Dealer confirmed retail and invoice pricing on BRZ
 

Got some new info:

https://lh4.googleusercontent.com/-l...brz_retail.jpg

Thanks.

Thanks bro!

Thanks.

I was in car sales about 8 years ago and at that time a $25k car had about 10% margin between MSRP and Invoice.. Now they are down to about 5% or less. It seems they are shifting the profit margins into holdback and marketing accounts. Smart on the seller side because the general consumer still things "invoice" is what the dealer's cost is. So they think if they get invoice that they got a great deal and got the dealer to come down as much as possible.. But, the dealer can still sell the car for invoice and make over $1k not including financing and other items.

I was really hoping the invoice margin was going to be bigger because I have that price pre-negotiated.. I could get the FR-S with the college grad $1k rebate as well, but I like the BRZ much more.

bumped for the noobs who are too lazy to search and just post new threads asking about invoice....sticky maybe?

Do they get the $550 holdback if they sell the car above invoice, or is that only if they sell it at invoice?

Can someone walk me thru what all the dealer invoice, holdback, floor plan etc costs are for the dealer. I want to see how much money dealers r making for selling this car at msrp. Thanks

Dealer gets to keep holdback, marketing, floor plan and gas allowance regardless of what price they sell the car for.

holdback and marketing are fictional categories designed to help the dealers keep more profit. They used to lump all that margin into a lower invoice price. But, since customers, buying groups like truecar and Costco, and the general proliferation of the internet has made all consumers think they deserve invoice pricing, the dealers and manufacturers have moved some of that profit into other categories.

In theory, the holdback was always just a little reserve to help the dealers be competitive. The marketing thing didn't exist when I sold cars.. but the theory now is that it helps them cover their sales and marketing expenses. Floor plan has always existed.. the dealers have a line of credit to cover the cost of the cars they buy from the manufacturer called a floor plan. The floor plan credit is designed to cover 30+ days of interest on that line of credit. Gas allowance clearly covers the cost of gas while on the dealer lot and for a full tank for the buyer to drive home on.

what was the pre-negotiated price?

Thank you!
So long story short, the dealers make money

House always wins.

Here is how I understand this, someone correct me if I am wrong.

Let's use a Limited 6MT as the example:

Basically, while SOA lists an invoice price, the dealer also gets to keep hold back, marketing fees, floor plan, and gas fees as part of any deal they sell.

So it keep things really simple, if you want to know exactly what it costs the dealer for this car here ya go.. (this assumes that the dealer will pass on the $770 destination and delivery fee directly to you ...which they will)

Model DZE
Invoice = $26,882
Minus hold back - $550
Minus Mkting adj - $550
Minus floor plan - $200
Minus gas. - $75

Real cost of car to dealer $25,507

Purchase car at MSRP $27,495

Profit $1,988

Even more if the dealer's a **** and doesn't fill up your tank, which I've seen in the past. Don't forget their doc fees and other some such.

Yea...my math was strictly what is costs them...plenty will be adding all kinds of charges.

I also believe some large dealerships that have a higher volume might buy at a lower cost.

Costco sized BRZ allotment = Costco cost BRZ? :lol:

Possible to get a Limited 6spd for under 30K OTD. Too bad I ordered mines already.

Wow. Thanks. Helped alot.

Truer words were never spoken.

Doc fee is a b/s paperwork fee, but all dealers charge it and to sort of play devil's advocate, there's a crap ton of paperwork to do. Additional fees are at the dealer's discretion. Bottom line is, they're a business selling product. I'd hate to ask what the AT&T store makes as a percentage profit on an iPhone, or what the grocery store gets as a percentage profit on RedBull.

Thanks for your post. It helps explain how invoice isn't really dealer cost and how there are other factors going in to the purchase that are not so well known.

I prefer the simpler approach. Keep things transparent and let people either buy it or not buy it. This obfuscation is what leads to people getting jerked around.

Thanks for the info!

Nice! :happy0180:

Do you have Scions invoice as well? Don't forget the options are invoiced too.

This info will be helpful once cars aren't selling for MSRP. Knowing exactly what the dealer is taking home on a certain price definitely helps at the negotiating table. Especially when you order a car since their actual spent cost is next to nothing compared to cars sitting on the lot.

Which makes an interesting discussion for someone who doesn't need the car right away it probably is worth saving $1200 for when VIP works and/or you can better negotiate. $1200 is quite a bit to save.

its hard to believe thats enough profit for a dealer to remain in business, but I guess this isn't a volume seller like a Camry or Accord.

For a car that will stay on the lot for ~10-15 min after it is prepped? Seems like a large profit to me. This isn't a car that will be sitting on the lot for a long time (at least not at first) where the dealer will need to be paying interest on their own loan.

Thanks OP for posting that info. It's good arsenal to have when a sleeze-ball dealership decides to play a pity card and try to tack on a "market adjustment", you can throw it back in their face with gusto. They're getting a super easy $2k profit for customers running into the dealership and willingly paying MSRP.

Good point. With all the balloons and giant letters (to hold hoods open) and annoying television commercials... it's a wonder anybody gets paid. :bellyroll:

More profit is made on selling used cars compared to new ones. But dealers with service facilities make their killing on repairs/maintenance. Example: the $440 I paid for diagnostics on my old SC300.

Great great info. Thanks man.

Wow, the margin is lower than I expected. Usually its around $2000 between Invoice and MSRP on a car in this price range, this is just over $1000. Must be due to the high value of the Yen.

The real margin is more like $2400. They have just shifted some of that margin into new or expanded outside categories. The marketing allowance is relatively new and the holdback is increased over what it used to be in the past. Make no mistake.. they are both profit for the dealer.

They are making about $1200 between invoice and MSRP plus another $1000 for marketing and holdback. They also get another $200 for holdback..

So even a sale at invoice is earning the dealer more than $1200 profit.

Plus, they also make money on the finance end of things if they write the loan for you. Even if they don't write a loan, they still usually charge a doc fee of some sort that helps bring in more money.

Even still, selling new cars is probably the least profitable part of the dealership. Service is most profitable, followed by used car sales.


Now.. having said all this.. They should be profitable! I'm all for getting a good deal on a car.. but I don't believe dealers should have to give away cars at no profit. For some reason our society has villianized dealerships and think that any profit they earn is theft. That's crap! Every other business you walk into is expected to earn a profit. Very few business work on such low margins. A nice profit for a car dealer is 10%. Do you think your clothing store, jewelry store, doctor, dentist, painter, plumber, childcare center, or any other place you buy from works on less than 10% margins? (I just thought of an exception - Groceries stores probably operate on under 10% margins.. but they are very high volume)

k.. off my soapbox.

Again, truer words were never spoken. Thank You.

What the consumer fails to understand is all of the work that goes into selling a car.

There is so much going on at dealers constantly that people don't see and so many more employees involved in the sale than just the Salesman.

PreOwned Mgr - If there is a trade-in involved.
Inventory Mgr - To stock the car or dealer trade and all of the paperwork invloved.
Clean-up - It doesn't come to the store spotless.
Porter - To drive cars to and fro gas, inspection, delivery, etc.
Finance - To process the transaction properly.
Tag/Title - Process the registration, county, city, tags, title, etc..

What many people don't understand is that there are fees that we will have to pay internally to sell a car. A "pack" fee which will eat into the holdback.

Many dealers can't get by on holdback alone and still stay in business. This was a big problem with the american mfrs. We all got to see what happened to them.

I understand that you guys have had some bad experiences with car dealers. I used to call car dealers "stealerships" because of some run-ins that I've had with shady dealers.

But we aren't all bad and shouldn't be lumped into one.

I work very hard for very little pay-off most months. This is because I love my product, customer and store.

I am very blessed to be where I am and these are the reasons I stick around. It's definitely not for the money.

So please try and understand that we are a business providing a service and product. We should be allowed to stay profitable and continue to stay in business.

Per-dealer profit is at the highest level since NADA started reporting it in 1970. New car profitability hit its lowest point in 2009 and is now back on the upswing.

http://www.autonews.com/article/2012...IL07/303269967

http://www.nada.org/NR/rdonlyres/079...11.pdf#page=21

I'm going into the dealer today to try and get the final OTD price figured out and on paper. I'll report back with numbers once I get them.

Do dealership managers get a personal performance bonus like managers of some of the big box stores? (Buddy is an assistant manager at Walmart here and he gets an annual bonus based on the store's profit or something...)

Something else that could play into negotiating once the hype comes down. If they do, and you have an idea when cut off is, make your deal then. They may come down a lot more to increase their personal bonus.

I'm still waiting on my dealer to get his "official" info on accessories. I think I want the auto-dim mirror with homelink and I'm considering the interior illumination. I think that comes together in an option package based on another thread I remember reading.

The tough call will be depending on due date and whether or not the addition of accessories creates a significant delay in shipping the car to me.

So I haven't done the math yet on my final price. I'm also in the process of moving from Ohio to MI.. I think I'm going to try to convert my residence officially before I take delivery because MI has slightly lower taxes.. plus then I don't have to pay title and reg. in two states.

I'm really hoping to get my car before May 11th. Fingers crossed!!

Isn't start of sales (contract underwriting) next week, around April 20th? If you have your pre-order spot, should you rush into a contract now, when not all accessories have been yet released?

Again waiting it out will show how on average price is doing (below-at-above MSRP, etc)...