Document preparation fees--RIPOFF

[schoolsout]

Oh if I had a dollar for every time a sales person used that line. If you're upfront about it, I'm ok with it. (no, there's not a ford in my future) With a next to zero margin, how does a dealership pay the utilities, pay the help, get more inventory, buy more land to expand, put up a larger showroom, marble baths and counter etc., etc., etc.
Actually part of that equation isn't true, most of the local dealers have almost stopped stocking inventory. It's much more convenient for them to order it from the warehouse and have the customer make two or three trips to get parts. Then the parts guy wants to gripe about how people are buying things off the internet and having it direct shipped.

Service/Parts pays the bills...Sales makes the extra, supposedly.

I'll be more than happy to show you the actual invoice to a truck (not a doctored up one) and our profit level. Gone are the days that dealerships make good margin...it's all about volume now (and that isn't the right way to do it, either. Our economy is shot.)

 

[JDgreen227]

Service/Parts pays the bills...Sales makes the extra, supposedly.

I'll be more than happy to show you the actual invoice to a truck (not a doctored up one) and our profit level. Gone are the days that dealerships make good margin...it's all about volume now (and that isn't the right way to do it, either. Our economy is shot.)

I remember when I was shopping for my first new luxury car back in 1985, my choice was an LTD Crown Victoria, which was priced at about $20,000 sticker, loaded. One salesguy kept wanting me to up my offer of $17,000 for the vehicle I had in mind, which was a fair price to me, according to the dealer cost.

He asked me "so what is a fair profit for the dealership to make on a twenty grand car, anyhow..." and took a big swill of coffee, then when I said "$75.00" he choked and spat half his mouthful on his desk....:laughing:

Well, since we couldn't agree, I went elsewhere and got an even better deal than what I had hoped for with him, and a month later I saw him at a gas station, filling up his demo, as I walked by into the station to pay for my gas. Came back out, said hello to him, asked if he remembered me, he said..."Ummm, Bill....17 grand for a loaded 'Vic. right...?"

Pointed at my new LTD two pumps away, told him "thanks for making me walk away, I got that one for sixteen-five....." :laughing:

 

[ultrarunner]

Service/Parts pays the bills...Sales makes the extra, supposedly.

I'll be more than happy to show you the actual invoice to a truck (not a doctored up one) and our profit level. Gone are the days that dealerships make good margin...it's all about volume now (and that isn't the right way to do it, either. Our economy is shot.)

For many Dealers the used car side of the business has more profit per unit...

Used Cars are much harder to shop because no two are alike... identical new ones are available from many sources...

 

[JDgreen227]

For many Dealers the used car side of the business has more profit per unit...

Used Cars are much harder to shop because no two are alike... identical new ones are available from many sources...

Well stated....and because a dealer pays wholesale for them on a trade or at an auction and sells them for retail....more profit. The buyer of a used car really has no idea what the dealer paid for it, while the buyer of a new car can research dealer cost easily.

 

[schoolsout]

3% net return is great for dealerships, just so y'all know.

The computer you are typing from had more markup than that vehicle on the lot...

 

[schoolsout]

Well stated....and because a dealer pays wholesale for them on a trade or at an auction and sells them for retail....more profit. The buyer of a used car really has no idea what the dealer paid for it, while the buyer of a new car can research dealer cost easily.

true.

 

[grsthegreat]

well, if new dealers are not making any $$$, than how come the toyota dealership in Coeur d'alene just finished a $4 mil expansion and remodel

 

[ultrarunner]

Several common ways profit is generated are profit on sale, profit from arranging financing, profit on the trade and profit from selling warranty/maintenance packages.

Some very shrewed buyers negotiate a very low profit purchase price and let the Dealer come up with the numbers for everything else... so the overall deal will still be profitable and then at the last minute signing, pull out the check book and pay cash without Dealer Financing, Trade In, or Service Contracts...

 

[schoolsout]

well, if new dealers are not making any $$$, than how come the toyota dealership in Coeur d'alene just finished a $4 mil expansion and remodel

volume

 

[JDgreen227]

The last four new vehicles we have purchased were with the GM discounts available to the families of GM employees and retirees. Sometimes I wonder if I could possibly be able to buy a new GM car or truck for less than the GM employee price by going thru the old-time haggling method with the sales representative.

Last time we made a car purchase, I asked the salesguy if he liked selling via the GM plan and he told me he would rather sell via GM discount plan as the sales price is pretty much set, so he doesn't need to worry about some other dealership undercutting him. Guess that means they would rather have a steady stream of sales with a fixed profit than try to take a minimal profit on one sale then try to make up for it by soaking the next customer.