enterprise but Hertz’s prices around here are dirt cheap, as they buy the cars in droves at fleet discounts when new and can then undercut everyone in the used car market once they retire them and sell them.

Retired rental cars typically have higher mileage & have been driven harder than a typical single owner/user vehicle, both of which make them less valuable.

@FoieGrasIsEvil

I mean, I get that

I don’t think you do.

@FoieGrasIsEvil

hesitancy but man…sometimes people just can’t act either.

It’s the second most expensive most people make in their life; one they’ll be paying for years & possibly driving for years after it’s paid off. One that some will spend a significant number of hours in. You don’t see why people might be hesitant to commit to buying, especially if they don’t need to right away?

@FoieGrasIsEvil

And even if we are getting a kickback (generally in the form of a monthly volume bonus for management and ownership from the manufacturer, hence why buying cars at the end of the month is the best time to buy), what of it? It seems only in car sales is the word “profit” a dirty word. I need to make money to survive. If it weren’t for Subaru money I would have to work somewhere else!

There’s this perception out there that people are getting raped constantly and that dealers are making money hand over fist and for most customers, that’s just not true. At Subaru, we are, in dealer parlance, “giving the cars away”. This simply means that the sales managers are caving to customer demands to buy the car at an insanely low price and the only money we get to keep selling the car is our “holdback” money, which is expressed in the few hundreds of dollars, not thousands, and if I sell a car for that amount, I get paid $150. That’s it.

So? If it’s my money going toward paying your salary I’d rather pay less & have an order taker.

In fact, given I did a lot of the work for the dealer with my last car purchase, that’s exactly what they were. I negotiated a deal on a specific model/trim & options package/color. They found the car at another dealer, but the salesman started giving me BS about they’d found the car at another dealer but would have to make a trade & he wasn’t sure it could happen, blah-blah-blah. Getting a bad vibe, I went to the car company’s website, put it what I was looking for & found exactly one of that particular build at that other dealer, 150 or 200 miles away. I called another local dealer, told them the model, level & options & color I wanted, & oh-by-the-way, it’s located at such-&-such a dealer; you’ll need to work out a dealer trade. They did & I got the car from them. Never did hear back from the first dealership. So tell me, what did the first dealer do for me? What did the second salesman do other than paperwork?

[FoieGrasIsEvil]

@Spiderman

Not if you’re getting $2000 from the manufacturer.

But that $2000 is coming off the MSRP. $1000 behind invoice on a $35000 Subaru Forester means you’re buying it for about $32,000, which is $3000 off the sticker price.

@Spiderman

Retired rental cars typically have higher mileage & have been driven harder than a typical single owner/user vehicle, both of which make them less valuable.

Agreed, and like you said, can have questionable provenance due to people driving them that don’t give a shit about them because they “aren’t theirs”.

@Spiderman

I don’t think you do.

It’s the second most expensive most people make in their life; one they’ll be paying for years & possibly driving for years after it’s paid off. One that some will spend a significant number of hours in. You don’t see why people might be hesitant to commit to buying, especially if they don’t need to right away?

So? If it’s my money going toward paying your salary I’d rather pay less & have an order taker.

In fact, given I did a lot of the work for the dealer with my last car purchase, that’s exactly what they were. I negotiated a deal on a specific model/trim & options package/color. They found the car at another dealer, but the salesman started giving me BS about they’d found the car at another dealer but would have to make a trade & he wasn’t sure it could happen, blah-blah-blah. Getting a bad vibe, I went to the car company’s website, put it what I was looking for & found exactly one of that particular build at that other dealer, 150 or 200 miles away. I called another local dealer, told them the model, level & options & color I wanted, & oh-by-the-way, it’s located at such-&-such a dealer; you’ll need to work out a dealer trade. They did & I got the car from them. Never did hear back from the first dealership. So tell me, what did the first dealer do for me? What did the second salesman do other than paperwork?

I think what I am running into in this thread is that people on the Dope in general aren’t typical car buyers that would require a high level of interaction on my part to understand how all the technology works in the cars that I sell (for example), or what a Boxer engine is, how assymetrical all wheel drive works or any number of things about Subarus. I completely understand what you are saying…I tell people all the time “hey, it’s your money” and I mean it.

I am not a high pressure sales guy. I am very laid back and I do not speak to customers in word tracks. I speak to people openly and honestly. I guess I’m something of an anachronism in this industry I fell into in 2014 (see? only five years! NOT a jaded salesperson!). I’ve had managers give me shit for not being more aggressive with people when it’s time to figure out how they are going to pay for the car.

Fuck those guys anyways. I never listened to them because I wanted to pave my own way and my CSI scores reflect that. Everywhere I’ve worked I have always had the highest satisfaction scores at the dealership because I take care of my customers.

I don’t want to be an order taker. I want to be an experience deliverer.

[Dobbs]

When asked if the ‘dealers invoice’ represented the cost of a car to the dealer,

@FoieGrasIsEvil

No, but $1000 behind invoice is a really good deal.

So if the ‘dealers invoice’ isn’t what the dealer pays for the car, just what is it exactly? A made up number?

[FoieGrasIsEvil]

@Dobbs

When asked if the ‘dealers invoice’ represented the cost of a car to the dealer,

So if the ‘dealers invoice’ isn’t what the dealer pays for the car, just what is it exactly? A made up number?

It is roughly the cost to the dealer, plus any fees or regional advertising costs the dealer may have paid.

But that number also includes holdback money, which usually ranges from $300-500 per car. That money is paid to the dealer by the manufacturer when he sells the car. There’s also unadvertised “dealer cash” that the manufacturer will grant the dealer in certain scenarios that they can take off the invoice price to be able to sell the car below invoice and not lose money.

Manufacturer rebates/cash also can influence that price positively for the customer.

So yes, buying a car at or below invoice should be every customer’s goal. Not every dealer will do it, depending on the popularity of the new car, and salespeople don’t like selling cars for that amount either because they get paid a “mini” on the car, which is usually $100-150…for sometimes 8 hours of work.

[Czarcasm]

@FoieGrasIsEvil

It is roughly the cost to the dealer, plus any fees or regional advertising costs the dealer may have paid.

But that number also includes holdback money, which usually ranges from $300-500 per car. That money is paid to the dealer by the manufacturer when he sells the car. There’s also unadvertised “dealer cash” that the manufacturer will grant the dealer in certain scenarios that they can take off the invoice price to be able to sell the car below invoice and not lose money.

Manufacturer rebates/cash also can influence that price positively for the customer.

So yes, buying a car at or below invoice should be every customer’s goal. Not every dealer will do it, depending on the popularity of the new car, and salespeople don’t like selling cars for that amount either because they get paid a “mini” on the car, which is usually $100-150…for sometimes 8 hours of work.

What laws regulate what is and/or is not included in that dealer’s invoice?

[Riemann]

@FoieGrasIsEvil

It is roughly the cost to the dealer, plus any fees or regional advertising costs the dealer may have paid.

But that number also includes holdback money, which usually ranges from $300-500 per car. That money is paid to the dealer by the manufacturer when he sells the car. There’s also unadvertised “dealer cash” that the manufacturer will grant the dealer in certain scenarios that they can take off the invoice price to be able to sell the car below invoice and not lose money.

Manufacturer rebates/cash also can influence that price positively for the customer.

So, translating this into plain English: it is not the cost to the dealer.

And you wonder why people are complaining about deceptive and misleading practices?

[FoieGrasIsEvil]

@Czarcasm

What laws regulate what is and/or is not included in that dealer’s invoice?

This I do not know the answer to, but I suspect that it’d be on a state by state basis.

@Riemann

So, translating this into plain English: it is not the cost to the dealer.

And you wonder why people are complaining about deceptive and misleading practices?

It actually IS the cost to the dealer. That is what they pay the manufacturer for the car when they acquire it, but they get a small amount of money back when the car is sold.

[Czarcasm]

@FoieGrasIsEvil

This I do not know the answer to, but I suspect that it’d be on a state by state basis.

How is it regulated where you are?

[Riemann]

@FoieGrasIsEvil

It actually IS the cost to the dealer. That is what they pay the manufacturer for the car when they acquire it, but they get a small amount of money back when the car is sold.

Yeah, to anyone other than a car dealer, if I pay you $100 and you give me $10 back, that’s the same as paying you $90.

[CookingWithGas]

@FoieGrasIsEvil

It actually IS the cost to the dealer. That is what they pay the manufacturer for the car when they acquire it, but they get a small amount of money back when the car is sold.

Either you are being disingenuous or your dealership is an exception to the rest of the industry.

@Edmunds

Dealer holdback is designed to supplement the dealer’s cash flow and indirectly reduce “variable sales expenses” (another way of saying “sales commissions”) by artificially elevating the dealership’s paper cost. …Dealer holdback allows dealers to advertise attractive sales. Often, ads promise that your new car will cost you just “$1 over invoice!”

There are many other types of holdbacks and dealer credits that may be available from specific manufacturers at various times, some of which consumers may hear about and others of which are never disclosed to the public. Each of these can have the effect of reducing the net cost of a vehicle to the dealer. They include:

[ul]
[li]Advertising credits[/li][li]Flooring assistance[/li][li]Floor interest reserve[/li][li]Floor plan allowance[/li][li]Transfer balance[/li][li]Wholesale reserve[/li][li]Wholesale credits[/li][/ul]

[Spiderman]

@FoieGrasIsEvil

@Spiderman

@FoieGrasIsEvil

@Dobbs

Are you saying flat out that the invoice price you show to customers is the true price the dealer paid to the manufacturer?

No, but $1000 behind invoice is a really good deal.

Not if you’re getting $2000 from the manufacturer.

But that $2000 is coming off the MSRP. $1000 behind invoice on a $35000 Subaru Forester means you’re buying it for about $32,000, which is $3000 off the sticker price.

You’ve just changed the base from invoice to MSRP.

@Riemann

@FoieGrasIsEvil

@Dobbs

So if the ‘dealers invoice’ isn’t what the dealer pays for the car, just what is it exactly? A made up number?

It is roughly the cost to the dealer, plus any fees or regional advertising costs the dealer may have paid.

But that number also includes holdback money, which usually ranges from $300-500 per car. That money is paid to the dealer by the manufacturer when he sells the car. There’s also unadvertised “dealer cash” that the manufacturer will grant the dealer in certain scenarios that they can take off the invoice price to be able to sell the car below invoice and not lose money.

Manufacturer rebates/cash also can influence that price positively for the customer.

So, translating this into plain English: it is not the cost to the dealer.

And you wonder why people are complaining about deceptive and misleading practices?

@Riemann

Yeah, to anyone other than a car dealer, if I pay you $100 and you give me $10 back, that’s the same as paying you $90.

This is the Dope; we’re supposed to be fighting ignorance here; yet I feel like I’m being played with a four square; obfuscate & confuse [del]us[/del] the customer until they agree to…something.

[FoieGrasIsEvil]

@Czarcasm

How is it regulated where you are?

I live in SE Indiana and work in Ohio. Cars purchased are titled and taxed based on where you live, not where you buy the car. I only mention this because when I worked in Northern Kentucky, many Ohio buyers thought they’d shave a percent off their sales tax buying in KY where the sales taxes are lower than Ohio’s. That said, I’ll have to ask someone in order to properly answer your question.

I’m off work today but getting ready to head in to meet my parents, whom are grabbing a suitcase from me and then getting my 16 and 13 year old sons to take them to…CHICAGO! They are going to go to Northwestern U tomorrow to watch the Duke football game. I’m super jealous of them. I have to work.

@Riemann

Yeah, to anyone other than a car dealer, if I pay you $100 and you give me $10 back, that’s the same as paying you $90.

How about if you give me $100 and then a year later I have to keep paying taxes and insurance on that $100 you gave me and by the time I get you your $10, I’m now into my loan from you on the order of $150?

@CookingWithGas

Either you are being disingenuous or your dealership is an exception to the rest of the industry.

Please never accuse me of being disingenuous. I am only reporting things as I know them, I’m not in management, so therefore not privy to what I imagine to be a wealth of more information. What I am saying in this thread is what I’ve managed to glean from 5 years in the business. And what you posted from Edmunds only mentions dealer “credits” and fails to mention costs that the dealer incurs having inventory on the ground, such as taxes, insurance, advertising costs, fees for failing to have sold older units, and so on.

@Spiderman

You’ve just changed the base from invoice to MSRP.

This is the Dope; we’re supposed to be fighting ignorance here; yet I feel like I’m being played with a four square; obfuscate & confuse [del]us[/del] the customer until they agree to…something.

The “base” is ALWAYS sticker price. That’s ALWAYS the starting point regardless of whether it’s a lease or a purchase. MSRP is what the dealer would LIKE you to pay for the car, but so few do anymore that it does indeed seem a fruitless exercise.

And why on Earth would you think I’m engaging in any type of obfuscation here? I feel like I am being as forthright as I am able. I am answering any and all questions as honestly as I can.

[Spiderman]

@FoieGrasIsEvil

The “base” is ALWAYS sticker price. That’s ALWAYS the starting point regardless of whether it’s a lease or a purchase. MSRP is what the dealer would LIKE you to pay for the car, but so few do anymore that it does indeed seem a fruitless exercise.

And why on Earth would you think I’m engaging in any type of obfuscation here? I feel like I am being as forthright as I am able. I am answering any and all questions as honestly as I can.

In my first set of nested quotes (Post #76, which were all taken in order from earlier in the thread) you first talk about a $1000 discount from invoice, then you switch to a $2000 discount from MSRP. A larger discount but from a higher starting amount, which means the car actually costs more. That’s obfuscation!
What percentage of people really pay MSRP? I bet it’s low.

In the second set, you say that invoice is (roughly) the cost to the dealer, but obviously it isn’t once the various holdbacks/kickbacks/rebates are taken into account. You yourself say a good price is $1000 under invoice; how could a dealer sell a car for less than they paid for it & stay in business?

[running_coach]

@Spiderman

You yourself say a good price is $1000 under invoice; how could a dealer sell a car for less than they paid for it & stay in business?

Volume!!!

:flees:

[CookingWithGas]

@FoieGrasIsEvil

Please never accuse me of being disingenuous. I am only reporting things as I know them, I’m not in management, so therefore not privy to what I imagine to be a wealth of more information.

Management may have some more information than you do but I find it hard to believe that a car salesman does not have the same information available to the public on the Internet from one of the longest-established and most well-known auto sites. It would seem that’s just basic homework for anyone in retail car sales.

You said unequivocally

@FoieGrasIsEvil

[The invoice price] actually IS the cost to the dealer.

when it is obviously not the net cost to the dealer for any given unit. All the others costs you mentioned (except unsold fees*) are fixed costs, otherwise known as “the cost of doing business” which have nothing to do with how much a dealer pays for any particular car. Bottom line is that my post and others here demonstrate that the invoice price is not the net unit cost to the dealer, but dealers would like the customer to think so. And if you persist in claiming otherwise, then what should I conclude?

---

*I have never heard of a manufacturer’s penalty for failing to sell older units. I"ll take your word for it. But it would seem to me that failure to sell a unit is its own penalty since the dealer has to carry the inventory, has cash tied up in the car, and is using space to store a car that he would rather use for cars he can sell. I am also surprised to learn that a dealer would sign a contract that imposes penalties on inventory that the dealer has already paid the manufacturer for. It seems like the manufacturer would have more effective options if it’s in their own interests to move out old stock–like providing an incentive to sell instead of a penalty for not.