So are you saying that the dealer is getting $8000 back from the manufacturer and the $4500 additional rebates should come off after that? I am really confused now.
I see what you mean about the $8000 listed under the '05 Trailblazer.. very confusing...
However, Car_man will be along to give you the specific numbers for your model... (AWD or RWD?).. If you give him your location, he will also be able to check for any regional incentives..
In the meantime, you might look this over... for a complete explanation on how TMV is calculated..
This bug or boon (I tend to think bug) runs throughout GM SUV's on Edmunds.
It's always twice the rebate + the gmac $1000, so I think somebody just goofed. I can't find any justification for these numbers. If they are right, I am so buying an SUV tomorrow.
You're right xeo. I suppose that I should have mentioned that consumers who finance through Hyundai using its standard finance rates, not the 4% special rate, receive an additional $1,000 cash bonus ($2,000 total). The problem with this offer is that one has to finance using Hyundai's standard interest rates, which are not very good, to get the additional grand.
Hi trojan2000. Nissan is currently providing $2,000 customer cash or 3.0% financing for up to 3 years and 4.0% for 4 years plus $500 customer cash or a special lease program on the 2005 Xterra. It is not currently offering any sort of incentives on the 2006 Xterra though.
Hello maril. General Motors ic currently providing $4,500 customer cash plus an additional $1,000 bonus cash ($5,500 total) on the 2005 Chevrolet Trailblazer. I'm not sure where the $8,000 that you saw mentioned came from. Perhaps that eight grand includes an assumed dealer discount.
Nobody knows where it comes from, but if you do a TMV price on any GM SUV you will pull up outrageously high (13,000 for a yukon!) rebates. I think it has to be a bug of some sort.
I'm looking at the 2006 Town and Country Touring and Touring Signature Series, and The 2006 Grand Caravan SXT and SXT Special Edition. I live in MA.
I see the touring apears to have $4000 in customer cash, and the Grand Caravan has $3500. Are there any Dealer incentives? Geographical incentives? What is the Dodge/Chysler Holdback Percentage? ANythign else I should know about?
As I suspected, the Edmunds database was bugged. I received this reply from Edmunds:
"Unfortunately, these rebates are not correct. There was an error in one of our databases that was doubling up some of the rebates on a few of the 2005 GM models. We have since fixed this problem and our TMV calculator is now showing the correct incentive amounts for these vehicles. The 2005 Tahoe has $6000 customer cash plus the $1000 customer cash that can be added together."
Hi zeis. The $1,000 owner loyalty cash that I mentioned earlier was an enhancement that DaimlerChrysler made to its October incentive program for the Jeep Grand Cherokee. Unfortunately, it is not available in November. The good news is that the 2005 Jeep Grand Cherokee's incentives were enhanced again this month.
Hello kmcdonald. DaimlerChrysler is currently providing $2,500 customer cash plus $1,000 bonus cash ($3,500 total) on both the 2006 Chrysler Town & Country and the 2006 Dodge Grand Caravan. Neither of these vans currently have any sort of dealer cash available on them. You can find out about dealer holdback in the following section of this site: Edmunds.com - Dealer Holdback. Keep in mind though that dealers hate to talk about holdback and mentioning it usually serves to break down negotiations. Furthermore, dealers will rarely dip into holdback to make a sale.
The chrysler website Shows the $2500, but only lists the extra $1000 for leases, is that true? The one dealer I've talked to so far said there was a $1000, and another $1000, and then a $500 that's only good till 11/20, and then that's it. *That* doesn't really mesh with everything else I've seen, is he full of it? (This is in MA if it makes a difference.)
Lastly, I know about their reluctance to deal in holdback. It's just that I want to be fully informed, and Since I'm hoping to get the minivan ordered just for me, I'm under the impress that it might be less taboo since it won't ever sit on the lot?
I see Nissan has this Lease which appears to be subsidized:
Nissans offer is cap cost 15336 with a residual of 8672.55, 209 a month for 36 months, I think that makes the money factor .0019745 or 4.739 percent. Not a bad deal, but I know that in a regular deal I can get the car for about a thousand less, but don't know if I can still negotiate the Cap Cost in a subsidized lease?
Do you know Nissan's current money factors?
Should a money factor normally correspond to a new car interest rate?
I'm looking for the best lease on a Sentra. The 05's have 2500 cash back instead of 1500, should I insist on a locate? There seems to be none in the area. I'm in Cleveland, Oh. so you can give more accurate pricing.
The dealer is also claiming they will pay off my last payment and give me true market value for my current lease turn in. From what I understand they are saying they will give me the difference between what my car is worth and what the residual is, which is 7359. It may be worth more as it's an 01 with only 30k and the SE 2.0 package, moonroof, etc... This offer sounds too good to be true as I don't see how they could sell it for a profit if they are giving that profit to me.
If the car really is worth more than the residual I would consider a purchase, but they are saying 8-9 percent on that loan and I need to stick with them for financing as I'm preapproved with excellent credit, tier 1, but no job. So I had trouble loan shopping.
Thanks and sorry for multiple posts, I just wasn't sure what forum you are in mostly.
on all their 2006 models beginning Monday. Oct.14th and the program will continue until Jan.3rd, 2006. Just read same at AutoBlog and also received the same type info from GM rep. plus all rebates are still good.
A reporter with a major national daily newspaper would like to hear from consumers who are thinking about buying a vehicle or have just bought one (since Oct. 1) and can comment about how important incentives are/were in their purchase decision. If you have a story to share with the reporter, please respond to pr@edmunds.com with your daytime contact info. and the make/model of the vehicle you bought/are thinking of buying, no later than EOD Tues., November 15, 2005.
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You're welcome Kyle. The $1,000 bonus cash is available with all types of transactions, not just leases. I don't know where the dealer that you are working with got their information from, but DaimlerChrysler is definitely currently providing $2,500 customer cash plus the $1,000 bonus($3,500 total) on the 2006 Chrysler Town & Country right now.
The fact that you are ordering your van might actually hurt your bargaining position rather than halp it. Dealers are usually more anxious to sell vehicles that they already have on their lots than they are to order vehicles for consumers. Their thinking is that they would rather sell something that they already have so that they do not have to continue to pay floorplan interest on it.
Hi dtos01. Even with a lower interest rate, a 24 month loan will have a much higher monthly payment than a 60 month loan. As long as you can afford to pay the higher payment, a lower interest rate is always better though.
Hi Anthony. Nissan's lease money factors are not the same as its special finance rates. Also, even though the 2006 Sentra currently has $2,500 customer cash available on it and the 2006 model has $1,500 on it, these cash incentives are not compatible with these cars' special lease programs. Nissan is currently only providing $750 lease cash on both the 2006 and 2005 Sentra. I would be happy to give you an idea of what this car's lease program is currently like. I'll respond to your post over in the following discussion: "Nissan Sentra: Lease Questions".
Thanks, I got your numbers from a different dealer, and confronted the first. He 'went and double checked' and came back with the same $3500 you have. That lasts till Nov 30th.
Here in MA at least they have another $500 rebate. It is connected somehow to the auto show that ended today in Boston I think. That $500 is good till the 20th.
I know ordering can harm my position. It didn't in '99 when I got an awesome deal on my rodeo thanks to this website. I'm just trying to refresh my head about all the numbers again so I can at least shoot for a similar deal this time around. I'm hoping this early in the year they'll fell like they still have plenty of time to move the other cars so ordering one special won't be that bad.
I just realized that 'floorplan' is what I was remembering 'holdback' as. (Are they the same?) If not, is seeing the invoice itself the only way to get the real floorplan amount for a chrysler vehicle? or is there a formula or some other way to get it?
Lastly, when configuring the van here on edmunds, there is a option pkg called CMA2 that has a MSRP of $0 but an invoice of $305. If I leave it off then the invoice price disagrees with another website by exactly $305, so I think I'm supposed to include it, at least in MA.
What is this pkg? Is CMA2 some sort of Marketing and Advertising fee?
Someone over there had posted that now that the "red Tag" pricing went into effect on the Pontiac Vibe that his new offered price was now $500.00 "MORE" than before the sale. The dealer told him that the $500.00 rebate was "no longer" applicable. I thought I had read that the rebates "still" were applicabe with the "red tag" pricing. Can you please tell me if in fact they "are" or "are not" applicable!
When I priced the 2006 base Vibe with the sport pac, power pac and auto. xmission, the MSRP comes to $20,195.00. (this includes the dest. charge of $560.00). The "Invoice price on the same package comes to $$18,742.00.(this also includes the dest. charge of $560.00). After clicking in the "RedTag" price on the same configuration at the GM site, the "Red Tag" price comes out to $19,145.30. This is $403.30 "MORE" than the invoice price. I don't see how this is a "Good Deal". I thought the "RedTag" sale price was supposed to be approx. 2% "lower" than invoice. Am I missing something here???? Thanks in advance for any answers you might have to the above two posts.
"‘Red Tag’ promotion, prices are prominently displayed on eligible vehicles at participating GM dealerships and take into account available rebates, but exclude taxes, title and dealer fees."
I have been told the same thing from 3 dealers. It now seems that a GM vehicle (at least Vibes) now costs $500 more than last week.
I was quoted $16,999 last week before rebates, tax, title, and tags which I calculated to be $17,639 with a $500 Conquest rebate. Today, only 4 days later, I was just quoted $18,142 out the door price.
Another dealer quoted me $19,101 for another Vibe last Wednesday. Today I calculate the price to be $19,596 of that same car.
What is GM thinking? This is not a good way to get people to buy your product.
Well I guess you answered your own question. I suggest, if you are not in a hurry to purchase the Vibe...that you give it a month or so and see if GM doesn't reinstitute the rebates. I Emailed my local Toyota dealer and they are currently offering $100.00 over INVOICE on all 2006 Matrix'. (Vibe twin car) and there prices are less to begin with...check out the Edmunds prices on the aforementioned. Seems to me you should be able to find a Pontiac dealer that is willing to sell a Vibe at "INVOICE". It's not as though they are flying off the lots.
Well, I dunno about the "not flying off the lots".
Meaning, I really don't know. But I do know that it's taking my dealer a while to get them, and they only have a half dozen or less in stock at any given time. I'd think that word is getting out about this car, it's been a pretty steady seller at least in urban areas, and it's one of GM's mpg leaders. So of all the cars they've got to sell, I don't see the General discounting the Vibe too heavily.
If resale is a concern, the Matrix probably makes more sense. Get the GM Card and knock some more money off that way; I wrote up how this should be good for another $500 off on the car instantly... if anyone is interested, they can search for it.
I'm planning to place a factory order for a Ford Ranger and am informed that the rebate I'll receive will be based on that in affect when the vehicle arrives ~8 weeks after the order is placed, so am trying to anticipate when a favorable time to order might be. Does anyone know if Ford rebates in particular or rebates in general tend to steadily increase throughout the model year, or do they sometimes peak at certain times, for example in December or January? Thanks in advance for any speculation or observations.
You're very welcome Kyle. It makes sense that there is an extra $500 in your area if you recently had an auto show there. The domestic automakers usually offer some sort of additional incentive for a limited time in the areas that have an auto show going on.
Holdback is money that dealers get back from manufacturers. It was originally created to help dealers pay some of the floorplan interest on vehicles. Dealers never pay in full for the vehicles they have on their lots. They have a standing agreement with their captive finance company, or some other bank, to pay for their vehicles. As a result, the longer a car or truck sits on their lot, the more floorplan interest they have to pay on it. Dealers hate to take about holdback and it is highly unlikely that they will dip into it to sell you a vehicle.
Hey nortsr1. In most instances, the cash incentives that were available on vehicles before the Red Tag program went into effect are still around. However, General Motors eliminated its $500 customer cash offers on the 2006 Chevrolet Aveo and 2006 Pontiac Vibe when this program began. You still may be able to purchase one for around the same price given the Red Tag Event's price structure though, depending upon how good a deal you negotiated on one before.
Nortsr1, the prices for GM's Red Tag Event are based upon the prices that are available through its Supplier Purchase Program plus $100. GM's supplier prices are equivalent to GM's Employee Purchase prices plus 4.5%. While it varies from vehicle to vehicle, the Supplier Prices usually end up being right around dealer invoice rather than the 2% under that you heard. You're right, on a vehicle that you would have been able to purchase for dealer invoice anyways before this sale, this offer is nothing special.
Mathias is right. I think that one of the reasons why GM cut back on its cash incentives on the aveo and Vibe is that these are two of its vehicles that get the best gas mileage. Since gas prices spiked a month or two ago, the demand for cars that have good mileage ratings has increased and the demand for gas guzzling SUVs has decreased. The Vibe is probably one of the few models that GM is not having that hard a time selling right now.
Hi landdriver. That is a very good question. Some manufacturers, like Lexus, provide more attractive incentives on their products in December to make a big push for a strong annual sales total. However, I think that Ford's incentives, like those of most automakers just tend to increase as the model year progresses. If I recall correctly, Ford's incentives on the 2005 Ranger were more attractive in January of this year than they were in December of last 2004. Ford went on to enhance its incentives on this truck again a couple of months after that.
I really do understand that the dealer isn't going to want to give up the Holdback. I really don't expect him to. But if I order the new loaded Town & Country, I'd like to know how much the Holdback is adding to his profit line, so I can negotiate better on the other items.
I know Holdback originally started to cover the interest on the money borrowed for the dealer to buy the cars he's trying to sell. I guess what I'm trying to figure out now is:
1. Is Floorplan the same as Holdback now? Or is it seperate?
2. I know the Holdback from Chrysler/Dodge is 3% of MSRP, where does one find the floorplan figure if it's seperate from holdback?
Again, I don't really expect to get either of these numbers a a discount. But if one or both is going to be pur profit to the dealer because I'm ordering it, then I'd like to adjust my offer. I mean if they were 100-200 I'd offer 1300-1400 additional profit. If they're 1000-1200, I'd probably offer 300-500.
Again, mostly it's for my comfort zone. I like to feel like I've reaserched everything enough, and that I"m well educated on how things work.
So are Holdback and Floorplan the same thing in this case?
Thanks again for your help. I know I wouldn't know where else to look for this info.
Floorplan is the interest paid by the dealer on the money loaned to them to pay the manufacturer for the car. It accrues between the time the dealer is invoiced by the manufacturer and the time they actually pay for the car.
Holdback is money built into the MSRP of the vehicle (which the dealer pays) with is "rebated" to the dealership at some point.
If their cost of floorplanning the car exceeds the holdback amount, the dealership loses money in that area. In any case, the dealerships pays for the holdback and then gets the money back at some point. IMHO, it's not profit in any form.
Your statement about the gas mileage is most likely true, in fact I had a dealer tell me that exact thing today. The Vibe is Pontiac's best seller and their best at gas mileage. So it seems GM is lowering incentives for that while raising incentives on their trucks and SUVs. At least that is what I talked a dealers about recently, but then again if you have been paying attention to anything this year about vehicles you most likely could have predicted this.
I think I get it. Holdback is the rebate to the dealer to cover at least part of the floorplan cost.
I dont understand how it's never profit. Of course if the dealer's floorplan costs are equal or more than the rebate it couldn't be profit.
However if the vehicle is custom ordered, and the vehicle is sold on or nearly on the day it is delivered, then the floorplan costs are very small, and holdback rebate could be much more than the floorplan cost.
This rebate it then reducing the cost to the dealership for the vehicle. Right? A reduced cost to the dealership does mean higher profit. Right?
Again, I'm new to all this (well I did read up on it about 7 years ago but that's all forgotten now) I love learning... Please educate me if I've missed something.
Is there a recommended way to go about pricing Dealer installed Options?
I've found the MSRP for several options on the Mopar site, but I imagine I should negotiate the selling price of these options along with the the price of the van?
Is there a place to get an 'invoice like' price for the dealer installed options?
The dealer buys a car at invoice - let's say $10,000. There is a 3% holdback based on the invoice (to keep it simple) so the dealer's total cost is $10,300. Let's further assume for simplicity the dealer doesn't floorplan and pays for the vehicles outright.
The dealer pays the $10,300 to the manufacturer then gets the $300 back at some other point when the vehicle is sold. So the dealer is getting back the money they put into the vehicle not some magic extra money brought by the holdback fairy. It's the same as getting a $20 rebate on a printer. You pay the retailer $100 and then get the rebate in the future. It's a return of initial investment - not extra money.
Now of course it's much more complicated than that because of hundreds of vehicles, millions of dollars, and dates of purchase, invoice, payment, return of holdback, et al. And I'm sure that with creative cash flow execution and luck, it could become profit. But the bottom line is that holdback typically pays for financing the vehicle before it's sold.
The dealer pays the extra 3% up front? Ok that's different. I thought the 3% rebate was already included in the 10,000.
What I thought was more like the $100 printer with the $20 rebate. I pay $100, then I get the $20 rebate. My net cost is $80.
What you're describing is if the price on the printer is $100, but I pay $120, then get $20 back, net price $100. That's a strange way of working it.
I thought the Manufacturer was returning the holdback to help the dealer with the floorplan (the manufacturer contributing out of his pocket towards the early days interest.)
If the dealer pays the holdback on top of the invoice price then he's just loaning (and borrowing from his bank) extra money to the manufacturer for some period of time. That's silly. He'd be better off paying only invoice and not getting the rebate.
Your last statement is what I understand:
"But the bottom line is that holdback typically pays for financing the vehicle before it's sold."
And if the cost of financing is at or close to $0, because the vehicle is sold to me as soon as the dealer buys it, then what's the holdback spent on?
And if the cost of financing is at or close to $0, because the vehicle is sold to me as soon as the dealer buys it, then what's the holdback spent on?
Paying the floorplan on the other 50/100/150 cars sitting on the lot that aren't sold before coming in. You look at the micro view - the dealer looks at the macro view.
Ok I'll concede that. Of course in the macro view any profit on one particular deal will cover losses or other expenses on other deals and vehicles.
That doesn't mean that on the micro scale of the one deal, that the holdback doesn't end up being profit.
You didn't answer my other question, does the dealer really pay the holdback first as an additional cost on top of the invoice price? or is it included in the invoice?
In otherwords is the mfg. giving the dealer back money the dealer basically loaned the mfg.? or is the the mfg really refunding part of the price of the vehicle?
You didn't answer my other question, does the dealer really pay the holdback first as an additional cost on top of the invoice price? or is it included in the invoice?
Here is my take on holdback. Some Mfg's add it as a seperate line on the invoice, some include it. Doesn't make a difference. Either way the dealer pays it when they buy the car from the Mfg. The reason the Mfg's even have holdback is to offset the dealers cost of carrying the inventory. If they didn't, dealers would only stock one car to show and test drive and special order every car sold. Why tie up their own money? Imagine the chaos this would cause the Mfg's as well as the consumers who want a car now. Some Mfg's only pay holdback quarterly, or pass the credit on the dealer's parts statement. Most dealer owners do not even allow the sales department to consider it when negotiating a sale. And they certainly don't break it down by car. So its no wonder dealers balk at even discussing it. You might as well say "its off the table". And for most dealerships, it really is. Now rebates, incentives, dealer cash, another story all together....
I totally understand. My point is that if it does come back and the dealer doesn't have to spend it on something else related to this vehicle, then it is 'profit' on this deal.
It *is* additional money in the dealer's pocket. granted the dealer may then use it to offset higher costs on other vehicles. It reduces the real cost of the vehicle for the dealer.
I totally agree that the dealer is going to be reluctant to talk about it. I don't plan on even bringing it up, I don't plan on asking them to give it up either. I just like being fully informed.
As much as I agree they'll be reluctant to talk about holdback, on my last purchase (a '99 Rodeo) I had one dealer offer it to me by name along with all the current dealer incentives, without me even asking, and another beat that price by $600 without blinking.
But then I have no way of knowing whether either dealer actually used the holdback to make the deal possible.
We've got a pretty good discussion on Dealer Holdback questions if you'd like to discuss this in depth.
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Carman, what's Ford about to do with their incentives? I just got an e-mail from a dealership I inquired about a Focus wagon with earlier this year saying they're going to offer the Ford Partner Plan prices (which I already qualified for) to everyone, but apply all the rebates with those prices as well. I don't see anything about this on the Ford Web site yet. If that's true, I suspect Focus wagon prices may approach the employee prices they were offering this summer and I'd be alot more interested in one...
I just had a dealer tell me that if they couldn't locate the car I wanted soon, then the price he quoted might go up because the MFG to Dealer incentives he was using to get me the price he quoted were going to expire.
Car_man I know you said there aren't any Chrysler/Dodge dealer incentives in MA right now, is he full of it?
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However, Car_man will be along to give you the specific numbers for your model... (AWD or RWD?).. If you give him your location, he will also be able to check for any regional incentives..
In the meantime, you might look this over... for a complete explanation on how TMV is calculated..
How We Calculate New TMV Prices
regards,
kyfdx
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It's always twice the rebate + the gmac $1000, so I think somebody just goofed. I can't find any justification for these numbers. If they are right, I am so buying an SUV tomorrow.
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I see the touring apears to have $4000 in customer cash, and the Grand Caravan has $3500. Are there any Dealer incentives?
Geographical incentives? What is the Dodge/Chysler Holdback Percentage? ANythign else I should know about?
-Kyle
"Unfortunately, these rebates are not correct. There was an error in one of our databases that was doubling up some of the rebates on a few of the 2005 GM models. We have since fixed this problem and our TMV calculator is now showing the correct incentive amounts for these vehicles. The 2005 Tahoe has $6000 customer cash plus the $1000 customer cash that can be added together."
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The chrysler website Shows the $2500, but only lists the extra $1000 for leases, is that true? The one dealer I've talked to so far said there was a $1000, and another $1000, and then a $500 that's only good till 11/20, and then that's it. *That* doesn't really mesh with everything else I've seen, is he full of it? (This is in MA if it makes a difference.)
Lastly, I know about their reluctance to deal in holdback. It's just that I want to be fully informed, and Since I'm hoping to get the minivan ordered just for me, I'm under the impress that it might be less taboo since it won't ever sit on the lot?
Anyway, Thanks for the info.
-Kyle
I see Nissan has this Lease which appears to be subsidized:
Nissans offer is cap cost 15336 with a residual of 8672.55, 209 a month for 36 months, I think that makes the money factor .0019745 or 4.739 percent. Not a bad deal, but I know that in a regular deal I can get the car for about a thousand less, but don't know if I can still negotiate the Cap Cost in a subsidized lease?
Do you know Nissan's current money factors?
Should a money factor normally correspond to a new car interest rate?
I'm looking for the best lease on a Sentra. The 05's have 2500 cash back instead of 1500, should I insist on a locate? There seems to be none in the area. I'm in Cleveland, Oh. so you can give more accurate pricing.
The dealer is also claiming they will pay off my last payment and give me true market value for my current lease turn in. From what I understand they are saying they will give me the difference between what my car is worth and what the residual is, which is 7359. It may be worth more as it's an 01 with only 30k and the SE 2.0 package, moonroof, etc... This offer sounds too good to be true as I don't see how they could sell it for a profit if they are giving that profit to me.
If the car really is worth more than the residual I would consider a purchase, but they are saying 8-9 percent on that loan and I need to stick with them for financing as I'm preapproved with excellent credit, tier 1, but no job. So I had trouble loan shopping.
Thanks and sorry for multiple posts, I just wasn't sure what forum you are in mostly.
Peace
Anthony
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The fact that you are ordering your van might actually hurt your bargaining position rather than halp it. Dealers are usually more anxious to sell vehicles that they already have on their lots than they are to order vehicles for consumers. Their thinking is that they would rather sell something that they already have so that they do not have to continue to pay floorplan interest on it.
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Here in MA at least they have another $500 rebate. It is connected somehow to the auto show that ended today in Boston I think. That $500 is good till the 20th.
I know ordering can harm my position. It didn't in '99 when I got an awesome deal on my rodeo thanks to this website. I'm just trying to refresh my head about all the numbers again so I can at least shoot for a similar deal this time around. I'm hoping this early in the year they'll fell like they still have plenty of time to move the other cars so ordering one special won't be that bad.
I just realized that 'floorplan' is what I was remembering 'holdback' as. (Are they the same?) If not, is seeing the invoice itself the only way to get the real floorplan amount for a chrysler vehicle? or is there a formula or some other way to get it?
Lastly, when configuring the van here on edmunds, there is a option pkg called CMA2 that has a MSRP of $0 but an invoice of $305. If I leave it off then the invoice price disagrees with another website by exactly $305, so I think I'm supposed to include it, at least in MA.
What is this pkg? Is CMA2 some sort of Marketing and Advertising fee?
Thanks for your help Car_man!
-Kyle
After clicking in the "RedTag" price on the same configuration at the GM site, the "Red Tag" price comes out to $19,145.30. This is $403.30 "MORE" than the invoice price. I don't see how this is a "Good Deal". I thought the "RedTag" sale price was supposed to be approx. 2% "lower" than invoice. Am I missing something here????
Thanks in advance for any answers you might have to the above two posts.
http://msnbc.msn.com/id/10033164/
http://www.autoblog.com/entry/1234000283067688/
Both these articles seem to state the rebates are available after the Red Tag price. However GM's website seems to contradict the above statement.
GM's site
"‘Red Tag’ promotion, prices are prominently displayed on eligible vehicles at participating GM dealerships and take into account available rebates, but exclude taxes, title and dealer fees."
I have been told the same thing from 3 dealers. It now seems that a GM vehicle (at least Vibes) now costs $500 more than last week.
I was quoted $16,999 last week before rebates, tax, title, and tags which I calculated to be $17,639 with a $500 Conquest rebate. Today, only 4 days later, I was just quoted $18,142 out the door price.
Another dealer quoted me $19,101 for another Vibe last Wednesday. Today I calculate the price to be $19,596 of that same car.
What is GM thinking? This is not a good way to get people to buy your product.
Meaning, I really don't know. But I do know that it's taking my dealer a while to get them, and they only have a half dozen or less in stock at any given time. I'd think that word is getting out about this car, it's been a pretty steady seller at least in urban areas, and it's one of GM's mpg leaders. So of all the cars they've got to sell, I don't see the General discounting the Vibe too heavily.
If resale is a concern, the Matrix probably makes more sense. Get the GM Card and knock some more money off that way; I wrote up how this should be good for another $500 off on the car instantly... if anyone is interested, they can search for it.
-Mathias
Holdback is money that dealers get back from manufacturers. It was originally created to help dealers pay some of the floorplan interest on vehicles. Dealers never pay in full for the vehicles they have on their lots. They have a standing agreement with their captive finance company, or some other bank, to pay for their vehicles. As a result, the longer a car or truck sits on their lot, the more floorplan interest they have to pay on it. Dealers hate to take about holdback and it is highly unlikely that they will dip into it to sell you a vehicle.
I am not familiar with the CMA2 option that you mentioned. You may be able to find a community member who knows what it is by visiting the following discussion: "Chrysler Town & Country and Dodge Grand Caravan 2005+".
Car_man
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Thanks again,
I really do understand that the dealer isn't going to want to give up the Holdback. I really don't expect him to. But if I order the new loaded Town & Country, I'd like to know how much the Holdback is adding to his profit line, so I can negotiate better on the other items.
I know Holdback originally started to cover the interest on the money borrowed for the dealer to buy the cars he's trying to sell. I guess what I'm trying to figure out now is:
1. Is Floorplan the same as Holdback now? Or is it seperate?
2. I know the Holdback from Chrysler/Dodge is 3% of MSRP, where does one find the floorplan figure if it's seperate from holdback?
Again, I don't really expect to get either of these numbers a a discount. But if one or both is going to be pur profit to the dealer because I'm ordering it, then I'd like to adjust my offer. I mean if they were 100-200 I'd offer 1300-1400 additional profit. If they're 1000-1200, I'd probably offer 300-500.
Again, mostly it's for my comfort zone. I like to feel like I've reaserched everything enough, and that I"m well educated on how things work.
So are Holdback and Floorplan the same thing in this case?
Thanks again for your help. I know I wouldn't know where else to look for this info.
Holdback is money built into the MSRP of the vehicle (which the dealer pays) with is "rebated" to the dealership at some point.
If their cost of floorplanning the car exceeds the holdback amount, the dealership loses money in that area. In any case, the dealerships pays for the holdback and then gets the money back at some point. IMHO, it's not profit in any form.
I think I get it. Holdback is the rebate to the dealer to cover at least part of the floorplan cost.
I dont understand how it's never profit. Of course if the dealer's floorplan costs are equal or more than the rebate it couldn't be profit.
However if the vehicle is custom ordered, and the vehicle is sold on or nearly on the day it is delivered, then the floorplan costs are very small, and holdback rebate could be much more than the floorplan cost.
This rebate it then reducing the cost to the dealership for the vehicle. Right? A reduced cost to the dealership does mean higher profit. Right?
Again, I'm new to all this (well I did read up on it about 7 years ago but that's all forgotten now) I love learning... Please educate me if I've missed something.
-Kyle
I've found the MSRP for several options on the Mopar site, but I imagine I should negotiate the selling price of these options along with the the price of the van?
Is there a place to get an 'invoice like' price for the dealer installed options?
The dealer buys a car at invoice - let's say $10,000. There is a 3% holdback based on the invoice (to keep it simple) so the dealer's total cost is $10,300. Let's further assume for simplicity the dealer doesn't floorplan and pays for the vehicles outright.
The dealer pays the $10,300 to the manufacturer then gets the $300 back at some other point when the vehicle is sold. So the dealer is getting back the money they put into the vehicle not some magic extra money brought by the holdback fairy. It's the same as getting a $20 rebate on a printer. You pay the retailer $100 and then get the rebate in the future. It's a return of initial investment - not extra money.
Now of course it's much more complicated than that because of hundreds of vehicles, millions of dollars, and dates of purchase, invoice, payment, return of holdback, et al. And I'm sure that with creative cash flow execution and luck, it could become profit. But the bottom line is that holdback typically pays for financing the vehicle before it's sold.
Ok that's different. I thought the 3% rebate was already included in the 10,000.
What I thought was more like the $100 printer with the $20 rebate. I pay $100, then I get the $20 rebate. My net cost is $80.
What you're describing is if the price on the printer is $100, but I pay $120, then get $20 back, net price $100. That's a strange way of working it.
I thought the Manufacturer was returning the holdback to help the dealer with the floorplan (the manufacturer contributing out of his pocket towards the early days interest.)
If the dealer pays the holdback on top of the invoice price then he's just loaning (and borrowing from his bank) extra money to the manufacturer for some period of time. That's silly. He'd be better off paying only invoice and not getting the rebate.
Your last statement is what I understand:
"But the bottom line is that holdback typically pays for financing the vehicle before it's sold."
And if the cost of financing is at or close to $0, because the vehicle is sold to me as soon as the dealer buys it, then what's the holdback spent on?
-Kyle
Paying the floorplan on the other 50/100/150 cars sitting on the lot that aren't sold before coming in. You look at the micro view - the dealer looks at the macro view.
That doesn't mean that on the micro scale of the one deal, that the holdback doesn't end up being profit.
You didn't answer my other question, does the dealer really pay the holdback first as an additional cost on top of the invoice price? or is it included in the invoice?
In otherwords is the mfg. giving the dealer back money the dealer basically loaned the mfg.? or is the the mfg really refunding part of the price of the vehicle?
Kyle
I believe it's built into the invoice price.
The reason the Mfg's even have holdback is to offset the dealers cost of carrying the inventory. If they didn't, dealers would only stock one car to show and test drive and special order every car sold. Why tie up their own money?
Imagine the chaos this would cause the Mfg's as well as the consumers who want a car now. Some Mfg's only pay holdback quarterly, or pass the credit on the dealer's parts statement. Most dealer owners do not even allow the sales department to consider it when negotiating a sale. And they certainly don't break it down by car. So its no wonder dealers balk at even discussing it. You might as well say "its off the table". And for most dealerships, it really is.
Now rebates, incentives, dealer cash, another story all together....
It *is* additional money in the dealer's pocket. granted the dealer may then use it to offset higher costs on other vehicles. It reduces the real cost of the vehicle for the dealer.
I totally agree that the dealer is going to be reluctant to talk about it. I don't plan on even bringing it up, I don't plan on asking them to give it up either. I just like being fully informed.
As much as I agree they'll be reluctant to talk about holdback, on my last purchase (a '99 Rodeo) I had one dealer offer it to me by name along with all the current dealer incentives, without me even asking, and another beat that price by $600 without blinking.
But then I have no way of knowing whether either dealer actually used the holdback to make the deal possible.
Kyle
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But by most definitions, this would be considered "gross margin".
"Profit" is whats left when all the bills are paid, including payroll, rent, advertising, utilities, taxes, etc.
Then the dealer gets to put it in his pocket.
Charlotte
Not to get back on subject again but...
I just had a dealer tell me that if they couldn't locate the car I wanted soon, then the price he quoted might go up because the MFG to Dealer incentives he was using to get me the price he quoted were going to expire.
Car_man I know you said there aren't any Chrysler/Dodge dealer incentives in MA right now, is he full of it?
-Kyle