The real Koon's deal

[RussJeep1]

Dealer financing is certainly up for discussion as it affects true cost, but was avoided under the presumption that how you pay for the vehicle, outright or through loan, the latter dealer or fair market originated, was not tied into purchase cost.

For dealers who penalize/incentive financing/not financing through them, in fairness, needs to be noted for accurate comparisons, One does not get a good deal paying $23,000 for a loaded Rubi JLU, where (in theory if not legally) the interest rate is 47.8%.

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[Jeepsterfreak]

Does Koons offer the 5% below invoice on a cash deal?

When I looked at F-150s, pricing was all over the place depending on how you financed. Mainly due to different factory rebate offers. It was cheaper to buy the truck at a lower price (but with higher interest rate) then pay off the loan in the first month vs paying cash up front.

 

[CantThinkOfAHandle]

I’ve seen that, but if you could afford to pay cash for one outright I don’t think it would be worth the hassle for $1000 and in my research I’ve found interest rates on refinancing a vehicle are higher than when purchasing a vehicle, so even if you get a better rate than Dillons through refinancing it is still likely to be a higher rate than one could have gotten initially elsewhere. I am making a lot of assumptions here. My point is people need to take all of this into consideration when determining how good of a deal it will actually turn out being. My guess is both of these deals are better than most and possibly the best deal going, especially for those that do not qualify for other special pricing.

My credit union would charge the same rate whether I bought the vehicle new through Dillon or refinanced, as long as the current model year is 2016 or newer. Their rate is 2.49% for 60 months. So the issue for me with Dillon is what would be the unrecoverable upfront fees, which I'm trying to find out. Others have said that Dillon has no prepayment fee after six months; I want to confirm that as well. Even with the $1,000 fee, Dillon, by my calculation, computes to about 6% under invoice, a very good deal.

As far as paying cash is concerned, you would presumably be taking that money out of investment. Your normal expectation would be that something like a car or home loan charges less interest than you could, on average, earn through investment. So, people who can afford to pay cash would logically still finance low interest rate purchases, unless they have quite low risk tolerance.

 

[Mid-life Wrangler]

Does Koons offer the 5% below invoice on a cash deal?

When I looked at F-150s, pricing was all over the place depending on how you financed. Mainly due to different factory rebate offers. It was cheaper to buy the truck at a lower price (but with higher interest rate) then pay off the loan in the first month vs paying cash up front.

I don’t think Koons requires financing through them to get the deal, just the $699 fee. Dillons does, but I think I read you can pay off or refinance after 6 months there.

 

[Mid-life Wrangler]

My credit union would charge the same rate whether I bought the vehicle new through Dillon or refinanced, as long as the current model year is 2016 or newer. Their rate is 2.49% for 60 months. So the issue for me with Dillon is what would be the unrecoverable upfront fees, which I'm trying to find out. Others have said that Dillon has no prepayment fee after six months; I want to confirm that as well. Even with the $1,000 fee, Dillon, by my calculation, computes to about 6% under invoice, a very good deal.

As far as paying cash is concerned, you would presumably be taking that money out of investment. Your normal expectation would be that something like a car or home loan charges less interest than you could, on average, earn through investment. So, people who can afford to pay cash would logically still finance low interest rate purchases, unless they have quite low risk tolerance.

I agree with everything you stated. As I was trying to say, each person has to do some work to figure out exactly what is best for them. I believe people are looking at these forums trying to find the best deal, but none of these are “one size fits all”. Some people on this forum are clearly in a better place financially than others and some are taking on substantial debt to purchase their jeep.

 

[Matthew/E36]

I'm just happy I don't live in one of these states I'm seeing with 8.5% plus sales tax.

WHY DID YOU HAVE TO REMIND ME!

Lol, just kidding, but yes MO vehicle sales tax stinks...also have yearly personal property tax on it.

 

[J.R. Quimby]

I'm already talking with Craig to finalize my deal with Koon's. I get to pay below invoice and not some inflated price, and to me thats all that matters to me

 

[TReed]

Nothing new here. This has all been posted by Craig.

 

[ThirtyOne]

This has been discussed ad-nauseum.

I think where some people are getting tripped up - and I do think it is helpful to provide this information - is that doc fees vary so much by state.

For those of us in NC and Virginia we are accustomed to Doc Fees around $600.

For reference: https://www.edmunds.com/car-buying/what-fees-should-you-pay.html

And traditionally these types of programs, and this includes tread lightly, employee pricing, etc. do not include the doc fees.

So for example, we could start a thread that says Tread Lightly is not really 1% below invoice because the doc fees take it over 1% below invoice. And by the way it is actually $75 above 1% below invoice because of a fee that is built in and that is before you add the doc fee. So in my state 1% below invoice is actually above invoice.

These fees are also not considered to be part of the actual selling price of the car for sales tax purposes and in some states cannot be capitalized in a lease for example. So in some very fundamental ways doc fees are not part of the selling price of the car.

Generally these fees are figured into the out-the-door price which includes things like fees, trade-in value, tax, tags, license, and financing. And in the case of traveling out of state you should include gas, flights, hotel stays, time off work, etc as well.

For the most part, this is a non-issue except for the rare case where someone travels out of their home state to buy a car. So now everyone is acting like they discovered fire when this is just business as usual. It is just that people from other parts of the country are traveling to Virginia where they have high doc fees and they are getting sticker shock.

Is this thread adding clarity or creating more confusion? Not sure. I do think reminding everyone to calculate the full out-the-door price and not just rely on the Selling Price is a good idea.

 

[MEO73]

I also have a problem with dogging Koons for being misleading (seen in many of the comments that like drove the OP to create this thread). It is 5% off and there are then fees like EVERY car dealer I've ever worked with on a new car. Theirs happens to be a little higher than some but it would be that same fee, I assume, on any car with any deal on their lot (unless you haggled your way out of it). Most all dealers have absorbent "doc" or "handling" or "processing" fees. VA just happens to allow these fees to go higher than many. There is no cap in VA. The cap in MD is 300 and my dealer does 300. I'm not financing and the doc fees don't cover registration or titling (different fee) so I'm not really costing them anything but they are charging me anyway. So, if were truly comparing dealers across the board you should figure in these fees on the overall deal, sure, but it doesn't change that the dealer is doing 5% off invoice. Mine is also doing 5% but the dealer fees are less. I still say they are matching the deal I could have done with Koons. As others note, the bottom line out the door is what matters. I'm just happy I don't live in one of these states I'm seeing with 8.5% plus sales tax.

May I ask who your MD dealer is? You can PM me if you prefer. Thanks much!

 

[Karl_in_Chicago]

This has been discussed ad-nauseum.



These fees are also not considered to be part of the actual selling price of the car for sales tax purposes and in some states cannot be capitalized in a lease for example. So in some very fundamental ways doc fees are not part of the selling price of the car.

Maybe not where you live but in Illinois doc fees are absolutely considered part of the taxable sale price.

 

[RussJeep1]

31 raises some interesting points I'd like to summarize, hopefully correctly.

Doc fees may be different from other fees in both what dealers can charge for them, possibly their tax exempt status, and whether they can be subsumed into a loan. In States where doc fees are tax exempt, dealers would be smart to make money on doc fees as (their) tax savings, as any good economist will tell you, are shared by buyer and seller alike in different portions depending on demand for the item.

(People may cry, if I'm paying those taxes how the heck are they shared? Silly example. Suppose coffee from country "X" is taxed more. Country "X", knowing you'll just buy your coffee from another county, is forced to decrease the cost of their coffee by the amount of the tax. On cigarettes, consumers eat most of the tax because they're addictive.)

But at the end of the day they're fees (taxable or loan worthy, or not). Fees the dealer need not charge, fees the dealer can name something else (and risk being taxable.) And as much as the dealer deserves fees--they can come in other ways, like in purchase price, or FCA incentives on sales volume. If these fees can vary (and they can) and the customer pays them (even if technically the cost on their tax is shared,) the consumer needs to factor them into the calculus of coming up with a fair price to judge a deal's worth by, even if some fees need to be given special consideration for potential tax exempt status, like doc fees.

...not that 31 disagrees.

Maybe it's easier to consider the things that it's unfair to use to rate one dealer compared to the next on.

1) Taxes. The dealer is required to collect them on behalf of your home State.
2) Title/plates: If the dealer is charging you what your State charges for these DMV items, like taxes, these fees should not be used to determine the worthiness of a deal for comparison purposes.

So for example, we could start a thread that says Tread Lightly is not really 1% below invoice because the doc fees take it over 1% below invoice.

True. In fact, we did, and I started it. Tread Lightly is not only less than 1% at Koons on the most bare bones JL purchase, but at a fixed $150 net savings ($250 deduction - $100 membership) the percentage of the sale that Koons takes off for Tread Lightly approaches (but never reaches) 0% as the purchase price increases, just as the discount--all fees considered--approaches (but never reaches) 5% with the same purchase price increase.

So the small savings (TL) Koons is less friendly on with us, while the big savings (approaching 5% discount) they are more friendly on. That's a good trade off for us, as the more you spend, the more, real and percentagewise (approaching 5%) you save. The Koons deal is not simply very competitive, but smart and fair and relatively straightforward compared to some other dealer offers, incentivizing us more percentage discount as we spend (and they make) more.

Generally these fees are figured into the out-the-door price which includes things like fees, trade-in value, tax, tags, license, and financing. And in the case of traveling out of state you should include gas, flights, hotel stays, time off work, etc as well.

Absolutely, on top of the cost of intangible things like your time and travel inconvenience (hardly an exhaustive list.)

​

For the most part, this is a non-issue except for the rare case where someone travels out of their home state to buy a car. So now everyone is acting like they discovered fire when this is just business as usual. It is just that people from other parts of the country are traveling to Virginia where they have high doc fees and they are getting sticker shock.

That's sad if its the case. Doc fees don't scare me, nor should they scare anyone. The final price scares me. And the price that I can use for comparisons interests me to compare dealers. Any dealer can charge me (laws notwithstanding) $30K in fees as far as I am concerned, if they're willing to take 98% off the price, where Koons currently offers 5%.

Dealers that demand you finance with them scare me too. Such demands, by definition, given the dealer is profit oriented (itself not a bad thing) seek to sneak into purchase price, loan terms above fair market value, deliberately making the transaction harder to understand, to decrease deal transparency at customer expense. A dealer that insists that you finance with them (at a rate greater than inflation) ought to be compensating you for limiting your choices to either pay outright, or not shop in the market for the cost of renting money.

 

[macintux]

1) Taxes. The dealer is required to collect them on behalf of your home State.

Are you sure about that? In Indiana, the BMV seems prepared to charge us at registration if the taxes collected weren't sufficient. I've not seen any legal obligation for out-of-state dealers.

 

[banessi]

May I ask who your MD dealer is? You can PM me if you prefer. Thanks much!

Sure thing. They said I could share. I posted their info here.

https://www.jlwranglerforums.com/forum/threads/recommended-dealers-list.1227/page-8#post-41202

 

[ThirtyOne]

31 raises some interesting points I'd like to summarize, hopefully correctly.

True. In fact, we did, and I started it. Tread Lightly is not only less than 1% at Koons on the most bare bones JL purchase, but at a fixed $150 net savings ($250 deduction - $100 membership) the percentage of the sale that Koons takes off for Tread Lightly approaches (but never reaches) 0% as the purchase price increases, just as the discount approaches 5% with the same purchase price increase.

You missed my point on this. I wasn't talking about Koons. I was talking about in general. The FFP which is advertised as 1% below invoice does not include doc fees. And there is actually a $75 fee that is charged on top of the 1% below invoice. So even though it is generally advertised as 1% below invoice that is before fees.

My point is that it is a general practice for incentive programs to not include doc fees in the calculation.

Let me put it this way. Does MSRP include doc fee? No. Does Invoice include doc fee? No. These are the two prices that selling price gets compared to. For the rest of the world outside this thread doc fees are not included in the selling price of a vehicle so that the selling price can be compared apples-to-apples to MSRP and Invoice.

Dealers have learned that in order to stay out of trouble they need to charge the same doc fee to every customer and stay within the norms for that state. So if you shop within a state there is generally little variation in doc fees.

We had a high profile case here where our mega-dealer got in trouble with their doc fees. When they were asked to justify them they couldn't come up with how they were calculated. Why did they get in trouble? Because they sold cars in North Carolina and South Carolina and their fees were out of line for South Carolina where doc fees are generally 40% less. They can keep charging the unjustified $599 here as long as they want because everyone else charges the same.

Honestly, I think this thread only exists because you don't live in Virginia and you are considering buying a car in Virginia. Pick any dealer in Virginia and ask them their doc fees. Most likely $599. Koons is only getting singled out because their prices are lower!

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