Dealer Markup Wheaton Kia, Regina Saskatchewan

[SKStinger]

The sales team here is friendly, accommodating and knowledgeable but I was not happy with the pricing in either of my two transactions with this dealership over the last year. Both of which lead me to another vehicle/dealership.

At my request, they contacted me when they received a 2019 Stinger GT Limited in the colour I asked for and I immediately came to look at it. I was prepared to buy as it was a cash purchase so I asked for their best dealer discounted price.

What I received was a marked up price that included an inflated MSRP $1,000 higher than published on the Kia Canada website. The explanation I was given was that this price included the Dealer's PDI. A $1,000 charge. Out the door price with taxes (11%) and fees included was north of $60,000, including a $400 charge for the "premium DEFA block heater". I calculated the fees to be ~$650.

In my experience purchasing cars in this market, items like block heaters and PDI are not passed on to the customer. These are ways of marking up the vehicle in a convincing way that most customers don't question.

I informed the salesman that I was going to shop around for a better price and was then asked what price I wanted. This is not acceptable. When I ask for the best dealer discounted price and get the above, i'm out. I did respond with the MSRP discount I was looking for and had no further response from the sales team.

10 days later I had the car I wanted delivered from Sherwood Kia in Sherwood Park, Alberta for ~$4,500 less (Incl. both taxes) than I was quoted from Wheaton Kia. Shop around, it's worth it!

 

[mldavis2]

I had a similar experience down here in SW Missouri. I used to buy fleet cars for a company and I simply listed specs and solicited bids. No playing the "let's make a deal" games. I think many salespersons and dealerships think they haven't earned their profits unless they spend a couple hours bickering over prices. Not me.
Walked into three dealerships, handed them a sheet of paper with my specs on the Stinger, told them it was an order car (not a dealer inventory car), no dealer options, no "dealing" and one bid chance because I was shopping it.
First dealer offered $500 off MSRP and $4,000 for my trade-in. Never mentioned the lease/finance rebate of $7,200 at the time.
Second dealer refused to order a car and would only sell a car off the lot. I later found they were in the process of being bought out by another dealer and had to liquidate inventory.
Third dealer offered $1,500 off MSRP, $6,000 for my trade-in ($6,800 Kelly Blue Book trade-in value based on year, options and mileage)
Bottom line is that there is a huge difference if you shop around. Know what the dealer markup is and know what your trade is worth, buy the car based on bottom line cost, not on monthly payments in which they can hide all kinds of profit.

 

[Mach_Tuck]

I like the idea of "order car"
When i went for mine, i was freshly off the delivery truck (within 5 hours) and i wanted to buy it as it sat with no dealer installed option. The sales manager kindly informed me that i was REQUIRED to pay for the dealer add ons of tint, gps alarm tracking, and paint sealant and would need to bring the car back after the sale tonight. HA HA, yeah right.

Long story short, the car sat in their showroom for over 5 weeks and then i went back in got the deal i originally wanted. So, shop and around and know what you will pay....that is all that matters.

 

[SKStinger]

Bottom line is that there is a huge difference if you shop around. Know what the dealer markup is and know what your trade is worth, buy the car based on bottom line cost, not on monthly payments in which they can hide all kinds of profit.

This resonates with me. Always ask for the cash price and negotiate from there. If you know how much movement dealers have on the car that is the ammunition you need for negotiation. This forum was very helpful for that as I learned that Dealer margins on the GT Ltd in Canada were ~$3,000 so from there I knew going in that I wasn't prepared to pay MSRP or higher for that matter!

 

[mldavis2]

I don't begrudge a dealership a fair profit. They have some overhead to cover, salaries to pay, etc. But there is a lot that customers don't know about actual dealer costs on a car. The markup between MSRP (which is set by the factory as a starting point for negotiations) and "dealer invoice" on the Stinger runs around $3,000 plus or minus depending on the trim level.

But there are a couple of things that can get hinky there. First, when you are shown what the dealer represents as "Dealer Invoice" that is not what the car actually costs the dealer. They can create a "Dealer Invoice" sheet that they show customers that is not the true "Dealer Invoice" but some figure they manufacture and print out for you to see. Not all dealers do that, but what you think is "Dealer Invoice" is not always the dealer invoice. In addition there are several other "hidden" rebates the dealer gets for things like volume discounts and incentives, special factory discounts (similar to the lease/finance rebate given to buyers) and other incentives the factories use to move stock. Many people thought they paid "dealer invoice" for the car when they did not because they didn't really know what that net cost was.

In addition, anything the dealer adds that is not on the legitimate (legal) Moroney sticker is usually close to pure profit. Extra warranties are big profit items for dealers as well. So your best deal is go know the Kelley Blue Book dealer invoice on your car compared to the MSRP, know what your trade-in is worth from the same source, and avoid paying for anything you did not order or do not want. You are usually money ahead by self-insuring those extra warranties because if you think of them as something for nothing, they aren't, they are designed for additional profit. Then and only then can you come up with a monthly payment if you don't have a better source of financing or can't pay cash. Never let them stick you for added stuff after you "bought" the car in your mind.