The Dealer Invoice Price Has Become a Bloated Imposter That Has Had
Nothing To Do With Any New Car's Real Cost For Over Twenty Years! And
The Industry Moves It Further From Any Cost Year-After-Year-After-Year.
As noted above, Bragg proved it to senior execs of Consumer Reports, Kelley Blue Book, Edmunds, Cars.com and TrueCar in a 11/27/12 USA TODAY Automotive Roundtable discussion of "whether online car shopping and information services are believable and are relevant in today's market." The centerpiece of that meeting was the "bombshell" exhibit that shocked them. To see it, Click here.
You could have heard a pin drop. Incredibly, no one was aware of a game-changing fact that had been in front of their noses for 17 years! It's their worst nightmare because it exposes their "pay what others paid" as terrible advice.
Bragg asked the Consumer Reports person, "Who's been running your New Car Price Service for the past 20 years, Rip Van Winkle?" He was not amused.
To read much of the USA TODAY "Don't Trust That Invoice Price" write-up on that meeting (in which Bragg was dubbed a "peppery contrarian"), click here.
To understand how laughable new-car pricing is today, check out the tiny percentage differences between the base invoice and retail/sticker prices for each brand: Acura/5%-7%.
And that's if you pay the full sticker price! Who does that? The guy who thinks Taco Bell is a Mexican phone company.
Add the fact that dealerships have an overhead expense of 12% to 15% of revenue, and you'd have to be brain dead to believe the invoice price is in the same area code as any cost number.
The auto industry is having a good laugh at how gullible we are. It's even flipping us off now with pricing for the Chrysler Pacific Hybrid minivan: invoice 44,895, retail 44,995!
Yet all the info and advice on those auto websites is based on our swallowing - hook, line and sinker - the preposterous notion that for decades, automakers have been telling everyone what their dealers pay for their cars. If that were true, dealers would go ballistic. But they don't, and they never did, even before the Internet arrived.
"I never did give anybody hell.
I just told the truth, and they thought it was hell.
- Harry Truman
The inside story of the discovery of that game-changing fact is told in our book, "Letting The Cat Out Of The Bag: How The Auto Industry 'Redesigned' The Dealer invoice Price When The Internet Arrived," available in paperback and Kindle format at Amazon. To read the back cover copy, Preface, Table of Contents and the first four chapters, click here. If you'd like a author-signed copy ($14.95 including postage), you can add that to your order for the Fighting Chance information package.
Here's Bragg's Take On Those Consumer Auto Pricing Sites
Those sites are: (a) pitching the range of what other clueless shoppers have paid as the "holy grail" of transaction prices, (b) using rebates (which everyone gets) and a comparison of their prices to the full sticker price (which almost no one pays) to inflate their claims of "savings" from using their services, and (c) sending you on a 'milk run' to a small number of dealers in their "networks," who relish the thought of selling you a car at those prices and reward those "conduit sites" handsomely with the advertising and/or "finder's fee" dollars that come out of your pocket.
Question: When you're thinking about getting a new car, are you sitting there saying, "Gee, I hope I get a price that's close to what everyone else is paying?"
"The truth is incontrovertible. Malice may attack it.
Ignorance may deride it, but in the end, there it is.
- Winston Churchill
These Are The Facts About How Most Dealer Incentive Programs Work Today
It's 2017, not 1994, and that world isn't flat anymore, it's round.
90% of the bucks spent on "dealer cash" are in multi-month programs based on total sales targets and issues like customers' ratings of their selling dealerships, NOT sales of specific vehicles. The rewards can be six-and seven-figure bonuses. Some are "stair-step" promotions, in which per-vehicle bonuses increase as dealers reach higher volume thresholds. And no one can tell you any dealership's target or performance level, or when these programs start and end.
So reaching month-end goals along the way is crucially important. There's a lot of seasonality in the business, and dealers can't go into the last month 15% behind where they should have been based on that seasonal pattern. That keeps steady sales pressure on, month after month. Dealers trailing their monthly targets near month-end will sell for much less, and that's likely to be different dealers each month.
WHAT'S IN THE FIGHTING CHANCE PACKAGE?
You'll have the only independent, unbiased source of truthful information and powerful negotiating advice on the Internet. We've been focused single-mindedly on this subject since before the Dead Sea got sick, and much of our knowledge has come from our customers' feedback.
You'll have us as your coaches as you go through the process. Got a question? Call us. Want to run the numbers before you sign a lease? Call us. There's no such thing as a "silly question" here.
In the package's "centerpiece," How The Phone+Email Attack Can Get You The Best Deal, Saving You Time, Money and Aggravation, you'll learn exactly what to do and say each step of the way as you conduct a competitive bidding process from your home or office. Ideally, you'll enlist 9 or 10 dealers that you choose to make price proposals, and you'll go with the winner. We also tell you the best day of each month to start the process.
You'll receive our signature "Big Picture" analysis of how the brand(s) and the specific vehicle(s) you're interested in have been doing in the market. Are sales up or down so far this year? Does the average dealer sell 2 per month or 22? This piece also reveals the current "holdback" information for brands that use it (several don't).
You'll get the complete current sticker/MSRP and dealer invoice pricing data for the vehicle(s) you're considering, covering all the trim levels and equipment packages. Here's a current list of model pricing available.
You'll also get these insightful, fact-based articles by Mr. Bragg,
most of them information no other auto-info site will tell you:
"How We Abandoned Our Inborn Common Sense About New-Car Pricing."
"How The Industry Has Turned The Invoice Price Into A Bloated Imposter
By Continually Raising It By More Than The MSRP For Over Two Decades"
"How New-Car Dealers Make The Big Bucks (And How They Don't)
"Today Incentives Often Differ From Market To Market. Here's How To Check The Offers Where You Are"
"What I've Learned About 'Below-The-Line' Dealer Cash Programs, Facts No One Else Is Telling You."
"The Two Big 'Fake News' Come-ons To Ignore"
"The Myth Of Vehicle-Specific Dealer Cash Incentives"
"The Crucial Financial Importance Of A Dealership's Customer Satisfaction Rating."
"Important Note On The Pricing Of Dealer-Installed Accessories"
"Can You Get The Vehicle Configuration You Want?"
"Things To Consider About Placing A Factory Order"
"Have You Chosen A Crashworthy Vehicle?"
"Thoughts On Buying A Demo Or Last Year's Leftover Model"
"Should You Buy An Extended Warranty?"
"Dealing With A Trade-In" (If you tell us you have one.)
"Leasing 101: The Straight Skinny" (If you tell us you're leasing or undecided.)
"Here's The Information We Need To Analyze Your 'Best-Offer' Lease Numbers With You." (If you tell us you're leasing or undecided.)
Our unique $39.95 package includes all the information you need to negotiate the best price on for any one vehicle. Additional vehicles are $15 each. You may place an order here on a secure, encrypted order form at any time.
Special Message To Previous Customers
The Fighting Chance package is always changing to reflect new knowledge and the best ways to deal with the changing realities in the retail car business. Sometimes the changes are dramatic. For example, the method for getting competitive bids differs substantially from the arms-length "fax attack" process we recommended just a few years ago. At other times the changes are small, but represent worthwhile improvements. The suggested wording in the note you'll send dealers is fine-tuned often. The package you'd receive today will typically include several insightful changes compared to the one you ordered years ago.
The Cost Of This Unique Package
$39.95 (Includes all the information you need for any one vehicle.)