Save $10,000 Off The Sticker Price... NOT

Lets get serious... Do you really think that a new car has a $10,000 mark up... 99% of the time the answer is no.

As part of this blog I not only want to teach you how to get the best deal possible, but I want to insure you are not chasing an unattainable deal. Some blogs/sites out there will tell you that if you press hard enough you can get the dealer to discount their price of the vehicle upwards of $7000-$10000. The truth of the matter is the majority of the time this is just NOT TRUE. There just isn't that kind of mark up in a vehicle.

There is one rule when it comes to vehicle mark. When you are talking a brand new vehicle the more expensive the vehicle is the more mark up there is, generally speaking. There is more mark up in a top of the line 1 ton truck then there is in a compact car...

Example Ford F350 Lariat vs. Ford Fusion SE. There is more mark up in the $50,000 truck vs. the $20,000 car.

What you need to keep in mind is that quite often the Manufacturers ie. Ford, Chevy, Dodge, etc. provide the dealers with rebates. These rebates maybe as little as $500 or as much as $7,500 maybe even more depending on the time of the year.

Here is how you would see $10,000 off the price of a vehicle...

Lets say you where looking at a $45,000 Chevy Silverado and there is a $7,500 rebate on that new truck you are looking at because of the time of the year. Then because the dealership really wants to move that particular truck, they are willing to discount the MSRP by $2,500. 95% of the time this would be shown to the consumer as...

"$10,000 off the MSRP"
or
"MSRP $45,000 THIS WEEK ONLY $35,000"

Here is the math...

$7,500(rebate) + 2,500(discount) = $10,000

$45,000(MSRP) - 10,000(rebate+discount) = $35,000...

You might be asking yourself why is this important, they (the dealership) have reduce their price by $10,000. WRONG!!!! The dealership has only discounted their price by $2,500 the other $7,500 is a rebate. This is extremely important to remember because next month or maybe even next week the dealer may NOT be able to offer the same deal. If the $7,500 rebate program ends then the dealer will not be able to offer you a price tag of $35,000.

You can not go in to a dealership expecting $10,000 savings by negotiating like a Hard Ass. There just isn't the mark up in a vehicle. If you try to hold out for a astronomical savings like that you may just end up never purchasing that new vehicle. That said, it is important to know when these programs (rebates) end. There is nothing worse then deciding to buy just to find out the dealership can no longer offer you that deal. Once the program ends, that rebate is gone. Trust me that is a horrible feeling.

When you read the upcoming post on negotiating you will realize that it is even more important to remember the difference between a discount on the price and a rebate.