Document preparation fees--RIPOFF

[tlbuser]

Service/Parts pays the bills...Sales makes the extra, supposedly.

I'll be more than happy to show you the actual invoice to a truck (not a doctored up one) and our profit level. Gone are the days that dealerships make good margin...it's all about volume now (and that isn't the right way to do it, either. Our economy is shot.)

That wasn't intended as a direct shot, more of a generality to the sales profession. Auto, truck, tractor, equipment, home.........whatever else can be thought of with a sales person involved.

Just last week I was tire shopping, wanted 4 Yokohama Envigor W 215/45-18, 45000 mile warranty. Called a couple places price shopping. One shop said no we don't carry those, we have the YK-520 w/a 60000 mile warranty and out the door is $1100.00 on sale. Nope, too high, the tire I want was listed at 160 each. He dropped his price to $900.00 out the door. Nope, too much. Next price I got was $850 including a 4 wheel alignment. Nope, not interested. "If you buy today and today only", $750 total including 4 wheel alignment. We agreed at $700. So, is that one heck of a markup or did he give me the "deal of the century"? Unless you're in the business and know the true bottom line (which can be a sliding scale based on volume) you'll never know.

 

[JDgreen227]

tlbuser,

You say you told them "the tire I want was listed at 160 each...."

So, tell us where you got the 160 (I assume that refers to dollars) figure from. Thanks.

 

[LBrown59]

Nothing illegal about them, but I think maybe you meant that they are not legally required; i.e., not a legal requirement.

Right.

 

[4Rook]

tlbuser,

You say you told them "the tire I want was listed at 160 each...."

So, tell us where you got the 160 (I assume that refers to dollars) figure from. Thanks.

Brick and mortar tire shops always have huge markups on their tires. They make your bring in a better price and they will beat it. Tire shops, like car dealers have their profit makers. They try to sell a package with nitrogen inflation, road hazard, alignment in order to offset the low profit margin created by online retailers.

Tire Rack lists the Yokohama Envigor W 215/45-18 for $132. Add $60 for shipping a set of 4. Mounting and balancing usually runs around $75 for all 4. Avoid the extra stuff and you can save $.

 

[Bird]

Tire Rack lists the Yokohama Envigor W 215/45-18 for $132. Add $60 for shipping a set of 4. Mounting and balancing usually runs around $75 for all 4.

I guess that's not a bad deal; just a little more than Discount Tire gets for that tire and then they will rotate them every 6k miles, rebalance every other rotation without it being requested, rebalance any time you request it, and fix any and all flats free of charge.

But I did check, out of curiosity, and the out the door price here with our sales tax, for the 4 would be $700, and that's with no negotiation at all; exactly the same as you negotiated.

 

[ultrarunner]

I've bought the last few sets from the local Costco Tire Center...

Prices were fair and never had a bad Michelin Tire so far.

 

[two_bit_score]

And as a disclaimer, I sell commercial trucks. There is so little profit in most of what we do, customers that haggle and want $500-1000 off are kindly explained that that is the profit level...if they don't want it, go buy a Ford...[/


The one thing I've learned early on is to work with the fleet department when possible. Never just wander into a showroom and get tangled up with a 'salesman'.

 

[LD1]

I guess that's not a bad deal; just a little more than Discount Tire gets for that tire and then they will rotate them every 6k miles, rebalance every other rotation without it being requested, rebalance any time you request it, and fix any and all flats free of charge.

But I did check, out of curiosity, and the out the door price here with our sales tax, for the 4 would be $700, and that's with no negotiation at all; exactly the same as you negotiated.

With where I live, I never negotiate all that extra crap either.

Those big stores that offer all that free rotation, fix flats for free, etc are 30 miles away at the closest. I 2 local mom-and-pop type auto shops within 3 miles of me.:thumbsup: They can BOTH fix flats and computer spin-balance.

So lets see, I have a tire with a nail in it. To me, it makes more sense to pull the car into the garage, yank the tire off in 3 minutes, go 3 miles down the road, Pay $10 for them to dismount tire, patch, re-mount, and then re-balance. 5 minutes later I am back home and tire on.

OR...go 30 miles away for a free repair, and who knows how long the wait???

Rotate tires.....I can do that in the garage in less time than it would take to drive to one of these places that do it free.

So I guess what I am saying is that a company that offers these free goodies doesnt really benefit me. Because its not the cost thats a factor, rather the inconvience of the problem. And the inconvience is un-avoidable. I would rather save my money up-front without the extras, and pay the $10 when the time comes I need a patch:thumbsup:

 

[Bird]

So I guess what I am saying is that a company that offers these free goodies doesnt really benefit me. Because its not the cost thats a factor, rather the inconvience of the problem. And the inconvience is un-avoidable. I would rather save my money up-front without the extras, and pay the $10 when the time comes I need a patch

I'd say you have a good reason for doing what you're doing. In my case, I also consider the convenience. The Discount Tire store is less than 2 miles from my house.:laughing: They have another one the opposite direction less than 5 miles from our house. The last flat I needed to have repaired was on the Crown Vic which still has the tires I bought it with; i.e., Michelins didn't come from Discount Tire, but they promptly fixed the flat at no charge.

Now when I lived down in the country I had several flats fixed at a local one man shop instead of driving 20+ miles to town.

 

[tlbuser]

tlbuser,

You say you told them "the tire I want was listed at 160 each...."

So, tell us where you got the 160 (I assume that refers to dollars) figure from. Thanks.

that number came from a local tire shop that's hit or miss on timely service. I usually don't spend a ton of time trying to save $5.00, but I will call two or three shops just to make sure I'm in the right ballpark.

 

[BeeferMan]

3% net return is great for dealerships, just so y'all know.

The computer you are typing from had more markup than that vehicle on the lot...

Due to holdback, %3 is about what they make when they sell you the car at "invoice"...

 

[schoolsout]

Due to holdback, %3 is about what they make when they sell you the car at "invoice"...

Know what's crazy? We don't even keep holdback...the $1k profit or so on a medium duty purchase is exactly that...

 

[two_bit_score]

Know what's crazy? We don't even keep holdback...the $1k profit or so on a medium duty purchase is exactly that...

Who keeps it?

 

[grsthegreat]

Now wait, manufacturers used to also kick back $$$$ for volume of sales. So the vehicle cost LESS than actual invoice.
Dont they still do that?

 

[Ductape]

Now wait, manufacturers used to also kick back $$$$ for volume of sales. So the vehicle cost LESS than actual invoice.
Dont they still do that?

Yes, dealers pay less than invoice.

 

[schoolsout]

Who keeps it?

What do you mean, who keeps it? We don't put profit on top of the hold back...we sell the truck as if there was no such thing as holdback.

 

[schoolsout]

Yes, dealers pay less than invoice.

No...they pay less than the invoice price they show you.

 

[two_bit_score]

What do you mean, who keeps it? We don't put profit on top of the hold back...we sell the truck as if there was no such thing as holdback.

So the holdback is your profit?

 

[Mike Costello]

Dealer holdbacks are defined as a percentage of the vehicle's MSRP that is rebated back to the dealer by the manufacturer. Each manufacturer varies in the percentage it pays back to the dealer. Thus, a car with a MSRP of $20,000 and a holdback of 3% will result in $600.00 returned to the dealer somewhere down the line. Holdbacks are considered sacred territory by most dealers and they will usually never deal to the point of invading that part of the invoice. In fact, they would prefer you never knew what a holdback is all about.

 

[BeeferMan]

Dealer holdbacks are defined as a percentage of the vehicle's MSRP that is rebated back to the dealer by the manufacturer. Each manufacturer varies in the percentage it pays back to the dealer. Thus, a car with a MSRP of $20,000 and a holdback of 3% will result in $600.00 returned to the dealer somewhere down the line. Holdbacks are considered sacred territory by most dealers and they will usually never deal to the point of invading that part of the invoice. In fact, they would prefer you never knew what a holdback is all about.

The holdback may also depend on how quickly the vehicle is sold and the volume the dealer does.

Yes, they certainly would rather you thought the invoice price was their cost.

I had a rather heated negotiation with a sales guy once, he responded to my "at invoice" offer on a $30K vehicle that was being unloaded while we watched by saying they wouldn't make any money if they sold "at cost". I pointed out that even at "cost" (which was really invoice) they were making at least 3% on the vehicle, maybe more since they were turning it over so fast. I never saw a guy get so red so fast. Said they did NOT negotiate holdback! I told them I wasn't negotiating holdback, just pointing out that he wasn't being truthful, and was treating me like I was an idiot. Needless to say at that point any chance of a deal was over, so I got up, said that we were wasting each others time, and walked. Found another dealer that had five of the same vehicles on the lot (that helped!) and the sales guy fell all over himself getting us a $100 over invoice deal.