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Comments
I would suggest that the F&I profit is too low. At many dealers I worked at it was in the 1600 range.
You may not even hear the lowest rate as some bank offer the dealer more profit on a higher loan.
At many of the dealers I worked at there was never much real commission. Even on a car you took in for 10,000 and sold it for 14,000 the next day. Somehow there was always 3500 worth of work done on it in that 12 hour period.
There is also a lot of bonus money paid on units sold that is not included in the story,holdback or the commission paid. This is based on units sold and can be up to 1500 per car.
I think any midsize car dealer is making at least a million a year for himself and there is no reason to worry about him.
i have been in the auto business for 20 years now, it has changed a lot.
where is edmunds getting that we get $2000 dealer cash... i am a ford\dodge combo store and ford VERY rarely gives dealer cash,,Chrysler has an objective based cash, but it might get you $500 per car, IF you meet the objective,,,,
TO the thumbs down people that think $1000 profit is enough, lets break that down,,,
salesman gets apprx $200
floorplan $200 << thats if it sells quickly and not a 50k diesel
fuel fill up $100<< no, ford/chrysler doesn't reimburse us that
i am stopping here for a reason:
first
at our store, avg price of a new truck is say $35000
that's less than a 3% return
assume we sell 40 new vehicles a month
40x$500= $20000 ($500 remaining from above)
out of that the dealer has to pay the following
himself,title clerk,sales mgr,acct. payable,secretary,detail,light,water,gas bill,pens,paper,copier,computer software,building cleaning,insurance,
DO I NEED KEEP GOING?????
IF YOU WANT TO BE A HAPPY CUSTOMER, PAY ME ABOUT $3000 PROFIT, WHY?
because when you have a problem, i can help you.. need someone to figure out the garage door programmer or the radio? my salesman will happily help you, same with picking up your car at work for service etc.
I can do this because i made some money to afford it....
USED CARS
I find it hilarious that people want to argue over a few hundred dollars..
when i am at the auction, the same car may bring $1000 more one week than the next or it may bring more in one auction lane than the other..
you tell me you found one down the road for $500 cheaper and i say go buy it, why? because i probably replaced the air filter, serviced the transmission, and put plugs in mine.... did they??
will they help you after the sale???
my whole point here is that YOU the customer and edmunds do not look at this side of the business. a $1000 swing on a used car is nothing due to a lot of factors....
a car dealers happiest customers are the ones we make money on.....
I have used Edmunds advice to negotiate cars and have always gotten a good deal. It is not easy, but it can be done. In the end, I got a good deal and the dealership still made money. That is the real win, win.
There is nothing better than seeing car dealers getting cleaned out and going out of business.
The concept of car dealerships is too old and needs to be gone.
Thanks to websites like truecar.com, edmunds, cars.com we, the consumers now have power to negotiate and deal with these blood suckers.
In a consumer driven capitalist economy, car dealerships need to be eradicated.
An online sales with factory support centers is the future.
I can order my Mercedes exact to the AMG door pins online - I do not need dealerships.
For those working for car dealerships find another line of work. You have made a living of lies and deceit.
You time is running out. watch when car sales are strictly online - you will die a slow starving death
The rules of the game were created by dealerships, for the benefit of dealerships. If the simple fact of both parties understanding the rules makes it difficult for you to make a living then you need to re-think the rules. Because what you're really saying is, "without my ability to lie, I can't make money."
I understand that many salespeople work 10 + hours a day. And I understand that you're all just trying to make a living. But that's a beef you need to take-up with the dealership, not the car buyer, and certainly not with an article that gives people the information they need to negotiate an honest deal.
People that get a Great deal usually get better treatment and those customers that are not Difficult asking for stupid pricing always get the goodies! the service and part dept tipically takes good care of them - We are in business to make a profit a small profit we are not a charity center, how many people go to work for free?? NO ONE ALSO TELLS THE CUSTOMERS THAT WE DO NOT GET A SALARY WE ONLY GET PAID IF -ONLLY IF WE SELL A CAR! We stand in the rain, heat - cold weather all year long!
then we get some Hindu asking for BS prices ! GTFO!!
BBB Fees, advertising fees, vehicle history report fees, bond to protect customers, credit card or paypal fees, cash deposit fees, and the list goes on and on. The small car lot is making a decent living if they sell enough cars but if this writer thinks that we sell one car a month and go home a play with our kids all day he is mistaken. You have to be skilled at buying and selling/reconditioning used cars. We deserve every penny we make and this guy makes our job even harder. Thanks for that!
Handy that you have all of the tools to fleece the dealers out of business. I love these imaginary profit margins that haven't existed for years. Most dealers I work with have a net profit somewhere around 3-4%. As websites like Edmunds and TrueCar push down the profits on the front ends of deals - dealers make the money elsewhere, and the shell game continues. You pretend like you're giving the consumer knowledge and power, but in reality Edmunds is just making money perpetuating the game.
Cars are just like any other commodity sold, except you don't walk into Target, Bed Bath & Beyond, Nordstroms, Foot Locker, Best Buy, or any other retailer telling them you know exactly how much they paid for something, and you're only willing to pay them 5 or 10% more than that. These companies all have similar overhead - real estate, power, gas, employees, insurance, advertising, etc.
Why don't you take Edmunds public and let the public and dealers have a look at your financials? Let them negotiate with Edmunds over the price of your services. You guys must be making a lot of money if you're offering the highest commission on affiliate leads in the automotive category!
Right this moment, I am going to dealerships for the first time in 10 years - because they simply have the selection. I can USE them to understand cars again. After sticking to 'private sellers' for the last 10. WOW. Nothing has changed. They are ALL [talking about Dealerships here, NOT the shady guys next to the Pawn shops] in 30 years. STILL the same lies, same delaying - kidnapping [holding you till you give in] and BS "market value", "retail price", and other fake terms - as if they don't realize we have the Internet now. LOVE the lies about all they DO to a used vehicle, until you actually ask them to verify what they tested, refurbished, or gaurantee, then suddenly the story changes. You still hear the line "literally driven by an old couple" all the time - really sad.
Here is what I do. Go in with my price in mind, willing to walk away, and after you make your offer and get that "LOOK", right before they walk of shaking their head to "talk to the manager" - which is guaranteed to elicit a response of "Wow, my manager is in a good mood and willing to meet you half way!!" - before you get there, and stick to your price...say this: "Look Bubba [or your salesman's name], I can tell you are someone I want to deal with. This is my offer. Understand, I'm not just buying a used car from you. Bubba, I'm trying to build a relationship. You don't make money in your business on a one-time profit, and either do we in life. It's about the long term. Sell me this car at what I know is a fair price, and lets build a future of business together." LOL. This line, in one form of another is THEIR garbage and is a master neutralizer. It will shock them to the core and they'll either take the deal or walk. Remember, they are getting 40-60% profit on those 'trade-in' cars, so trust me there is room for negotiation. Especially, on the ones they call "wholesale to the public" - which is them gambling on a high profit Finance deal - or they go to auction.
The last time I had a car on Craigslist, the first offer I had by someone actually looking at the vehicle in person, I told him this: "That might be a fair offer, but since this is the first day I want to wait to see what the market will bring. Give me your number and I call you back in a week or sooner if my price is too high." Why can't a car salesman say that? I sold the car THAT day, because the buyer's desire to have the car and feeling my price was fair enough overrode the delay, or chance he'd loose the deal.
You need to approach a car purchase willing to walk away, OR just buy it and shut up.