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Discussion Starter #1
Sorry if this isn't the proper place for my question, but here goes. I'm interested in purchasing a new Jetta TDI sedan but I haven't decided on a 2010 or 2011. I've done quite a bit of reading on this site and others, so I'm up-to-speed on the differences between the two. I prefer the new 2011 body but I know that the 2010 has a little nicer interior, albeit with less leg room in the back. If the difference in price is $1k or less, I'll likely pay the extra for a 2011. However, a local dealership just started running some TDI specials that make a 2010 tempting. They are extending the 0% APR for 60 months on a 2010 and they are offering them for $550 below dealer invoice. The 2011's don't have the same APR and they're offering them for $250 over invoice right now.

That said, I'll admit that I'm a little ignorant when it comes to buying a new car, as I've only bought used until now. What I'm having a hard time understanding is invoice pricing. The bottom line is that I'm trying to crunch figures, based on what the dealer has in inventory, and I'm trying to figure out if I can get a 2010 for significantly less than a 2011. What I've done is I've asked the dealership to email me a few VINs with the invoice pricing and I've found that their provided invoice pricing is not much lower than the asking price on their website. I've also taken those same VINs and I've looked them up at http://www.decodethis.com/. I'm assuming the information is legit because all of the correct specs show up (body color, interior color, etc). However, the invoice price listed on the site is over $3k less than what the dealer has sent me. So either the invoice pricing on the aforementioned website is not accurate, or the dealership is not being completely honest with me. But I have a hard time believing the latter is the case because I'm pretty sure that's something the dealerships have to be up-front about.

As an example, I won't show the VIN here, but here's one car I'm looking at:
2010 Jetta TDI w/ DSG (no navigation)
Dealership provided invoice: $25,018
Invoice tied to VIN at www.decodethis.com: $21,528

That's an over $3k difference in price. So what am I missing here? Thanks for any input or advice guys.
 

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Location seattle - auburn vw is a pretty well known dealer, have you tried them?

Invoice is what the dealer "pays" for the car but it's not the price they actually pay for the car. Everyone knows invoice and MSRP pricing due to online reports and enthusiast websites. In response, manufacturers have raised the invoice price to pad some profits in there. For example, Porsche is a low volume manufacturer who overprices their cars quite a bit so that their dealers are happy. They're not the most profitable car company per car sold without a good reason. (You can also add $30-40,000 worth of options to their cars). When SUVs were hot there was often $10,000 in room to move! That's why manufactures were so happy to build them.

There are various promotions and deals where the dealer can buy their cars below invoice. The dealer provided invoice is the "invoice" price. The $21k price is probably the "actual invoice". You could probably move another $500-1500 below the price they gave if you find the right salesman - don't worry, he'll still make money. But first walk into 3 more dealerships and negotiate a price with them so you have a comparison point and competitive offer. People also don't buy cars often so you get a chance to whet your teeth bargaining. That's what the salesman do for a living and you're at a disadvantage in skill and conditioning right off the bat.

Before you think you're wasting their time or being disrespectful, not at all. It's their job and their goal is to get the most money out of you. Your objective is to get the car for the least amount. If they weren't making money they won't sell the car to you. Some places want to hold out for higher profits and some places will deal in volume and accept low profits in return for moving cars. There are also bonuses for moving cars which means a volume dealer can buy the cars at a lower price than another dealer, so real invoice at one dealer is not the same at another place.

Lastly, cars and homes are among the highest priced single items many people will buy in their lifetime. You do want to educate yourself and condition your bargaining skill by talking to multiple dealers to make sure you're making the right decision. While you can buy a home off foreclosure at a great loss to the last owner, you can't buy a new dealer car off foreclosure. So they should be happy to have you as a customer and if not, screw 'em. Find another dealer who wants your hard earned money. Of course, if you're getting rejected by all the local dealers then you know your offer is unreasonable then. There is such a thing as a bad customer too.
 

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Discussion Starter #4
Location seattle - auburn vw is a pretty well known dealer, have you tried them?

Invoice is what the dealer "pays" for the car but it's not the price they actually pay for the car. Everyone knows invoice and MSRP pricing due to online reports and enthusiast websites. In response, manufacturers have raised the invoice price to pad some profits in there. For example, Porsche is a low volume manufacturer who overprices their cars quite a bit so that their dealers are happy. They're not the most profitable car company per car sold without a good reason. (You can also add $30-40,000 worth of options to their cars). When SUVs were hot there was often $10,000 in room to move! That's why manufactures were so happy to build them.

There are various promotions and deals where the dealer can buy their cars below invoice. The dealer provided invoice is the "invoice" price. The $21k price is probably the "actual invoice". You could probably move another $500-1500 below the price they gave if you find the right salesman - don't worry, he'll still make money. But first walk into 3 more dealerships and negotiate a price with them so you have a comparison point and competitive offer. People also don't buy cars often so you get a chance to whet your teeth bargaining. That's what the salesman do for a living and you're at a disadvantage in skill and conditioning right off the bat.

Before you think you're wasting their time or being disrespectful, not at all. It's their job and their goal is to get the most money out of you. Your objective is to get the car for the least amount. If they weren't making money they won't sell the car to you. Some places want to hold out for higher profits and some places will deal in volume and accept low profits in return for moving cars. There are also bonuses for moving cars which means a volume dealer can buy the cars at a lower price than another dealer, so real invoice at one dealer is not the same at another place.

Lastly, cars and homes are among the highest priced single items many people will buy in their lifetime. You do want to educate yourself and condition your bargaining skill by talking to multiple dealers to make sure you're making the right decision. While you can buy a home off foreclosure at a great loss to the last owner, you can't buy a new dealer car off foreclosure. So they should be happy to have you as a customer and if not, screw 'em. Find another dealer who wants your hard earned money. Of course, if you're getting rejected by all the local dealers then you know your offer is unreasonable then. There is such a thing as a bad customer too.
chittychittybangbang - thanks for the great response, and great website. It's funny you mentioned Auburn VW because that's the dealership I've been dealing with. I won't name names, but I'll just say that their "Internet Sales" department has been very reluctant to send me invoice pricing. Everytime I ask a question I'm asked to come in to discuss in person. Though I understand this is a common car sales practice, it's frustrating to get this from a department that is supposed to be setup to deal with emails, etc. I've now made contact with the equivalent Internet Sales departments at 3 or 4 other local dealerships and I'm going to see if I can get in touch with someone that is a little more willing to help me out.

Regarding the invoice pricing, what you said all makes sense. I think what is still throwing me is why the invoice prices provided to me by the dealership is so far off from what I see on a VIN lookup. I guess I just thought that was something the dealerships were required to be upfront about. After all, isn't the invoice price shown on the sticker on every new car?
 

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Yes, they want your butt in the negotiating seat because they know that once you step in the door the chance of a sale goes up greatly. They know that you're looking to BUY, not looking to negotiate :) That was the nice thing about saturn - no hassle purchase, the price was the price. Too bad they made ugly cars that were outclassed even when freshly designed.

Sure, the invoice price can be shown on the sticker but it doesn't show all the dealer incentives or manufacturer rebates, etc. I've never sold cars so I don't know exactly what the invoice price represents.
 

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Invoice pricing is a touchy subject. Having sold cars for a few years...non VW... I'll try to give the best explanation. Invoice pricing is an intermediate price between what the dealer actually pays, and msrp. At invoice, the only money between that and what the dealer actually pays is little "kickbacks" of sorts. For example, advertising moneys that the dealer gets from the factory on each car since the dealer is actively advertising the product, they get a kickback from the factory or manufacturer. This amount is usually only a hundred or two...at least on GM vehicles..what I was selling. Another thing under invoice is dealer holdback. Basically as chittybangbang explained, this is a little cushion that the manufacturer builds into the pricing so if a dealer sells you a car at "invoice", they're still making some money to keep the salesman happy and keep the dealership up and running..aka profitable. Now the amount of the holdback on a vehicle really depends on the cost of the vehicle....ex..the more the vehicle costs, the more the hold back reserve is. This might be why the site you checked out shows invoice at 3k less than what the dealer is showing you. Til the advertising dollars and hold back is subtracted. Just my 2 cents.
 

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I recently got full cash discount and 72 months 0% credit. Admitted I bought two cars the same evenings but it was still a very sweet deal.
 
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