jpee

I was just wondering if "ALL" Chevy dealerships pay the "EXACT" same amount of $$ to GM when they order a car..

If Kerbeck... (Big Dealer) and (Joe Schmo) tiny dealership both ordered the EXACT SAME CAR color and same "exact" options.. would both dealerships pay the same amount of $$ to GM..

Or would the "Big Boy" (Kerbeck) get it a lower cost because of the volume they do....

Just wondering. if its not the exact same how could the small dealership stay in business if they had to pay GM more $$ that other larger dealerships??

topper7788

yes

Gary '09 C6

it's more an issue of unit allocation and GM-to-dealer marketing incentives/allowances...
the more units sold (of any/all models), the better the latter...

1bdvet

That's the way they do business!

v26278

Big volume dealers get other perks like ability to priority order high demand/hard to get models, but they pay the same. Otherwise the dealer network would cannibalize itself. Even freight charges are equalized across the country

topper7788

Ok, for about the 100th time on the forum ...

ALL dealers pay exactly the same thing for a car.... Sales incentives when tied to volume are weighted by dealer sales volume groups allowing small dealers to earn the same incentives as larger ones...

In essence ALL dealership pay the same or have about the same opertunity to earn additional incentives when offered...

If the playing field wasent level, small dealers could NEVER stay in business..

Hope that helps....

jpee

Thank you all....

Now I know what to say and/or do when going to look for a new C6.... I'll just have the exact car I want with the "Exact" options listed... make 4 or 5 Xerox copies and hand them out to 4 or 5 dealerships on a Monday, & tell them what I did (won't mention any dealer names...

I'll say I'll be back on Thursday, & buy it from the best price PERIOD!

fasthwks

The only thing that could be different is if a dealer is part of the LMA, it is a 1-1.5% advertising charge that gets added to the invoice price which the dealer gets billed. You will never see a difference on the sticker.

mpuzach

Of course what's on the sticker has nothing to do with how much the dealer pays for the car, which is what the OP asked about.

greengo

My son just got a New Chevy Cruze
I took him to my friend who owns a small dealership but has always beat any price that I can get for me and my family,
He gave my son a price that looked great ......until.......my son went to a HUGE dealership in Houston.
They beat the price by $400 and added a sunroof for $200 more
I went back to my friend and he said "NO WAY they can sell him that car at that price"
My son bought it and the Houston dealership told him "We sell a hundred cars a day....So we dont have to make money on every car...we will make it up on the next sale we sell to someone who is not so price conscious"
I dont know who to believe !

mack morrow jr

Believe the big dealer. It is true.

ALD_Z06

The part about "you win some and you lose some" is correct and a business philosphy.

However, the 100 cars a day (3000 a month) is a huge fib.

mjcourt

I talked to dealership today that claimed the deal he was offering was a loss for them. Funny thing is, I could still get a better deal at other dealerships. I find it hard to believe any dealership can sell cars at a loss. Be skeptical of what any salesman tells you.

mpuzach

How did the selling price compare with the dealer invoice, such as can be found at Edmunds.com? (Their numbers are considered to be quite accurate.) One thing to keep in mind is dealer holdback. Even if a dealer sells a car for less than "invoice", the holdback money they receive can turn the transaction into a profitable one, especially if they haven't been paying any interest on the car.

Crow Hunter

Don't forget they get a "holdback" on each vehicle they sell. They can sell it at their actual cost, and still make money on the "holdback".

fasthwks

I guess I need to apoligize for trying to clarify, I guess everyone knows what a LMA charge is... I am sure you do

cutnout

Wholesale is wholesale. Invoice is something that seems to help marketing and sales. Customers sometimes gets invoice confused with dealer wholesale. I am pretty sure wholesale is the same dealer to dealer. I would bet the so-called invoice includes the account "cost of goods sold and includes profit" IMHO and as taught in many marketing classes.
cutnout aka Charlie

jschindler

I work in an industry that distributes franchised products. While I can't claim to know exactly how the auto industry works, I would agree that they pay the same on the invoice they receive from GM, but there is simply no question that dealers can earn additional incentives in a number of ways.

In our business, we do not allow our sales people to use these incentives to calculate sell prices, and our gross margin does not reflect them. But a manager can authorize a sale at a low margin or loss, and credit the cost of sales for that item by doing an accounting journal entry to use funds from the incentives we receive.

randy500

All dealers do pay the same price. Some are part of advertising groups and do pay a fee for that, it varies. They all get the same holdback, a percentage of the cost of the vehicle paid straight to the dealer that cuts out the sales commision. I also have audited a few dealerships, the do in fact sell many new cars at a loss, some of the losses are even a loss with the hold back factored in. They make their real money on the used cars, I would guess the profit on those is 4 times as much on average.

jschindler

You are not taking into account incentives that come back to them either quarterly or annually. They don't apply to specific vehicles, but they do come back as "other income" on their books. Again, I can't say I have the facts, but I'd bet on it.