Well Freaks,

I have been doing way too much research and negotiation around my Fit purchase, but along the way I have gathered some very useful and practical info and feel it is my duty to share it with you! The numbers are for a new Fit Sport with Manual Transmission, so they can be adjusted up or down depending on the trim level you are shopping for.

I'm sure many of you have heard from your dealers that the margins are so low that they need to charge more than the MSRP for the car. Or they just feel entitled given the supply and demand situation. I understand it, but knowing how much they are actually making when the sell for msrp makes me completely unwilling to entertain these bloated prices.

But we all know that the arbitrary numbers like the invoice price and msrp have little to do with what really matters which is what the dealer actually paid for the car. It is from that starting point that you can negotiate a fair price.

Below is a chart that outlines all of these numbers which I sourced from, among other places, Consumer Reports and from a dealer in Oakland CA. The important ones are the Total Dealer Invoice and the Dealer's Actual Cost.

The Total Dealer Invoice is a number that suggests it's actually what the dealer paid for the particular car including the invoice price for any add-ons or options. As it turns out, this is the maximum price the dealer would have paid but it is rarely what the dealer actually paid. (For that, look for the Dealer's Actual Cost below). You will notice a discrepancy between the Consumer Reports invoice and the Oakland dealer's invoice on the chart...I was unable to get an explanation as to what made up the difference but it was either just pulled from thin air or it was for some wheel locks and mud flaps!

The Dealer's Actual Cost takes into account the behind-the-scenes, factory-to-dealer forces that really effect the dealer's cost and ultimately the dealer's profit. In the case of the Fit, there aren't any incentives to sell these cars offered by the factory....the car sells itself! However, there are dealer "holdbacks" (see below for more info) on the Fit which vary based on factors specific to a dealership. In the case of the Fit, CR says there is a $455 holdback. The dealer in Oakland indicated that they have a $303.40 holdback on the Fit. Essentially, it is a way for the manufacturer and the dealer to disclose a smaller margin than what is actually the case, thus keeping the consumer completely in the dark.

So, if you subract the holdback from the "Invoice", you get a pretty good idea about what the dealer actually paid. It's virtually impossible to find out exactly, but it is got to be close to this amount.

At the bottom of the chart, I calculated profits based on the what the dealer in Oakland was asking. (I also calculated the profits for these Oakland prices based on the CR invoice and holdback info.) So far, they are unwilling to sell at MSRP and the dealer actually told me proudly that they have never sold and Fit for MSRP! I know many of you have been successful at buying for MSRP and that is at the high side of a good price I think. Actually, I would say that it is definitely in the range of a fair price for this car. And with supply as it is, it think it is a fair compromise to pay MSRP.

The Fit is a great car. It's the only car I have ever considered paying MSRP for! But, IMHO, no car is worth paying huge fees on top of MSRP...a markup on a markup really rubs me the wrong way! I love the fit, but when the MSRP has an extra $1000 tacked on to it, it starts to compete with a whole other class of car. As for the dealers, they are making a fine profit at msrp and don't really have to do anything for it! The car sells itself! They don't even have to pay for advertising!

Anyway, be tough and negotiate hard. And report back the prices you are getting so we can see what the market is doing!

Good luck. I hope this info is helpful to all those prospective buyers out there!

-fitfeevr


Base MSRP
15170 CR
15170 OH

Destination charge
595 CR
595 OH

Total MSRP
15765 CR
15765 OH

Base Invoice
14533 CR
?? OH

Dest. Charge
595 CR
595 OH

Total Dealer Invoice
15128.00 CR
15365.05 OH


Factors That Effect The Dealer’s Cost
(these are subtracted from invoice)

Incentives – Manu. Will offer incentives to dealer to move slow selling cars. Not the case with the Fit, they seem to sell themselves!

0.00 CR
0.00 OH

455.00 CR
303.40 OH

Dealer’s Actual Cost
14673.00 CR
15061.65 OH
Dealer Asking Price (1000 over msrp)
16765 (2092 profit) CR
16765 (1703.35 profit) OH

Dealer Best Price ($500 over msrp)
16265 (1592 profit) CR
16265 (1203.35 profit) OH

MSRP
15765 (1092 profit) CR
15765 (703.35 profit) OH

My Offer
15500(827 profit) CR
15500(438.35 profit) OH

 

The reason the price is different is because Honda charges a advertisement fee to Honda dealerships which consumer reports will not show. Online sources are vary rarely accurate. Theyreusually off by a few hundred dollars. On top of that using CR or edmonds wont help you in negotiating for a Fit. Why? Because Edmonds nor CR sell cars, they are merely 3rd party info which is not always correct. Either way... theres only actually $400 profit in this car.

 

Unless you markup that markup. $400 for a car that sells itself is pretty good I would think. To get that on a Civic, a dealer would have to work pretty hard, no?

Yep, as a consumer it is really difficult to know what one is dealing with. The dealer in Oakland told me explicitly that his net profit at MSRP is $514.35. That was after the automatic dealer intalls of wheel locks and mud flaps. Without that stuff, he told me explicitly that the profit is 703.35.

For the sake of understanding, how much is the advertisement fee that the dealer is charged on a Fit Sport?

Thanks for all of your advice Chris. I have read many of your posts. Too bad you aren't in NorCal, you would have yet another customer! And thanks for not trying to exploit a supply shortcoming from the factory.

-fitfeevr

 

so 15,500 is a good deal for you and the dealer? Kinda. Well better for you but not bad for them. Like FitFeevr mentioned the car sells itself since half the people that go to buy them know more about them then the sales man.

 

I agree with Frodo...I've definitely felt that I know more about the car than the person who is selling it...almost every time actually.

 

you are not gettin a fit for 15500 from oakland honda, or any honda dealership in the area.

as far as running into salespeople not knowing as much as you. salespeople who knows a lot, dont always sell. successful salespeople dont always know a lot about cars.

and ad fee right now for the area is 2% of msrp. the crappy commerical we see on tv right now (the black cop saying his red accord is a chick magnet, the mom saying the odyssey is cool, etc).

 

the problem witht the fits is that in some areas there is more demand than supply. You will have no negotiating power even if you know how much they are paying for it. If you try to haggle they'll simply say "NEXT" as Fits on those areas don't even get to stay on the dealership for a day. Most of them are already sold even before they arrive at the dealership. I too have been doing research for at least 2 months. I have learned a lot about buying cars but sadly, it was not applicable in my case. I tried all the dealers in Oregon within a 100mile (5 dealers) range and all but one gave quotes of 1000 above MSRP. Only one gave me a 500 above MSRP (the lowest quote). I thought, that is not bad since there is no sales tax. In other states they pay $1500+ for tax alone. When I took the test drive, I tried not to be impressed so I could ask for a rug but i failed miserably. The manager that was with me even told me that if i don't want to push thru with the purchase, they can refund me the 500 reservation fee. They're pretty confident it wont last a day in their showroom. He was even hoping i would not get it sooner so that they will have a fit to display on the showroom.

 

the drive is only 7 hours

 

u gonna take a 300 under msrp deal for a fit??

 

I might consider 500 over if I didn't have to pay 1500 in sales tax....but I doubt it!!!

jdmc - Do you have a VBP Sport MT down there in Fontana?!

 

that's funny. a dealer i went to told me the fit had rear disc brakes lolz. i even showed him the difference between the front discs and rear drums. he STILL insisted they were discs.

that's when i walked away and decided not to buy the car from them.

 

I purchased my 08' Base Model Fit earlier this month with 2+ hours haggling/test driving with the dealer. I'm just glad to check out Consumer Report that morning. My research consisted of a 10 min reading up on the Fit's specs and MSRP price. Final price out the door after taxes $15,200, no more, no less. I was pretty satisfied with the price. Make sure to speak out with confident when proposing your price. My sales person, asked me if I was going to make it easy or difficult to negotiate the price and I said, I've got all the time in world and other dealerships to do my business with if my price is not right!

 

Hold backs are meant to offset the hit the dealer takes for the car sitting on the lot. True, in the Fit's case, that's not long, but the dealer does have a lot of inventory sitting on their lot that they paid for and pay interest on until they get someone to purchase it.

Somehow this past October I managed to get $200 off MSRP and free floor mats. I ordered my car off the truck basically. I took a look at the incoming shipment manifest and picked my car from it and put down a deposit while explaining that "Hey, at least you won't be paying squat to have it sit around, don't you wish you could sell all cars off the truck?"

(The truth is, they would say no if honest because they need inventory to squeeze people into impulse "drive it home today" sales)

I took delivery of my Fit about two weeks later -- had 4 miles on OD.

 

good write up

 

I only paid 15.9 for my sport, with floor mats and cargo cover, they didn't mark up anything and I didn't have to bargain on anything with them, it was a straight up deal more or less once they found the car I wanted

 

I paid msrp, but also had to wait a month for shipment since every single Fit on any lot was already purchased. This year I drive by and I see maybe 6-8 sitting there all shiny.. many of them are white fits.

 

White? That's the color I wanted.. Out here, the lot I bought mine from (its on the way to and from work) always has a red one on hand, but nothing else.

Bought mine for $15.9 but no freebies. They wouldn't even throw in a shift knob. Of course, when I go to pick up the car a couple of days later, the salesman is all about the accessories they have for sale and i had to shoot him down and show him benardi parts and college honda and tell him to shove it unless he can price match.

 

Destination changed to 635 a few months ago. By Law every dealer pays th same base cost for a vehicle from Honda. The add fee differs from region to region. In Colorado ours is 150.00. Hold back is money to cover the cost of having vehicles on the lot. granted this doesn't happen often with the Fit. And although none of you guys(except Chris and a few others) care they have to pay me and other staff. Don't get me wrong my dealership isn't going broke. but it does bother me and others in the industry when people think we are a non profit business.

 

I work for a dealer, I can safely say that the dealer will *always* make at least $1000 on a car. In some cases, they make anywhere from $2-3000 off a Cadillac, Lexus or Acura.

Unless you're paying cash for the car, you're going to get royally shafted in the financing. I know people who end up paying 18-19k for the car on 7 year plans...

They're making money no matter what... The bottom line though, they will not sell for less than $1000 profit... Unless you're a chrysler dealer... THAT's a different story.

The old adage amongst dealers is "there's an ass for every seat"

They will sell the car no matter what, I'd say save the hassle, buy the one you want and be happy (oh, and pay cash.)

Used 07 MT Fit sports are selling at dealer auctions for around $13k with 30k miles on them (thats VERY VERY good depreciation: to give you an idea, an 07 MT mazda3 i touring retails for $16,500 and I'm seeing them at auction for around $11,500 with less than 10k miles on them)

My point is this, the fit has probably the best depreciation rate in the industry right now (seriously!) you will be at a break even point (where you owe as much as your car is worth) within a couple years... Even if you're financing $18k over 5 years (and that's only if you're a total bust out, credit wise...)

Don't sweat the small stuff, beat them up, read your contracts, don't get totally shafted, but the dealers are there to make money too... The amount they make, no matter how hard they stick it to you is nothing compared to some other vehicles....

 

I bought my vbp sport mt. from the fleet sales mgr. Paid 15,254.00 , no destination charge. just tax and tag. even got the carpet mats for free. maybe the demand is not like in the west coast here in Florida.