Pricing Help on 2012 ISF
Rookie
Joined: Feb 2017
Posts: 81
Likes: 23
From: WA
It's silly to assume that my dad didn't do research and went to a dealership like some shmuck simply trying to "play hardball". The research we did is part of what uncovered the fact that the rarely sell under MSRP where I live - the market is different here; a perfect example of that is the fact that ISFs are dirt cheap where I am compared to most of the USA, since they have to sit in the garage for at least half the year (the exact time period a subaru is awesome, in fact. lol). Supply and demand isn't the same for every single car in every place in north america, it's not as simple as "industry average is XX, so you should expect that anywhere".
And it doesn't make ZERO difference what the store's "cost" is... it's not the be-all end all, but it's ignorant to think that it doesn't factor into the sale price - just ask anyone you know that works in sales, they'll know EXACTLY what their margins are on what they're selling. This wouldn't be the case if it didn't matter. Cars are priced based on a combination of things, and you're correct in saying the supply demand curve is a major factor - but you're talking about setting the cost ("how dealers price most cars") - that's just the starting point. I'm talking about the ability to get a seller to move off that cost. Margins come more into play when you are trying to get a seller to deviate from the initial price - they're going to do everything they can to maximize margin (or avoid selling at a loss), because at the end of the day, the business is about making money; i.e. your margin. And please don't misunderstand, I agree that market demand is a huge factor in a buyer's ability to get the seller to deviate from the cost.
One thing I wholeheartedly agree with in your above post - and is definitely the most important piece of advice when going into a car purchase - is your recommendation to research the heck out of whatever you're buying. Hopefully OP doesn't get too distracted by this debate, and still takes this away from the discussion! haha.
And it doesn't make ZERO difference what the store's "cost" is... it's not the be-all end all, but it's ignorant to think that it doesn't factor into the sale price - just ask anyone you know that works in sales, they'll know EXACTLY what their margins are on what they're selling. This wouldn't be the case if it didn't matter. Cars are priced based on a combination of things, and you're correct in saying the supply demand curve is a major factor - but you're talking about setting the cost ("how dealers price most cars") - that's just the starting point. I'm talking about the ability to get a seller to move off that cost. Margins come more into play when you are trying to get a seller to deviate from the initial price - they're going to do everything they can to maximize margin (or avoid selling at a loss), because at the end of the day, the business is about making money; i.e. your margin. And please don't misunderstand, I agree that market demand is a huge factor in a buyer's ability to get the seller to deviate from the cost.
One thing I wholeheartedly agree with in your above post - and is definitely the most important piece of advice when going into a car purchase - is your recommendation to research the heck out of whatever you're buying. Hopefully OP doesn't get too distracted by this debate, and still takes this away from the discussion! haha.
Ive been in the car biz for many many years, while i've worked retail, i now work for *** Automotive for the last 10 years, we own Manheim, Autotrader, KBB, VAuto, Dealertrack, Dealer.com, and many other companies all auto related.
And while i get your point about the pricing, that is not the current status of any dealer that is staying in business right now. Margins have been DRASTICALLY condensed over the last few years, and any dealer that is doing well is using market based pricing, and they have tools that will tell them what to pay, when to pay it, what it will sell for, and how quickly it'll sell at that those metrics, and if not they'll cut it lose either wholesale or retail, the name of the game is turning cars as quick as humanly possible. Dealers can not afford to sit on cars for more then 30-45 days (on average) 60 days at most. Trust me when i say, they buy and sell for market value, and certain cars have high market days supply (which will be priced more aggressively and lower margin), and certain cars have low market day supply (can price higher at higher margin, and still sell in low amount of days) its called inventory turn, and it HAS to be less then 60 days in the industry climate these days.
I was being somewhat facetious in saying cost doesn't matter, of course it does, however with that said...... they have their cost figured out on that car, well BEFORE they buy the car, or they wouldn't buy it at all, if it wouldn't fit in their business model. Trust me. Im very well versed on how car dealers operate.
My example was extreme when saying if they bought it for 20K clearly they aren't buying a clean 2012 ISF for 20k, BUT, i still maintain if they just found some crazyy smoking good deal on a ISF they would STILL sell for market value. ANY intelligent business person would do the same. Just because they make an average of 3k per car, doesnt mean they wouldn't make 10-20k if they could on one or 2... (which they do I'm sure), but at the same time, you'd be surprised at how many cars dealers will lose $ on just to get rid of it, because its aging inventory, that will continue to go DOWN in value if they don't cut losses now.
Trust me. But no offense was meant to you or your dad, but i promise you they were willing to sell the Subaru for the price you got it at because they had the ability to, and knew if they didn't, you would get it elsewhere for that $. You can think it was your negotiating all you want, but they sold it for what other dealers were selling for, or they wouldn't have sold it. What goes on in a sales office isn't "wow these guys are good, they made a good point there, lets save them a 1000.00" its more like this....."does this price work for this vehicle? how many days old is it? what color and equipment is it? is it a hot model right now? whats the gross profit at this $? How many of these do we have sitting around? whats the other subaru dealer selling them for? how many rebates do we have from the factory? whats the current incentive? now does that price work? Yes? Sell it! No? Boot them, next"
Sorry to say thats how it works.
Rookie
Joined: Feb 2017
Posts: 81
Likes: 23
From: WA
They told me they didn't change the tires or brakes. Those items were not serviced by Lexus during the inspection/reconditioning. He specifically told me they did not do those items. The only things mentioned were wipers, oil change, and some other things. I specifically asked for brakes and he said, No. I checked the tires. I am not a tire guru at all. From my guess, they were about 60-75% in valuation.
I appreciate your responses!!! Please PM me the details of their purchase! I will buy you In-N-Out.
I appreciate your responses!!! Please PM me the details of their purchase! I will buy you In-N-Out.
@ 40,000 +/- is what they're in the car, and they will sell it in the next 2-3 weeks. Guarantee'd. ANNNND they paid more then your original offer of 38,000.00, so you're not going to be anywhere close to 38000.00, you'll be lucky to get under 45k, but maybe they'll hook you up at 44-44500.00 if you go in with enough data to support that price, but even then don't be offended when they say NO.
So it can be you, or it can be one of the other 1000 people looking for that exact car...
Last edited by USB2011JAM; May 21, 2017 at 09:57 PM.
Rookie
Joined: Nov 2016
Posts: 94
Likes: 8
From: AB
Please don't take my reply as knocking you or your dad, that wasn't my intent whatsoever.
Ive been in the car biz for many many years, while i've worked retail, i now work for *** Automotive for the last 10 years, we own Manheim, Autotrader, KBB, VAuto, Dealertrack, Dealer.com, and many other companies all auto related.
And while i get your point about the pricing, that is not the current status of any dealer that is staying in business right now. Margins have been DRASTICALLY condensed over the last few years, and any dealer that is doing well is using market based pricing, and they have tools that will tell them what to pay, when to pay it, what it will sell for, and how quickly it'll sell at that those metrics, and if not they'll cut it lose either wholesale or retail, the name of the game is turning cars as quick as humanly possible. Dealers can not afford to sit on cars for more then 30-45 days (on average) 60 days at most. Trust me when i say, they buy and sell for market value, and certain cars have high market days supply (which will be priced more aggressively and lower margin), and certain cars have low market day supply (can price higher at higher margin, and still sell in low amount of days) its called inventory turn, and it HAS to be less then 60 days in the industry climate these days.
I was being somewhat facetious in saying cost doesn't matter, of course it does, however with that said...... they have their cost figured out on that car, well BEFORE they buy the car, or they wouldn't buy it at all, if it wouldn't fit in their business model. Trust me. Im very well versed on how car dealers operate.
My example was extreme when saying if they bought it for 20K clearly they aren't buying a clean 2012 ISF for 20k, BUT, i still maintain if they just found some crazyy smoking good deal on a ISF they would STILL sell for market value. ANY intelligent business person would do the same. Just because they make an average of 3k per car, doesnt mean they wouldn't make 10-20k if they could on one or 2... (which they do I'm sure), but at the same time, you'd be surprised at how many cars dealers will lose $ on just to get rid of it, because its aging inventory, that will continue to go DOWN in value if they don't cut losses now.
Trust me. But no offense was meant to you or your dad, but i promise you they were willing to sell the Subaru for the price you got it at because they had the ability to, and knew if they didn't, you would get it elsewhere for that $. You can think it was your negotiating all you want, but they sold it for what other dealers were selling for, or they wouldn't have sold it. What goes on in a sales office isn't "wow these guys are good, they made a good point there, lets save them a 1000.00" its more like this....."does this price work for this vehicle? how many days old is it? what color and equipment is it? is it a hot model right now? whats the gross profit at this $? How many of these do we have sitting around? whats the other subaru dealer selling them for? how many rebates do we have from the factory? whats the current incentive? now does that price work? Yes? Sell it! No? Boot them, next"
Sorry to say thats how it works.
Ive been in the car biz for many many years, while i've worked retail, i now work for *** Automotive for the last 10 years, we own Manheim, Autotrader, KBB, VAuto, Dealertrack, Dealer.com, and many other companies all auto related.
And while i get your point about the pricing, that is not the current status of any dealer that is staying in business right now. Margins have been DRASTICALLY condensed over the last few years, and any dealer that is doing well is using market based pricing, and they have tools that will tell them what to pay, when to pay it, what it will sell for, and how quickly it'll sell at that those metrics, and if not they'll cut it lose either wholesale or retail, the name of the game is turning cars as quick as humanly possible. Dealers can not afford to sit on cars for more then 30-45 days (on average) 60 days at most. Trust me when i say, they buy and sell for market value, and certain cars have high market days supply (which will be priced more aggressively and lower margin), and certain cars have low market day supply (can price higher at higher margin, and still sell in low amount of days) its called inventory turn, and it HAS to be less then 60 days in the industry climate these days.
I was being somewhat facetious in saying cost doesn't matter, of course it does, however with that said...... they have their cost figured out on that car, well BEFORE they buy the car, or they wouldn't buy it at all, if it wouldn't fit in their business model. Trust me. Im very well versed on how car dealers operate.
My example was extreme when saying if they bought it for 20K clearly they aren't buying a clean 2012 ISF for 20k, BUT, i still maintain if they just found some crazyy smoking good deal on a ISF they would STILL sell for market value. ANY intelligent business person would do the same. Just because they make an average of 3k per car, doesnt mean they wouldn't make 10-20k if they could on one or 2... (which they do I'm sure), but at the same time, you'd be surprised at how many cars dealers will lose $ on just to get rid of it, because its aging inventory, that will continue to go DOWN in value if they don't cut losses now.
Trust me. But no offense was meant to you or your dad, but i promise you they were willing to sell the Subaru for the price you got it at because they had the ability to, and knew if they didn't, you would get it elsewhere for that $. You can think it was your negotiating all you want, but they sold it for what other dealers were selling for, or they wouldn't have sold it. What goes on in a sales office isn't "wow these guys are good, they made a good point there, lets save them a 1000.00" its more like this....."does this price work for this vehicle? how many days old is it? what color and equipment is it? is it a hot model right now? whats the gross profit at this $? How many of these do we have sitting around? whats the other subaru dealer selling them for? how many rebates do we have from the factory? whats the current incentive? now does that price work? Yes? Sell it! No? Boot them, next"
Sorry to say thats how it works.
Rookie
Joined: Feb 2017
Posts: 81
Likes: 23
From: WA
I'm 100% in agreement, and obviously I took your post a little too personally (and took your facetious comments at face value haha, I should know better since this is the internet after all), that's my bad. No need to apologize or think I might be offended - what you described as how the deal "should" work, is pretty accurate for our experience - obviously I didn't do a good job in articulating that. Give me a break, I have a background in engineering, I'm not good with words.
All good, I have a background in the car business, in many different parts of the biz... I just know how dealers work, and how car deals work, ive been involved in literally 10s of thousands of car transactions, be it wholesale, retail, auction, whatever... I don't expect people to know the biz like i do, thats why ill occasionally post on here. Because i see a lot of people going through the grind of trying to buy a car, and 9 times out of 10 they go at it the WRONG way. They get bad advice on THIS forum, maybe, eventually they find a car, or buy, but a lot of times end up with a poor experience, or mad at the dealer, or feel ripped off, whatever the case is. Don't get me wrong there are some POS's for dealers, but for the most part any reputable new car store, or large independent (CarMax) for the most cant afford to rip people off anymore. They'll go out of biz.
Last edited by USB2011JAM; May 21, 2017 at 10:10 PM.
Racer
Joined: Sep 2014
Posts: 1,521
Likes: 270
From: Nc
Too many trips to the dealership with "offers" won't get you a good deal.... actually does just the opposite. It tells them you REALLY want that particular car and that you can't do better elsewhere (which is usually true with the ISF). They are probably daring you to find a car as clean, with as few miles, ect anywhere in the area....which you probably can't do. Be careful, if you really want that car, don't let it slip thru the cracks. It won't be there in 2-3weeks.
Use the "no new tires, no new brakes" to your advantage of taking a few $$$ off....but can't ask $9k off, let's be realistic. Ask for $2k because you'd like to change these items out for piece of mind (or something to the sort). Like another member said, are you really gunna pass on a $47-50k car because you couldn't get $1-$2k off?!
Good luck!
V.
Use the "no new tires, no new brakes" to your advantage of taking a few $$$ off....but can't ask $9k off, let's be realistic. Ask for $2k because you'd like to change these items out for piece of mind (or something to the sort). Like another member said, are you really gunna pass on a $47-50k car because you couldn't get $1-$2k off?!
Good luck!
V.
Lexus Champion
Joined: Mar 2006
Posts: 1,841
Likes: 74
From: FL
All good, I have a background in the car business, in many different parts of the biz... I just know how dealers work, and how car deals work, ive been involved in literally 10s of thousands of car transactions, be it wholesale, retail, auction, whatever... I don't expect people to know the biz like i do, thats why ill occasionally post on here. Because i see a lot of people going through the grind of trying to buy a car, and 9 times out of 10 they go at it the WRONG way. They get bad advice on THIS forum, maybe, eventually they find a car, or buy, but a lot of times end up with a poor experience, or mad at the dealer, or feel ripped off, whatever the case is. Don't get me wrong there are some POS's for dealers, but for the most part any reputable new car store, or large independent (CarMax) for the most cant afford to rip people off anymore. They'll go out of biz.
Lead Lap
Joined: Nov 2010
Posts: 767
Likes: 7
From: Biloxi, Ms
Please don't take my reply as knocking you or your dad, that wasn't my intent whatsoever.
Ive been in the car biz for many many years, while i've worked retail, i now work for *** Automotive for the last 10 years, we own Manheim, Autotrader, KBB, VAuto, Dealertrash, Dealer.com, and many other companies all auto related.
Ive been in the car biz for many many years, while i've worked retail, i now work for *** Automotive for the last 10 years, we own Manheim, Autotrader, KBB, VAuto, Dealertrash, Dealer.com, and many other companies all auto related.
Sorry to go OT here.
Rookie
Joined: Feb 2017
Posts: 81
Likes: 23
From: WA
Fair enough, DT was just aquired by CA, and i know CA is planning a lot of changes to it. Im from the wholesale side, not software, so not my forte, but let them know and maybe they can help make some better changes.
Rookie
Joined: Feb 2017
Posts: 81
Likes: 23
From: WA
Many factors involved though, number of days on the lot, popularity of the car, and also the business model of the dealer, some stores prefer to sell more cars at a lower spread, and some prefer to operate on kind of an old school method of holding higher gross profit but that usually results in selling less volume. So it really depends. New cars, unless its a new hot model, they pretty much don't make much money at all on the "spread" its mainly money made in finance, or money the OEM provides the dealer, parts or service.
Rookie
Joined: May 2017
Posts: 37
Likes: 3
I still have to get my private party loan approved, but he did not provide the VIN yet.
49k still seems like a bit much when this 2k11 sold for 40 https://www.clublexus.com/forums/lex...-on-white.html
and this one sold for 42 https://www.clublexus.com/forums/lex...lexus-isf.html
I guess they are outliers, but can there really be 2 outliers in 1 month lol.
I suppose they are 2011 and not 2012. I am just trying to justify my reasoning. Please excuse my rant.
Rookie
Joined: May 2017
Posts: 37
Likes: 3
It was in rough shape. I might have lost my deposit, but it's okay. Lesson learned: Do not place a deposit over the phone.
I placed an offer for $25,000 on this one: https://www.clublexus.com/forums/is-...uys-think.html
The owner told me that the car was hit on the driver's side and he bought it from auction. He also told me that someone placed an offer of $10,000 down and got denied from the bank. This person was supposed to return with a co-signer.
It seems as if this car has sold since it is no longer on car gurus.
I visited Lexus of Riverside. They wanted $44,500 plus taxes and fees for the 2012 with 40,000 miles.
http://www.lexusofriverside.com/Vehi...-CA/2980154233
This will be the 4th ISF that I look at.
It's been quite the journey the last few weeks. I've learned a lot. I'm still a newbie in terms of cars.
It's all about the process after all. I hope to join the IS-F family very soon.
Racer
Joined: Apr 2011
Posts: 1,794
Likes: 71
From: NC
I placed a $100 deposit on this 2009 https://www.cargurus.com/Cars/l-Used...ting=175199040
It was in rough shape. I might have lost my deposit, but it's okay. Lesson learned: Do not place a deposit over the phone.
I placed an offer for $25,000 on this one: https://www.clublexus.com/forums/is-...uys-think.html
The owner told me that the car was hit on the driver's side and he bought it from auction. He also told me that someone placed an offer of $10,000 down and got denied from the bank. This person was supposed to return with a co-signer.
It seems as if this car has sold since it is no longer on car gurus.
I visited Lexus of Riverside. They wanted $44,500 plus taxes and fees for the 2012 with 40,000 miles.
http://www.lexusofriverside.com/Vehi...-CA/2980154233
This will be the 4th ISF that I look at.
It's been quite the journey the last few weeks. I've learned a lot. I'm still a newbie in terms of cars.
It's all about the process after all. I hope to join the IS-F family very soon.
It was in rough shape. I might have lost my deposit, but it's okay. Lesson learned: Do not place a deposit over the phone.
I placed an offer for $25,000 on this one: https://www.clublexus.com/forums/is-...uys-think.html
The owner told me that the car was hit on the driver's side and he bought it from auction. He also told me that someone placed an offer of $10,000 down and got denied from the bank. This person was supposed to return with a co-signer.
It seems as if this car has sold since it is no longer on car gurus.
I visited Lexus of Riverside. They wanted $44,500 plus taxes and fees for the 2012 with 40,000 miles.
http://www.lexusofriverside.com/Vehi...-CA/2980154233
This will be the 4th ISF that I look at.
It's been quite the journey the last few weeks. I've learned a lot. I'm still a newbie in terms of cars.
It's all about the process after all. I hope to join the IS-F family very soon.
Is the 2012 a CPO car? CPO means it's certified and includes factory warranty, which is not a bad thing to have. They recondition certain things or replace them (brakes and tires are common)
Car looks pretty clean from the photos, did you drive it?
In my very personal opinion, if you want to come across as serious buyer with this particular 2012, offer them something like 42,000 (plus tax) and see what the response is.
Don't forget Provident Credit Union, they have very good car loan rates. (As long as you have good credit)