Nissan Titan Forum - View Single Post

lacrossetitan · 05-31-2004, 02:39 PM

There is several ways in which a sale can eventually impact a dealerships bottom line.

A Nissan dealership has less to gain on the commonly advertised "INVOICE" sale that we all have seen run at our local domestic dealerships. Nissan "holds back" 2% of dealer cost on each of its vehicles. Whereas the big three "hold back" 3% of MSRP. So, this being said, a Ford dealership that sells you a truck at their "invoice" price sees a more substantial return after the sale than a Nissan dealership would on a comparably priced vehicle. With this in mind, a Ford that lists for $40,000 even when sold at cost, will net the dealership $1200.00 ($40,000 x .03). On the other hand, a Nissan that lists for $40,000 will have a dealer cost of approx. $36,500 so, a dealership would only net $730.00 ($36,500 x .02).

To make things even more confusing, most manufacurers also have some sort of sales volume based quaterly or annual incentives as well as the benefit of sales volume based future vehicle allocations. A greater number of allocations means that there will be more selection on the lot for the consumer. A larger selection generally leads to higher consumer interest in a given dealership. Higher interest can lead to eventual higher sales. Higher sales means a fatter bottom line and even more allocation for the next year. It is a cyclic process. One thing leads to another and before you know it you're shopping at the largest, most profitable dealership in your area.

I set my sights at a dealership profit of $1000.00 per sale. If you go for anything less than this it can be insulting to your dealer and it also becomes tough to keep the lights on. They have alot of asssociated costs in selling you a vehicle (salesperson's salary, benefits, building expense, inventory interest, etc...).

It would be nice if, as a consumer, it didn't require so much effort to obtain a FAIR deal and everything was more upfront. Unfortunately the burden is on our shoulders, as consumers, to be educated and get what we can for our money. Good luck to all.

P.S.
I paid $8.00 over dealer cost for my Titan. The dealship only made about $700 on my deal (List $36,780.00, sold to me at $33,200). I didn't expect to end up at this number when I went in but, they were aggressive and wanted my business badly enough that ultimatelly I paid less than I was willing to.

05-31-2004, 02:39 PM	#165 (permalink)
lacrossetitan Registered User iTrader: (0) Join Date: May 2004 Posts: 2 Thanks: 0 Thanked 0 Times in 0 Posts	How much is the dealership making on my deal? There is several ways in which a sale can eventually impact a dealerships bottom line. A Nissan dealership has less to gain on the commonly advertised "INVOICE" sale that we all have seen run at our local domestic dealerships. Nissan "holds back" 2% of dealer cost on each of its vehicles. Whereas the big three "hold back" 3% of MSRP. So, this being said, a Ford dealership that sells you a truck at their "invoice" price sees a more substantial return after the sale than a Nissan dealership would on a comparably priced vehicle. With this in mind, a Ford that lists for $40,000 even when sold at cost, will net the dealership $1200.00 ($40,000 x .03). On the other hand, a Nissan that lists for $40,000 will have a dealer cost of approx. $36,500 so, a dealership would only net $730.00 ($36,500 x .02). To make things even more confusing, most manufacurers also have some sort of sales volume based quaterly or annual incentives as well as the benefit of sales volume based future vehicle allocations. A greater number of allocations means that there will be more selection on the lot for the consumer. A larger selection generally leads to higher consumer interest in a given dealership. Higher interest can lead to eventual higher sales. Higher sales means a fatter bottom line and even more allocation for the next year. It is a cyclic process. One thing leads to another and before you know it you're shopping at the largest, most profitable dealership in your area. I set my sights at a dealership profit of $1000.00 per sale. If you go for anything less than this it can be insulting to your dealer and it also becomes tough to keep the lights on. They have alot of asssociated costs in selling you a vehicle (salesperson's salary, benefits, building expense, inventory interest, etc...). It would be nice if, as a consumer, it didn't require so much effort to obtain a FAIR deal and everything was more upfront. Unfortunately the burden is on our shoulders, as consumers, to be educated and get what we can for our money. Good luck to all. P.S. I paid $8.00 over dealer cost for my Titan. The dealship only made about $700 on my deal (List $36,780.00, sold to me at $33,200). I didn't expect to end up at this number when I went in but, they were aggressive and wanted my business badly enough that ultimatelly I paid less than I was willing to.