Car dealer showing/adding profit figures on sticker - is this a thing?

[Murloc]

the MSRP is the suggested RETAIL price, that means the dealer profit is already in it.

My guess is this is just a mark-up based on demand.

Also DrPizza makes a good point, if you set the bar ridiculously high the negotiating is easier for the dealer.
It's still weird they're being honest about it though. Or maybe they assume everybody knows the MSRPs.

 

[FelixDeCat]

Who needs a $60,000+ car?

Pay cash for a $2,500 one and you be fine.

 

[nexus5rocks]

It's not unheard of for cars that are in high demand, but a Hyundai?

 

[mikeford]

I saw it first back in the 70's, when the Datsun 240z came out most dealers put on a additional sticker, $1000 for polished rims or special wax etc. A few years later the Porsche dealers would be putting on 35% increases for nothing "market value".

 

[CPA]

The free market economy at work

You are correct, and OP can buy something else if he likes. I don't have any qualm with the dealer doing it.

 

[CPA]

Who needs a $60,000+ car?

Pay cash for a $2,500 one and you be fine.

Here we go with "need"-based purchasing again. smh.

 

[Charmonium]

When I bought my car, everybody was asking over list for it. I kept emailing dealers in a wider and wider radius from my home until i found one that was willing to sell for the MSRP. Anyone who wouldn't correspond over email got eliminated. Anyone insisting on a dealer premium got eliminated. Sooner or later you're going to find someone who has what you want at the price you're willing to pay. You might have to drive a couple hundred miles to pick it up but so what.

I have a theory about which are the best dealers to go to. Dealers in wealthier areas don't try to dick you around as much as ones in more middle class areas. I think that's because rich people tend not to have the time to spend hours in a dealership playing their stupid ass games so they're more willing to make a deal over the phone or by email and just have you come in to drop off the check. They know what the market will bear in terms of price and they know rich folks tend to be pretty tight assed with their money so if they try to dick you around you'll just go someplace else. There's no point in trying to squeeze every last dime out of you.

 

[darkswordsman17]

You are correct, and OP can buy something else if he likes. I don't have any qualm with the dealer doing it.

As a consumer I do. I don't give a shit if its legal or any horseshit "durr free market, that's econ 101!" arguments, stuff like this is why car dealers continue to have the scummy reputations they do.

Acting like this should be accepted has just enabled it to spread wider and it's why pieces of shit like the guys from Enron have been able to pull the bullshit they have.

What's next, a "suggested tip" line?

 

[s0me0nesmind1]

Tell them to take the dmu off. They still make money through car manufacturer incentives, holdbacks and actual invoice vs msrp.

That DMU is more like "increased profit".

This. What is wrong with you? I expected to see how much the dealer ACTUALLY PAID for the vehicle. Not interest charges :|

 

[CZroe]

Whether accurate or not, he even said the "appearance package" was actually nothing - just an additional profit to the dealer. Didn't really want to have a fraud conversation with him while I was standing there though.

Probably not fraud if it means they shined it up and threw on an extra coat of wax. Crap is expensive.

 

[3chordcharlie]

As a consumer I do. I don't give a shit if its legal or any horseshit "durr free market, that's econ 101!" arguments, stuff like this is why car dealers continue to have the scummy reputations they do.

Acting like this should be accepted has just enabled it to spread wider and it's why pieces of shit like the guys from Enron have been able to pull the bullshit they have.

What's next, a "suggested tip" line?

As a consumer, you have the ability to walk away. It's standard practice that newer, high-demand models are sold above MSRP. This benefits the dealership, of course, in the sense of windfall profits, but it also limits queuing and arbitrage.

The vast majority of cars are sold below MSRP, with some sort of factory incentives, and with a normal profit to the dealership.

If you want to direct your rage at car dealers, stick to rustproofing, financing games, and extended warranties.

 

[LTC8K6]

"ADM $3,000.00" was on every vehicle at a Chrysler Jeep dealer...not one was in high demand.

 

[Bock]

Repo Auction & then customize the car.

 

[FelixDeCat]

Here we go with "need"-based purchasing again. smh.

Ok, go ahead and splurge, nobody really cares what you drive or what you paid for it. Its just a stupid car.

 

[zCypher]

Isn't this why we call them stealerships? Not surprising at all. They will take full advantage wherever they can.

 

[3chordcharlie]

"ADM $3,000.00" was on every vehicle at a Chrysler Jeep dealer...not one was in high demand.

Then they won't sell any.

 

[waggy]

Cars are suppose to cost LESS than MSRP. The fact that the dealer is adding DMU on top is not a good sign at all.

No. but it's a great idea. People see these and ask what htey are. the Salesmen is "honest" and says the DMU is dealer mark up and the other one is profit. you demand to take them off. He goes "talks" to the manager.

they reluctantly agree.

buyer thinks they got a great deal. salesmen makes a bunch.


it's like the TSA. it's nothing more then show

 

[TheGardener]

Good information on buying a car. I find the dealers, who advertize (with a shifty smile) that there is no haggling, are the ones praying upon the weak and infirmed of the herd. Buying a vehicle is not suppose to be like going to the supermarket and paying whatever it says on the can of baked beans.

I agree that requesting bids on the internet today is a necessary part of car buying. Every dealer assumes you've done that. But like the OP, I would want to first test drive a car before considering whether to get serious about it.

I bought a car a 18 months back. I went to local dealerships to test drive cars. Didn't even want to discuss a price until I decided on a make and model. When I did, I ran into the no haggle price routine. Like most everyone, I had researched pricing on Edmunds and KBB. The salesman didn't offer a price, but asked me to offer him one. First time I ever ran into that. I offered a price 10% below the sticker price, and that was at the lower range of prices people recently paid, as polled by the two websites. The salesman said fine, and that made me do a mental facepalm. I knew that I've been had.

Long story short. I saved an additional 6% contacting other dealers over the internet. If you don't negotiate, you'll get had.

 

[CPA]

Ok, go ahead and splurge, nobody really cares what you drive or what you paid for it. Its just a stupid car.

See that's more like.

 

[MetalMat]

The MSRP is just what the manufacturer has suggested for the selling price, you would have to get the actual invoice number to see what the dealership paid for the car and thus making in profit before incentives and what not.

For cars in high demand with limited stock the dealership can and will mark up the selling price which is what they did here with the DMU. Frankly they can charge whatever they want, its simple supply and demand.

It is a little surprising that they have this listed right up front but if they were going to be totally straight forward they would give you the invoice number instead of the MSRP which does not happen often.

 

[GagHalfrunt]

The MSRP is just what the manufacturer has suggested for the selling price, you would have to get the actual invoice number to see what the dealership paid for the car and thus making in profit before incentives and what not.

For cars in high demand with limited stock the dealership can and will mark up the selling price which is what they did here with the DMU. Frankly they can charge whatever they want, its simple supply and demand.

It is a little surprising that they have this listed right up front but it they were going to be totally straight forward they would give you the invoice number instead of the MSRP which does not happen often.

Invoice number means jack. With dealer holdback and other incentives the price they really pay for the car is way below the invoice price. They can sell at invoice price and still make a substantial profit. So showing that number is not being "totally straight forward", it's just another layer of bullshit.

 

[MetalMat]

Invoice number means jack. With dealer holdback and other incentives the price they really pay for the car is way below the invoice price. They can sell at invoice price and still make a substantial profit. So showing that number is not being "totally straight forward", it's just another layer of bullshit.

This is true. While I do know that they get money through other various methods like you mentioned I would be lying if I said I have any clue what that number is, seems like it would vary quite a bit from car to car.

And don't forget that if you need to finance the car at the dealership they are going to try extremely hard in getting you to purchase all sorts of different extended warranties which is almost always just another profit margin for them.

 

[GagHalfrunt]

This is true. While I do know that they get money through other various methods like you mentioned I would be lying if I said I have any clue what that number is, seems like it would vary quite a bit from car to car.

And don't forget that if you need to finance the car at the dealership they are going to try extremely hard in getting you to purchase all sorts of different extended warranties which is almost always just another profit margin for them.

And therein lies the problem, even an informed buyer has a hard time knowing the real number, they can only sort of guess. The "invoice price" is nothing but a game, a fake number that the dealer can show to people to pretend to show the absolute zero profit level and negotiate up from there. But a really good buyer, particularly on domestic cars without a high demand, should be able to take the invoice price and negotiate down. Holdback doesn't usually change, it's 2%-2.5% on imports, more like 3% on domestics. The other incentives fluctuate, so you can't ever be sure how much they are at any given time, but you likely wouldn't be far off to assume the dealer is making close to 5% at invoice. At a $20,000 "invoice price" the real dealer price is $19,000 to 19,150 or so. For many models they might take a few hundred less than invoice because they're still going to make money and they're getting a customer that they can sell service to down the road.

 

[CountZero]

Buying a vehicle is not suppose to be like going to the supermarket and paying whatever it says on the can of baked beans.

But it should be, all this haggling crap is stupid. A complete waste of time perpetuated by scummy dealers.

This is 3rd world country crap that has stuck around in this one little area and needs to go away.

It isn't that I've been ripped off but I complete resent the time I had to spend to not get ripped off.

 

[s0me0nesmind1]

But it should be, all this haggling crap is stupid. A complete waste of time perpetuated by scummy dealers.

This is 3rd world country crap that has stuck around in this one little area and needs to go away.

It isn't that I've been ripped off but I complete resent the time I had to spend to not get ripped off.

It's the same way with furniture stores. Every time I gotta walk in with a game face of willing to walk. Even if I like the piece of furniture.