Lexus ES350 Price Negotiation Help

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The Critic

The Critic

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Buddy of mine is in the market for a Lexus ES350, either 2007 or 2008. I offered to help him price shop.

The configuration that he wants costs 37,400 for a 2007 model, but about 37,700 for the 2008 model. The 2008 model does not have Bluetooth included in the price (and cannot be equipped with it without adding Navigation, due to option combo changes), but the 2007 does. Other than that, the 2007 and 2008 models for the car are nearly identical.

Invoice for the 2007 model is about 33,400. On Edmunds, it appears that people are purchasing the car for about 32,500 with some negotiating. Some lucky ones have gotten it for 31,500. On the other hand, for the 2008 model, I have yet to see any postings of transactions or official invoice prices. Based on the 2007 figure, I’d assume that the invoice price for the 2008 model is a few hundred bucks higher.

I e-mailed one dealer, let's call him "Dealer A," asking him for a price on a 2008 model. He wants my phone number. I told him no, let's keep this via e-mail until we are closer to purchasing. He replies , and instead of giving me his best price, wants me to make an offer.

I’ve been taught to start low, and work my way up, so I made him an offer of 32,000. Of course it was rejected, I was expecting it. Made him a second offer of 32,500, not expecting this one to be accepted either.

I also e-mailed “Dealer B.” She sends me a price of invoice on the 2007 model, but says that she has no clue on the price of a 2008 model. Invoice on a 2007 is a mediocre offer, so I e-mailed back with a 32,000 offer.

Questions:
1) Is it worth getting a 2008 over a 2007?
2) What is a reasonable price for a 2008 at this time of the year? Do note that the 2008s are showing up on the lots this past week or two.
3) Am I doing this the right way, as far as negotiating goes? Am I making them reasonable offers? How much should I bump up each offer? I’m new to this.

Thanks in advance, and all help is appreciated.
 
Reasonable offers for any vehicle is $200-$500 over the invoice price. On a Lexus or any other top line vehicle, that $200-$500 may be unacceptable to the dealer. When my wife and I purchaced our RX-300 new, we went on line and did a "Free Dealer Price Quote" form EDMONDS.com. My best price was $1200 over invoice due to the RX being Lexus' best selling vehicle. Typicly your not going to get close to the invoice price on those vehicle. The invoice price that you listed for the 2007 is about $33,400. But, thats just the invoice of the base price of the ES without options. You need to get an invoice price of the whole vehicle as it is equiped with options. Those who have gotten the best prices of about $31,500, may have gotten lesser equiped vehicles without all of the bells and whistles that can bring an ES closer the the $40,000 price tag. With some more homework and hard negociating you should be able to get very close the the price that you want to pay. Good Luck!
 
Here's how to do it: simply print out all of that information that you have about what other people actually paid for a similarly equipped vehicle, or better yet, print out Autotrader listings of vehicles that are actually selling for that price and bring the information with you. Tell them that you're not buying the car unless you get it for X price and here's why (bring out the print outs). This typically works better with used cars, but it will work for new ones too as long as you can find appropriate information. The dealer will almost certainly tell you that the information you brought is wrong and that you have no way of validating it, but both of you know that is a lie. Stand firm on your position and you'll at least be able to get him down to a few hundred over the lowest price you found online.

I bought my used car almost 7 months ago now and I recently checked the NADA guide to see what the dealer retail was, and even with the additional 12,000 miles I've put on it, I still paid more than $1000 less than it's current dealer retail.
 
Critic, try going through Costco's program to get a price. You can find it on the web page under services. I got a Acura TL for 500 over invoice no hassle in Elk Grove that way.

How good their price is varies according to what make and model of car and what their contract is with the dealer. It can range from a very good deal to not so hot.
 
Just find the lowest price somebody has paid on Edmunds Prices Paid and Car Buying Experience forum for a similarly equipped car and offer to buy at that price. Chances are, the dealer is able to sell at that price because somebody has gotten it.

Another way to do it is to start your first offer at invoice and subtract any factory incentives available, which would put you below invoice (assuming factory incentives exist at the moment). But this will most likely only work on the 2007 as I'm sure the dealer can get more than invoice on 2008s, especially on a Lexus.
 
There is sure to be a dealer incentive on an '07 that is not on an '08. Which one I would go with depends on how long I am going to keep the car.

My best advice after 30 years in the auto bidness-Don't buy a new car anywhere you don't intend to take it when it requires warranty repair.
 
Critic,
I just read your post again, and it looks like you've already done pretty much what I would have done so sorry for not reading more carefully the first time. I think you are going about it the right way. The only thing I'd add is that a 2008 will have higher resale value. So if you're friend plans to dump the car at reasonable mileage within a few years, it may be worth paying a little bit more. But it's a personal choice really.
 
Quote:


My best advice after 30 years in the auto bidness-Don't buy a new car anywhere you don't intend to take it when it requires warranty repair.

Click to expand...


MrCritical, are you saying that dealers actually have an explicit system for discriminating against customers that didn't purchase from them? How much of a fall off in service are we talking about?
 
Thanks. Here's an update:

Dealer A rejected me 32,500 offer, and asks what was the offer made to me? Huh? Never had any 2008 offers yet. How should I respond?

Dealer B mailed me back. She didn't say she is rejecting my 32,000 offer, but said that she'd like to talk about the difference in person if I'm ready to buy. I just told her that I don't have time to drive 100 miles to meet her in person until everything is finalized.

Help???
 
Shoot, I bumped Dealer A up to 33,000 because I was getting impatient. I was honest with him, tell him that I hadn't received other offers for a 2008 yet.

Anyway, I'm really have no clue what I should be paying for a 2008 at the time of year. I'm guessing that within $500 of invoice is reasonable?
 
Quote:

My best advice after 30 years in the auto bidness-Don't buy a new car anywhere you don't intend to take it when it requires warranty repair.

Click to expand...


I bought my car in Oklahoma and have since taken it to a dealer in New York and in Maryland, and both the New York and Maryland dealer were delighted to do some warranty work for me. They were extremely courteous and helpful. I can't imagine why this would be a concern at all.

It's not like the parent company doesn't pay the dealer for doing the warranty work.
 
I work at a dealership with 3 GM franchises. We spend ten grand a month on training techs. Probably another ten on special tools. We don't sell any vehicle that we don't have techs with the latest training available certified to repair.

Most of our salespeople have been with the dealer since he opened 19 years ago. The newest one has been there 5 years.
Every aspect of sales/service is above board. It's a great place to purchase a car, we have moms and dads bring their kids in to buy. The dealer has the fairest pay plans for all his employees I've seen in my 30 years in this business.

We are in a fairly large city, surrounded by smaller towns, most of which are within 20 miles of us. Almost all of these towns has a dealership with at least one of the franchises we do. None of these dealers hase 50% of the investment in customer satisfaction that mine does. So guess what? They can usually sell a car for $200-$300 less than we can. They sell a lot of vehicles in our town.

Then the fun begins. You have a problem with your car you bought out of town, and it's inconvenient as heck to drive a 40 mile round trip to get it fixed. I'm supposed to feel sorry for you?

We don't give lesser service to an owner who purchased at another dealer, we simply can't work on it at all. We're perpetually working 110% on what we sell. It's not hard to choose between someone who spent forty grand with you vs. driving 40 miles to spend it elsewhere.

GM owners manuals are very specific on warranty repairs. If it's driveable it goes back to the selling dealer.

Most vehicles in their lifetime need repairs. I would feel a lot more comfortable if I did need some help, say with a borderline warranty question going to someone I spent forty grand with vs. someone who knows I spent it elsewhere.
 
Your going the right route offering low at invoice and working your way up. In the end I would go with the dealer with the best reputation and hopefully local. Also do they offer special favors to purchasers like where I bought from like free state inspections and free loaners? What is your friend willing to spend?
 
Quote:


GM owners manuals are very specific on warranty repairs. If it's driveable it goes back to the selling dealer.



Click to expand...

Mine don't. since GM owners manuals are available online, I'm sure you won't mind linking a recent GM manual that has that statement.
 
A 2008 is definitely worth more than a 2007 when it comes to resale. Based on the depreciation that's already happening to the '07, I'd want an '07 for $2500 less than I could get an '08.
 
Critic ,

Somehow this discussion is missing some things concerning price .

Also , things like looking up data on recalls , tsbs , campaignes , and owner feedback .

Of course , there is just the most basic information , ie open information on the 'net .

Here is just two things your friend may want to be aware of - might help with pricing - may want to wait and see whats up .



1.) " - WASHINGTON — After receiving 40 complaints of unintended acceleration and reports of eight crashes — including one involving seven vehicles — the National Highway Traffic Safety Administration has elevated its investigation of 98,454 2007 Lexus ES 350 sedans to an engineering analysis - "


Longer article and links at :


http://www.

edmunds.com/insideline/do/News/articleId=122210



2.) " Lexus Faces Class Action Lawsuit Over ES350 Airbags "

" - According to Lexusdefect.com, "many owners have found that these sensors are intermittingly turning off thereby creating a situation where… the air bag would not deploy." - "

http://www.

thetruthaboutcars.com/?p=4468 (1August2007 Frank Williams - author .

2b.) From Autoblog same subject ;

:http://www.

autoblog.com/2007/08/02/lexus-facing-lawsuit-over-es350-airbags/



" - One representative claims that he tested multiple ES350 vehicles and found them to be defective, as did other customers from across the country. Worse, it claims Toyota was warned about these issues and failed to correct them. - "

You can search the net for both unintended acceleration and airbags/airbag sensors in regards to this vehicle for much more information .

So far , on each issue its not clear if the 2008s are involved - I believe they haven't been released yet .

Use this as you see best , - hope it helps .

cheers.gif
 
2006 Pontiac Vibe Owner's Warranty Book Page 1.

"Your selling dealership has made a large investment to insure that they have the proper tools, training, and parts inventory to make any necessary warranty repairs should they be required during the warranty period. We ask that you return to your selling dealer for warranty repairs. In the event of an emergency repair, you may take your vehicle to any authorized GM dealer for warranty repairs."

http://www.genvibe.com/images/misc/manuals/pontiac_warranty_all_2006.pdf

Sorry, but we don't consider your inconvenience as an emergency. If the vehicle is inoperable, of course we'll get in running again.
 
Quote:

Buddy of mine is in the market for a Lexus ES350, either 2007 or 2008. I offered to help him price shop.

The configuration that he wants costs 37,400 for a 2007 model, but about 37,700 for the 2008 model. The 2008 model does not have Bluetooth included in the price (and cannot be equipped with it without adding Navigation, due to option combo changes), but the 2007 does. Other than that, the 2007 and 2008 models for the car are nearly identical.

Invoice for the 2007 model is about 33,400. On Edmunds, it appears that people are purchasing the car for about 32,500 with some negotiating. Some lucky ones have gotten it for 31,500. On the other hand, for the 2008 model, I have yet to see any postings of transactions or official invoice prices. Based on the 2007 figure, I’d assume that the invoice price for the 2008 model is a few hundred bucks higher.

I e-mailed one dealer, let's call him "Dealer A," asking him for a price on a 2008 model. He wants my phone number. I told him no, let's keep this via e-mail until we are closer to purchasing. He replies , and instead of giving me his best price, wants me to make an offer.

I’ve been taught to start low, and work my way up, so I made him an offer of 32,000. Of course it was rejected, I was expecting it. Made him a second offer of 32,500, not expecting this one to be accepted either.

I also e-mailed “Dealer B.” She sends me a price of invoice on the 2007 model, but says that she has no clue on the price of a 2008 model. Invoice on a 2007 is a mediocre offer, so I e-mailed back with a 32,000 offer.

Questions:
1) Is it worth getting a 2008 over a 2007?
2) What is a reasonable price for a 2008 at this time of the year? Do note that the 2008s are showing up on the lots this past week or two.
3) Am I doing this the right way, as far as negotiating goes? Am I making them reasonable offers? How much should I bump up each offer? I’m new to this.

Thanks in advance, and all help is appreciated.

Click to expand...


For number one, off the top of my head, there is no difference between the 2007 and 2008 Lexus ES350 model years, so it will not matter which your friend gets as long as he plans to drive it for the rest of his life. If he does not plan to drive it for the rest of his life, then I would have to question why he wants to pay tens of thousands of dollars for a car that he intends to retire. For number two, see the following thread:

http://www.fatwallet.com/forums/messageview.php?catid=24&threadid=444610&start=0

For number three, tell him not to bother calling the dealer or going in person. One day when your friend has time, have him email the dealerships, telling them what he wants, that he will not visit their dealership unless they can either agree to match price x (with x being the lowball price that he calculates using the formula from the thread at fatwallet.com) or give him the best quote he can find and that if they do give him either that price or the best quote he can find, he is prepared to visit them that day to buy the vehicle, all in the initial email. If they try to avoid giving him a quote and instead try to get him to visit them, he should tell them that he would hate not to do business with them if they could give him the lowest price and insist on being given one. I did this for my mother's car (which she is still waiting to get because the 2008 models are not yet available) and we were able to arrange to pay $1,500 less than what the dealer wanted in person.

The reason this works is because over the internet, the dealer has no leverage, but when someone visits a dealership, there is a psychological "you are here; you might as well buy the car" factor that the salesmen will expect to be in that person's head and the only thing that has any hope of saying to them otherwise is leaving.
 
Quote:

2006 Pontiac Vibe Owner's Warranty Book Page 1.

"Your selling dealership has made a large investment to insure that they have the proper tools, training, and parts inventory to make any necessary warranty repairs should they be required during the warranty period. We ask that you return to your selling dealer for warranty repairs. In the event of an emergency repair, you may take your vehicle to any authorized GM dealer for warranty repairs."

http://www.genvibe.com/images/misc/manuals/pontiac_warranty_all_2006.pdf

Sorry, but we don't consider your inconvenience as an emergency. If the vehicle is inoperable, of course we'll get in running again.

Click to expand...


There is a big difference between what you said earlier
Quote:


GM owners manuals are very specific on warranty repairs. If it's driveable it goes back to the selling dealer.


Click to expand...

and what you quoted.

My experience has been that a dealership welcomes the opportunity to convince a person that they are good enough to be the one that sells the service customer a car next time.
 
Last edited:
Our only problem with convincing them that we are good enough to be the one that sells the service customer a car next time is that we have to displace a customer who already bought a car from us to do it.

We are balls to the wall from start to closing to service our customers who did purchase from us. There is no excess capacity. We don't leave techs idle so we can turn down owners who purchased out of town.

Dealers in this area like to put their sticker on the trunk or tailgate of vehicles they sell for advertising purposes. It's difficult to explain for someone who purchased a car from us that we can't service their car because we are working on one from a competitive dealer.

I figure that $200-$300 owners may have saved at purchase will cost them double or triple that amount minimum over the warranty period of their car, in fuel, time away from work ect. Heck of a deal huh?

The moral of the story is the cheapest price isn't always the best price.
 
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