How to negotiate buying a 3rd gen Tacoma at the stealership.

I'm making this post to give everyone on the forum who is wanting to buy a new 3rd gen Tacoma but doesn't want to get bent over at the stealership. I have some example screenshots that will show some of the BS charges they add on and where some of their mark ups are at. Remember these sales people are highly trained thieves and are out to not only steal the money you have but the money you intend to make in the future.

Here is an example of a FACTORY invoice which is a better representation of what the stealership cost is closer to. The stealership will try to give you the DEALER invoice, which is worthless as it includes their markup. Always ask for the FACTORY and DEALER invoice and compare the two.

Lets break it down:

MFG base price vs MSRP = $3412.00 mark up

Factory options, dealer vs MSRP = $91 mark up

Locally installed option dealer vs MSRP $522 mark up

Never pay for dealer added options, you could get them for half the price yourself

T.A.F. Toyota Advertising Fund = bullshit charge NEVER pay it

T.M.F. Toyota Marketing Fund = bullshit charge NEVER pay it $998 mark up

Delivery/processing/handling, a some what legit charge but should be around $760 = $238 mark up

Base vehicle holdback, this is paid to the dealership after you buy the truck. Its guaranteed profit for the stealership, if you pay it they will get double paid. = $668 mark up

PIO holdback, same as Base Vehicle Holdback, don't pay it = $158.85 mark up

Fleet price protection, paid to stealership by Toyota like the holdbacks, never pay it

Financial reserve MSRP, paid to the stealership by Toyota financial when you finance through Toyota. Never pay it. = $335 mark up

Choose the options you want and then negotiate the option individually never as a total. and for the love of everything holy never pay the damn VIP sales follow up call, state inspection (included in TT&L) or gas. = $70 mark up.

That's $6492.85 in bullshit mark up charges, on this example. The higher the trim level the more mark up there is. The stealership will recive a lot of money from Toyota when the meet their sales number for the month. So never fall for the "we aren't making any money at invoice" bullshit. If their profit margins were really that small, the stealership would go bankrupt in no time.

I hope this helps anyone thinking of buying a new truck.

 

So in your opinion, what is an acceptable amount of profit for a dealer to make off of a vehicle?

 

I just went to a dealer that didn't have all those BS fees.
I also agree and recommend people to buy a true factory model that hasn't been tampered with aftermarket alarms and other non sense.

 

I think what he is trying to say is that a dealer should be able to make enough money by selling in the range of true factory invoice and true factory MSRP.

Edit: Otherwise its just a schema to make buyers overspend.

 

What does the dealer do to make a profit? They are going to make at the bare mimimum $826.85 for doing nothing more than standing in between the purchaser and Toyota. They don't make the truck, they don't design it they just middle man the fucking thing so why should they get paid for doing nothing?

 

Well that is the question, what is an acceptable amount. What profit margin (per vehicle sold) is reasonable?

What do you think that margin is compared to a pair of shoes, TV or blender you buy?

If you pay full sticker price on a vehicle, that margin is usually 30% or less. In most business schools they will tell you that you need to have a "keystone profit margin" meaning that you double the price from wholesale to retail. Do you think a dealer buys a $40k truck for $20K? Not a chance.

I am all about getting a good deal on a vehicle but the vitriol I see spewed at dealers and not other retails industries is amazing.

 

Dealers shouldn't make profit. They should pay me to drive their trucks.

/sarcasm.

 

Well said. Nice to see someone who lives in the real world in TW

 

Seeing as the average spending on advertising per vehicle is $616 that doesn't leave much room to pay employees.

https://www.statista.com/statistics/252369/average-ad-spend-per-new-car-sold-by-size-of-dealership/

 

That's their cost of doing business, if it isn't profitable to operate a stealership then why do it? Get rid of the stearlships and buy from Toyota.

 

Derp.

 

I agree, its stupid to pay someone for doing nothing. Paying a dealership a large profit just because it exists is retarded.

 

Yeah, same with Best Buy the local grocery store, etc.

Capitalism is Dumb!

 

There isn't a $6500 mark up on a loaf of bread. Operating a dealership isn't capitalism is a racketeering. Capitalism isn't dumb, its just you.

 

Again with the amount vs the percentage. You really need to read a book about business.

Here is some reading that will enlighten you as to the margins that car dealers work with.
http://www.marketwatch.com/story/car-salesmen-arent-as-sleazy-as-you-think-2014-07-08

Edit to ad another:
https://www.nada.org/Press-Releases...Car-Dealership-Profits-Remain-Steady-at-2_2_/

 

Don't argue with dumb people.... waste of time.

 

I think the OP expected praise and pats on the back for this, but instead it has turned on him and has gotten ugly.

That is my recap of this particular thread. You're welcome.

 

I don't think you get it, the profit margin is irrelevant. What does a dealership actually do for their profit? There is already a mark up from Toyota when Toyota sell the truck to the dealership, then the dealership marks it up again so they can make more profit on top of the padded profit toyota has already guaranteed them and was factored in to the price Toyota sold it to the dealer for. All the while the dealership does absolutely nothing. Dealer doesn't design the truck, manufacturer the truck, hell they don't even ship the fucking truck. Why should anyone pay the dealership any amount of profit? Like I said..... its a racket, dealerships don't provide any legitimate service.

Here is some light reading that might put it all in perspective, although I have a hunch you work for a dealership and that's why you are defending it so much.
http://www.investopedia.com/terms/r/racketeering.asp?lgl=no-infinite

 

The way I see this is some people need that middle-man to tell them what to buy. For better or worse these people are at the mercy of the dealership/salesperson.

If you aren't that type of person, then you go in knowing what you want, you have researched a fair value or price point, and you negotiate down to that point. I told my dealership straight up that I wasn't paying over 35 for my truck, and after a little back and forth and them realizing that I knew more about this truck than they did (Thanks guys) I was out the door at the price I wanted. It sucks there are middle-men making the cost go up, but if it's not an impulse buy and you can stick to your guns, what's the problem?

 

There are very few products one can buy direct from the manufacturer.
caveat emptor