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OT: how much do stealerships mark up new cars by?

I figure there's got be some common ground here. Any thoughts? 100% markup?
Do dealerships basically buy their cars from manufacturers?

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Re: how much do stealerships mark up new cars by?

dealers buy cars from manufactures (franchise thing)usually through things
like for example Chrysler dealer credit they pay loan on the car. so the
longer a car sits on lot the worse it is for the dealer. the dealer is also
expected to meet sales expectations therefore the manufacturer sends them
say 50 sx 2.0 and they must sell them and they must pay for them.

usually mark up is 10% so say a 20K$ sx 2.0 they will make 2000$ the dealer
gets 1800 and the sales guy gets what's left.
it's all percentages.
also the end of the month is best to buy as credit payments must be made
usually the beginning of each month. to pay for all those new cars on the
lot that the dealer is expected to sell.
this is also the best time to buy used as that money pays the credit on the
new cars on the lot.

"Doug" <pigdos@nospamcharter.net> wrote in message
news:yk8he.7855$rt1.4848@fe04.lga...
>I figure there's got be some common ground here. Any thoughts? 100% markup?
>Do dealerships basically buy their cars from manufacturers?
>
> --
> Remove nospam to email
>

Re: how much do stealerships mark up new cars by?

there is not a certain % they mark them up... 4 cyl wranglers have about 500
between invoice and sticker rubicons have about 3000 all are different..
Here's how to find out what real invoice is and any rebate money if it is
offered...***** what ever car you want to buy example 05 unlimited
rubicon....call a Jeep dealer near you and ask for the new car manager..
tell him you are from abc motors and are trying to trade for an 05 unlmtd
rubi with 2500 miles.(people dont like it anymore) ask what invoice is with
all options and ask if there are any rebates?? he will think you are a
dealer...then ask "are you a buyer if I trade for it" & what price... he
will spill his guts on invoice rebates and all so you will have a good idea
what to pay for a new one!!!! should I write a book or what!!!!

--
Jarod Sprauer

Talk is JEEP at
www.sprauermotorsports.com
281-807-JEEP (5337)

"wraithyjeep" <wraithyneon@sympatico.ca> wrote in message
news:u89he.42105$XX1.908993@news20.bellglobal.com. ..
> dealers buy cars from manufactures (franchise thing)usually through things
> like for example Chrysler dealer credit they pay loan on the car. so the
> longer a car sits on lot the worse it is for the dealer. the dealer is
also
> expected to meet sales expectations therefore the manufacturer sends them
> say 50 sx 2.0 and they must sell them and they must pay for them.
>
> usually mark up is 10% so say a 20K$ sx 2.0 they will make 2000$ the
dealer
> gets 1800 and the sales guy gets what's left.
> it's all percentages.
> also the end of the month is best to buy as credit payments must be made
> usually the beginning of each month. to pay for all those new cars on the
> lot that the dealer is expected to sell.
> this is also the best time to buy used as that money pays the credit on
the
> new cars on the lot.
>
> "Doug" <pigdos@nospamcharter.net> wrote in message
> news:yk8he.7855$rt1.4848@fe04.lga...
> >I figure there's got be some common ground here. Any thoughts? 100%
markup?
> >Do dealerships basically buy their cars from manufacturers?
> >
> > --
> > Remove nospam to email
> >
>
>

Re: how much do stealerships mark up new cars by?

>I figure there's got be some common ground here. Any thoughts? 100% markup?
Do dealerships basically buy their cars from manufacturers?>

This is a bit complicated, but, yes, of course, they buy the cars from
manufacturers at whatever the mfr. sets as the "invoice" price. However,
that's obviously not where it ends.

Mfrs often give dealers incentives (discounts off invoice, called "trunk
money") on certain cars & trucks that aren't selling well, plus there's
something called "holdback", which is a certain percentage of invoice
(usually 2 - 5%) that's paid to dealers for each car they buy from the mfr.
Mfrs pay this to dealers on a periodic basis. Thus a dealer can sell you a
car for "Invoice", i.e., what he technically paid the mfr for it, but still
get paid whatever the trunk money is, plus 2-5% holdback. It varies
frantically, manufactures change this stuff weekly or monthly, based upon
what's selling & what's not. This is why you'll see crazy swings in
advertised prices, goofy rebates, etc.

So, a simple answer to your question is hard to provide, however if you
figure 10% off list is the invoice price, you'll be pretty close. Figuring
out the invoice price is easy, just check out the National Automobile
Dealers Association (NADA) website. It shows invoice & retail for any car
you can think of.

http://www.nadaguides.com

(Why would dealers tell potential customers what they paid the manufacturer
for the product? Simple, that ain't what they paid once you figure in
holdback & trunk money/incentives.)

You can often check them and other sites for current incentives (rebates)
for both customers and dealers. It helps when negotiating to let the dealer
know flat out that you know what the invoice price is, and what any rebates
are, and you can grill them on the holdback %.

It also helps to know that dealers generally don't buy their inventory, but
instead finance it on something called a "floor plan". It's an open-ended
line of credit the dealer's bank or captive finance company gives them, with
which the dealer pays the factory for the cars. Dealers then pay monthly
payments comprised of accrued interest on anything being held in stock, plus
the cost of anything they sold during the month. (Dealers who don't pay the
bank back promptly owe more to the bank than the value of the inventory,
it's called being "sold out of trust".) Thus, it often pays for the dealer
to get vehicles on & off the floor plan quickly, as the finance charges
escalate and eat into whatever profit there may be on any given model. It's
often in a dealers' interest to get rid of a car that's been in inventory
too long at a paper loss, just to save the finance money, which can be
applied to something else that might make a profit. Dealers fight with
manufacturers for cars that sell, versus having to take stuff that doesn't.
Manufacturer sales reps often make a dealer take five "stiffs" just to get
five hot models, so a Jeep dealer may get stuck with five Libertys just to
get five Rubicons.

If you think this is complicated, it is. This is why dealers get so
aggressive & have bad reps, they work on incredibly skinny margins in terms
of the capital outlays involved, and the manufacturers don't do much to
smooth this crap out for them, Further, if the dealer goes broke, the
manufacturer is out absolutely nothing. They just go looking for another
dealer / investor in the area to pick up the franchise.

(Oh, I worked in retail for a number of years, then spent twenty years with
two manufacturers in Service....I hate the car business!)