Ford Mustang Forum - View Single Post - Looking for advice buying my first new car
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post #10 of (permalink) Old 06-18-2014
tommy9946's Avatar
Joined: Apr 2014
Location: The North
Posts: 154
Sorry about your experience and disappointment, but there are a few things to keep in mind. First, a bird in the hand is worth two in the bush. As far as the dealer is concerned, you could never show up to buy that Mustang regardless of what you signed. What are they going to do? Take you to court? You mentioned you live out of state, right? Rather, someone walked in to buy the unit you wanted. Business is business; if I were running the place, I'm taking the sure sale. That's all they did.

Second, we love cars but they don't. Car sales is a units moved game. Many consumers don't realize that dealerships finance/pay rent on the new cars they sell. So every month, each Ford dealer is making a payment to Ford for every unit sitting on their lot. Truth. See now how they'd move a unit right out from another customer? For every day that car sits on the lot, they're losing money (either in real dollars or income potential). Plus when you live out of state, it's not like they will see you again. What's the loss to them? They have to pay for the lights, maintenance, employees' health insurance and 401k matches, advertising costs, etc.

Third, forget your dealership coupons. They don't exist. It's bullhonkey. Any dealership sales tactics like that come out from the car's "holdback" money. Here's the deal: dealerships never pay what they claim they paid for a new unit. The "invoice" price isn't what they paid. Rather, the real price they paid is the "invoice" price MINUS the "holdback" price per unit. In that capacity, holdback money is meant to ensure a profit on each new unit sold. A dealership counts the rent they pay on each unit out of said holdback money. Once the numbers come out in the wash, many times dealers make under $1,000 profit on a new unit sold. Sometimes they legitimately lose money. The real money in car sales comes from used cars, where the profit margin averages upward to $5,000 per unit.

So here is my advice: don't take it personally. I've purchased over twenty new cars (personally + going with friends/family); I know the sales game as I worked in the industry prior to becoming a teacher. Take your $750 cash from Ford (that is a real incentive), take the $3,000 in current rebates and find a V6 unit you want in stock somewhere close-ish. Drive there. Drive the car, look over the car, ask for the dealer sheet. You'll see they advertise/point out the "invoice" they "paid" for the car. In the lower left-hand side of this sheet, there is a box/column titled Holdback. For my $34,XXX Mustang, the holdback was just under $1000. I pushed for, and got, invoice price plus $500 of their holdback money. I purchased my car from the Ford dealer across the street from where I work, and they know me quite well. I walked in and the sales manager and floor manager came over and one asked, "So Tom, what are you stealing today?"

Be informed. A good deal is getting a car for just below invoice price plus all your rebate money (keep in mind rebates are funded by Ford, so that doesn't come out of the dealership's pocket). Find a car you like with a good assortment of options and work down. LARGER DEALERS WILL ALWAYS GIVE YOU A BETTER DEAL, AS THEY HAVE MORE UNITS TO ABSORB A LOW PROFIT DEAL AND MAKE UP THEIR NUMBERS/PROFIT PERCENTAGE ON THE NEXT SUCKER TO WALK IN THE DOOR.

Put $100 down for them to hold your car until you secure the financing the next day with your bank and go back to get the car. And don't let them put a stupid dealer sticker on your paint. Tell them to put a license bracket on your car and then promptly take it off when you get home.

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