Help deciphering this offer.

mike62

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I am going to help my daughter lease a new Sport S when she turns in her present JEEP. I have read to start as if to purchase then discuss lease options. The error on this offer is a 2 door and she wants a 4 door but just to get your opinion. This offer is based on MSRP of $34,075 minus the $2700.00 incentive? I said I would entertain an offer starting at invoice. I then planned on trying to get somewhere around 6-8% below invoice. He did say this offer was financing with Chrysler.

Should I ask for their invoice then subtract the incentive and the 3% MSRP holdback to get at a real offer price?

As I see it their offer does not involve any dealer money just Chrysler mfg. incentives?

Any techniques or suggestions are appreciated.

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Moreace

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$2,700 off MSRP doesn't seem like that much. Friends and Family should be more than that alone. There is another $1,000 off here in the northeast. Doc fee looks high too, but that may be geographic. Have you priced out at different dealers or at least looked at similar Jeeps on other websites within a radius?
 

Sohm Wan

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no other perks/packages for the car?
 
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mike62

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$2,700 off MSRP doesn't seem like that much. Friends and Family should be more than that alone. There is another $1,000 off here in the northeast. Doc fee looks high too, but that may be geographic. Have you priced out at different dealers or at least looked at similar Jeeps on other websites within a radius?
I'm dealing online right now due to the national situation. The sales manager gave me that price. When I emailed back he said that 2700.00 was ALL dealer money which I question. I have asked for clarification that he is not figuring Friends and Family into that money but according to him it was all dealership money .

There are not many incentives in the southeast currently. 0% for 36 months, big deal, lol. Other dealerships are offering about 2K off MSRP. I will be contacting others.

Am I more likely to get a better price starting at invoice and deducting the 2700.00 if possible? I am not sure what the dollar amount of Friends and Family actually is. Is that possibly around 700.00 off i.e. employee pricing and in this case he has taken approximately 2K off MSRP? If so 2K is not even the 3% MSRP holdback.
 
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mike62

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I'd walk just on the "Doc Fee". That's nutty.
I agree but every dealership in the Nashville area adheres to it pretty strictly.
 

EZMFE

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Any techniques or suggestions are appreciated.
I said I would entertain an offer starting at invoice.
- This would be taken as if you would buy at invoice. Why would the salesman go lower?

I then planned on trying to get somewhere around 6-8% below invoice.
- Trying? You start at that and don't entertain any offers above it. You have to know what you want to pay like you know the color green. You have to show confidence and the resolve that you are going to pay 6%, nothing more. If you show weakness or show the slightest "tell" that you may be willing to pay more... the salesman will smell that weakness and pray on it.

When making purchases at this level you walk in knowing what you are going to pay based on the research (auto/fincancial) you have done. You really shouldn't tell them you will entertain an offer at all. You hold all the cards in this case and should be able to pull off a great deal if you make the right plan and stick to your guns.

One of the problems is your emotions... you want this for your daughter but need to separate the emotional side of things so you can get the deal done right. This is hardball and if not careful you and her could get hit pretty hard with a high interest rate and a higher final price than what the dealer is willing to sell it for. This is actually the key... what the dealer is willing to sell it for.. and that is what your goal is to find.. the bottom end of what they will sell it for... That is why you feel them out and start below what you know they will sell it for. That way when you are dancing with the salesman... you can act surprised when they don't take it... all while laughing inside... Once you find the bottom... you truly start your negotiations. You see when you are dancing with the devil... it's a bit more fun when you know the dance moves.

The average going rate for those that do dance is 5% under invoice and so my first offer would be 6%-7% under invoice. For you this might be different and based on research in your area you may find 8% is where you will start.

First you need to know what invoice is and if the numbers that they are showing you are truly invoice. If you are not sure than take 5% as starting point and that will get you close (it's most likely closer to 6%). So 5% off MSRP for invoice and then another 6% off of that. Now to be honest, at this point you are most likely more around 5% under invoice but you would just keep that to yourself knowing those numbers are exactly where you want them to be. As far as they are concerned you agreed to 6% under invoice and so see if the numbers are accurate. If they are then make the deal. Also, that little 1% is a win on their side... you gave them that tiny win... let them have it... but know you gave it to them. I am not sure if you can follow that but those starting numbers are what will decide.

Cross off all of those extra fees on that paper you have in the image. Take a pen an cross off all the BS charges. Tell them you are not paying any extra fees. This will make them explain what they are... so you can watch them BSing you about charges. The first thing you want to do is tell them to take it off the price of the auto. If they added a $600 doc fee.. tell them they can keep it but it must come off the price of the car. You don't really care how all those numbers add up... you just know the final price should be 6% under invoice... and you have that number written down. If they give you a sob story of how they will not be able to keep the lights on unless they swindle you out of that doc fee etc.. give them a little bit. Tell them a doc fee of $200 is more reasonable and so you are willing to give them that but the other 400 must come off the price. See, you have to be a stickler with these charges and nickle and dime them to death or they will think they can just add them. If you push back on them and make sure they are aware of how much bs they are blowing up your rear.. you will find you just saved yourself a few hundred dollars. Make them itemize every last charge so you know exactly what you are paying and what for. Also, go in knowing what the doc fee, tax rate, license plate fee, are in your area.

Another important item is knowing what you qualify for as far as interest rates. Know your scores and don't allow them to tell you otherwise. You go to myfico.com and purchase all three reports and you will see multiple scores (mortgage, auto, etc) including the one they will use. Also, secure financing before the deal so you know exactly what interest rates they need to beat for you to allow them to select their favorite "high kickback rate" financial institution. If you "allow" them to finance it for you, they must beat the interest rate that you have already secured.

As far as the financial institution they may go through... Most are high volume and have little to no customer service. There are horror stories out there of people receiving late fees, excessive charges, and not being able to get their title when paid off. So sometimes paying that .25 - .50% higher interest rate to a local bank/CU is better than having to deal with a company that could truly care less about the customers they pretend to service.

One item you will want to remember is you are holding all of the cards. Without you they do not sell the automobile so that is something you can build confidence on. The sales/finance staff depend on people like you to purchase vehicles and if they don't sell vehicles at some point.. they don't have jobs. The key is knowing these people are sharks and keeping that in the back of your mind at all times is key. They are not your friend and will take as much money as you are willing to give them. They will settle for much less but will ask for and take as much as they can persuade you to give. You must play the game back if you want to win. You must pretend to be their friend.. laughing.. joking.. just keep your eye on the final amount.

Oh, and about that dance. You see these guys practice hours and hours on how to sell cars to people. One of the basics of that "dance" is to negotiate. So a salesman will not feel as if they are truly doing their job correctly if they are not able to negotiate a little bit. That is why you must start low when starting that process. You are essentially dancing with this dude and can do it with ease or get all jammed up when trying to move some numbers. They may pull out all kinds of numbers and tell you how much you are saving here or there.... Make sure you have written down the final numbers and know exactly what you plan on paying. Take a look at that paper to remind yourself of where you are and what you are doing. If you are way off for some reason and they are not willing to budge...just walk. Tell them you will think about it and walk (shaking your head in disappointment). Tell them if they can hit the numbers you have provided... you will stick around but if they cannot then you will need to look elsewhere. Tell them you have not looked at any other dealers and at this point you are not sure if you might be able to get a better deal with one of them. You can make it seem as if you just thought about that and are now... thinking that might be a better opportunity.

Many dealers will be willing to deal with you as long as you play the game. To be honest they don't always come across people who truly dance with them. It is more them dancing with themselves and the inflate the price of the vehicle, pump up the interest rate, and steal the trade... It's a cut throat game for sure but with the right moves... one can come out with slight scratches instead of deep wounds.

I know these long post are not for everyone and my apologies to those peeps but buying an automobile is a time where you can be taken advantage of very easily or at the very least... pay too much for a vehicle.
 
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mike62

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I said I would entertain an offer starting at invoice.
- This would be taken as if you would buy at invoice. Why would the salesman go lower?

I then planned on trying to get somewhere around 6-8% below invoice.
- Trying? You start at that and don't entertain any offers above it. You have to know what you want to pay like you know the color green. You have to show confidence and the resolve that you are going to pay 6%, nothing more. If you show weakness or show the slightest "tell" that you may be willing to pay more... the salesman will smell that weakness and pray on it.

When making purchases at this level you walk in knowing what you are going to pay based on the research (auto/fincancial) you have done. You really shouldn't tell them you will entertain an offer at all. You hold all the cards in this case and should be able to pull off a great deal if you make the right plan and stick to your guns.

One of the problems is your emotions... you want this for your daughter but need to separate the emotional side of things so you can get the deal done right. This is hardball and if not careful you and her could get hit pretty hard with a high interest rate and a higher final price than what the dealer is willing to sell it for. This is actually the key... what the dealer is willing to sell it for.. and that is what your goal is to find.. the bottom end of what they will sell it for... That is why you feel them out and start below what you know they will sell it for. That way when you are dancing with the salesman... you can act surprised when they don't take it... all while laughing inside... Once you find the bottom... you truly start your negotiations. You see when you are dancing with the devil... it's a bit more fun when you know the dance moves.

The average going rate for those that do dance is 5% under invoice and so my first offer would be 6%-7% under invoice. For you this might be different and based on research in your area you may find 8% is where you will start.

First you need to know what invoice is and if the numbers that they are showing you are truly invoice. If you are not sure than take 5% as starting point and that will get you close (it's most likely closer to 6%). So 5% off MSRP for invoice and then another 6% off of that. Now to be honest, at this point you are most likely more around 5% under invoice but you would just keep that to yourself knowing those numbers are exactly where you want them to be. As far as they are concerned you agreed to 6% under invoice and so see if the numbers are accurate. If they are then make the deal. Also, that little 1% is a win on their side... you gave them that tiny win... let them have it... but know you gave it to them. I am not sure if you can follow that but those starting numbers are what will decide.

Cross off all of those extra fees on that paper you have in the image. Take a pen an cross off all the BS charges. Tell them you are not paying any extra fees. This will make them explain what they are... so you can watch them BSing you about charges. The first thing you want to do is tell them to take it off the price of the auto. If they added a $600 doc fee.. tell them they can keep it but it must come off the price of the car. You don't really care how all those numbers add up... you just know the final price should be 6% under invoice... and you have that number written down. If they give you a sob story of how they will not be able to keep the lights on unless they swindle you out of that doc fee etc.. give them a little bit. Tell them a doc fee of $200 is more reasonable and so you are willing to give them that but the other 400 must come off the price. See, you have to be a stickler with these charges and nickle and dime them to death or they will think they can just add them. If you push back on them and make sure they are aware of how much bs they are blowing up your rear.. you will find you just saved yourself a few hundred dollars. Make them itemize every last charge so you know exactly what you are paying and what for. Also, go in knowing what the doc fee, tax rate, license plate fee, are in your area.

Another important item is knowing what you qualify for as far as interest rates. Know your scores and don't allow them to tell you otherwise. You go to myfico.com and purchase all three reports and you will see multiple scores (mortgage, auto, etc) including the one they will use. Also, secure financing before the deal so you know exactly what interest rates they need to beat for you to allow them to select their favorite "high kickback rate" financial institution. If you "allow" them to finance it for you, they must beat the interest rate that you have already secured.

As far as the financial institution they may go through... Most are high volume and have little to no customer service. There are horror stories out there of people receiving late fees, excessive charges, and not being able to get their title when paid off. So sometimes paying that .25 - .50% higher interest rate to a local bank/CU is better than having to deal with a company that could truly care less about the customers they pretend to service.

One item you will want to remember is you are holding all of the cards. Without you they do not sell the automobile so that is something you can build confidence on. The sales/finance staff depend on people like you to purchase vehicles and if they don't sell vehicles at some point.. they don't have jobs. The key is knowing these people are sharks and keeping that in the back of your mind at all times is key. They are not your friend and will take as much money as you are willing to give them. They will settle for much less but will ask for and take as much as they can persuade you to give. You must play the game back if you want to win. You must pretend to be their friend.. laughing.. joking.. just keep your eye on the final amount.

Oh, and about that dance. You see these guys practice hours and hours on how to sell cars to people. One of the basics of that "dance" is to negotiate. So a salesman will not feel as if they are truly doing their job correctly if they are not able to negotiate a little bit. That is why you must start low when starting that process. You are essentially dancing with this dude and can do it with ease or get all jammed up when trying to move some numbers. They may pull out all kinds of numbers and tell you how much you are saving here or there.... Make sure you have written down the final numbers and know exactly what you plan on paying. Take a look at that paper to remind yourself of where you are and what you are doing. If you are way off for some reason and they are not willing to budge...just walk. Tell them you will think about it and walk (shaking your head in disappointment). Tell them if they can hit the numbers you have provided... you will stick around but if they cannot then you will need to look elsewhere. Tell them you have not looked at any other dealers and at this point you are not sure if you might be able to get a better deal with one of them. You can make it seem as if you just thought about that and are now... thinking that might be a better opportunity.

Many dealers will be willing to deal with you as long as you play the game. To be honest they don't always come across people who truly dance with them. It is more them dancing with themselves and the inflate the price of the vehicle, pump up the interest rate, and steal the trade... It's a cut throat game for sure but with the right moves... one can come out with slight scratches instead of deep wounds.

I know these long post are not for everyone and my apologies to those peeps but buying an automobile is a time where you can be taken advantage of very easily or at the very least... pay too much for a vehicle.
Thank you for such an articulate explanation. i know you are exactly right on each point its just a matter of me preparing so it rolls smoothly as the inevitable dance begins.

Fantastic advice.
 

Amaruq

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How does one negotiate out of a doc fee? I’m looking at one similar in doc fee and dealers always say that’s non negotiable even after getting 7% below invoice.
 

viper88

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How does one negotiate out of a doc fee? I’m looking at one similar in doc fee and dealers always say that’s non negotiable even after getting 7% below invoice.
Everything is negotiable if there is scrap of meat left on the bone. In the old days people used to think they negotiated out the DOC. In reality there was still money left on the table so the dealer might say they were giving you the DOC. They really were not giving you anything but a little more discount on a deal they had more margin on. With the internet and forums like this the car business changed. People are getting better deals by comparing dealers openly. You will probably pay a DOC fee if a true NET/NET deal was made because there is no meat left on the bone. That DOC fee might be all the meat that is left on some deals.

DOC fees are regulated by State. Some States have lower fees then others. For example FL has some of the highest DOC fees in the nation. I have seen DOC fees as high as $800+ in FL. This is something to consider when making deals and buying in other States. Many dealers in States like FL can tell you they are giving you 7% under invoice when in reality that's might be really 6% under invoice because they can charge $500 more then another dealer in IL who's cap is $300 for a DOC fee.
 
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Amaruq

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Everything is negotiable if there is scrap of meat left on the bone. In the old days people used to think they negotiated out the DOC. In reality there was still money left on the table so the dealer might say they were giving you the DOC. They really were not giving you anything but a little more discount on a deal they had more margin on. With the internet and forums like this the car business changed. People are getting better deals by comparing dealers openly. You will probably pay a DOC fee if a true NET/NET deal was made because there is no meat left on the bone. That DOC fee might be all the meat that is left on some deals.

DOC fees are regulated by State. Some States have lower fees then others. For example FL has some of the highest DOC fees in the nation. I have seen DOC fees as high as $800+ in FL. This is something to consider when making deals and buying in other States. Many dealers in States like FL can tell you they are giving you 7% under invoice when in reality that's might be really 6% under invoice because they can charge $500 more then another dealer in IL who's cap is $300 for a DOC fee.

Here is a list of DOC fees by State. The data might not be fully updated but you get the idea.

http://www.realcartips.com/newcars/482-documentation-fees-by-state.shtml
Yeah GA seems pretty high.
 

JayJay

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Yeah GA seems pretty high.
It varies all over the place. I believe that Mall of Georgia Jeep is ~$700. Jasper Jeep doesn't charge document fees. Jacky Jones Jeep is in the $350 range. Just remember that document fees are nothing more than EDP (Extra Dealer Profit) same as wheel locks, Scotch Guard, etc. What ever the document fees are being added at the back end you need to take into consideration at the front end when starting the negotiation or just work on an out the door price.

Later,
Johnny
 

EZMFE

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How does one negotiate out of a doc fee? I’m looking at one similar in doc fee and dealers always say that’s non negotiable even after getting 7% below invoice.
Call around to other dealers in your area... pick any brand of vehicle and ask what their doc fee is.

How much should you pay for someone to complete the paperwork for the financing, licensing/registration, etc? I mean, when you go to register your vehicle in a year.. are you going to pay someone a doc fee to handle your paperwork or are you just going to stand in line at the DMV? You see what the doc fee covers is what software has streamlined to a point that it is just free money.

Ask yourself why one dealer has a doc fee of $200 and another has a fee of $600... Does it cost more to take care of the back end work at one dealer over another? Or is it that they can charge whatever they want and $600 is what the salesman's overlord has told them they charge... it like a written rule... we always charge this.. well unless the customers negotiates it... like requesting it be subtracted from the price of the vehicle.

Final numbers are where it is at. Know your final numbers and tell them you do not care how it adds up... they can put all the charges they want on there as long as the final price is 7% below invoice. The funny thing about this tactic is it actually gives the dealer something to consider. They can add the silly security stickers on the inside of the doors and whatever else they have thought of... It allows them to pad their sales numbers of those products... even though they were actually included in your final price...
 

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