No way is that the case, I bought a new 2009 Tundra limited in 2009 and got 3500.00 off msrp at 0% financing.
Car dealers generally pull in 7-9k on trucks, about 3-5k on cars before any incentives the dealer gets. If they don't they can't possibly be in business.
I worked for jap bike dealer years ago, it works the same way, cars or bikes.
The dealer has a floor plan to finance his inventory which he has to pay monthly on until the unit is sold.
The dealer gets incentives based on the amount of his inventory. Out of the sales price he had to pay the loan off, the salesman, and all his other employees (secretaries, managers, f&I guy and the guy that preps the bike) pay the rent, plus keep the lights on.
No way is it possible on a $1500 profit margin. Somebody didn't tell you everything. Those numbers sound like the backend dealer incentives.
Don't know about Tundras, but I have run both a HD dealership and a Ford dealership. The markup on Touring line Harley's is pretty much in line with what has been discussed. I remember that the markup on a new roadking was around 3600 and on an ultra more like 4300 back in 2005. In 2004 the retail on a FLHTCSE was 28995 If I remember correctly, and the invoice was 23500 or so. This does not count prep, any dealer incentives, or freight. On the car side the markup on a typical XLT f150 4x4 that retailed in the high 30's was around 3300 not counting holdback which was 16-1700. At the time the regional average front end, or what the dealerships averaged after negotiations, was just under 700 on a new Ford car and was just over 1200 on trucks. My averages were 1200 and 2000 respectively. Again, this was not counting Holdback which is paid to the dealer once the car is sold. You gotta remember though that most car dealers floor plan their new vehicles, and holdback was conceived to help with this cost.
I worked for a GM dealership and the markup there was less than Ford. A lot less.
Where the real money is at any car dealership is in the Used car business. It is harder for the consumer to "shop" a used car, by that I mean that you can go find 5 identical new vehicles pretty easy, but finding 5 used vehicles with identical miles, and equipment is next to impossible. With the 5 new cars the consumer can find the invoice price on each on the Internet, and that is what the dealers paid. With the used cars there there is no invoice price that can be found and the price is not set anyway. Every used car on every lot in the country is there as the result of a negotiation, either with a customer on a trade, or with other dealers at auction. Therefore the potential to make profit is higher, because of the negotiations, at the time of the used car purchase, and when it is ultimately sold to the consumer.
Regards
Shrader
Author
Topic: What others are paying (Read 10858 times)