Well you have to define "dealer cost" and that can be many ways. If its COGS (Cost of Goods Sold) then its what the dealership paid for the car and the costs of getting it ready for the sale.
You can also cost out the car to include portions of all direct costs (i.e. sales commissions) and indirect costs such as property tax, utilities, office staff and the like.
So you have a wide range if you don't specifically state what "costs" are.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
As a liberal, I do take some satisfaction that we liberals at least know something! Knowledge is a rare thing these days, espeically within the GOBP. I thank Mr. Reagan for his kind remarks.
Regarding how much money a car dealer should make is not relevant to me as a customer. I am only concerned with how much I have to pay for the vehicle. Dealer profits are dependent on many things. In some instances a dealer may be willing to sell a vehicle at a loss or at a very minor profit simply to cover the dealership's fixed costs. If a dealer is willing to sell me a vehicle for my price, why should I have concerns about the dealer's profit?
I agree Hondas. Snake is obviously the only person knowledgable enough to post responsibly in this forum.
Yes invoice is what dealers pay to have a car in inventory. Yes there are programs in place to help defer costs like invoice, or occassionally factory to dealer incentives.
I sell Nissans ( interent manager) and the mark up is usually in the range 5% if you including hold back.
Just a tidbit: I recently quoted somone on a vehicle and the since the lead came from Edmunds, I went $500 under the TMV price in the hopes of ensuring her business. She came in and asked (demanded, but I don't want to seem harsh) more money off. When I showed her it was less than the market value for our area she said "we" pay those websites so those numbers don't matter yet she was using information "from hundreds of websites" to tell me her price was justified. We sold her a car for $150 less than my origional offer but these are the cases where I'm scared to see what she will do on the survey which could be more damaging than the cheap car sale we got.
As I'm sure you've learned by now, it's the people like her who give the worst surveys. They are never happy. They leave thinking that just maybe, someone else paid less than they did.
You will see her later in service whining about the price of an oil change and demanding that we fix a scratch that "wasn't there when I brought the car in"
Let's just say that in certain cultures grinding every penny out of a purchase is commonplace.
The sales people here know what I mean.
Haha, I know exactly what you mean. But I won't say it at risk of being politically incorrect. But sometimes you'll find cheapskates all across the board, not just in certain cultures. But yes, some cultures do it more than others. Watch Russel Peters (stand up comic) and he'll explain.
Tidester.....again I'll refer you back to my posting from last week. I tried my best to inform my customer that invoice price was NOT necessarily the actual dealer cost of the vehicle.
Snakeweasel, since you have done countless audits of car dealerships, assuming a sticker price of $22000 with a $700 mark up from invoice, what would be the approximate profit to the dealer? We salespeople need to become more educated.
The point is that most dealers make a profit, and it doesn't matter how they do it, be it holdback or hidden incentives.Our job as buyers is to get the best deal possible regardless of what is fair to the dealer or what we are comfortable with. Dealers know what their bottom line is, and they will not accept a deal that is not fair to them. So why worry about it?
And, after I buy, I don't go to some Prices Paid forum and ask total strangers if I got a good deal!
Or if 6 months later when you don't like the product anymore, or if it has issues, or if you can't make payments on it, accuse the dealer of ripping you off six month before and demanding that they compensate you or cut you a break, or "cancel" your lease or finance contract.
Well first I haven't done "countless" audits just stated that I have done audits.
Secondly you have to really define what you mean by "profit"? Do you mean "gross" or "net" profit? Are you calculating in the costs to get the vehicle in condition to be sold and any sales costs?
In short I could give you a dozen answers (provided I had more information) and each one would be right.
Shall I go on?
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Well, nothing like yours but I have been in retail management all of my life.
We had lawyers and CPA's like yourself who would give us the numbers and show us where we stood. At one point I had like a 30 million dollar P& L responsibility.
Is it just me???? Has this turned into a pissing match between car salesmen and buyers??? The hostility isn't this bad even when I have a customer that's hard to talk to sitting across my desk!! LOL Bottom line, I don't think there are very many new car dealers that are raking in money faster than they can spend it.
problem is, not all, but many dealerships charge ridiculous for a oil and filter change! My Nissan dealership wanted almost 100 bucks for an oil and filter change for full synthetic. I mean those are BMW, MB, and other luxury dealership prices and were talking a Nissan here. Don't get me wrong but that kind of money for a oil and filter change is simply ridiculous, plain and simple, especially for a Nissan. I can get the exact same job done by a independent national chain shop or myself for almost half the price if not more using the same quality oil or better! Price gouging at its max.
Cars are the second biggest purchases we make in life, we have every right to be sticklers and complain if we need to be! I can't speak for your dealership or every single one, but many of the ones I've dealt with where I live over the years seem to think we are made of money and should pay the enormous costs the service department feels like charging! I mean I understand they need to make a profit and pay the technicians etc but there comes a price limit when it becomes simply a hosing. You salesman seem to think that once we get our cars that we should just except any imperfections or prices when we're spending 30, 40, or 50k on a vehicle.
Smarty.....you're going to the wrong dealerships pal. Not the synthetic oil...but a full oil change and filter at our place is $19.95. The work is done by a certified GM technician....not a fella that forgets to screw the filter back on. I was out of town and had my oil changed at one of the chains. I just about came unglued when I got the bill! Then, he tried to upsell me to add on to the ticket.
I certainly understand your desire to be happy with your purchase. I understand the scope of your purchase. I can't tell you the number of times I've got to bat with the service department on my customers's behalf. Already today 2 customers got work done under warranty when the miles on their vehicle were a little bit over the limit. I wish I made the same kind of money our technicians make. I will say that they earn it. Their training is rigorous. They have countless years of experience. As a customer, I'd rather have an experienced technician taking care of the second biggest purchase I've made as opposed to some shade tree mechanic.
I really am sorry you've had bad experiences in the past at dealerships. It makes us all look bad when that happens.
The work is done by a certified GM technician.... not a fella that forgets to screw the filter back on. I was out of town and had my oil changed at one of the chains. I just about came unglued when I got the bill! Then, he tried to upsell me to add on to the ticket.
It was my understanding that most "oil change mechanics", who do the oil changes at dealerships, do nothing but oil changes. Why would you pay a highly trained mechanic to do a simple oil change?
In my experiences of using both dealerships and Jiffy Boobs, one is not better than the other. Dealership oil changes seem to cost less these days. I've gotten $19.99 oil changes on my Mazda for almost 6 years. The Valvolines and Jiffy Lubes always seem to be around $35. Doesn't make "cents" not to go to a dealership these days for an oil change.
I'd agree with that, with one exception - I often go to a place that only does oil changes, but it isn't one of the chains. It's a one-off, family-owned shop. The waiting is super clean, with "free" fountain sodas and current magazines. They're really quick, and they don't do the upsell push. I just like them because they provide a good service in a pleasant environment. I pay a little more, but it's worth it to me.
Just out of curiosity, I did a quick net search on them and found a couple of consumer reviews, all 5/5 stars, so apparently it's not just me.
MODERATOR /ADMINISTRATOR Find me at kirstie_h@edmunds.com - or send a private message by clicking on my name. 2015 Kia Soul, 2021 Subaru Forester (kirstie_h), 2024 GMC Sierra 1500 (mr. kirstie_h) Review your vehicle
It was my understanding that most "oil change mechanics", who do the oil changes at dealerships, do nothing but oil changes. Why would you pay a highly trained mechanic to do a simple oil change?
All the Tech's at the dealership I worked at did oil changes. From the newest to the most senior. You never knew what you were going to find under the hood/car once you started. Also, customers usually had something else they wanted checked or addressed as well.
I almost forgot one other thing. Not only do we charge a cheap price for the oil change....we'll also go get your vehicle while you're at work....bring it to the dealership....do the work....take it back ....and leave a bill in the front seat that you can pay at your convenience. Small towns....small dealership....HUGE commitment to service!
I almost forgot one other thing. Not only do we charge a cheap price for the oil change....
Yep, dealerships are a great bargain as long as all you need is oil changes. Took my Mazda MPV into the dealership today to have the sway bar links replaced. They charged $177 in labor (took a little less than an hour) and $57 per sway bar (cost $30), for a grand total of $279 (I had a $25 off coupon). But, hey, they washed my car and didn't charge me for it.
Yes, and totally unworkable in anything than a very small town.
Especially the part about paying the bill at your convenience.
You're kidding, right?
Do you live in Mayberry RFD?
The town I grew up in had a tiny family owned Buick store that would do that.
A guy would ride a 3 wheeler Harley Davidson to your house. He would attach a hitch to your rear bumper and pull the motorcycle back to the store. When the work was done, he would deliver your Buick back to you the same way.
It was, indeed, a simpler time and cars had actual bumpers.
The driver's name was Foxy and on his return trips with the motorcycle he would take great amusement in riding down the hill by the high school and turning off the ignition. He would coast up to a group of us before switching the ignition back on which, of course wold result in a loud backfire. We would jump, he would laugh like hell and take off.
It was a simpler time. The town once had 17 car dealerships. The last one folded in 1977. Auto malls rule now.
I don't think its getting into a pissing match. I for one am just trying to point out that financially speaking the invoice isn't the only thing in the equation when determining what a particular car costs a dealership
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
A while back I worked for a large corporation that had someone come in once a month to do oil changes. Had a good sized truck and parked it in on corner of the parking lot and all you had to do was drop off your car when you came into work, pay the guy and your keys would be at the security desk at the end of the day. Price was reasonable and you couldn't beat the convenience.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Tbone_rare.. Don't worry, definatly not a pissing match. We've been going on for years like this. No harm, no foul.
You are right. There are holdbacks and sometimes incentive money to the dealers.
There are also MASSIVE amounts of overhead that have to be paid each and every month to keep the doors open.
But...as someone else said, what a dealer paid for a car shouldn't really matter to the buyer. Stores buy for WHOLESALE and they try to sell their products for RETAIL. It's eather a good value to a buyer or it's not. simple as that!
The town I grew up in had a tiny family owned Buick store that would do that.
A guy would ride a 3 wheeler Harley Davidson to your house. He would attach a hitch to your rear bumper and pull the motorcycle back to the store. When the work was done, he would deliver your Buick back to you the same way.
It was, indeed, a simpler time and cars had actual bumpers.
The driver's name was Foxy and on his return trips with the motorcycle he would take great amusement in riding down the hill by the high school and turning off the ignition. He would coast up to a group of us before switching the ignition back on which, of course wold result in a loud backfire. We would jump, he would laugh like hell and take off.
It was a simpler time. The town once had 17 car dealerships. The last one folded in 1977. Auto malls rule now.
It was much the same for me, growing up in a small South GA town. The car driver that rode the Harley Servicar was called Pop, but I never knew his real name. That's what everyone called him.
My small town had these dealerships: Ford/Mercury/Lincoln, Chrysler/Plymouth/Dodge/Desoto, Chevrolet/Buick/Oldsmobile/GMC, Studebaker/Packard (although I don't think they ever actually sold a Packard, and maybe never even actually saw one in the dealership, even for service) and Pontiac/Cadillac. And, I almost forgot...International Harvester.
In the fall, when new models were introduced, it was always a big thing for the town residents to go to new model "unveiling parties" at the dealerships.
Service was important, as was reputation, simply because you could alieniate only so many people before you had no customers at all. And, there were a couple of times a dealer would make a deal with a competitor to sell the competitor's car to a customer, because the customer was mad at the competitor, yet still wanted the model the competitor sold. Definitely different times back then.
My brother still lives there, but the town, like so many rural community centers across the US, has all but dried up. There is only a Ford dealer there now, and he depends on truck sales to survive.
It's a little big bigger than Mayberry.....LOLOL It's a town of about 3500 people. Everyone knows everyone. St. Louis is relatively close by however. We have to do the little things for our customers. We normally compete pretty well on price with the big boys......it's the services we provide to keep our customers coming back. We have a good reputation for fairness and honesty. It's something we're very proud of!!
Comments
Is invoice price the same as actual dealer cost?
tidester, host
SUVs and Smart Shopper
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
You can also cost out the car to include portions of all direct costs (i.e. sales commissions) and indirect costs such as property tax, utilities, office staff and the like.
So you have a wide range if you don't specifically state what "costs" are.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
tidester, host
SUVs and Smart Shopper
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
"how much is two plus tow?"
"Well, how much would you like it to be?"
Regarding how much money a car dealer should make is not relevant to me as a customer. I am only concerned with how much I have to pay for the vehicle. Dealer profits are dependent on many things. In some instances a dealer may be willing to sell a vehicle at a loss or at a very minor profit simply to cover the dealership's fixed costs. If a dealer is willing to sell me a vehicle for my price, why should I have concerns about the dealer's profit?
Don't you know that? Just ask him!
Yes invoice is what dealers pay to have a car in inventory. Yes there are programs in place to help defer costs like invoice, or occassionally factory to dealer incentives.
I sell Nissans ( interent manager) and the mark up is usually in the range 5% if you including hold back.
Just a tidbit: I recently quoted somone on a vehicle and the since the lead came from Edmunds, I went $500 under the TMV price in the hopes of ensuring her business. She came in and asked (demanded, but I don't want to seem harsh) more money off. When I showed her it was less than the market value for our area she said "we" pay those websites so those numbers don't matter yet she was using information "from hundreds of websites" to tell me her price was justified. We sold her a car for $150 less than my origional offer but these are the cases where I'm scared to see what she will do on the survey which could be more damaging than the cheap car sale we got.
You will see her later in service whining about the price of an oil change and demanding that we fix a scratch that "wasn't there when I brought the car in"
What a miserable, small way to go through life.
The sales people here know what I mean.
I didn't mind a person trying to get a great deal as long as they didn't cross the line.
And, there is a line. If they buy a car and leave unhappy I never felt good. I would much rather not sell a car than have an unhappy customer.
The sales people here know what I mean.
Haha, I know exactly what you mean. But I won't say it at risk of being politically incorrect. But sometimes you'll find cheapskates all across the board, not just in certain cultures. But yes, some cultures do it more than others. Watch Russel Peters (stand up comic) and he'll explain.
2016 Audi A7 3.0T S Line, 2021 Subaru WRX
Yes, it's across the board and, again, as long as people are decent and good natured about it I was fine with a tough sale.
A huge difference between a friendly yet frugal customer and one who is just downright cheap and mean spitited.
I just need to read your posts to see how things really work!
When I buy something I don't care what the store paid for it. If it meets my needs and I think it's a good value, I'm done.
And, after I buy, I don't go to some Prices Paid forum and ask total strangers if I got a good deal!
Some things I will never understand...
Or if 6 months later when you don't like the product anymore, or if it has issues, or if you can't make payments on it, accuse the dealer of ripping you off six month before and demanding that they compensate you or cut you a break, or "cancel" your lease or finance contract.
2016 Audi A7 3.0T S Line, 2021 Subaru WRX
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Secondly you have to really define what you mean by "profit"? Do you mean "gross" or "net" profit? Are you calculating in the costs to get the vehicle in condition to be sold and any sales costs?
In short I could give you a dozen answers (provided I had more information) and each one would be right.
Shall I go on?
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Well, nothing like yours but I have been in retail management all of my life.
We had lawyers and CPA's like yourself who would give us the numbers and show us where we stood. At one point I had like a 30 million dollar P& L responsibility.
My job was to make the sales happen.
I respect your background. I just wonder how you can know so much about how the car business works?
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Cars are the second biggest purchases we make in life, we have every right to be sticklers and complain if we need to be! I can't speak for your dealership or every single one, but many of the ones I've dealt with where I live over the years seem to think we are made of money and should pay the enormous costs the service department feels like charging! I mean I understand they need to make a profit and pay the technicians etc but there comes a price limit when it becomes simply a hosing. You salesman seem to think that once we get our cars that we should just except any imperfections or prices when we're spending 30, 40, or 50k on a vehicle.
I certainly understand your desire to be happy with your purchase. I understand the scope of your purchase. I can't tell you the number of times I've got to bat with the service department on my customers's behalf. Already today 2 customers got work done under warranty when the miles on their vehicle were a little bit over the limit. I wish I made the same kind of money our technicians make. I will say that they earn it. Their training is rigorous. They have countless years of experience. As a customer, I'd rather have an experienced technician taking care of the second biggest purchase I've made as opposed to some shade tree mechanic.
I really am sorry you've had bad experiences in the past at dealerships. It makes us all look bad when that happens.
It was my understanding that most "oil change mechanics", who do the oil changes at dealerships, do nothing but oil changes. Why would you pay a highly trained mechanic to do a simple oil change?
In my experiences of using both dealerships and Jiffy Boobs, one is not better than the other. Dealership oil changes seem to cost less these days. I've gotten $19.99 oil changes on my Mazda for almost 6 years. The Valvolines and Jiffy Lubes always seem to be around $35. Doesn't make "cents" not to go to a dealership these days for an oil change.
Brings back a lot of memories!
I would stay away from the drive through Quickie Lube shops like the plague.
I have seen (and experienced) the results of their work.
They tend to use cheap filters and rush the jobs through while they try to upsell anything they can needed or not.
Just out of curiosity, I did a quick net search on them and found a couple of consumer reviews, all 5/5 stars, so apparently it's not just me.
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All the Tech's at the dealership I worked at did oil changes. From the newest to the most senior. You never knew what you were going to find under the hood/car once you started. Also, customers usually had something else they wanted checked or addressed as well.
The chains strive to see how many cars they can do in a given day and the guys are judged on how much extra stuff they can sell.
Don't get me wrong. If my cars have a problem, I want to be informed of it. I just don't want a bunch of "fluff" sold to me.
Yep, dealerships are a great bargain as long as all you need is oil changes. Took my Mazda MPV into the dealership today to have the sway bar links replaced. They charged $177 in labor (took a little less than an hour) and $57 per sway bar (cost $30), for a grand total of $279 (I had a $25 off coupon). But, hey, they washed my car and didn't charge me for it.
Yes, and totally unworkable in anything than a very small town.
Especially the part about paying the bill at your convenience.
You're kidding, right?
Do you live in Mayberry RFD?
The town I grew up in had a tiny family owned Buick store that would do that.
A guy would ride a 3 wheeler Harley Davidson to your house. He would attach a hitch to your rear bumper and pull the motorcycle back to the store. When the work was done, he would deliver your Buick back to you the same way.
It was, indeed, a simpler time and cars had actual bumpers.
The driver's name was Foxy and on his return trips with the motorcycle he would take great amusement in riding down the hill by the high school and turning off the ignition. He would coast up to a group of us before switching the ignition back on which, of course wold result in a loud backfire. We would jump, he would laugh like hell and take off.
It was a simpler time. The town once had 17 car dealerships. The last one folded in 1977. Auto malls rule now.
I either don't complain about prices or I do the work myself.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
You are right. There are holdbacks and sometimes incentive money to the dealers.
There are also MASSIVE amounts of overhead that have to be paid each and every month to keep the doors open.
But...as someone else said, what a dealer paid for a car shouldn't really matter to the buyer. Stores buy for WHOLESALE and they try to sell their products for RETAIL. It's eather a good value to a buyer or it's not. simple as that!
A guy would ride a 3 wheeler Harley Davidson to your house. He would attach a hitch to your rear bumper and pull the motorcycle back to the store. When the work was done, he would deliver your Buick back to you the same way.
It was, indeed, a simpler time and cars had actual bumpers.
The driver's name was Foxy and on his return trips with the motorcycle he would take great amusement in riding down the hill by the high school and turning off the ignition. He would coast up to a group of us before switching the ignition back on which, of course wold result in a loud backfire. We would jump, he would laugh like hell and take off.
It was a simpler time. The town once had 17 car dealerships. The last one folded in 1977. Auto malls rule now.
It was much the same for me, growing up in a small South GA town. The car driver that rode the Harley Servicar was called Pop, but I never knew his real name. That's what everyone called him.
My small town had these dealerships: Ford/Mercury/Lincoln, Chrysler/Plymouth/Dodge/Desoto, Chevrolet/Buick/Oldsmobile/GMC, Studebaker/Packard (although I don't think they ever actually sold a Packard, and maybe never even actually saw one in the dealership, even for service) and Pontiac/Cadillac. And, I almost forgot...International Harvester.
In the fall, when new models were introduced, it was always a big thing for the town residents to go to new model "unveiling parties" at the dealerships.
Service was important, as was reputation, simply because you could alieniate only so many people before you had no customers at all. And, there were a couple of times a dealer would make a deal with a competitor to sell the competitor's car to a customer, because the customer was mad at the competitor, yet still wanted the model the competitor sold. Definitely different times back then.
My brother still lives there, but the town, like so many rural community centers across the US, has all but dried up. There is only a Ford dealer there now, and he depends on truck sales to survive.