Quote:
Originally Posted by GearHeadDave
The real problem is finding the dealer's "true cost", holdback and incentive. We used to be able to get "invoice cost" and work from that, but dealers have gotten smarter about hiding that information.
Here's an example:
$22,239.00 = Sticker price of new car
$20,839.00 = Factory invoice
-$444.78 Subtract dealer holdback (2% of MSRP *amount varies)
-$1,000.00 Subtract dealer incentive ($1,000 factory to dealer incentive)
$19,394.22 = True dealer's net new car cost
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Remember, the goal isn’t to try and get the dealer’s margin down to 0. It’s to get a new car at market rates.
In reality some cars will consistently sell at a loss. Working toward that $19k when everybody else gets them for $18k is counter productive. Likewise, a rarer car (especially if you’re picky about options), will sell for far more than the dealer’s cost.
If you’re the only person on the world who knows the dealers cost, and nobody else does, they’ll just sell to everybody else and that information will be useless. They’re not going to sell you a car for $19k if everybody else is willing to pay $21k.