Dealer Showed Me The "Purchase Price" - Is It BS??

wes96 on 10/02/2018 - 18:44

I was negotiating a used car recently at a car dealership who also had used car inventory. We were back and forth with the negotiation and he told me that my offer was lower than what he paid for the car. He then showed me something on his iPad which was written as "Purchase Price: $25,000".

I've always taken these guys with a grain of salt so is that actually the real price or some hiked rubbish to make customers reconsider?

If it helps you to justify what happened here, the car was a Mazda 3 SP25 Astina. Quick look on carsales shows you $25k as a dealer isnt exactly reasonable. Or in my mind at least.

Automotive

Comments

  • mysterytal on 10/02/2018 - 18:48
    +13

    The purchase price may also includes a discount that was given to encourage the purchaser to buy.

    i.e they may have paid $25,000 for a trade-in against a new car listed at $70,000 but they could have sold the $70,000 car for $65,000 without a trade-in. So they really valued the $25,000 car at $20,000.

    It's all a con. Just pay what it's worth. If you can't then walk.

  • [Deactivated] on 10/02/2018 - 18:48

    Using this app?

    www.appstore.com/bs4customers

  • lxndev on 10/02/2018 - 18:48
    +3

    They get kickbacks, etc. same as places like JB.

  • BertieBrown on 10/02/2018 - 19:03
    +19

    I’d say if the salesman voluntarily showed you this, it’s almost definitely malarkey. Any reasonable salesman will never show you actual figures b/c it could damage their position or their leverage if you know how much they paid.

    It’s the same when retail staff ‘secretly’ show you what their cost price is, it’s all complete rubbish meant to bamboozle the buyer into thinking their getting a good deal.

    Use red book and the market in general as a guide would be my advice.

    • wes96 on 10/02/2018 - 19:08
      +3

      That's a good way you put it. I work retail myself and have never given the cost price to anyone.

    • John Kimble on 10/02/2018 - 19:33
      +1

      Exactly. Would be like playing poker and the other player showing you his cards!

  • CyberMurning on 10/02/2018 - 19:08
    +2

    Come on… If squack like a duck then it is a duck

    • rompastompa on 10/02/2018 - 19:12
      +22

      If it squacks, it's more likely a ducktopus.

  • altomic on 10/02/2018 - 19:15
    +3

    here's a piece a paper with "purchase price $30,000" written on it in crayon.

    still think you are getting a bargain?

    the best way to know if you are getting a decent price is to scour carsales (and similar sites) and find the identical vehicle and look for the lowest price there.

    that lowest price is the very most you should pay for a car.

  • chumlee on 10/02/2018 - 19:54
    +13

    Go back and show him something on your phone with your bank balace of $20K and get the deal done

    • kingmw on 10/02/2018 - 20:48
      +1

      Lol I hope this works!

      But ultimately, it they want to sell it, they will contact you. Don't sound desperate and contact them.

  • R-Man on 11/02/2018 - 01:13

    Definitely load of crap. Most recent Demo car we bought, the dealer showed us their "Cost price". The next day they agreed to sell for that same cost price. Although they get incentives when they sell, I am sure selling @ cost price is not how business works.

    • wes96 on 11/02/2018 - 19:16

      The business where I work is cost price + 10% and that's our staff discount. Good enough for the business, good enough for the staff.

      • SnoozeAndLose on 11/02/2018 - 20:15

        You never know the cost price includes commission, tax write off and other hidden benefits.

        I used to work in timberland warehouse, the real cost for a t-shirt manufacture by the China local factory is RMB $8 ~ AUD $2. So in the shop the cost price become $50 which it is what you tink you are getting a real discount.

  • bobbified on 11/02/2018 - 07:02
    +1

    If anything, it'll most likely be the price that they need to sell it at to break even. ie, the actual cost price plus a whole range of dealer expenses.

  • boccos on 11/02/2018 - 08:13
    +1

    There are Dealer incentives that get paid if they meet quantity targets. These are quite lucrative, so lucrative that even if they sold the whole lot at cost price, they would get more than compensated. But the poor sales staff, if they get commissions on the gross profit of the sale,
    would get very little commission.

  • Hithere on 11/02/2018 - 08:42
    +1

    How do you tell when a car salesman is lying?

    You can see their lips moving.

    With the kickbacks they get their official cost price is often thousands of dollars more than the dealership pays for a vehicle.

  • alxr0101 on 11/02/2018 - 10:54

    End of month and end of quarter are good bargaining times.

  • JayOh on 11/02/2018 - 11:15

    Depends on how the dealer acquired the car - if it was a trade in, they may have written it into their books with a much higher trade in price instead of discounting the car they were selling.

    If they bought it wholesale to sell retail they may have paid too much and got stuck with a car that owes them too much.

    Either way it doesn't really matter, for a car like the Mazda 3 the market sets the price - there's enough out there so keep shopping around until you find one at the price you want.

  • Jalif on 11/02/2018 - 13:04

    It's likely true, but does not factor in rebates or bonus payments.

    If they're willing to sell at cost that price then they must be making money somewhere.

    On the sales side, car dealerships make their money on bonuses for hitting sales targets and add-ons like window tinting, extended warranties etc that are sold at high markup.

    There are also usually kickbacks for dealer approved finance.

  • test123123 on 11/02/2018 - 20:01

    Do not ever trust dealer

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