Hi Lease Hackrs,
Thought this might be a fun topic for everyone curious about the dark side. Been in the Automotive business for close to 5 years at the same dealership and had tremendous success by selling the way I would like to purchase or lease a vehicle. Feel free to ask me anything from someone who is actually on the other side of the desk!
See what other leasehackrs that have bought or leased from mehere.
Does a dealer make same amount of money from leasing vs financing?
How much effective loss does a dealer take selling 1 or 2 yr old new inventory at significant discount? Does manufacturer absorbs some of loss
Dealerships make the same amount whether you lease or finance for the most part. Granted that depends how much they mark on either the MF or interest rate. There is a cap for both but nowadays it is extremely rare to see any mark up on either of the two.
It is rare to have inventory that is a year old. The only one’s I’ve seen that actually sit on our lot for that long are fully loaded RS models that have some weird exclusive color that nobody wants. Dealerships do ask the manufacturers for help on those and negotiate a kickback so to speak.
Allocation is extremely important to a dealership. Having a bunch of aged inventory prevents the dealership from getting fresh units that are more desired so dealerships will take a net loss from time to time just to get rid of aged inventory.
What’s the best way to negotiate a deal?
Thanks for ur insight. Your average car buyer/leaser doesn’t know that dealerships don’t own the new cars but rent/lease the space for the manufacture. To that end, car that don’t sell tgeyvneed to move to leave room for those that do. Of corse used cars are a different story.
That’s correct. The dealership do get charge after 30 days a flooring fee. It’s a rent/interest charge from the banks for having their merchandise sit there.
With used car it is even more dangerous to have it being aged as the owner paid cash for the car. If it’s over 60 days they will do whatever it takes to unload it. Having a used car sit for over 60 days only means one thing. They took it in for way more than anyone is willing to pay.
Be simple with your inquiry! Shop online. The more technical you get asking for info such as break down of the drive offs, MF and residual on multiple cars the less likely someone will respond to you. In their mind, it’s not worth the time and effort since clients who are that particular will usually go with the lowest priced quote only. If they know they are working for a dealership who’s objective is not strictly volume then those inquiries usually are ignored.
Drive the car, narrow down the model and trim, give them a total out of pocket you are willing to pay and ask for their best monthly payment. You’ll get far more responses going that route and you will be much more efficient finding the best deal.
Not sure if AFS ever has a low enough MF to make something like this work, but can you answer this question below?
How are dealers sometimes able to offer what seems crazy high discount off msrp/sticker (15-20%+) for new same year cars?
It definitely puts the # below the perceived “invoice” price. Does the dealership “take a loss” on it but the sales guy still sale credit?
Only other thing I could think of was they have permission/help from manufacturer to allow for the decrease on specific stock.
From what I’ve seen though, it seems decently scarce occurrence and usually from big nation wide dealerships.
Do dealers get a tax incentive on loaner vehicles since they get registered to them as a fleet vehicle? Verse factory support.
I’ve had clients want a further reduction on sales price and want us to make up the difference by marking up the MF to the max.
Their goal is to just pay the car cash after 3 months and benefit from the lower sales price. In theory it is possible but no dealership will ever trust a client to make the full 6 payments because the manufacture will charge the dealership back the difference.
So to answer your question. Yes it can be done but no dealership in their right mind will do it.
The sales person will always get credit for the sale no matter how ugly the deal is.
Those are needles in the haystack deals that rarely occur but here’s how it can be done.
If a dealership is 4 cars away from hitting their manufacturer quota to get for example $80k from the manufacture and it’s the last day to
make it happen. It makes sense to lose a total 10K combined for the 4 cars to hit their number. With that being said, that RARELY happens and most dealerships never cut it that close every month.
So do you guys end up taking a bath on those crazy colored RS models?
And are these cancelled orders or do you guys usually order them in those colors?
If you have a valid dealer license you don’t pay sales tax for the vehicle. Manufacture will usually allow a certain depreciation before you are you allowed to sell it has a pre owned. Must reach certain miles and time before you can pull it out from service loaner status to your used car lot.
Usually it’s an order from client that backed out of a deal or a “gift” from Audi. A color Audi ordered and allocated to a store.
Not really a gift if it’s a hard color to sell so once it sits long enough we ask for support.
Most dealerships play it safe with high end sports models. White, Black, Gray with black interior but you’ll be surprised with some of the color choices clients choose over the safe colors.
There’s a price for everything.
Speaking of interesting color choices, how about that Sonoma Green on the new RS5! I think it just replaced Nardo as my favorite Audi color.
If a client backs out of a custom order, do they lose the deposit?
Audi has some nice greens in their arsenal. The Gotland green and Camouflage green is pretty sick in my opinion. It’s like a “F you, I can afford it” color.
All deposits in California are refundable.
Because all deposits are refundable, do you ever turn away custom orders if it’s an outrageous color or very odd options choice, in case the buyer backs out?