marcpitch

The invoice prices for the new GS' are on Edmunds and WOW....Lexus is really making out on these cars. Only looking at base prices, the GS430 is marked up 19% ($8,200) and the GS300 RWD is marked up 18% ($6,500). The dollar figures and the percentages are astonishing.

I guess one could look at it two ways. For those waiting a bit, you have a lot of room on price so your "deal" can be win-win. I almost reconsidered my rejection of the new GS, since I know I can pick up a semi-loaded 430 by the end of the year for close to $50,000-$51,000. However, my problem points, as detailed in other posts, prevail, and I will not get the GS at any price. It is a great car....just not for me....or others over 6'1" who like to have their seat back above a 45 degree angle.

The other way to look at it.....those of you buying at sticker...or heaven-forbid above sticker....you have been stuck! I have looked at cars with comparable and much higher base prices than the GS and none compare in percentage OR dollars over invoice to the GS. Look at the following cars invoices and MSRP's (Base prices) Audi A8, Audi A6, BMW 745, BMW X5 (8 cyl.) Infiniti M45....none of these cars, including the $70,000 BMW X5 approach the percentage mark-up. The BMW X5 is the only one of these approaching dollars marked up at $6,200, but that is with a $70,100 base MSRP. Simply Incredible!

To describe Lexus' 2006 pricing with a quote from the movie Top Gun "Gutsiest move I ever saw!"

While the relative quality of all these cars is debatable, the GS discrepancy between invoice and MSRP seems out of whack. Where do they get off entering a competitive market, loaded with new or almost new models, and decide let's mark these up higher than the competition's $70,000 cars. Are they trying to make up for the 2 years too long that the 2nd generation was in play? Incidently, the 2nd gen. GS never had an MSRP mark ups like this.

I am sure Rockville will have some insight or spin. I would more readily accept the answer that Lexus does this because they can, rather than some baloney about Lexus quality, etc. I know they have quality and I know their cars are great, but not 18-19% mark-up great. Perhaps, the 4th generation isn't due until 2020 and they need to get their GS money when they can.

Be assured, I am not upset with Lexus for this mark-up. I am perplexed. Now, if I was drving a new 2006 GS, then I would be upset. It is one thing to pay sticker; I have done that; it is quite another to pay through the nose.

akbergq

To be quite honest, i was very perplexed to see difference in numbers of invoice and MSRP.

But, with this there is room for negotiation. Id imagine that in 8-12 months, you will see alot of change....all contributing to a price decrease.

1. More readily available cars at the lot with various colors and combinations of packages adequate to choose from

2. More mature demographic marketplace in terms of knowledge of real competition and intuitive/knowledgeable buyers.

3. Better lease rates FOR SURE. The lease option on this vehicle is absolutely ridiculously sky high! You could get a mercedes S class with a payment like the current lease pmt on a GS3!




These are the main points of interest I thought made sense. However, now that i think about it...it may be a little more than 8-12 months since the 2007 model GS - will be launched in may-june of 2006. That makes any room for negotiating price at LEAST a WHOLE years worth of waiting. Am i right?

LexFather

Newsflash, every car maker does this. EVERY one. You want to barf, GM makes 30k per H2 sold and 25k per Escalade sold.

Please post the other car makers invoice vs MSRP so we can compare. And since you have no intentions to buy the car, I guess your trying to convince others to do the same.

flipside909

I concur with 1SICK.

jrock65

"Lexus is really making out on these cars. "

You mean Lexus dealers, not Lexus. A big gap between invoice and MSRP favors dealers.

Gekko

The free market will figure out the correct price over time. Price is merely what the buyer is willing to pay and what the seller is willing to accept. Capitalism at its finest.

jrock65

2005 E320:

MSRP ($48,500) - Invoice ($45,105) = $3395 or 7.5%

2005 530i:

MSRP ($45,400) - Invoice ($41,495) = $3905 or 9.4%

2006 M35:

MSRP ($39,900) - Invoice ($36,676) = $3224 or 8.8%

2006 GS300:

MSRP ($42,900) - Invoice ($36,465) = $6435 or 17.6%


Interesting, the M35 invoice is actually higher than the GS300 invoice. Lexus dealers must LOVE Toyota the manufacturer.

spwolf

Yes, Lexus dealers are pretty happy with Lexus, thats why Lexus service is always rated the best :-).
And yes, Lexus sells most luxury cars in the US, with least number of dealers that get the highest margins on their cars.

As to the dealer margings - 18% is a bit too much from any kind of car - keep in mind that these are margins that dealers make, not manufacturers margins. Usual % for luxury car brand is 12%-13% of dealer margins, at least here in Europe.

I wonder if the info is actually correct, there is no real reason for Lexus to give dealers 50% better margings for no reasons at all... these margins are usually written in dealer contracts and are not likely the subject of change. These margins have nothing to do with how much Lexus actually makes per car. Probably just bad info from Edmunds.

In 2003 MB dealers in Germany went in uproar when MB wanted to lower the margins from 13% to 12.5%, in order to cut prices on their cars....

JHStrange

While it would be nice to get a reduction, who doesn't want a "deal" or more for less but I've rarely had a problem with profit; particularly when I get the level of service I've gotten from our Lexus dealer. If you squeeze too much you start to lose services, you get run through the wringer every time you want to have something done, etc.

For now, this is a new, major re-do of a popular car; negotiation will come as mentioned in previous posts by others. My perception is some posters just like to stir up the responses.

Threxx

Seems like all Lexus sticker prices are wayyy over invoice price. Much more than the Toyota parent company and even more than some other premo brands.

People don't seem to mind it though.

I've never bought a new one but if I wanted to I'd make sure to find a dealer willing to sell to me very close to invoice, or else I'd just go used. No way I'm putting 8 grand in markup in the dealer's pockets plus their kickback (2-3% I think), plus their sales bonuses.

AsianGirl007

iTrader: (1)

Actual dealership GS profit margins are smaller than you are letting on with. I am looking at some invoices right now and your profit numbers are too high. Also, the GS430 still has a very long waiting list, up to 5-6 months at some dealers. I'm not sure where you think one can buy a 430 for below invoice on a 2006 new body style. It's on a 18 months cycle so no discounting anytime soon on that car.

In addition, the last time salespeople made any money on the GS was in 1998!!! It's all about supply and demand. (Business 101)

1SICKLEX:
$32k?? Seriously for a H2??? Good gracious, that's nuts!

LexFather

If its true, I don't care. Lexus has the best dealer service. Even before i had extra perks, the dealer service was great. When it wasn't I switched dealers. I like a new loaner, free gas, orange juice. I like a nice clean dealership, internet access, new magazines to read there. I like the fact I am never hassled about a loaner.

AS spywolf pointed out, unhappy dealers start pooting on customers. They start taking away benefits. Infintii is pretty decent (but won't be argued since they are off Lexus radar)but BMW and Benz are notorious for dealer practices that are subpar. And looking at what Jrock posted, Benz and BMW makes the money. A E320 invoice is 46k to a GSs 35k.

So its better to get ripped off by Benz than by the dealer?

Your buying a luxury brand, not a Kia. Gekko spelled it out anyway.

Threxx

How has nobody made money off a GS sale? Even an invoice sale should give them a hundred or two hundred bucks at least, right? At least I know that's the case at GM dealers.

And pretty much everywhere I've gone (carpoint, edmunds, consumer reports, etc) Lexus vehicles as a whole are given a very large % of markup between invoice and sticker. So where does that money go?

Also since you are here, I was just curious is it possible to get a new LS430 with just the basic options (not a super loaded model) for invoice or near invoice?

jrock65

Longo,

Are those Edmunds numbers wrong? If so, we should let them know. A LOT of shoppers rely on them for invoice prices.

jrock65

$32k for a H2?

Um.

H2 MSRP $52,430. Invoice is $47,973. Thats more like $4500. Of course, it's possible that there are rebates, but even so, it's nowhere in the vicinity of $32,000.