CPO at dealership question

this is exactly whats wrong with Veeky Forums right here.

trying to get a good deal on a car?

no, but your post is

Sales manager at a dealership here. No haggle pricing on our used inventory (luxury franchise for new sales) is really just our cost+reconditioning+ a small profit margin, say about 4%.

This all depends on being the #1 rank in terms of pricing/condition in the market. From the 4% markup, don't forget we have to pay commission/salary for employees, rent, interest on our inventory, utilities etc. You would be amazed at how thin the actual profit margin is.

It has really invigorated our pre owned sales, and it's a lot less stressful for the consumer and sales person. You don't make as much money per unit, sure, but I strongly believe you sell more cars.

Some issues from our side is that you have to constantly monitor the prices of competitive vehicles- if the same vehicle in the same condition is cheaper, the system fails.

Additionally, the biggest issue is that if you don't sell the unit quick enough, you actually start having to sell things for a loss.

Yeah that's all well and good for schmucks off the street who have no idea how to research their car or how to negotiate. But I have never payed a cent more than bottom line dealer cost for a car and on a handful of occasions I've paid 5-10 percent under that price. It's negotiation and buying power.

What?

Aren't we talking about (possibly certified) pre owned, no haggle pricing? What sort of dealers would ever get themselves into a situation where they are selling used vehicles for 10% under their cost? That is absolute madness. No one would ever do that unless they are the worst dealership ever.

As for new domestic/cheap import vehicles, it is very common to get them below dealer cost. You can walk into any Chevrolet dealership right now and walk out with a Silverado for 5% under dealer cost any day of the week because of how their back end rebates are structured. They are still making a lot of money (more per unit than I would and I can't do the same under cost shenanigans).

At our dealership (luxury import manufacturer) you can get a great deal on a new vehicle but it is impossible to get one under cost without a special pricing plan. The deal would be rejected by the manufacturer during the"funding" phase (where the manufacturer gives you the money for the sold unit if it's financed/leased) and you'd be out ~$70,000. They do this because they don't want to be like Ford/GM when it comes to under cost pricing, and don't want their staff to have to deal with the people who are trying to get the price to fit their budget, as opposed to buying a car in their budget from what they tell us at training. It is just a worse buying process from every angle.

I've had deals where I have someone $400 above dealer cost (our manufacturers limit for a deal) and I will walk them over a tank of gas because I literally have no other choice. I would probably walk the customer before that anyways.

Every dealer from the same manufacturer has the same limits, so there isn't a way to beat this system unless you're buying a demo- which you should NEVER do.

reliable solid daily driver with many of the accessories of models twice the price.

ignore the jap crap posers and euro trash... if you want an entry-level BMW... find a place that will negotiate.

lmao wagie

Oh no I was talking about new. Sorry wasn't following that we were talking about cpo. The last 3 that I've purchased at or below dealer were a '01 Honda crv, a '10 Mustang v6, and 2 years ago a Ford F150 Platinum edition. Rebates and trade specials plus negotiation.

>Aren't we talking about (possibly certified) pre owned, no haggle pricing? What sort of dealers would ever get themselves into a situation where they are selling used vehicles for 10% under their cost?

Most dealers sell on volume. If you make $100 or $5000 you're still making money cuckboi

Were they owned by autonation?

Oh yeah makes total sense then. You did the right thing with that Platinum- I genuinely can not believe how nice they are inside for a truck. If I had any reason to haul anything I would 100% go that way. Plus, the rebates Ford has near the end of the model year make it an absolute no brainer when compared to the other guys.

Not the case on pre owned. Pre owned at any sized dealership of any brand is about profit per unit. There's no volume bonuses to speak of on pre owned.

I've never seen a dealer provide any sort of bonus for pre owned inventory. Possibly certified pre owned, but then that's very small in comparison to new vehicle volume bonuses, and CPO inventory is usually much smaller than regular pre owned inventory. If you only have $100 gross in the vehicle you're actually losing money once you pay the sales guy and managers their minimum commissions.

Pre owned sales is all about gross profit in the vehicles. If there's no profit in the front end, you can bet your ass service made a killing reconditioning the car. Or your wholesaler needs to be canned.