Dealer profit on vehicle at invoice price question

eugene

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I told my dealer that if at any point In the process that if I found out he lied to me I would go elsewhere. Right now he has says he can order me a JLR on Monday and quoted me at 1% below invoice. When he did this he mentioned that the dealer would only be making $900 on the vehicle at that price Is this true?

I’ve seen the thread of people getting more than 5% off and comments where people say the cost to the dealer is way below invoice price. Can anyone shed some more light on this topic? Did my dealer lie to me? I can post my build sheet that will go through on Monday once I decide on a color and after I call around today to try and get a couple % more below invoice.
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eugene

eugene

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Also after the 1% off invoice all I am paying for after that is taxes, there are no other fees involved. Not sure is the destination charge is figured into invoice.
 

am1978

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The 5% below invoice is slight more than $500 over employee and almost equal to friends/family pricing.
 
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eugene

eugene

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The 5% below invoice is slight more than $500 over employee and almost equal to friends/family pricing.
He said the 1% off invoice is the FFP price that I’m getting. Now I’m confused. Lol
 

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He’s lying
 

am1978

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He said the 1% off invoice is the FFP price that I’m getting. Now I’m confused. Lol
PM’d you my build sheet.
 
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eugene

eugene

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Can you be more specific about what he lied about, the $900 profit he is making or ?
 

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To my understanding the invoice price minus holdback money ($1400ish) is the price dealer pays for Jeep unless there are factory incentives on the vehicle. On a current year JL I do not believe there are any incentives offered by FCA due to record sales numbers. Why discount something if you sell them as fast as you make them.

With that said however I also understand that monthly and yearly sales numbers place dealers in tiers of bonus money that they really want to hit or move up a tier as those dollars must be substantial.

Meaning a dealer may offer a sale at their cost to put another tally mark in the sold order column banking on a bigger payday month and year end.

Any dealers want to chime in?
 

Goin2drt

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Friends and family is right at about 5% under.

What they are making is a very gray area as different dealers based on volume get different “hold back” or deals from Jeep. Without taking ANY of those things into consideration, maybe he is right. However that is not the true “profit” on the vehicle.
 

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It all depends on the vehicle. Each make, model and trim have a different mark up. For example the mark up on a Rubicon is greater than the mark up on a Sport. The cost to FCA to make both is similar, but the msrp and subsequent invoice are quite different. Likewise a Ram PowerWagon has a much higher mark up over other Rams, than a Rubicon does of other Wranglers.
There is no base number or percentage which is indicative of the mark up or profit. I've bought many cars and trucks using employee pricing and friends/family pricing. Every time I've done it they show me the invoice, which shows my preferred pricing and dealer cost. It's never a consistent percentage because options change what they charge.

All that said. You need to stop worrying about how much the dealership profits. We all know it's a business, and they need to make money. They won't sell the car without a profit, so you need to decide what the Jeep is worth to you. You need to decide on a price which you are willing to pay for the vehicle, not focusing on how much profit they make. If you feel a Jeep is worth $30,000, and you pay exactly $30K for it, you've gotten your money's worth. If the dealership made $1,500 off the sale, it doesn't change that you felt the Jeep was worth $30K. It doesn't suddenly make it worth $28,500 and you got screwed. I understand that you want to spend as little as possible, and you're right to research the actual cost. That said you should be focusing on the actual value of the specific trim/options you're looking at not focusing on their profit margin.
I've walked away from many sales over the years because I told them I'd pay $___ for a vehicle and they came back $50 higher or something like that. If they have it in the margin to come down to the price you said, they'll call you back. If they don't, I guess you know where the line on profit was. The point is pick a price that's worth it to you and stick to that number as a max. Obviously try to negotiate below that price, but don't go over it and you won't feel cheated.
 
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eugene

eugene

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Friends and family is right at about 5% under.

What they are making is a very gray area as different dealers based on volume get different “hold back” or deals from Jeep. Without taking ANY of those things into consideration, maybe he is right. However that is not the true “profit” on the vehicle.
He told me the FFP is 1% below invoice, are you saying it’s 5% below MSRP?
 
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eugene

eugene

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It all depends on the vehicle. Each make, model and trim have a different mark up. For example the mark up on a Rubicon is greater than the mark up on a Sport. The cost to FCA to make both is similar, but the msrp and subsequent invoice are quite different. Likewise a Ram PowerWagon has a much higher mark up over other Rams, than a Rubicon does of other Wranglers.
There is no base number or percentage which is indicative of the mark up or profit. I've bought many cars and trucks using employee pricing and friends/family pricing. Every time I've done it they show me the invoice, which shows my preferred pricing and dealer cost. It's never a consistent percentage because options change what they charge.

All that said. You need to stop worrying about how much the dealership profits. We all know it's a business, and they need to make money. They won't sell the car without a profit, so you need to decide what the Jeep is worth to you. You need to decide on a price which you are willing to pay for the vehicle, not focusing on how much profit they make. If you feel a Jeep is worth $30,000, and you pay exactly $30K for it, you've gotten your money's worth. If the dealership made $1,500 off the sale, it doesn't change that you felt the Jeep was worth $30K. It doesn't suddenly make it worth $28,500 and you got screwed. I understand that you want to spend as little as possible, and you're right to research the actual cost. That said you should be focusing on the actual value of the specific trim/options you're looking at not focusing on their profit margin.
I've walked away from many sales over the years because I told them I'd pay $___ for a vehicle and they came back $50 higher or something like that. If they have it in the margin to come down to the price you said, they'll call you back. If they don't, I guess you know where the line on profit was. The point is pick a price that's worth it to you and stick to that number as a max. Obviously try to negotiate below that price, but don't go over it and you won't feel cheated.

Thank you for the reply, I understand everything your saying and agree. I just don’t like being lied to and will not trust the dealer if he did lie to me. That’s why I’m hung up on how much he is making. I wanna know if the 900$ profit from the FFP price is true or not.
 

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I get that completely, I'm the same way.
Unfortunately there's no concrete way to tell if he's lying or not, without actually seeing their books. You could always ask to see the invoice. They may not show it to you, but you can certainly ask. Even that isn't really going to show you a lot. It will show the the invoice price, FFP, and employee prices. It doesn't detail any hold back, dealer incentives, etc. It might give you an idea of how close that 1% is though, if they're willing to show you. Some dealers will, some won't.
 
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eugene

eugene

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he did show me that paper. I can PM it to you or I can post it up in this thread, not sure If its inappropriate to post in a thread or not
 

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Yes FFP is 1% below but you can get that with Tread Lightly ALL DAY long.

For reference on my vehicle.
MSRP 53,970
Invoice or FWP 50,687
Hold Back 1,583
FFP 50,255
EP 48,353

and I got it for 48,153

Again trying to prove he is lying you will never be able to do unless he gives you full disclosure of his books. You really can only go by what is your MSRP and what is the best deal you can get by shopping around.

Good Luck
 
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