Dealers now dealing

[Turfman]

Just how do you find invoice?

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[Saejin]

I say negotiate via email using Costco buying program, truecar pricing, quotes in this forum, etc.

Eventually you’ll find a dealer that will work with you.

 

[ThirtyOne]

Just how do you find invoice?

You can find it in the order guide here Official 2018 Jeep Wrangler Unlimited Order Guide (4-Door JLU - U.S.). Order bank is open!, or you can ask the dealer for a POC that shows the FWP price. That is the invoice price. It will show for each option and the total.

 

[mikeaglvi]

Just how do you find invoice?

You can find it here...

https://www.jlwranglerforums.com/fo...guide-4-door-jlu-u-s-order-bank-is-open.1467/

 

[old8tora]

Don't be rude or a jerk about it. They’re going to know you purchase elsewhere when you take it in for service. Showing them that you saved a good amount of money lets them know you had a good reason to. Possibly encourage them to be more competitive in pricing. Probably not, it it could.

How does 10% off MSRP compare to 6.5% off invoice anyway?

Your posts are always perceptive . My guess is that the dealer makes a profit of about 20% of MSRP , and FCA makes about 30% of MSRP , so the actual manufacturing cost value is 50% of MSRP , including corporate costs . The whole invoice business is a fake marketing ploy . So , I always just give them my offer in writing . ( I must write because I am disabled and deaf .)

One time a jerk wrote his answer : " What are you trying to pull ? "

 

[Solidaxle]

This is good to hear with the announcement of another record sales month for the wrangler, I was scared dealers would be holding the line on pricing.

 

[Tampa_Lee]

Im new to this forum and looking to buy my first Jeep. Reading this blog has me curious...... How does a dealer make any money selling for "below invoice" ? And why would they want to even go that low? Obviously ive heard of dealers selling cars at invoice or maybe $500 over invoice, but never below invoice. Can someone explain how this works with jeeps?

 

[ThirtyOne]

Im new to this forum and looking to buy my first Jeep. Reading this blog has me curious...... How does a dealer make any money selling for "below invoice" ? And why would they want to even go that low? Obviously ive heard of dealers selling cars at invoice or maybe $500 over invoice, but never below invoice. Can someone explain how this works with jeeps?

This has been answered a few times. There are a lot of ways a dealer can make money selling below invoice:

- The dealers have a holdback of roughly 3% of the invoice price. So their true cost for the vehicle is 3% below invoice
- Dealer doc fees are basically pure profit
- Dealers get incentives from the factory that are not known to the public. These can be regional incentives on particular vehicles, or sales thresholds where the factory gives bonuses on every sale
- Dealers use sold (factory) orders to pump up their numbers which gives them more stock for the lot and access to more special edition vehicles. Those vehicles sell at higher margins
- There is some kind of fleet program that has factory support that allows them to sell at lower prices
- Financing - they can add interest points to financing to make money or get commissions from banks to use their financing
- Other stuff we don't know about

 

[Tampa_Lee]

This has been answered a few times. There are a lot of ways a dealer can make money selling below invoice:

- The dealers have a holdback of roughly 3% of the invoice price. So their true cost for the vehicle is 3% below invoice
- Dealer doc fees are basically pure profit
- Dealers get incentives from the factory that are not known to the public. These can be regional incentives on particular vehicles, or sales thresholds where the factory gives bonuses on every sale
- Dealers use sold (factory) orders to pump up their numbers which gives them more stock for the lot and access to more special edition vehicles. Those vehicles sell at higher margins
- There is some kind of fleet program that has factory support that allows them to sell at lower prices
- Other stuff we don't know about

Thank you for clarifying!

 

[old8tora]

Im new to this forum and looking to buy my first Jeep. Reading this blog has me curious...... How does a dealer make any money selling for "below invoice" ? And why would they want to even go that low? Obviously ive heard of dealers selling cars at invoice or maybe $500 over invoice, but never below invoice. Can someone explain how this works with jeeps?

Simply , "invoice" is far above what the dealers owe for the vehicle . Giving you a price "below invoice" is another way of saying they are making gross revenue of 20% over what they paid .

If a vehicle is 100K , the dealer owes 75K . If "invoice" is 96K . Dealer sells it to you for 95K , "below invoice" . Dealer still makes gross revenue 20K . Think Porsche .

The more expensive , the bigger the spread , because the bigger risk for a dealer to sell a super-expensive vehicle , think Aston-Martin or Ferrari .

"Invoice" is a fake marketing tool ; the buyer is not getting anything below dealer cost , and never will . That would be impossible . It's a business , with partners , all making money .

To give you an idea of the numbers involved : FCA just published first quarter Revenue of Euros 25 Billion , and Profit of US $ 1.24 Billion . And that is only the first three months of the year . My guess is that each of about 4,000 dealers worldwide has about over US $ 1 Million gross revenue over three months . After all the expenses , that would leave maybe $ 200,000 profit for the dealership . It's a business .

 

[Chicago]

Simply , "invoice" is far above what the dealers owe for the vehicle . Giving you a price "below invoice" is another way of saying they are making gross revenue of 20% over what they paid .

If a vehicle is 100K , the dealer owes 75K . If "invoice" is 96K . Dealer sells it to you for 95K , "below invoice" . Dealer still makes gross revenue 20K . Think Porsche .

The more expensive , the bigger the spread , because the bigger risk for a dealer to sell a super-expensive vehicle , think Aston-Martin or Ferrari .

"Invoice" is a fake marketing tool ; the buyer is not getting anything below dealer cost , and never will . That would be impossible . It's a business , with partners , all making money .

To give you an idea of the numbers involved : FCA just published first quarter Revenue of Euros 25 Billion , and Profit of US $ 1.24 Billion . And that is only the first three months of the year . My guess is that each of about 4,000 dealers worldwide has about over US $ 1 Million gross revenue over three months . After all the expenses , that would leave maybe $ 200,000 profit for the dealership . It's a business .

Selling like crazy !!

 

[old8tora]

Selling like crazy !!

Yep , and to put it in Wrangler terms : say a Jeep dealer has 3 Wranglers , of different builds , say a Sport , a Willys , and a Rubi . Their combined MSRP is $ 100,000 .

Now , their cost to the dealer is about $ 80,000 .

The fake "invoices" show a fake invoice cost of $ 95,000 or $ 96,000 .

The dealer tells the buyers that he will sell them "below invoice" , for $ 94,000 or $ 95,000 .

Thus , he makes a gross revenue of $ 14,000 ; and , after his dealer expenses , a net profit of more than $ 3,000 , for the owners/partners .

The buyer is happy because he believes he purchased them "below invoice" .

The big volume dealers generally set a price at a bigger percentage below MSRP , say $ 92,000 . Then their gross revenue for the three is $ 12,000 ; but they are big volume , so the net profit is multiplied by many more sales , perhaps 30 sales for the big volumes , rather than 3 or 4 sales for the small volumes .

Meanwhile , FCA entire corporate and manufacturing cost for the 3 wranglers is $ 50,000 ; so the extra $ 30,000 from the dealers is all net profit . That is how FCA can post a US $ 1.24 Billion profit during the first three months .

 

[Tampa_Lee]

Wow, I did not realize from all my years of buying cars that the invoice listed on Kelley blue book or Edmunds, for example , was not the actual invoice price that the dealer paid for the car.

 

[old8tora]

Wow, I did not realize from all my years of buying cars that the invoice listed on Kelley blue book or Edmunds, for example , was not the actual invoice price that the dealer paid for the car.

Yep , if you look at the dealer's overhead in personnel , office workers , paying interest on finance loans from manufacturer's credit agency to have the inventory in the first place , land cost or rent , payroll , advertising , taxes , etc .... then HOW could the fake "invoice" price be real ? It is Impossible .

The big volume dealers don't play around ; they simply offer their prices more lower up-front .

The small volume dealers give you a smidgen below fake "invoice" , and then add on a bunch of extras , including higher finance charges , lower trade-in value , extended warranties , etc .

When I special ordered my JK sport , the original cost was something like $ 27K ; and without my asking , the dealer wrote down a price of about $ 25K . Later on , when I needed some paperwork errors corrected , the office lady gave me a copy of the "invoice" , which was more than I paid . This entire fake "invoice" business is simply a marketing trick into making you think you beat them . And I never asked nor wanted a lower price ; I thought $ 27K was fair from the get-go .

So , if you need or want a Jeep , just figure your best price will be about 8% below MSRP , IF you go to a big volume dealer , and even they sometimes add on a $ 600 fee when you special order .

Don't try to beat them ; many salespersons are bottom dwellers with foul breath , and you will demean yourself by arguing with them .

Choose the dealer instead , one known for high volume and lower prices . That's why so many Jeeps and Rams are sold in Idaho to out-of-state customers .

To give you an idea of the profit mark-ups on extras , Hayes Jeep will sell you an extended warranty far below what the dealer would charge you . There is a huge MSRP mark-up on extended warranties . That's why everyone buys theirs from Hayes , in Kalamazoo , Michigan . And Hayes still makes a profit .

 

[Solidaxle]

And now with the Internet letting us share. Smart customers have much more power than in the past. Thanks for the info everyone.

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