Based on Frantz's long history of posting helpful information that in no way benefits him personally, I'm going to put a littie more weight behind his answers than someone else's.

Myself, I'm a lot less worried about how much money the dealership makes, and more worried about what I spend. So I'll compare dealerships near me, and choose the lowest available price. It's not as complex as some folks like to make it.

 

you are flat out wrong, and you have no facts to back up your claims. If it was thousands in extra profits then we would see it on the public traded companies. Frantz has laid out logic, he has nothing to gain.

 

he has nothing to gain? That's funny. Just your cash, What do I have to gain? Keeping my own
check out fowlerville ford for facts to back up my claim, stop being sheeple, geez

 

They show one F350 in stock and it says "call for pricing". At the bottom of their page they state any pricing that would be given does not include doc fees or destination. I've found Edmunds chart to be not 100% correct, but generally close, and it lists MI as avg $165 and a cap of $190 or 5% of sale price for doc fees, so that's reasonable at least. But the destination is $1295 less than I would show right off the bat because I include destination in my pricing (per state law mind you).

So I scrolled over to their F150 listing and they indeed show they are advertising at A/Z plan. since they are located near the hub of production, that's probably a good chunk of their business. They list the advertised price as ** but then don't give a clear requirement, so it can well be "you must qualify for A/Z plan". Counter, if I sold it at A/Z plan price and then added destination back in then you're really no different than what I WOULD agree is a really good, and feasible deal.

44Dan44, you're stumbling into my motivation for being so vocal on the subject. There is SO much information out there that unless you work in the industry it is very very very hard to decipher it all and it does lead to great confusion from the consumer side. I hope to show people the business model to be real, realistic, and fair (and I hate using the word fair, I do it with much caution).

FWIW, the "Fowlerville Price" advertised on the F150 I picked is invoice.

 

I looked at Fowlerville and they have all the different prices listed for whatever plan you may or may not qualify for. As Frantz has stated numerous times, some of those deals require money from ford on the back end or they would be selling at a loss. Why would I be a sheeple, I want the best deal possible. I'd say I'm a realist.

 

The internet has made it so the folks who get the very best deal aren't that far off from the folks who say "yes" to what's asked for on internet pricing, and it hurts the ego to not be able to do thousands better than someone who has no clue what they are doing but bothers to use TrueCar or even just look at dealer site pricing. The story of hidden money is eroding and generations of family lore are going down the tubes.

 

Fowlerville has 28 F350 and 9 F250 in stock.
Dont complicate it folks, Scott used to post here a lot, destination is included and the price is clearly listed for all.

 

And I'm at my local dealership getting that price matched as we speak so take it as you will gentlemen. Good day to you.

 

Don't know where you got the 2.7% from.

For the forth quarter of 2016 Penske reports a gross profit of 7.9 % or $2,988
per unit

Penske Automotive Reports Record Fourth Quarter And Full Year Results

 

It seems they have two sites set up, a .com and .net

The .com does indeed NOT state destination as being excluded. The .net site has a different disclaimer. Without a link I think you can understand where I didn't look for every possible connection to what you were posting about. What the site doesn't say, nor does your post prove, is that you can just walk in and get A-Z plan price without being eligible.

 

the 7.9% was gross, so before expenses. the 2.7% is after expenses. I may well have read it wrong somewhere too, but the numbers you just posted go along with what I had read.

 

I've also stated there are bonus figures that have various goals to hit. So part of the profit per unit is the bonus money, which for accounting purposes is divided among the units sold. It's not all a volume thing either. So the 7.9% is total profits for the sales department include sales price to net and any bonus money. The whole kit and kaboodle of the entire new car sales accounting office! Then when you take out all the expenses you get back to the 2.7% which washes out well to consumers using invoice offsets as a realistic and fair figure to work from.

 

what is "that" price? You received a plan or x plan? Or some other special price??

 

Don't quite understand how a $2,988 gross profit per unit and your claim that 2.7% net profit shakes out to most of sales at invoice prices.
To many variables to make that assessment.

Besides ,if $2,988 is maximum profit before expenses per unit, and 2.7% is net profit from the $2,988 gross , the expenses eat all but roughly $80. That's $80 net profit per unit, is that what you're saying???
Or are you using the 2.7% in a purchase price equation. Witch is a much greater number and can't be discovered using the information provided.
​​​​




​​​​​​

 

Certainly not 2.7% of the gross profit! I mean 2.7% of the investment is returned as profit. If it was 7% than everyone would buy Penske stock. If it was 2.7% of 7.9% then no one would be in the business.

I don't directly deal with accounting and don't pretend to know all the ins and outs. I am taking what I know to be true and finding the facts to back it up, so there is a danger of error there, but I do find the facts at least! If part of the income generated is bonus money Ford gives for advertising (which they do) that would be able to be divided per unit, and then money spent on advertising is deducted per unit. I know Ford pays 50% of my commercialtrucktrader.com bill so long as funds are available. CTT is pretty cheap, something like $600. I probably sell 4 units a month from CTT, with my advertising cost of $300 and avg profit per unit of $1000. I spend $600, get $300 back from Ford and earn $3k. Gross is $3300, with $600 expence, so net of $2700. It's less profit per unit, but it's also sales I wouldn't have likely generated without CTT. So when I would figure out a cost per unit from a full accounting point you'd take the entire departments income divide by unit and get your cost, then you'd take revenue and divide by unit and get income per unit. Do the division and get a gross per unit, in the example its 7.9%. But you have to take out all those expenses then too. Once all the overhead is pulled away you're left with 2.7% profit in the given example as net profit per unit. So you have 2.7% that is a real variable to work from the avg transaction price to the 0% profit price. While from a statement perspective you show the full amount, the department gets that money from sources other than direct sales. Currently we get somewhere around $25k a month for hitting CSI figures. If we sell 80 new cars, that's an extra $312 per car, but that's not from selling the car, it's from getting a good CSI score on the collective of cars. Those numbers could be a hair off, but the principle is there.

I'm not a dealer principle, and I'm not saying that to pass the buck. I see lots of numbers and everything I've ever seen lines up with what I've said. It's called pattern analysis. The pattern fits the template. The idea of thousands of profitable dollars being tossed around and lining the pockets of owners around the country and nothing but hearsay on the internet sounds like a crock to me and other than people feeling they are paying too much, there isn't any evidence.