Just FYI: my GM told me about his $2,100 on a punched S90 with 235 miles, which he kept calling “new” (which technically was true since it was not used as a real demo/loaner). But you must know better as a Volvo insider.
A Volvo dealer gets $2,100 for punching a car as a service loaner (sometimes there are different amounts, but the typical one is $2,100). The dealer gets the money right away, but to retain it the car (typically) needs to be a loaner for 6 months AND have 4,500 miles on it when retired/sold, or 6,000 miles and the time requirement is waived. If less time or miles are on the car, they are charged back. With permission, they can get a pro-rate approved. In CA, we’re required to disclose prior history things that start the warranty prior to the final sale or lease.
A dealer gets $0 for punching a car as a demo, although sometimes at the end of the month if the market manager is trying to manufacture sales, they might toss the dealer an incentive of $500-1,000 (maybe more) to punch a car as a demo.
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Interesting. Then why would he be willing to give me this $2,100 on a car with 235 miles? They do punch cars just to hit targets, but do not necessarily put them into demo/loaner fleet, as he told me.
Doesn’t make sense to me. If the $2,100 came from the car being punched as a loaner, I can’t see how he wouldn’t get charged back for it. It’s a large amount for a market manager to give a dealership for punching a car as a demo, on top of being a very coincidental amount of $2,100, the most commonly seen amount for loaners.
Don’t know if it was punched as a “demo” or as a “loaner”. Is there difference? He actually never said words “demo” or “loaner”, just that it was punched and it was still new.
Punched as a demo lets Volvo show a sold unit, even though it’s still in inventory. It’s supposed to mean the car is being used as a demo, but they’re often not. There’s no money associated with punching a demo, unless the market manager pays the dealer to do it (this is the only scenario that would appeal, as it’s a discount without the car being used, with the only issue being a shorter warranty). Punching a car as a service loaner does have an incentive associated with it, typically $2,100. Volvo has been fiddling around with different amounts and time/miles requirements for the last 2-3 years. If a car is punched as a loaner, Volvo wants to see it used as one for the required time. There can be an audit and loss of incentive if not used as required. Most dealers that use loaners also write them down as well, typically $500-750/mo, as the $2,100 isn’t enough to offset the loss in market value for a car that’s say 6 months old with 5,000 miles on it.
KD, good info. So if I am searching for a (XC90) deal, I would be looking for a service loaner, not a demo car and the one which has been "loaner for 6 months AND have 4,500 miles on it when retired/sold, or 6,000 miles and the time requirement is waived. " I can then reveal the knowledge of $2,100 in making the deal.
Is there an upper limit of miles, e.g. a car with 9k miles can be still leased ?
Also the info “$500-750/mo write off” is good to know.
Volvo can’t lease a car with over 10,000 miles. When you lease a loaner, it’s a little like “two steps forward, one step backward.” You get a lower price, but that’s offset with a residual reduced by 20 cents/mile.
The IL taxes are 6.5% ($3164.40). The MSDs and first month payment is due at signing so $7107.
I also learned that the car was traded from another dealer out of state and driven back (instead of shipped) to Chicago area. It’s not a punch car.
I can’t get this to match what you’re saying. Are the calculations yours or are they from the dealer?
If the tax of $3,164.40 is 6.5%, then the taxable amount was $48,683.08, which looks very similar to the net selling price of $48,000 + $695 acquisition fee. I’m assuming the tax is capped, since it’s not in the drive-off. So I plugged in $48,000 + $3,164 + $176 + $213 as selling price, assumed the $695 is capped, set the tax rate to zero since the tax is paid up front, etc, and get a payment of $634/mo. How are the fees $683? You listed doc $176 and license $236, but show $683? Are there another $271 from somewhere?
Does this lease calculator always put doc and license in the drive-off? If you are capitalizing them, do you add them to the selling price and set doc and license to zero?
Why does the lease calculator make the 10 deposits $7,000 when the payments are between $600-650?
The $3164.4 looks like a purchase tax, are you sure that is the right? Are you in Chicago city, that include the additional in-use tax?
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Yep. Looks like exactly 18.5% Chicago tax. Either dealer messed up or he is in Chicago or it is purchase tax.
@KD6-3.7 What dealer in Bloomington/ Peoria, are you dealing with ? I am in market too… I am looking at X5 vs Rx-L vs this volvo.
It’s NAS out there in IL
In Chicago. The amount is what they gave me.