On a macro level, this is easily googable. It’s covered in the financial media and dealer corporations like Autonation are publicly traded. The short answer is that their business models no longer rely on per-unit profits from the sale of a new car. It’s mostly service, parts, F&I products and used sales
You know me all too well 
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Most sales people make the minimum commission on any new car once it’s discounted any significant amount(cars in demand would be the exception). Used cars are a different story, no invoice on those to figure what the dealer paid. I heard Honda dealers make allot of money Accord Touring Hybrid’s…
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Surely for every Leasehackr-worthy deal, there are a hundred others that they’re making bank on in any given month so it all works out right?
I’m sure. I know well-educated (book smart) people tell me that leases are only offered at the advertised prices - you don’t negotiate them 
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Can help someone help me clarify, when benchmarking the 1% rule are we talking about zero drive off or zero down payment and with or w/o acq fee rolled in?
I see what you did there.
To your point though, that is what made BMW ex corporate demo leases such a screaming deal before all the incentive and residual changes. Dealers bought those cars at auction at largely used car market rates, which meant they could give strong discounts relative to MSRP on these leases and still make money.
The Volvo dealer started with a 500 payment a 46k car and ended up with 350 payment on 46k car.
So I imagine that they are looking to make 500-350 * 36 on every sale = 5k.
In addition, they are probably looking for service, extra insurance products etc etc to make their money.
If a dealer gives me the deal I want I don’t care if they make $200 or $2,000. The salesman’s job is to hold gross for the dealer, the buyer’s job is to get the best price they possibly can. The money the dealer makes all depends on who does their job better.
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It also depends on how much competition there is, small markets might only have one or two dealers of a particular brand, so less discounts.
Agreed. The dealer is entitled to make some amount of money - that’s how they stay in business. Unfortunately, so many dealers resort to slimy tactics to make money by either outright lying or hiding the ball - that’s what I object to.
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Dealerships make money on service. We get about 50 plus clients in for service a day where they charge $180 a hour for labor whereas the store sells ~170 new cars a month. That should put things into perspective.
Audi is not only competing with other Audi dealerships but with other luxury brands as well. Given that they inherently lease higher than our competitors we really don’t make much selling new cars because we have to discount the hell out of them to stay competitive.
Buyers are way more informed and there is a wealth of information on pricing online. Margins on new cars are real thin.
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Are you able to tell us how this works with warranty repairs? At what rate does the manufacturer reimburse dealers for labor? Especially since we’re in CA where there is no law on it.
The reality is that selling cars is not a dealership’s profit driver. The profits come from service and parts, used cars, in-house financing, etc., basically everything but selling new cars.
But the other reality is that for every one of us spending $300/month on a C-Class, there’s a dozen people spending $550/month on the same C-Class. Most people see the manufacturer special and say “sign me up.” Although admittedly even those are probably razor thin profits.
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Warranty repairs are paid at a flat rate by the manufacturer, x repair pays y dollars. And it usually pays for less time than it actually takes. Mechanics and service writers prefer customer pay, although the service writer just wants to write as many tickets as he can since he’s just paid a percent of what he writes.
Then why do some dealers go out of their way to get a warranty claim approved while others don’t seem to want to do it at all?
Because some dealers suck
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Some dealers are very transactional while some prioritize reputation/referrals/CSI scores