I know a guy who owns a Buick/GMC dealership and he once told me if a dealer has to go into his holdback to close sales,he won't be in business long.

 

You must be talking about a '10 RX because at $1300 under invoice on an '11,with no manufacturer to dealer incentive,the dealer is losing around $600.

 

that's what i thought. 2011 that sounds weird

 

I was offered $38,859 on a 2011 AWD with MSRP of $44,339 and Invoice of $40,353..
This was back in October too, ended up getting a 2010 AWD for $3,000 under invoice..
It all depends on where you are, here in Bay Area, Lexus sells well and competition between dealers are pretty fierce..
which I believe might explain the aggressive pricing..

 

Competition is one thing but dealers losing money on sales is another.
With no manufacturer to dealer incentives,dealers are losing hundreds to thousands on a sale with numbers posted here and that doesn't make sense.
I'm in the NYC metro area with over 20 Lexus dealers in a 75 mile radius and those deals are not available here on a '11.I doubt anywhere unless you're a friend or relative of the dealership owner.
You were actually better off buying the '11 for the $1500 under invoice.
The '11 would be worth $3K-$4K maybe more in resale than the '10 for another $1500..

 

dealer true cost is not the invoice price..actually, it is no where near the invoice price they showed you..
you might think by taken away dealer holdback & wholesale financial reserve which is 3% for Lexus, dealer then will not make money, but you are wrong..

there are factory rebates, trunk money, cash to dealer, etc, that are offered to all dealers and those are the info we find on sites such as true cars & edmunds..
then, there are other things such as DELIVERY ALLOWANCE & DEALER REBATES that are offered to select dealers but not all..

then, there are also carry-over bonuses, volume bonuses, and customer-satisfaction bonuses, which dealer split w/ sales and can all add to dealer's profit..
(haven't you wonder why luxury brand like MB, BMW & Lexus, after the sale is done, the sales person will remind you to give them perfect score on survey from manufacturer??)

I didn't include TDA because that's an actual cost, the actual advertise cost per car maybe less than TDA, but dealer do have to spend money on maintain the facility, clean the show room, etc..

 

Interesting....
I've heard top selling dealers just get more hot selling vehicle models and vehicles with hot selling colors and model options allotments.

 

New owner here. I just purchased a 2011 Rx 350 awd for $42,700 with a sticker of $47,985. Did I get a decent deal? Not sure what people are paying

 

i think that's close to invoice? congrats on the new car you got the car already, just enjoy it

 

Just bought a 2011 RX350 AWD, MSRP of $44,450 for $39,200, which is under invoice. Nobody would budget on a doc fee though, and when I settled on a dealer, he refused to give me Navigation for under MSRP (although others would have I'm sure), so I just didn't get it. Most dealers only offered me invoice.

 

I just picked up a 11' at invoice.

 

Just got one at the same price :-)

 

then, there are also carry-over bonuses, volume bonuses, and customer-satisfaction bonuses, which dealer split w/ sales and can all add to dealer's profit..


When we go to walmart, do we worry about how much Walmart has to pay for the mechandize? When we buy a house, do we worry about how much the previous owner pay for the house and hence his/her profit (or loss)? I think it is pretty silly to focus on dealer cost instead of focusing what is the best deal that I can get in a particular market. When people make proclaimation in a msg board that "you should not buy a car unless you get xxx below/above invoice", I would ask where? All car price are local. If you live in a town with only one Lexus dealer, tell me how can you get them to agree to xxx below/above invoice. If there is no competition, the dealer will set the price and we can either pay up or walk away. There is not much leverage one has in those situation.. however, if there are a few dealers around your area, then things can get interesting. And you can let each dealer bid on your business and drive down the price. Would I shed a tear if a dealer has to sell me a car below cost? No, I won't. but I also won't beat up myself if I need to pay up for the car if I really want the car and I already did my best in getting multiple dealer involved.. So stop preaching the good deal base on dealer cost theory.. It does not work, because you ignore the local supply and demand for that parituclar car. The best way is to email or call all dealer in your area and find out the best price you can get.. If it is not good enough, try dealer in Los Angeles area and see if the saving is worth your trouble of flying to LA... We are just wasting time discussing dealer cost.. by the way, what about the insurance, rent, lighting, commission, salary for accounting support, detail person etc etc. that go into dealer's cost? Why aren't those important to the dealer...

 

It depends a great deal where one is located (State or within a State) as to what kind of deal one can get. The general caveats of "supply & demand economics" still seems to
work in car sales as well. One can likely negotiate a far greater deal in California with 37 or so Lexus Dealers than in Oregon (2 Lexus dealers in the State), or other states with near zero dealerships. What a dealer pays for the vehicle is nice to know when negotiating, but every dealer's negotiations differ based on their respective policy, etc.
I do not care what a dealer makes as much as I care if I got a deal (and a vehicle of choice) that makes me happy.

 

picked one up today for 1300 under invoice. $47,504 down to $41,570. Also got $1000 Loyalty program incentive towards down payment (currently own a '07 GS350) and also eligible to use a $1500 new car purchase/lease credit coupon (still waiting to receive it, and send in for my rebate) im receiving b/c my GS had a valve spring recall and the coupon was sent out as a courtesy.