How much $$ do car salesmen and dealerships make?

by Quirky1 18 Replies latest jw friends

• 

  John Doe

  What I don't understand is how you all can see this too and not believe this great tribulation is at hand. I don't quite understand how some people call it armageddon, because it's not armageddon! Media says now we are going into something like the great depression.

  I don't see how anyone can tie expected and predictable market/economy fluctuations to something a bunch of sheep herders wrote 2,000 years ago. Do you remember earlier this year when people were saying $4 a gallon gas meant we were in the great tribulation and the like?
• 

  Highlander

  Part of my business is involved in auditing dealerships. A typical new car sale will have a gross profit to the dealer of about 800 or 900 dollars. Subtract the commissions paid out to as many as 2 salesmen, the sales manager and you have a net dealer profit of about 400 dollars.

  Let's not forget about the money made on dealer financing, dealer installed accessories, F&I products such as GAP insurance, service contracts, extended warranty, etc. There is profit in each of those items as well.

  If a customer walks in and buys only the car and nothing else, the dealer doesn't make much money. The customer that buys some of the other products mentioned above allow the dealer to earn a profit.

  It's true that there was much more money to be made in the business 20 or 30 years ago, however the dealers of today are still making money. The advantage today is the internet and all the information that is available to any consumer
• 

  cameo-d

  I don't see how anyone can tie expected and predictable market/economy fluctuations to something a bunch of sheep herders wrote 2,000 years ago. Do you remember earlier this year when people were saying $4 a gallon gas meant we were in the great tribulation and the like?

  It wasn't all written 2000 years ago. It has been updated through the centuries with additions, deletions, and more focused agenda.

  And the 4 dollar gas=great trib.... well, now its less than 2. But the extremes tell me something is very wrong and that we are being played.

  When I look at other countries and all the suffering there, I see horrible tribulation. Children starving, mothers dragging their dead sons out of the streets, the wars, the illnesses from contamination....great trib has already come for them.

  The US is overdue for a great tribulation of its own.
• 

  John Doe

  When I look at other countries and all the suffering there, I see horrible tribulation. Children starving, mothers dragging their dead sons out of the streets, the wars, the illnesses from contamination....great trib has already come for them.

  Can you specifically point to any time in history when these things didn't exist? Why do doomsdayers perpetually concentrate on the negatives, and never even acknowledge the positives?

  Positives:

  1. heath is increasing in many parts of the world, along with life expectancies
  2. technology is increasing, along with science and understanding
  3. travel and communication has improved exponentially in our lifetimes. Now, we're not isolated in the world, but actively help each other out handling disasters and catastrophes
  4. medical advances are increasing. I'm living proof. Had I been born 100 years ago, I would have died when I was 5 years old with an unknown and incurable disease.
  5. racial tolerance in this country is increase. 60 years ago, we had segregated schools. Today, we have a black president.
  6. people are harder to manipulate because we all have much greater access to information and opposing viewpoints.

  These are just a few off of the top of my head. Tell me again, why are we heading into a great tribulation? Why is this tribulation different from any other fairy tale?
• 

  AudeSapere

  cameo wrote: The US is overdue for a great tribulation of its own.

  You are a non-witness on a JW discussion board using a loaded JW phrase.

  In JW-land and JW-speak, the 'Great Tribulation' comes immediately before Armageddon - Jehovah God's war in which all wickedness and wicked people (read: Non-witnesses) will be destroyed.

  Is this the tribulation you are referring to?

  -Aude.

  PS: Dang - I think I added to the hijack...

  On topic, I have an acquaintance who sells Ford vehicles. I'm not convinced that even he knows about all the various commissions, incentives, pass-throughs, etc that are linked to car sales. My understanding is that there is greater profit in selling used cars than in new. But it's nowhere near as sexy.

  -Aude.
• 

  Highlander

  My understanding is that there is greater profit in selling used cars than in new.

  Correct.
• 

  SnakesInTheTower

  My understanding on a typical $20-30K car, probably about 3-5%. Not including the kickbacks from the manufacturer that never show up on the invoice on the car.

  I know one PO in my old congo who was a used car salesman..and he was a shady character in my opinion in more ways than one. Sold me (or pointed me to) several cars over the years..all ended up lemons...after the last one (3rd or 4th) I finally got wise and found my own car.

  here is my only story about buying a new car from a dealer.

  When I bought a new car in 02, I bought a Honda. I had researched car prices for 2 year leading to that point. When I was ready to buy, I went on Consumer Reports and ordered a couple of new car reports...those reports included wholesale cost, rebates, etc...and what sort of profit margin the dealer should reasonably expect to make.

  So I had a price range in mind for two specific cars at the Honda dealership. I went in on a Saturday. I told the salesman that I was prepared to buy but only within certain price ranges. He was salivating. I took the car on a test drive..about 15 miles as I remembered...got back, he wanted to negotiate, asked me to shoot him a price. I told him up front I had the reports and done my research. He tried to get me to give a price. I told him: "Look, if you shoot me a price within the narrow range of reasonable profit that I have on this report, I will buy the car, no question." He started to try that go talk to the manager stuff. I said, "Joe, how long have you worked here?" He shot me an experienced number of years. I then said, "You know exactly how much you can sell me this car for and still give yourself a nice commission and the dealership a profit. You dont need to talk to a manager."

  After a brief argument about the $95 floor mats that were the only add on listed...and several feeble attempts at trying to upsell me on unnecessary things (rustproofing...which I said, "if the car comes out of the factory and then needs additional rustproofing, I may need to rethink the whole buying Japanese") ...the guy shot me a price...it was on the mid-high end of my range. I have no patience for playing the game and since he shot me a price in my range, I accepted. I got that in writing then discussed financing. I got financing (with great credit scores the terms were very favorable) and a car in less than 5 hours on a Saturday afternoon. I left my junker on the back lot for about 3 days until I could sell it (an old 79 Caprice) to a brother for parts..he brought his racing trailer...ever try to fit a Caprice into a racing trailer? He had to crawl out the car window and out the side panel of the trailer.

  I dont play with these folks. Most expensive purchase of my life....I walk in and take control. I still have the car 6+ years later..189K miles.... except for rebuilding a transmission (which was probably my fault for not having it serviced it correctly), it has all been normal wear and tear and maintenance. No regrets. Same sales guy is still there ..I see him when I have some service work done.

  Snakes ()
• 

  observador

  I don't know how much money these guys make, but judging from the pompous dealerships in the area here, you have to assume that they make quite some money. I have mixed opinions about this.
  
  What I would say is: depends on what price range you're buying. Likely they make little money in low end cars below, what?, 20K.
  
  In the past 7 years I have bought 3 new cars. The last one, 2 years ago, was a really painful experience. I won't go into details because just recalling make me sick. :)
  
  However, I find interesting some of the techniques people have related here. For instance, the one that avoids "go talk to the manager" game. The problem is that in this last purchase, even if I had tried to apply it, it wouldn't work because the sales person as a woman with probably a month on the job. So she was completely sidestepped and I had to play the game with the manager himself. A long story short: the car had a price tag of $22,500 and I paid $18,500 after a $2,500 rebate, about $1,100 Supplier's Discount and my negotiation.
  
  The key is to know very well beforehand all about the car you're trying to purchase, such as trim levels, etc, and all related numbers.
  
  At this dealer apparently things are so bad that they mistreat you even at the Financing Guy's office. They make you sign a paper declaring you have been offered [include here whatever dealers push you] but that you have declined to buy. At this dealer I had to purchase the car in a lump-sum because they offered a 7.9% APR financing (2006) and I told them in no uncertain terms I would never buy a car with those terms.
  
  Now, talking about financing... in my previous purchase at a Honda dealer (2003), the negotiation was not so bad, but at the financing office, the first financing offer the "manager" gave me was a 4.9% APR. I told him "look, I want to make things easier for you and me. There is no way I would pay more than 3.9% APR". Then he turned to his computer, without saying a word, typed a few things there, and said "is 3.5% OK for you?", to which I responded "OK". Three days later was driving out of the lot a new CRV.
  
  The thing I find most confusing/irritating/stressful when buying a new car is that you almost never find the exact car you're looking for (trim level, optionals, color, etc. etc.). One optional that this car has makes it a completely different beast from the one you saw for less in another dealer.
  
  And before I forget... never answer the question "how much do you want to pay monthly?"
  
  Observador.
• 

  snowbird

  Buy American Sylvia!!

  I did - twice.

  I've just got to have one of those little boxes!

  Sylvia