The actual law is really confusing. It depends on why the discount was applied. For instance if it is an employee discount then sales tax is still required on the original amount before the employee discount because the fair market value is higher then the sales price (people could give free cars as compensation and avoid payroll taxes/income tax AND sales tax). In this case you would not owe sales tax on 20k but 18k because that is fair market value (your discount isn't really a discount). But on promotions that give away free stuff you usually actually still owe sales tax on what the presumed fair market value (usually defined as companies cost or original pricing) is. Its a way to prevent people to avoid sales tax by "giving it away" and charging something that is exempt or deducting payable. The salesman has no reason to charge you higher amount unless he's pocketing it which as stated is illegal. Ask for an invoice receipt and threaten to show it to the state Department of Revenue and 100% they'll get audited so they'll just refund the difference.
(disclaimer not actual tax advise just my opinion)
Last edited by smoothcriminal99; 11-10-2017 at 03:29 PM.
BS, What are your thoughts about TrueCar? I needed to buy a new car about a year ago and think I did pretty well. It was an interesting process though. Some dealerships apparently did not appreciate me mentioning/use TrueCar while other did. Made the entire process very simple. After doing some research, I saw some dealership groups were actually suing TrueCar and had some pending lawsuits. Unsure what ended up happening though. I don't think truecar was around when you originally posted this though.
I think TrueCar has greatly angered the car dealership community with their marketing. Other than that it's just a service people use to get the haggling out of their car buying experience. As I understand it TrueCar gets decent prices for the people who use it.
That's about all I have on them and it's a pretty weak opinion (meaning I could very easily be wrong, would not be surprised, and would change my existing opinion instantly with any new data). Again I've been in a car dealership once in the last 5 years and I was the customer that time.
B2B is about the steak and Consumer sales is about the sizzle.
B2B is about meeting a specific customers needs and B2C is about trying to provide a consistently excellent standard product.
Situations where you negotiate are totally different as well. In B2C it's pretty much houses and cars and the salespeople have very little incentive to do anything but extract max money. In B2B I'm frequently negotiating with people who I talk to 5-10 times a day and do business with constantly. The dynamics are pretty radically different.
Maybe this is just a fluke, and I may have already posted this somewhere in the last 10 years, but anyway, just an anecdote that made a big impression on me.
My buddy had never in his life gotten a good deal on a car, and he accepted this about himself and was not sweating it.
One day he was thinking that in the coming months he would probably be buying a new truck, and having some time on his hands, he stopped by a couple dealerships just to look around. He genuinely did not plan on buying a car that day or even that month.
He visited 2 dealerships that day, and told them both the truth: he was just looking, he was going to stop at a couple of places, mull it over, and in a few months when he was ready to buy, he would come back in. But they both treated him like a customer who was really there to buy, and he just sort of ignored their sales pitches.
Over the course of a week or so, both dealerships called him back repeatedly, offering lower and lower prices. He laughed it off after the first call, but then he started (completely honestly) reporting to each dealership exactly what the other one was offering, and they just kept coming back to him with better and better offers.
Eventually it became clear that they reached rock bottom, and maybe for the first time in his life he was actually poised to get a good deal on a car, so he changed his mind and actually bought one instead of waiting as he had planned. I don't remember the specific numbers, but I know he got it for thousands less than the sticker price, and I remember looking into it at the time and thinking he had gotten an amazingly good deal.
He still has no negotiating skills. It was purely an example of like a super loose stud player who falls into a super high ante game and manages to turn a profit by accident. Being interested in what various trucks drove like, and how comfortable their seats were, and their ballpark prices, but totally disinterested in buying, gave him this magical edge that caused two dealerships to go to war with each other for his business.
And while I hate to undermine my own story, it occurs to me that maybe it is out of date, or just very situation dependent, because in 2016 I had the following happen to me.
I negotiated hard for a used car, walked out, got chased back in, and finally got the salesman to write down the price I wanted, and literally "plus TT&L and no other fees," and then sign it and give me the piece of paper.
Naturally they added TT&L and then another $65 "document" fee. I showed the finance guy the signed note from the salesman, and said I would not be paying the $65 fee.
Long story short, he stuck to his guns. He brought in the sales manager who spoke to me very rudely and basically said we are not trying to scam you, every dealership in the state charges a $65 document fee, you can pay it or leave. So I left.
Two days later the salesman called me to see if I had changed my mind, but he was not going even a penny lower than what I was already offered. I told him no, stick to his word about "no other fees" or there is no deal. He said he couldn't do it.
I found a very similar car at another dealership and told them I wanted to buy it, and the salesman, with the sales manager looking over our shoulders, pulled up the other dealership's website, found the car I had the offer for, and I showed them the signed paper with the other dealership's final offer on it, and we really really scrutinized everything, finding every possible little thing that was better or worse about the two cars to make sure we weren't comparing apples to oranges.
Eventually the salesman and the sales manager go away for 20 minutes. The salesman comes back looking hangdog, and apologizes, says he hopes I do not feel insulted, but offers me a price like $1500 higher than the other dealership. He says they were not just putting on a dog and pony show for me, he really was arguing for the last 20 minutes with his bosses to just beat the other dealership by $100, or even just match them, but they wouldn't budge, and he knows I'm not going to buy a car from him, and sorry. The truth is, if they don't sell it to me, within a week or two they will find someone else to buy it at the price they want, so he see's their point, and all he can tell me is I should probably go buy that car from the other dealership, it looks like a solid deal, and he seriously is not going to chase me down or call me back and offer less.
Two days after that, I had not heard back from either dealership again, and at this point I had to admit to myself that while MAYBE I could get a few more dollars off if I waited a few more days, I wanted the car, it was still a good deal with the extra $65, and I didn't want to take a chance that someone else would buy it and I'd have to shop around again and start the process all over. I bought it for the negotiated price + TT&L + $65.
You definitely got the best deal you were going to get then. I think you carried it a bit further than necessary, but overall fine. Also this being a used car deal is extremely relevant to whether or not the bidding war strat will work. The best thing about new is that it IS apples to apples and they can probably get another one just like it. That means that they have very little incentive to not do the deal and hope you buy a warranty.
Thanks for the bump, this thread was a good read. I have probably consumed more car sales videos/literature than most care sales people, simply because of the amount of stuff that exists out there, and because a lot of pros (like yourself) have boiled it down into a science, so I found it very useful even though I'm in a field that has nothing to do with selling cars.
No I haven't. There are a lot of guys like him though. TBH I'm not a huge fan of sales training material. I think it ruins a persons natural authenticity and that's substantially more important than being polished.
Great thread. Questions on negotiating a new car lease. I am coming out of a 2 year lease soon, and will be needing a new car. My current car is not over miles, I don’t need to trade in early, nothing like that. It doesn’t seem like there are very many variables in this negotiation, am I missing something? Should I just look for dealers who are offering the lowest combination of total DAS (including fees) and payments for the same vehicle? I guess my question is, do dealers have any flexibility to go below their advertised price or $225/month with $0 DAS in this scenario (for example)? What things are important to negiotate on in a ne car lease with no other variables?
Great thread. Questions on negotiating a new car lease. I am coming out of a 2 year lease soon, and will be needing a new car. My current car is not over miles, I donít need to trade in early, nothing like that. It doesnít seem like there are very many variables in this negotiation, am I missing something? Should I just look for dealers who are offering the lowest combination of total DAS (including fees) and payments for the same vehicle? I guess my question is, do dealers have any flexibility to go below their advertised price or $225/month with $0 DAS in this scenario (for example)? What things are important to negiotate on in a ne car lease with no other variables?
Lease turn ins typically aren't negotiable. If they give you some kind of deal on the lease turn in you can be assured that from an accounting standpoint it came from the new cars deal.