I Just Bought My First Lexus

[firstone]

Hello

Today I pick up my new 2007 SE 350 Obsidian (black) with Cashmere interior.

MSRP $39.472 includes Destination but not sales tax or dealer fee of $119

Options include Rear seat air bag, Full size spare, Blue Tooth, Rear seat shade, HID head lights, Park Assist, Premium Plus, Wood wheel, Preferred Accy Pkg.

I chose not to buy the Nav. because I love my Garmin 276C because I can move it from car to car to boat (using the Blue Charts).

According to Consumer Report Buying Kit dealer cost for this car minus holdback but including destination charge of $719 with all options is $33,984.

My cost before sales tax & fee is $35,972 which is a discount from MSRP of 8.8867%

Using Consumer Report Kit I figure the dealer discount on this car is 13.9% before the holdback or any Factory incentives.

I have seen members here say they would walk out of a dealer if they didn't get 12%.......or more discount. I can't see a dealer making only 2% or $789 on this car!

What am I missing??????

I am going to love this car!!!!!!

[mehullica]

Many dealers will sell the car at $500-$1000 over invoice. All day long. They'll make their money in the back-end when they sell you a loan for 1-1.75 points higher than what you actually qualify for. The bank will pay the dealer for the points, and there's another $1-$2k for the dealer again. So many people think they're getting a great deal at slightly over invoice. Unless you have your own financing from your own bank, or pay with a check, you're almost always going to get sold a higher interest rate.

[firstone]

Many dealers will sell the car at $500-$1000 over invoice. All day long. They'll make their money in the back-end when they sell you a loan for 1-1.75 points higher than what you actually qualify for. The bank will pay the dealer for the points, and there's another $1-$2k for the dealer again. So many people think they're getting a great deal at slightly over invoice. Unless you have your own financing from your own bank, or pay with a check, you're almost always going to get sold a higher interest rate.

Thanks for your reply

I find it hard to believe that anybody that is able to buy a car (particulary a Lexus at 500 -$1000 over invoice) whould be foolish enough to get screwed on a non competitive loan. The dealer typically doesn't give away the profit in anticipation of making it up on a high interest loan..

Sorry I can't buy your conclusion.

[poncherello]

I just leased an 07 ES 350 Ultra Luxury with Mark Levinson, XM radio, and PArking Assist. The sticker was a shade over $45,000. The lease was based on a "purchase price" of $40,600, which was about $800 over invoice. Best deal I could do considering the Ultra Luxury cars are very hard to find.

[Gryphon]

There is also dealer holdback which is often around 2%. And the dealer is strongly hoping to get your warranty and non-warranty service for several years. Serice is a very profitable area for dealers of all type of vehicles, including motorcycles which I have experience with.

Tom

[firstone]

There is also dealer holdback which is often around 2%. And the dealer is strongly hoping to get your warranty and non-warranty service for several years. Serice is a very profitable area for dealers of all type of vehicles, including motorcycles which I have experience with.

Tom

Tom

Dealer holdback on a ES 350 is $669. This is no matter what the MSRP is.

Reference Consumer Report New Car Buying Kit. The cost is $39 for 3 months. The kit enables you to determine actual dealer Invoice on any car. Dealer invoice includes Destination fee but not the Dealer Holdback. If you buy a ES 350 at invoice the dealer still makes the $669.

The point I am trying to make is that dealers are not going to "give most of the profit" on any car because they will make it up on high interest rates. warranty extensions or prepaid maintanence plans. They want it all and get it sometimes from uninformed buyers. The dealers are good at what they do.

Tom

[SW03ES]

Thanks for your reply

I find it hard to believe that anybody that is able to buy a car (particulary a Lexus at 500 -$1000 over invoice) whould be foolish enough to get screwed on a non competitive loan. The dealer typically doesn't give away the profit in anticipation of making it up on a high interest loan..

Sorry I can't buy your conclusion.

You would be UNBELIEVABLY shocked what people will do. My father, who is an extremely successful sales professional, fancies himself a shrewd negotiator and he is. I watched him haggle until he and the salesman literally almost came to blows over the price of a car...and then buy paint protection, Lojack, an extended warranty, and get approved for a 13% interest rate until my mother finally stopped him and insisted they finance it at their credit union who did it for 7% (this was many years ago). He is a very savvy and smart businessman and investor. He just got whomped.

Dealers absolutely give up money to anticipate getting it back on the loan or on extras, I consulted with car dealers for years. They will make the profit they want to make, or they won't sell the car. People buy the *BLEEP* all day long.

Now, luxury car dealers are a little more upfront, but not always.

I'm a residential real estate broker and I had a situation just today. A buyer and I negotiated literally for 3 days and we got him a great deal on a home, really sharp guy. He was approved for a loan through a bank at 8% when my lender could do it for 6.5. He wanted to give the business to the first lender because they got irritated when they found out he had called another lender after all the work they'd put in on his case. Just think about the cost of that abhorently inflated rate on a $500k house over the 7-10 years he'll own it.

If it wasn't for me, he would have done it and wasted all that hard and good negotiating.

[firstone]

Thanks for your reply

I find it hard to believe that anybody that is able to buy a car (particulary a Lexus at 500 -$1000 over invoice) whould be foolish enough to get screwed on a non competitive loan. The dealer typically doesn't give away the profit in anticipation of making it up on a high interest loan..

Sorry I can't buy your conclusion.

You would be UNBELIEVABLY shocked what people will do. My father, who is an extremely successful sales professional, fancies himself a shrewd negotiator and he is. I watched him haggle until he and the salesman literally almost came to blows over the price of a car...and then buy paint protection, Lojack, an extended warranty, and get approved for a 13% interest rate until my mother finally stopped him and insisted they finance it at their credit union who did it for 7% (this was many years ago). He is a very savvy and smart businessman and investor. He just got whomped.

Dealers absolutely give up money to anticipate getting it back on the loan or on extras, I consulted with car dealers for years. They will make the profit they want to make, or they won't sell the car. People buy the *BLEEP* all day long.

Now, luxury car dealers are a little more upfront, but not always.

I'm a residential real estate broker and I had a situation just today. A buyer and I negotiated literally for 3 days and we got him a great deal on a home, really sharp guy. He was approved for a loan through a bank at 8% when my lender could do it for 6.5. He wanted to give the business to the first lender because they got irritated when they found out he had called another lender after all the work they'd put in on his case. Just think about the cost of that abhorently inflated rate on a $500k house over the 7-10 years he'll own it.

If it wasn't for me, he would have done it and wasted all that hard and good negotiating.

I guess this is good for the folks who really know how to shop for cars, loans and other big ticket items. Because the car dealers and the bankers make huge profits they can sharpen their pencils when they are dealing with an informed buyer.

Another example is how much some people pay for financial advice simple because they are too lazy to learn how to do it themselves.

Thanks

[SW03ES]

Another example is how much some people pay for financial advice simple because they are too lazy to learn how to do it themselves.

Thanks

Well, that really depends. I have a financial planner that I am happy to pay irregardless of whether or not I could do it myself, and I have a CPA that I am happy to pay irregardless of whether or not I could do that myself. Its not a question of being lazy, I'm too busy out making money to worry about watching my investments and making calculated moves or doing my taxes. They do a great job for me and I'm happy to pay them, doesn't make me lazy.

[jaspal]

Another example is how much some people pay for financial advice simple because they are too lazy to learn how to do it themselves.

Thanks

Well, that really depends. I have a financial planner that I am happy to pay irregardless of whether or not I could do it myself, and I have a CPA that I am happy to pay irregardless of whether or not I could do that myself. Its not a question of being lazy, I'm too busy out making money to worry about watching my investments and making calculated moves or doing my taxes. They do a great job for me and I'm happy to pay them, doesn't make me lazy.

SW03ES,

Sorry, it is off topic. I need a financial planner in DC area, where I believe you are. Could you pm the info please. Thanks.

[firstone]

Another example is how much some people pay for financial advice simple because they are too lazy to learn how to do it themselves.

Thanks

Well, that really depends. I have a financial planner that I am happy to pay irregardless of whether or not I could do it myself, and I have a CPA that I am happy to pay irregardless of whether or not I could do that myself. Its not a question of being lazy, I'm too busy out making money to worry about watching my investments and making calculated moves or doing my taxes. They do a great job for me and I'm happy to pay them, doesn't make me lazy.

My comment was that "some" people are lazy. Of course this was not directed at you. Please don't take issue with my post. It was a general statement.

I had a very sucessful industrial distributorship business for over 30 years and retired at 59 YOA. My investments were made in growing my business. My timely inventory purchases returned more to me than my investments that I payed far too much commission on both the buy and the sell side. It was pretty easy to make money in the market during the 90's. Many brokers & planners never ever saw anything like what happened starting in Jan 2000.

How many folks really got hurt badly in the Jan,2000-2003 period on bad advice from their planners & brokers. A unpaid guru I follow advised his clients to get out in a e-mail allert in Jan 2000. I did............what a call!

To run my business I had to understand the economy and how it affected my customers many of which were in the Fortune 500. Using this knowledge it was easy to apply it to my investments. I have not used a broker for over 15 years and I never used a "financial planner"...........

I realize this is off topic but I felt I needed to answer your comment

Tom

[SW03ES]

Sorry, it is off topic. I need a financial planner in DC area, where I believe you are. Could you pm the info please. Thanks.

Absolutely, I dont have his info here but I have it at the office, I'll PM it to you tomorrow. He's in Bethesda.

My comment was that "some" people are lazy. Of course this was not directed at you. Please don't take issue with my post. It was a general statement.

Oh no, I never thought you meant me. Not to worry.

Thats great that that worked for you. However, for most people your experience wouldn't be applicable.

[elementau]

I just leased an 07 ES 350 Ultra Luxury with Mark Levinson, XM radio, and PArking Assist. The sticker was a shade over $45,000. The lease was based on a "purchase price" of $40,600, which was about $800 over invoice. Best deal I could do considering the Ultra Luxury cars are very hard to find.

Funny you should mention those figures. My Ultra luxury edition was stickered at $45,097, but I dealed him down to about $40,600. They did finance me at 6.7%, but I got a better rate at another bank and paid off the dealerships loan in a couple of weeks. I was very pleased witht the price I received, but I couldn't for the life of me find an ES350 witht the pre-collision system which I really wanted. I wanted the Radar cruise control, but no one seemed to have it. It's in a lot of LS's but not in the ES's

[SW03ES]

On the ES its purely a special order option, you'd have to order a car with it from Japan and wait for it to be built. It would have cost you a fortune in that you probably couldn't have negotiated as good a deal as you did on the price on a car they had to special order.

[FLG8R]

On the ES its purely a special order option, you'd have to order a car with it from Japan and wait for it to be built. It would have cost you a fortune in that you probably couldn't have negotiated as good a deal as you did on the price on a car they had to special order.

Actually the reverse is true....dealers pay interest on cars that sit on the lot. A special order doesn't cost the dealer any interest

[SW03ES]

Thats true, but they have an incentive to move a car thats on the lot already because of the interest they've paid (its actually a lease and insurance fee)to date and may in the future. I've looked into it before, dealers don't like to do it and you're not as likely to get a great deal.