Sr. Citizen's Question On Car Pricing ?

You need to know even more than that. Aside from the published programs, a
dealer may have additional price breaks based on volume, etc.

As I said before, you'd need to ask the dealership's accountant, and it isn't
very likely you'll get the information from them, unless they want to lose
their job...

 

Yes, it's true that knowing the real dealer cost is damn near impossible.

However, you can come pretty close by finding out the invoice price, all
the factory to dealer incentives that are in place, and all the known
kickbacks that the factory or region is giving the dealers. I know that
in my area, the Toyota dealer is getting 2% holdback, 2% in advertising
subsidy, and 1% called WFR (which is ostensibly to finance their
inventory with their bank).

The key thing to remember is that "invoice" can easily be $1000 more
than the dealer cost. The dealer isn't losing money when they sell some
vehicles at $500 over their cost.

 

dude, again, the "invoice" is fictional. no money has changed hands
with that number on it.

 

why are you making up stories? that's not even vaguely true.

you don't understand is that i actually have no problem with a dealer
covering their overheads, commissions, advertising, etc., i simply
object to this bullshit charade about "dealer invoice" because it's a
crock designed to deceive. and evidently successfully so in your case.

 

you don't understand - "invoice" is fictional. even if it sells at
"under" invoice, the dealer still has a profit because the /actual/ cost
is way lower.

do you believe that the dudes on the sales floor with the gold chains
and bad teeth get cross-subsidized by the service department???

 

No one made that claim. Sales people are paid for sales. It's much
better to go home with $100 in your pocket from a $500 over deal than
to go home after working 10 hours with nothing. While these deals do
not support the dealership, the back end can and does as has already
been explained. As was also stated it doesn't happen everyday, but
when it comes to making a sale-vs-no sale, it will happen, especially
during slow times.

 

Also remember that the dealer can't tell the factory, "send me only
large shipments of the hottest models." They have to take a product mix.
When gas was cheap the Odyssey and Pilot were hot they'd have loved to
get no Civics and fewer Accords. Now they'd love to get a lot more
Civics. But it doesn't work that way. They have to sell the complete
line, and if that means moving the dogs off the lot by selling them at
very little over what they pay for them, so be it. Eventually supply
catches up with demand, so the patient customer doesn't overpay, while
the one that simply must buy the hot model as soon as it comes out will
subsidize other customers.

 

but it doesn't support the sales people on commission. what incentive
do /they/ have to sell for only $100???

there's no way you're going to let $20k of inventory go for only $100.
that's 0.5% profit. even high volume retailers like a supermarket can't
live on margins that skinny.

 

Once again, no one made that claim. It's been explained already.

Are you just looking to argue? No one is saying that ALL sales result
in a $100 commission, but when it's SLOW, it's better to have made
$100 than go home after working all day empty handed. There are days
you'll make a lot of profit on a car and the commission that goes with
it and days you won't, it's stated in what you quoted below.

Last time, profit is also made on the back end (lose out front, gain
it on the back end) and in service,
and the small profit sale deals do not happen every day. The end.

 

no, i just want to inject some commercial reality into what is clearly
the very non-commercial world in which you live.

dude, when there's $20k worth of car sitting on the lot, with all those
real estate, advertising, insurance, tax, admin staff, phone bills and
commission overheads biting your ass, there's absolutely no freakin' way
you're going to let that thing go for only $100. absolutely no way.

you don't understand. the dealer makes profit on sales. not $100
profit. big multi-thousand dollar profit. every time. that's where
all huge-ass sales real estate gets paid. all the multi-page
advertising in your local paper gets paid. all the tv ads get paid.

again, i have no problem with that, but i do object to the deception
about "dealer invoice". and right now, i strongly object to the poor
fool that grimly cling to this deception as their way of dealing with
reality.

 

No, you don't understand.

$100 was the salepersons profit, the dealer made $400+, then they made
money on financing, extended warranty or GAP insurance, credit life
insurance , trade-in re-sale, 3000 mile "service" , "dealer
recommended maintenance" , parts, warranty work, "the next dummy who
paid full retail" , and on and on. The consumers job is to get that
$500 over deal and walk on the rest.

Note the part at the end of this quote where it says "the profits from
used car sales and from parts and service are what keep the dealership
in business."


http://autos.aol.com/article/general/v2/_a/how-a-car-dealer-is-run/20070911143309990001

"First of all, that revenue mix significantly changed over the last
several years, especially for Ford, GM and Chrysler franchise dealers.
Consumers spend a lot of time haggling over the price of a new car,
but new car sales aren't what they used to be in terms of the role
they play in the car dealers' revenue. In the past -- during more
flush times -- the profits from new car sales were much greater than
they are now, said Paul Taylor, chief economist for the National Auto
Dealers Association (NADA), based in McLean, Va. In fact, due in part
to heavy incentives, the latest stats show that car dealers are
actually losing money on new car sales.

"On net, the average new car dealer is losing about $30 per new car
sold through June of this year, and that is inclusive of new car
finance and insurance revenue," Taylor said. "So, during difficult
years for new car sales, like this year, the profits from used car
sales and from parts and service are what keep the dealership in
business."



Then there is this tidbit,

"Dealer financing is another area where a new car dealer can make
exorbitant amounts of money, sometimes more than the profit on the
sale of the car itself."

 

do you know what "p.r." is? do you know how "news" gets placed? i do
because i've been involved in it. and what makes it to print is
absolutely no guarantee of accuracy. especially when there is a
concerted effort to "reposition" something. again, i know this from
personal experience from a repositioning in which i was involved. i
also have finance experience, and again, there's no way a $20k vehicle's
being sold with 0.5% mark-up.

now, you go away and believe your little propaganda stories so it makes
you feel warm and fuzzy about what a great deal you negotiated.

 

I know what you mean, I recently saw a claim that rental car companies
only pay 50% of sticker for a new car
and since I've been involved in it, I knew it was a very inaccurate
staement.

I never buy new and never mentioned any deals I had (or didn't). Must
be another example of something being inaccurate.

 

"It's not a station wagon! It's an SUV!"

"It's not an SUV! It's a crossover!"

 

Some required reading for buying a car:

http://www.edmunds.com/advice/buying/articles/78386/page001.html

http://www.edmunds.com/advice/buying/articles/42962/article.html

http://www.edmunds.com/advice/buying/articles/43096/page008.html

a

 

Jim actually revealed another common misconception regarding car buying,
that of the "0.5%" mark-up. Dealers would be quite happy with 0.5% over
dealer cost on vehicles that are in sufficient supply.

He's a source of incorrect information on many different subjects.

 

Also, don't trust the dealer for the "invoice" price. I saw someone
mention in a Toyota forum that the dealer had an "invoice" that showed
additional fees for TDA (advertising), holdback, and WFR. In reality
these are rebates to the dealer from the manufacturer, not additional
costs to the dealer. The dealer does contribute to regional advertising,
which is what the TDA fee from Toyota is intended to subsidize.

The true invoice pricing is easily available on-line. Once you know the
invoice you can work backwards to figure out the dealer cost (somewhat,
since you don't know what additional factory to dealer incentives are in
place).

The Edmund's TMV prices are much higher than you ever have to pay.

Also, what Jim doesn't understand is that the invoice price is much more
than the dealer pays for the vehicle, something that Edmund's makes very
clear, "the invoice price is almost always higher than the amount the
dealer actually ends up paying to the manufacturer. This results from a
variety of discounts offered to the dealer that do not appear on the
invoice." That's why invoice price is really the defacto retail price in
many areas.

 

not true. business 101. simply can't cover overheads for $100.

sure - i'm a massive bullshitter.



but getting back on topic, let's do a little math:

let's say a dealer has 6 sales dudes. let's say each one grosses $50k -
to be conservative. to make $50k a year, that's 500 vehicles with 0.5%
markup per year, or say 10 per week. for 6 sales dudes, that's 60 cars
a week. that's about 6 transporter trucks per week. and that's with
100% of the net going to the sales dudes.

now, let's say the sales dude keeps 50% of the net, the rest going to
the dealer. that means 120 cars a week, 12 transporters per week, and
out of that net $6000 [50% x 120 x $100], the dealer has to pay at least
two on staff admins at say $1000 per week. then the kids that do the
detailing of the new inventory. that's another $1000 per week, minimum.
then real estate and/or loans, that will be another $2000/$3000 per
month minimum. then insurance, utilities, advertising, etc.

bottom line, you go ahead and believe these guys only make 0.5% markup.
but you'll be deluding yourself because the math just doesn't work.

 

eh? that's what /i/ have been telling /you/.

no, it's because the schmucks that don't understand pricing look at
"dealer invoice", pay a little over, then think they got a good deal
because "dealer invoice" set their pricing expectations.

 

Why do you keep spouting off about a $100 deal when NO ONE mentioned
or suggested it? Do you think making things up will help your
argument? You also ignore the fact that several times it was posted
that these types of deal are not the norm, but again, you just want to
ignore anything else being stated.

About the $100 deal, yes you are.

As expected, you also ignore the back end, a source of revenue that is
very profitable, sometimes more so than an individual car sale.

Once again, the BS flies when you state they "only" make 0.5% markup,
sometimes they do, more often they don't. Over and over that has been
stated and yet you continue as if EVERY vehicle was sold at the same
markup. You're either very stupid or just being an ass (troll), past
experience says it's the latter.