Do dealers lie about the MSRP?

[FL-JOE]

Back in our boating days I had an "awakening" when it came to MSRP on large vessels. A dock mate made a deal on a 33' Sea Ray with all the bells and whistles. The MSRP was just over $300,000. He got a large dealer to sell it to him for around $200,000 plus fees. Everyone was very impressed with his negotiating skills.

About a month after he took delivery another dock mate's son was down visiting. This young man worked for Sea Ray in the front office somewhere. Over a few beers he revealed that a $300,000 MSRP Sea Ray cruiser would be sold to a large dealer for around $150,000. He claimed that the markup from dealer price to initial MSRP would fluctuate between 80% to 100% depending on model and price.

I have no reason to believe that large DPs are any different. Some of us think we got a great deal when we finally drive a dealer down to 30% off MSRP. In reality they probably still had almost 70% on the table they got to put in their pocket.

 

[sheridany]

I have no reason to believe that large DPs are any different. Some of us think we got a great deal when we finally drive a dealer down to 30% off MSRP. In reality they probably still had almost 70% on the table they got to put in their pocket.

I believe that is the reality here. I have yet to find anyone who offers a service to broker a deal on your behalf that knows the dealer margins and can negotiate effectively with their knowledge. I would gladly pay for that knowing I was getting a better "real deal".

 

[FLSteve]

Just a question … does Newmar charge all their dealers the "exact same price" for the base coach??? In other words would a large dealer like NorthTrail RV who sells lots of Newmar's each year get a lower price from the factory vs. a small dealer that only sells a few coaches each year??

FLSteve

 

[sheridany]

Great question @FLSteve. I would venture to guess only there is some discounting or credit incentives on volume for the dealers but possibly everyone is eligible for special incentives as the year rolls on as it gets closer to the new year coming out. Keep in mind the dealers “buy out” the full production run at the Newmar dealer show so that has to be a hefty financial commitment by a dealer like North Trail.

 

[Jabber Jaw]

Similar to the automobile industry, my guess is, the Dealer receives "incentives" or "bonuses " throughout the model year, possibly paid Quarterly or Semiannually. By doing it this way, the monies go directly to the "bottom line" of the Dealers Financial statement, and doesn't have to be shared!

 

[FL-JOE]

I would guess, and this is strictly a guess, that a dealer as big as North Trail either gets bonuses during the year from Newmar and Tiffin as the new coaches sell or they get them cheaper in the first place. I doubt there is a significant difference between what a large dealer actually pays and a small dealer but I'm sure there is a difference.

Remember, a large dealer like North Trail also makes a huge profit from selling a larger number of used coaches, especially this time of year when many northern dealers are sitting in their offices playing solitaire.

 

[Hawkeye]

I do't care what industry you're in, the more you buy, the larger the discount. It's no different than the TDS fuel card, larger buying group, more discount.

 

[TJ&LadyDi]

We just bought a new car this past week. If the "invoice" we were shown was the actual price the dealer paid, it lost $1,800 in the transaction...unless, there's "more to the story."

Now, I really don't like using the word "lie" in the context of MSRP and invoices. Dealers use those numbers to their advantage, to be sure, but I don't think they actually "lie" in the accepted sense of the word. I do think that there are undisclosed factory incentives available to dealers and that likely account for why it would appear that the dealer lost $1,800 on our transaction.

TJ

 

[Jabber Jaw]

We just bought a new car this past week. If the "invoice" we were shown was the actual price the dealer paid, it lost $1,800 in the transaction...unless, there's "more to the story."

Dealers usually COMBINE the incentives and actual price the Dealer sold the car for, to arrive at a net purchase price.
Fairly easy way to arrive at what price the Dealer SOLD the vehicle is to add back the incentives to get a SALE price versus DEALER INVOICE. The difference is the gross profit on the sale, not including the Dealer HOLDBACK (usually 2-3%).

Now, I really don't like using the word "lie" in the context of MSRP and invoices. Dealers use those numbers to their advantage, to be sure, but I don't think they actually "lie" in the accepted sense of the word. I do think that there are undisclosed factory incentives available to dealers and that likely account for why it would appear that the dealer lost $1,800 on our transaction.

TJ