sharmila19

Good or bad? Of course this includes destination charges.

mspasadena

What city are you in ? Does it have any options ? Purchase or Lease ?

sharmila19

In edison nj, purchase. No lease. Absolutely no options.

Nelexus88

Thats lower than the published MSRP of $36,600 or the invoice of $34,300 "starting price", so it would seem to be a good deal, as long as the options are not important to you.

lesz

I agree.

The Southern California region seems to consistently be the area where people are able to get the best prices, but the Texas, Florida, and New York/New Jersey regions are not far behind. The $33850 price is a little below invoice, which would seem to be a good price for your area at this time of the year.

But, even if that is a good price, there are things to watch for that could turn a good price for you into a good price for the dealer. Those things include finance terms (if you are financing) and trade-in value (if you are trading a vehicle), Also, you need to make sure that the dealer is not able to convince you to buy an extended warranty or any other similarly high mark-up add-on that can turn the deal into a high profit sale for the dealership.

gmanusmc

Try for 32.5 to 33k. With the 2015s just around the corner, you should be able to get at least 10% off msrp - especially with a base model that doesnt have many takers - most buyers like the car loaded up.

Bill G

lesz

During the course of a model year, Lexus varies its invoice pricing. Earlier in the model year, the markup for the ES from invoice to MSRP was as high as 11-12%. According to sources like Edmunds and KBB, now, it is only about 7%. I have no idea what incentives are being offered by Lexus to dealers in the New Jersey/New York region, but, unless Lexus has something special going on in that region, I'm not sure that a more than 10% discount from MSRP is realistic at this time, and that might be especially true if the dealer doesn't have the opportunity to pad its profits with favorable (to the dealership) lease or finance terms, with undervaluing a trade in, by selling the buyer a high mark-up extended warranty, or by selling the buyer other high mark-up dealer add-ons.

gmanusmc

Thanks lesz - wasn't aware that Lexus invoice increases later in the model year - doesn't seem to make good business sense though - making the dealer pay more just as they are trying to clear out the outgoing model year inventory.

Folks in CA seem to still be getting super discounts.

lesz

From the point of view of marketing strategy, raising invoice prices while keeping MSRP the same has a couple of advantages to corporate Lexus.

First, it allows Lexus to have what is, in effect, a mid-year price increase without having to raise advertised prices and, in turn, discourage customers from considering the vehicle. Absent other incentives to dealers, buyers will get lower discounts from MSRP if invoice pricing is increased, but, again, advertised pricing remains the same.

Also, auto manufacturers would like to see their dealers sell vehicles for minimum discounts from MSRP because industry depreciation comparison levels are calculated from MSRP, not from actual selling prices. Thus, when discounting is held to a minimum, it makes it appear as if there is less depreciation, which allows the manufacturer to advertise how well its vehicles maintain their value. Decreasing the difference between MSRP and invoice prices (again, absent other incentives to the dealers) is a means of forcing dealers to sell vehicles at prices closer to MSRP, which, again, has the effect of making it appear that those vehicles are retaining a greater percentage of their original value.


I have no idea why there are such vast differences in discounting available from one region to another, but it definitely is reality. If you read through almost 2 years worth of posts in the ES pricing thread, it is clear that people in Southern California, Texas, Florida, and New York/New Jersey have consistently gotten the significant discounts. At the same time time, you won't find any examples of people from Michigan or Minnesota or Nebraska or other places in the interior of the country who have gotten discounts even close to those in the regions with heavy discounting.

In the long-term picture, though, it does even out somewhat because true used car depreciation (not the industry calculated depreciation comparison level) starts from actual selling prices and not from MSRP, and, thus, in regions where there is more discounting of new vehicles, used car values will also tend to be lower. Thus, while car buyers in some regions pay less for new vehicles, they also are likely to get less back when they sell or trade in a vehicle.

gmanusmc

Good points - still, even with the reduced 7% spread, 33,850 is only around 200 below invoice - in my opinion, sharmila might be able to get to 1k below invoice for a vehicle that will be last year's model in a month or so. Wouldn't hurt to try.

lesz

Just to show the difference in pricing by region, I spent a few minutes on Edmunds, I first priced a bare-bones ES, like the OP is considering. The MSRP for that vehicle is $37530, and the invoice is $35210. In the Southern California market, Edmunds says that the typical "fair" selling price for that vehicle right now is $34,588, which means that some people are doing better than that, and others are doing worse. That price is $622 below invoice. The typical selling price for the same vehicle in Illinois (and other states in the Midwest) is $35932, which is $722 over invoice and $1344 higher than in Southern California. In the New York/Jersey market of the OP, the typical fair selling price is currently $35710, which is somewhere in between the pricing for Southern California and the Midwest.

Out of curiosity, I also priced out a very nicely equipped ES UL. The MSRP for the vehicle was $48445, and the invoice was $45761. The typical current fair price being paid for that vehicle in Southern California $44626, which is $1135 below invoice. The current fair selling price for the same vehicle in the Midwest is $46370, which is $609 above invoice and $1744 more than in Southern California. In the New York/New Jersey market, the same vehicle's current fair selling price is $46,085, which is $1459 higher than in Southern California.

I know that it is hard for people in Southern California to understand that people in many other parts of the country are not able, regardless of their negotiating skills, to by a Lexus for the same price that people in Southern California are paying, but the reality is that, in other parts of the country and especially in the interior of the country, people have to pay more for a Lexus than people in Southern California are paying.

gmanusmc

Wow - good work lesz - you're right...we enjoy such keen competition here because of the many dealers, we are probably spoiled. A recent poster stated he got almost a $6k discount on a loaded IS350 f sport - pretty good deal.

I think the OP for this thread has lost interest - he hasn't posted in a couple days.

lesz

I would guess that you are right in saying that more competition is a factor, but I suspect that there are other factors. In the past, when I've checked to see what special offers Lexus has available, it has not been uncommon to see, if I plug in a Southern California zip code, some sort of buyer assistance in the range of, say, $1000, but, if I plug in a zip code for somewhere in the Midwest, no special offers will show up. I also suspect that Lexus is offering more incentives to dealers in the Southern California region than they offer to dealers in many other parts of the country. I've wondered, too, whether proximity to the port of entry has an effect on pricing in different regions.

Nelexus88

Since all ES Lexus are built in Japan and shipped to the US, it would be reasonable to expect cars sold on the coasts (east, west, gulf) might be less costly due to the shipping expense. Cars sold in the midwest would have additional shipping cost from the coast, but I wouldnt think it would add more than a few hundred dollars to the price. I once had a car shipped 1500 miles for about $600, so the high pricing differential must be due to additional factors.

bc6152

The invoice price to a dealer is not the actual price that the dealer pays the manufacturer for a car. In addition to the various incentives offered by the manufacturer, there is "holdback money". A percentage of the vehicle value that is given to the dealer to assist with bank financing. It is a complicated formula that is computed based on how long the car stays in inventory after delivery to the dealer. So if one buys a car "below invoice" this does not mean that the dealer is losing money on the sale. Far from it. Holdback can be several thousand dollars.
Once, while negotiating a deal I mentioned holdback to the salesman who got highly annoyed that I even knew about it, and stated that it had nothing to do with the price of the car. It does because it's profit.