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Discussion Starter · #1 ·
Hello all,

I live in the Seattle area and I've decided to buy a new S60 T5. I'm now trying to learn what a good price would be for the car. I've visited a couple of dealers to get price quotes and have been offered $500 over invoice. Is that a good price?

According to a number of sources (Consumer Reports, etc.) the dealer holdback on a T5 is 1% of base MSRP or $340. So at $500 over invoice, the dealer would still be making $840.

Also, has anyone had experience going through a buying service that negotiates the price for you, such as Costco.com or AutoAdvisor.com? According to AutoAdvisor.com, their average transaction price for an S60 is $0 over invoice. Is that realistic? Is it possible to get a much better price this way than by negotiating directly?

Oh, one last question: isn't the 'advertising charge' considered part of the dealer markup? That is, if you're quoted $500 over invoice, wouldn't that include the advertising charge?

The specific car I'm looking for will be configured like this:
- Manual transmission
- Metallic paint
- Touring package
- Cold Weather package
- Sport leather seats
- Standard sound system (cassette/CD)
- Amalthea 17" wheels
- Sport chassis suspension

According to Consumer Reports, Costco, Chrome, etc. the invoice price for such a car is $35,581, including the $625 destination charge. So, $500 over invoice would be $36,081.

Any help on these questions--including others' price-negotiating experiences--would be much appreciated!


Matt
 

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Go overseas TDS (at http://new.volvocars.com/overseas/osd_s60_specs.shtml ) and it will be $34,360 including 15 day insurance, two airline tickets, and one hotel night in Goteborg. Plus, they'll pick you up at the airport and then again at the hotel the next day to go to the delivery center. There you'll pick up the car, take the factory tour, and eat a free lunch at the cafeteria. Note: the overseas delivery does NOT charge the $625 'shipping fee' to ship the car back--it's all included in the discount price.

The cheapest I've seen it done is you fly out on Saturday (this constitutes your saturday night stay for the airfare), spend the night Sunday at the hotel, pick up the car Monday morning, drop off the car Monday afternoon, then grab a cab to the airport.

I spent 10 days going down to Copenhagen and Holland, but if you order now you'll be picking up the car in the summertime, so you should have lots to see in Sweden itself.

I think it's worth the extra time, plus it's cheaper. You decide. Tell us what color you get.
 

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Quarterswede -

You might want to check carsdirect.com pricing in your zip code. I put your options in for my zip code and the pricing is $700 below invoice.
 

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quote:

Originally posted by QuarterSwede:
Hello all,

I live in the Seattle area and I've decided to buy a new S60 T5. I'm now trying to learn what a good price would be for the car. I've visited a couple of dealers to get price quotes and have been offered $500 over invoice. Is that a good price?

According to a number of sources (Consumer Reports, etc.) the dealer holdback on a T5 is 1% of base MSRP or $340. So at $500 over invoice, the dealer would still be making $840.

Also, has anyone had experience going through a buying service that negotiates the price for you, such as Costco.com or AutoAdvisor.com? According to AutoAdvisor.com, their average transaction price for an S60 is $0 over invoice. Is that realistic? Is it possible to get a much better price this way than by negotiating directly?

Oh, one last question: isn't the 'advertising charge' considered part of the dealer markup? That is, if you're quoted $500 over invoice, wouldn't that include the advertising charge?

The specific car I'm looking for will be configured like this:
- Manual transmission
- Metallic paint
- Touring package
- Cold Weather package
- Sport leather seats
- Standard sound system (cassette/CD)
- Amalthea 17" wheels
- Sport chassis suspension

According to Consumer Reports, Costco, Chrome, etc. the invoice price for such a car is $35,581, including the $625 destination charge. So, $500 over invoice would be $36,081.

Any help on these questions--including others' price-negotiating experiences--would be much appreciated!


Matt
Matt,

I can appreciate the fact that you are looking for the "best" (there is not such thing) deal for yourself; I would do the same. But remember one thing...You are looking to buy a $40,000-car...is $500 over invoice (no holdback as of january 1, 2002) such a "bad deal" for such a car? If you went to an Audi/BMW or Mercedes dealer and asked them if you could get one of their cars for $500 over their invoice, they would laugh at you. The lowest number is not always the best deal out there. Do your shopping and buy from the dealer who makes you feel comfortable, is the most honest, convenient and has the best reputation for service...Could you beat some poor salesman to death by initiating a bidding war between him/her and two or three other dealers? Sure! But remember, this is about establishing a relationship with the dealer where you are going to buy the car from because one day you may (and most likely will) need them to help you. It is not a good thing to be remembered as someone "who beat us up to death"!

Why do I bother writing all this to you? Not to make you feel sorry for "us poor dealers"! Not at all...but to reinforce the fact that go with whoever your gut feeling is telling you to go...not just the lowest price. Such dealer may not be around to help you in the future or may not care for you beyond making the sale. Get a good deal for yourself and it is OK for the dealer to make a profit, over invoice. After all, this is the only business where invoices are common knowledge. When you buy electronics, furniture, houses, etc., their total costs are not known and us consumers pay mark ups of up to 100% or 150%.

BTW, the advertising fee is not a profit item for a dealer. It is a fee that the dealer has to pay to the manufacturer. That is why it is not reflected on the MSRP.

Best of luck!

Yannis
 

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But when you go in for service, they're mostly not likely to remember how much you payed for the car or how much you negotiated. You're probably not going to even see the salesperson since you'll be going into the service department of the dealer. They're not going to check up on how much you paid for the car or know anything about your purchase, especially the service department people. They're not going to type in your name in the computer and think "hmm, this guy bargained with us for 3 days and got it cheap, so let's see, let's treat him badly and give him mediocre service."

So there's no point in paying for more just to please the dealer. Go for the best price because no one is going to remember or know who you are, especially the service department. Even a better reason: go for the best price because you can get service elsewhere.
 

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quote:

Originally posted by bfavre4:
But when you go in for service, they're mostly not likely to remember how much you payed for the car or how much you negotiated. You're probably not going to even see the salesperson since you'll be going into the service department of the dealer. They're not going to check up on how much you paid for the car or know anything about your purchase, especially the service department people. They're not going to type in your name in the computer and think "hmm, this guy bargained with us for 3 days and got it cheap, so let's see, let's treat him badly and give him mediocre service."

So there's no point in paying for more just to please the dealer. Go for the best price because no one is going to remember or know who you are, especially the service department. Even a better reason: go for the best price because you can get service elsewhere.
The purpose of my post was not to argue the point that if you pay more then you will be "remembered" is a certain fashion. But hard to please, people who do not start the relationship "right" tend to be the same when it comes to service. No one is keeping tabs on anyone but people's memories go a long way. Of course, as a consumer, you are going to go for the best price. But my point is that the "lowest"/"best" price is not always the best value, in the long term. And it is not ethically right to use a salesperson by pitting him (repeatedly not as a result of you shopping around) against his/her counterparts just so you can get "that extra $100 or $200" off the price you had. If you recongize that you got a FAIR and a GOOD price, buy the car! That's all I was trying to say/write.

Yannis
 

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Discussion Starter · #7 ·
T5 Dave, thanks for the info on the overseas delivery service. It sounds like a great deal: $1700 less, plus a free trip to Sweden. I wonder how Volvo can do that and still make money? Unfortunately, I won't be able to take advantage of it because I don't fly. I had a close call a few years ago and have since vowed to stay on the ground.

Carl, thanks for the carsdirect.com tip. I tried it with my zip code, but it quoted nearly $2000 over invoice.
I wonder why s60s are so cheap in New Jersey?

Yannis, I think you made some valid points. I agree that it's important to work with a dealer who seems honest and trustworthy. The most unpleasant aspect of buying a new car for most people is working with dealers who are obviously trying to pressure or deceive you.

I'm actually not looking for the absolute "best" price. I just wanted to get a sense of what others have paid relative to invoice to see what the current market is for this car. After all, in our wonderful capitalist society, prices are set by the law of supply and demand. If the supply is low and the demand is high, then a car might be sold for well over MSRP. On the other hand, if supply is high and demand is low, a dealer might actually have to take a loss just to sell the car.

So whether $500 over invoice is a good deal or a bad deal has less to do with the fact that a car is in the $40,000 range and more to do with what the current supply and demand is for that car.

As for Audi and BMW, I notice AutoAdvisor shows the Audi A4 selling for $1800 over invoice and the BMW 325 selling for $1300 over. Apparently, the demand for those cars exceeds the demand so much that the dealers can charge those prices and people will pay them.

I don't see anything wrong with giving dealers a chance to offer a lower price than their competitors. But I do agree with your point that it's not just about finding the lowest price. I'd rather pay a few more bucks to a dealer who treated me with honesty and respect than one who pulled out every trick in the book before finally, reluctantly giving me his lowest price.

Thanks for the info on the advertising fee. Does anyone know how much that usually costs?

Thanks again for all the thoughtful replies!

Matt

[This message has been edited by QuarterSwede (edited 03-28-2002).]
 

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quote:

Originally posted by QuarterSwede:
Thanks for the info on the advertising fee. Does anyone know how much that usually costs?

Thanks again for all the thoughtful replies!

Matt
It depends on the market/city. For example, here in Philadelphia it is $400. In MD/DC it is $500. In Long Island it is $250, in Boston $500, etc. Depends...

Yannis
 

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Sorry yannis for the over-agressive post. I think I was either in a bad mood because my harddrive died (now using backup comp) or I was trying to stir up a good discussion on a boring day.
 

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quote:

Originally posted by bfavre4:
Sorry yannis for the over-agressive post. I think I was either in a bad mood because my harddrive died (now using backup comp) or I was trying to stir up a good discussion on a boring day.
Oh no big deal...I like duscussions, anyway!

Yannis
 
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