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re: There are some crazy deals on 2018 Rams
Posted on 4/13/18 at 9:09 am to Bmath
Posted on 4/13/18 at 9:09 am to Bmath
quote:
I’m sure that are some sort of corporate incentives or rebates for the dealerships, but this really makes MSRP look like a giant scam.
Here is how dealerships work in a nutshell, at the end of the year the dealer gets a percentage of the dealer cost of all cars sold back from the manufacturer (2.5-4%). That percentage, and all the profits from service and parts sales, are where the dealer makes his money. The car sales profits above their cost go towards salaries and overhead for the dealerships day to day activities. This means that, in theory, the dealer could sell every car for “dealer cost” and still turn a profit. Generally though, they won’t sell a car for less that about $250 above their true cost as that $250 will cover the salesman salary and overhead for the sale (manager salary, admin overhead, etc). So yes, MSRP is a joke. Note that the manufacturer kickback and $250 number are based off of what it was when I sold cars for six months right when I got out of college and was waiting on my first security clearance to come through. Those numbers are likely different now.
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