Seven Secrets to Getting the Best Price on Fleet Vehicles
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- July 20, 2012
You’ve seen the ads by auto dealers that seem to shout on billboards, in newspapers, or on TV:
“We won’t be undersold!”
“We’re stacking ‘em deep and selling ‘em cheap!”
“We’ll pay off your trade no matter how much you owe!”
But as a business owner or fleet manager, you don’t have time for the hype and hassle typically associated with vehicle shopping. Whether you’re purchasing service vans, pickups, or larger delivery trucks, you want the right vehicle, for the best price — without having to spend hours at a dealership to get it.
So, how do you cut through the B.S. to strike a sweet deal on your company vehicles?
Here are vehicle-buying secrets I gleaned from “the inside,” during my six years as a dealership fleet sales representative before becoming an industry journalist.
1. Use Dealerships That Offer a Dedicated Fleet Department
Fleet sales reps, for the most part, understand that you don’t have time to waste. They’re often better-equipped to provide competitive pricing upfront, without the back-and-forth, “let-me-talk-to-my-manager” wrangling typically associated with retail sales. Whereas a retail purchase could take several hours to complete, buying vehicles through a fleet department tends to be more efficient and less stressful.
2. Pick the Right Vehicle, Not the Cheapest One
You can get the lowest price, but if the vehicle is underpowered or too small to do the job, you’ve spent too much, no matter how great a deal you get.
Here are questions to answer to ensure you select the right vehicle for your application:
- What exactly will you be hauling in the vehicle? How much space will that require? How much payload (weight capacity) will the truck need? These questions help you determine vehicle type (pickup, van, or box truck) and size (half-ton, three-quarter ton, one-ton, and so forth).
- How will the payload be organized? Will the vehicle need special shelving, toolboxes, ladder racks?
- How many people, including the driver, will be in the vehicle at any one time? Will you need regular cab, extended cab, or crew cab?
- Will the vehicle need to pull a trailer? What size and how much weight?
- Will the vehicle require two-wheel or four-wheel drive? Will the vehicle need to be driven off road enough to justify the added expense of four-wheel drive?
3. Apply for a Fleet Number
There are a number of discounts exclusive to qualified fleets that offer savings from a few hundred to over a thousand dollars per unit. The typical qualifier is a total of 15 vehicles in a fleet or a one-time purchase of five or more vehicles. Once your company is assigned a fleet number by the automaker, you can use that number to purchase vehicles from any new car dealership that sells that brand.
4. Focus on Invoice, Not Sticker Price
A common mistake for buyers is to negotiate discounts “off sticker” (the manufacturer’s suggested retail price, or MSRP) because that’s the way deals are presented on the retail side of the automotive business. The problem is that even if a sales rep shows you a $4,000 discount from MSRP, you could still be paying too much for the vehicle, depending on the markup.
Instead, make the dealer invoice (the amount an automaker charges the dealer for the vehicle) your starting point, but with the understanding that the dealership still needs to make a profit. So, think in terms of what a fair mark-up might be, perhaps $250 to $1,000 over invoice, depending on type of vehicle and number of units you’re looking to purchase.
Ask to see the invoice and propose what you’re willing to pay relative to that invoice amount. This approach simplifies the purchase process, especially with subsequent orders, because you can say something like, “Show me the invoice, put $500 (or whatever the number) on top, subtract any applicable manufacturer rebates and discounts, and that’s what I’ll pay.”
5. Finalize Purchase Price First, Then Deal With Trade-Ins
This way, you can decide whether it makes more financial sense to trade-in, sell outright, or keep the vehicle, without muddling how much you’re actually paying for the new vehicle.
6. Capitalize on Manufacturer Incentives
In many cases, the fleet discounts and retail incentives aren’t compatible. Yet, there are occasions when retail programs offer the larger savings. So, have your fleet rep run the numbers with both sets of incentives to determine which program (retail or fleet) offers you the best bottom-line number.
7. Ask to Waive the Dealer Fee
Usually ranging from $100 to $600 or more per vehicle, the dealer fee, or doc fee, is often described as a means to pay for “back-office support” to process paperwork, prep the vehicle for delivery, and so forth. In reality, it’s another avenue for dealers to preserve profit, especially on retail sales transactions. Some dedicated fleet departments waive doc fees automatically. So, check whether or not it has been added to your vehicle’s pricing and negotiate accordingly.
The Bottom Line
Purchasing fleet vehicles at a fair price doesn’t have to be an all-day ordeal. Get the best possible price, with less hassle, by working with dealers and sales reps who understand how to make the vehicle-buying process more convenient for businesses.
Image via The Consumerist.