Dealer Markups

[~el~jefe~]

Originally Posted by Yoshoobaroo

Your use of that word leaves little to our imagination about who the actual moron is.

democrat?

[dpfarr]

Originally Posted by Yoshoobaroo

Your use of that word leaves little to our imagination about who the actual moron is.

Holy shit do I feel that way when Siri predicts that is a word, let alone a word I would use.

[Yoshoobaroo]

Originally Posted by ~el~jefe~

democrat?

Guess I was right, only an idiot would deduct political leanings that statement.

[~el~jefe~]

Originally Posted by Yoshoobaroo

Guess I was right, only an idiot would deduct political leanings from a completely fact-based statement.

Leave a forum for a few years and all the most moronic remain.
FOLLOW THE SCIENCE
WEAR YOUR MASK
etc

[Dadhawk]

Originally Posted by FrickingReallySlow

Don't make MSRP your goal...invoice price + $500 should be the target

This works (and I've done it) when a dealer is involved. It's when you go "direct to manufacturer" you lose that ability. It then becomes basically like ordering anything else online from a non-auction site. Again, RE: Tesla/Carvana.

[Veloist]

Regarding factory orders...there is still an element of supply and demand.

- Today is August 20th. At this point I already know my September Allocation. Any car I order today will go to October allocation or beyond.
- Let's say I am projected to receive 20 cars for the month of October.
- Let's say I put in 5 orders today that will count toward my October allocation.
- If you do the math (20 minus 5) that means I have 15 cars left for allocation.
- However because of logistical reasons, the manufacturer caps factory orders at 25% of Allocations.
- Let's say I put in 1 more order today.
- That order gets a November allocation since I have already maxed out at 25% orders for October allocation.

But let's look at a legitimate scenario in today's market.

The Toyota dealership across the street from me is getting 0 cars for October Allocation due to the inventory and supply chain hardships. Any cars coming in are due to a little luck if there's any overflow or early November shipments.

If I walk in and ask to order a GR86 and try to negotiate $500 over invoice--roughly a $1700 profit...why would any competent manager WASTE a valuable allocation when they can use said allocation on a RAV4 that is selling $3000-$4000 above MSRP ($5000-$6000 profit)?

Edit: To be even more specific, the dealer probably will only get 3-5 GR86's for the first month (November). If manager knows there's a market where 3-5 people will pay full MSRP or more...they will keep those GR 86's on the lot until those buyers come in.

In today's market, supply and demand is still the biggest influence on your car's price whether you order or not.

But people are right. If you put the legwork in and commit the time you will indeed be able to find at least 1 or 2 dealers willing to give below market value. Keep in mind market value can be different from MSRP.

It's just a little harder and definitely more time consuming. And if you keep sharing the same dealer who is giving 500 over invoice like candy, their allocation gets filled fast or they find the demand is high and change their price.

This happened with my competitor dealer (Subaru) with Crosstreks who were quoting $500 over invoice on Crosstreks and are now at MSRP even with orders. This dealer doesn't have any Crosstreks coming in until end of September. Whereas I have about 4 in stock and another 5-6 coming in first half of September. My other competitor is at $3000 over MSRP for both orders and in stock cars they have about 10 in stock.

[Veloist]

To be honest, I had a customer tell me that another Subaru dealer offered $500 off MSRP on an order for a 22' BRZ. I had to let them go because that's way too little profit for the market right now (but a very good deal for the customer).

I have a feeling the dealer offering that price is the same dealer who was offering the Crosstreks below market value.

[Yoshoobaroo]

Originally Posted by Veloist

To be honest, I had a customer tell me that another Subaru dealer offered $500 off MSRP on an order for a 22' BRZ. I had to let them go because that's way too little profit for the market right now (but a very good deal for the customer).

I have a feeling the dealer offering that price is the same dealer who was offering the Crosstreks below market value.

Is that before or after the ‘dealer fee’?

Not being snarky, I’m genuinely curious.

[Veloist]

Originally Posted by Yoshoobaroo

Is that before or after the ‘dealer fee’?

Not being snarky, I’m genuinely curious.

Hm not sure I understand what the "dealer fee" refers to. Mark-up is usually included in the sale price before tax and fees are presented.

Customer basically told me $500 off MSRP plus tax and DMV registration fees. I believe that's just the standard tax, titling, and license in CA.

[Yoshoobaroo]

Originally Posted by Veloist

Hm not sure I understand what the "dealer fee" refers to. Mark-up is usually included in the sale price before tax and fees are presented.

Customer basically told me $500 off MSRP plus tax and DMV registration fees. I believe that's just the standard tax, titling, and license in CA.

Sorry, meant if it’s too little profit before or after you count the dealer fee / documentation fee into it? Or does the dealer fee not have any profit ‘built in’?

Edit: nevermind apparently dealer fees are not a thing in most states. Ugh Florida. This is why we need direct sales.

[Veloist]

Originally Posted by Yoshoobaroo

Sorry, meant if it’s too little profit before or after you count the dealer fee / documentation fee into it? Or does the dealer fee not have any profit ‘built in’?

Edit: nevermind apparently dealer fees are not a thing in most states. Ugh Florida. This is why we need direct sales.

Ah that make sense. In CA the Documentation Fee is capped at $85.00. That doesn’t go toward a dealer’s gross profit.

Ive seen some states with documentation/dealer fees of several hundred dollars but with significantly less sales tax %.

[FrickingReallySlow]

Thanks for sharing, I agree in today's environment its not going to be easy especially on a new model that's going to popular (no 2021 twin production and everyday more get wrapped around tree or blown engine)

record profits for dealership groups right now especially the F&I department

Originally Posted by Veloist

Regarding factory orders...there is still an element of supply and demand.

- Today is August 20th. At this point I already know my September Allocation. Any car I order today will go to October allocation or beyond.
- Let's say I am projected to receive 20 cars for the month of October.
- Let's say I put in 5 orders today that will count toward my October allocation.
- If you do the math (20 minus 5) that means I have 15 cars left for allocation.
- However because of logistical reasons, the manufacturer caps factory orders at 25% of Allocations.
- Let's say I put in 1 more order today.
- That order gets a November allocation since I have already maxed out at 25% orders for October allocation.

But let's look at a legitimate scenario in today's market.

The Toyota dealership across the street from me is getting 0 cars for October Allocation due to the inventory and supply chain hardships. Any cars coming in are due to a little luck if there's any overflow or early November shipments.

If I walk in and ask to order a GR86 and try to negotiate $500 over invoice--roughly a $1700 profit...why would any competent manager WASTE a valuable allocation when they can use said allocation on a RAV4 that is selling $3000-$4000 above MSRP ($5000-$6000 profit)?

Edit: To be even more specific, the dealer probably will only get 3-5 GR86's for the first month (November). If manager knows there's a market where 3-5 people will pay full MSRP or more...they will keep those GR 86's on the lot until those buyers come in.

In today's market, supply and demand is still the biggest influence on your car's price whether you order or not.

But people are right. If you put the legwork in and commit the time you will indeed be able to find at least 1 or 2 dealers willing to give below market value. Keep in mind market value can be different from MSRP.

It's just a little harder and definitely more time consuming. And if you keep sharing the same dealer who is giving 500 over invoice like candy, their allocation gets filled fast or they find the demand is high and change their price.

This happened with my competitor dealer (Subaru) with Crosstreks who were quoting $500 over invoice on Crosstreks and are now at MSRP even with orders. This dealer doesn't have any Crosstreks coming in until end of September. Whereas I have about 4 in stock and another 5-6 coming in first half of September. My other competitor is at $3000 over MSRP for both orders and in stock cars they have about 10 in stock.

[CaptainFenderbaum]

Originally Posted by Veloist

Keep in mind market value can be different from MSRP.

The above is the simple truth. Like many simple truths, failure to recognize or accept it can lead to acute posterior discomfort.

[Alltezza]

Yeah I'm anticipating stealership mark ups, for at least the first year.
Give it about a year or so and it should calm down.


Hopefully all the shortages and supply chain issues iron itself out by then.
We'll see what happens.