How much below MSRP on custom Transit orders
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I've paid less than invoice on the last 7 cars I have bought. At invoice they are making money. Whether it relates to net profit depends on how well they manage their dealership.
Edit: If the margin on a new vehicle was 5.8% they wouldn't be in the business of selling cars. There are extra margins, holdbacks, volume discounts and rebates to the dealer that also come into play.
Edit: If the margin on a new vehicle was 5.8% they wouldn't be in the business of selling cars. There are extra margins, holdbacks, volume discounts and rebates to the dealer that also come into play.
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348 Posts
No news here. They make money selling at employee discount for the reasons you stated. But the service dept. is where the real money is.
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618 Posts
I look at MSRP the same way I look at a real estate listing on a house. That dollar number is basically saying that "this is the most we think we can get for this house/car/truck in this market at this time".
Realtors would never list a house at a price that is less than what the market is paying and they are always looking for that one buyer that is motivated in a way that is different than typical and is willing to pay more than anyone else. Granted, they can't be wildly off the market or the result would be no showings if listed too high, or a seller lawsuit for a sale that was listed too low.
When it comes to MSRP, manufacturers are saying that, with luck, you Mr./Mrs. Dealership can reasonably hope to find an eager buyer willing to meet this asking price. But, no guarantees! In a rare event, like Sprinter 4X4 components, due to higher than normal demand and lower than needed supply, it may work to charger a premium for the unit. (anecdotally, charging $15,000 for a $7,800 4X4 option).
With volume manufacturing, costs are mostly fixed. Pricing is a variable driven buy supply/demand characteristics. The new platform of the 2020 Transit will sell for more now than it will when there are lots more of them available, and especially once there are some on the used market. The question then becomes, how long can you wait?
I think of MSRP as an attempt to prop up a sales price, while hiding the true selling price behind opaque things like discounts and point-of-sale price reductions that are not widely disclosed.
The one concept that I hold to is "Whoever has the money is in charge of the transaction" As a buyer you can decide to make the purchase or not. That gives you bargaining leverage. But, once you hand over that money, you also hand over your leverage. Bargain hard while you can.
Realtors would never list a house at a price that is less than what the market is paying and they are always looking for that one buyer that is motivated in a way that is different than typical and is willing to pay more than anyone else. Granted, they can't be wildly off the market or the result would be no showings if listed too high, or a seller lawsuit for a sale that was listed too low.
When it comes to MSRP, manufacturers are saying that, with luck, you Mr./Mrs. Dealership can reasonably hope to find an eager buyer willing to meet this asking price. But, no guarantees! In a rare event, like Sprinter 4X4 components, due to higher than normal demand and lower than needed supply, it may work to charger a premium for the unit. (anecdotally, charging $15,000 for a $7,800 4X4 option).
With volume manufacturing, costs are mostly fixed. Pricing is a variable driven buy supply/demand characteristics. The new platform of the 2020 Transit will sell for more now than it will when there are lots more of them available, and especially once there are some on the used market. The question then becomes, how long can you wait?
I think of MSRP as an attempt to prop up a sales price, while hiding the true selling price behind opaque things like discounts and point-of-sale price reductions that are not widely disclosed.
The one concept that I hold to is "Whoever has the money is in charge of the transaction" As a buyer you can decide to make the purchase or not. That gives you bargaining leverage. But, once you hand over that money, you also hand over your leverage. Bargain hard while you can.
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618 Posts
Umm, oops. Any Realtors out there?
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