Employee Discount vs Dealer Discount + Manufactures Rebates

[kevin1914]

I’ve been told by multiple dealerships that their dealer discount + rebates can beat a ram employee Discount + rebates.... is that possible?


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[19Jake]

employee price w/rebates is my starting point for negotiations

 

[mjw930]

Affiliate is 1% below true invoice, employee is either 3% or 5% below (I don’t recall the current number) minus all rebates and incentives. With these programs that’s your price, no negotiation allowed or the dealer can’t submit the deal under the program and get their compensation (they get a stipend to make up the difference between invoice and the discount).

The only way a dealer can sell to you at a lower price is to either leverage a factory to dealer bonus they don’t tell you about (one they must disclose in a true employee or affiliate deal) or dip into their holdback (Google dealer holdback).

However, there are times of the year, usually near the end of each quarter, where they need to meet a sales quota to either qualify for a full holdback payout or get a significant bonus where they will sell a vehicle at a loss (start at invoice, subtract all incentives and subtract the holdback) to make their numbers. Sometimes losing $1000 on a few deals can earn them tens of thousands of dollars in bonus and holdbacks. If you’re lucky you’re the one buying one of these sacrificial lambs.

I’ve been buying under the various programs (affiliate, x plan, supplier) for 20+ years. The 2019 Long Horn I just bought was $51500 MSRP, affiliate was $47900 and there were $6500 in rebates and incentives. Bought the truck for $41400 + tax and tags. No negotiation, deal took 5 minutes to close. I’m pretty satisfied to save $10100 without having the break a sweat.

 

[kevin1914]

I guess I've been offered affiliate because the deal is 1% under invoice plus all eligible rebates. On the other hand there is a dealership across town advertising 13k off of msrp (combination of rebates + dealer discount )

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[Dgulia]

Employee discount is 5% below invoice plus rebates and depending on dealer may give you another 1000 or so based on a vehicle.

 

[mjw930]

I guess I've been offered affiliate because the deal is 1% under invoice plus all eligible rebates. On the other hand there is a dealership across town advertising 13k off of msrp (combination of rebates + dealer discount )

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We’ve all seen those ads showing $13k off a $45000 truck, they are bogus. No one can qualify for all the incentives and rebates, it’s impossible because some explicitly exclude others but the computer programs used the auto generate these “offers” simply add up all incentives with no regard for what you actually qualify for. Read the fine print on the ads, they always state “Subject to buyers qualifications, not all rebates apply”.

Even at invoice the dealer makes their holdback and may make bonus money based on quarterly sales and that’s fine, they need to make a profit or they wouldn’t stay in business. If they can make some money and you are happy with the deal then everyone wins.

 

[V8Spock]

Another idea Kevin is to get an out-the-door price for everything and have several dealerships compete against each other for your business.

Basically, your trying to flush out the dealership that needs the sacrificial hidden payouts that mjw930 mentioned above. One or two will bubble to the top. Shop the final OTD, lock it down in writing, figure out financing and only walk in for delivery.

In the end, you get the truck you want at the lowest price your market can deliver.

If interested:

Fighting Chance

https://www.fightingchance.com/

Deal talk podcast

https://itunes.apple.com/us/podcast/deal-talk/id1020426124?mt=2