davepl

When you can buy a car for $2K back of supplier pricing (I'm doing this on a Tahoe this week, but we've seen even better deals on Zs), where does the dealer wind up making money?

I know there's like a 2% holdback they'll eventually earn, but that's not much. Is that all they get if they're selling at or under cost, or is there something else I'm overlooking?

Or, since we're talking about 2016s, are they just trying to clear remaining stock off the lots at cost, "without respect to loss of profit" as they inanely say on the radio here...

Oakmtnbody

Incentive money or end of model year discounts come from GM and the dealer also is compensated for the total units sold at the end of the year. I worked at a GM dealer years ago and at least that's the way it was back then.

2019 ZR1

They also make money on all the trades they get in and sale. I'm in the car business and know a few GM dealers very well..

Bill Dearborn

GM makes a boat load of money on Trucks and Corvettes. The cost of building a car or truck is pretty much about the same. Assembly time is almost identical with the only variable being the size of some of the parts. Every vehicle pretty much has to have the same parts as every other vehicle so there isn't much variability in cost from that standpoint. This is one of the reasons it is hard to make money on small cars. They cost just as much to build but the Customer won't pay a reasonable price for them but they will pay an unreasonable price for a Tahoe, Suburban, Yukon or Escalade. As sales drop GM can offer incentives to the dealers to move product and take less of a profit than earlier in the year. Even when that is done they are still making a large profit on an SUV.

Bill

pkincy

My dealer told me he tries to breakeven on the sales side (new and used) and makes his money on Service and on Parts and in the Body Shop. Those are very profitable.

btwicked

When I bought my Z the dealer showed me his "cost sheet." The holdback on that car that stickered for $103K car was over $3K. So even at dealer invoice they are making a nice profit on the car. I think he said they make even more for an employee pricing on the holdback from GM, if I remember correctly that was like 4 or 5kish per $100K car. As others have stated they also have incentives for volume goals based on units moved, dealer incentives per vehicle etc.

Dealers make more on the used side. They can make much more profit on a used car than a new.

RJ111

If you are buying a 16 Tahoe, you can do much better than that.

I just bought a loaded LTZ last week with almost 17 k off sticker.

It was tagged with the 12% off and the dealer discounted the rest. He said the tags for this month is less, I'm not sure how much.

The holdback is 3%. GM is helping the dealers move the 16's.

There is a lot of bonus money to the dealers too. Say if you sell so many Silverado's by the 15th, you might get a 30k from GM.

Lot's of money on the backend now, that's why the difference between invoice and msrp is not that much at all on some cars.

ffr1352

pkincy is correct- Dealers make more money from service not selling new cars just like gas stations make more money off store sales not gasoline sales.

rattt g

not from me once its out of warantee they never see me again

b4i4getit

Dealers make lots of money on a new car even with discounts. If you are trading in a car they make a lot more. Never think the dealer is losing money on your deal. When you are talking about Corvettes the dealers make more than you can imagine.

davepl

The one I'm buying is MSRP 74, getting it for 65, so I'm only getting about 9K off. I've talked to a lot of dealers, everyone is within $1000 of that price on their units.

Why would you be able to get 17K off if the best I can do is universally around 9K off? Was it purple? :-)

Can you send me a link to an advertised unit anywhere near that kind of deal? I'm at supplier pricing less 2K incentives less bonus cash they put on it this month. That's the best I can do.

I can search for incentives by VIN in GMGlobalConnect, so there's not much magic that I can think of.

TEECEE

I just picked up a 2016 Z06 last night. 16800.00 off sticker! Dealers regular discount, a 1500.00 GM rebates then an extra 10% GM rebates to the dealer. They want them gone.

davepl

Z06 yes, the 2016s are deeply discounted. Tahoes seem to be at about $2K of rebates, so best pricing I've found is Costco less rebates.

If I knew how to do better than supplier pricing less rebates I would, but so far as I can tell that's where the dealership is breaking even.

Congrats on the new Z!

OVR60

How much money was made when the 2014 c7's came out and they were selling with little or no discounts. The top salesmen on the Forum must have had some huge paychecks when they were selling hundreds of C7's and we know they were making more than $100's on a car.

RJ111

The GM told me yesterday the incentives went down some on the Tahoe this month.

My Tahoe MSRP was 73,165, selling price was 67,982. Then he added the 12% bonus tag at 8,779. off. I was shopping around to get a better deal, and the dealer called and said ne needed to move it that day to get another bonus tag. So he came down another 2500.00. I'm not sure where that 2500. came from.

Mine is White with the Cocoa dune interior..

RJ111

I just asked the GM at my dealership about your deal. He said it sounds about right. The bonus tag now is only 3500. He said GM is correcting back to regular deals.

I just went to GM's website to build one, to see if it showed any dealerships with the 12% bonus tag. It looks like the factory is discounting the MSRP on Tahoe's right at 5k.

davepl

I'm about 9K back of MSRP, so almost double that. If that's what you meant to say (5K off MSRP) I guess I'm doing pretty well. They went to fetch it as we speak (had to dealer trade it out of another state as there just was not matching supply up around here with the right options for us).

Thanks for the info!

tws

Nice! you stole it!