Unknown Dealer Charges??

[dieck]

Cliffy's perspective is very accurate from a 20 thousand foot view. It's all supply and demand.

In my practical Toyota buying experience I've never had a dealer cannibalize TDA. It is an advertising fee that they pay. I have seen dealers cannibalize Dealer Holdback and Wholesale Financial Reserve. They are usually reluctant to do this, but if a vehicle is rolling on their lot and you buy it frictionless from them very quickly after it arrives they will sometimes pass this on to you. Apparently these line items are used to cover the dealer for having the vehicle on the lot for a certain duration. If they sell it more quickly, it is cash back in their pocket. If they sell it after 3 months it costs them more.

I've found that if you want the cheapest out the door price you often need to buy from a non local dealer who would otherwise not get your business and doesn't need to worry about additional follow up costs. The consequence of this though is then you depend on the local dealership to do your service and relationship. Some handle this ok some not so much.

If found most Toyota dealers are horrible to deal with for service or after sale activities anyway but there are some clear exceptions. I avoid going to the dealer like the plague.

If you work it right you can pay invoice, give the dealer a fair profit in the TDA and Holdback, and get in and out of the dealership in under a half hour.

Good luck!

Originally Posted by Frag Master

For those of you who have already purchased your Tundra maybe you can help me. The attached PDF shows my invoice from the dealer on a 08 CM Limited. We agreed on a price of invoice plus $750 period, what I don’t understand is all the various fees and charges they have itemized such as:
TDA $736
Dealer Holdback $841
Whsl, Financial Reserve $420

Has everyone else been paying these same charges or am I on to something?

A little good news is the Toyota is now offering 60months at 0% in CA.

Thanks for your help.

Hopefully I've got the pdf attached.

[Frag Master]

Originally Posted by Cliffy1

Ugh... again. Invoice is not cost. Please don't pretend that it is. If you pay $750 over invoice you didn't pay $750 profit. If you get a deal at $750 over "net-net" (invoice minus holdback and WFR), you still didn't pay a $750 profit. The dealer's profit involves a lot more than just what is paid for the vehicle and honestly, its not a consumer's business. Its not even the business of the salesman. Its a decision made by the owner of the dealership and involves how much he pays his salesmen, manager and finance people, how much he spends on advertising, floorplan interest, taxes and how much he pays the legal department. In short, "profit" involves a lot more than you as a customer needs to know about a small business.

So what does invoice mean? It allows you to compare your deal to the deal on a different vehicle at a different dealer. In some cases, a good deal is $750 over invoice. If demand is low, inventories are high and nobody is coming into the store, even $1000 under invoice is a rip-off. Knowing invoice only allows you to compare your deal with another one within your market area, at that time.

Don't be fooled by guys talking about the astounding deal they made last year. You don't know a thing about the circumstances. They may have bought a truck that had been on the lot for 120 days, had 700 miles, been in a color that didn't sell well in that area and he might have caught a manager making a mistake that will never be repeated. You may be looking at a high demand vehicle that's fresh to the lot and easy for them to sell. Its two different deals and you can't compare the two.

Now, as to your specific questions, the fees you listed are all part of the invoice.

TDA is not refunded. Its a real fee that the dealer pays to the regional distributor. Because its a regional fee, most on-line sources don't tell you what it is, but it is real.

WFR and HB are refunded to the dealer at a later date. They are used to cover various expenses associated with the vehicle. Most salesmen are not paid on these amounts.

I think Cliffy has clarified this for me. There is a difference between “Dealer invoice” and “Dealer cost”. What was confusing me was this was the first time I’ve seen a cost breakdown from a Dealer that actually reflects their “cost”. So when I look at the attached PDF invoice –Vehicle Base Model- it shows $36811 as Dealer cost. If I go to edmunds or KBB they have Dealer invoice at a higher price, basically the difference is the Dealer holdback. Another way of saying it is, my Dealer could have shown that same line as $37652 which includes the holdback and I would not have even questioned it.

They may even have Whsl. Financial Reserve $420 in that number too, as I don’t recall ever seeing it itemized.

Bottom line is I believe this is the deal that the salesman and I originally agreed on, but I just needed confirmation from those of you in the know.

Thanks for the help and sorry I did not do a search the first thing. What I did do was to go back through several pages of threads trying to find a similar question.

[Cliffy1]

Originally Posted by Frag Master

I think Cliffy has clarified this for me. There is a difference between “Dealer invoice” and “Dealer cost”. What was confusing me was this was the first time I’ve seen a cost breakdown from a Dealer that actually reflects their “cost”. So when I look at the attached PDF invoice –Vehicle Base Model- it shows $36811 as Dealer cost. If I go to edmunds or KBB they have Dealer invoice at a higher price, basically the difference is the Dealer holdback. Another way of saying it is, my Dealer could have shown that same line as $37652 which includes the holdback and I would not have even questioned it.

They may even have Whsl. Financial Reserve $420 in that number too, as I don’t recall ever seeing it itemized.

Bottom line is I believe this is the deal that the salesman and I originally agreed on, but I just needed confirmation from those of you in the know.

Thanks for the help and sorry I did not do a search the first thing. What I did do was to go back through several pages of threads trying to find a similar question.

I'm glad it helped. edmunds and most other invoice sites roll the HB and WFR into the total invoice number. The dealer does get an invoice which does this as well, but that's a hard copy and not something that can be copied and pasted. The computer generated invoice breaks down those figures which is why you saw them.

[Cliffy1]

Originally Posted by dieck

I've found that if you want the cheapest out the door price you often need to buy from a non local dealer who would otherwise not get your business and doesn't need to worry about additional follow up costs. The consequence of this though is then you depend on the local dealership to do your service and relationship. Some handle this ok some not so much.

If found most Toyota dealers are horrible to deal with for service or after sale activities anyway but there are some clear exceptions. I avoid going to the dealer like the plague.

If you work it right you can pay invoice, give the dealer a fair profit in the TDA and Holdback, and get in and out of the dealership in under a half hour.

Good luck!

That may be your experience, but that is NOT typical, nor is it how we in the dealership view things. Let me give you a few reasons why.

First, old units are old for a reason. They are lower in demand. Every week, we get a meeting with the owner, demanding that we get rid of the older units that are costing him money. Older units seem to get "stale", and its actaully easier to sell an identical unit that just arrived. People somehow know if they are not the first butt to sit in a seat and they want that. That gives a lot of motivation to sell the aging unit.

The WFR line on the invoice isn't paid to the salesman. Its put into a pot to pay the average floorplan expenses. The more aged units, the more floorplan interst the dealer pays. The floorplan interest on old units counpounds and makes them weigh the whole expense sheet.

Next is the issue of location. What you're talking about is "conquest" customers. Those are nice to have and can be viewed as "found business". They also will never produce a referral, will likely never buy another vehicle from you and will never use our service department. A smart dealer will give the best deals to those who will generate future revenue. Granted, there are not enough smart dealers so your advice may be correct anyway.

Finally is the issue of time. The longer a customer stays in the dealership, the more likely they are to spend money. Customers who finance with a dealer's bank is many times more likely to buy more accessories, aftermarket products, warranties and financial products. Think about that for a moment. If you make an offer on the truck that leaves the salesman and manager with very little commission, they may be more inclined to take the deal if they have a glimmer of hope of talking you into buying something else once you're here.

I can't tell you how many times I have seen offers that don't get taken seriously. They are usually sent by fax and essentially tell the dealer that they can expect no repeat or referral business, no service business, no parts business, low front gross, no chance of finance profit, little chance of upselling and with so little time for rapport building we will probably get a low CSI rating when the survey. This is usually for a vehicle that has to be ordered or located and is often on a very high demand vehicle. When an offer like that comes, most managers will tell a salesman, "here's a price, but don't spend a lot of time with them. Its not worth it."

[dieck]

Respect your perspective and experience.

My goal is to get out as cheaply as possible including time value of money (financing). I usually get somewhere between invoice and 1k under invoice depending on the model (all this before rebates). I know there are better and worse deals but this works for me.

To pre-negotiate the deal and get in and out with as little friction (and green leaving my wallet) is my style. As always your mileage may vary.

Originally Posted by Cliffy1

That may be your experience, but that is NOT typical, nor is it how we in the dealership view things. Let me give you a few reasons why.

First, old units are old for a reason. They are lower in demand. Every week, we get a meeting with the owner, demanding that we get rid of the older units that are costing him money. Older units seem to get "stale", and its actaully easier to sell an identical unit that just arrived. People somehow know if they are not the first butt to sit in a seat and they want that. That gives a lot of motivation to sell the aging unit.

The WFR line on the invoice isn't paid to the salesman. Its put into a pot to pay the average floorplan expenses. The more aged units, the more floorplan interst the dealer pays. The floorplan interest on old units counpounds and makes them weigh the whole expense sheet.

Next is the issue of location. What you're talking about is "conquest" customers. Those are nice to have and can be viewed as "found business". They also will never produce a referral, will likely never buy another vehicle from you and will never use our service department. A smart dealer will give the best deals to those who will generate future revenue. Granted, there are not enough smart dealers so your advice may be correct anyway.

Finally is the issue of time. The longer a customer stays in the dealership, the more likely they are to spend money. Customers who finance with a dealer's bank is many times more likely to buy more accessories, aftermarket products, warranties and financial products. Think about that for a moment. If you make an offer on the truck that leaves the salesman and manager with very little commission, they may be more inclined to take the deal if they have a glimmer of hope of talking you into buying something else once you're here.

I can't tell you how many times I have seen offers that don't get taken seriously. They are usually sent by fax and essentially tell the dealer that they can expect no repeat or referral business, no service business, no parts business, low front gross, no chance of finance profit, little chance of upselling and with so little time for rapport building we will probably get a low CSI rating when the survey. This is usually for a vehicle that has to be ordered or located and is often on a very high demand vehicle. When an offer like that comes, most managers will tell a salesman, "here's a price, but don't spend a lot of time with them. Its not worth it."

[dieck]

I agree with most of your statements as reflecting the dealers perception. But I can tell you that a dealer that will sell you a Toyota at invoice with zero haggling is a HUGE deal and when I find them I tell everyone who will listen. I've also bought repeat vehicles from these same remote dealers.

You may underestimate the value of a low friction sale on both sides of the table. My remote internet sales guys love me because I don't call them unless they have the vehicle in stock that I want and they only have to invest about an hour to get a sale. And this is literally just filling out the paperwork.

Regards

Originally Posted by Cliffy1

Next is the issue of location. What you're talking about is "conquest" customers. Those are nice to have and can be viewed as "found business". They also will never produce a referral, will likely never buy another vehicle from you and will never use our service department. A smart dealer will give the best deals to those who will generate future revenue. Granted, there are not enough smart dealers so your advice may be correct anyway.

[TunTac]

I live all the way across the country from Cliffy1 and about 500 miles south of SFTundraman, but if I lived within a reasonable distance to either one, I'd buy a vehicle from them in a heartbeat! In fact, I would send them every single referral I knew living in their vicinity.

I'm not taking credibility away from any other members who have commented on this issue, but when it comes to inside knowledge of how the car biz works, these are the two guys you should listen too. Seriously!

Both of these guys have worked in the business for 10+ years and have chosen to HELP and EDUCATE consumers, rather than perpetuate the cycle of "sliminess" that the car biz is known for.

They are true professionals and I commend them for all the FREE information they provide!

[Cliffy1]

Originally Posted by dieck

I agree with most of your statements as reflecting the dealers perception. But I can tell you that a dealer that will sell you a Toyota at invoice with zero haggling is a HUGE deal and when I find them I tell everyone who will listen. I've also bought repeat vehicles from these same remote dealers.

You may underestimate the value of a low friction sale on both sides of the table. My remote internet sales guys love me because I don't call them unless they have the vehicle in stock that I want and they only have to invest about an hour to get a sale. And this is literally just filling out the paperwork.

Regards

Believe me... more than most people you will run into, I know the value of a low friction sale. I also know that this is rare and something you are not likely to find. I am also of the opinion that the low friction sale isn't always the absolute lowest price. It may be, but if a guy is willing to grind the fillings out of a dealer's teeth, he can usually beat the low friction price. I'm the type that when I'm on the other end of the table, I'll pay more for the luxury of a smooth, fast and easy sale. I'll pay more for that level of service.

[SFTundraMan]

Originally Posted by fla_guy

Try posting this at the dealer forum:

Pricing and Dealers - Tundra Solutions Forum

One of the salesmen there (like Cory) will be able to answer. I think the fees are legit. The TDA is what the dealer has to pay for advertizing, the holdback is the typical holdback, I forget the other one. If you get an answer over there, maybe post back here to let us know what it all means?

In the SE region, there is no TDA, since the SE region does their own scam of advertizing.

wow, it always amazes me what comes out of some people mouths on this forum. lol

not talking about you by the way.

All the fees are legit and when any dealer states invoice, they are including those fees. There are numerous post on here already about what those fees are and which ones the dealers get back and which ones they dont , so I am not going to get into it again.

[SFTundraMan]

Originally Posted by RONE

I didn't have all those fees. I did invoice plus $300 profit plus $99 "administration fees".

when a dealer shows you the invoice, those fees are already included, they are not added after the fact. You paid them, you just didnt know itt

[SFTundraMan]

Originally Posted by Frag Master

Good ideas bros thanks, I will post an injuiry with Cory, just to get their take on it. I'll post their answer.
There is no customer rebate because I opted for 0% for 60 months.

I'm also wondering what may be happening is when you buy a vehicle you typically don't see the dealer holdback as they have it built into the Base cost. But let's face it everything is negotiable.

very true, they are legit parts of the invoice, but everything can still be negotiated. You can offer what you want to, they can say yes or no. It will always be about supply and demand.

[SFTundraMan]

Originally Posted by dieck

Cliffy's perspective is very accurate from a 20 thousand foot view. It's all supply and demand.

In my practical Toyota buying experience I've never had a dealer cannibalize TDA. It is an advertising fee that they pay. I have seen dealers cannibalize Dealer Holdback and Wholesale Financial Reserve. They are usually reluctant to do this, but if a vehicle is rolling on their lot and you buy it frictionless from them very quickly after it arrives they will sometimes pass this on to you. Apparently these line items are used to cover the dealer for having the vehicle on the lot for a certain duration. If they sell it more quickly, it is cash back in their pocket. If they sell it after 3 months it costs them more.

I've found that if you want the cheapest out the door price you often need to buy from a non local dealer who would otherwise not get your business and doesn't need to worry about additional follow up costs. The consequence of this though is then you depend on the local dealership to do your service and relationship. Some handle this ok some not so much.

If found most Toyota dealers are horrible to deal with for service or after sale activities anyway but there are some clear exceptions. I avoid going to the dealer like the plague.

If you work it right you can pay invoice, give the dealer a fair profit in the TDA and Holdback, and get in and out of the dealership in under a half hour.

Good luck!

the only problem i have with your statement is that I would give a local customer a better deal any day of the week. I have a chance of making it back on them some day in service. A non local customer, I will never see again. So for me anyway. That statement is not true.

[SFTundraMan]

Originally Posted by Cliffy1

That may be your experience, but that is NOT typical, nor is it how we in the dealership view things. Let me give you a few reasons why.

First, old units are old for a reason. They are lower in demand. Every week, we get a meeting with the owner, demanding that we get rid of the older units that are costing him money. Older units seem to get "stale", and its actaully easier to sell an identical unit that just arrived. People somehow know if they are not the first butt to sit in a seat and they want that. That gives a lot of motivation to sell the aging unit.

The WFR line on the invoice isn't paid to the salesman. Its put into a pot to pay the average floorplan expenses. The more aged units, the more floorplan interst the dealer pays. The floorplan interest on old units counpounds and makes them weigh the whole expense sheet.

Next is the issue of location. What you're talking about is "conquest" customers. Those are nice to have and can be viewed as "found business". They also will never produce a referral, will likely never buy another vehicle from you and will never use our service department. A smart dealer will give the best deals to those who will generate future revenue. Granted, there are not enough smart dealers so your advice may be correct anyway.

Finally is the issue of time. The longer a customer stays in the dealership, the more likely they are to spend money. Customers who finance with a dealer's bank is many times more likely to buy more accessories, aftermarket products, warranties and financial products. Think about that for a moment. If you make an offer on the truck that leaves the salesman and manager with very little commission, they may be more inclined to take the deal if they have a glimmer of hope of talking you into buying something else once you're here.

I can't tell you how many times I have seen offers that don't get taken seriously. They are usually sent by fax and essentially tell the dealer that they can expect no repeat or referral business, no service business, no parts business, low front gross, no chance of finance profit, little chance of upselling and with so little time for rapport building we will probably get a low CSI rating when the survey. This is usually for a vehicle that has to be ordered or located and is often on a very high demand vehicle. When an offer like that comes, most managers will tell a salesman, "here's a price, but don't spend a lot of time with them. Its not worth it."

are you trying to tell me you dont get excited when you see those faxes? lmao

[SFTundraMan]

Originally Posted by dieck

Respect your perspective and experience.

My goal is to get out as cheaply as possible including time value of money (financing). I usually get somewhere between invoice and 1k under invoice depending on the model (all this before rebates). I know there are better and worse deals but this works for me.

To pre-negotiate the deal and get in and out with as little friction (and green leaving my wallet) is my style. As always your mileage may vary.

as with anything, it would depend on the car. A hybrid highlander right now would not be sold of $2000 over invoice. But a camry could be bought for $1000 under. All depends on timing, supply, demand and what kind of mood I am in that day, lol

[agswin]

Can somebody tell me what thse following terms are and if they are negotiable?

1% Financial Reseve MSRP - $281

thanks