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How much do you think your dealership makes on a 35000~40000$ car like Nox/Terrain ? (price in CDN)

  • 500-1000$

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  • 1001-2000$

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  • 2001-4000$

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Discussion Starter #1
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I am wondering about how much could our dealership make when selling a car like that. My salesman when i purchased my 38660$CDN Terrain said he was only hardly making about 2000$. One of my friend say that they make about 6000 to 10000$. And you ? How much do you think they make ?

If a dealership pass around, please be honest and post a real answer for us.[/color]

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Why not look up the invoice for the vehicle. That is what the dealership paid for it. Its pretty easy to find on the net.
 

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Discussion Starter #3
I don't know where to look to find that info. Can you post a link ?
 

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Discussion Starter #5
I am from canada, and i think that the price dealer pay here is not like in the usa. So there is not much canadian site... i searched on google and did'nt find anything about that...
 

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The invoice may be the "price" paid by the dealer, however, there's a lot more that goes into it than simply the initial price. For example, GM give dealers cash back when they exceed their monthly sales quota's. They also get GM cash back when they sell show moving models, selling the trade-ins and accessories. Perhaps the biggest reason to sell a vehicle is for the dealer to get the return warranty business as well as the periodic maintenance/service business. They could never survive strictly on the money they make off new car sales.
 

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GM normally pays a dealership 3% back on all vehicles if they are within an acceptable sales range of the number of vehicles. It can go higher if the dealership sells over that range. I'm not sure how much higher, but could be a lot more. This is why so many dealerships are rabid in their sales techniques. And, why larger dealerships and growing dealerships can sell for less.

All car makers use this to make dealerships more hungry to sell cars.

In the area where I live, it's normal for any dealer of any make of pickup truck to sell them at invoice and usually go lower. They get such a large kickback due to the number of trucks sold here that they really deal hard on them.
 

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It really depends on the car. I can tell you that on a Terrain the largest invoice to MSRP difference I have seen is around $1300. An average SLT-1 Terrain has $700-$900 of mark up in it. GM Changed there Pricing Structure a few years ago to lower their prices for a more competitive vehicle. When they did this they drastically reduced dealer mark up. A dealerships largest profit center is service followed by pre-owned vehicles. New car sales really just generates business.
 

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GMCaggie said:
It really depends on the car. I can tell you that on a Terrain the largest invoice to MSRP difference I have seen is around $1300. An average SLT-1 Terrain has $700-$900 of mark up in it. GM Changed there Pricing Structure a few years ago to lower their prices for a more competitive vehicle. When they did this they drastically reduced dealer mark up. A dealerships largest profit center is service followed by pre-owned vehicles. New car sales really just generates business.
So are you saying that considering any possible holdback, incentives, rebates, etc. that the manufacturer would offer to a dealer a new Terrain SLT-1 would only result in a profit to the dealership of $700-$900? I must say that I am skeptical about this. Also, how do you know this information?
 

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WI-Terrain said:
So are you saying that considering any possible holdback, incentives, rebates, etc. that the manufacturer would offer to a dealer a new Terrain SLT-1 would only result in a profit to the dealership of $700-$900? I must say that I am skeptical about this. Also, how do you know this information?
The Dealership does not make any money on rebates or incintives, so that is not a profit center. Other than mark up the only other profit from the sell would come form volume bonus. If you meet your mark for how many new vehicles you are suppose to sell GM gives you money. There are a few other ways they reward you as well. A lot of people are having a hard time buying in to the new fact about mark up, there really just isn't any there in the new models coming out.

I work for a dealership, so I work with these numbers everyday. I can also tell you that new cars isn't what keeps a dealership in business, new cars brings in new customers. Service, parts, and pre-owned sales are what keep the doors open.
 
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How about we just simply state our trim level and post the "Dealer Discount" amount "off the MSRP" posted on the window sticker of the vehicle. This way we'll get right down to the real discounts off MSRP that a dealer can really get down to, and we'll know when they're [email protected] when they say "oh no, can't do it...won't do it...that's below our cost" yehhh right!

Here's mine:
Ontario, Canada
2011 (have to wait 8-12 wks for delivery). LTZ, V6, AWD, upgraded 19" wheels & Sunroof.
MSRP - $40,755
Dealer Discount right off the top - $2175, about %5.5 off

I suspect the dealer would make about 8-10% of a loaded LTZ in Canada. Plus as everyone mentioned the kick backs from GM for sales volume ect...
 

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As fancy as our dealer's showroom is we would say they made enough![/color]
 

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the invoice price and the dealer price are not the same. A dealer will make about $2000 on a mid range awd equinox. The invoice price would have you believe he makes about $1300. Prices and profits will vary with the msrp.
 

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I cant speak for GM, but I know that with BMW they get cars for below "dealer invoice". The dealer invoice is set up simply to make a customer think they are getting the car for the same price the dealer gets it for. If thats the case then there would be no need for dealerships as they are simply a middleman.

I got my Nox for "supplier pricing" which is a deal set up through my work. It is $400 below "dealer invoice". That worked out to $900 give or take off sticker. The dealer would have no incentive to sell to me if they werent making anything off the deal.
 

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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. :eek: 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.
 

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Well, someone is making money somewhere. I priced a MSRP Cadillac SRX at 40,000 +, Invoice of about 38,000, and on the internet (the salesman never met me, doesn't know me from Adam) he quoted me 36,000. That's $4,000 off MSRP and $2,000 off of invoice. Hey, this guy is over 100 miles from me. He knows that when he sells me the car I won't be going to him for service. And even if I did, Cadillac offers basic service FREE! If you think they're only making a few bucks then you are living proof of what P.T.Barnum said..."A sucker born every minute".
 

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If the dealership makes the quota for the month they will get far more money than the $2k they lost on your sale.
 

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bballr4567 said:
If the dealership makes the quota for the month they will get far more money than the $2k they lost on your sale.
My wife's sales team just earned a $50,000 bonus from GM for March for selling over 100 new vehicles in the month.
As you go through the month, a bonus program like that is always in the back of your mind, do you give up a little more on this deal because you will probably hit 100 units this month or do you wait untill that last week of the month when you have a better idea of your chances of success? If you treat every vehicle like it has a cost $500 less then your true cost and then only sell 96 cars and fail to earn the bonus, who pays the $48,000 short fall?
 

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A $50K bonus for 100 cars ($500 per car) doesn't seem like the dealer is getting rich from selling cars.
 
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