Bada Bing

I filled out a ZAG online inquiry for a fairly basic A4 2.0T for my wife (2.0T FWD with CVT, wood trim, homelink/bluetooth package, and music interface with iPod cable). The three offers that showed on the screen were: 1) one dealer at $500 over invoice (KBB.com and Edmunds.com invoice with no add-ons like advertising fee, port fees, dealer prep fees, etc. which some people have had to pay) and 2) two dealers at $500 below invoice (again the same clean invoice prices you find on KBB.com or Edmunds.com).

Within 2 minutes of submitting my online inquiry, I got a call from one dealership. Since I know someone who had purchased a 2010 Avant from them for $1500 under invoice, I asked if they would be willing to go to that price. The salesman thought that $1500 under invoice is very much realistic and he could confirm it with the GM before I decide to make the hour-long drive. The MSRP for the car listed above is $33,675, KBB invoice is $31,377 and presumably their selling price would presumably be $1500 below the latter price, or $29,877. So we are talking about a discount of about $3800 off MSRP.

Now I know that they wouldn't sell a car at a loss, but I am dumbfounded as to how they can sell a car at $1500 below their supposedly true cost. Does Audi give them some money in some other fashion? Can I push my luck and ask them to throw in AudiCare for free as well? I like the idea of getting AudiCare because of the 1-point bump in residual value (A4's residuals are pathetic, so every point helps!), even though for a 3 yr/10K mile per year lease, it would only amount to 2 covered services under the plan (15K and 25K).

So what's the secret in these below invoice deals? Would I be out of line by asking them to throw in AudiCare if they offer to sell the car at $3800 below MSRP without any hard negotiation? How much is the regional advertising fee in SoCal anyway?

benspeed83

Invoice is not the true cost of the vehicle. Invoice to a dealer is the equivalent of MSRP to a consumer. They can buy under invoice and the more cars they sell the better the deal they get from Audi.

1,500 under invoice is a very good deal though. Make sure you get a verbal number from them as to what the final purchase price would be. Some dealers try to make the profit back on high interest rates and stupid fees.

It is unlikely they would give AudiCare on top of that offer but you never know until try. Good luck.

Mark @ danbury Audi

Nobody can sell the car under cost. They would not be able to stay in business. They are playing games with you. Get it in hard writing and take it and run. Good luck something is fishy if they offer it to right up front .

benspeed83

True: no one can sell under cost and be profitable but invoice is NOT cost. It is more complicated then that.

Moviela

I always chuckle when a dealer "Bob" chids in that they cannot sell a car for less than cost. They also believe that invoice is the cost of the unit. Both ideas are not true. Some dealers sell some models for less than they pay for them to get them off the lot and free capital for new cars. They realize that profits will be made when the unit comes in for service. I enjoy also that Audi has no holdback. That is true. VW pays it. It is roughly 3% of MSRP.

All dealers pay the factory the same amount for the cars. That is invoice. Then the money starts flowing back to the dealer. The holdback, advertising co-op, finance incentives, sales incentives, building fund, dealer look and feel money, sales prizes, free leases, demo plans, shop equipment money, trunk money, pre-delivery inspection, and training compensation. You always see a destination charge on the sticker. Many people think that is for transportation from the factory to the dealer. No, that is a charge at destination designed to compensate the dealer for adminstrative costs. It also allows the dealer to exclude those dollars from calculation of salesman's commissions.

Most A4's have about $ 2,600 between invoice and the dealers' true bottom line. If you pay $ 1,500. below invoice and the destination charge, and the "document" charge, you just put $ 2,000 in the dealers pocket. If you paid "invoice" you put $ 3,500. in his pocket. If you paid MSRP, you were hit from behind without the benifit of a reach around.

Don't believe what anyone you meet at the dealer tells you about cost of the unit. They are all liars. In most of the 300 odd US dealers only one person knows the true financial particulars, maybe two people in the top few volume dealers.

For you guys that need to order a car to get the equipment you desire, please do it using European Delivery. You can get a sizable discount at ANY dealer, and if you are a sweet talker, you can even get the ED price discounted.

My A4 is a nice ride, but it is even sweeter when I pass other A4 owners who paid 5K more than I did in order to get "free Audicare."

r3zon8

heres the answer...its all in the financing. dealers will promise you the best price because we all feel empowered negotiating the lowest SELLING price, we feel like we took them by buying $500 under invoice. the sad truth is, if you dont understand how financing works, they can easily make back that 500 3 fold by ****ing with your money factor/residuals. For example, here are lease rate for January 2010 for an Audi Q7. http://search.audiworld.com/showpost...00&postcount=1 The rates you see there are what you SHOULD pay, not a decimal more. But the dealer can inflate that to cover the discount they just gave you on the car to make you think you got it cheaper.

at the end of the day theres nothing special about buying/leasing a car. its just MATH!!

if youre leasing, arm yourself with a lease calc:
http://www.carbuyingtips.com/regm.xls
put this baby on your laptop and walk in there with your laptop underarm.
make sure you know the lease rates BEFOREHAND by searching around the net. many forums post AFS(audi financial services) lease rates at the beginning of each month. ofcourse these lease rates are only good if youre leasing through AFS(captive lease).

the point is...you want to walk in there knowing everything there is to know about cost/price/lease rates before you step foot at the dealer. youre really only there to check their stock and find the right model/options/color you want. Use your knowledge to your advantage. Dont show them your cards up front..let them say they are giving you 1500 under invoice. once you start working on financing and you see their lease rate/residual is different. bring it up right away. tell them AFS rates are so and so for january for that model car. tell them that since they lied to you, you will not pay any dealer fees/etc. **** with them, just like they are ****ing with you...

dont sit down with anyone until youre ready to actually buy...that way you dont waste your time, or theirs. both are valuable and they appreciate the buyer who doesnt lolligag. agree on price, agree on financing, sign for it, and get the f out...

Adidora

Is there the same level of shenanigans when purchasing versus leasing?

Bada Bing

I would say no. There are a couple of extra places on a lease where a dealer can pad his profit. They are allowed to bump up the acquisition fee they pay to their financing company (AFS, BMWFS, etc.) by up to $200 and not have to disclose it to you. They can also bump up the base money factor up to a certain amount from published captive lease MF. So it's more critical to examine all the figures to make sure everything is legitimate. If you know before walking in what price they are selling you the car for (actual price, not $ over invoice), you can do the lease calculation and know exactly how much your payment has to be using a lease calculator. The exact drive-off amount is hard to determine since one doesn't know exactly how much DMV and doc fees are, but you can guess those and come out within $50-100 of the exact figure.

On my last lease, I was within $1 in monthly payment and the only discrepancy was because the doc fee was added to the capitalized cost by the dealer (instead of being added to the drive-off).

Adidora

Thank you Bada Bing.

I am looking at making an offer on a new 2010 Audi A4 with a couple of upgraded packages. I have read many places the prices people are getting and they range from $1,500 above invoice to $1,500 below invoice. I have seen the Edmunds data but that averages those that aren't in the know with those that are....what seems reasonable?

Zeus69

They can really increase the money factor at their discretion?!? How would I call them on that (ie, is there a publically available published rate that I could use to dispute their numbers)?