Dealer net vs Dealer invoice

[ham]

Hey all - total board newbie here.

We're looking at buying a 3 Sport GT loaded (except leather) here in Calgary, Canada. Through work I'm eligible for an X-Plan price (which appears to be about $1000 less than MSRP).

My question (which I'm not sure I'm getting a correct answer to from the two dealers I've asked) is what is the difference between Dealer Invoice price and Dealer Net price?

My X-Plan rate is supposed to be Dealer Net + 4% + $300 PDI + $100 admin fee. Both dealers are telling me that there is no difference between Dealer Invoice and Dealer Net (which I'm not sure I believe).

Anyone have insight they'd be willing to share?

Thanks
ham

 

[wongpres]

Dealer invoice is a US term and dealer net is a Canadian one. For the most part, they're pretty much interchangeable. Regardless, that's not the real price dealers pay for the car (there are holdbacks).

Your X-plan rate is correct and it will be about $1,000cdn off MSRP for a Mazda3 (it depends on trim level too).

Edit: Just remembered, welcome to the board and please enter your location in your profile - it really helps to provide local information (like in this case)

 

[ham]

Wongpres

Thanks for the insight - isn't it those "holdbacks" that would create the actual difference between dealer invoice and dealer net? The reason I believe there is a difference is because on the fordpartner website they list the different X-Price structures for each of the five manufacturers (Ford, Lincoln, Volvo, Rover and Mazda) and make a point of differentiating between dealer invoice +4% for Rover and Dealer net +4% for Mazda. Other websearches have indicated that "net" would signify invoice less any holdbacks and other incentives to the dealer (meaning that net could be a significantly lower starting point than invoice).

The Fordpartner 1-800 line had no idea how to respond to my question but suggested I call Ford customer support who, in turn, suggested I call the dealer. Call me a skeptic but that may not be the purest information source. Mazda customer support won't even talk to me (other than to tell me to call a dealer) if I'm not calling about an actual Mazda I already own.

I did call two local dealers today - the sales manager at the first said there was no difference between the two and the finance manager at the second said the same thing. When I pressed him about holdbacks - he actually told me there are no holdbacks on Mazdas. Is there any wonder consumers continue to get frustrated with this process?

I'm coming to realize that if there is, indeed, a difference between invoice and net - Mazda won't be the ones to tell me what that difference is.

If anyone has knowledge through a recent purchase, can you at least let me know if you feel a bottom line of CDN $26,500 to drive an '04 3 sport GT loaded (except leather) with automatic tranny off the lot is a fair price? Remember I'm in Alberta so the only tax is 7% GST.

The good news is - one day soon I'll be driving my Ti rocket off that lot!

Thanks in advance for any further insight!
ham

Dealer invoice is a US term and dealer net is a Canadian one. For the most part, they're pretty much interchangeable. Regardless, that's not the real price dealers pay for the car (there are holdbacks).

Your X-plan rate is correct and it will be about $1,000cdn off MSRP for a Mazda3 (it depends on trim level too).

Edit: Just remembered, welcome to the board and please enter your location in your profile - it really helps to provide local information (like in this case)

 

[Mazda3]

Ok, here's the crash course on buying a Mazda in "Canada".

First off don't listen to anyone from the U.S. that posts advice on buying a car. The business is totally different there. All the talk of huge discounts and buying under dealer invoice are exclusive to the the U.S. market.

There are NO holdbacks, kickbacks, or any other backs for Mazda Canada dealers. The dealer invoice you have been quoted is correct. The total gross mark-up on the 3's is only $1100-$1650 depending on the model. Yes that's all the dealers make on the sale on the vehicle. Although they don't have an Access Toyota type set-up its supposed to be a one price best price system. Dealers aren't supposed to discount the 3's.

The X-plan is dealer optional, they don't have to honor it if they don't want to. At the rate the Mazda3 is selling at right now there is a major shortage of supply in Canada. Most dealers would probably not give you one at x-plan price right now, so if you have found a dealer who will sell you one at that price I wouldn't complain, they might change their mind and sell it to the guy behind you at full price.

At that price the salesman makes the minimum $100 commision, so he's probaly not thrilled to death with the deal. You have to sell ALOT of cars at $100 a piece to make a decent living.

 

[wongpres]

I concur with everything Mazda3 said above, except for the no holdbacks, kickbacks, or other backs for Mazda Canada. From my understanding, there is something (call it whatever you will), but it's very, very small (nowhere near the approximately 2% for MazdaUSA).

On my purchase, I got X-plan price (including the less freight), plus an additional $600 off. Even paying cash, I calculated that my dealership made around $1,500 off my purchase. How much my salesman made in my deal, I don't know - but he's the son of the dealership's owner.

Mazda3 is right in that if a dealer honors X-plan, then you should go for it (it's around the best one can do in Canada). Your price sounds pretty good (after accounting for the fact you're in Alberta).

Back to dealer net vs dealer invoice, different companies may use different terminologies (that's why the differences on the Ford Partner website, which I've been to). Again, it's all terminology with no true definition, but the key is that you're negotiating up from net/invoice, which is the proper way to negotiate (as opposed to MSRP down).

 

[K-CI]

I concur with everything Mazda3 said above, except for the no holdbacks, kickbacks, or other backs for Mazda Canada. From my understanding, there is something (call it whatever you will), but it's very, very small (nowhere near the approximately 2% for MazdaUSA).

On my purchase, I got X-plan price (including the less freight), plus an additional $600 off. Even paying cash, I calculated that my dealership made around $1,500 off my purchase. How much my salesman made in my deal, I don't know - but he's the son of the dealership's owner.

Mazda3 is right in that if a dealer honors X-plan, then you should go for it (it's around the best one can do in Canada). Your price sounds pretty good (after accounting for the fact you're in Alberta).

Back to dealer net vs dealer invoice, different companies may use different terminologies (that's why the differences on the Ford Partner website, which I've been to). Again, it's all terminology with no true definition, but the key is that you're negotiating up from net/invoice, which is the proper way to negotiate (as opposed to MSRP down).

hi wongpres, I started looking at a 3 today at Markham Mazda, I just found out (after looking at the car) that I could also get the X-plan, I was wondering where you got yours, and how difficult is the process of getting the X-plan is?
Thanks, K-Ci

 

[wongpres]

hi wongpres, I started looking at a 3 today at Markham Mazda, I just found out (after looking at the car) that I could also get the X-plan, I was wondering where you got yours, and how difficult is the process of getting the X-plan is?
Thanks, K-Ci

K-CI, welcome to the forum and please add your location in your profile - it really helps with providing local info (like in this case).

I got mine at Westowne - because I have a special price plan with them (although I was eligible for X-plan, I actually used another plan).

I don't know what you mean when saying "I could also get the X-plan", but then saying "how difficult is the process of getting the X-plan". You're either X-plan eligible or you're not.

But assuming you are eligible for X-plan pricing, making the purchase is really easy. On your end, you need to go to the Ford partner website (Canadian section since you're in Canada), and generate a PIN. Then, go to any dealership and let them know you are X-plan eligible (and I would personally tell them you have your PIN with you, this way they take you much more seriously). The dealer will then either go through the Mazda3 X-plan pricing with you, or tell you they're not selling the vehicle on X-plan (dealers are not required to do sell on X-plan, but all the Toronto dealers I have spoken to will).

 

[K-CI]

thanks for the help wongpres,
Sorry for not being more clear.
I'm located in Markham, and I my dad can get the X plan so I can get him to purchase it.
Cheers,
K-Ci

 

[d0hboy]

Adding to the conversation, I asked out of curiousity on the net X-plan discount on a mazda 3 GX-Sedan auto, no other options. It was about $500, which to me was piddles.

That said, I'm interested in what the markup would be for higher model options, such as the GT with GFX package, etc. Does anybody have this info, because the dealers seem to be incredibly reluctant to give me the pricing info unless I commit to a sale or deposit (which I thought was ludicrous--why would I pay if I didnt know the exact price..)

 

[wongpres]

Approximately $800 (so $300 more than than a GX). The X-plan rate in Canada is nowhere near as good as the US equivalent S-plan rates.

In addition, in Canada, dealerships don't make much money off the base price of a vehicle like Mazda3. The money is primarily made off interest, accessories, and any additional charges they can get you on. But this doesn't only apply to the Mazda3, just about all the cars in this class (e.g. Corolla, Civic, Cavalier, etc...) don't have large margins. The SUV's - well that's another story.

So, add the fact that MSRP and invoice/net prices isn't that far apart in Canada + the relatively weak X-plan price (as compared to US), you see why you don't get much money off.

 

[ham]

I agree wongpres... I calculate that I saved about $800 at the most on our 3 sport GT by using X-plan. Where the real savings came - in my mind - was the limited BS in the negotiating process. I'd bet a skilled negotiator might get close to the X-Plan price on his or her own but I personally detest that whole "game". I would highly doubt the even the best negotiator would ever beat the X-plan price on a CDN dealership.

ham

Approximately $800 (so $300 more than than a GX). The X-plan rate in Canada is nowhere near as good as the US equivalent S-plan rates.

In addition, in Canada, dealerships don't make much money off the base price of a vehicle like Mazda3. The money is primarily made off interest, accessories, and any additional charges they can get you on. But this doesn't only apply to the Mazda3, just about all the cars in this class (e.g. Corolla, Civic, Cavalier, etc...) don't have large margins. The SUV's - well that's another story.

So, add the fact that MSRP and invoice/net prices isn't that far apart in Canada + the relatively weak X-plan price (as compared to US), you see why you don't get much money off.

 

[d0hboy]

Good point.

That's exactly what I was looking to verify/hear. Thanks for the input, because at this rate I still think for my purposes, getting a used 2003/2002 Protege5 is going to be my best option. The only thing that was going to pull me away would have been a screaming X-plan deal on a mazda3. No more.

... I'd bet a skilled negotiator might get close to the X-Plan price on his or her own but I personally detest that whole "game". I would highly doubt the even the best negotiator would ever beat the X-plan price on a CDN dealership.

 

[Zoom Zoom Zoom]

Ok, here's the crash course on buying a Mazda in "Canada".

First off don't listen to anyone from the U.S. that posts advice on buying a car. The business is totally different there. All the talk of huge discounts and buying under dealer invoice are exclusive to the the U.S. market.

There are NO holdbacks, kickbacks, or any other backs for Mazda Canada dealers. The dealer invoice you have been quoted is correct. The total gross mark-up on the 3's is only $1100-$1650 depending on the model. Yes that's all the dealers make on the sale on the vehicle. Although they don't have an Access Toyota type set-up its supposed to be a one price best price system. Dealers aren't supposed to discount the 3's.

The X-plan is dealer optional, they don't have to honor it if they don't want to. At the rate the Mazda3 is selling at right now there is a major shortage of supply in Canada. Most dealers would probably not give you one at x-plan price right now, so if you have found a dealer who will sell you one at that price I wouldn't complain, they might change their mind and sell it to the guy behind you at full price.

At that price the salesman makes the minimum $100 commision, so he's probaly not thrilled to death with the deal. You have to sell ALOT of cars at $100 a piece to make a decent living.

If the "mark up" on the Mazda 3 is between $1100-$1650 (depending on model), how much negotiation (flex in price) is there? Let say for example the Mazda 3 GT (with auto and GFX package) which comes out to $23540 (before taxes). How much or what would be a reasonable price I could get the vehicle for?

On a side note, how much is the mark up for the Mazda 6?

 

[RoadWarior]

Here in California, it's little supply and big demand for the 3's.

I was lucky in one way that I got an S-plan coupon but it didn't matter.
The dealers are not required to honor the plan.

If I were to buy any other Mazda, I would have probably got the car at dealer invoice or some where near it.
But the 3's are so hot right now, I paid about $500 over invoice.

I figure the only way I could have gotten a real deal would be when the 2005's are released and the dealers will try to sell off their 2004 inventory. But my other car was dying a slow death and I really needed a new car now.