2012 Es350 - How Much Should I Pay?

[MichelleN]

Hi,

I am in Northern California. I am looking to lease (or possibly buy) a 2012 ES350. Can someone provide me some info on the following:

1) what is the cost of this car for the dealer (provide link if possible)

based price, without any options

2) about how much rebate would the dealer get back from Toyota/Lexus?

3) is it customary for the buyer to pay for the delivery fee, if so, about how much is that?

4) are there any other fees that the dealer may ask me to pay for, that I shouldn't be paying for?

5) how much should I offer for this car, from the based priced that the dealer buys it in for?

$1000 below what they pay for? (since they may get back $2000, $3000 rebate from Toyota/Lexus)

6) are the any other major issues should I be concerned about, that I haven't mentioned so far?

Thanks so much for your help.

[SW03ES]

Hi Michelle! Welcome to the LOC.

The information you are looking for is easily found on the Internet. Check out www.edmunds.com, www.truecar.com. www.zag.com

Lexus generally doesn't do factory to dealer incentives, like domestic carmakers do. The dealer's cost, less the holdback, is the dealer's cost. Lexus' holdback is 2% of the base MSRP, so the base MSRP is $36,275...so holdback is $725.50. So if you buy whatever optioned model you choose and pay invoice, they're only making $725.50. From time to time they will do a special deal on the ES, IS & RX where maybe they'll have $1,000 in special incentive, or a loyalty rebate for current Lexus owners or lessees, but not real often. In general invoice is an EXCELLENT price for one of these cars, and you may only be able to get down as low as $1,000 over invoice.

Lexus, like all manufacturers, charges a destination fee that is already included in the base price.

[MichelleN]

Even though many websites say that the invoice price for the ES350 is around $33,290, the holdback/rebate that the dealer gets is about $7000, according to the site listed below. This makes the dealer price for this car about $26,829.

See this link: http://www.car-buying-strategies.com/Dealer_Invoice/lexus-es-350-prices.html

If the dealer buys this car in for about $27,000 (this includes the delivery fee of $875), so how much should I offer for it?

[SW03ES]

The information you are looking at is incorrect. The dealer does not get $7,000 in holdback, thats preposterous. Edmunds is the trusted source when it comes to manufacturer pricing, and as per them Lexus' holdback is 2% of the base MSRP:

http://www.edmunds.com/car-buying/dealer-holdback/

Another source listing the same thing, 2% of base MSRP:

http://www.thetruthaboutcars.com/2011/06/the-truth-about-dealer-holdback/

Another source...same thing, 2% of base MSRP:

http://www.safecarguide.com/gui/neg/holdback.htm

In order for there to be a $7,000 holdback that basically means there would be over $11,000 in profit in the car at MSRP, and thats just not the case. I consulted with car dealer sales departments for a few years, and I can tell you for a fact there aren't a whole lot of cars on the market where the profit margins are that large, and certainly not on a car of this price. I bet thats an error...and they've typed in 20% instead of 2%. The site says holdback is $7,345, thats 20% of the base MSRP of $36,725. My guess is it should be 2%...as per all the other sources...which would be $734.50.

I think if you could get the car for invoice in CA, thats the $33,290 figure thats about the best deal you'll be able to get. I would try that www.zag.com site, we just bought our Jeep using that and got significantly less than invoice, but thats because of factory to dealer incentives that companies like Lexus, BMW, Mercedes, etc generally don't offer. We had $3,500 in rebates on the Jeep that allowed the dealer to sell it to us for $3,500 below their cost and still make a little money, you're not in that situation on the Lexus. I paid $1,000 below invoice for my ES350, but they had a $1,000 owner loyalty rebate at that time that they don't have now as far as I know.

If not Zagg, I would email some dealers and see what they offer it to you for and start from there.

But, trust me, I've bought 4 Lexus cars in my life and have negotiated for weeks for all of them and I *know* I paid bottom dollar for every one of them, regardless of what that site says there is no "$7,000 holdback". Dealer cost is invoice, less 2% of base MSRP holdback ($734.50) Anything below that the dealer will loose money on the sale, and thats not happening on something like a Lexus that they will sell.

I emailed the webmaster of that site you linked to inquire about this error. I'll let you know what he says...but in case he doesn't respond check to see if he updates it from 20% to 2%.

[pj8708]

Hi Michelle and Welcome as well to the Lexus Owners Club,

Owning a new 2012 ES would be a pretty cool gift for the new year. I just wanted to echo Steve's words regarding purchasing from a Lexus dealer vs. say a domestic brand such as Ford, Buick, etc.

I bought my 2010 ES350 about a 14 months ago. The MSRP or sticker price was $42,500. Instead of asking for the car at invoice price, I took a suggestion from others on this forum and said I wanted 10% off the sticker. They didn't even blink. As I had figured in advance the 10% brought it down to exactly invoice. I then asked for a value of my car on a trade. They said &12,500, the book (Edmund's)said 14,500 and we finally agreed at the $14,500 figure. At the same time, Lexus was giving their dealers $1,000 certificates to use as they saw fit to help close a deal. (This is the time of year they usually give the $1,000 off so ask when your looking around.) I felt it was a good deal for me and they were happy as well.

It's my belief that if you feel your dealer is out to screw you and you have to try and beat them out of every penny you can, then you are at the wrong dealer or you can't afford the car your buying.

Let us know how you come out.

Paul

[The G Man]

I believe the dealer cost plus all the fees for a base 2012 ES350 with no options is around $34000. There are some hidden manufacturer incentives during the Lexus december to remember sale, you might be able to save maybe another $1000, but the sales ends on 1/3/2012.

[SW03ES]

Yeah the December to Remember gives them those $1,000 coupons...

Another unusual thing about those coupons is they only give each dealer so many...so its possible for the promotion to still be going on and for a specific dealer to be out of coupons.

[The G Man]

Thats good information Steve, I did not know Lexus use the limited coupon system.