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    discount on ordered car vs new car on lot

    I have a question about discount for ordered car vs car in lot

    this is what i understand how a dealership works, but maybe i m wrong

    To be a dealership, they have to order certain number of cars to keep their quota and maintain status. I know that manufacturer also give a dealer holdback (cost to keep the car in lot) up to 90 days usually. If you order the car, the dealership is already eating that holdback and also already guaranteed one car off their order quota number, that means less cars on the lot. In my opinion, that should give the buyer at least the same discount as the car on the lot if not more discount than the car on the lot as the dealership already get profits from the dealer holdback.

    so why does the car on the lot can command more discount than ordered car? maybe i m missing something here

    Re: discount on ordered car vs new car on lot

    they also depreciate the car over time so thats the extra discount

    Re: discount on ordered car vs new car on lot

    I can get you various "showfloor" Cayman models with up to 10% rebate over here in Germany. Don't know about the US though.

    Re: discount on ordered car vs new car on lot

    Quote:
    RC said:
    I can get you various "showfloor" Cayman models with up to 10% rebate over here in Germany. Don't know about the US though.


    Discounts are appearing in the US as well, largest that has been reported are up to $6k. Then there are some markets where discounts are not offered. Goes to show just how large and diverse the US market really is. Nevertheless, the fact remains that discounts for Cayman S's are here if the buyer takes the time to look for them on off showroom floor cars. Not sure about any discounts for ordered cars though. Cheers.

    Re: discount on ordered car vs new car on lot

    Quote:
    gameson said:
    so why does the car on the lot can command more discount than ordered car? maybe i m missing something here



    I think the answer is simple retail economics, where to maximize your return on capital, a dealer has to optimize its margins on sales as well as inventory turns. An ordered car doesn't stay on dealer lot as inventory very long, whereas a dealer-spec's car does go into inventory. The longer the car stays in inventory, the lower the return on capital for the dealer. This doesn't even consider the financing costs to hold the inventory, which gives the dealer even more incentive to turn its inventory quicker. Cheers.

    Re: discount on ordered car vs new car on lot

    Quote:
    schao said:
    Quote:
    gameson said:
    so why does the car on the lot can command more discount than ordered car? maybe i m missing something here



    I think the answer is simple retail economics, where to maximize your return on capital, a dealer has to optimize its margins on sales as well as inventory turns. An ordered car doesn't stay on dealer lot as inventory very long, whereas a dealer-spec's car does go into inventory. The longer the car stays in inventory, the lower the return on capital for the dealer. This doesn't even consider the financing costs to hold the inventory, which gives the dealer even more incentive to turn its inventory quicker. Cheers.



    that's what I thought too. ordered car will give the most profit to dealers, but yet, in most case, cars on the lot gets the most discount. quite confusing, i should say.

    Re: discount on ordered car vs new car on lot

    Sales people really like getting paid today vs. three months. Plus, if you purchase the car on the lot they can still sell the next guy a car to be built. A bird in hand is better than two in the bush. If the accountant's were selling cars your logic would work. But then again cars wouldn't sell very well either. I'm not a sales person but I like the odds of 100% chance of getting paid today rather than odds of the person ordering a car and decinding not to purchase it in two months. This sense of urgency is what gives you better leverage with the car on the lot. Also why you can get better deals close to pay day.

    Re: discount on ordered car vs new car on lot

    Spent 14 hours over the weekend over three days at a VW, Audi, Porsche dealership. They were offering $5K discounts on the Cayman's on the lot without even asking. The turbo and the C4(S) were a different story. They added $300 for the European turn signals alone.

     
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