Average dealer profit on selling a denali?

[DarkHorizon]

Just trying to get an idea of what sort of service I should be expecting from the dealer... so I am trying to get an idea of what the average profit the dealer sees out of selling a single denali with a 75-80k price tag? I've heard things as high as 15% goes to the dealer at time of sale, but I am mostly curious. I know alot of it gets mixed up into quota bonuses, etc, but I would assume that someone has a ballpark idea on what a per car profit looks like after all of the bonus payments come in.

 

[RVAHokie]

Just trying to get an idea of what sort of service I should be expecting from the dealer... so I am trying to get an idea of what the average profit the dealer sees out of selling a single denali with a 75-80k price tag? I've heard things as high as 15% goes to the dealer at time of sale, but I am mostly curious. I know alot of it gets mixed up into quota bonuses, etc, but I would assume that someone has a ballpark idea on what a per car profit looks like after all of the bonus payments come in.D

Invoice (what they pay) is typically 5-10% below MRSP.

2022 Denali Invoice - $67k
2022 Denali MRSP - $71k

In todays market most dealers are selling well above MRSP between dealer fees, dealer add ons, and market adjustment. That said most $ made from dealers comes from the service department. Historically though dealers make little to no profit on the sales, todays market is an anomaly.

 

[Blackcar]

I have had dealers show invoice from GM that shows their price that they pay. I know it doesn't answer your question, but you might ask. From what I understand they are getting over sticker so that even more profit.

 

[WalleyeMikeIII]

Well, I know what the dealer invoice was for mine...and what the MSRP was; there was about $4k difference.
There is something called "dealer holdback" which is 3% for GM, this is all profit for the dealer, and comes in form of a rebate later from the mfgr to the dealer.
Additionally, there are other incentives to the dealer that are useful, like additional allocations based on the number of units sold, etc.
If they sell you any accessories, they probably make profit on those too.

Net, I would say if the customer paid MSRP, of $80K, the dealer stands to profit in the $5-8K range.

Any additional profit items like service contracts, pinstripes, protective coatings, bank/credit union loan kickbacks, etc would add to that profit, and probably come with a much higher margin than the vehicle itself.

I honestly don't think the dealers make a ton of profit on warranty service, unless the concern is pretty straightforward. (example: I saw a couple TSB's offering 0.3hrs of labor for a reprogram of a module. 0.3hr = 18 minutes. Hard to imagine a tech being able to go get your vehicle from the lot, pull it in, do the diagnostic, set up the equipment, perform and verify the job, and go put it back in the lot in 18 minutes...)
If they can retain you w/ normal maintenance visits, and long term service at retail, they probably do OK on that too.

 

[johnsmith4545]

There is a GMC dealership by me just flat out puts $10,000 market adjustment on the sticker price (even online). I can appreciate them being straightforward about it and not wasting my time. I went to a Chevy dealership for a Tahoe and they told me yea we can do your build for MSRP. I go and then they give me the final build sheet with an extra $7k of costs (e.g. ceramic coating, window tinting, wheel lock, etc) and say yea its required now. I walked out and found an honest dealership about an hour away from me to put my order.

 

[suterusu]

Well, I know what the dealer invoice was for mine...and what the MSRP was; there was about $4k difference.
There is something called "dealer holdback" which is 3% for GM, this is all profit for the dealer, and comes in form of a rebate later from the mfgr to the dealer.
Additionally, there are other incentives to the dealer that are useful, like additional allocations based on the number of units sold, etc.
If they sell you any accessories, they probably make profit on those too.

Net, I would say if the customer paid MSRP, of $80K, the dealer stands to profit in the $5-8K range.

Any additional profit items like service contracts, pinstripes, protective coatings, bank/credit union loan kickbacks, etc would add to that profit, and probably come with a much higher margin than the vehicle itself.

I honestly don't think the dealers make a ton of profit on warranty service, unless the concern is pretty straightforward. (example: I saw a couple TSB's offering 0.3hrs of labor for a reprogram of a module. 0.3hr = 18 minutes. Hard to imagine a tech being able to go get your vehicle from the lot, pull it in, do the diagnostic, set up the equipment, perform and verify the job, and go put it back in the lot in 18 minutes...)
If they can retain you w/ normal maintenance visits, and long term service at retail, they probably do OK on that too.

You nailed it, there is much more to per-unit profit than just the difference between invoice and selling price.

 

[DarkHorizon]

I havent asked for much from my dealer, but I would say I haven't received much more than $70-100 worth of time from my sales guy. I generally want to check on things, find out my spot in line, see what constraints are listed at etc on a month to month basis. I have called my sales guy about 20 times with no answer, no call back. Called the main number to ask for help from someone that would be willing to help and while I heard some yelling in the background I was eventually hung up on. If these guys were making a few hundred bucks selling me a car I might understand they dont want to deal with me being an annoying weirdo calling a few times a month to see what my large deposit and impending $75000 vehicle purchase is up to....

 

[Blackcar]

I havent asked for much from my dealer, but I would say I haven't received much more than $70-100 worth of time from my sales guy. I generally want to check on things, find out my spot in line, see what constraints are listed at etc on a month to month basis. I have called my sales guy about 20 times with no answer, no call back. Called the main number to ask for help from someone that would be willing to help and while I heard some yelling in the background I was eventually hung up on. If these guys were making a few hundred bucks selling me a car I might understand they dont want to deal with me being an annoying weirdo calling a few times a month to see what my large deposit and impending $75000 vehicle purchase is up to....

You have vehicle ordered and deposit down and they aren't talking to you?

 

[todayusay]

concerning the salesmen....pre covid, I suspect the majority of new GM new car sales were at invoice or below, and with "invoice" being the basis by which dealers determine their profit on a vehicle, most new car commissions ended up being $100-200 minimums and then the salesman would get a quarterly bonus of a couple hundred as well...so selling a new vehicle several years ago would result in a $300-500 payday to the salesman. Car commissions can range from 20-30%...usually in the 25-30% range, so taking the middle range of 25%...and a dealer selling for sticker where the markup is $4k, the salesman's take is $1k and that's not even taking into account the bonuses. Move to a dealer with a $10k market adjustment and the commissions paid out are nothing to sneeze at....some dealers have started to reduce the market adjustment and either complement it with or move completely to upping the "add-on" price as commissions on those are probably paid out differently


as far as how much the dealer is making...the above is correct about the holdback being brought into the equation...which is how a dealer can sell for $1k under invoice and still be making money....the additional aspect that has probably changed over the past couple years...similar to the salesman, dealers also receive bonuses for meeting quotas, meet the sales target and they get paid 500-$1k/vehicle sold...miss the target, nada. Local, decent size dealer runs a segment on the largest radio station in the area at the end of every month (they stay on the air for 2hrs in the morning on the sports station) and the owner has said he's literally given vehicles to neighbors/family friends to make sure they hit their sales goals....

I'd lean towards $8k and above in the current market on a Denali sold at sticker

that's not taking into account any profit or kickbacks on the financing side

 

[jimgeb]

Just trying to get an idea of what sort of service I should be expecting from the dealer... so I am trying to get an idea of what the average profit the dealer sees out of selling a single denali with a 75-80k price tag? I've heard things as high as 15% goes to the dealer at time of sale, but I am mostly curious. I know alot of it gets mixed up into quota bonuses, etc, but I would assume that someone has a ballpark idea on what a per car profit looks like after all of the bonus payments come in.

From what one Chevrolet salesman told me they make most of their profit from the sale of good late model used cars that the owners trade and of course their service department.