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Super Member
It comes down to the fact that it is nobodies business what anyone pays for anything that they wish to sell. If you pay 120K for a house and flip it for 300k, are you going to tell the buyer what you paid? ( I know it may be advertised in the local paper but saying this for the sake of this discussion) What are your variables for establishing your price? Some would think it obscene of the profit you are making and say you are greedy. Others just love the house and think it worth it. What mindset would you cater to? especially if you were selling houses every day? Now add to that any personal variables such as a pending lawsuit, or a family illness or divorce or whatever else. If you are going to stay in business, you need to cover your butt. The reason for that is, there are too many variables to effect the cost either way.Car costs have been advertised and bandied about all over the place from Kelly Blue book to Consumer reports. All theses variables you mention are not written in stone as if quotas are not met, that money is not doled out to the dealership and on the flip side , if the dealer is not sued, then his costs do not go up. If a dealer needs to "give away" a vehicle to meet a quota because more money is to be made in the long run, that does not preclude that all vehicles can be sold for that price. Its as if someone asked you would you cut off your right pinky for $500,000 dollars. You can't cut off all your fingers all the time to make more money. I will agree with you on one point. No one knows what the final cost of a vehicle is; and this includes the dealer. This is why a parameter to have at least something to go by such as dealer invoice, is necessary and not necessarily of "having to be upfront" Maybe you are looking for the dealer to say "look , I don't know what this car is eventually going to cost me but I need some padding in case the worse happens". You'd be no different if you layed out millions of dollars for a product line and support of everything else because you had a chance to make a great living. The greater the risk, perhaps the greater the reward.Cars are not what they cost only because of material and labor. They also cost what they do because of advertising and litigation adding to the fact of "no one knows what a car will cost" Its all comes down to human nature to have their self best interest come to the fore whether you are a seller or purchaser.Early in the 1980's when people and banks began to leak the true cost of a new car and people began to show up on lots with the true invoice cost to negotiate with car companies began to hide those true costs. The dealer invoice is not the true cost of the vehicle. There are kickbacks over the year for a whole slue of things, number of vehicles sold during the month, the quarter, the year, in that model. So showing the invoice is not even close to the invoice by the end of the year, that number is closely guarded, and well below the invoice number the dealer will show you. Nice try. Why not be up front. When you see a dealer (right now today) in Houston selling a truck for 12K off sticker, and 2-3K below invoice they are still making a profit, and trying to break some thresholds they need to bring home a kickback over hundreds of cars sold during the year.
HS