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The obvious ones are to sell at MSRP and give really low offer on trade-in.

So besides that...

1) Does a dealer make more on an ordered truck or one that has been sitting on the lot for 6 months?

2) Does a dealer make more selling at a/X-Plan or $400 over invoice

3) Does a dealer make more selling one off their lot or doing a dealer trade

I know of the 3% dealer holdback and all but... what is the minimum amount of money a dealer would hope to get selling a truck with a MSRP of $40,000 and a trade in that wholesales at $23,000? Offering $20,000.


Thanks...

BB

 

As much as he can possibly screw you out of...

seriously though, don't know.

 

dealers make more money on used cars than they do new cars. They make money by selling in volume, not so much how much they sell each vehicle for. They also make their cash in the finance office. In order to know what the dealer is making off that 40k truck you need to know the actual cost, not invoice cuz thats bs. All this hinges on when they purchased the vehicles and what dealer incentives were offered at the time. Your not going to find that info out unless you know the owner of the dealership. If they are offering 20 you can bet they are gonna sell it for whatever private party prices are due to financing. So perhaps 27ish. So thats 7k of free money right there plus whatever % they are grabbing from the financing assuming its financed through ford, plus whatever % they get from ford in incentives and volume discount for cars sold for that particular model. All that equals an assload of cash for the dealer and a need for lube for the customer.

 

They also make money selling warranties, parts, service such as rotating tires, oil changes, general repairs, some have body shops, and accessories such as covers, bedliners, mudflaps, steps, etc.

 

not all the time, selling warranties varies..at times they will and at times they wont, it all depends how well they are doing.

and i have never heard of a dealer making money off of selling bedliners, mudflaps ect... they NORMALLY INCLUDE such items for free.

and as for dealers making off on customers, they make decent money on used cars but not on new cars, on new cars they very rarely will sell at the full MSRP, and i have never heard of a dealer making 7 grand off of one sell..lol thats crazy...maybe 900 the most..but never have i seen 7 grand.

remember the dealership will get a large percentage way before the dealer would.

 

When I was going through my buying process to get my 04, the guy I was dealing with. A fleet manager by the name of Bob Kailey, I will reccomend anyone to him, you get a price, he'll beat it. Guy is friendly, and a good man. My family has bought three Fords from him.

But back on topic, he shared a little trade secret with me. Ford, or any make, issues these books about thier car models. He was showing me the book on the F150, and it was about, as thick as a dictionary. It gave full indepth descriptions as what truck belongs to what person. And in the beginning there's a table of certain questions the dealar asks you and your answers reflect the truck/car/SUV they offer you.

I've heard of dealar's screwing people, but if you don't know what you want walking into the dealarship, that is when they are gonna make some money off of you. But if you walk in, get approached by one of them, tell them exactly what you want. Don't take the 'leather package' if you don't want it. Just be straight to the point and tell them what you want. Also make sure you become friends with the person. Because they'll offer and give you valuable discounts, rebates, etc with the next vehicle you purchase.

 

I used to work for an auto finance co. back in the 1980's. I learned a lot about how this business works.
1) Used cars are higher profit than new cars. Any consumer can get the dealer invoice on a new car. Makes it hard to "gouge". This is not true for used cars.
2) Dealers make money on financing by charging the customer a higher interest rate than he would normally qualify for. The lenders give dealers rebates based on the interest rates charged.
3) Anything sold in the "finance office" is high profit. This includes service contracts, security systems, credit insurance, appearance care packages, etc.
4) If a dealer can give you a low price on your trade-in, he makes a bigger profit when he sells it used.
5) Dealer installed options are marked up. If you get these things for free, you did great. If you paid, you were probably charged a high price. A $160 bedliner can sell for $399. A $300 alarm is $499, etc.
Best way to get a good deal is to look at the transaction on 3 levels;
1) Get the best price on your new car. Look at sites like www.carsdirect.com for accurate quotes.
2) Get the best rate on your loan. Get pre-approved by your bank, your credit union, or the auto club. Do this before you go to the dealer.
3) Sell your trade-in before you buy. Use the cash for the down payment. If you want to trade-in, look at www.kbb.com (Kelly Bluebook) and research the trade-in value of your old car. The dealer may even try to mislead you by claiming a lower 'book value'. If you call him on the difference, he will tell you he misread the value; wrong year, wrong mileage, wrong options, etc. He will always claim it was a simple error, not a deliberate fraud.
The best deals are the 'advertised specials' if you can find one you like. You may have to work hard for this. Dealers may tell you it is already sold or try to 'upsell' you to a higher priced car.
Always remember that the dealer needs to make a profit to stay in business. Your goal is simply to get the best price on the vehicle you want.
If you can deal with a "fleet manager", they are generally lower pressure guys. Not so much 'hard sell'. Make them compete with the 'internet' sellers.
If you must deal with a floor salesman, go to the dealer near closing time. Everybody wants to go home on time. A deal might take 5 hours during the day to complete. At closing time, the same deal is finished in under an hour.
Finally, try to find good dealers for your business. Some are definitely better than others. Reward the good ones, punish the bad ones. If you feel you are being treated poorly, LEAVE that store and go somewhere else.
Good luck.

 

Good post RedFord150

 

While I will attest to most of the statements made on this thread.
Here goes some logic from someone who has trained car salesman and worked in multiple dealerships.

1. Don't ever believe you are actually getting the dealer invoice. And for many reasons; in some parts of the country (the south being a shining example) trucks and SUV's are the hot sellers and as such cannot always be gotten (same as convertibles in california being abundant but not in Maine) don't believe that some yutz with a high school diploma on the other end of that phone is going to tell you what Acme motors in duluth spent on 05' Expedition, because he does not know and if he does and reveals he will be taken to court in a second (dealer records are covered under federal industrial espionage laws, as well as state and local protectorates for businesses). Some dealers will have paid hundreds over what you are told while others paid Thousands!! less and you the average consumer go in thinking you have got a great price when you just got shafted and they didn't even have to work you.
2. Used cars are the bread and butter of profit margin...not the only source of good revenue. Just because you make a higher margin on used (and that is only due to the lack of comparitive sources that are available for new vehicles), new sales are almost always higher (except in rebateless recessions) and overtake used cars in the pure profit department.
3. The financing statements are completely accurate. If you have a credit union or trusted lender. Go through them, you may have worked an incredible deal but trust me; finance with your dealer and you just negated it. Great advice on financing
4. Dealer options are always marked up and the number one reason given is "well you have to remember, that price includes installation and shop A is just quoting the item; not the install" or number two being "but with our install it's covered by your factory warranty"...guess what five out of ten dealer installed items are not covered by factory warranty because they will sell you an aftermarket acc. that the purchased rather than the Ford authorized version.l
5. You do not need to sell your trade-in on the open market in all instances. If you have a very clean, low-mileage and documented maintained vehicle with a blue book and some local ads average it out. If they can't match it, then go the more difficult route of getting a stranger to take over your payments after racking up miles on test-drives and attempting the payout on your vehicle can be a pain with some loan companies
6. Definately follow the Fleet advice as they can sell any vehicle on the lot and really are laid back as business generally comes to them
7. If they try and sell you a basic service plan (not extended warranty, but that is a bitc$ as well) do NOT take it. You can do the exact same services through other dealers who want to steal your service needs from the purchase dealership and will usually try to give you real incentives (that you did not have to pay for) to stay with them for your major auto needs in the future.
8. And this is the MOST important thing you ever need to know about car buying. No matter how you feel about a vehicle; even if it's exactly what you wanted. If you feel you are being slighted in any manner, stand up and thank the person for their time and walk. They will (unless they want to lose their jobs) try and stop you and work out any differences you have on paper.

 

I second that....I would like you to go with my wife and I to purchase our Ford Five-Hundred.