Confused about Advertised DriveAway Car Prices

GordonR on 03/10/2019 - 09:10

I am sure this is right up Spackbace’s alley…

I am researching prices for a possible new car - one possibility is a Hyundai Tucson Active X (TL4 MY20) auto petrol 2wd with metallic paint.

According to the Hyundai website the WA drive-away price is $34,585 for this car.

If I look at some dealer’s pages (eg Osborne Park Hyundai) then they have a pile of them listed at exactly this price, and the same for other dealers.

But if I look at drive.com.au then they list the price as much more ($38,821) and Carsales.com.au gives an “indicative drive-away price” of $38,888.

What am I missing?

Is the dealer’s drive-away price excluding something?

Automotive

Comments

  • bhubb18 on 03/10/2019 - 09:38
    +1

    When you buy something, they advertise RRP. That doesn't mean the retailer buys it for that price, and they can sell it for whatever they want.
    Dealers want to sell cars - they make money on options, and finance. They'll happily sell it for what seems like a cheap price to make more money out of you.

    • GordonR on 03/10/2019 - 10:31

      What is confusing me is not that dealers might discount the car to make money elsewhere, but why drive and Carsales are advertising several thousand dollars OVER the RRP that Hyundai and its dealers are offering.

      • Skramit on 03/10/2019 - 10:43

        To cover their own butts they use the maximum possible price including all fees. If they advertise an amount under what is actually achievable, they might get busted for false advertising etc.

  • RockyRaccoon on 03/10/2019 - 09:52
    +1

    Could be that the car sales deals were put up a long time ago and doesn’t reflect a new deal price, nothing wrong with calling the dealer and asking.

  • salmon123 on 03/10/2019 - 10:04
    +2

    But if I look at drive.com.au then they list the price as much more ($38,821) and Carsales.com.au gives an “indicative drive-away price” of $38,888.

    drive.com.au and carsales.com.au don't take into account the state where you are purchasing and their pricing can be dated, compared to actual advertisements.

    Basically when a manufacturer launches a car, carsales/drive/etc will list the RRP. A few weeks after the launch, car dealer will start offering discounts on the car, to get it moving. No one really pays RRP for a car (maybe Telsa owners do, but that's an exception, rather than the rule).

  • Skramit on 03/10/2019 - 10:26
    +5

    According to the Hyundai website the WA drive-away price is $34,585 for this car.

    As a general rule, never pay full advertised price.

    Always factor in 10-15% discount to start your negotiations.

    For that Car, Demos are advertised in WA for ~30k which gives you a good idea of what dealers are prepared to part ways with a car for to move the stock on.

    A low km demo price is usually a good price point to start your negotiations on a brand new car. If I were you I'd offer 30k and see how you go from there. Paying around 31k or 32k is probably a decent deal still so have some room to move in your negotiations.

    Remember as the buyer you hold ALL of the power. ALL of it. Dealers know you can walk down the road to another hyundai dealer or another manufacturer and give them your money instead. Car sales are down at the moment and consumers have all the power.

    Dealers are trainer liars. I mean in a professional job sense. Thats how they make a living. It's not personal to them and it shouldnt be personal to you. They lie/fib as much as they can to get you to sign on the dotted line and the highest possible price.

    Play it roughly like this (made up figures btw):

    1) Test drive
    2) Make offer of 30k
    3) Dealer will likely laugh/scoff, tell you $35k is his best offer (which is always a lie)
    4) Say "here's my phone number 04xxx….. call me if you change can do better. I'm off to look at the Mazda CX5 and Toyta RAV4"
    5) Walk out calmly. (dealers friggen hate this)
    6) Dealer will call you with $34k or something.
    7) Offer 31k. Bit more back and forth/
    8) Buy car for $32k

    • GordonR on 03/10/2019 - 10:43

      Cheapest TL4 demo that I have seen is $32,250 (though plenty of TL3s closer to $31k).

      But at the moment all I really want to know is why the dealer’s $34585 “driveway price” is $3500 cheaper than the same model’s”driveway price” on carsales.com.au.

      • Skramit on 03/10/2019 - 10:46
        +1

        Ah you're right. I missed that they dont include fees and charges at 30k.

        In that case start your negotiations at 31k see how you go :)

        Carsales/Drive have to advertise maximum possible RRP drive-away so they don't get caught out for misleading advertising. Ignore that figure. Just focus on the dealers drive-away price.

      • Cheeper on 03/10/2019 - 10:48

        Go in and offer your happy to buy price and drive out with a new car.
        Dealers can advertise whatever price they like…. what you pay is what matters :-)

    • spackbace on 03/10/2019 - 11:38
      +6

      Say "here's my phone number 04xxx….. call me if you change can do better. I'm off to look at the Mazda CX5 and Toyta RAV4"
      Walk out calmly. (dealers friggen hate this)

      Worst way to get the best deal. We don't call people back with better prices, if we can get your business there then we will. If you say you're looking at other models, we'll just gather you're not actually ready to deal.

      Put your offer in writing, with a signature. Put your money where your mouth is and let the dealer know you're serious and genuine. Verbal offers aren't serious and lack effort. Don't say you're looking at alternate cars, we'll either know that you're bullshitting (we see these lies every day), or just brush you off.

      We don't call back with any better offers than what we could do on the day, and save everyone the hassle.

      • Skramit on 03/10/2019 - 11:52
        +2

        It's worked for me before. But I accept your POV!

        It really is the battle of the bullshitters! Who can out bullshit the other. The problem is we consumers are just not good at it and you are trained masters of the car purchase lie :P

        Put your offer in writing, with a signature.

        I meant this was kind of given when making an offer. Make a serious low offer and work up from there.

        • spackbace on 03/10/2019 - 11:56

          The problem is that there's no control from the dealers POV once you leave the dealership. Even if I called you back and said yes we'd do your deal, there's nothing to stop you then walking into another dealer and doing it all over again. When you're here, we stand a better chance at getting your business, so there's more need for us to close you here.

          Only times recently I've seen customers called afterwards was with trade-ins, where we were able to get more money after the fact.

          I have a current customer who we're $1k away from doing a deal. His offer is in the negative, so we won't do it, and calls back to him are along the line of "have you revisited your budget" etc. He thought he'd do that idea and walk away during negotiation, but he walked away from a price we just can't do, so he's not getting the "yes we can do it, what's your CC details" phone-call. It's frustrating lol

          • Skramit on 03/10/2019 - 12:02
            +2

            @spackbace:

            there's nothing to stop you then walking into another dealer and doing it all over again.

            Correct, that's to the consumers advantage whcih is a good thing IMO, sucks for you though. I guess that's the balance you have to judge with every potential deal in your profession - are they serious or not. I probably didn't spell it out specifically enough to OP - but when making that low ball offer, be serious!

            I just hate the whole dance in general. Buying a car is generally bad experience for most people other than driving it out the door on delivery day. But its unfortunately a necessary evil. I just like to give consumers some tips on possible ways to negotiate instead of walking in and slapping RRP on the table like a fool. :P

            • spackbace on 03/10/2019 - 12:02

              @Skramit:

              and slapping RRP on the table like a fool. :P

              Unless it's a RAV4 Hybrid ;)

              But hey, they're priced competitively anyway

              • Skramit on 03/10/2019 - 12:12

                @spackbace: I saw a new RAV4 the other day, the design has improved 10 fold over the outgoing model I actually like it now. Way more Euro looking than Japanese. Are you getting similar feedback in the shop?

                • spackbace on 03/10/2019 - 12:29

                  @Skramit: Yeah definitely. New cars are getting nicely designed, everyone comments on the new Camry too

                  • Skramit on 03/10/2019 - 12:40

                    @spackbace: Yeah but its still a Camry. I told my wife if I ever buy a Camry, she can have me shot as I will have finally lost the plot. ;)

                    • spackbace on 03/10/2019 - 12:50

                      @Skramit: Eh, same engine and gearbox is in the RAV4 hybrid as the Camry hybrid

                      I actually prefer driving the Camry. I'm 6'2 and I can get a really comfortable driving position

                      • Skramit on 03/10/2019 - 12:53
                        +4

                        @spackbace: I'd have to put a box of tissues and a wide brimmed hat on the rear shelf if I had a Camry. I couldn't live with myself.

                        • RockyRaccoon on 03/10/2019 - 15:39

                          @Skramit: Whoa, thats rather discriminatory 😀

                        • Whisper Quiet on 04/10/2019 - 10:16

                          @Skramit: Sorry but that's awful advice for the OP or anyone that listens to you. Basically just what Spackbace replied. Leave that way with saying your looking at other cars, you'll never get a call back or another offer. How do you think they're going to drop 10-15% off?! You ever bought a brand new car. Time have changed from the 1990s!

                          • Skramit on 04/10/2019 - 11:28
                            +1

                            @Whisper Quiet: Worked for me before. Suit yourself.

                            Spackbace is just disagreeing because he doesn't want people playing games like they do. They like easy victims. :P

                            • Whisper Quiet on 04/10/2019 - 16:03

                              @Skramit: I know two car salesman very well and they tell me so much of the business, losses and gains, cost prices, availability etc. The industry is suffering because of online and private sales so they need to price cars lower at the start so you don't have much room for bartering. Very rare to get a $34K car down to $30K if at all! Might have to be EOFY sale or clearance price. Don't know how much you think dealers make off a car these days. Few days ago my friend said they turned down a customer for $300 difference from a $42,500 price. Customer offered $41,300. Most they would go was $41,600. This is at Toyota and customer walked away with nothing. So good luck with your views

                              • Skramit on 04/10/2019 - 19:09
                                -1

                                @Whisper Quiet: Toyota is high volume though. Different type of negotiation.

                                My experience is with smaller dealers to be fair.

  • spackbace on 03/10/2019 - 11:35
    +1

    The other sites are likely listing full RRP, it's likely that the manufacturer has it on special.

    Not really anything to be confused about tbh, take the manufacturer's site as gospel, all others with a grain of salt. Some sites list RRP as the list price, before on-road costs, which further confuses things.

    • GordonR on 03/10/2019 - 11:49

      So if I were, hypothetically, to walk in to Osborne Park Hyundai and put $34,585 on the table, then I could drive off with the car without additional expenses - this covers stamp duty, govt fees etc?

      • spackbace on 03/10/2019 - 11:49

        Yep

      • Skramit on 03/10/2019 - 11:55
        +3

        Just dont do that at $34,585 or you're getting ripppppped.

  • dins on 03/10/2019 - 13:01

    You should be able to grab a new TL3 for under $30k or a demo for under $28k. I recall seeing those sorts of prices from a local dealer here in Brisbane.

    I'm no expert but from my recent experience here are a few tips:

    Do your research and settle on a price (forums like Whirlpool etc a good place to find out what others are getting them for).

    Then once you have a price in mind start ringing up all the dealers around your area asking them for their best price and give them a figure of around $500-$1k under your target if asked.

    Also contact car brokers like autoexpert etc and when ringing up dealers make sure you mention that you have contacted other dealers around your area and car brokers as well.

    Tell them that you are in no rush and already have a car but will jump on a good deal if offered even on that same day.

    Once you find a dealer willing to play ball ask to include mats, full tank of fuel and/or any service discounts etc as they start upping the price (ie they'll most likely go back and forth saying that they have to contact their manager or something like that).

    Be firm stick to the target price range.

    Best to do this towards the end of the month (monthly sales targets).

    Hope that helps. Good luck!

    • GordonR on 03/10/2019 - 15:54
      +1

      Thanks for your suggestions.

      The trouble with this whole negotiation dance is the information asymmetry - there is some price at which the deal is fair to both parties, but only the dealer knows that number.

      Some people say to pick a price that “you’d be happy with” and stick to that and be firm.

      But that price is ALSO unknown to the buyer - maybe I’d be happy paying $30k, but the absolute minimum is $31k and then you end up going round in circles like the customer in Spackbace’s comment above.

      And if the dealer refuses to play ball at my “happy price”, then what? If I increase the offer, then I’m not being firm and sticking to my original budget. If I knew for sure that my happy price was totally unreasonable then I would have to rethink it, but I can’t know that.

      So there is a long tedious process of price discovery, where the dealer holds all the cards, has all the time and patience, and is a trained expert…. I read somewhere that it is has been shown statistically that new car buyers who were happy with the process pay, on average, more for the same car. It’s as though you can only get a reasonable deal after an exhausting adversarial process, and if it’s easy, you got ripped off.

      This information asymmetry could be reduced if we could find out actual sales prices for cars (without any confounding variables like finance or trade-in), but I cannot find any recent data on Whirlpool although it is rumoured that spreadsheets etc used to exist.

      • spackbace on 03/10/2019 - 16:06
        +2

        I've mentioned on various posts before, the problem is how people perceive value. Some customers come in, and they're happy with sticker price because a) the car could be on sale, putting it at the lowest it's been, or b) they could be price comparing with other makes, which is creating value in their minds, or c) they're just happy with the car and price, no other comparison being made.

        We've had people ask for huge discounts on new RAV4, or the old "what's your best price?". Well on a car with a 6 month wait list, we can let them walk away. I've had someone ask for a 10% discount on the car, and we've just let them go. He couldn't perceive any value if he didn't see that sort of discount, because forums like this generate that idea. The notion that if you don't save 10% off a car, that you haven't done everything you could. We said sure, we'll see you in 2 years for that discount off a demo or used car.

        Yes, dealerships are propped up by those that pay RRP, but stores like Harvey Norman are no different (in reality, service/parts keep the doors open but that's another convo). Some customers almost feel like they couldn't tell their friends, or post on forums what they paid for fear that they'll be shot down. Others are happy with the product and service, happy with the price the car is already advertised for and go from there.

        Toyota generally builds value into the fact they generally hold off on discounting. New Camry has been on the market since December 17, still not on special. New Corolla has only had finance offers put on it. RAV4 won't see a discount for a couple of years I reckon.

        Oh and there's always those idiot friends/family members going "I saved $10k off a car and so should you" etc etc. Yeah I can help you save $10k off a Landcruiser, doesn't mean anything. But it means the notion of 'value' is affected, which can sour the whole buying experience.

        I've had customers bring their friend in to do the negotiating, and they've offered under the value and a deal hasn't been struck. But as a result, you can just see they've soured the whole experience of buying a car for the people who are actually going to drive it! Most people don't buy a new car that often, so service can be the key in how happy you are with the whole ownership.

        As an aside, I bought an engagement ring for my ex from a particular store in Perth, not a chain store. I was all geared up to hit them up for a discount, a reverse sales pitch I guess coming from a salesperson. They flat out refused, told me along the lines of "how would you feel if the ring was on special next week". Yeah it took me some time to get my head around that! Bought it though.

        • GordonR on 03/10/2019 - 18:11

          So if someone offers a price less than RRP (in writing etc) that happens to be in the acceptable range, then would you just take it immediately, or always counter with something between the offer and the RRP?

          • spackbace on 03/10/2019 - 18:47
            +1

            @GordonR: It's negotiation, you'd always try to counter to maximise profit (and therefore income). Get Manager involved. If you're a serious buyer, and it's a doable deal, we'll buckle. If we let you walk, it was too low and you should consider whatever our counter-offer is.

            • BestofOZB on 17/11/2019 - 01:14

              @spackbace: "If we let you walk, it was too low and you should consider whatever our counter-offer is"

              I've read this comment on many of your posts, but I was made to walk away from dealers before with my credit card ready and still managed to get the same price I wanted at another dealer, so maybe not all salespeople/car makes play by this rule.

            • duketing on 20/11/2019 - 11:30

              @spackbace: i made a verbal offer which I was willing to put to paper which i thought was reasonable and they went to talk to manager and said nit possible and no counter offer was made from them. So walked out. They missed out on a potential return sale for our other car that also need replacing soon.
              No sure if cause not end of month or guy doesn't know how to sale or wants to deal with us.

      • dins on 04/10/2019 - 10:27
        +1

        If you do your research and check out forums etc (search "$" and jot down prices people are getting) and contact one or two car brokers you should be able to confidently figure out a reasonable price range. It has to be a fair price some on forums might mention really low prices just ignore those most likely those deals were done via family/friend discounts/connections etc. If your target price is reasonable they will play ball. Lowball figures will only lead to you wasting your and everyone else's time and you might pass over decent offers in the process as well.

        Do not ever think that the dealer holds all the cards. They'll ask you what sort of price you are looking at and when they do don't be afraid to tell a fib or two (ie for example say your fair target price is $30.5k tell them that another local dealer/car broker has already offered $30k but you are shopping around for a slightly better deal before signing on the dotted line). If that is a fairly reasonable price they will ring back even if they initially are hesitant to deal at that price.

        When they are prepared to play ball they will usually play "I'll talk with my manger" game and start upping the price each time they ring back. When they do that's a good time to start adding 12 months rego (if only 6 months is being offered), mats, full tank of fuel, annual service discounts (tell them that your intention is to service your car with them once purchased) etc. If you remain firm and follow that process you should be able to deal around $30.5k or a couple of hundred more with a fair few extras thrown in.

        If you do your research properly you will be the one holding all the cards. Good luck!

  • HeWhoKnows on 04/10/2019 - 09:07

    A drive-away price for a specific car is just that.
    You pay no more. No dealer charges, stamp duty etc

    However there may be several models or cars available with other options which obviously cost more.
    So the dealer may advertise the cheapest option in the hope of selling you up - as they would of course!

  • GordonR on 04/10/2019 - 10:43

    Another one for spackbace… who mans the little pop-ups that appear on every dealer’s page webpage offering to start a live chat?

    “Hi, I’m Harley, are you looking for a new or used car today?”

    • Skramit on 04/10/2019 - 11:29
      +1

      External parties, paid call centres. All they do is take your name/number/query and pass it to a dealer.

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