So I was just at a Hyundai dealership negotiating a lease and they showed me their “net profit” on the calculation sheet was negative. Is that value just there for show or is that really what the dealer uses to determine their profit.
It depends, really. They tend to make it in the back. For me, I always place a Tundra for -2,200 profit, but there is $1,400 positive in every deal with $300 Flat by US Bank. And if they are to make some money on warranties, then it would be positive.
But also, I want to make aware that $1,400 is not represented for every dealership. It’s just for me
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So its just an arbitrary number that the dealer sets? Or is it the actual profit on the vehicle i.e. you selling it at a $2200 loss but get other incentives from the bank or from selling add ons so the total profit is positive?
OEM may provide back-end “dealer cash” incentives to move certain inventory.
Or can get incentives from the OEM in terms of volume-based incentives or a better allocation of popular (ie profitable) models.
The only person who knows is the sales manager who did the deal. Every dealer is different is how they set up their system. I have seen some include dealer cash and rebates, while others is just MSRP to invoice.
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To answer your question, that value is for show …
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There are multiple income streams on every vehicle. They may be showing a negative profit on that income stream, but they’re likely making it up and then some on others they aren’t showing you.
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Just ignore it. It has 0 bearing on whether you should accept or not.
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Just an arbitrary holdback money we get at the end of the month with no other extra incentive and no, I am not selling add-ons. It’s always included