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Wondering how close is what Edmunds shows as invoice price vs the dealers invoice?

Any one answer for me?

Thanks
 

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I think Edmunds shows both. They were right on target with Honda CR-V I just picked up.
 

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Wondering how close is what Edmunds shows as invoice price vs the dealers invoice?

Any one answer for me?

Thanks
The dealers "invoice" is LESS than what Edmunds shows. A Toyota dealer receives 2% of base MSRP from the manufacturer known as holdback, he also gets 1% of base MSRP known as a delivery allowance, so even if the dealer shows you the actual invoice that is NOT his actual cost. Depending on availability and demand for certain models you may be able to go below invoice, the bastard is still making money!
 

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The dealers "invoice" is LESS than what Edmunds shows. A Toyota dealer receives 2% of base MSRP from the manufacturer known as holdback, he also gets 1% of base MSRP known as a delivery allowance, so even if the dealer shows you the actual invoice that is NOT his actual cost. Depending on availability and demand for certain models you may be able to go below invoice, the bastard is still making money!

You are 100% correct.

However, and unfortunately, dealers generally pay sales staff from that invoice that Edmunds lists. In other words, +- 20% of the gross profit based on that invoice to the salesman, then a % to the sales manager, a % to the GSM and on and on.

I personally have never pushed too hard to get into that 3% holdback simply because there are soooo many other costs a dealer needs to pay to stay open; everything from utilities to flooring on the vehicle.

Depending on a dealers' standing, they can pay as much as 1/4-1/2% a month interest on inventory. A vehicle with a $30,000 invoice may cost $150 in interest a month to keep on the lot.

No, I don't feel sorry for dealerhips, but I realize the fact that I may need them in the future for suppport and in order to stay open, they are entitled to make some profit for their efforts........just no where near the MSRP....LOL!!!


IMHO, Edmunds has always been a very good starting point concerning negotiations.....people just need to be wary of BS fees like dealer prep and Doc fees.....some states limit those doc fees, some don't; either way, they are nearly 100% profit.
 

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You are 100% correct.

However, and unfortunately, dealers generally pay sales staff from that invoice that Edmunds lists. In other words, +- 20% of the gross profit based on that invoice to the salesman, then a % to the sales manager, a % to the GSM and on and on.

I personally have never pushed too hard to get into that 3% holdback simply because there are soooo many other costs a dealer needs to pay to stay open; everything from utilities to flooring on the vehicle.

Depending on a dealers' standing, they can pay as much as 1/4-1/2% a month interest on inventory. A vehicle with a $30,000 invoice may cost $150 in interest a month to keep on the lot.

No, I don't feel sorry for dealerhips, but I realize the fact that I may need them in the future for suppport and in order to stay open, they are entitled to make some profit for their efforts........just no where near the MSRP....LOL!!!


IMHO, Edmunds has always been a very good starting point concerning negotiations.....people just need to be wary of BS fees like dealer prep and Doc fees.....some states limit those doc fees, some don't; either way, they are nearly 100% profit.

The floorplan interest is much more than that. Before the banking crash a dealer with a well established relationship with a bank could usually get prime plus half a point, after the financial mess, I know of dealers who had been in business for 2 or 3 generations suddenly have their lines of credit slashed, eliminated or rates almost double!

Salesmen pay plans are all over the place! some dealers pay on a sliding percentage of gross profit depending on units delivered, the more you sell the higher the percentage, the most I've seen is 12%, 15% for a really good consistently producing sales guy. Then you have the "mini" so if the dealer takes a really small gross the salesmen still get a certain fixed amount.

Dealers also recieve a "fuel reimbursement" credit for filling the tank, and some dealers who have a really tight relationship with their district sales rep are able to buy company demo's for WAY under invoice, here the customer really has no idea what the dealer is into the vehicle, these are usually "homerun" deals; high gross.

But the real bread and butter for a dealership is the fixed ops; service/parts!
 

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The floorplan interest is much more than that. Before the banking crash a dealer with a well established relationship with a bank could usually get prime plus half a point, after the financial mess, I know of dealers who had been in business for 2 or 3 generations suddenly have their lines of credit slashed, eliminated or rates almost double! !

Ummmm...........I think we're saying the same thing.

I was basing my 1/2% monthly on obviously a 6% APR.

The bottom line is it's money that has to be taken into consideration in addition to that holdback/profit.



Salesmen pay plans are all over the place! some dealers pay on a sliding percentage of gross profit depending on units delivered, the more you sell the higher the percentage, the most I've seen is 12%, 15% for a really good consistently producing sales guy. Then you have the "mini" so if the dealer takes a really small gross the salesmen still get a certain fixed amount.!
Wow, in all the years I was in the business I'd never seen a pay plan less than 20%.....the minis were $75 and there were always the old stockers that had $500+ flats.

Heck, my pay plan in F&I was 11% +LAHA + juice and I grossed over 1 million a year. Of course I was at the dealership 10-14 hours a day, 6 days a week.


Dealers also recieve a "fuel reimbursement" credit for filling the tank, and some dealers who have a really tight relationship with their district sales rep are able to buy company demo's for WAY under invoice, here the customer really has no idea what the dealer is into the vehicle, these are usually "homerun" deals; high gross.

I've seen the whopping $20-$30 for 1/2 a tank on Ford's invoices.....not sure on others.

Factory demos/used cars; really no difference in that they are usually the highest grossers.



But the real bread and butter for a dealership is the fixed ops; service/parts!
Yup, and when manufacturers pay less on warranty work than service makes on customer pay, people wonder why dealers fight so hard not to warranty stuff.
 

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Yup, and when manufacturers pay less on warranty work than service makes on customer pay, people wonder why dealers fight so hard not to warranty stuff.
I never wondered. With my old Dodge I had to fight and argue tooth and nail to get problems recognized prior to 36K. Make a senior tech take a ride with me and wait for my steering wheel to vibrate violently in his hand while both accelarating and braking and then point to his shaking hand holding the wheel.

At 60-75K: Drop truck off. Hand over keys. Wait two hours. Get phone call with in-depth 2-3000 dollar diagnosis, no stone un-turned, nothing missed.
 

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I never wondered. With my old Dodge I had to fight and argue tooth and nail to get problems recognized prior to 36K. Make a senior tech take a ride with me and wait for my steering wheel to vibrate violently in his hand while both accelarating and braking and then point to his shaking hand holding the wheel.

At 60-75K: Drop truck off. Hand over keys. Wait two hours. Get phone call with in-depth 2-3000 dollar diagnosis, no stone un-turned, nothing missed.

Service departments have what is known as a "Flat Rate" manual. This tells the service people how much time a technician should get paid for a job or how much warranty will pay per hour for the same job. There are certain jobs that take WAY longer then what the warranty flat rate manual says, techs HATE these jobs and usuall try to pawn them off on "newbies". Experienced technicians will "cherry pick" the schedule that moring, they know which are the gravy jobs, IE. flat rate pays 4.0 hours but it only takes 2.0 hours, even though the job only took 2.0 hours you get charged for 4.0 and the tech gets paid for 4.0 hours, this is where service really makes the money.

Why do you think dealerships offer such "great" deals on oil changes/tire rotations? TO GET YOUR CAR/TRUCK UP ON THE HOIST!! and start finding things that your car "needs"...like blinker fluid! If your car is out of warranty take it somewhere else besides the dealer! and don't buy the line that "we have all the tools and expertise to fix your Toyota, or any other brand" any repair place worth it's salt will have access to scan tools and internet manuals very similiar to what the dealer has, and be alot cheaper....usually.
 

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Minis' were always $100 on used, and $200 on new, depending on how much the sales staff was complaining to the owner and sales manager that month! Those were the percentages, you had to be a top producer to hit the 15% mark.

F&I pay plans, DAMN!! you almost need a Phd. in math to figure some of those things out! penetration percentages, volume, percentage of back end to total vehicle gross...etc...etc...etc!! after a BAD experience, see below, they would always have a new guy on diff pay plan for the first 90 days, wanted to see how they produced and what kind of chargebacks they had.

One guy started and was packing every deal with credit/life/disibility, service agreements, bumping the rate really high on reserves and add the infamous "rust, paint, fab" protection. The dumb [email protected]@ sales manager (also a partner) never did an employment check of people, either lazy, stupid or incompetent....all three if you asked me, but anyways, the guy was averaging like $3000 F&I gross on new/used deals, well his pay was through the roof!! owners didn't care, he was making them money, until he hit the fourth month when cancelations and finance chargeback started coming in!! that's when the guy decided to "move on" he raped those idiots and moved on to better pickings!

Toyota always paid for a full tank. The amount would fluctuate depending on the average price per gallon in your region.
 

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Minis' were always $100 on used, and $200 on new, depending on how much the sales staff was complaining to the owner and sales manager that month! Those were the percentages, you had to be a top producer to hit the 15% mark.

F&I pay plans, DAMN!! you almost need a Phd. in math to figure some of those things out! penetration percentages, volume, percentage of back end to total vehicle gross...etc...etc...etc!! after a BAD experience, see below, they would always have a new guy on diff pay plan for the first 90 days, wanted to see how they produced and what kind of chargebacks they had.

One guy started and was packing every deal with credit/life/disibility, service agreements, bumping the rate really high on reserves and add the infamous "rust, paint, fab" protection. The dumb [email protected]@ sales manager (also a partner) never did an employment check of people, either lazy, stupid or incompetent....all three if you asked me, but anyways, the guy was averaging like $3000 F&I gross on new/used deals, well his pay was through the roof!! owners didn't care, he was making them money, until he hit the fourth month when cancelations and finance chargeback started coming in!! that's when the guy decided to "move on" he raped those idiots and moved on to better pickings!

Toyota always paid for a full tank. The amount would fluctuate depending on the average price per gallon in your region.

You're bringing back some bad memories for sure........LOL!!

I killed the other F&I guy in penetration.....won all the cool trips for the dealership etc...

The only thing is, is he out grossed me by about 200K a year by selling crap base warranties.

Usually the only warranties I missed were his previous disgruntled customers......of course, the owner never saw that crap; he just saw $$$ signs.

I always tried to keep people close to our buy rate because I didn't want credit union one pays screwing with my stuff....... that and the charge backs could kill a paycheck.


The old saying "money can't buy happiness" was never more true while I was in the car bizz.... 22 years old making mid six figures and I was miserable. I got out after 6 years.
 
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