2013 "Invoice Pricing"

[ziggypup]

Hello. I am new to the forum and have a question. I am looking at new Explorer and took a stroll into my local dealer. They had one that had everything I wanted. The dealer then proceeds to show me the factory invoice. Their were no surprises except except 2 fee's that are added on at the bottom. The first is a advertizing assessment for $728.00 and a fuel charge for $67.64. Are these legit fee's that are paid by the dealer? Thanks in advance.

 

[Blue Raptor]

Yes. They are legit fees.

 

[peterk9]

Hello. I am new to the forum and have a question. I am looking at new Explorer and took a stroll into my local dealer. They had one that had everything I wanted. The dealer then proceeds to show me the factory invoice. Their were no surprises except except 2 fee's that are added on at the bottom. The first is a advertizing assessment for $728.00 and a fuel charge for $67.64. Are these legit fee's that are paid by the dealer? Thanks in advance.

Welcome to the Forum ziggypup.:wavey:
I have been driving for 50 years and have never seen those items on any contract I signed. My Explorer came with a full tank of gas as did all my previous 5 new vehicles and there was no line item for gas. That isn't to say it wasn't buried in some other cost such as admin or prep. Advertising is part of doing business and I would have thought that the dealer would have a budget for that purpose. On the other hand if the dealer is asking its customers to subsidize that cost, perhaps they can afford a lower selling price.
Perhaps it is a U.S. thing.

Peter

 

[13Sport]

Welcome to the Forum ziggypup.:wavey:
I have been driving for 50 years and have never seen those items on any contract I signed. My Explorer came with a full tank of gas as did all my previous 5 new vehicles and there was no line item for gas. That isn't to say it wasn't buried in some other cost such as admin or prep. Advertising is part of doing business and I would have thought that the dealer would have a budget for that purpose. On the other hand if the dealer is asking its customers to subsidize that cost, perhaps they can afford a lower selling price.

Peter

On the actual dealer invoice the dealer is charged these fees. Fuel cost for shipping to the dealer (both freight and truck), and advertising fees that are paid by the dealer on each vehicle to Ford. It wouldn't have been on your contract, the OP is talking about the dealer invoice that was showed during the deal.

 

[peterk9]

On the actual dealer invoice the dealer is charged these fees. Fuel cost for shipping to the dealer (both freight and truck), and advertising fees that are paid by the dealer on each vehicle to Ford. It wouldn't have been on your contract, the OP is talking about the dealer invoice that was showed during the deal.

Thanks 13Sport. I guess I misunderstood the post. I thought that this was being charged separately to the buyer.

Peter

 

[13Xworldchamps]

Hello. I am new to the forum and have a question. I am looking at new Explorer and took a stroll into my local dealer. They had one that had everything I wanted. The dealer then proceeds to show me the factory invoice. Their were no surprises except except 2 fee's that are added on at the bottom. The first is a advertizing assessment for $728.00 and a fuel charge for $67.64. Are these legit fee's that are paid by the dealer? Thanks in advance.

I always use online resources (edmunds, cars.com and kbb.com) to get an idea of what the "dealer invoice" is. My Ford dealer tried the same tactic with the advertisment fee of around 800 bucks to inflate the dealer ivoice price. I have never seen that tactic before with a ford or honda new car purchased over the years. In the end I did haggle through the extra fee and agreed on a purchace price of 45,740 (minus incentives available) which was the invoice price using the fore mentioned online tools. The dealer has about 3% of MSRP wiggle room called holdback. They can but rarely like to dip into that profit.

Ed

 

[13Xworldchamps]

Also,
Did anyone notice the MSRP price increase of $100.00 ($595.00) on the White Platinum Tri-coat option on the Explorers?

When I ordered mine it was $495.00 on 14 DEC.

Ed

 

[blichy]

On the actual dealer invoice the dealer is charged these fees. Fuel cost for shipping to the dealer (both freight and truck), and advertising fees that are paid by the dealer on each vehicle to Ford. It wouldn't have been on your contract, the OP is talking about the dealer invoice that was showed during the deal.

Actually, I believe the fuel cost is for the cost of filling up that particular vehicle. The fuel costs for shipping are embedded in the destination/delivery charge.


Also, it should be noted/remembered that Dealer Invoice is NOT the price the dealer is charged from the factory. A dealer selling the car at Invoice is still making profit.

 

[broken strut]

Actually, I believe the fuel cost is for the cost of filling up that particular vehicle. The fuel costs for shipping are embedded in the destination/delivery charge.


Also, it should be noted/remembered that Dealer Invoice is NOT the price the dealer is charged from the factory. A dealer selling the car at Invoice is still making profit.

The part about the fuel is correct: but

Invoice is the amount the dealer pays the factory for the car and is generally the amount that the dealer floorplans, or pays interest on. Very few dealers pay cash for their inventory. They borrow it, and that amount is called the floorplan. The factory retains approximately 3% of the MSRP of the car, called "holdback", and that is included in the invoice price. The dealer at some point gets the holdback returned to them.

Many customers and so-called advisors consider the holdback to be additional profit. The cost of operating a car dealership is staggering, and the margins on new cars are slim to non-existent. Holdback is used to pay the interest on the new cars in stock, utilities, insurance, and other overhead.

So if you consider that there is no profit in holdback, then the invoice price is the price that the dealer pays for the car. I'm sure there will be quite a few self-appointed "experts" that have never worked in management at a car dealership that will disagree, but those are the facts.

Some consumers have been able to buy cars below invoice, or "into the holdback". If you did, congrats to you, you got yourself a heck of a deal. But as a rule, most dealers won't go into the holdback unless a car is really a distressed piece of merchandise or they're in a financial jam or you're a swell guy and they're doing you a favor.

Factory pricing plans, such as Friends and Family, or employee pricing, are at prices established by the factory. They are typically at a price up to 3% below invoice, which means they are basically taking the holdback away from the dealer, and the dealer is paid a set fee to deliver the car to the customer.

The amount of the holdback varies from manufacturer to manufacturer, and sometimes is tiered within the same manufacturer, depending on the dealer's sales volume, customer satisfaction scores, or other criteria.
__________________

 

[peterk9]

Also,
Did anyone notice the MSRP price increase of $100.00 ($595.00) on the White Platinum Tri-coat option on the Explorers?

When I ordered mine it was $495.00 on 14 DEC.

Ed

In Canada it is still $300. That is also what it was on my 2011 Ltd.

Peter

 

[blichy]

The part about the fuel is correct: but

Invoice is the amount the dealer pays the factory for the car and is generally the amount that the dealer floorplans, or pays interest on. Very few dealers pay cash for their inventory. They borrow it, and that amount is called the floorplan. The factory retains approximately 3% of the MSRP of the car, called "holdback", and that is included in the invoice price. The dealer at some point gets the holdback returned to them.

Many customers and so-called advisors consider the holdback to be additional profit. The cost of operating a car dealership is staggering, and the margins on new cars are slim to non-existent. Holdback is used to pay the interest on the new cars in stock, utilities, insurance, and other overhead.

So if you consider that there is no profit in holdback, then the invoice price is the price that the dealer pays for the car. I'm sure there will be quite a few self-appointed "experts" that have never worked in management at a car dealership that will disagree, but those are the facts.

Some consumers have been able to buy cars below invoice, or "into the holdback". If you did, congrats to you, you got yourself a heck of a deal. But as a rule, most dealers won't go into the holdback unless a car is really a distressed piece of merchandise or they're in a financial jam or you're a swell guy and they're doing you a favor.

Factory pricing plans, such as Friends and Family, or employee pricing, are at prices established by the factory. They are typically at a price up to 3% below invoice, which means they are basically taking the holdback away from the dealer, and the dealer is paid a set fee to deliver the car to the customer.

The amount of the holdback varies from manufacturer to manufacturer, and sometimes is tiered within the same manufacturer, depending on the dealer's sales volume, customer satisfaction scores, or other criteria.
__________________

A-Plan pricing for Ford was (at least back when I worked there) set at dealer price, less a few things such as marketing charges. In my current company I can say for a fact that the "invoice" pricing that can be seen on sites like Edmunds is higher than the prices the dealers are paying for the cars.

In the end we are saying the same thing--invoice less holdback is the price the dealer pays for the car, not straight invoice.

 

[ziggypup]

Thanks to all for your replies, even though some of you went off in a different direction.....lol. Still looking for a clear answer to the question. Any current Ford Dealers on this forum that could possibly shed a little light on the advertizing assessment question?

 

[blichy]

Thanks to all for your replies, even though some of you went off in a different direction.....lol. Still looking for a clear answer to the question. Any current Ford Dealers on this forum that could possibly shed a little light on the advertizing assessment question?

I don't work for a Ford dealer (used to work for corporate finance), but based on the region, there is an advertising fee that is charged to the dealers for each car. This goes for the advertising on tv, online, print, billboard, etc. It could be different from region to region, but I am not certain of that.

 

[blwnsmoke]

The advertising fee is a legitament feet that is charged to the dealer by Ford. If the dealer negotiates that fee, they are dipping into their hold back which is rare. Both fuel and advertising fees are not made up.

 

[ziggypup]

Thanks guy's. I should know this afternoon whether or not a deal can be made.

 

[blichy]

Thanks guy's. I should know this afternoon whether or not a deal can be made.

Good luck!