How do dealers work?

[Yayo]

ok so basic questions about new car dealers....

 

when a sticker is the Dealer Invoice that's not what they get the cars for right? because some people get their cars below that invoice. so how far can you haggle?

 

and what about commission, do some dealers get a percentage of what they sell the car for?

 

my parents bought an 06' 4Runner and the salesman was sayin that they don't work on the same commission anymore but they simply get a flat rate for every car they sell and a bonus if they sell X amount of cars a week. true?

 

thank u for anyone that can clarify.

[Boostjunkie]

ok so basic questions about new car dealers....

 

when a sticker is the Dealer Invoice that's not what they get the cars for right? because some people get their cars below that invoice. so how far can you haggle?

 

and what about commission, do some dealers get a percentage of what they sell the car for?

 

my parents bought an 06' 4Runner and the salesman was sayin that they don't work on the same commission anymore but they simply get a flat rate for every car they sell and a bonus if they sell X amount of cars a week. true?

 

thank u for anyone that can clarify.

 

Invoice is what the dealer pays for the car. However, there is also "holdback" which is an amount that the manufacturer pays the dealer after a car is sold. This amount will vary from brand to brand. Some brands do not pay any kind of holdback to their dealers, so you will almost never find dealers for such a brand selling below invoice, because they would then truly be losing money. Otherwise holdback is usually around 2-4% of the price of the car. So in the case of a $30,000 car, and a 4% holdback, the holdback amount paid to the dealer would be $1200. So in theory the dealer could sell a car for a much as $1200 below invoice and not "lose" money.

 

As for commissions, that will vary vastly from dealer to dealer, even within the same brand.