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-   -   Dealer Profits (http://www.jeepgarage.org/f97/dealer-profits-31767.html)

nosmoke 11-28-2011 09:37 PM

Dealer Profits
 
Hello,

Is the Jeep dealer holdback 3%? i.e. if I pay invoice, the dealer is still making 3% on the deal, correct?

A long time ago, was there a .pdf document posted that talked about pricing for all of the new SRT models, etc?

Thanks!

Milous 11-28-2011 09:51 PM

Re: Dealer Profits
 
The dealer holdback is 3% of the total MSRP price (excluding destination). They also get an $1,100 SRT advertising allowance and a $545 Delivery Allowance.

nosmoke 11-28-2011 10:27 PM

Re: Dealer Profits
 
Quote:

Originally Posted by Milous (Post 523644)
The dealer holdback is 3% of the total MSRP price (excluding destination). They also get an $1,100 SRT advertising allowance and a $545 Delivery Allowance.

Thanks.

So, if MSRP is say, $65,000, they will make $1925.25 (65,000-825 destination * 0.03) + $1,100 + $545 for a grand total of $3,570? Is the math right?

$3,500 is not bad considering all they had to get my car was type an order into the computer and I will pick it up the day they get it in, so its not like it'll be sitting around on the lot wasting space and money.

That's why I'm going for invoice. They'll still make some dough.

Edit: Not to mention that my USAA car buying service prices out at invoice. So I will expect them to get it to me at LEAST invoice.

mlarco52 11-28-2011 10:59 PM

Re: Dealer Profits
 
Isn't the 3% holdback off from the invoice price, my dealer told me they're making 5-6k if they sell at MSRP.

nosmoke 11-28-2011 11:16 PM

Re: Dealer Profits
 
I just did some more research, and I think Milous is right: it's 3% of total MSRP. Either way, when you special order a vehicle and it doesn't even spend a night on the lot, they really should give you a decent price.

And, as impossibly hard as it will be, if they don't honor price protection or if they try and jack me to MSRP, I am 100% prepared to walk. I'm already not happy spending over 60K for this truck (as awesome as it seems to be), and I refuse to get bent over more than Jeep already has gotten me.

tyresmoker 11-29-2011 05:47 PM

Re: Dealer Profits
 
Seriously, what would you do if your name was on the sign? Here is a vehicle that no one can get- even the ones that ordered them. Then some schmuck comes in and offers 3% over tissue and claims the advertising and transportation fees are "allowances".

I buy and sell more cars and trucks in a year than some small dealers do. The entire process is retard economics...simple supply and demand. If they dont have it, why should they give it to you? If they are choking on ten, why even offer them 3%?

WolfeWS6 11-29-2011 08:39 PM

Re: Dealer Profits
 
Quote:

Originally Posted by tyresmoker (Post 524180)
Seriously, what would you do if your name was on the sign? Here is a vehicle that no one can get- even the ones that ordered them. Then some schmuck comes in and offers 3% over tissue and claims the advertising and transportation fees are "allowances".

I buy and sell more cars and trucks in a year than some small dealers do. The entire process is retard economics...simple supply and demand. If they dont have it, why should they give it to you? If they are choking on ten, why even offer them 3%?

Because 1 out of the 50 dealers in 100 miles would like to make $3,500 more than they currently have.

A good dealer will also realize that it is a Jeep and it will be in the shop several times during it's warranty period, which will bring them more income. It is "retard economics". A happy repeat customer and $3,500 in margin with low risk. :thumbsup:

nosmoke 11-29-2011 09:24 PM

Re: Dealer Profits
 
Quote:

Originally Posted by WolfeWS6 (Post 524287)
Because 1 out of the 50 dealers in 100 miles would like to make $3,500 more than they currently have.

A good dealer will also realize that it is a Jeep and it will be in the shop several times during it's warranty period, which will bring them more income. It is "retard economics". A happy repeat customer and $3,500 in margin with low risk. :thumbsup:

That's precisely it. This dealer happens to be 5 minutes from my house. I am trying to give them the business that will most certainly follow in service calls and very possibly, a repeat customer. The GM told me a few weeks ago that nobody else has ordered one at their dealership, so people aren't (at least around here) knocking down walls to pay 60K for a Jeep. So yeah, if they say, "F-you, we want MSRP with no price protection", I will get my deposit and walk away. I don't think they will, but who knows.

Believe me, if 250,000 people wanted to buy these, they wouldn't be making 3,800 of them.

tyresmoker 11-30-2011 06:38 AM

Re: Dealer Profits
 
Good luck with that....

Milous 11-30-2011 06:56 AM

Re: Dealer Profits
 
Quote:

Originally Posted by nosmoke (Post 523683)
So, if MSRP is say, $65,000, they will make $1925.25 (65,000-825 destination * 0.03) + $1,100 + $545 for a grand total of $3,570? Is the math right?

$3,500 is not bad considering all they had to get my car was type an order into the computer and I will pick it up the day they get it in, so its not like it'll be sitting around on the lot wasting space and money.

That's why I'm going for invoice. They'll still make some dough.

They "have" to spend the ad allowance on SRT related advertising. While that's a "benefit", it's not the same as cash profit. When buying at invoice the sales person makes little or no commission, so it is in their best interest to "find" some profit wherever they can. Low-balling your trade-in (if you have one) is certain to happen, plus adding document fees, advertising fees, extended warranties and whatever else they can think of.

Unless you have negotiated in advance, finding a dealer to sell at/near invoice this early in the new model year will be extremely tough. There are some buyers who had an early "agreed upon" deal for "invoice" are finding their dealers not wanting to honor it.

tyresmoker 11-30-2011 09:09 AM

Re: Dealer Profits
 
This was bound to happen. The hayseed Jeep dealers out there are not accustomed to floorplanning $50k vehicles, let alone $62k vehicles.
I actually kicked around the idea of going to a local store on release day back in May or June and trying to order one at or close just to see if I can catch them with thier pants down. At the end of the day, the sales contract has a non-performance clause that actually protects both parties. If the dealer is not able to perform due to circumstaances beyond their control (production delays, availability etc) in an allotted period of time, the agreed to price, t&C are null and void, and the deposit will be returned to the buyer. No harm, no foul.
Been down this road, not worth the frustration.
As I have stated a hundred times, until there is one more SRT-8 on the ground than there is a buyer for it, no deals.

Brian302505 12-02-2011 07:59 PM

Re: Dealer Profits
 
Quote:

Originally Posted by tyresmoker (Post 524641)
This was bound to happen. The hayseed Jeep dealers out there are not accustomed to floorplanning $50k vehicles, let alone $62k vehicles.
I actually kicked around the idea of going to a local store on release day back in May or June and trying to order one at or close just to see if I can catch them with thier pants down. At the end of the day, the sales contract has a non-performance clause that actually protects both parties. If the dealer is not able to perform due to circumstaances beyond their control (production delays, availability etc) in an allotted period of time, the agreed to price, t&C are null and void, and the deposit will be returned to the buyer. No harm, no foul.
Been down this road, not worth the frustration.
As I have stated a hundred times, until there is one more SRT-8 on the ground than there is a buyer for it, no deals.

That is true, as I also sell Jeep. Our SRT-8 Grand Cheroke was just delivered to the customer 2 days ago. We sold that one at MSRP which was $66,170. He was happy that we didn't charge a market adjustment fee (even though our GM had a passing thought on that). But as tyres said as long there are none sitting on lots there will be no deals.


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