Hold on! Is a "$500 under-invoice" price better than a TrueCar price? Which is the better deal? Comparing TrueCar pricing with dealer offers is confusing because the TrueCar price is built "backwards." Know that, NO TrueCar FFE price includes leather. I just ran a new TrueCar "build," and one dealer resulted with an "unusually low" (according to TrueCar) "estimate" of $26,998 (the number they print in big, bold letters), which I've circled below in purple. What does this price really mean?
TrueCar estimate, the price printed in BIG BOLD LETTERS:
Does not include leather [$995].
Does not include dealer document preparation charge [$80].
Does not include tax, title, and license.
Does include freight delivery charge [$825].
Does include $6,000 Ford retail bonus customer cash.
Does include $300 American Express discount (through TrueCar) for certain dealers ($100 for others).
Now, at first glance, this looks like a fantastic deal, right? [It is--see post below] Note that this price is $780 better than the TrueCar result I printed two months ago, I presume, due to end-of-quarter, plus end-of-month timing. My old TrueCar price (without leather) was $27,698 (actually, from the same dealer, Santa Monica Ford). Now, my notes on my two-month-ago negotiations are pretty incoherent, but I believe, Sunrise Ford honored that same $27,698 price for an FFE
with leather (but, upon review, I may have gotten confused, and they actually didn't). Below are my calculations to "normalize" the TrueCar price so we can compare it to the "$500 under-invoice" price:
Example 1: TrueCar
TrueCar:
$26,998 ["Estimated TrueCar dealer price" from Santa Monica Ford as of 09/27/2014]
$80 ["dealer document preparation charge"]
$995 [add in leather option which is not included in the TrueCar price]
_________
$28,073
$6,000 [add $6,000 bonus cash back into "TrueCare dealer price" to compare]
_________
$34,073 ["normalized" TrueCar price]
Example 2: $500 under-invoice
Ford Dealer:
$36,990 [MSRP with $995 leather option included; $825 destination and delivery included]
$35,053 [invoice price of above]
_________
$1,937 ["discount" (invoice difference from MSRP)]
$500 ["discount" (negotiated under-invoice amount)]
$6,000 ["discount" (Ford retail bonus customer cash)]
_________
$8,437 [total "discounts"]
$34,073 ["normalized" TrueCar price]
$34,553 ["$500 under-invoice" price]
_________
$480 [amount left on the table at "$500 under invoice price"]
Please check my math/logic. Now, that said, my salesperson at Sunrise is extremely pleasant. She spent extra time with me to find a recent-inventory FFE in my preferred color. Their manager was even willing to sell me Titanium wheels at cost if I wanted them. Now, since few lots actually have what I want, a dealer trade is almost inevitable with any of the dealers local to me.
$500 under-invoice, out-the-door price:
Using the $500 under-invoice price, here's the total cost of the car, if purchased as a Los Angeles County resident:
$36,990.00 MSRP [including leather and destination]
$35,053.00 Invoice [$1,937.00 difference from MSRP]
$35,053.00 Invoice
($500.00) Less $500 under-invoice offer
$34,553.00 Negotiated "$500-under" price
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$34,553.00 Negotiated "$500-under" price
($6,000.00) Less Ford customer cash
$28,553.00 Final base price
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$28,553.00 Final base price
$3,754.49 California state sales tax (9%) and VLF (1.15%), based on the full MSRP price ($36,990)
$32,307.49 Total out-the-door
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$32,307.49 Total out-the-door
($7,500.00) Federal tax credit
($2,500.00) California state rebate
$22,307.49 Final cost
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