chree

As I shop for a truck I find the "invoice" amount you can easily calculate on the 'net does not mean "invoice" in the sense that it is what the dealer pays for the truck. (and Manufacturer's Suggested Retail Price, MSRP, is meaningless, except for calculating other numbers).

Even if the dealer pays "invoice", they get back dealer holdback, and may also get:

• Advertising credits
• Flooring assistance
• Floor interest reserve
• Floor plan allowance
• Transfer balance
• Wholesale reserve
• Wholesale credits

This informative article at Edmunds lists the dealer holdback at 3% of MSRP (for Dodge).

Dave Smith in Idaho would order a truck for $500 below invoice, or the Mega cab I was considering would be $2000 off invoice plus the current $1000 customer cash allowance. Obviously this favors buying a truck on the lot (they have hundreds).

I do not believe Dodge dealers are under as much pressure to sell trucks this year as in years prior... less trucks plus a new design... I wonder if the incentives will get better.

DirtEater

Good info. So far, Dodge does not appear to be as competitive with the others for incentives.

ramtradxb

[QUOTE=chree;2746384]As I shop for a truck I find the "invoice" amount you can easily calculate on the 'net does not mean "invoice" in the sense that it is what the dealer pays for the truck. (and Manufacturer's Suggested Retail Price, MSRP, is meaningless, except for calculating other numbers).

Even if the dealer pays "invoice", they get back dealer holdback, and may also get:

Thanks for correcting something with me - I incorrectly referred to that in another post as a "rollback" versus "holdback" - I must be watching too many Wally Mart commercials! But yes, even at Invoice a dealer makes plenty. If you know where to find it the invoice will also show the employee pricing, and they make money at that lower price too. But hey, if someone's going to get a steal deal, then someone else has to pay more!

I don't think we'll see a huge amount of incentives this early on in it's introduction - maybe later if they don't sell as many as they hope to.

Graphite 6

chree; 2k off invoice plus the 1k? Are you sure that is right, that would be a good deal as that is less than the money they would make in the holdback, even given the other ways a dealer can make money
"I don't think we'll see a huge amount of incentives this early on in it's introduction - maybe later if they don't sell as many as they hope to."
ramtradxb; True, plus Chrysler has already said the days of big incentives will not come back, and we're already over half way into the production year. Their sales numbers are still down but I don't know, where they want to be in figures since they lag way behind the other two. That being said, they offer some good incentives on the 1500s, they might change their mind in a month or two.

deal as that is less than the money they would make in the holdback.

ramtradxb

[QUOTE=Graphite 6;2747066]chree; 2k off invoice plus the 1k? Are you sure that is right, that would be a good deal as that is less than the money they would make in the holdback, even given the other ways a dealer can make money

Altho on the surface 2K plus 1K incent seems to be too good to be true, it may not be, as with the holdback and other dealer incents "chree" listed, they might still come out O.K. on the Mega's, as they have the biggest margin. And besides, if it's one they had sitting there since the beginning, they might be willing to deal even more.
I got mine for basically $250 under invoice plus the grand incent, and I didn't work them to get that - so I'm thinking you could get it for less dependent upon the dealer, etc... (I had another dealer offer me the same equipped unit but with the sunroof and buckets - only things I didn't get besides rear seat entertain - after incents I had it would've been $1750 under invoice)(too far away and store I was already working with was willing to buy my trade outright for more than anyone else - about 5.5K over KBB trade-in value!)

chree

The breakdown was; starting at invoice:
$1,000 customer cash allowance (or low APR, not both)
$500 dealer discount
$1,000 dealer coupon
$500 credit union membership discount

They have almost 700 2500s and 3500s in stock. They are the largest Dodge dealer in the world. Obviously they are willing to sell at a price to support that volume. My salesman told me they can sell making $600-$700 per vehicle whereas a local dealer can't survive on such low margins.

I would call my salesman to confirm this is the current deal but I've already wasted enough of his time. My plan is to drive an hour away to test drive both 3rd and 4th generation trucks (with manual transmissions) to decide which is right for us (new vs. used, crew vs. Mega).

ramtradxb

Not sure exactly what the "dealer discount" and "dealer coupon" are - but all factory incentives have specific codes, and some are incompatible with others - so be sure all you are quoted actually apply to the specific deal. If they're something the dealer themselves offers, they can make them compatible or incompatible with anything they want. But based upon that volume you note, they can offer their own discounts and still come out O.K.
Be aware that the $1000 factory incentive (or the low financing) expires at the end of April if it hasn't been renewed. Also, if you're an FFA member or a member of a farm bureau, there's additional incentives through the end of the year.

HMX-1

Dave Smith will be the only place I ever buy from again. I got both my '06 and '08 from them within 3 weeks of each other, and the deals were too good to pass up. The only sad part was I had to trade in my '03 for the '08.



Kris

Jerith

This is a touchy subject for me. This will be long. I'll explain what I can.

I understand a customer trying to get the best deal they can... This drives you to certain mega-dealers who didn't get cut or shut down. Which is taking business away from the smaller guys who just can't achieve the sales quotas a dealership needs to get extra bonuses on sales. Which the mega-dealers do. Its like a triple whammy to the small guy. So yes, you'll see volume sellers who work on that business model and sell so many at near zero profit on the unit but who rely on the volume bonuses. Something not all dealers can attain.

Just like when you borrow money, dealers borrow and pay interest on the stock that hasn't moved. Yes there is hold back. In Canada, on a 2500 it is $700 (the same on all trucks regardless of price). Sales Floor Plan = $275. The SFP is eliminated by the interest in less than 3 months. GMAC sells us 6%. STANDARD RATES! We pay a higher payment than most payments a customer gets before they own it. Then the Marketing Allowance. $525? Easy to blow on whatever way you advertise (or detailing 5 cars). There is a second marketing allowance for three certain provinces that others don't get.

Getting the hold back isn't guaranteed. If transferring stock, a dealer can keep that hold back to help pay for interest on the truck if it has grown a beard. It may have been nothing but a money pit, so a unit is happily transferred to another dealership. A hold back could also be chewed up if the truck had to come from far away due to a picky colour/option choice.

All of these are based on the Canadian system. The disparity between the US and CAN system causes some headaches when it comes to price. I JUST had a guy bring me a photocopy of a US 2500 Laramie in Arizona, loaded enough to have the backup-cam. Off of the window sticker I guessed that the dealer discounted about $3K off of MSRP. Then there was a 2K program, and with some digging, an extra 1K rebate, (like our different provincial marketing allowance I think.). In Canada, there is a difference of around $6.5K between invoice and MSRP on a 2500 Laramie. His $47K truck, built similarly, would cost $60K here. This was based on a fast build of what his truck had in the factory order software. The options were identical. So not counting any of the extras like CMA or SFP, I added a modest $1800 for profit. Then I used the $3500 incentive to lower the price. Voila, $60K. The dollar disparity sucks, and is pure win, in different situations. Now the dollar is like it is two years ago, I wonder if the 8K incentive will show up again. THAT is when to buy. They have offered 0% at the same time too. Will it ever be that sweet again? I dunno. I've done the numbers. A Canadian customer can save $10K by shopping in the US. IF buying a truck. The cheaper models are different, and with two models I think Canada is even cheaper.

The EP price (Employee Price) is simply the invoice minus the hold back. Then there are extra programs that pay extra as an incentive for Chrysler employees (not dealership employees). The EP program forces you to sell at less, but will pay 5% of the invoice after the SFP, CMA, holdback, AC tax, destination fee, PPA assesment, and fuel fill allowance (Not even available anymore. That tank of fuel you got came right out of the markup on the truck. No longer profit.) are deducted from the invoice. During the last monthly program where customers could get EP too, profit max was set. About $2K on what is a $60K sale. Could you run your own business on a 3% markup? So what I saw some of the mega-dealers advertise even lower than EP, but watch that administration/documentation/whatever fee they tack on. More if they had to find financing for you. It's always in the fine print, but its the mega-dealers who use that tactic. I think that stinks. Honesty should sell more, but it just doesn't.

A dealership employee gets a program which is exactly like another one called the Preferred Customer Price Program. It is like the EP program, but only pays 2% after all of the deductions. It essentially pays 2% to sell it at invoice.

I could go on and on about what Chrysler jams into the dealer as well. Monthly trademark use fees. Vehicle Locate fees. Two or three monthly fee's for other software enrollment programs (Prodesc 360 and such).

But I'm not here as an apologist. Just my observations from inside the cage. I don't think I get defensive. I'm semi-neutral when it comes to brands. But its the whole customer-dealership confrontation irregardless of the brand, that gets me. Let me make a profit that will let me keep the dealership open, and I'll show you the factory invoice.

On that point. Would that help you make a decision to buy? To know just how much you didn't get screwed out of? Rather than always having that niggle of a doubt and setting up that -you versus the dealership- scenario. More like a -you and the dealership versus Dodge-? Would that cinch a deal?

So I better wrap it up here. Most of this might be available with a 'search' on here.

Thanks,

Jerith

ramtradxb

Jerith - hang in there buddy. Not everyone is willing to screw local guy by shopping at Wally Mart of Chrysler to save five hundred bucks. I didn't buy the cheapest but bought at a good deal because I want to have a good relationship with a store who takes care of all my needs. I have other Chryslers, and they need maintenance and the occasional accessory - and I want someone who will do it all. Matter of fact, my truck's at the dealer right now getting new wheels and tires...yes, I might have gotten a few more bucks off at a tire warehouse, but these folks just gave me a free rental car because they discovered after taking the stock tires off the stock rims that the TPMS sensors can't be reinstalled on the new rims - Mopar doesn't sell the stems separate from the sensors, and you know what happens if you try and reuse a rubber stem... So they keep the truck overnight waiting for new sensors... They also are giving me the tuner locks, and this is after selling me the wheels and tires for 10% over their cost. When I bought the truck they added the leveling kit at cost-plus-ten, along with running boards - not a bad deal and on top of all that they actually know my name and know me by sight! (and if I stop by on the right days I can eat lunch for free at one of their promotional BBQ's) Are they high volume - no...maybe about two hundred vehicles a year. But if I can help it they'll be there for years to come.
I know there's other people out there like me who don't shop at Wally's and try and keep the small businessman alive when they can.
Thanks for your informative post, too.

Jerith

Awesome. You shop smartly. Isn't it great when you see some dedication and that extra step occasionally? I tried that yesterday for a past customer.

I had sold a guy a 09 2500 Laramie. Nicely appointed. I knew the truck wouldn't stay mint for long. At 17K km's the truck received a driver door to rear wheel well shopping cart gouge. Looked more than a shopping cart though. I didn't know shopping carts are that tall. Anyways.

It was at an automotive collision repair shop a town over. They wanted me to see if the rusting around the few small paint chips should be covered. So I drove to the next town and took some photos. It turned out that there was some... halo of light rust on the paint surface around the chip. Something that wouldn't be there if they had washed the truck with soap and a bit of love and some care. I took a trade from them and good lord. Silt caked into bricks around the tailgate seal on a Durango. They are on a long gravel road. Gravel every day. I washed a pile of boulders from the top of the t.case shield. I wonder just how many times they washed it.

Once looking closer, some of the chips looked like it was on the outside and into the paint. Most of the others were because of the dent on the inside of the metal. I also saw outward bulge dents on the left side of the rear bumper. Some rocks were shot seriously fast into the back of the bumper. Surprised that the license plate light was still intact. Working? Don't know.

None of them would be covered by the perforation warranty and could have been controlled with some care but left alone it progressed to where it is.

So I couldn't get them a free paint job but I took an extra step to check. To the annoyance of the service manager, I look into complaints seriously.

CamperAndy

I live 45 miles from Dave Smith so I consider them local and I will say the experience of buying there beats hands down the other local dealers I could get a truck from. Not to mention the price was great.

Dave Smith will get my return business when I need to move to a new truck.

SOhappy

My local (small-ish) dealer told me the holdback days are over since the reorganization. All dealers, regardless of size, will be offering the same incentives. He might have been pulling my leg, but so far both the big and small dealers seem to be offering roughly about $10k off sticker lately, on "sale" (e.g. "truck month", "72 hour sale", etc.)- which is about as good as you could've hope for on the 3rd gens in years past.

edc

Informative thread -- my experience in buying a 2500 CTD Laramie has been a little different (I have seen some better deals on the more basic trucks). First I found the dealer holdback does still exist and on a quick clean deal might be the "profit". My info also indicates that the difference between MSRP and dealer invoice on 50K+ Laramie is less than 10% (less than $5K). That is a small margin business for a large ticket item from my experience in other markets. I found that with the current $1k factory incentive, getting $6 to 7K off is a pretty thin deal for most dealers --- if you can get 10K off I am impressed. Ed

ramtradxb

Yikes - that dealer scares me - dishonesty (holdbacks) in selling is not a good trait... I know for a fact the holdbacks are still there because my dealer shared the internal paperwork with me that shows it. On the other hand, to certain extent he's right about the incentives - other than some zones having different incentives, the factory incentives that are available to you and I are the same for all dealers. But beware, not every dealer shares all that is available...
I'm willing to pay a little more to an honest guy, myself.