Employee Pricing Question

Ask the Hackrs
1

I live in the Detroit, MI area. Virtually everybody here has access to some kind of an employee discount from either GM, Ford or Chrysler. The dealers here when they advertise cars deals on TV or in the newspaper even always show the price based on employee discount. It’s weird. It’s almost impossible to see an advertised price that DOESN’T include an employee discount.

I know from reading the forum that a lease price is basically the final capitalized cost of the vehicle (sale price) from the dealer, less any rebates or incentives like “lease loyalty” or competitive “lease conquest” rebates, minus the residual value…and the there is a cost of money calculation in there, but that’s my understanding of the gist of it. I keep reading how you guys have all negotiated these awesome deals from the dealers which are really reductions in the dealer selling price which are resulting in decreased lease payments. Obviously, the lower the price of the vehicle, the lower the lease payment with all other things being equal.

My question is, if you have access to an employee discount, I think that is a set price. Like a set discount of MSRP. You can subtract applicable rebates, but the sale price is set upfront for the employee price. Is this always the best deal? If you have an employee discount, would you always want to use it? Or, is it better to try and negotiate your best price even before you tell a dealer that you have an employee discount?

If a vehicle MSRP is $40,000, lets say the employee discount price is $35,000. That’s a set price…no negotiating on that price. But, let’s say the 2019’s are now hotting the lot and the dealer wants to unload his 2018’s and they are getting aggressive on their pricing. Might they negotiate a dealer discount off MSRP on that 2018 down to, say, $34,000? If so, did I just screw myself out of an additional $1,000 discount by whipping our my employee discount card right upfront when I walked in the door?

2

Hi,

I can tell you from my experience that Employee pricing does not dictate final price. So normally a dealer starts with MSRP -> Employee Price - Rebates - Dealer contribution. So If the MSRP is 40K then your final negotiated price could be 30K for some vehicles depending on your nego skills.

3

So you can negotiate employee pricing and dealer discount and rebates?

4

Interesting. Good to know. I guess I was under the impression that if I showed up with an employee discount, that was as good as it was going to get. Thanks for your reply!

5

I’ve been eligible for GM employee pricing for many years. Sometimes the employee price is the best deal. Sometimes the dealer will discount the vehicle more on a regular deal than on employee pricing. Sometimes there are rebate/discount/kickback programs that aren’t available with employee pricing.

You just have to ask

Regarding older stock, generally there are much bigger rebates on last years models than the new year. And also the new years models usually have a higher MSRP than the old year even if the vehicle is unchanged. It used to be for GM employee pricing that after (sometime around) Halloween we got an extra 5% off of MSRP. That isn’t the case anymore. The rebates are the game.

The other thing that comes into play is if you have an (original) GM rebate credit card. If you do you can no longer use those rebate credits on an employee deal. What I find is that my GM credit card rebate(s) are often bigger than the employee discount from what I can negotiate. On top of that the GM card often gives limited time plus-up offers where they stack cash onto your GM card rebates. Those plus-up offers cannot be used with an employee deal.

6

In theory, per the program rules, the employee price is a fixed price. In practice it just may be what you suggest.