How can Criswell afford -8% off invoice

[Burandtman]

I’ve read manny people receiving -8% off invoice from Criswell. How can they offer this price/ what is the business behind it? Thanks

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[cns721]

The JL's MSRP is quite high plus I'm sure they get some sort of volume discount from FCA.

 

[Carlton]

1. FCA offers volumn bonuses to dealerships. The higher the sales, the higher the bonus check.

2. Dealerships make money on financing

3. Doc fee and wheel lock fee

4. Up sales in the finance room.

 

[Kyanche]

Carlton's explanation covers all of the reasons anyone would do 8% off invoice. It might also be that when they offer you 8% off invoice, they think they'll be able to make it up elsewhere. (And if they don't, maybe that's ok because they've already made a lot of money off other jeeps).

It's hard to know exactly how much room there is for discounting. I know if you were buying something like a 300 or charger, 8% would be a kinda "meh" discount.

 

[oceanblue2019]

1. FCA offers volumn bonuses to dealerships. The higher the sales, the higher the bonus check.

2. Dealerships make money on financing

3. Doc fee and wheel lock fee

4. Up sales in the finance room.

Yeah, and don't forget FCA also offers incentives to manage the inventory. So at times "Invoice" is significantly above the true cost to the dealer net any of such incentives.

My local dealership lady was telling me that Jeep had a ton of extra JL inventory about 6 months ago and asked them to take 50 units for dealer stock to get them moving.

She was calling all customers who were contemplating a JL (she called me as we've been joking over my wife getting one) that if you took one of these 50 they had much more room to negotiate. The only downside are some were really odd combo choices and clearly custom orders that fell through or very basic builds.

I didn't get into true pricing negotiations as we were not ready to move on one for my wife but she was pretty clear that they had very significant room to move. This is the same sales person that got me 11% under invoice on my 2019 JLUR.

 

[Kyanche]

I'm guessing that being closer to Ohio makes it a lot easier for a dealer to get stock situations like that as well, lol.

 

[DonBindas]

Criswell is playing high stakes poker, in hopes of beating last year's sales total, in-order-to get a big cash kick-back that a normal dealer will not get.

A normal deal gets somewhere around 3% hold-back cash from the invoice.

This game works until it doesn't and then the party is over.

So, don't waste time and order your Jeep today

 

[Thenewjs]

Theres no money in new car sales. Financing and used car sales is where all the action occurs. Financing ain't bad either.

 

[viper88]

There is much more then a advertised price or % under invoice, fixed discount, to take into consideration.

Too many variables between each transaction. It's very uncommon to have a true apples to apples comparison. The only real apples to apples comparison is if it's a cash sale without financing, no trade-in, no additional products or back end products. Then the sale has to be in the same State because doc fees are state regulated. It's not uncommon to hear of (X)% under invoice and a high doc fee. The higher doc fee can be .5%-1% additional profit. Then there are incentives not everyone will qualify for. Incentives like military, disabled, direct marketing, etc.

Why one dealer can sell for one price and another dealer can't and will let you walk? Every dealer pays the same "invoice" but does not really pay the exact same price for it's inventory. There are a LOT of variables. Every dealership pays the same invoice price but the invoice price is not the total cost to the dealer. Dealers have credit ratings with banks and car companies. Just like we do with credit reporting agencies. The better the rating the better the loan rate. That difference in financing cost is reflected in selling prices.

A lot of a dealers income is from cash-flow. Car companies float some dealers with better credit with better terms. They make money off the float. It's kind of like borrowing money for 0% and investing it for a couple of months for no cost.

There are additional incentives from Monthly sales contest and annual sales goals. This is very dynamic. The deals dealers cut with the FCA/Jeep sales reps. Additional discounts and incentives offered. Not every dealer takes the same inventory. A smaller dealer might not have the resources to take additional inventory. These dealers don't get the best incentives from the car companies. Think Wallmart. Wallmart can sell for less because they buy more. Dealers are the same. It is not uncommon to offer dealers special financing, incentives or discounts for taking more inventory. There is huge incentive if a dealer buys more inventory year after year.

In reality dealers probably do not know what the "true net/net " selling price is when they sell you a vehicle. They need to calculate in all the hold backs, rebates, finance cost, additional incentives, sales bonuses, etc, they get through out the the quarter or business year.

On average I think 5%-5.5%-under invoice is probably close to net/net before any additional incentives are taken into consideration. This is before Affiliate, TL, direct marketing cash, rebates for military or handicap, extra dealer cash.

It's the finance office, used cars, service department where dealers hope to make profit even if there was minimal profit on the actual new car sale.

They hope to retain customers for service. They sell you a car for a minimal profit with the hope of you returning for your service. It's like buying a printer and needing to buy ink.

This is before covid19. Covid19 is a game changer. I believe there will be some outlying deals due to desperate dealers needing cash flow. Some dealers will simply go under or change hands. This happened back in 2008-2010.

At the end of the year the actual difference in cost for each dealer is substantial.

Criswell's business model is probably like the Wallmart model. Buy in bulk for less so they can sell for less. With every sale there is the very good chance to sell loans, additional products and services for huge margins. At the very least they get a chance for spiffs from financing companies and huge margins on trade-ins. Criswell is very sucessful with whatever model they use. They have been using their business model with Corvettes for decades and are considered one of the best dealers to buy from. It looks like they are doing the same with Wranglers.

 

[ThirtyOne]

There is much more then a advertised price or % under invoice, fixed discount, to take into consideration.

Too many variables between each transaction. It's very uncommon to have a true apples to apples comparison. The only real apples to apples comparison is if it's a cash sale without financing, no trade-in, no additional products or back end products. Then the sale has to be in the same State because doc fees are state regulated. It's not uncommon to hear of (X)% under invoice and a high doc fee. The higher doc fee can be 1% additional profit. Then there are incentives not everyone will qualify for. Incentives like military, disabled, direct marketing, etc.

Why one dealer can sell for one price and another dealer can't and will let you walk? Every dealer pays the same "invoice" but does not really pay the exact same price for it's inventory. There are a LOT of variables. Every dealership pays the same invoice price but the invoice price is not the total cost to the dealer. Dealers have credit ratings with banks and car companies. Just like we do with credit reporting agencies. The better the rating the better the loan rate. That difference in financing cost is reflected in selling prices.

A lot of a dealers income is cash-flow. Car companies float some dealers with better credit with better terms. They make money of the float. It's kind of like borrowing money for 0% and investing it for a couple of months.

There are additional incentives from Monthly sales contest and annual sales goals. This is very dynamic. The deals dealers cut with the FCA/Jeep sales reps. Additional discounts and incentives offered. Not every dealer takes the same inventory. A smaller dealer might not have the resources to take additional inventory. These dealers don't get the best incentives from the car companies. Think Wallmart. Wallmart can sell for less because they buy more. Dealers are the same. It is not uncommon to offer dealers special financing, incentives or discounts for taking more inventory. There is huge incentive if a dealer buys more inventory year after year.

In reality dealers probably do not know what the "true net/net " selling price is when they sell you a vehicle. They need to calculate in all the hold backs, rebates, finance cost, additional incentives, sales bonuses, etc, they get through out the the quarter or business year.

At the end of the year the actual difference in cost for each dealer is substantial.

On average I think 5%-5.5%-under invoice is probably close to net/net before any additional incentives are taken into consideration. This is before Affiliate, TL, direct marketing cash, rebates for military or handicap, extra dealer cash.

It's the finance office, used cars, service department where dealers hope to make profit even if there was minimal profit on the actual new car sale.

They hope to retain customers for service. They sell you a car for a minimal profit with the hope of you returning for your service. It's like buying a printer and needing to buy ink.

This is before covid19. Covid19 is a game changer. I believe there will be some outlying deals due to desperate dealers needing cash flow. Some dealers will simply go under or change hands. This happened back in 2008-2010.

Agreed. Lots of variables. For example notice none of these dealers are in big cities. There are different costs and allowances for things like lease space and advertising that figure into it as well.

If they look at a per vehicle basis it doesn't make sense. But when they figure in other costs and allowances then they can make it work.

 

[viper88]

Agreed. Lots of variables. For example notice none of these dealers are in big cities. There are different costs and allowances for things like lease space and advertising that figure into it as well.

If they look at a per vehicle basis it doesn't make sense. But when they figure in other costs and allowances then they can make it work.

I did not buy from Criswell. I am lucky to have a high volume dealer locally that is very competitive. I paid .05% of invoice more. That half percent more was less then any travel cost and time so I am very happy.

Anyone near Criswell should definitely give them a chance to earn their business. Criswell definitely knows what they are doing. They understand the internet and forums. They have been hugely successful with Corvettes for decades. Wranglers are no different. Both have huge followings and loved by enthusiast. In my opinion Criswell and a couple of other dealers set the benchmark for Wrangler pricing.

 

[viper88]

I’ve read manny people receiving -8% off invoice from Criswell. How can they offer this price/ what is the business behind it? Thanks

This business model is a secret is like the recipie for KFC or Coke. lol.

The owners know how to manage cash flow. Cash flow is probably the most important aspect of a dealership.

I think they probably have a great credit rating with FCA and other loan instiutions and sell a LOT of Wranglers every month- year. They get a opportunity to sell financing and other services and goods at retail with every sale.

 

[BullMoose1776]

Bottom line, there is a massive mark up on vehicles, from the actual build cost to the MSRP.

If you order a spec Jeep, there is literally 2 hours of work for the dealership to deliver the vehicle.

If you buy off the lot, there is a significant carrying cost for that inventory.

It seems like it would cost you more to order exactly what you want, but that is just not the case.

 

[txj2go]

I’ve read manny people receiving -8% off invoice from Criswell. How can they offer this price/ what is the business behind it? Thanks

Is this for a JL Sport or for a loaded Rubicon? I would think a loaded Rubicon would have more margin builtin. And of course invoice price might not be a real number. I've searched a big area and found a deal on a JLU Sport at about 11% off MSRP.

 

[Cuyose]

I recently purchased a new loaded Rubicon for ~13% below MSRP

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