Employee pricing, now everyone uses it

[b2089]

Okay, now I'm sure something fishy is going on. Everyone is now offering employee PLUS discounts trying to make GM look cheap. All I can say is either it's a scam or their employees really get screwed big time. Some of the offers from ford are supposedly 3 grand BELOW EMPLOYEE. 3 grand below employee discount, so their employees would have to be paying sticker price.

So what is it
1- employees get screwed
2- we are being lied to about the employee discount
3- we have all been screwed and the real markup on the cars is somewhere around 90 percent of the sticker

and further, where is it going to end. Are car prices finally going to stop climbing at the rate they have been? Has competition and slackluster sales finally woken the sleeping giants.

[30thAnnGAGT]

Originally posted by b2089
Okay, now I'm sure something fishy is going on. Everyone is now offering employee PLUS discounts trying to make GM look cheap. All I can say is either it's a scam or their employees really get screwed big time. Some of the offers from ford are supposedly 3 grand BELOW EMPLOYEE. 3 grand below employee discount, so their employees would have to be paying sticker price.

So what is it
1- employees get screwed
2- we are being lied to about the employee discount
3- we have all been screwed and the real markup on the cars is somewhere around 90 percent of the sticker

and further, where is it going to end. Are car prices finally going to stop climbing at the rate they have been? Has competition and slackluster sales finally woken the sleeping giants.


Let me address your points in order. I can only address them from the GM side, and only really allowed to say so much..... but I think I can help

1. No, the employees are not getting screwed. The suppliers are a little upset being that some of them had to fight for the rights to employee discounts.

2. You're being "marketed" but not lied to. You as Joe Customer do recieve what the standard employee would get as a discount. However with certain incentives on cars at different times of the year, it's possible to go below employee cost without an "employee cost" sale.

3. The markup on a car is NO WHERE NEAR 90% of what production costs are. Try in the neighborhood of 3-4% GM profits about 54 dollars a vehicle when all is said and done.

As far as your questions. Take a look at the stats. All we hear about is "lackluster" sales. Well that's what the media would love for us to believe. Truth be told, in each of the last 5 years running, America has seen an INCREASE in sales from year to year. From 16 million in 2002 to over 17 million in 2004. 2 out of 3 Americans have purchased a new or used car in the last 3 years.

Are car prices going to continue to increase? Yes

[b2089]

I guess the biggest BS flag for me came from a local Chrysler lot. Chrylser is useing something called Employee plus or something. I know it's a plus because the lot is calling theirs yada yada Plus PLUS. as in their employee pricing then take off all incentives then take off more and then some more. At a point you have to call foul.

As I type this a ford comercial came on. they have a truck prices at 22 and them mark it down to 15k. That's a 7 grand mark down.

I think in the end it looks to me (a marginally educated consumer but not insider) that it's the old raise the price so you can lower it game. I think with the move in general away from haggling that other industires have gone to the car makers are going to eventually have to go that route also. Buyers remorse is bad enough without people always wondering if they got a really good deal or not. I'd be willing to bet that if cars were priced more firmly then people wouldn't run from the salespeople like they do and car shopping would no longer be considered a herculean task. It could even be fun.

[Subtle_Cynicism]

Its about time. Cars are horrifically overpriced.

Some of GM and Fords cars are still too overpriced, and the employee discount is what it should be. I'm happy they extended the promotion, I don't think it could hurt.

I just wish they'd offer it on 2006 models :(

[Big Joe]

yeah i noticed all the big american car makers have a discount now

[30thAnnGAGT]

Originally posted by b2089
I'd be willing to bet that if cars were priced more firmly then people wouldn't run from the salespeople like they do and car shopping would no longer be considered a herculean task. It could even be fun.

I actually hear that quite a bit in my position with GM. And we are trying desperately to change that. Often times what happenes is Joe Customer is greeted by a guy that's been in the business for 20-25 years and might know sales, but knows jack about actually selling a car. We're trying to train sales professionals not car salesmen.

Know this while buying a car..........

1. Dealerships ALWAYS have a sale going on. They just put different terms on the marketing of it. Any Joe Shmoe could walk out of a dealership at any time of year with "Employee Pricing" or "Mega Sale" satus, it's all about how he feels about the experiance.

2. It's smart to look up the dealer invoice on a vehicle before purchasing. Give him about 700 bucks over invoice to pay the light bill and his employees and you're probably gonna walk out with the car of your choice.

And Finally.......

It's very easy to show a 7000 dollar markdown on a truck, car, SUV or anything. Take a fully loaded Grand Am GT1 in 2004. It retailed right about 25,000 dollars on the sticker, Show that on a commerical. Now, strip it down to the core only offering the basics like power windows. Throw an incentive on top of it, oh, and pull the one off the back of the lot that's been sitting there since the 04's arrived. A dealership is losing money on that car while it's sitting there due to lot reviews by their bank ( a ridiculous process to explain) get the bank to pull the sales tax on it, and BAM! you have a 16,000 dollar car. A 9000 dollar markdown! WHOO HOO! :D

[b2089]

How does one look up the invoices?

[Mike Reyna]

All I know is GM gave me a great price on my new car. Thanks GM. :D

[Subtle_Cynicism]

That's my biggest issue, Adam.

Every single car dealership I've went to (over seven) to get information on the G6 GTP has either a.) known nothing about it, b.) didn't know it existed or c.) had no idea about anything the G6 offered.

I knew more about Pontiac vehicles then they did, and that realyl, REALLY bothers me.

[XoticGA]

Yea, the DOdge Dealer down the street from me is offering Employee/Family discounts.. Such a shame.. had this been 2 months ago, I would've gotten that 4-door mean lean turbo machine that they offer :rofl:

[b2089]

Originally posted by Subtle_Cynicism
That's my biggest issue, Adam.

Every single car dealership I've went to (over seven) to get information on the G6 GTP has either a.) known nothing about it, b.) didn't know it existed or c.) had no idea about anything the G6 offered.

I knew more about Pontiac vehicles then they did, and that realyl, REALLY bothers me.

I hear ya. I had a salesman argue with me that pontiac "wouldn't use fake spoilers, only foreign cars and blue ovals do that". I then walked him over the GTO and opened the hood. He was nice, don't get me wrong. It's just hard to imagine that these guys don't look under the hood. Heck if I worked there they'd have to drag me out of the new arrivals. I'd have schematics for every car on the lot and I'd know about upcoming cars as much as GM would let me know. They instead only see sales oporotunities as the roll in on the truck. Short sighted at best.

[b2089]

About looking up the invoices again, I looked up the invoice on an 05 GA GT1. It said the dealer invlice was 20500. Then how does it sell for 18000?

[30thAnnGAGT]

Originally posted by b2089
About looking up the invoices again, I looked up the invoice on an 05 GA GT1. It said the dealer invlice was 20500. Then how does it sell for 18000?

Chances are it as I explained earlier. The dealer is losing money on the car. It's probably been sitting on the lot since September of 04. I guarentee the dealer has already lost more than 3 grand on it, and is looking to get all they can.

[30thAnnGAGT]

Originally posted by Subtle_Cynicism
That's my biggest issue, Adam.

Every single car dealership I've went to (over seven) to get information on the G6 GTP has either a.) known nothing about it, b.) didn't know it existed or c.) had no idea about anything the G6 offered.

I knew more about Pontiac vehicles then they did, and that realyl, REALLY bothers me.

Try a dealer that doesn't have their heads in their butts :)

Seriously,

What I find about dealers with them being all individually owned is that it's up to their own people to find out about things like that.

I'll have a G6 GTP very soon as a CTF car, I'll give you all the info you want ;)

[Rayz]

Most dealer invoices have a 3% to 5 % hold back that the manufacture pays after the car is sold. This is how a dealer can sell below invoice. Also at the end of the model year the manufacture will give selling bonuses to the dealers to reduce inventories.

[99blackSE]

Ya lol i found it funny that Ford and Chrylser quickly scrambled to copy GM with this employee stuff...

[Mike Reyna]

Originally posted by 99blackSE
Ya lol i found it funny that Ford and Chrylser quickly scrambled to copy GM with this employee stuff...

It's the only way to get rid of 05 stock.

[1stpontiac]

For those of you with experience in the business, do car dealerships buy cars from the manufacturer like regular retailers buy merchandise from companies? i.e. do the car makers sell the car to the dealer at a markup and then the dealer marks up some more, or does GM (or whoever) keep ownership until the car is sold and then pay the dealer for selling it?

When I bought my 04 GA a dealer offered me a deal for $0.80 over the dealer list, implying that he was only making $0.80 on it. I knew that couldn't be true, but when I got to thinking about it, I realized that the biggest price discount was a $3500 MANUFACTURERS rebate, which I took to mean the dealer would get reimbursed by Pontiac for that $3500. That would mean that the only thing the dealer took off his profit was the marginal extra amount he threw in when he saw me next door talking to the Dodge dealer.

At least that was my take on it...

[Gimli]

The dealer does buy the vehicle from GM at the price that is on his invoice but there are a few technicalities with that.

First, as you pointed out, any manufacturer rebate are claimed by the dealer upon the car's sale, which is why often the time limit for the promotion mentions that the delivery of the car must be by x end date and not the order for the car. When you order the car the sale isn't complete so the dealer cannot claim the manufacturer rebate from GM 'cause he hasn't bought the car from GM yet. Once the car is delivered to the customer then any manufacturer promotion applicable at that time is claimed from GM by the dealer.

On top of that most dealer also get payback from GM on their sales volume. The more cars they sell each month/year, the bigger their payback is on these sales. That's one of the reason December is a good time to buy a car, a lot of dealers will actually be willing to really lose money on a few cars just to get in a higher sales bracket and get a bigger payback on their car sales for the whole year.

[1stpontiac]

Interesting, thanks!

[Brandon]

the employee discount my dad gets for gm took the sticker price of my GA GT from $26,500 down to $18,XXX (with a 500 incentive for the leather package)....

fast forward to today, a gt without the sct package which alone is like 1300 bucks is "employee priced" to $23,500..... the discount i get from lowes was only about 1200 less then my dad's... so theres a discount on the cars, but not what it "could" be.