Mustang dealer cost price?

Nookie said:

Don't you believe it...

The story I got many years ago from a senior ex-VAG employee will no doubt be similar to the way a lot of other major dealers operate, in that their invoice cost (from the manufacturer) is indeed only marginally less than the published retail, which arms them with the ability to counter requests for discounts and allows them to offer occasional 'invoice cost sales' to draw in customers.

They [dealers] are set targets, which generally include allocations whereby the manufacturer sends them set amounts of 'stock/pre-manufactured' vehicles on a regular basis which they are expected to sell off the lot/showroom floor on top of any special order vehicles, further to which, and based on what percentage up to and over their set target they achieve, they receive retrospective 'bonuses'.

This is where their profitability lies, and it is obviously out of sight of the buying public.

This is backed up by the fact that, as car sales are calculated based on registration, you will see dealers pre-register vehicles so they are classed as sales for reporting purposes to the manufacturer, to enable them to receive their bonuses, then offer them for sale at vastly reduced prices to clear them off the lot to make way for the next batch.

It is impossible to believe that the end profit on the sale of a Mustang at, say £35K, would amount to just 1.5-2% (£500-700) as absolutely no business could operate on these margins (even if their margins on cars such as the Ka, Fiesta and Focus were double that of the Mustang, their typical retail is half as much), especially with the overheads involved.

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croyde said:

I'm sure I heard it was as little as £500 per Mustang.

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Nookie said:

Don't you believe it...

The story I got many years ago from a senior ex-VAG employee will no doubt be similar to the way a lot of other major dealers operate, in that their invoice cost (from the manufacturer) is indeed only marginally less than the published retail, which arms them with the ability to counter requests for discounts and allows them to offer occasional 'invoice cost sales' to draw in customers.

They [dealers] are set targets, which generally include allocations whereby the manufacturer sends them set amounts of 'stock/pre-manufactured' vehicles on a regular basis which they are expected to sell off the lot/showroom floor on top of any special order vehicles, further to which, and based on what percentage up to and over their set target they achieve, they receive retrospective 'bonuses'.

This is where their profitability lies, and it is obviously out of sight of the buying public.

This is backed up by the fact that, as car sales are calculated based on registration, you will see dealers pre-register vehicles so they are classed as sales for reporting purposes to the manufacturer, to enable them to receive their bonuses, then offer them for sale at vastly reduced prices to clear them off the lot to make way for the next batch.

It is impossible to believe that the end profit on the sale of a Mustang at, say £35K, would amount to just 1.5-2% (£500-700) as absolutely no business could operate on these margins (even if their margins on cars such as the Ka, Fiesta and Focus were double that of the Mustang, their typical retail is half as much), especially with the overheads involved.

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Manders Mustang said:

You work in audit/finance or did the Ex-VAG guy, it sounds a lot like the explanation my dad and brother both gave me who've audited ford stores for years (Both chartered accountants, dads now a DoF and Brothers an Audit manager). !

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slowhand99 said:

They make their money on finance deals. Try buying a car for cash from most main dealers, they aren't interested. I tried and failed to order an Audi Etron from 2 dealers, as soon they knew I was paying in full I couldn't get the time of day. Just as well. I ended up with a Mondeo and a Mustang.

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