There's always money made. The problem consumers have, is they have developed this "they're lying" attitude with the new car sales staff because of greedy salesman. But, the reality is its the USED car sales man you have to worry about and do the research a little more (I sold used also, they make more!). I used to work for a dealership and I will flat out admit there is some shady stuff depending on the dealership you go to. That being said let me throw out a few facts:
1. New Car Sales is the customer draw to get them in the door of the dealership. The main profit a dealership comes from EVERYTHING ELSE. New Sales may keep the lights on, meaning in the smaller dealerships, it may pay the electric bill for the place. (half assed sarcastic, but partially true). The money making power house is the Service Dept, closely followed by the Body Shop, and Parts Dept. Those three divisions of a new car dealership make 90%(rough) of the money. The point is most people want to buy their car and have it worked on in the same place, you may not, Johnny Ihavenoclue does. So you buy your car then you have all these people that "know" you at your disposal, its a false sense(to some extent) of security. No one in their right mind would open just a new car lot with out the Service Dept. They would go bankrupt within a month.
2. Some times a salesman will try to tell you "No more room" "I'm below cost" "blah blah blah." Fact...dealerships have what they call hold back that is basically a deposit to GM for the vehicle being on the lot. (As my sales mgr explained) That being said, once a car is sold that "deposit" is "rolled" to another vehicle coming on the lot, to pay its deposit. But on the accounting books, they show that as a profit on the vehicle. Typically holdback is in the $900-2000 mark, at least at Ford. Point being unless they've given you hold back (VERY RARE), they're making money off of the car.
3. "Stair Stepping" - this is a common term (at the dealerships I worked for in TX) for Volume Bonuses paid by the manufacturer to the Dealership based on # of units sold. I don't remember how much they we're, but I remember it was enough that when we were 1 car away from the next bonus level, a Finance Mgr bought a Truck so the mgmt staff would get a bonus from the GenMgr. So there is a little incentive there for the dealership. Ever been told to wait to the end of the month to buy a vehicle? THIS IS WHY. They have to hit numbers, and they are willing to give up a lot, if not all, of the markup to get to that # of cars sold for that higher level of rebate. (Salesman note...If you did not know this remember that one thing if nothing else i say. If you're a deal freak and want the most you can get off the MSRP, go the last day of the month. As long as you're realistic with numbers, they'll "deal" guaranteed!)
4. Finally, this may not work, but it did at my dealership when I sold, and when I bought my Terrain. When they tell you "I have no more room" simply ask to see the invoice sheet.
Shocker I know...a lot of the time if they are telling you the truth, they don't care anymore, and they'll show you anything. Then you can compare the numbers yourself and the truth is in the open.
All I can say is everyone has it out for a car salesman, but new car guys usually aren't making that much off of the smaller vehicles. $700-1500 markup is probably right on the 'Nox and Terrain. If I remember mine only had $900 before holdback. That mark up seems like a lot, but if you finance mull this one over...you can roughly estimate $20/mo for every $1,000 spent on a 5yr/60-month note. If your down to arguing over a grand, and IF YOU LIKE your salesman remember thats his living he might make $50-200max off that car deal(depending on their pay scale), and you may have spent a few days working with him/her. Cut him some slack and buy it, let him make a little money, they're 100% commission. If you wanna slam a car salesman, slam the used guys. They buy your vehicle cheap claiming all this about having to put money into it blah blah, but in reality they wont put much and they'll price it at NADA full retail. I actually watched a cp-worker quote someone on the lot $3K more than retail and the customer thought he was a living breathing angel when he said he convinced the Sales Mgr to take $3k off his quote "just for them." New car guys have a set number...and its on the window.
