Ordering a Tacoma cheaper than buying off the lot?

If all the dealership has to do is fill out some paperwork to direct a
Toyota Tacoma fitting my description to its lot, (assuming there are none
available in the region) wouldn't the dealorship be more likely to cut a
good deal since the truck will only be on the lot for one day?

Basically the expense involved with the truck is filling out the paperwork
and pulling the plastic off when it gets there.

I was told the following in this situation
1) We're aren't interested in profit that will show up 60 days down the
road. We're looking at this month.

2) Since the truck is not here, we have to make more on it or its not work
doingthe deal

3) We don't get dealer holdback unless we hit a quota and we might not hit
that quota that month. So we can't negoiate with dealer holdback.


Any of these claims correct?

#1. I cant see how spending 30 minutes to order a vehicle and sitting back
and waiting for a guaranted sale is bad busniess. Seems like gravy to me.

#2 Makes no sine bacause the cost in the truck as almost nothing so any
profit in the negotiated price goes directly into the dealerships profit.

#3 I've never heard of this. can someone enlighten me of this is true?

The deal I'm offering is 400 over invoice. With the 2% holdback (~500) the
profit is $900. That seem sweet for filling out some paperwork.

Have you tried doing it with the Internet dept. or another dealer Internet
dept? I bought a 05 Camry LE for $18165, msrp $21444
Hank
"Mook Johnson" <mook@mook.net> wrote in message
news:sudte.73452$PR6.55393@tornado.texas.rr.com...[color=blue]
> If all the dealership has to do is fill out some paperwork to direct a
> Toyota Tacoma fitting my description to its lot, (assuming there are none
> available in the region) wouldn't the dealorship be more likely to cut a
> good deal since the truck will only be on the lot for one day?
>
> Basically the expense involved with the truck is filling out the paperwork
> and pulling the plastic off when it gets there.
>
> I was told the following in this situation
> 1) We're aren't interested in profit that will show up 60 days down the
> road. We're looking at this month.
>
> 2) Since the truck is not here, we have to make more on it or its not work
> doingthe deal
>
> 3) We don't get dealer holdback unless we hit a quota and we might not hit
> that quota that month. So we can't negoiate with dealer holdback.
>
>
> Any of these claims correct?
>
> #1. I cant see how spending 30 minutes to order a vehicle and sitting back
> and waiting for a guaranted sale is bad busniess. Seems like gravy to me.
>
> #2 Makes no sine bacause the cost in the truck as almost nothing so any
> profit in the negotiated price goes directly into the dealerships profit.
>
> #3 I've never heard of this. can someone enlighten me of this is true?
>
> The deal I'm offering is 400 over invoice. With the 2% holdback (~500) the
> profit is $900. That seem sweet for filling out some paperwork.
>
>
>
>[/color]

"Mook Johnson" <mook@mook.net> wrote in message
news:sudte.73452$PR6.55393@tornado.texas.rr.com...[color=blue]
> If all the dealership has to do is fill out some paperwork to direct a
> Toyota Tacoma fitting my description to its lot, (assuming there are none
> available in the region) wouldn't the dealorship be more likely to cut a
> good deal since the truck will only be on the lot for one day?
>
> Basically the expense involved with the truck is filling out the paperwork
> and pulling the plastic off when it gets there.
>[/color]

And doing the pre-delivery inspection and detailing the vehicle, if the
vehicle is delivered directly to the dealership. More likely, the
dealership would do a search of surrounding dealer inventories and trade one
of their vehicles for the one you want. The problem is, if they have a lot
of other Tacomas on their lot and few "hot" vehicles, the trading dealer
would probably want one of their "hot" vehicles in return, i.e., trading a
Prius for a Tacoma.
[color=blue]
> I was told the following in this situation
> 1) We're aren't interested in profit that will show up 60 days down the
> road. We're looking at this month.
>[/color]

If there is a factory-to-dealer sales incentive going on and it ends soon,
they would naturally be more interested in a sale that qualifies for the
incentive than one that does not.
[color=blue]
> 2) Since the truck is not here, we have to make more on it or its not work
> doingthe deal
>[/color]

See #1
[color=blue]
> 3) We don't get dealer holdback unless we hit a quota and we might not hit
> that quota that month. So we can't negoiate with dealer holdback.
>[/color]

Pay holdback when they purchase the car from the manufacturer and then get
it back on a quarterly basis, kind of like a forced saving account. It does
not have anything to do with quotas. On the other hand, the factory often
runs factory-to-dealer incentives and those usually have quotas to meet
before receiving them. Most likely, this, and not holdback, is what they're
talking about.

They may be at or near the objective that gets them a higher incentive from
the factory right now with the incentive ending soon but at the time of
future deliveries, they would be at a lower tier of any future incentive, if
any.
[color=blue]
> Any of these claims correct?
>
> #1. I cant see how spending 30 minutes to order a vehicle and sitting back
> and waiting for a guaranted sale is bad busniess. Seems like gravy to me.
>
> #2 Makes no sine bacause the cost in the truck as almost nothing so any
> profit in the negotiated price goes directly into the dealerships profit.
>[/color]

Your points make sense if the dealer does not have an existing inventory of
vehicles. Since dealers do carry a vehicle inventory, they have money tied
up, either because they have paid cash for the vehicle or they are paying
flooring interest on it. In the first case, the money is tied up in iron
and not doing anything for them until they sell it or in the second case,
they are paying interest on it every month. Either way, their overall
profit will be better if they sell from inventory first, especially if he
has a lot of Tundras already on the lot or in his pipeline.



Yes, he can make a profit on an ordered vehicle, but it is not necessarily
true that the profit will be the same as selling one right now. Also,
unless you pay a non-refundable deposit or pre-pay for the vehicle, there is
not guarantee that you will actually take delivery of the truck when it
comes and then they would just have another truck in stock.
[color=blue]
> #3 I've never heard of this. can someone enlighten me of this is true?
>
> The deal I'm offering is 400 over invoice. With the 2% holdback (~500) the
> profit is $900. That seem sweet for filling out some paperwork.[/color]

The dealer probably has to pay into the local dealer advertising association
so the truck probably costs
more than an invoice amount you found in KBB or some other web site.

The holdback comes 2 or 3 months later - that's a long time to wait for
money. Let's say the advertising association fee is $350; his gross profit
before holdback in your deal is $50.00 If the dealer paid $20,000 for the
truck, that is .0025% return on his investment, and after he gets his
holdback, it would be 2.75% profit. The truck probably cost more than $20k
so the percentages go down accordingly. On top of all theat, the dealer has
to pay the salesperson a commission because that is how salespeople earn
their living, and if that is $90, then instead of a $50 initial gross
profit, he is $40 in the hole and doesn't get in the black until he ges hhis
holdback the next quarter. I doubt if the dealer is willing to invest over
$20,000 on a money-losing deal.

On the other hand, current factory-to-dealer incentives might make the deal
worthwhile today.
--
Ray O
correct the return address punctuation to reply

Mook Johnson wrote:[color=blue]
> If all the dealership has to do is fill out some paperwork to direct a
> Toyota Tacoma fitting my description to its lot, (assuming there are
> none available in the region) wouldn't the dealorship be more likely
> to cut a good deal since the truck will only be on the lot for one
> day?
> Basically the expense involved with the truck is filling out the
> paperwork and pulling the plastic off when it gets there.[/color]

Deal with Internet sales dept. or find another dealership with one. No
matter how or what happens on the sales floor, you'll never get the truth so
doing the math/plan for them is pointless.

The problem is that a dealer wants to get rid of the stock he has. That's
what he cares about in the first place, not your 500 dollars. The holdback
matters only if the car stays in the lot for a certain amount of time -
there is no quota crap.

Try [url]www.carsdirect.com[/url]


"Mook Johnson" <mook@mook.net> wrote in message
news:sudte.73452$PR6.55393@tornado.texas.rr.com...[color=blue]
> If all the dealership has to do is fill out some paperwork to direct a
> Toyota Tacoma fitting my description to its lot, (assuming there are none
> available in the region) wouldn't the dealorship be more likely to cut a
> good deal since the truck will only be on the lot for one day?
>
> Basically the expense involved with the truck is filling out the paperwork
> and pulling the plastic off when it gets there.
>
> I was told the following in this situation
> 1) We're aren't interested in profit that will show up 60 days down the
> road. We're looking at this month.
>
> 2) Since the truck is not here, we have to make more on it or its not work
> doingthe deal
>
> 3) We don't get dealer holdback unless we hit a quota and we might not hit
> that quota that month. So we can't negoiate with dealer holdback.
>
>
> Any of these claims correct?
>
> #1. I cant see how spending 30 minutes to order a vehicle and sitting back
> and waiting for a guaranted sale is bad busniess. Seems like gravy to me.
>
> #2 Makes no sine bacause the cost in the truck as almost nothing so any
> profit in the negotiated price goes directly into the dealerships profit.
>
> #3 I've never heard of this. can someone enlighten me of this is true?
>
> The deal I'm offering is 400 over invoice. With the 2% holdback (~500) the
> profit is $900. That seem sweet for filling out some paperwork.
>
>
>
>[/color]

I think you are missing a key part of the deal, the factory.

The factory -- the marketing guys in particular -- build, or order to be
built, a specific fitment of options and accessories, and they can crank
these out by the thousands and send them to the dealer's lot and offer the
dealer incentives for taking them as equipped. Then, you come along and want
a special order that blows off the incentives that the dealer is getting for
taking truck loads of cookie-cutter cars and trucks.

My guess is that you will get a better price on the coolkie cutter cars and
trucks, and pay a higher price for the special orders.

The expense is the special build. I think you should be able to get the
incentive price if there is a truck you want that is on a lot somewhere.




"Mook Johnson" <mook@mook.net> wrote in message
news:sudte.73452$PR6.55393@tornado.texas.rr.com...[color=blue]
> If all the dealership has to do is fill out some paperwork to direct a
> Toyota Tacoma fitting my description to its lot, (assuming there are none
> available in the region) wouldn't the dealorship be more likely to cut a
> good deal since the truck will only be on the lot for one day?
>
> Basically the expense involved with the truck is filling out the paperwork
> and pulling the plastic off when it gets there.
>
> I was told the following in this situation
> 1) We're aren't interested in profit that will show up 60 days down the
> road. We're looking at this month.
>
> 2) Since the truck is not here, we have to make more on it or its not work
> doingthe deal
>
> 3) We don't get dealer holdback unless we hit a quota and we might not hit
> that quota that month. So we can't negoiate with dealer holdback.
>
>
> Any of these claims correct?
>
> #1. I cant see how spending 30 minutes to order a vehicle and sitting back
> and waiting for a guaranted sale is bad busniess. Seems like gravy to me.
>
> #2 Makes no sine bacause the cost in the truck as almost nothing so any
> profit in the negotiated price goes directly into the dealerships profit.
>
> #3 I've never heard of this. can someone enlighten me of this is true?
>
> The deal I'm offering is 400 over invoice. With the 2% holdback (~500) the
> profit is $900. That seem sweet for filling out some paperwork.
>
>
>
>[/color]

"Jeff Strickland" <spamcatcher@yahoo.net> wrote in message
news:GvSdnVZajombmCrfRVn-1w@ez2.net...[color=blue]
>I think you are missing a key part of the deal, the factory.
>
> The factory -- the marketing guys in particular -- build, or order to be
> built, a specific fitment of options and accessories, and they can crank
> these out by the thousands and send them to the dealer's lot and offer the
> dealer incentives for taking them as equipped. Then, you come along and
> want
> a special order that blows off the incentives that the dealer is getting
> for
> taking truck loads of cookie-cutter cars and trucks.[/color]

The factory does not produce thousands of the same model/color/accessory
combination in order to save money. In fact, for a specific region, the
factory does not produce thousands of a model/color/accessory combination
unless it is to fill a fleet order. The number of vehicles produced in any
particular model/color and accessory combination is probably more in the
tens or at the most hundreds. Although the vehicle may appear to be cookie
cutter to someone unfamiliar with the car business, they are not even close
to being cookie cutter.

Within a series, each cab/bed/transmission/engine/trim level is a separate
model, so within the Tacoma Series, there is probably in the vicinity of 25
or 30 different models. Because of the long list of accessories, there are
thousands of permutations of model/color/accessory combinations, more than
are actually sold in any particular production period. Each region submits
their POP (production order preference) based on what dealers have been
asking for and what they think will sell most quickly, not because it is
covenient to build.

Factory to dealer incentives appear when the aggregate of all dealers' days
supply of vehicles exceeds the optimal, usually 60 days supply.
[color=blue]
>
> My guess is that you will get a better price on the coolkie cutter cars
> and
> trucks, and pay a higher price for the special orders.[/color]

This is true but no because of special orders.[color=blue]
>
> The expense is the special build. I think you should be able to get the
> incentive price if there is a truck you want that is on a lot somewhere.
>[/color]

The expense is NOT in the special build. The added expense is due to tiered
factory to dealer incentive programs.
--
Ray O
correct the return address punctuation to reply