% Below Invoice -- how can they guarantee?

[MaybeRubi]

Please correct me if I am wrong:.
At time of order from factory, the price (Invoice) is locked in. Jeep rebates/incentives change (monthly?), but apply at time of "closing."
So, those who promise a certain % below invoice are taking some degree of risk that their promised % off will work with whatever rebates/incentives are in effect at the time of "closing"???? (And they are willing to risk cutting into their holdback.) This risk is for the sake of increasing orders by way of the guarantee.
Am I missing something -- tell me what.
Thanks!

Sponsored

 

[TheBirdie72]

Most reputable dealers will honor the price you agree on. But always wise to get it in writing.

 

[Ratbert]

I'm pretty sure a rebate or incentive wouldn't impact a dealership's profit. Those don't change the invoice price.

 

[morph860]

The dealer I ordered from was able to lock in the price by using code 4EA on the order sheet. The "% below invoice price" was before any rebates or incentives - it's just based on the invoice price of the vehicle. Rebates/incentives would be extra savings. Rep said they could use either the rebates/incentives that were available when the order was placed, or the rebates/incentives that are available on the delivery date. Whatever was higher.

 

[gdeyarmond]

Rebates and incentives are from Jeep Corporate's profit and at their discretion. No sweat off the dealer's back if they are added or removed.

 

[MaybeRubi]

Thank you. That makes sense that rebates don't affect dealer cost.
So, for all these "% below invoice'" dealers, are the customers foregoing rebates by agreeing up front to a specific "% below?"
(Sorry if I'm being dense!)

 

[MaybeRubi]

Is there anything that affects the dealer's cost after the vehicle is ordered?

(I know Jeep can raise the price. I purchased a Ford Transit not too long ago and found that Ford reimburses the dealer later for any price increase post-ordering -- although some dealers hope to pass that increase along to the customer who doesn't know better AND get reimbursed.)

 

[Ratbert]

Is there anything that affects the dealer's cost after the vehicle is ordered?

Dealer's cost shouldn't impact us.

Just make sure you get the price locked in. In writing. Odds are there will be a price increase before yours arrives.

 

[morph860]

Thank you. That makes sense that rebates don't affect dealer cost.
So, for all these "% below invoice'" dealers, are the customers foregoing rebates by agreeing up front to a specific "% below?"
(Sorry if I'm being dense!)

No. You are still eligible to receive any applicable rebates or incentives.

 

[Nitehawk92]

I'm pretty sure a rebate or incentive wouldn't impact a dealership's profit. Those don't change the invoice price.

True, but the stealers will try to use that to increase their profits. It's been a few years, but one dealer tried to pull that on me. He said your already getting $2000 off the car, we really can't do any more. I did not buy a vehicle from him or his dealership...

 

[Ratbert]

True, but the stealers will try to use that to increase their profits. It's been a few years, but one dealer tried to pull that on me. He said your already getting $2000 off the car, we really can't do any more. I did not buy a vehicle from him or his dealership...

Which they can't do if your price is locked in.

 

[GrumpyOldVet]

Thank you. That makes sense that rebates don't affect dealer cost.
So, for all these "% below invoice'" dealers, are the customers foregoing rebates by agreeing up front to a specific "% below?"
(Sorry if I'm being dense!)

For my purchase, the agreed upon price (% below invoice) was before incentives were included and it was locked in by the signed agreement. My dealer even noted that had we not signed the agreement then Jeep (FCA) might not honor the reduced price to them - thereby impacting their bottom line. At least for this run up in price during and after the strike, Jeep issued a price guarantee to dealers but there were conditions such as having that signed buy order, the buyer taking delivery within 14 days, etc. I didn't give up any incentives, by the way. I was still able to tack another $1500 in savings onto the already under-invoice price I had. I walked out the door with a 2024 Rubicon X 3.6 AT for under $60k.

HOW they can afford to sell below invoice seems to have to do with other incentives they get for the volume of vehicles they sell and the high ratings we give them as sellers that directly affects the dealership. Other dealerships I spoke to said they couldn't even believe the pricing was legit and alluded to the negotiated price being a scam or something else would change when I go there to sign the paperwork, neither of which were true.

All too often if it sounds to good to be true, it usually is. However in the case of @Ratbert's dealer list, those dealers have been well vetted and you can bet any deal they give you is legit.

 

[Mgdstar]

Ordered a Rubicon X unlimited from Rob at Tuttle Click in Irvine, CA on October 12, 2023 before the last price increase. Rob texted me and assured me that my price was locked in. Good communication from Rob and the dealership.

 

[Victory]

I think where the confusion is, is that the “invoice price” is not actually the price the dealer pays for the vehicle. It maybe was once upon a time, but it seems to be a made up number assigned by the manufacturer now along with MSRP. The actual price the dealer pays will be much less than “invoice” which is why they can offer you 6% under or whatever - they probably pay 10% under invoice or something (I am just throwing out numbers there).

 

[LARSONEM]

The dealer I ordered from was able to lock in the price by using code 4EA on the order sheet. The "% below invoice price" was before any rebates or incentives - it's just based on the invoice price of the vehicle. Rebates/incentives would be extra savings. Rep said they could use either the rebates/incentives that were available when the order was placed, or the rebates/incentives that are available on the delivery date. Whatever was higher.

4EA is actually “Sold Vehicle”. This gives the vehicle a build priority to get it built ahead of those just going into inventory on the dealers lot. My understanding of a Sold Vehicle is that if delivery doesn’t take place to the customer who ordered the vehicle, that opens a “cooling off” period whereby the dealer must hold the vehicle for a certain time period before it can be sold to another customer. This prevents the dealer from ordering vehicles as “sold” to bump up inventory on their lot while taking “build priority” away from customers who have actually ordered a specific vehicle.

I believe it’s code “3AQ Price Protection” that locks in the price of the vehicle.

I went through this when I ordered my 2022 Rubicon. After 3 trips to the dealer they finally agreed to order/sell the Jeep at invoice price. Four days after ordering, the final/order accepted Price Order Confirmation (POC) came back with a $2335 price increase. I went ballistic. The salesman said I’d still get it for invoice but he couldn’t tell me exactly what the invoice price would be. So I waited nearly 12 weeks. First thing I wanted to see when the Jeep came in was the invoice. Yes the window sticker came in higher than the MSRP on the initial POC before the order was accepted by Jeep, but they honored the original invoice price through the price guarantee. In the end I had a Chrysler retiree friend who got me a Friends and Family discount code that put the Jeep at $493 below invoice.

At the end of the day, the dealer gets a Holdback on every vehicle sold. It’s about 3 percent of invoice. So even if the dealer sells at invoice, the still get a kickback. In the case of my Jeep, that amounted to $1753 (shows on the POC as HB) on a $60,000 plus Jeep. There are probably other incentives dealers get for multiple orders, volume sales, specific models or packages, etc that the average consumer has no way of knowing and the dealer holds those cards close to their chest.

Sponsored