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Starting a discussion on a different topic related to pricing.
My thoughts: Invoice pricing on vehicles is something the automotive sales community have managed to make mainstream and has very little to do with actual production costs. I believe that my $28,500 bronco actually costs closer to 15k to build than the invoice listing. I think a 4D 60k Bronco probably costs about half that to actually produce. I'm not sure why people think invoice pricing is what the dealer is actually paying, or anything close to it. If you purchase anything wholesale you basically are looking at 30 -50 % of Retail costs and that goes for most everything. If you're buying a $2,000 computer from BEST BUY they paid about $750 for that computer. As the retail price goes up, the expected margin of profit % generally does as well.
Don't we realize that some of the owners of these dealerships are some of the wealthiest people in any given area, so why do even us car enthusiasts play this game with "invoice" pricing. Do we really think that the dealership is actually paying these invoice prices? They are making so much damn money it isn't even funny!!!! It's just the "we can't lose money on this car" type of statements that make me laugh. I mean they have marble floors in the showroom and they say they are in the poor house.
So what are your thoughts on this, especially if you're a small business owner and pay wholesale prices for things?
So what do you think MOST dealers are paying for a typical Bronco in either % or $$ calculations?
My example: MSRP $28,500 My thoughts on cost to Ford - $12,000 - $15,000 My estimated dealer cost is about $22,000 - $24,000
leaving an expected profit margin of about 5k per vehicle sold.
My thoughts: Invoice pricing on vehicles is something the automotive sales community have managed to make mainstream and has very little to do with actual production costs. I believe that my $28,500 bronco actually costs closer to 15k to build than the invoice listing. I think a 4D 60k Bronco probably costs about half that to actually produce. I'm not sure why people think invoice pricing is what the dealer is actually paying, or anything close to it. If you purchase anything wholesale you basically are looking at 30 -50 % of Retail costs and that goes for most everything. If you're buying a $2,000 computer from BEST BUY they paid about $750 for that computer. As the retail price goes up, the expected margin of profit % generally does as well.
Don't we realize that some of the owners of these dealerships are some of the wealthiest people in any given area, so why do even us car enthusiasts play this game with "invoice" pricing. Do we really think that the dealership is actually paying these invoice prices? They are making so much damn money it isn't even funny!!!! It's just the "we can't lose money on this car" type of statements that make me laugh. I mean they have marble floors in the showroom and they say they are in the poor house.
So what are your thoughts on this, especially if you're a small business owner and pay wholesale prices for things?
So what do you think MOST dealers are paying for a typical Bronco in either % or $$ calculations?
My example: MSRP $28,500 My thoughts on cost to Ford - $12,000 - $15,000 My estimated dealer cost is about $22,000 - $24,000
leaving an expected profit margin of about 5k per vehicle sold.
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