Are car dealerships immune to economic conditions?

[tedbower]

I just bought a jeep for a my company car sticker was over 25000.00 and I bought it for 20,700.00 . My experience has been 4-5000.00 off of sticker.

 

[Dirtebiker]

Never trade in! Always sell your old vehicle on your own! Dealers will tell you they need your trade in but they will never give you what it's worth!
You can always get the best deal with an all cash offer... Just like real estate!!!
Also I have to agree with others... Buy 2 or 3 year old vehicle... Let someone else eat most of the depreciation! You still get a good car( usually the "lemons" have been taken care of) for roughly half price!

 

[45fan]

Something I learned from my days working in a dealership, profits are a highly guarded secret. The invoice might show a number that would lead you to believe that the dealer is only making 3-4k in profit, but at the end of the month, the dealership turns in numbers to the manufacturer, and there is a kickback payed out. There were some instances that we sold at near cost, just to move merchandise, and at the end of the month, we still made a profit.
Never forget Rule #1 of bargaining, never lay all of your cards out on the table. Car salesmen and dealers live by this rule.

 

[04DarkShadowGT]

Something I learned from my days working in a dealership, profits are a highly guarded secret. The invoice might show a number that would lead you to believe that the dealer is only making 3-4k in profit, but at the end of the month, the dealership turns in numbers to the manufacturer, and there is a kickback payed out. There were some instances that we sold at near cost, just to move merchandise, and at the end of the month, we still made a profit.
Never forget Rule #1 of bargaining, never lay all of your cards out on the table. Car salesmen and dealers live by this rule.

The holdbacks vary by car, generally arent all that much really either. It can all add up depending on the volume of the dealer, but holdbacks are there for a reason, just to add some cushion. If the dealer is selling the car for invoice less rebates you are getting a great deal.

Never trade in! Always sell your old vehicle on your own! Dealers will tell you they need your trade in but they will never give you what it's worth!
You can always get the best deal with an all cash offer... Just like real estate!!!
Also I have to agree with others... Buy 2 or 3 year old vehicle... Let someone else eat most of the depreciation! You still get a good car( usually the "lemons" have been taken care of) for roughly half price!

Actually they do give you what its worth, they give you what the trade value is worth. Not the private party value. If you can sell it quickly, then its certainly advantageous to do so. But in a lot of cases your car may not be all that appealing or nothing special and unless you price it aggressively it wont sell that quickly anyway.

In a lot of cases dealers would rather not even bother with a trade anyway, so that may be a win win.

You got ticked because somebody tried to get the best discount they could? Sounds hypocritical when you are trying to make the most profit you can. Some sales people are slimy so you get ticked off when somebody wants to play hardball. What did you expect?

Salespeople don't give a **** if a person can actually afford the payment. They want to know if they can make the payment not if a family can eat and make their car payment.

With all due respect its not the salesman's job to know if the buyer can afford to make the payments. If a buyer spends more than they can afford its on him, not the dealer, salesman, etc. Personal responsibility man.

 

[VaGriller]

Something I learned from my days working in a dealership, profits are a highly guarded secret. The invoice might show a number that would lead you to believe that the dealer is only making 3-4k in profit, but at the end of the month, the dealership turns in numbers to the manufacturer, and there is a kickback payed out. There were some instances that we sold at near cost, just to move merchandise, and at the end of the month, we still made a profit.
Never forget Rule #1 of bargaining, never lay all of your cards out on the table. Car salesmen and dealers live by this rule.

Agreed, Front end can show very little to zero profit when it sells the car for price minus cost.

Back end on the same deal can show a ton of profit, Add ons- IE: Paint protection (SCAM), GAP insurance (Buy it yourself you'll find it for half what the dealer charges), Extended warranty, Undercoat- Have it done yourself for half the price, and selling loans for above what they are approved for IE:, You have good credit and Cap1 says we'll finance @ 5%, dealer will say youre approved for 8% and get a kickback from Cap1.

 

[04DarkShadowGT]

Agreed, Front end can show very little to zero profit when it sells the car for price minus cost.

Back end on the same deal can show a ton of profit, Add ons- IE: Paint protection (SCAM), GAP insurance (Buy it yourself you'll find it for half what the dealer charges), Extended warranty, Undercoat- Have it done yourself for half the price, and selling loans for above what they are approved for IE:, You have good credit and Cap1 says we'll finance @ 5%, dealer will say youre approved for 8% and get a kickback from Cap1.

Better yet, no add ons and pay cash.

 

[JoshuaW]

I dont even bother with haggle dealers anymore. You really cant get that great of a dealer now, and I have really enjoyed the level of service I have been getting from no haggle dealerships (CarMax, and a dealer in Wisconsin I went to). It just seems like since there is no sales person against consumer mentality, things are much more pleasant, and you arent constantly badgered. If you want to see a car, or test drive one, they are more than happy to help you out, but they dont over play it any. It is what it is. Plus, if you are doing the whole used car thing, no haggle is typically in much nicer condition, so you really dont have "haggle points".

 

[Lucas156]

With all due respect its not the salesman's job to know if the buyer can afford to make the payments.

Never said it was just stating a fact.

 

[88GT]

Never trade in! Always sell your old vehicle on your own! Dealers will tell you they need your trade in but they will never give you what it's worth!
You can always get the best deal with an all cash offer... Just like real estate!!!!

Haven't you people ever heard of opportunity costs?

Not every thing boils down to the dollar figures and how they stack up at the end of it all. Sure, I might net a couple grand by selling it on my own. But I have to finance that much more up front, and the interest from that erodes some of the "profit" I gained by not trading it in. Then there's the time factor: how long will it take me to sell it? I'll now have to carry insurance for TWO vehicles instead of just one. THAT eats into the "profit." And that doesn't even include the non-monetary value of my time and the effort of meeting people, putting myself at risk, having some stranger cooty up my car.

And, no, cash doesn't really get you a better deal in real estate.

 

[04DarkShadowGT]

Never said it was just stating a fact.

I'm not even sure it is a fact to be honest. I am not even sure how the salesman would actually even know what the buyer can and cannot afford. They just work the deal on paper, its up the finance people and or bank to do the loan stuff.

But even if it was a one man run dealer, if the bank will approve the loan, go ahead and make the sale. Why shoudlnt they?