Dealer confirmed retail and invoice pricing on BRZ

[Ryephile]

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.

[bestwheelbase]

Originally Posted by brillo

its hard to believe thats enough profit for a dealer to remain in business

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

[RWD_only]

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.

[Dark]

Great great info. Thanks man.

[Kostamojen]

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.

[eikond]

Originally Posted by Kostamojen

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.

[thermobox]

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.

Originally Posted by eikond

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.

[Spaceywilly]

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

[Longhorn248]

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.

[Dimman]

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.

[eikond]

Originally Posted by Longhorn248

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.

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!!

[Oriental Life]

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)...

[Longhorn248]

I was told by my salesperson that any accessories that I'd like can always be added after the car is delivered by the dealer. The only thing I'm really considering right now would be the homelink mirror which I would probably just install myself anyways.

[Oriental Life]

Originally Posted by Longhorn248

I was told by my salesperson that any accessories that I'd like can always be added after the car is delivered by the dealer. The only thing I'm really considering right now would be the homelink mirror which I would probably just install myself anyways.

That worries me, those 'don't worry' promises. I kind of hope getting at least add-ons at invoice, rather than MSRP. Well, we'll see.