How Much Discount to Ask for on a Brand New 140K Mercedes GLS 350d?

Hi ozbargainers!

I have achieved a new milestone in my life and decided to treat myself and my family to a new car.

This is my second brand new car, my first one was during the financial crisis so rules don't apply now.

I have already decided on the car, test-driven it and am in the final stage of negotiating the price (please do not suggest used or alternative cars).

Dealer's initial price is 140k, my question is how much does a dealership usually margin their prices to allow for discounts? How much discount should I ask for/expect?

Details:

Car : Merc GLS 350d
State : QLD
Price: 95k
Options (heated seats, TV etc): 9k
Dealer delivery : 4k (max on Merc website is 2,700)
Rego: 900
GST : 11,000
LCT: 16,000
Stamp : 4,500

As a comparison Audi Q7 with similar specs quoted us 130k discounted to 119k.

I want to ask/get it for 125k, is that a reasonable ask, how much should I negotiate for. Any thoughts/facts would be appreciated.

Ask any more details if it is not there.

EDIT: Closed a deal at $125,800 drive away from a dealer 2 hrs away.
Ended up calling 5 dealerships. Prices ranged from $138-142K. Which makes it a discount of 9%-11.5%.

Comments

  • +5

    Not sure just consider ~$30k of that is tax and not going to change; so it's really $110k you are negotiating on.

    • +5

      It actually does. When the price of the car is discounted the tax comes down as well. The LCT drops by $333 for every $1000 off the list price. Similar for GST and stamp duty.

  • +18

    Hi BestofOZB,

    I suggest you put in a quote request through http://anynewcar.com.au/. There is a LOT of margin on luxury cars, I was surprised how much money I was able to save when I bought my new car last year.

    The process is easy:

    1. You tell them what you're after (which you've already posted here)
    2. They put in a tender to all the dealers in your area
    3. They send you the best quote and it's up to you if you wish to continue to purchase through them.

    It's a no hassle or haggle process, they are able to get you the best prices because they have access to fleet prices. Best of all, it's free. You don't pay them a cent - they get their commission through the dealership. Give them a go, I didn't regret it!

    Hope it helps, good luck!

      • +28

        You would be too if you had a great experience buying a new car. I haven't dealt with other car brokers & can only share my experience with who I have dealt with.
        No guarantees obviously either way - just an avenue you might like to consider.

        • +3

          Thanks.
          I didnt know such things exist so thats great. Will give it a go. Will also look for car brokers around my area. Thanks guys.

        • +1

          @BestofOZB: As others have said, there are other car brokers as well but I can't remember them off the top of my head. I know there's UnionCarshopper (I think it's still around), if you're a member of a union.

    • +5

      They tell you they get their commission from the dealership, but my experience with them is that they are about as trustworthy as dealers themselves. It's more likely that the discount they negotiated included their cut. Meaning they could have even got a better deal if they were doing it pro bono.

      I can't see a dealer begging them to take a car off them at the lowest price possible, and paying them for that privilege. It would be cheaper to just offer that price to any customer, and not pay an additional commission on top of it.

      • Bingo. They're making a spotters fee for referring your sale. On a car of this value it will probably be a few grand

      • +5

        No joke, but if they made nothing their business model would be unsustainable and they wouldn't exist. The question is can you or anyone negotiate a better price than what they can get you

      • +1

        So what you can do is get the broker to negotiate the price, then go direct to a dealer and offer less.

        It would be a dick move, but you know the dealer could afford to go even lower.

        Edit: FYI this happens with home mortgages too, I've found by shopping around that if you prod the bank personally they always offer better than what the broker gets you.

        • Most car brokers have thought this through and don't make it that easy for you

        • agree this is a dick move

          but i did just that in March when buying my new BMW. got a broker to shop around. then negotiated with 2 dealers on my own for the better deals. i found that pushing the bigger dealerships was much easier than the smaller ones. when they wouldn't budge any more on price, i got them to throw in 5 year 80K servicing and a grand unveiling at their HQ - had champagne, a ribbon on the car, etc.

          hope this helps.

  • contact 3-4 dealers, tell them you are ready to put a deposit down on it for 115K and see which one says yes.

    • 115k, true ozbqrgainer :)
      Yeah thats what I planned to do before knowing other options like car brokers exist. Wasnt sure what price to ask for.

      • +1

        thats the best, walk in, tell them the spec you want, let them give you a price, and say $115K, youll get a deposit today.
        If they say no, thank them for their time and leave.

        • +1

          I think the trick is to figure out the lowest $ offer you can make to get them to make a counter offer. If they simply refuse to even engage with you, the offer is too low (or they are a dealer you simply aren't going to get anywhere with). Once they make a counter offer, more negotiation can take place, but at least you've got the ball rolling. You can still walk away at any time.

          Of course, the other thing is calling their bluff. If they say no to your hard 115k offer, leave your number then leave. They may come crawling back.

        • @timmysbiscuits:

          Absolutely… Figure out your price and go get it.

        • @timmysbiscuits:
          Alot of high end dealers have enough margin in their deals that if one makes them 1-3K only while another will get them 10K, plus they like to put another sale on the board.

    • +9

      he is an idiot.

      • I'd like to hear the reason as to why he's an idiot :)

        • +8

          KIA AND HYUNDAI ARE THE BEST CARS IN THE MARKET
          Should be one reason, however he always goes on and says european cars are all rubbish.
          He will not help you buy a 140K merc, he didnt want to help me buy a 50K Audi.

        • +3

          Cadogan is highly polarizing. His schtick is part of an act and it works: quite a few views on youtube. In regards to his apparent love for all things Hyundai and KIA, he is pretty outspoken about some models and criticizes them, like the i40 and Genesis.

        • @BestofOZB: It can't hurt to ask though, right? I'd be interested in hearing his opinion. Never quite know what to make of him.

        • +1

          @tuzii: Certainly didn't help me with my european car purchase. I came from a KIA and he kept saying how I should upgrade to another Kia or Hyundai or wait for it Mazda 6 even though I told him constantly that I have been with Japs & Korean cars all my life and want to try the european car whilst I can.

          His reply to you would be, imagine how many Hyundais or Kia's you can buy with that money and start your own car rental company ;-p

        • -2

          He is a massively insecure person who tries very hard to appeal to the lowest common denominator. If someone makes a comment on one of his YouTube videos that he doesn't like he will attack them in a very childish and volga manner that is completely unrelated to the original comment.

        • +1

          @tuzii: If you are going to review cars, it's an advantage to be objective. Branding and style being subjective, if you were going to compare the latest and greatest Kia or Hyundai in many cases you will find that dollar for dollar they are better than anything else available. This is because they don't have the premium of a European car, labour may be cheaper in their country of origin, or the segment of the market is more competitive. It's the same with watches, you can buy a casio with a quartz movement that is going to tell you the time for 20 dollars more accurately than any Swiss movement is ever going to be although you could pay 10k for one of those. If you take the opinion that all that matters is price and function (including warranty, who else provides 7 years, and servicing costs and intervals, along with consumer satisfaction surveys), then he has a point.

    • +6

      He usually recommends a Hyundai, Kia or Mazda. Probably not what OP wants

  • +2

    I wouldn't recommend the GLS.

    But as you want it, I'd recommend you start at $100k as it's an old car (previously called the GL) and work your way up.

    Give a few dealers a call, even interstate, they may have stock that been sitting there for a while.

    I wouldn't try to negotiate $40k off a new Merc C63, but there's not much demand for a GL/GLS.

    • Yes the GLS is the new GL, as of the 2016 model they made some interior and exterior changes and called it by a new name. So there isn't unfortunately old GLS sitting around for a while, just the GL maybe.

    • +1

      GLS is fairly new car and trust me there is no GLS sitting that long around in Australia. You saying it's old. Have you driven GL and GLS? Not old…
      The only time you can get a really good discount on Merc is when new model is coming or you want to buy something what's hard to sell.
      Atm you can get cheap E class (not the new one), you should be able to get big discount on S or CSL and if you can still find SLK.
      Discount on GLS wouldn't be that big unless you can find a demonstrator. I doubt you would get more than 10k off.
      If that car is 140k drive away and you ask for 100k they wouldn't even talk to you unless that dealership is really desperate.
      I work in MB dealership I know what I'm talking about…

      • Damn Ritchma just tell me straight up how much should it sell for?

        I changed a few options, car is 138k…can I get it at 125k?

        • I forgot to ask. I'm not salesman but I'll find out tomorrow for you. It's 138k drive away price, correct? Are you ordering specific vehicle or there is an existing one you're after?

        • @Ritchma:Couldn't PM you!

          They have to order it.

          Its GLS350d standard plus:
          Premium pack.
          Entertainment pack.
          Metalic paint.
          Brown interior.
          Heated steering wheel.
          Floor protection pack (boot mat).

          Drive away price (QLD) at different dealers varies between 138-142k. So far all dealers stuck at 129-130k, Im trying 125k, is it possible? Im not in a rush and if waiting would let dealers drop their prices Im happy too.

          Thanks mate.

        • @Ritchma:
          Hey Ritchma,
          Is the C63s attainable for ~130K?
          Thanks

      • I haven't driven a GL or GLS because I don't like large SUVs. I do like the C63 in either sedan or coupe, the regular passenger vehicle Mercs are just boring to drive.

        As you work in a MB Dealership you know that there are massive margins on higher end Mercs.

        "If that car is 140k drive away and you ask for 100k they wouldn't even talk to you unless that dealership is really desperate."

        And how do you know if they aren't desperate? If you don't ask you don't get.

        What's the worst thing they could do? Say no or maybe they won't mutter a word to you and just point at the door.. no big deal. But maybe they would say yes. A car retailing at $140k, selling for $100k, it's happen before because someone offered and the dealer accepted.

  • I read this elsewhere, can't comment on how good the advice is or if it will work in Australia but might be something to consider:

    "When it comes to cars, people make the mistake of negotiating down from the sticker price (called the MSRP). Instead you want to negotiate up from the invoice price or at the invoice price plus a small profit (as they also have hidden profits such as the manufacturer giving them rebates for meeting a certain sales level). Then, don't be shocked when the salesman writes up the order on their form and there's a pre-printed charge that was never mentioned — something on the order of $300 (and each dealer calls it something else, like admin fee or processing fee) and good luck getting it removed — so ask to see the order form before the final agreed price so you don't have a heart attack after spending hours at the dealership and thinking you settled on the total cost!"

    • Thanks. yeah thats why always ask for the drive away price.

  • Congratulations on your milestone!!! Just curious to know what the actual milestone is that someone is willing to spend 150k on it.

    • +9

      Haha I knew that question was coming. lets just say a career promotion.

      • +53

        Congratulations Mr Turnbull

        • +5

          Hahaha, what happened to the trains.
          Not cutting it anymore??

      • So your the NAT that got into the ministry?

    • +38

      Why not? won't you? Thanks for your help.

        • +22

          Sorry if I came across as braging or insulted anyone, I am asking for a genuine advice, any help?

        • +10

          Only one here looking foolish is you unfortunately.

      • Iif your happy with 140 ill strong arm them Down Nd keep the remainder. :)

    • +3

      SMH @ you.

        • regardless of what i am buying.
          I know with my group of friends i will have bragging rights if i manage to get a good discount.
          It's a challenge not requirement. =D

        • Thanks.
          Hey where is your Ozbargain spirit? Cheer up!
          What exactly I don't want to be is a lowballer, that's why I am trying to ask here…..any advice?

        • @BestofOZB:

          Lowballing is the only way you can get a read of what is an acceptable offer. I got about 30% discount off a Audi just by going to different audi dealers and lowballing, getting a feel of what the market is willing to offer. I enjoy the negotiations… if you do… spend some time… it'll be worth it.

          Also if check if your company has corporate program with merc, they will throw in free servicing for 3 years, roadside assist etc. Saves you some $$. Also you get extra special treatment too with vouchers, drivers day, etc.
          http://www.mercedes-benz.com.au/content/australia/mpc/mpc_au…

        • @zeomega: Thanks.
          Yeah I agree negotiation (for a buyer) starts by lowballing and working up. But some very low lowballing turn people off that they no longer are interested, lets say 90k for a 140k. It always helps to know how much an item is marked up with and how low it can possibly sell for, before negotiating, which is what I am trying to do here.

          Seems like 10% is an average from what I gathered for this thred so far, which has helped me a lot.

    • +1

      You can take us out of OzBargain, but you can't take OzBargain out of us.

  • +13

    Congrats OP :)

    How many dealers do you have close by? I don't know QLD suburbs/towns enough to know which are close to you.

    The thing with MB dealers is there aren't many of them, so the rules of getting mass quotes don't quite apply as much as if you were looking at a more mainstream brand. This will also affect what a broker can and can't do for you.

    I know these sort of dealers generally pride themselves on their customer service, and (more importantly) their after-sales service. This is where I believe it's best to deal with the local dealer - the guy who's answered likely many questions from you, the guy you test drove with, the place you'll service through etc.

    I know I know, it's all about saving a $ on here, but you're spending quite a lot of money here, you want the whole process to be the best possible don't you?

    So, I would encourage you to not utilise the services of a broker but to actually try the negotiation yourself. Go in with what you hope to achieve (including any accessories - make sure this $130k car at least includes floor mats!), and put the offer in writing. You have nothing to lose in putting an offer through that might seem too low, at least you're progressing. The relationship between you and the salesperson won't be hurt by you putting in a lowball offer, but rather he'd be happier that you're not going through a third party.

    So look, most on here should know by now that I'm a car salesman by trade, so you can take it as bias if you want to, but it helps if you know the other side. If you use a broker, either you will buy from the non-local dealer and then have to deal with that hassle, or your local dealer will put 2 & 2 together and the relationship will sour. Soured relationship could equal - no free loan car at servicing, no helpful service on delivery (running through the many features etc), among other things.

    So, just do it all yourself! Put your big boy pants on that day, sit down with the salesperson and see what you can do yourself, you'll feel better for it and learn something in the process!

    • Thanks.
      I was waiting for you to comment on this thread (before I PM you :) )

      That's a good point.

      How much, however, do you think a dealer can cut the price by?

      • I couldn't even ballpark a profit margin in there, sorry :/

    • +1

      I'm in SEQ, 4 local/close dealers and 2 within 4-hr drive. Not bad :)

      • Are you looking around the scabport, I mean southport area? Think my work offers corporate deals with Mercedes. I could see what sort of deals they offer that you can use as info to base your negotiations off?

        • Yes I'm at the Gold Coast, only one dealer at Robina. Yeah would be handy to know how much discount they offer corporates( and hope they can match it for individuals)

    • +4

      I've never bought a luxury car new from a dealer before but from experience, the sales person doesn't really have anything else to deal with after the car is purchased and delivered, the service guys then build their own relationship with the customer, is that correct?

      Would it be safe to assume servicing a luxury car in a luxury car dealer always entitles the customer to a free loan car? Regardless of where the car was purchased?

  • +11

    The problem you'll come up against is that buying prestige vehicles is a bit of a 'ducks in a barrel' situation, you generally don't have the same bargaining power that you would if you were buying a vehicle in the <= $60k bracket because there are less dealers to 'shop' your price with and some brands implement processes to actively prevent shopping between dealers (such as only quoting / selling to buyers within a specific postcode range).

    While I agree with Spackbase that you'll probably do better negotiating in person, I don't buy into the discussion surrounding making the 'process' as good as possible - no matter what you pay for the vehicle you're entitled to the same level of service as the next person. Just remember after you take delivery of your new vehicle MB WILL send you a CSI survey asking about the experience you've had, these surveys mean a lot to dealers and directly influence their eligibility for monthly incentives. +1 for keeping away from the brokers though.

    Your biggest bargaining chip here is time, if you're in no hurry to purchase then use it, look at the value of identical used & demo vehicles as well as the discount cycles or specials that may be offered over time then decide for yourself what level you're happy to buy at. If you're in a hurry to get the deal done and take delivery, prepare to get your wallet out ;)

    Source - Ex-car salesman with 10 yrs showroom experience.

    • +1

      Just remember after you take delivery of your new vehicle MB WILL send you a CSI survey asking about the experience you've had, these surveys mean a lot to dealers and directly influence their eligibility for monthly incentives. +1 for keeping away from the brokers though.

      There's 'doing enough' and 'going above and beyond' in any form of customer service. If you're lining their pocket, you should expect the latter, however if that relationship sours, expect the former. And really this is relevant in all sales of that nature (housing, cars etc), certainly not comparatively cheap items like electrical goods etc.

      The above paragraph may sounds like a d*ck thing, but it's true, and sorta falls under the "you get what you pay for" category.

      +1 for keeping away from the brokers though.

      :)

      look at the value of identical used & demo vehicles

      Demo's for MB are plentiful as all staff drive brand new cars (both new and used salespeople) because the manufacturer bonuses on the cars are good. Mainly because the market for a demo/secondhand luxury car isn't as high as the new cars. Most people buying a $100k+ car would want to know they were the first to drive it, not an employee or another customer!
      And I'm guessing OP wants to treat themselves with that brand new car, and good on them for getting to that level where they can :)

      • +3

        There's 'doing enough' and 'going above and beyond' in any form of customer service. If you're lining their pocket, you should expect the latter, however if that relationship sours, expect the former. And really this is relevant in all sales of that nature (housing, cars etc), certainly not comparatively cheap items like electrical goods etc.

        This is true, but any good will is limited to those who you had direct contact with at the time of purchase. With the frequency of staff movements within the automotive industry you'll inevitably find yourself being 'reset to zero' at some point because either the salesperson you formed a relationship with has moved on or the dealership has changed hands.

        Not trying to be negative here, just realistic ;)

        • +1

          Yeah that's a fair point :)

        • +3

          @Spackbace:

          I think (I hope) the reason OP wants a brand new car (and not a lightly used, or demo) is for the extras and specifics.
          In these high-end/luxury cars theres a great deal of customisations to do.
          If the OP doesn't take advantage of that, and gets something vanilla, that is a real shame.
          They would've been just as well served with a lightly used model, or a car from a lower price point.

          Just my $0.02

      • +1

        My uncle bought a Mercedes ML (can't remember exact model but it was brand new for that year), took it in for it's first service. Found out someone from MB took it out for the weekend - even after he specifically told them not to. Shit hit the fan, uncle got his money back and didn't want the car anymore, I think seeing all that unfold is the reason why I hate car dealerships, and the bs involved in buying a car. Partner got a wicked deal a few weeks ago and I just found the whole ordeal draining…

        • What, they took it home for the weekend when it was in for a service?!

          I have never ever heard of that happening

        • +2

          @Spackbace:

          It had something to do with the odometer being a totally different number than before, less than what he had it at. Apparently you could reset the odometer if it was below 100ks without issue - so maybe it was for something to get fitted and not a service because it's now obvious I'm not definite on the particulars and no car gets serviced at 100ks haha - I can say with certainty that it was dropped off for something to be done. All I really took from the situation was that an MB employee took the car out for the weekend. My uncle just straight up cruised right through the service department and dealership interrogating for answers and he got them.

          My mate was also a mechanic for a luxury car dealer and he took a few cars out, even videoed himself laying some black straps down in a Maserati. Luxury cars aren't worth the stress.

        • @jenkemjunkie:

          Jees :/

        • +3

          @jenkemjunkie: Now that's very helpful lol!

          OK, no service over the weekend for me.

    • Another car salesman…great :)
      How much do you think the dealer "overpriced" that car?

      • +3

        Just a quick estimation, but…

        …you said a similar specced Audi Q7 was discounted from $130K down to $119K.
        So that's a saving of ~9% (or $11K).

        So if M-B are asking $140K for the GLS, you could potentially just go…
        … $119 / $130 x $140 = $128K.

        So realistically they could sell it to you for $127K without upsetting their profit margin.
        Armed with this "knowledge" try to settle for $125K.
        Just be persistent.
        And be persistent some more.
        Then be patient.
        And be persistent again.

        Eventually they will succumb and should give it to you Drive Away price for $125K-$128K.
        So you could be saving yourself a good $15,000 !!

        Just as roberbruce said below:
        - Assure the dealer the deposit will be made the same day
        - You will provide a A1 customer survey
        - You will provide a referral
        - You are going to get your servicing done there

        …and if they don't want to compromise, guess what?
        Mercedes-Benz goes bankrupt, that's what.
        It's a tough industry, and the inflexible don't last.

        • +1

          That's a fair call, especially that the Q7 price wasn't even hard to haggle and could possibly come down further.

        • @BestofOZB:

          Don't get an Audi…

          Unless you like paying out the ass to get a lightbulb changed because they are engineered that shit.

        • @jenkemjunkie: i really don't think MB and BMW are any better

        • +1

          You're right…but for the mechanically inclined the Audis are horrendous beasts. Dropping the front bar and having a bucket ready to catch washer fluid to change a headlight bulb is an Audi engineering Marvell.

        • +2

          @jenkemjunkie:
          Don't get it done at your mechanic. Just change it yourself.
          It's very easy and quick. Marvellous engineering at its best.
          Here, a video:
          https://www.youtube.com/watch?v=E6GsXhBb10k&spfreload=10

        • @Kangal:

          errr why would you show me a video of a mazda changing blinker fluid?

          edit: Sorry just got the lols. I was thinking washer fluid the whole time then watched it and was like WTF ;) then I saw the muffler bearing and elbow grease lol

        • @Kangal:

          That's funny

          Chrisfix is a good YT channel though. He has plenty of great videos on fixing genuine problems, issues and faults

  • submit your exact specs including colour and options to some brokers and see what's sitting around.

  • why don't you ask them for their best offer?

    • +3

      Doesn't work, especially the case with prestige.

      While most car dealers will be happy to negotiate for your business, pretty much none of them will throw money at you just because you asked for their 'best price', especially if you're not physically inside the dealership.

      A better tactic IMO is to negotiate aggressively at the dealership and be ready to put your money where your mouth is. By aggressively, I mean stand your ground in negotiations and don't allow yourself to be sidetracked, not yell at the salesperson :)

  • I have a friend who purchased a brand new Q7 for $100K 3 years ago, after much bargaining and price matching from 2-3 Audi dealers.
    IIRC, the price started at $130K and called a couple of dealerships back and forth for a couple of hours requesting to beat that price.

    I've been told there is A LOT of wiggle room when negotiating for a new car. In the anecdote above, I'd say being aggressive with your expected price (let's say $100K) wouldn't be the way to go, but more persistence :)

    • I am below that price range but similar market. A friend has this merc and I believe it was about $128k that he managed. He is a senior partner in a law firm so maybe they were very keen for his business.
      Personally If I could afford it I would go the A7 or even look at the top end R series XC90.

      • I managed 129k so far with 9k worth of extra…so not too bad.

        I'm after a 7 seater SUV, A7 isn't. the third row of the Q7 and XC90 are just too small.

        • Good choice on the GLS! I just saw the new Q7 on the road and it looks disgusting.

        • Yeah, sorry meant Q7 as my preference. Any hoo merc is one very comfortable beast!

    • 3 years ago the Q7 was a VERY old model - oldest in its segment. The Argument for that model can't be applied here.

      • It wasn't intended to - it was an anecdote like I mentioned above.
        Your argument for my anecdote can't be be applied here.

  • Dealer delivery is rubbish. It's used as a bargaining chip for sales.

    At least you can squash that and get options thrown in for free.

    • That only saves me 4k unfortunately, I'm hoping for a bit more.

  • +2

    Also consider Corporate discounts, assuming you work for one.

    I work for one of the banks, and the discounts offered when I purchased a car recently were considerable, in addition to that it also included servicing costs for 3 years!!! (big saving on that alone).

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