I have been negotiating on various trucks (F350) for the past few days and got this response from one of the better priced dealers today....thoughts? Is this even remotely honest? Feels odd based on everything I have ever read about how dealerships are "really compensated"

MSRP = 78,555 (incl dest)

.... I just read through your email that you sent ZZZ about your thoughts on pricing. The invoice on the truck is $74053.02 invoice. Holdback is $2321holdback. Bringing dealers true cost to $71732.02dealer cost (= invoice - holdback). once you take the $2750 in rebates off of that it brings it to $68982.02 cost after rebates (=dealer cost -rebates) as a 100% $0 for us at the dealership. Ford went away with monthly and annually volume incentives almost 2 years ago. There is no floor plan incentives. So for us to sell you this truck at $68982.02cost after rebate would be a complete $0 profit for us. what you buy in financing is up to you. Your offer of $6600015% off MSRP would require me to lose $2982.02 invoice - holdback -
rebates - $3000. I unfortunately would not be interested in doing that. The price you were quoted cost after rebates + $1000makes the dealership $1000 which is not unreasonable for an $80,000 truck ....

Updated and clarified (hopefully) - Sorry. I should have been more clear. I am not actually trying to validate the $ numbers...so much as I am trying to validate the underlined phrase. Doesn't seem to make sense because a dealership would never stay open with only $1000 profit per vehicle sold.

 

It would be helpful to know about the truck you're looking at buying and what features it has.

 

pretty sure that is incorrect. At least about the volume incentive payback from Ford to dealers .
I know one dealer that pays to the customer it's holdback. There goal is to sell a lot and get their volume sales kickback from Ford. At least that's what I was told by an Internet GM from the dealer.

 

The past several times I have gone into a dealership to make a deal on a vehicle I have gotten the same "were selling this truck to you for dealer invoice" or "were selling this truck to you for $700 below dealer invoice" and they go on to tell you that they're making 0 dollars on the truck. I have always ignored the comments but always want to ask "So why are you selling me the truck if you're losing money???

I realize the comments by them make most people feel warm and fuzzy inside that they're getting a deal but I hate being bull****ted around and lied to.

As far as the deal on your truck is concerned, Whats the MSRP? What are they offering you? Most people seem to get around 8k off the msrp that are trying to get the best deal possible. I have read one place that someone was able to get 10k but don't know the whole story. Lots of factors can play into the "deal" you are getting especially if you're trading in.

 

This time of the model year $2750 in rebates doesn't sound like much to me. Also in case you are a US military Veteran there should be incentives for that as well.

 

My bull**** meter is pegged in the red... the fact is the dealership will never sell at anything realistically close to 0 dollars profit... I got 15.5% off MSRP on a Lariat Ultimate after being two TWICE that the previous offers (9% and 11% off roughly) were "zero profit" deals...

And this is from a dealer that i otherwise really like... the bull**** is just part of the game like it or not.

 

Not sure if they are lying or not about those specific dealer incentives/bonuses, but it is possible to get these trucks for less than invoice minus holdback minus rebates. Just have to work with the right dealer.


My custom ordered 2017 F250 Lariat Value:
$56635.00 MSRP
$53556.86 Invoice
- 2250.00 Rebates ($1500 + $750 FMC)
- 1660.20 Holdback
------------
$49646.66


$48146.00 Purchase price (plus TTL and $250 doc fee)
14.99% off MSRP

 

Notice that he omitted quarterly volume bonuses?

 

Check with Holiday Ford in north TX. Manufacturer’s incentives and unbeatable deals are alive and well there...this isn’t a plug for the dealer but, if you want a deal on a truck, they’re gonna be hard to beat - just speaking from research and personal experience.

 

My King Ranch invoiced for $73,342
Hold back $2,229

$73,342 - $2,229 = $71,113
Before rebates Sales price was $69,894 at Holiday Ford.

Your dealer might not be in the bonus money volume range so he may not be lying but you can do better at another dealer that is on target for a bonus.

That said Holiday Ford isn't discounting their remaining Platinums like they were because of limited supply.

 

Rebates are not paid by the dealer...they are paid by Ford. So rebates don't have anything to do with the dealer's actual cost. They pay invoice minus the holdback.

In some cases, on cheaper vehicles, the holdback is all the dealer makes and it would be unreasonable for the customer to want part of it. But on this very expensive truck, the holdback will be larger and it seems to be fair to go a little below invoice.

 

It’s not likely. One sure way to know is just thank them for there time. Let them know that you are going to buy somewhere within the next week but if the deal won’t work for them ... it’s not a problem and you completely understand.
If they want the deal they will come back in a couple days with some made up reason that the deal is now possible.

 

I'm not entirely sure what some folks in this thread are trying to accomplish here. Let me explain a few things to help the OP and dispel a few myths....

Tiger275, not knowing the VIN of the truck you're looking at, I'm taking everything at face value on the price of the truck right at or very near $80,000 as stated in your post. If that's the case and based on that invoice and holdback amount quoted, what the dealer is telling you is absolutely correct.

Also correct is that the volume purchase incentives and various other incentives have gone away or changed significantly. There are still some out there, but a lot of different factors go into how they are calculated, and oftentimes dealers don't actually know until the month is complete, as some incentives are based on unit sales for the month. A dealer isn't going to get into that when selling a vehicle.

Even better is that whoever sent you that email is being honest that anything you buy in financing is up to you and that he or she isn't trying to entice you to purchase anything extra to help them increase their profits. That's probably the most honest and straightforward dealer emails I've ever seen. That person pretty much just laid all their cards on the table and told you to come get it at the very best possible price.

If a dealer is splitting or even giving all the holdback, that is an OUTSTANDING DEAL no matter what anyone else here is trying to tell you. If that's the truck you want - RUN, don't walk - to the dealer.


For others in this thread, something to consider:

Dealers still get some incentives, but that's not a number that is handy to the sales managers so they can't really attach that figure to a quote anyway. There are many factors that go into how much a dealer ends up receiving in total incentives. Furthermore, why does a customer think they are entitled to that money anyway? Try operating a business where you sell all your products at $0 profit and see how long your doors remain open and you can pay your employees.

A customer's only real chance of getting a vehicle under holdback is an old-age unit that a dealer is just trying to get rid of and is willing to take a loss, or if it's the last day of the month and they are a unit or two away from hitting bonus payouts. Again a dealer won't factor in those incentives, they are just going to take a straight up loss to dump old inventory or to reach that goal for extra incentive paybacks. Anything else and every dealer out there will stop short of going under holdback.

 

I'm Buying mine in a couple of hours after waiting over 2 Months for a seatbelt fix that still isn't happening. I'm buying a different truck.
Here's My deal.
2017 Platinum
MSRP $78,440
Invoice $73,912
My Price $71,162 Minus $3500 trade in assistance rebate, $1000 Military Rebate and $750 Private cash offer. Not sure if I can use the Private cash and Military rebates together.
Unfortunately in California You get taxed on the rebates.

 

Thank you to everyone that has replied so far. I have gone back and edited my original post to clarify my question. I have no doubt that the dealer is offering me a decent price at about 11% off MSRP, but I felt like there was something not completely straight forward about the part about not getting any volume based kickbacks. It just doesn't seem possible.

Also, there is no trade so that does not complicate the conversation.

@Pocket - thank you for the detailed response.

Ironically, it is not the specific price that I am most focused on (at this price point, what is a few thousand $ anyway ) . What I am trying to do is reconcile getting a '17 at 11% discount (this deal) vs '18 at 7% (offer i got). #igottahaveitnowitis hasn't set in yet, but it is fast approaching. I realize that no one else can make that decision for me but before I made the decision, I just wanted to truly understand what my valid negotiating window was.

Thanks again to everyone. This is such a great forum for information sharing.