New '08 Yukon Denali - Price

grogman45459 · December 19, 2008

I had to to copy & paste this post from the Yukon Denali forum the Car Space forum:

Thanks to everyone on these boards. New poster, long time lurker.

I have just purchased my third car in the past three years and each time the Edmunds forums (especially the Prices Paid threads) gave me the info and confidence to save a ton.

After weeks of watching the boards, reading the ads and walking the lots late at night, and taking inventory of the model I was interested in (hint: the same cars sat there week after week) I just purchased a loaded 2008 Yukon Denali AWD in the San Francisco Bay Area.

Options: Sun/Ent/Destination (nav, rear cam, DVD player, sunroof); 20" wheels; power retractable steps; heated steering wheel; 2nd row leather bench seat.

Odometer: 7 miles

Amounts below are taken from both the "Purchase Information Screen" and Retail Installment Sale Contract":

MSRP: approx. 57,500

GM Rebates: (10,000)

Dealer Discounts: (8,000)

Price before sales tax: approx. 39,500

Discount from MSRP: over 31%

No trade-in, financing offered through dealership process at high 6% figure for either 60 or 72 months.

I got them to apply an offer made on one specific car to another car. The only difference between the cars was color. The car is gorgeous but is not black.

Dealer negotiation/purchase experience was my easiest ever.

I learned a lot during this market and spoke with many dealerships selling GM SUVs (Chevy and GMC). Most dealerships have been in denial about the supply/demand for their cars right now. They are starting to break down and dump 2008 models to raise cash to survive and to make room for buying cars that are more likely to sell when cars start selling again.

They are rightfully worried about setting customer expectations for very low prices for years to come, and they know they are already sitting on tons of 2009s, which, with the big difference in current rebates/incentives on GM models, are not selling **at all** right now.

Unless the economic news gets suddenly better, expect to see deals almost this good on 2009s in January 2009, once the 2008s have been largely sold down. Or maybe they will hope against hope and wait until February 2009. No true way to know.

Don't fixate on a particular color or exact option package. Buy what's on the lot. Look for GM SUVs made in Janesville, WI, they are almost always the oldest sitting on the lot (it's printed on the sticker). Look for situations where they have two or more identical cars -- say two golds with similar options, or two silvers (how will they sell two when they can't sell the first one?)

If a dealer won't get real and talk at least 3-5k more off the Red Tag price, don't even waste your time. Keep driving and e-mailing and calling. Someone will.

By the way, all the guys who wouldn't "talk turkey" and go below red tag in the past few weeks are suddenly calling me today and incrementally moving lower. I told them they're still not close, and that I am already driving my new Yukon Denali.

If you've ever been taken advantage of in a car deal in your life, this may be the only time you can reverse it on the dealer. Enjoy, and get out there and get that car in a tolerable color before the 2008 stocks are gone.

Some other thoughts: in this market, on an almost 60k MSRP car, I wouldn't pay more than 3k over the current Kelley Blue Book trade-in value for that car with your exact options and no miles. Who is going to even pay you KBB for your car when the market is flooded with unsold new vehicles in a depression?!

KBB trade-in value on a 2008 Yukon Denali in perfect condition with no miles is only 36.5k or so. And that's not taking all these new discounts into account, which drive that figure down further over time.

If you like the Yukon Denali XL, you may even be able to get 20k off MSRP (they appear to be in much less demand than the shorter wheelbase).

In normal times, dealerships apparently have many sources of profit on a sale transaction. Another dealer took some time to figure out, right in front of me, whether another dealer selling at 18k off MSRP (of which 8k was dealer discount) was truly losing money after considering "all sources". Believe me, it took a little time to figure it out. They were counting sources of manufacturer money that we consumers aren't aware of. And yes, they concluded 18k off MSRP was not profitable, but it did not seem that the loss was that significant.

The underlying lesson is that even at "invoice", dealerships ultimately (maybe months later when incentive checks are cut) make a lot on a sale of a luxury vehicle, even if the salesman only gets a mini commission.

What we forget is that dealers try to sell to each customer at that customer's maximum acceptable price. They get enough uninformed people to make a killing on a substantial number of cars, so they start out by trying to get that every time. I'd do the same if it were me.

But it is important to be respectful and mindful in speaking with them of the fact that these folks are not making what they're used to making right now, and that they have a lot of fear, as many of us do about what the future now holds for us all economically.

My approach is I am always ready to buy when I enter a pricing conversation with a salesperson. When you tell them "I will buy this car right now" if the deal is right, most will get down to serious work. Still, 4 out of 5 won't give you your optimal price. (They will call you later in the week with a better deal, though).

If you go in with a recognition that you are lucky to be able to purchase a car in these scary times, some dealer will work with you on a mutually beneficial deal. Be humble and they will be happy for your great deal and to cement a new long term customer. (And show some loyalty to them in return when times are better when they can make a few bucks).

I look forward to monitoring this board to see future great deals.

I am not a name-namer, sorry about that. But I will simply say that the dealer making this offer is not being shy about it. The discount is ostentatiously marked out front on the cars.

Nothing beats walking or driving by the lots, and reading the ads in the paper every day for all the brands. Car dealers are a pack, and they will follow each other's innovations.

Invest some time in knowing their situation, and you will get a great deal these days.