Auto dealership owners are given the opportunity to get massive "kickbacks" from manufacturers at the end of the year, which can amount to hundreds of thousands of dollars.
Dealership owners are rewarded by vehicle manufactures throughout the year, given thousands of dollars monthly if they meet a sales quota, a benefit to customers at the end of the month who can pay lower prices, as dealers scramble to sell enough cars and trucks to meet the manufacturers' quotas.
But, the very best time to take advantage of these "kickbacks" to dealerships is the end of each sales year. Customers who show up on the very last days of the manufacturers' year will be able to negotiate the lowest prices of the year.
Typically, the "last day of the year" is not December 31, but actually around January 2 or 3 or even later depending on the manufacturer. The best method to determine the last official day of the year is to ask the dealership when the "rebates" end, which should be the official end of the year and the best day to buy that new vehicle.
Go into the dealership late in that day and check out which vehicles have the largest rebates and special "deals" which will indicate which cars and trucks the dealership and the manufacturer want to get rid of by the end of the night. Don't worry about the store's closing time, they will stay open as long as it takes to sell you a vehicle.
Typically these may be slow selling vehicle models, or colors they haven't been able to sell, or vehicles that the dealership is overstocked with and have been sitting on the lot for many weeks. Although these may be the best bargains after negotiating, any vehicle on the lot will still be a target the dealer wants to sell that day to get their manufacturer's kickback.
Dealerships have the largest profit on the trucks, followed by SUVs, and then small cars. So the amount of discount you may get depends on that, as well as the fact that the small cars don't sell as well, and they may want to unload them at a large discount even if losing money.
Depending on how many vehicles have been sold already, and how many more the dealer needs to sell by the end of the day, will determine how low the sales price will be. If the owner can reap hundreds of thousands of dollars by selling just 10 more vehicles, for example, that many vehicle can literally be given away at a loss, and the dealer still wins big time.
Remember though, that although customers may think they are great negotiators, they are still no match for the sales staff, especially sales managers, who negotiate for a living every day.
YouTube Video - How To Get The Best Price by Don Browne
Your best price also will depend on if you want a specific model or are willing to buy whatever has the largest rebates and advertised discount from MSRP. If you ask for a specific model, the sales folks have one up on you, especially if it's a popular model. So, they can out negotiate you on that.
If you do want a specific model, the best advice is to get three or more "out the door" prices from different dealers. "Out the door" mean what you can write a check for to buy the vehicle, not including transferring license tag or a new one, and state sales tax. Dealers and their ads will quote a price for the vehicle but in the fine print it will say it does not include dealer fees and other profit items not disclosed in the price.
It will be difficult to get a dealer to give you that out the door price, as they want you in person to go through their hours-long complete sales process.
Try telling them, "If you give me the out the door price, you will have a one in three chance to sell me a vehicle, if you can't give me a price, you have no chance to ever sell me a vehicle."
The kickbacks from the manufacturers benefit the owner the most, secondly the general manager, thirdly the sales managers, and lastly the salesman. Everyone at a dealership is on commission (even the service advisor) and all sales personnel benefit from these manufacture's programs at the end of the year.
Be advised that normally a sales person has no permission to negotiate vehicle prices, that is left to his or her sales manager, who reports to the general manager, who reports to the dealership owner. You can be sure the owner is keeping up to the minute during that last day of the year to make sure he or she gets enough cars and truck sold to get his big bonus. The owner will instruct the managers just how low they can sell the vehicles for as the day winds down to the deadline.
In summary, if you feel like negotiating for several hours, go buy that vehicle on the final day of the official sales year and be prepared for a possible lowest price obtainable for the year on a new vehicle.
Wow !! Detailed . Everyone wishing they could have you in their pocket to negotiate.
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