A dealer showed me their invoice on a truck and it showed a cost of $34,300. Down in the lower left hand corner, there was the number $1098. He told me that the $34,300 was their cost and the $1098 was their only profit on the sale. Don't they get incentives and rebates in addition to that, that effectivly reduces their cost?

 

They also get factory to dealer rebates plus dealer reserves from the finance company.

When I was selling Chevs a couple of years ago there was about $6-$7000 mark up in an Avalanche LTZ. 1500's weren't that far off either. It may have changed since.

 

Yeah, I have always heard there are kickbacks to the dealer. I just wish I could trust one to tell me the truth. I want them to make money on the sale, just don't lie to me. He was trying to tell me that they would break even on the deal.

 

They don't stay in business by breaking even. They make money on the truck because they can't necessarily rely on the fact people will finance through them. So believe me, there's margin to be made, even on an A/D/X-plan sale...

 

I have a cousin that was a general manager for two different Ford dealerships. I heard him refer to "Dealer Holdbacks" , But I never could get the truth out of him. Typical car salesman

 

 

That is their ~3% holdback. There may not currently be any factory to dealer rebates, so, if you buy at invoice, and don't finance through them, that ~3% is pretty close to what they will make on the deal.

They will make far more on your trade (if you trade your current truck in).

 

No trade and paying cash.

 

So if the MSRP is 36,600 and the dealer invoice is 34,300 or so and Ford is giving 3500 in rebates, they still make money if I pay 27,600?

 

The Manufacture rebates have nothing to do with the dealer. They will take the money off on your sales reciept, but ford will pay the dealers. The dealers also make $400 on every x,a,d-plan. Ford will cut them a check. The dealer is actually being pretty honest with you by saying "break even". They will make more money if the truck is not sitting on the dealer lots for more than 30 days or if they hit sales numbers. So by letting this truck go for minimal profit it registers as another sale pushing them closer to sales targets.

 

I know the $3500 rebate is the buyer's but if the dealer keeps it, then the true discount is only $5500 when we agree to $9000 off MSRP..

 

Dealer will pay the sales person a flat fee when cutting one loose at that low of a price. So by the time they pay there staff and sell you the truck at invoice less factory rebates the dealer will make around 600-800 pending there payroll structure. I would say they are offering you a really fair deal. Its when trades are involved that I typically find dealers vary the most. You can get a cash no trade deal like this one at most dealers. But when trades are involved, every dealer seems to have a difference of opinion as to what your trade in is worth, and the only way to get to the nitty gritty is to shop around. On a cash deal like this your just burring gas and splitting hairs over what little profit is there to manipulate, just as well go for it. Just watch out for all the add on BS the finace office will try and hit you with, which is in turn a huge proffit center for dealerships, typically on new cars there is more made on the back end the FI dept. then there is on the front end or the sale of the actual truck. Don't go for any of the adders most all are primarily way over priced. Example they might try and sell you a warranty for 2 grand that you could buy the same warranty on line for a grand.

 

The only add on I have ever bought was an alarm system on my 2005. They had already installed it and I decided I would rather leave it on than have it ripped out. I do not buy warranties, protectants, etc.

 

That $1098 in the lower left of the "dealer invoice" IS the dealer hold back. That is what the dealer gets when they sale you car the truck. Anything that they charge you over that "dealer invoice" is profit in their pocket.....especially if they sucker someone into paying sticker... The rebates are done directly with Ford and do not really affect the dealer as the finance mgr has already built that into your deal....Like if you financed through Ford, you got $1000 rebate, and if you used an X plan or the likes, there is another $2500....a total of $3500 in rebates that comes off of the "dealer invoice" price of the truck....

I still can't help but feel that those "dealer invoices" are complete bull ***** and likely have a ton of mark up built into them....years ago those "dealer invoices" were just sales propaganda...usually having several thousand built in....

I just went through this two weeks ago when I bought my truck.... I could not get them to budge off of the dealer invoice price OTHER then the $3500 in rebates I got....... For example, my truck MSRPd at $46,200..."dealer invoice" was like $42,000. Then subtract the $3500 in rebates and it put me at $38,500 before TTL....after all was said and done, I drove out for $41,400 or so..... The dealer hold back was $1338. I just have some suspicion there was still quite a bit of mark up in that dealer invoice but.....these were similar numbers at 4 dealers I went to so..... I was just ready to be done with it and took the tater....

You can't believe anything any of those bastards at car dealers tell you.....98% of them are slime *****....and the Finance Managers are the WORST....

 

Yep dealer invoice price is BS, they can basically make up a number and put it on paper. If invoice price was correct then all the small dealers would go under because they don't move enough vehicles for $1000 profit per vehicle to pay to keep the doors open.