azmojo

I was going to wait until I had answers on sales tax, but I'll just post when I get that situation officially resolved.
I recently concluded my special order transaction with Lexus of Santa Monica (CA). In doing so I learned a few things:
1. The invoice prices I have quoted so far do not include LDA (Lexus Dealer Advertising) which was $601. I believe it is $601 for everyone. So except for the prior post, all invoice figures I posted are actually $601 higher. Edmunds shows this fee on their website but they don't have a value for it and mark it with an (*). I will be adding $601 to invoice price quotes from now on.
2. Additional fees paid included an $80 doc fee. I expect this varies from dealer to dealer. If you live in CA, a DMV fee of about $11 was also added.
3. The dealer invoice included a statement: "This invoice may not reflect dealer's ultimate vehicle cost. Dealer receives a wholesale finance reserve of $970... Dealer may receive other allowances, rebates and incentives earned by or offered to dealer which are separate from the dealer invoice price."

gmanusmc

You're around 12% off msrp which a is a pretty good deal, even here in CA. If this price is the result of negotiating with multiple dealers and if this is the color combo and equipment you are looking for, you might be at or close to the best you'll get.

Let us know how it turns out.

gfunk

This is actually an AWD, so that makes the deal a bit sweeter I guess. I'm gonna have to go have a chat after the holidays. I'll update if I purchase.

-g

azmojo

OK, that gives an invoice price of $46845. I had also mistakenly include ML. You are $3k under invoice which is a good deal.

Machine13

Azmojo,

In my opinion, the statement in your item #3 is the best reason to discontinue what you said you’d keep doing at the end of item #1, “quoting” dealer invoice prices.

I feel that by continuing to bring up dealer invoice everytime someone new posts here, it might be shifting people’s understanding away from the better and more normal metric to gauge their deals, which is percent off MSRP.

If I were a dealer, I would be perfectly happy for customers to try to base their negotiations off dealer invoice because I’d already know the invoice is designed to deceive.

As your item #3 indicates, dealer invoice is completely meaningless anyways.

It’s not that it’s wrong to analyze a deal, after the fact, in terms of dealer invoice, I don’t have a problem with that. But I do think it potentially adds confusion for people coming to this thread looking for help on the best way to base their negotiations or gauge their deals. There’s no harm in knowing what invoice price is, but actually working a negotiation as dollars off invoice price is not the best or most straightforward route to negotiating in general.

The best baseline metric to track over the long term, and what is most helpful for people in a thread like this, is what percent off MSRP one’s selling price ends up being. This brings into focus a single, constant, easy to understand percentage number, or percentage range, that the buyer can target. Thinking in terms of percent of savings makes more sense than dollars of savings, especially off the farce that is dealer invoice.

As far as more specific negotiating tactics, and how to get dealers to eat some of their ridiculous fees, I will leave that to another discussion.

Finally, regarding LDA, the LDA on my car’s invoice, which I got a copy of from the dealer, was $790. So, perhaps the LDA changes from dealer to dealer or region to region and that’s why Edmunds may have an * asterisk on this fee.

Also, the dealer completely waived the LDA during my negotiations.

I know you’re here to help. Me too. If you’d be interested, I’d like to hear any rational why you think keeping track of the metric of dollars off invoice price is better than, or a good supplement to, % off MSRP. Obviously excluding taxes and fees for this part of the discussion.

With kind regards,

azmojo

I'll continue to maintain that MSRP is a poor way to think of deals, and I'll give some examples.

The markup on options varies greatly, which can lead to a distorted opinion or view of how good a deal is. For a more extreme example, the F-Sport performance exhaust invoice is $1050, and MSRP is $1600, a markup of ~52%. While for the PCS system, invoice is $460 and MSRP is $500, a markup of ~8%. If you're trying to make a deal on a car with only the exhaust as an option, the dealer will probably very readily give up $550 of price (approx 1% of car's cost) to sell to you at invoice. Whereas if the car has only the PCS as an option, the dealer would in most cases be only willing to give up $40 without much argument (only .1% of car's cost) to sell at invoice. The guy getting the car with the exhaust will look like he got an extra ~1% off on his purchase compared to the guy buying a car without the exhaust won't be able to achieve. If you got 13% off on a car with the exhaust, then how does someone know that getting 12% off on a car without the exhaust is an equivalent deal?

Secondly, the invoice price - not MSRP - is how I believe dealers "think" about deals. They know how far back of invoice they can go because those margins are usually fixed or fairly standard.

As it applies to this forum, because of my examples above, it's easy to make a deduction that if the prevailing deal posted here is about ~$3000 under invoice, that any good negotiator at a motivated dealer can get a similar deal regardless of options packages and configurations chosen.

Edited to add:
The invoice approach also has implications for shopping around.
Call a dealer and ask if they'll do $1000 under invoice on any 2015 IS and they'll usually give you an answer or you can even negotiate the figure without talking about a specific car. Ask them for 10% off of MSRP and they'll probably have to identify a specific car and do some calculations. Not that it can't be done, but it's more back-and-forth and a little more work for the dealer that way.

tjs1970

Hello -

I am looking at an IS250 - 2015 - AWD with Nav, Premium Package, a few other add in's that equal an MSRP of $45158. Invoice is $42,308 or very close to it.

Here is what the dealer is offering me:

Negotiated Price: $42948
Pro Trim add in: $229.00 (this was supposedly already included as an aftermarket)
Total Rebates: $850.00 (doesn't specify who it goes to or where it is from)
Advanced Payments: $384.33 (first payment is supposed to be complimentary right now)
Upfront Charges: $83.30 (doesn't specify)
Trade in Allowance: $15,985.00
Trade in Payoff: $11,751.24
Total Cap Reduction on sheet I was given: $4,650.43

36 months
12,000 miles per year
Residual 64%
Money Factor: 0.00075
Tax Rate: 8.9%

Base monthly payment: 350.03
Tax $34.30
Monthly Payment: $384.33


Total due on Delivery: $0.00

They are telling me 1st month payment is free, 32 payments that are tax free and then 3 payments at the full $384.33.

I went to 4 different lease calculator sites that indicate the after tax payment should be between $343 and $348 per month with these numbers added in.

Thanks in advance for any help and advice!

azmojo

I don't know enough about leases to comment, but I think with the Pro Trim (I'm not even sure what that is) if you are stubborn enough you can get that for free. Just start asking if there are any cars that don't have it installed or ask if they can get a car from another dealer. If you fight it, they will waive it.

rp2000r

The Pro Trim in WA is horrible. It's trim around the fender wells and sticks way out and usually is not a good paint match. Really ruins the lines of the IS.
Me and a friend in WA bought 15 350F RWD, BSM, Mark, Nav, and a few other little options for $43,950/$44K so I think you can do better but you have to stand your ground or what till the end of the month when the sales people start hounding. Both cars had a MSRP of $48,800 or so. Basically 10% of MSRP

Goodluck!

gmanusmc

I'm way confused on this one but will try to help.

Using the info you provided, I get a 36 mo payment of approx 382 incl tax. I have never heard of some payments being tax free so you need a detailed explanation of that. If multiple security deposits are allowed in WA, you should use your trade equity for those to reduce the money factor and get the MSDs back at end of lease. Also, they haven't given you squat for discount. As the other poster said, you should push for a 10% discount off msrp - that, combined with MSDs, if allowed, would probaby get you a lease payment less than 300.

tjs1970

I negotiated the sales price down to Invoice of $42,298. Kept the same trade value, money factor first month included and 35 payments of $331.55 which are all tax free because of the tax credit from the trade. I have a form in my paperwork that clearly outlines that I have 36 payments that are non taxed. No money out of pocket.

I am quite sure they made money on this deal, but I feel satisfied with the deal I got. Have the car home now.

gmanusmc

Congrats - enjoy your new IS!

Very tough market in WA - now that you've explained the tax credit aspect available to you, it makes sense. It's nice to only pay around $160 sales tax on the lease payments.

Not to worry - dealer made a tidy profit on this deal - but you got a great car.

gfunk

So,

I ended up with a different color (but essentially the same) car. I got a 2015 IS350 F Sport AWD in Silver Lining Metallic / Stratus Gray with these options:

• Navigation System
• Blind Spot Monitor w/Rear Cross Traffic Alert
• F Sport Package
• All Weather floor mats
• Accessory package

Negotiated Price: $43,898
Delivered Price: $46,615.41
Financed: $31,615 (after trade in and cash) at 1.9%
Payments: $553.16/mo.

-g

azmojo

Doesn't look too bad for me. Invoice is $45985 + LDA (approx $600) so you are approx $2700 under invoice. That's not a terrible deal by any means.

gmanusmc

Nice deal and great color combo - congrats and have fun with it!