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Using Costco to Purchase a New Car

This topic contains 34 replies, has 0 voices, and was last updated by  stevel1959 3 years, 9 months ago.

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  • #177040

    DivotMaker
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    We’ve been shopping for a new 4Runner so I wanted to share our experience using Costco to purchase. My neighbor has a 4Runner, so I asked who he used since I did not have any contacts with Toyota. He gave me the sales guy’s name that he used and highly recommended him. I visited the dealership a few weeks back and introduced myself. I was assured I’d get the best deal possible since I was a referral of a past customer. Fast forward a few weeks, and we visit the dealership and start negotiations. I’ll be the first to admit that I HATE negotiation with a car dealership. As such, my wife handles this part because she’s 100 times better at it than I am. Anyway, we go back and forth and the final price is one that we’re not happy with. The salesperson says “This is absolutely the lowest price we can offer and there’s no way we can go any lower.” My wife says “we’ll see about that” and the discussions are over. A few hours later we get a text that he can come down another $500 but again there’s no more room to negotiate. I do some checking on various website and this price is consistently about $900 over invoice. We decided we can live with that, but then my wife tells me she discovered Costco has a program where you get a fixed price by contacting them. She sends off our information and then gets a reply back that someone from the same dealership we’d previously went to will contact us the next day. Next day arrives and our “fixed price” is now just $200 over the invoice price. And to top it off, we can’t use the sales guy that we were previously working with because he’s not the dealership’s authorized Costco rep. We then got a text from him saying “Your Costco price is $xx,xxx but I can’t work with you because I’m not a Costco rep.” I wanted to reply “If you would have just offered us that price you would have closed the deal.” but didn’t. Not sure if it’s because we used Costco or not, but the sales process was very easy. The sales rep was super friendly and not your typical “used car salesman.”

    The finance part was a totally different story. Guy was a sleeze. Tried to slip all kinds of things by us, but we caught them and told him we’re leaving so he realized we were reading the fine print. Aside from that, a good car buying experience.

    So if you’re ever in the market for car, give Costco a chance.

  • #292142

    LC
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    Ummmmmmmmm……wish you’d have contacted me first. I’ve yet to see a Costco deal being the lowest. If it’s a 2016 $200 up isn’t bad though. My Subie was $1600 BACK of invoice, but today each manufacturer has different pricing structures to try to avoid the Internet comparisons between cars. I would not have been able to make that deal on a current model 4Runner. Last Toyota we got was a Tacoma, that was $500 back of invoice. I haven’t paid up in a long time, even for the Lexus.

    What really matters is you got an OK deal and a GREAT GREAT little stud of a truck. One of the best vehicles ever.

  • #292152

    newmom
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    Wow-what kind of stuff did the finance guy try and slip in? I hate that kind of stuff. Its what gives sales people a bad name.

    We’ve tried to use Costco before, and the dealer in their system refused to give us a price over the phone or email and required that we come in for a visit before he’d give us a price. This was about 8 years ago. The same experience with the same dealer happened a couple of years later when we were replacing that car after an accident. It was out in Davis and we didn’t want to take the kids all the way out there and get the full press hard sales process. I told them we weren’t interested in dealing with them if they couldn’t be upfront with the price of the car, and that if their price really was best they wouldn’t hesitate to give it out over the phone. They wouldn’t tell me, so they didn’t get our money.

  • #292133

    DivotMaker
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    @newmom 123757 wrote:

    Wow-what kind of stuff did the finance guy try and slip in? I hate that kind of stuff. Its what gives sales people a bad name.

    First thing was the price was mysteriously $200 more. When I pointed that out, he said oh it’s a mistake, it should be $167 instead because you’re using Costco and started rambling on. We interrupted him and said “wait, why is it even $167 more” and he started talking about some anti-theft service that we never discussed about and we had to once again interrupt him and tell him we didn’t want or need that. He tried to blame that on the sales guy.

    Then, the price of the extended warranty went up $200. He said this was because Costco wouldn’t allow them to modify the price. I immediately said “we’re leaving” and my wife went off on him. He started backpedaling and said he’d be right back. He came back from what I’m sure was just standing around the corner and said the price was back to what we were originally told and that he could override anything all of a sudden.

    Finally, he tried to change our Gap insurance (only put $5k down) to a different company than Golden1 and we caught that and made him change it.

    Just a slime ball from start to finish.

  • #292163

    PhysAl
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    I had gone through the Costco program to get a price. We had to go to Davis Toyota back in 08. We met the costco rep salesman. He opened a book, pointed to the price and said that’s it. The price was good according to my research. We then went to Elk Grove Toyota. They had an 8 seater van we liked, Davis didn’t have one at the time. They did not want to move much on the price. We went through it for a while and then when they wouldn’t move anymore, I threw out the Costco price and they weren’t a Costco dealership. He did come back fairly quickly with about $2,800 more off the price. We bought it.

  • #292143

    LC
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    We got the Tacoma in Fairfield, and had the exact same thing with the magical theft prevention device. He said it was already on the car, and I asked what the fee was for, he said activation. I said don’t activate it, and it was gone. My daughter financed that one through Toyota Motor and it was easy. Overall a good dealership. When I was shopping for a Sequoia recently they were not competitive. I always give Folsom Lake Toyota first shot as they’ve always been a good dealership, but they’ve never been competitive since Chuck Peterson sold it and the Ford store next door.

  • #292159

    plasmadrive
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    @newmom 123757 wrote:

    Wow-what kind of stuff did the finance guy try and slip in? I hate that kind of stuff. Its what gives sales people a bad name.

    We’ve tried to use Costco before, and the dealer in their system refused to give us a price over the phone or email and required that we come in for a visit before he’d give us a price. This was about 8 years ago. The same experience with the same dealer happened a couple of years later when we were replacing that car after an accident. It was out in Davis and we didn’t want to take the kids all the way out there and get the full press hard sales process. I told them we weren’t interested in dealing with them if they couldn’t be upfront with the price of the car, and that if their price really was best they wouldn’t hesitate to give it out over the phone. They wouldn’t tell me, so they didn’t get our money.

    I had a similar experience with EG Nissan.. they would not give me a price over the phone even though I had been there the previous day with a salesman. I told them to forget it and I bought my Titan from a dealer thru Costco. That was in 2006..

  • #292162

    Bainc
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    The next time my wife or I buy a car from a dealer will be the first time. As adults we’ve owned a total of 8 vehicles all private party sales. These are some horrifying stories and makes me glad I’ve bought private party and never financed.

  • #292157

    jusme
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  • #292134

    DivotMaker
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    @bainc 123767 wrote:

    The next time my wife or I buy a car from a dealer will be the first time. As adults we’ve owned a total of 8 vehicles all private party sales. These are some horrifying stories and makes me glad I’ve bought private party and never financed.

    We’ve probably bought 4 or 5 new cars over the years, but we’ve always been really good friends with the fleet manager at a local Toyota dealership. The NICEST guy a person could ever meet. He knew all the fleet managers, so we’d go see him and he’d refer us out and we’d get the price over the phone and just go in and be done with it. And the price was always right at invoice. We only actually bought one car from him in 20 years, but he still treated us like we were stars. We were very saddened to hear he passed away recently. So yeah, it can be a ridiculous experience if you don’t have someone you can trust. And FWIW, we have a great person at Toyota, Ford, and Chevy. But finance, what a nightmare. Bunch of crooks.

  • #292138

    EGL Admin
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    That’s where they make all their money back. Alarms, service packages, extended warranties.

  • #292164

    leowm
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    We just, in the last few weeks bought a 2016 Explorer Limited from Elk Grove Ford. What an easy and stress free experience. Went in on a Saturday night just to look and make up my mind on color. Salesperson, Cole had us test drive the model we were interested in, gave us his cell phone number and said to give him a call when I decided on the color and was ready to purchase. Called the following Monday, went in that evening and made the purchase. There was no high pressure sales, just a great car buying experience. Very happy with the car!

  • #292144

    LC
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    I like the look of those new Exploders, especially in white or black. I looked at one early on when I started looking for a smaller SUV, and eliminated it immediately, I don’t remember why. Probably ground clearance. Came down to only two I could reasonably live with. Divotmaker got one of those, I got the other, Subie. Both are great. Glad you like yours too. Never had any luck with EG dealers, but at least I always give them a shot.

  • #292158

    EGdonald
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    @newmom 123757 wrote:

    … We’ve tried to use Costco before, and the dealer in their system refused to give us a price over the phone or email and required that we come in for a visit before he’d give us a price. This was about 8 years ago. The same experience with the same dealer happened a couple of years later when we were replacing that car after an accident. It was out in Davis and we didn’t want to take the kids all the way out there and get the full press hard sales process. I told them we weren’t interested in dealing with them if they couldn’t be upfront with the price of the car, and that if their price really was best they wouldn’t hesitate to give it out over the phone. They wouldn’t tell me, so they didn’t get our money.

    Not too much has changed. This past October, 2015, I became interested in a Dodge Ram1500 Diesel. I went through CostcCo, and what was even more surprising was that they basically gave me MSRP price! eye rolling
    What?! I asked them what benefit does being part of the CostCo auto purchase program have? Salesperson’s response was basically “it is what it is”. Ok whatever, I wasn’t in dire need of a truck anyhow.

    @leow&m 123849 wrote:

    We just, in the last few weeks bought a 2016 Explorer Limited from Elk Grove Ford. What an easy and stress free experience. Went in on a Saturday night just to look and make up my mind on color. Salesperson, Cole had us test drive the model we were interested in, gave us his cell phone number and said to give him a call when I decided on the color and was ready to purchase. Called the following Monday, went in that evening and made the purchase. There was no high pressure sales, just a great car buying experience. Very happy with the car!

    Not to assume anything on you, but these types of dealership reviews always worry me :p
    Perhaps there are dealerships that actually have the intention of making purchases easy. But every time I hear “I had a great experience at XYZ dealership”, I always worry whether the buyer got a good deal or did they just end up walking in there and buying the car with little effect on the invoice price (not to be confused with MSRP).
    So hopefully you got a good price. And not just a price you’re happy with, but a good price compared to invoice – not that your happiness is irrelevant, but it technically could be in regards to what makes the buying purchase pleasant.
    For example, I could have got OTD (out the door) price of $20,000 on a Hyundai Accent and walk out feeling the process was simple and quick, and the experience was great!
    Or I could have paid OTD $15,000 on a Hyundai Accent and walk out feeling like it was torture to get the price down, but got the price I wanted.
    MSRP on a Hyundai Accent, based on Edmunds.com, runs at about $16,900

    Again – I’m not implying anything about you not getting the great deal, nor saying I don’t believe you had a great experience. I’m just mentioning my thoughts on experiences like yours and am curious to ask what your pricing was and the amount of time spent in negotiation.

    Not to say all car salespeople have a bad reputation, but I’d presume that if the salesperson (or financial salesperson) isn’t trying to get more of your money, then they’re not working :p — or I’m hugely missing something.
    Just like the idea of Scion cars (despite they’re going away) don’t budge on price. I walked out of a Scion dealership wondering “what’s the purpose of the dealership, if they don’t make deals?!” – that is, why not just sell online, once payment is setup, the buyer can walk onto the lot and pick up the car – why all the hassle of talking with a dealer, finances, etc if no deal can be struck.

  • #292145

    LC
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    I’m good car buyer. Being on the financing end early on with a bank helped, but it’s just something I’ve always researched long before Al invented the Internet and I discovered a lot of data that’s not readily available, and I’ve acted as an agent for others from time to time. But, this last time, I had a real education. As I mentioned earlier, I bought my Subie at $1600 back of invoice, a 2016. That’s not a real price savings, because the amount below invoice exceeds the published holdback so why would they do that? The car was an order too, so not on the lot. I’m sure the true dealer pricing has become more secret than ever, and there are unpublished (or at least I haven’t found them yet) incentives, bonuses, holdbacks, or kickbacks with some manufacturers, Subaru obviously being one of them. A friend got his Subie for $1500 back, and his son $1200 back. Those deals are usually for dog colors or models, end of year, with factory incentives. It’s never been that hard to buy at invoice, but not $1000-$1500 back for a current model. Something’s awry.

    I think getting a car at invoice today is like paying $500 up five years ago. I think the only way to be certain you’re doing OK is to put out an RFP to 4-8 dealers and start looking at how they come back. The first stop should be carsdirect.com. That will give you the worst case price, but still a ceiling, and work down from there with the dealers. Keep in mind that (this happened to me with the Subie) different regions can have different incentives. None of the Sac dealers could touch Bay Area or Reno prices. Sometimes the Central Valley dealers have the best deal. I always get prices from LA, Bay, and Reno as well as local just to see what regional incentives might be out there elsewhere.

  • #292135

    DivotMaker
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    @lc 123874 wrote:

    I think getting a car at invoice today is like paying $500 up five years ago. I think the only way to be certain you’re doing OK is to put out an RFP to 4-8 dealers and start looking at how they come back. The first stop should be carsdirect.com. That will give you the worst case price, but still a ceiling, and work down from there with the dealers. Keep in mind that (this happened to me with the Subie) different regions can have different incentives. None of the Sac dealers could touch Bay Area or Reno prices. Sometimes the Central Valley dealers have the best deal. I always get prices from LA, Bay, and Reno as well as local just to see what regional incentives might be out there elsewhere.

    Another recommendation is to visit online forums for you potential car. Many have “Prices Paid” sub-forums that you can browse to get an idea what they’re going for. I read through nearly 70 pages of posts on the 4Runner forum before deciding that the price we were offered was very competitive and often lower than many people paid out of and in state.

  • #292146

    LC
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    @divotmaker 123878 wrote:

    Another recommendation is to visit online forums for you potential car. Many have “Prices Paid” sub-forums that you can browse to get an idea what they’re going for. I read through nearly 70 pages of posts on the 4Runner forum before deciding that the price we were offered was very competitive and often lower than many people paid out of and in state.

    I was going to add that, but felt I had said enough. But, you’re SO right! Plus, you can discover “trunk money” that dealers may have from the factory to make deals. That happened to me when I was buying the Z3 years ago and it saved me $500. I’m not sure everyone on the forums is honest about the price paid, but if you have enough data you can certainly find out about where you should be, plus you can get some dealer names that might be local that have offered favorable deals. In your case, the 4Runner forums are extensive and detailed (total fanboyz) and very helpful. Same with Tundra forums which cover all the larger Toyota trucks and the Sequoia.

  • #292136

    DivotMaker
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    @lc 123879 wrote:

    I’m not sure everyone on the forums is honest about the price paid,

    Wait just a minute! If it’s on the internet, it has to be true!

  • #292165

    stevel1959
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    Costco policy…Customer needs to come in to the dealer.

  • #292153

    newmom
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    That seems silly when the dealer is 45 minutes away. No way I’m driving 1.5 hours round trip and taking two kids (and back then one was under 4) without knowing what I’m going in for.

  • #292147

    LC
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    Requiring a buyer to work a deal at the store retail level is outdated and very 1.0, especially when 90% of the dealers will firm quote you in writing via email. Then you pick the best quote, maybe meet the rep and work down from there. The first time I met my rep on the last auto purchase was when I gave him a check for the car and drove off an hour later.

  • #292166

    stevel1959
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    It’s just the policy because you need to show your membership card. Car buyers also don’t take in to account that dealers pay to be a Costco dealer and they need to see a return on the dollars they are spending. If your a member then you have to go to the dealer to get the Costco deal and if this is to much trouble then just email a internet manager at any dealer. I never understand the bashing of car dealers.

  • #292154

    newmom
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    It’s not bashing, it’s stating the facts. In my case, the dealer was out in Davis. I wasn’t going to drive all the way out there if they were going to play games with me. I did email every fleet dealer in the area and had quotes from them all, my credit score was fantastic, and I already had one of the same make and model so they knew I was serious about the car. Why would I take the time to go all the way out there? To buy things from the Costco website you only need to put in your membership #, to use their other business services such as insurance, vacations, etc, you simply provide your membership #,….why not for purchasing a car?

  • #292148

    LC
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    ^ this

  • #292139

    EGL Admin
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    I have a question. Why would a dealer sell a car for $200 over invoice or even back of invoice when someone else will come along pay more? And do we know what the actual invoice is? Or is this invoice just some number they use and the actual price is much lower but they want people to think they are getting a good deal?

  • #292149

    LC
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    We “think” we know what the invoice is, but I don’t think we do. I can say that as I can’t imagine how a market deal can be more than 4% back of invoice which, assuming a holdback of 3% of the MSRP, would be below dealer cost in theory.

    If a dealer is quite sure he can sell an inventory unit for more than the offer, then of course he’ll decline the offer under some circumstances. But, if there’s a time-sensitive dealer incentive or they are on a push for next year’s allocations, they may sell for much less than maybe a week later or prior.

    This is why I rarely buy off the lot, and order. I will almost always do better as it doesn’t cost the dealer any flooring expense, and it’s in and out plus I get get what I want, or don’t want. In the case of the last order the dealer did say by ordering I’d miss out on a great factory financing buy down, which was true, but as I was a cash buyer it didn’t matter.

    Again, it’s a bid market, and the more bids the better. Without those you have no idea what kind of a deal you’re getting. $200 over might be great, or it might be way high, depending on the make, model, color, equipment, and current incentives. Some cars you’re going to pay a lot more than that, like a Range Rover, because there’s no inventory and more chumps than vehicles.

  • #292137

    DivotMaker
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    @stevel1959 124070 wrote:

    It’s just the policy because you need to show your membership card. Car buyers also don’t take in to account that dealers pay to be a Costco dealer and they need to see a return on the dollars they are spending. If your a member then you have to go to the dealer to get the Costco deal and if this is to much trouble then just email a internet manager at any dealer. I never understand the bashing of car dealers.

    Also to clarify, we DIDN’T have to go to the dealer to see our Costco price. They emailed it to us directly.

  • #292167

    stevel1959
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    The dealer has the option to give the price over the phone or email but they can also require that you come in. The deal spoken about here sounds like they require you to come in. What’s the difference because Costco is not the best deal and their are better deals out there on new cars, so just shop around but don’t bash any dealer because they have policies you don’t agree with. I’m sure that dealer is still in business either you bought their or not and I’ve found out that people who complain about how they were treated by the dealer or salesman were acting like idiots anyways. Lot’s of people look down on dealers and salesman and come in with a demanding attitude. Their time is always more important then the salesman time.

  • #292155

    newmom
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    No one here is bashing. We are stating how our experiences with certain dealers led them to not get our business. No one bashed any sales person, or named any specific cars or dealers. And clearly, it’s not COSTCO policy to require a person to come into the dealership to see the price-it’s the choice of the dealer. Some choose to force the customer to come in, others are willing to bet their price is the lowest. I was in sales for a long time and was paid 100% commission at times, so I respect sales people. However, that does not mean my time isn’t valuable and I’m going to play games just because I want to buy a car that is available from lots of different dealers. In my case, I got quotes over email/phone that differed by thousands of dollars. Knowing that, why would I take a (then) 2 year old, 7 year old, and make my extremely busy husband pile in the car and drive all the way to Davis (1.5 hours round trip) if their starting price (and supposedly final with no negotiation) was thousands more than dealers that were closer? The last two times I purchased a car I did everything over email and phone, then drive to the dealer by myself to negotiate the trade in, dealt when the stuff they tried to sell me that were “already on the car” like upgraded rims, etc, then when all the paperwork was read by husband came over with the kids, signed where he needed to sign, and left. No way I was making my kids and husband hand out at the dealer for hours for that stuff. The kid would go crazy and my husband is far too busy with work.

  • #292150

    LC
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    Cars are a commodity. Where you buy the car makes absolutely no difference after you drive off the lot. You’re not going to get any better service because you bought the car there. Not many have dealer loyalty as there’s really no reason for it. As for value of time, I could not care less about the time I might take from an auto salesperson. If he/she doesn’t think it’s worth their time, they can cut and run.

    Well, there might be an exception. My next door neighbor goes through Lexus’ like butter. He seems to get a new one or two every year. I will say that when he does half the staff of Lexus of Roseville is at his house delivering it. Whenever I look at a Lexus I joke that I should get some credit being his next door neighbor. They all know him, and laugh and nod. His latest Lexus RCF is one of the few cars I lust over. Not that terribly expensive either–I just know I wouldn’t use it.

  • #292160

    gearshark23
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    I don’t feel like going back and reading. But is Costco only for brand new cars? I totaled my car, (not the wifes) last week. ( I am fine, kids were not with me). I’m looking for a used car now..

  • #292156

    newmom
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    Wow-glad you are ok.
    Yes, Costco is only for new cars.

  • #292140

    EGL Admin
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    @gearshark23 124264 wrote:

    I don’t feel like going back and reading. But is Costco only for brand new cars? I totaled my car, (not the wifes) last week. ( I am fine, kids were not with me). I’m looking for a used car now..

    We have a 2006 Lexus available. $7500, 205K miles.

  • #292161

    gearshark23
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    Want something newer… 2011+

  • #292141

    EGL Admin
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    I see how you are……

  • #292151

    LC
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    Here’s another good rule of thumb when buying a new vehicle. Try to get the out the door price, which is the purchase price +sales tax+reg+dealer processing ($80 limit in CA) to come in no greater or slightly below the Monroni sticker. That’s been a benchmark for years. I just looked at my Monroni and I came in $1780 below, out the door. If your OTD is higher than the Monroni, keep working. Subtract any dealer or factory incentives from the Monroni for the same formula result.

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