How much can you save on a car at a dealer?

[iamweasel]

Originally Posted by Ted Bear

Determine the exact make and model car which you wish to own.

Determine the dealers cost.

Offer the dealer his "cost"...as long as he shows you his invoice.

THAT is how you buy a car.

No hassles. NO haggling. No fussing about rebates.

Here's the price: Yes or no?

If the answer is no, then move along to the next dealer.

Do you really think a dealer is going to sell you a car at cost *AND* show the proof to you? You are kidding yourself. I work in the business and lets just say customers like you are hilarious. Many dealers have 2 sets of "invoices" to show customers the "cost" and even then that doesn't take into account the off-invoice incentives like dealer cash, stairsteps, etc.

Sometimes selling it at "cost" shown on the "invoice" is absolutely great for a dealer. I don't know why people think they can get the real "cost" of cars online, etc. There is so much mis-information out there and even "experts" like Edmunds, etc, don't have good info. They can be in the ballpark sometimes but the more "off-invoice" incentives there are the more places like Edmunds are wrong.

Those "I got your cost online" customers are easy prey. To truly get the best deal get 2 different dealers to bid on each other for the same car. That is how you check each one against the other and sometimes you can get a better deal than the "cost" shown on the "invoice."

[jm1982]

Yeah i've always been suspect about the "invoice" cost.

They are in business to make money so it doesn't seem to make sense they would sell at cost.

What does a dealer make on a new car that is around $20,000..I guess it probably depends on which brand/model too?

[iamweasel]

Originally Posted by jm1982

Yeah i've always been suspect about the "invoice" cost.

They are in business to make money so it doesn't seem to make sense they would sell at cost.

What does a dealer make on a new car that is around $20,000..I guess it probably depends on which brand/model too?

On a typical $20,000 car a dealer will make about $500-$750 profit per car. Margins in the car business are very, very thin largely due to the massive amount of competition with dealers seemingly on every block. (And for those of you who are supporting Tesla's bid to sell direct be careful what you wish for. 50 years from now if direct sales from the manufacturer are permitted then that could lead to higher prices for consumers due to lack of competition. Instead of having 10 Ford dealers in a given town they could just have 1 or 2 and collude on the prices.)

That being said, sometimes you CAN get a car for lower than a dealer's true cost and most of the time that is because of a stairstep program. Those are the root of all evil and create the games that you see these dealers playing. Manufacturer's love them but most dealers (especially salespeople) hate them.

Basically it works like this. Ford might publish a stairstep program on Fusions this month and will give a dealer the following incentives:

- For the 1st to the 50th Fusion sold this month a dealer gets no additional incentives.
- For the 51st to 75th Fusion sold the dealer will get $250 per car RETROACTIVE to ALL FUSIONS SOLD.
- For the 76th to 100th Fusion sold the dealer will get $500 per car. (Again....RETROACTIVE.)

So if a dealer is trying to get to that next tier they could sell cars at a loss to get there, but still be better off overall due to getting those stairstep incentives on every other car sold that month.

It's a pain in the ***** to manage and just drives all kind of wacky behavior with the gamesmanship it requires.