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Help: Struck Out ordering '14 Summit at 2 Dealers !

5K views 37 replies 17 participants last post by  CHALLENGERBIZJET 
#1 · (Edited)
Need some help and advice..........

I went to 2 different dealers yesterday with a check in hand hoping to order a new '14 Summit at 3% Below Invoice and struck out twice !! :mad:

Background: I was looking to order a '14 Summit, V8, Auburn Pearl with Brown
<O:p</O:p
Trade: I was trading in my 2007 Acura MDX with 122,000 miles and both dealers used "Galves" for the trade value. I paid the $4.95 to get Galves Values and they came up with the exact same price I had (12,575). Both dealers said the high mileage made it destined for wholesale auction so they didn't have alot of room with it. (not sure if this is true ?)
<O:p</O:p
Dealer #1: Test drove here 2 weeks ago, then found out a good friend of mine is a friend, business associate and golf partner of the Dealer's Owner so he referred me and I had corresponded with the owner ahead of time by e-mail so he was expecting me. Let me take a Overland V8 and a Summit V6 each on a 20 mile, 45 minute test drive (including parked time comparing stereos with SD card) in city and highway at 80mph without the salesmen & confirmed I wanted the Summit's stereo and a V8.
<O:p</O:p
Dealt with the Owner directly and was offered 1% below invoice (as per the prices on page 1 of Milous' pricing thread) and he called this "Special Affiliate Pricing". I countered with 3% and they would NOT BUDGE at all. They finally increased the trade by 600 but that was the best they could do and let me walk out.
<O:p</O:p
Dealer #2: Had already test drove here 2 weeks ago, so sat down with salesmen to talk #'s. He offered the same for trade and printed sheet showing MSRP and Invoice (again matched Milous' numbers) and offered me Dealer Invoice. I said the "tread lightly" program will get me 1% so you had to do better than that and he went down to 1.5% below invoice. When I countered with 3% below, he circled the HB number of $1,650 at the bottom and said this Holdback amount is 3% and was their cost and would make NO money at that price and thus was willing to split the Holdback at 1.5%
<O:p</O:p
He also said my Trade would be "re-valued" at Delivery and I would have to accept the new value - but I countered and said whatever #'s we agree on today is our contract. I won't ask for more off the Jeep price when it comes in, so you can't ask for a lesser trade value !! I think he would go for this, but didn't move from the 1.5% and I again walked out !!
<O:p</O:p
* Both Dealers acknowledged I did my Homework (Thanks to you guys !!).......So what did I do wrong ?
<O:p</O:p
* Can somebody please explain the "Dealer Holdback" and how this works ? Does the 3% Holdback rate sound right and can the Dealer go below this amount ?
<O:p</O:p
* I had read about deals in the 3%, 4%, 5% and 6% below invoice (granted some were group buys) but I thought the 3% number seemed fair to both sides.
<O:p</O:p
* What should my next step be ? :confused:

Thanks,
Tom
 
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#3 · (Edited)
need some help and advice..........

I went to 2 different dealers yesterday with a check in hand hoping to order a new '14 summit at 3% below invoice and struck out twice !!
:mad:

background:
i was looking to order a '14 summit, v8, auburn pearl with brown
<o:p
trade:
i was trading in my 2007 acura mdx with 122,000 miles and both dealers used "galves" for the trade value. I paid the $4.95 to get galves values and they came up with the exact same price i had (12,575). Both dealers said the high mileage made it destined for wholesale auction so they didn't have alot of room with it. (not sure if this is true ?)
<o:p
dealer #1:
test drove here 2 weeks ago, then found out a good friend of mine is a friend, business associate and golf partner of the dealer's owner so he referred me and i had corresponded with the owner ahead of time by e-mail so he was expecting me. Let me take a overland v8 and a summit v6 each on a 20 mile, 45 minute test drive (including parked time comparing stereos with sd card) in city and highway at 80mph without the salesmen & confirmed i wanted the summit's stereo and a v8.
<o:p
dealt with the owner directly and was offered 1% below invoice (as per the prices on page 1 of milous' pricing thread) and he called this "special affiliate pricing". I countered with 3% and they would not budge at all. They finally increased the trade by 600 but that was the best they could do and let me walk out.

<o:p
dealer #2:
had already test drove here 2 weeks ago, so sat down with salesmen to talk #'s. He offered the same for trade and printed sheet showing msrp and invoice (again matched milous' numbers) and offered me dealer invoice. I said the "tread lightly" program will get me 1% so you had to do better than that and he went down to 1.5% below invoice. When i countered with 3% below, he circled the hb number of $1,650 at the bottom and said this holdback amount is 3% and was their cost and would make no money at that price and thus was willing to split the holdback at 1.5%
<o:p
he also said my trade would be "re-valued" at delivery and i would have to accept the new value - but i countered and said whatever #'s we agree on today is our contract. I won't ask for more off the jeep price when it comes in, so you can't ask for a lesser trade value !! I think he would go for this, but didn't move from the 1.5% and i again walked out !!

<o:p
* both dealers acknowledged i did my homework (thanks to you guys !!).......so what did i do wrong ?

<o:p
* can somebody please explain the "dealer holdback" and how this works ? Does the 3% holdback rate sound right and can the dealer go below this amount ?

<o:p
* i had read about deals in the 3%, 4%, 5% and 6% below invoice (granted some were group buys) but i thought the 3% number seemed fair to both sides.

<o:p
* what should my next step be ?
:confused:

Thanks,

tom
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#5 ·
Where are you located?? I would check with more dealers. If they aren't giving you what you want for your car then just sell it yourself.
 
#7 ·
Some people have been able to get 2% or more by themselves. If your willing to drive a little try contacting more dealers in your state to see if they will work with you. If you are using affiliate program, the dealer is getting that money back so they aren't losing anything.
 
#9 · (Edited)
You went in with high expectations. While there are some dealers who will go very low to beat quotas and maybe build allocations for the following year, that's not a typical way to do business.

As for the trade in, the dealer was right. Mine put a mileage limit to maintain the price. It was fair, and I didn't come close. And, if Jeep came out with a rebate by the time your Jeep came in, you would be asking for it ... and get it.

Once the dealer goes below 2% of invoice (with affiliate) his profit is the 3% hold back, less any expenses. Expenses on an ordered car should be minimal. On top of that he may get bonuses for reaching 2 quotas.

That is gross profit. Out of that come salaries (sales and support), rent, utilities, insurance, etc. Oh yeah ... taxes. I'm not saying dealers should gouge, but getting offered a fair price isn't failing.


.
 
#10 · (Edited)
If they let you walk out, the deal wasn't worth doing for them. Its just business.

It is hard for a Jeep dealer to sell a 120k mile Acura on their lot. They will send it to auction, and thus won't give you more than a couple grand less than average auction prices. Regardless of what a book says about value.

If we're talking about 1.5% of invoice, we're talking about $750 maximum. Its up to you to decide if $750 is worth not having the Jeep you want. The numbers are what the numbers are...
 
#11 ·
Agreed here, you're expecting too much out of them. It's a brand new vehicle and you're asking them to take your high mileage trade that they're not going to make any money on, take a check from you so they're not going to make any money on financing, and give you the vehicle at their cost.

Reading the forums I can understand why you'd expect that they'd take this deal. A lot of people will "spin" their stories so they can feel like they got a better deal ("Oh I got mine brand new at 15% under invoice and the dealer gave me a handy out back!"). Reality is, the dealer has to make their money too.

1.5% under invoice is a smoking deal. And the re-value thing makes sense, it's a few weeks away, and you could crash it, drive it across country, etc.

It sounds to me like both dealers are willing to give you a damn good deal, you're just expecting them to lose money to sell to you.
 
#22 ·
It depends on the situation. Invoice, less holdback, less incentives is the dealer's price for the car. If you have a trade, that is another profit center because they pay you one price, sell it for more. If you finance through them, more profit. Buy a warranty or paint sealant, more profit.

In the OP's case he's buying the car cash, assuming he buys no extras, cost is invoice less holdback (3%).
 
#17 ·
If this guys dealer was beating him up about 1.5-2% under invoice and crying broke then how are these dealers making money and offering the forum members 4-7%?? How are those dealers making money on the deal without misrepresenting something somewhere else in the deal??
Because Chrysler LLC (Jeep) offers cash to the dealer for volume sales. The group buys were contingent on meeting certain numbers, e.g. 5 or 10 sales minimum.
 
#18 ·
Volume sales they get a certain % back by a date in the month, then how many they sell in a certain quarter. The dealer isn't losing money on a sold order ask they aren't actually taking ownership of it like they do with ones sitting on the lot.. If they lose $500 per car but can make $30k from all those sales, would you think they are losing money now??
 
#19 · (Edited)
Black book is $11-12K

Trade is $13-10k

so that looks fine.. but I will tell you that they will not want a 122k mile car!! and as for the $$ agreement I dont know really anyone that will sit on a price in todays used car market.. OH ya I also wholesale cars and one of my dealers in a jeep dealer
 
#25 ·
Hold back is 3%. So if they sell to you at Invoice - 3%, they have to make money elsewhere. Trade, add-ons, warranty, financing, etc.

Large volume dealers may get an additional kickback from Chrysler, but no dealer in the world factors that in to the cost of their vehicle unless they know for a fact that they can hit whatever target (ie, you go in to buy a fleet of 20 trucks).
 
#26 ·
Let's start with the invoice. It is the nominal cost to the dealer. If a dealer sells you the car for invoice, he still has other streams of income on the car ... Hold back and quota bonuses.

Chrysler has an affiliates program which you might be able to participate in through your employer. In a large company check with human resources. The other way to participate is to join some environmental organization. I joined Tread Lightly.

With this program, Chrysler guarantees you a price of 1% below invoice. For participating, the dealer's cost is 2% below invoice. So if the dealer gives you 1% without the program or 2% with, he is selling you the car at his nominal cost. Some vehicles are excluded.

The 3% hold back is based on MSRP, and is an amount Chrysler allows the dealer to cover 'floor plan expenses'. An example would be interest the dealer pays until he sells the vehicle and actually pays for it. So the quicker the dealer sellls the the car, the more he gets to keep. On an ordered car that is sold as soon as it comes off the truck, the dealer gets to keep all or most of the hold back.

Next is the bonus for making quota. If the dealer makes the quota set for the 20th of the month he gets $150 for every vehicle sold. If he reaches his end of month quota, he gets another $600 for every vehicle sold.

Now it must be remembered that running a dealership isn't cheap. It's not like the owner gets to put all that money in his pocket.


If I've made errors, please feel free to correct them as it's late, working from memory, and typing on a tablet.

And note, where ever I said he, please read it as he/she.
 
#28 ·
Chrysler has an affiliates program which you might be able to participate in through your employer. In a large company check with human resources. The other way to participate is to join some environmental organization. I joined Tread Lightly.

With this program, Chrysler guarantees you a price of 1% below invoice. For participating, the dealer's cost is 2% below invoice. So if the dealer gives you 1% without the program or 2% with, he is selling you the car at his nominal cost. Some vehicles are excluded.
Thanks Bill....Great Info Here !!

So if the Dealer already offered me 1% Below Invoice for the "Affiliates Program" could I also join Tread Lightly and get another 1% for a Total of 2% ?
 
#30 · (Edited)
Not much I can add to bills post.

And no, you can't combine programs to get deeper discounts.
 
#33 ·
As I posted on another link, Dealers here in Atlanta are taking $2500 off msrp for a 14. I just bought a loaded 2014 Limited and my trade was at kkb. I don't know about your area but in Atlanta Jeeps are not moving as well as other manufacturers. The price for your trade sounds good though.
 
#34 ·
As I posted on another link, Dealers here in Atlanta are taking $2500 off msrp for a 14. I just bought a loaded 2014 Limited and my trade was at kkb. I don't know about your area but in Atlanta Jeeps are not moving as well as other manufacturers. The price for your trade sounds good though.
For the Summit, Dealer Invoice is $2,955 off of MSRP and adding another 1% Below Invoice is $550 more, so I am at about $3,500 off of MSRP now and was still hoping for another $500 to $1,000 !!
 
#36 ·
Best I was able to do was 1.75% off invoice. Two of the three dealers in town wouldn't go below invoice at all. I think your 1.5% offer is pretty fair. The difference in 0.25% is only about $100.
 
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