Where to set my target price for negotiation?

I'm aware they still make money at invoice. But it's not nearly as much as they make at MSRP. One can attempt to shave the bone clean or even take some of it with them but most dealerships are going to turn you away. Invoice is a good spot in my opinion. You get almost all of the meat but leave enough on the bone so the dealership will bite.

 

More fallacy provided here.

First: When I bought my truck zero of the 16 banks that were checked for credit based their rates off of prime. Checking bank rates online is a great starter to see if the bank is anywhere near what you are looking for but there is a spread over some index. That spread is based on your risk profile (essentially your credit score). This spread will change so if a bank says "Auto loans as low as 2%" you could be at 6% and wont know unless you request credit.

Prime is an index used on variable rate loans. Vehicles are rarely financed at a variable rate. From my experience the only ones that have been were part of equipment loan packages with fairly sophisticated Borrowers that knew what they wanted or were buying on an equipment line. Things like vehicles are generally based off of some fixed index like the FHLB SecureConnect Bullet Rate (usually based off the of amortization that matches the vehicles/equipments life or the life of the loan; which, generally match. FHLB rates can be found on the FHLB website. But, that is on the commercial side of things.

Second: Reporting agencies can take time to reflect a credit pull and even when they do consecutive pulls for Auto loans are generally lumped into a "shopping period" and are no more damaging to your credit than a single pull. So, pulling from a credit union or other lender and then going to Toyota and seeing what Toyota Finance will offer will not have any compounding impact.

Third: I have seen many and know many people with loans from credit unions that are at or near 1% on Auto loans. Stating that they cannot touch 1.9% is incorrect. Many credit unions or "relationship based banks" offer this as they see the opportunity for the consumer to bring over deposits and finance other things like Personal lines, credit cards, mortgages, etc.

Fourth: Having a blank check offers a lot of negotiating power with the dealership. The sales team knows you are capable of buying and know a sale is forthcoming quickly. They will wheel and deal to get that quick payment. Believe me I walked away all said and done on a 2017 Blazing Blue Pearl DC Off-road at 33k (TT&L included) (2018 were not out yet). I told the guy I was preapproved and had a check (I did not tell him for how much) and for the right deal I would buy that day. He came back with that offer, I said yes and moved on to finance. The finance team worked extra hard to get me to finance through Toyota including offering their extended service plan, GAP insurance and other things for free. I declined as I did not want to finance with Toyota. They matched my interest rate.

You are correct on one thing. It doesn't matter the time of month if they are far from their goal or if they are a non-commission based dealership, they wont budge based on "needing to hit that goal." However, this can vary based on sales person to sales person as their relationship with the sales manager and their person goals impact what they will offer.

$0.02 from a Banker who bought their truck less than a year ago.

 

My suggestion, take what you expect/hope to discount by and add a couple of percent. The dealer is not going to take your first offer, this will give you some negotiating room.

 

Unless you're hellbent on getting something brand new, start looking at used. You can find trucks with 10k or fewer miles at a much lower cost. Sure, someone owned it before you, but from the vehicle standpoint, it's basically brand new. After only a week of shopping, I got a '17 TRD Sport (Moonroof, JBL Audio, no leather)with 11k miles for 33000 OTD. I could have made a better deal on it I'm sure but it was one of the few trucks in my area that had EXACTLY what I wanted. Call around to dealerships and let them know you're looking. I could have gotten a brand new one for around 3500 more but with few accessories and not what I EXACTLY wanted. Find the truck you LOVE and buy it! 1000 over 5 or 6 years won't break you.

As for your original question, scour the internet to find competitive prices on what you want to spend. The dealerships know what the avg prices are in the area so they already know what you know. It's just a matter of finding a middle ground. Offer a little less than what you're willing to spend so their counter offer can be closer to what you ACTUALLY want to spend. GL on your shopping!

 

I have good credit so the 10 points on the pull didn’t effect my rate. My credit union had a lower rate than Toyota and the other bank the dealer used at the time (Memorial Day ‘16). Third gens were fresh/hot and Toyota wasn’t offering anything better than 2.9% and no rebates that month. My dealer was selling tacos as they rolled of the truck. My credit union offered 1.9% which was the best at the time. Today my credit union is at 2.49% for a new car loan. I’ve seen rebates on tacos ranging from $500-750 if you qualify for all the terms:recent grad, military, etc. They can change monthly as can the loan rates.

I’ve always purchased towards the end of the month and my purchase prices were $300-$500 over invoice. For my first taco and Toyota, that had everything I wanted on it and only had to wait one day for it to be delivered from the rail yard, I’m satisfied with the process I used and price I paid. Toyota is more firm with pricing bc they don’t offer $1k-2k rebates on vehicles to everybody that walks in like say Ford, Chevy, Dodge.

Just my experience in purchasing new 3 trucks and a car over 15 yrs.