MSRP discount 992
12-18-2019, 03:29 PM
#181
So even if a car is loaded to the hilt with silly options whose stand-alone margin approaches 100%, like body-colored key or interior-colored key pouch and the such, all the gravy stays with Porsche corporate, and none extra goes to the dealer? Same margin % as a stripper?
12-18-2019, 03:45 PM
#182
You sir would be incorrect on your assumptions. But, I can understand your skepticism based on your experiences. Typical MSRP to invoice is 10%. Doesn’t matter what car or what model. You name it, that’s the case. If you don’t believe it, well...I don’t live in your world. We say 8% because every store has their own process for preparing cars for the lot (Pre-Delivery Inspections and such, which do come out of their cost of the car). On average, yes, a store is dealing with 8-9% of front end (sales) profit. If they go beyond that, they’re tapping into what’s called holdback, which is a percentage below invoice. It’s not 10’s of percent, but rather just a few.
Your example with your used car really doesn’t do much for this argument, as it’s a Used car market without fixed margins like new cars have, but I’ll tap into that for you too.
While a select few times of the year/members of the public do get their 10-12-14% off of a new car, this is far from the norm. On a struggling, aging-on-lot car like a 718, I have easily seen 15%-17% off of the MSRP which is the entire kitchen sink and the house for a dealer. They just want the car gone. Good deal initially for the end buyer, sure! But long term you have to take into effect there’s a reason this deal happened and perhaps the car you just bought will be taking a hit down the road. And that they aren’t the only dealer selling the car at that heavy discount, so the market will be saturated...and thus we now see the 718 market some folks on the forum have talked about recently.
And to your point about CPO costs, yes it does in fact range from $2,300 -$2,900 for the cost of the warranty alone. If work to the car is required (services, tires, brakes, extra keys, etc), it is mandated that those get paid for before Porsche grants that warranty to the car. So often times the dealer has spent more than $2,xxx to get a car Certified, because Porsche requires the checklist to be performed and upheld. But no, $3,000 (as a round number), is not a lie or misconception.
I’m really sorry you have a sour taste in your mouth about dealerships, glad to take over your business if you want some transparency. PM anytime.
Porsche AG does, yes. When they sell their cars to PCNA and the likes of their distributors and factor that into the entire sale of the car. Not necessarily the case with cars on dealer lots Stateside/wherever you may live. We certainly make good money on the product, but it is a good product to begin with so that makes sense. Congrats on your solid discounts, you should be very happy and thankful for that relationship.
Your example with your used car really doesn’t do much for this argument, as it’s a Used car market without fixed margins like new cars have, but I’ll tap into that for you too.
While a select few times of the year/members of the public do get their 10-12-14% off of a new car, this is far from the norm. On a struggling, aging-on-lot car like a 718, I have easily seen 15%-17% off of the MSRP which is the entire kitchen sink and the house for a dealer. They just want the car gone. Good deal initially for the end buyer, sure! But long term you have to take into effect there’s a reason this deal happened and perhaps the car you just bought will be taking a hit down the road. And that they aren’t the only dealer selling the car at that heavy discount, so the market will be saturated...and thus we now see the 718 market some folks on the forum have talked about recently.
And to your point about CPO costs, yes it does in fact range from $2,300 -$2,900 for the cost of the warranty alone. If work to the car is required (services, tires, brakes, extra keys, etc), it is mandated that those get paid for before Porsche grants that warranty to the car. So often times the dealer has spent more than $2,xxx to get a car Certified, because Porsche requires the checklist to be performed and upheld. But no, $3,000 (as a round number), is not a lie or misconception.
I’m really sorry you have a sour taste in your mouth about dealerships, glad to take over your business if you want some transparency. PM anytime.
Porsche AG does, yes. When they sell their cars to PCNA and the likes of their distributors and factor that into the entire sale of the car. Not necessarily the case with cars on dealer lots Stateside/wherever you may live. We certainly make good money on the product, but it is a good product to begin with so that makes sense. Congrats on your solid discounts, you should be very happy and thankful for that relationship.
I understand dealerships need to make a profit. I do not begrudge them making a profit. I do begrudge being lied to and having people pretend that they make 1-2% profit on a $75,000 new Cayenne. $750 probably doesn't cover what the sales person makes on the car.
If the used car margins are so much better, why do dealerships even bother selling new cars? Just be a CPO factory and make 17-20% on a used car plus bank kickbacks and be happy. Why take 1-2% when you can get 17-20%?
The following 3 users liked this post by ianmSC:
12-18-2019, 04:07 PM
#183
Three Wheelin'
You can get 9-10% off a Cayenne without trying hard. So I guess they don't make any money on Cayenne's at all? Why do dealerships even buy them then? Come on guys, this is ridiculous. I get that you have to parrot the company line, but the margins are not 10%. They're 20-25% plus kickbacks. My fiancee's grandfather literally owned a Porsche dealership. I have a good friend who works in finance at VW and has told me on some cars they can make up to 30%. Porsche has the highest margins in the business. It does not cost $2900 to certify a car. Maybe it would if you were being charged full retail, but you're not, you pay wholesale. Just like it doesn't cost you $275 an hour to pay your mechanics to service a car. That's retail cost, not wholesale. Yes there are other expenses, but I guarantee it's not $245 an hour in expenses + $30 an hour to the mechanic. A dealership in LA quoted my fiancee $499 for an oil change on a 2016 Macan S, and an independent did the work for $160 and I guarantee made a significant profit in the 45 minutes it took them to do the work.
I understand dealerships need to make a profit. I do not begrudge them making a profit. I do begrudge being lied to and having people pretend that they make 1-2% profit on a $75,000 new Cayenne. $750 probably doesn't cover what the sales person makes on the car.
If the used car margins are so much better, why do dealerships even bother selling new cars? Just be a CPO factory and make 17-20% on a used car plus bank kickbacks and be happy. Why take 1-2% when you can get 17-20%?
I understand dealerships need to make a profit. I do not begrudge them making a profit. I do begrudge being lied to and having people pretend that they make 1-2% profit on a $75,000 new Cayenne. $750 probably doesn't cover what the sales person makes on the car.
If the used car margins are so much better, why do dealerships even bother selling new cars? Just be a CPO factory and make 17-20% on a used car plus bank kickbacks and be happy. Why take 1-2% when you can get 17-20%?
12-18-2019, 04:16 PM
#184
The CPO warranty from Porsche costs the dealer about $2900 bucks. Each car has to go through a CPO check out which costs about $450 give or take $50 bucks. In all my years as a Porsche manager I never once sent a car for a CPO check out that didn't need something. Tires and brakes have to meet spec, same with the service being up to the exact Porsche recommended schedule based on time and miles. If you have to do tires and brakes because they're is still nearly 50% life left in them but that falls below the CPO standard you can plan on several grand. Need a 20k service? that's more expense. Missing a key, tack on more.
If you didn't like the trade in price, then why trade the car in? Why do you care how much a dealer makes on used cars? No one forces you to trade a car in, no one forces you to buy a used car from them. Where are you when they take a loss on used cars? When you walk into another retail business do you get to be the arbiter of their margins?
A dealer has 10 minutes or so to put a number on a trade in car, sometimes there is hidden stuff the person trade in doesn't reveal and the dealer gets stuck. How about when a client begs you to put a number on their trade and when they show up the car is no where near as described. The the client screams bloody murder and calls you a liar, even though they didn't mention the 4 different brands of tires, the chipped windshield and all the paint work the car has had. Or how about the guy who brings in his trade and gets a value, works out a deal on the new car and then when he returns two days later to pick up his new car, he parks his trade far away from the showroom because he swapped out the factory wheels and tires for some garbage ones, then denies that after he leaves with the new car and you go grab the trade in from the back where he hid it?
If you didn't like the trade in price, then why trade the car in? Why do you care how much a dealer makes on used cars? No one forces you to trade a car in, no one forces you to buy a used car from them. Where are you when they take a loss on used cars? When you walk into another retail business do you get to be the arbiter of their margins?
A dealer has 10 minutes or so to put a number on a trade in car, sometimes there is hidden stuff the person trade in doesn't reveal and the dealer gets stuck. How about when a client begs you to put a number on their trade and when they show up the car is no where near as described. The the client screams bloody murder and calls you a liar, even though they didn't mention the 4 different brands of tires, the chipped windshield and all the paint work the car has had. Or how about the guy who brings in his trade and gets a value, works out a deal on the new car and then when he returns two days later to pick up his new car, he parks his trade far away from the showroom because he swapped out the factory wheels and tires for some garbage ones, then denies that after he leaves with the new car and you go grab the trade in from the back where he hid it?
In some cases, yes you do get to be the arbiter of their margins. You can choose to pay full price for clothing, or wait for a sale, right? Same thing with electronics and TV's etc. etc.
Car companies have decided to be in the business of negotiation, so yes, I do have some power over their margins, because that's what competition has allowed for. And again, I don't care about making a profit, but I do care about being lied to and I'd much prefer an honest and open conversation, instead of the usual conversation, which goes like this:
Me: "Hi, I'm interested in this 2020 911 Carrera S for $135,000. I'd like to get 9% off considering that's what I just got off on a 2019 Cayenne."
Dealer: "You have murdered my dog, sir, we lose money on this car, in fact, we lose money on every car we sell. Just looking that car costs us 10% of our profit, and our profit is 1% of 1%, plus kickbacks, which are $100 on every car. That is our entire profit, $100, that is how we pay our sales and support staff and the free snacks and coffee and expenses for this fabulous building"
Me: "Ok, well, I don't think that's true, you definitely don't lose money on cars. I expect you to make a profit, but pretending that you lose money and can't do any discounts is just inaccurate"
Dealer: "How dare you, we are losing $25,000 on this car. In fact, we lost $30,000 on the Cayenne we sold you, because we are a business, and that is how businesses lose money and the business owner of this dealership has a 918 Spyder and a GT2RS and a yacht and a $10 million house and four vacation homes. But he accomplishes that by losing money or making $100 a car"
Me: "I just can't believe that, what about 5% off, people on the Forums are repeatedly getting 5%"
Dealer: "Well those must be loss leader specials, we can't do that cause it costs us $19,000 to do a PDI car wash where we scratch the paint with used towels"
Me: "Ok, thanks, I'll just head out then"
Dealer: "God customers are just the worst"
If a dealership told me, hey, we make 20% on this car, but because we are in a business of supply and demand, and we believe there are enough customers willing to buy this car at a 5% discount instead of 10%, we're not going to discount it 10%. I would totally and completely understand that. And I'd say back, thanks for your honesty, and it's my choice whether I'm willing to pay the 5% or if I'm willing to wait and see if the discount gets bigger. But that's never the conversation, it's always the "we're losing money" crap.
And just for the record, maybe can we stop Porsche parroting this "KBB best resale FOREVER" nonsense, when their initial offer to a customer trading in a 2017 718 Cayman is for 53% off MSRP after 20 months and 21,000 miles. The car depreciated 47% in 20 months but you know, KBB resale!
The following 2 users liked this post by ianmSC:
Freddie Two Bs (12-18-2019),
soguinness (12-18-2019)
12-18-2019, 04:26 PM
#185
I traded the car in because I don't have the time to sell it privately, unfortunately. I do enjoy this attitude though: "We don't make that much money on cars, trust us...but also, who cares who much we make, take it or leave it"
In some cases, yes you do get to be the arbiter of their margins. You can choose to pay full price for clothing, or wait for a sale, right? Same thing with electronics and TV's etc. etc.
Car companies have decided to be in the business of negotiation, so yes, I do have some power over their margins, because that's what competition has allowed for. And again, I don't care about making a profit, but I do care about being lied to and I'd much prefer an honest and open conversation, which would go something like this:
Me: "Hi, I'm interested in this 2020 911 Carrera S for $135,000. I'd like to get 9% off considering that's what I just got off on a 2019 Cayenne."
Dealer: "You have murdered my dog, sir, we lose money on this car, in fact, we lose money on every car we sell. Just looking that car costs us 10% of our profit, and our profit is 1% of 1%, plus kickbacks, which are $100 on every car. That is our entire profit, $100, that is how we pay our sales and support staff and the free snacks and coffee and expenses for this fabulous building"
Me: "Ok, well, I don't think that's true, you definitely don't lose money on cars. I expect you to make a profit, but pretending that you lose money and can't do any discounts is just inaccurate"
Dealer: "How dare you, we are losing $25,000 on this car. In fact, we lost $30,000 on the Cayenne we sold you, because we are a business, and that is how businesses lose money and the business owner of this dealership has a 918 Spyder and a GT2RS and a yacht and a $10 million house and four vacation homes. But he accomplishes that by losing money or making $100 a car"
Me: "I just can't believe that, what about 5% off, people on the Forums are repeatedly getting 5%"
Dealer: "Well those must be loss leader specials, we can't do that cause it costs us $19,000 to do a PDI car wash where we scratch the paint with used towels"
Me: "Ok, thanks, I'll just head out then"
Dealer: "God customers are just the worst"
In some cases, yes you do get to be the arbiter of their margins. You can choose to pay full price for clothing, or wait for a sale, right? Same thing with electronics and TV's etc. etc.
Car companies have decided to be in the business of negotiation, so yes, I do have some power over their margins, because that's what competition has allowed for. And again, I don't care about making a profit, but I do care about being lied to and I'd much prefer an honest and open conversation, which would go something like this:
Me: "Hi, I'm interested in this 2020 911 Carrera S for $135,000. I'd like to get 9% off considering that's what I just got off on a 2019 Cayenne."
Dealer: "You have murdered my dog, sir, we lose money on this car, in fact, we lose money on every car we sell. Just looking that car costs us 10% of our profit, and our profit is 1% of 1%, plus kickbacks, which are $100 on every car. That is our entire profit, $100, that is how we pay our sales and support staff and the free snacks and coffee and expenses for this fabulous building"
Me: "Ok, well, I don't think that's true, you definitely don't lose money on cars. I expect you to make a profit, but pretending that you lose money and can't do any discounts is just inaccurate"
Dealer: "How dare you, we are losing $25,000 on this car. In fact, we lost $30,000 on the Cayenne we sold you, because we are a business, and that is how businesses lose money and the business owner of this dealership has a 918 Spyder and a GT2RS and a yacht and a $10 million house and four vacation homes. But he accomplishes that by losing money or making $100 a car"
Me: "I just can't believe that, what about 5% off, people on the Forums are repeatedly getting 5%"
Dealer: "Well those must be loss leader specials, we can't do that cause it costs us $19,000 to do a PDI car wash where we scratch the paint with used towels"
Me: "Ok, thanks, I'll just head out then"
Dealer: "God customers are just the worst"
12-18-2019, 04:29 PM
#186
Burning Brakes
I traded the car in because I don't have the time to sell it privately, unfortunately. I do enjoy this attitude though: "We don't make that much money on cars, trust us...but also, who cares who much we make, take it or leave it"
In some cases, yes you do get to be the arbiter of their margins. You can choose to pay full price for clothing, or wait for a sale, right? Same thing with electronics and TV's etc. etc.
Car companies have decided to be in the business of negotiation, so yes, I do have some power over their margins, because that's what competition has allowed for. And again, I don't care about making a profit, but I do care about being lied to and I'd much prefer an honest and open conversation, instead of the usual conversation, which goes like this:
Me: "Hi, I'm interested in this 2020 911 Carrera S for $135,000. I'd like to get 9% off considering that's what I just got off on a 2019 Cayenne."
Dealer: "You have murdered my dog, sir, we lose money on this car, in fact, we lose money on every car we sell. Just looking that car costs us 10% of our profit, and our profit is 1% of 1%, plus kickbacks, which are $100 on every car. That is our entire profit, $100, that is how we pay our sales and support staff and the free snacks and coffee and expenses for this fabulous building"
Me: "Ok, well, I don't think that's true, you definitely don't lose money on cars. I expect you to make a profit, but pretending that you lose money and can't do any discounts is just inaccurate"
Dealer: "How dare you, we are losing $25,000 on this car. In fact, we lost $30,000 on the Cayenne we sold you, because we are a business, and that is how businesses lose money and the business owner of this dealership has a 918 Spyder and a GT2RS and a yacht and a $10 million house and four vacation homes. But he accomplishes that by losing money or making $100 a car"
Me: "I just can't believe that, what about 5% off, people on the Forums are repeatedly getting 5%"
Dealer: "Well those must be loss leader specials, we can't do that cause it costs us $19,000 to do a PDI car wash where we scratch the paint with used towels"
Me: "Ok, thanks, I'll just head out then"
Dealer: "God customers are just the worst"
If a dealership told me, hey, we make 20% on this car, but because we are in a business of supply and demand, and we believe there are enough customers willing to buy this car at a 5% discount instead of 10%, we're not going to discount it 10%. I would totally and completely understand that. And I'd say back, thanks for your honesty, and it's my choice whether I'm willing to pay the 5% or if I'm willing to wait and see if the discount gets bigger. But that's never the conversation, it's always the "we're losing money" crap.
And just for the record, maybe can we stop Porsche parroting this "KBB best resale FOREVER" nonsense, when their initial offer to a customer trading in a 2017 718 Cayman is for 53% off MSRP after 20 months and 21,000 miles. The car depreciated 47% in 20 months but you know, KBB resale!
In some cases, yes you do get to be the arbiter of their margins. You can choose to pay full price for clothing, or wait for a sale, right? Same thing with electronics and TV's etc. etc.
Car companies have decided to be in the business of negotiation, so yes, I do have some power over their margins, because that's what competition has allowed for. And again, I don't care about making a profit, but I do care about being lied to and I'd much prefer an honest and open conversation, instead of the usual conversation, which goes like this:
Me: "Hi, I'm interested in this 2020 911 Carrera S for $135,000. I'd like to get 9% off considering that's what I just got off on a 2019 Cayenne."
Dealer: "You have murdered my dog, sir, we lose money on this car, in fact, we lose money on every car we sell. Just looking that car costs us 10% of our profit, and our profit is 1% of 1%, plus kickbacks, which are $100 on every car. That is our entire profit, $100, that is how we pay our sales and support staff and the free snacks and coffee and expenses for this fabulous building"
Me: "Ok, well, I don't think that's true, you definitely don't lose money on cars. I expect you to make a profit, but pretending that you lose money and can't do any discounts is just inaccurate"
Dealer: "How dare you, we are losing $25,000 on this car. In fact, we lost $30,000 on the Cayenne we sold you, because we are a business, and that is how businesses lose money and the business owner of this dealership has a 918 Spyder and a GT2RS and a yacht and a $10 million house and four vacation homes. But he accomplishes that by losing money or making $100 a car"
Me: "I just can't believe that, what about 5% off, people on the Forums are repeatedly getting 5%"
Dealer: "Well those must be loss leader specials, we can't do that cause it costs us $19,000 to do a PDI car wash where we scratch the paint with used towels"
Me: "Ok, thanks, I'll just head out then"
Dealer: "God customers are just the worst"
If a dealership told me, hey, we make 20% on this car, but because we are in a business of supply and demand, and we believe there are enough customers willing to buy this car at a 5% discount instead of 10%, we're not going to discount it 10%. I would totally and completely understand that. And I'd say back, thanks for your honesty, and it's my choice whether I'm willing to pay the 5% or if I'm willing to wait and see if the discount gets bigger. But that's never the conversation, it's always the "we're losing money" crap.
And just for the record, maybe can we stop Porsche parroting this "KBB best resale FOREVER" nonsense, when their initial offer to a customer trading in a 2017 718 Cayman is for 53% off MSRP after 20 months and 21,000 miles. The car depreciated 47% in 20 months but you know, KBB resale!
It's not like Porsche is modeling after Chevy ...
https://www.automobilemag.com/news/2...y-loses-money/
Or are they??
12-18-2019, 06:33 PM
#188
The CPO warranty from Porsche costs the dealer about $2900 bucks. Each car has to go through a CPO check out which costs about $450 give or take $50 bucks. In all my years as a Porsche manager I never once sent a car for a CPO check out that didn't need something. Tires and brakes have to meet spec, same with the service being up to the exact Porsche recommended schedule based on time and miles. If you have to do tires and brakes because they're is still nearly 50% life left in them but that falls below the CPO standard you can plan on several grand. Need a 20k service? that's more expense. Missing a key, tack on more.
If you didn't like the trade in price, then why trade the car in? Why do you care how much a dealer makes on used cars? No one forces you to trade a car in, no one forces you to buy a used car from them. Where are you when they take a loss on used cars? When you walk into another retail business do you get to be the arbiter of their margins?
A dealer has 10 minutes or so to put a number on a trade in car, sometimes there is hidden stuff the person trade in doesn't reveal and the dealer gets stuck. How about when a client begs you to put a number on their trade and when they show up the car is no where near as described. The the client screams bloody murder and calls you a liar, even though they didn't mention the 4 different brands of tires, the chipped windshield and all the paint work the car has had. Or how about the guy who brings in his trade and gets a value, works out a deal on the new car and then when he returns two days later to pick up his new car, he parks his trade far away from the showroom because he swapped out the factory wheels and tires for some garbage ones, then denies that after he leaves with the new car and you go grab the trade in from the back where he hid it?
If you didn't like the trade in price, then why trade the car in? Why do you care how much a dealer makes on used cars? No one forces you to trade a car in, no one forces you to buy a used car from them. Where are you when they take a loss on used cars? When you walk into another retail business do you get to be the arbiter of their margins?
A dealer has 10 minutes or so to put a number on a trade in car, sometimes there is hidden stuff the person trade in doesn't reveal and the dealer gets stuck. How about when a client begs you to put a number on their trade and when they show up the car is no where near as described. The the client screams bloody murder and calls you a liar, even though they didn't mention the 4 different brands of tires, the chipped windshield and all the paint work the car has had. Or how about the guy who brings in his trade and gets a value, works out a deal on the new car and then when he returns two days later to pick up his new car, he parks his trade far away from the showroom because he swapped out the factory wheels and tires for some garbage ones, then denies that after he leaves with the new car and you go grab the trade in from the back where he hid it?
12-18-2019, 06:42 PM
#189
Three Wheelin'
You sir would be incorrect on your assumptions. But, I can understand your skepticism based on your experiences. Typical MSRP to invoice is 10%. Doesn’t matter what car or what model. You name it, that’s the case. If you don’t believe it, well...I don’t live in your world. We say 8% because every store has their own process for preparing cars for the lot (Pre-Delivery Inspections and such, which do come out of their cost of the car). On average, yes, a store is dealing with 8-9% of front end (sales) profit. If they go beyond that, they’re tapping into what’s called holdback, which is a percentage below invoice. It’s not 10’s of percent, but rather just a few.
Your example with your used car really doesn’t do much for this argument, as it’s a Used car market without fixed margins like new cars have, but I’ll tap into that for you too.
While a select few times of the year/members of the public do get their 10-12-14% off of a new car, this is far from the norm. On a struggling, aging-on-lot car like a 718, I have easily seen 15%-17% off of the MSRP which is the entire kitchen sink and the house for a dealer. They just want the car gone. Good deal initially for the end buyer, sure! But long term you have to take into effect there’s a reason this deal happened and perhaps the car you just bought will be taking a hit down the road. And that they aren’t the only dealer selling the car at that heavy discount, so the market will be saturated...and thus we now see the 718 market some folks on the forum have talked about recently.
And to your point about CPO costs, yes it does in fact range from $2,300 -$2,900 for the cost of the warranty alone. If work to the car is required (services, tires, brakes, extra keys, etc), it is mandated that those get paid for before Porsche grants that warranty to the car. So often times the dealer has spent more than $2,xxx to get a car Certified, because Porsche requires the checklist to be performed and upheld. But no, $3,000 (as a round number), is not a lie or misconception.
I’m really sorry you have a sour taste in your mouth about dealerships, glad to take over your business if you want some transparency. PM anytime.
Porsche AG does, yes. When they sell their cars to PCNA and the likes of their distributors and factor that into the entire sale of the car. Not necessarily the case with cars on dealer lots Stateside/wherever you may live. We certainly make good money on the product, but it is a good product to begin with so that makes sense. Congrats on your solid discounts, you should be very happy and thankful for that relationship.
Your example with your used car really doesn’t do much for this argument, as it’s a Used car market without fixed margins like new cars have, but I’ll tap into that for you too.
While a select few times of the year/members of the public do get their 10-12-14% off of a new car, this is far from the norm. On a struggling, aging-on-lot car like a 718, I have easily seen 15%-17% off of the MSRP which is the entire kitchen sink and the house for a dealer. They just want the car gone. Good deal initially for the end buyer, sure! But long term you have to take into effect there’s a reason this deal happened and perhaps the car you just bought will be taking a hit down the road. And that they aren’t the only dealer selling the car at that heavy discount, so the market will be saturated...and thus we now see the 718 market some folks on the forum have talked about recently.
And to your point about CPO costs, yes it does in fact range from $2,300 -$2,900 for the cost of the warranty alone. If work to the car is required (services, tires, brakes, extra keys, etc), it is mandated that those get paid for before Porsche grants that warranty to the car. So often times the dealer has spent more than $2,xxx to get a car Certified, because Porsche requires the checklist to be performed and upheld. But no, $3,000 (as a round number), is not a lie or misconception.
I’m really sorry you have a sour taste in your mouth about dealerships, glad to take over your business if you want some transparency. PM anytime.
Porsche AG does, yes. When they sell their cars to PCNA and the likes of their distributors and factor that into the entire sale of the car. Not necessarily the case with cars on dealer lots Stateside/wherever you may live. We certainly make good money on the product, but it is a good product to begin with so that makes sense. Congrats on your solid discounts, you should be very happy and thankful for that relationship.
The following users liked this post:
detansinn (12-18-2019)
12-18-2019, 06:57 PM
#190
Rennlist Member
And just for s&gs, one of the $tealers I was working with left a VM on my cell phone last week. Apparently my name was (incorrectly) on a list for a new Speedster and the sales manager was tasked by management to reach out to me and the other 25 names on "the list" as management wanted to be sure I had an opportunity to purchase the vehicle. The car was unexpectedly available again because the bank wanted more cash down than the prospective buyer was willing to part with. Or something like that. I didn't care about the details and only remember the last part of the call because I was never on the Speedster list--the part where the sales manager told me that they were accepting offers for $50,000 OVER MSRP was sure memorable. When my wife complains about the price of my 992 4S, I'll play that message for her and remind her that I bought my car for UNDER msrp.
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Freddie Two Bs (12-18-2019)
12-18-2019, 06:58 PM
#191
Three Wheelin'
All this chatter and in the end we are all forgetting one thing...
Supply = Demand
it's a law... not a theory.
Supply = Demand
it's a law... not a theory.
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detansinn (12-18-2019)
12-18-2019, 06:59 PM
#192
Three Wheelin'
You can get 9-10% off a Cayenne without trying hard. So I guess they don't make any money on Cayenne's at all? Why do dealerships even buy them then? Come on guys, this is ridiculous. I get that you have to parrot the company line, but the margins are not 10%. They're 20-25% plus kickbacks. My fiancee's grandfather literally owned a Porsche dealership. I have a good friend who works in finance at VW and has told me on some cars they can make up to 30%. Porsche has the highest margins in the business. It does not cost $2900 to certify a car. Maybe it would if you were being charged full retail, but you're not, you pay wholesale. Just like it doesn't cost you $275 an hour to pay your mechanics to service a car. That's retail cost, not wholesale. Yes there are other expenses, but I guarantee it's not $245 an hour in expenses + $30 an hour to the mechanic. A dealership in LA quoted my fiancee $499 for an oil change on a 2016 Macan S, and an independent did the work for $160 and I guarantee made a significant profit in the 45 minutes it took them to do the work.
I understand dealerships need to make a profit. I do not begrudge them making a profit. I do begrudge being lied to and having people pretend that they make 1-2% profit on a $75,000 new Cayenne. $750 probably doesn't cover what the sales person makes on the car.
If the used car margins are so much better, why do dealerships even bother selling new cars? Just be a CPO factory and make 17-20% on a used car plus bank kickbacks and be happy. Why take 1-2% when you can get 17-20%?
I understand dealerships need to make a profit. I do not begrudge them making a profit. I do begrudge being lied to and having people pretend that they make 1-2% profit on a $75,000 new Cayenne. $750 probably doesn't cover what the sales person makes on the car.
If the used car margins are so much better, why do dealerships even bother selling new cars? Just be a CPO factory and make 17-20% on a used car plus bank kickbacks and be happy. Why take 1-2% when you can get 17-20%?
On the other hand, used cars is a whole other ball game and profits can range all over the place & way over 25% depending the trade details etc.
12-18-2019, 07:29 PM
#193
RL Community Team
Rennlist Member
Rennlist Member
And just for the record, maybe can we stop Porsche parroting this "KBB best resale FOREVER" nonsense, when their initial offer to a customer trading in a 2017 718 Cayman is for 53% off MSRP after 20 months and 21,000 miles. The car depreciated 47% in 20 months but you know, KBB resale!
Why is this?
Well, let's start with the fact that there are still 350 brand new 2019 Caymans sitting on dealer lots unsold and we're just a couple of weeks away from year end. When you look at Porsche's sales numbers, the 718 is barely registering and the number of unsold cars is not insignificant compared to the total imported. When there is a glut of new cars being heavily discounted to get them off of the lot, the values of that model used suffers that much more greatly. It's a demand problem.
Is the 718 a bad car? No, but it very much lives in the shadow of the 911. Many potential new car buyers start adding options to their 718 and realize that they're very quickly into 911 money. Do you buy a new 718 that will drop like a rock in value? Or do you pick up a used 911 (that also performs better and has greater utility)? SPOILER ALERT: Of the few people who actually are considering a new 718, a lot of them choose the latter and this demand is why the 911 fares so much better when it comes to depreciation. People want the 911 for a multitude of reasons. There has always been demand for the 911. The Cayman/Boxster just don't have the cachet of the 911 and that hurts demand for those cars.
Beyond that formidable challenge within the Porsche line-up, there's the matter of buyer/market tastes. People aren't buying spendy little two seaters anymore. Mercedes dropped the SLC. BMW is dropping the Z4 in its second year (that factory is shifting to all Supras). Audi's TT was a 2+2 in name only and also dropped. Fiat dropped the 124 aka the Fiata. I would not be surprised if Porsche makes a similar decision around the 718. Mazda is the automaker that can do any volume in this segment, because they've kept their car cheap enough to be a toy.
It's important to remember that a used car is only worth what people in the market are willing to pay. Unfortunately, the market isn't willing to pay much. You'll find used Caymans/Boxsters under $30k, under $20k, under $15k, with cars sitting on the market for months. Maybe the Cayman/Boxster will experience a little renaissance and upswing? Anything is possible, but Porsche made a freak ton of these things and supply very much exceeds demand at the moment.
(Yes, I know that people said the same about 914s, but they have since shot up in value. Well, remember, corrosion dramatically reduced the supply of those cars and many of the 914s er uh... returned to the earth. Then, there's the matter that the insane aircooled 911 prices managed to elevate in interest in other Porsches of that era.)
12-18-2019, 07:39 PM
#194
If you are getting 9-10% off on a brand new 2020 Cayenne (cash deal) then the dealer isn't making much of anything in the grand scheme of things (holdback - factory cash if applicable). However, if you are financing or leasing the Cayenne it's quite easy to pad some profit right back into the deal without you ever knowing. 20%-25% profit margin on a new Porsches is laughable.
On the other hand, used cars is a whole other ball game and profits can range all over the place & way over 25% depending the trade details etc.
On the other hand, used cars is a whole other ball game and profits can range all over the place & way over 25% depending the trade details etc.
The sales person when I bought my car told me they couldn't offer me what my 718 Cayman trade in was worth, because they were "losing money" on selling me my 2018 911 T. He said it was a two way deal, so I'd have to take less. That's when I got extremely annoyed, and I explained to him that it was not my fault that they had a used car they were supposedly losing money on and couldn't sell, and the car should be worth the same in trade regardless of what car I was buying from them. Why would I ever want to do business with someone who's telling me I have to lose thousands of dollars to get them out of a bad decision? Insanity.
Again, if dealerships are willing to discount 718's 17-18% without any real negotiation, I can't believe that the margins on any of their other cars are any different. I am EXTREMELY BEYOND skeptical that dealerships ever sell a car at a true loss, but it would make sense if they're selling those at 2-5% profit plus whatever financing/leasing kickbacks. That said, there are 2018 New 718's for sale in the LA area that are 23-24% off right now. Now you're in the range where I believe you're losing money. But I have an extraordinarily hard time believing that the dealerships profit on a 9% discounted $80,000 Cayenne is $700. That makes zero sense. 6-10% profit, that makes sense, that's what I would expect. But if they're making 6-10% profit and willing to discount 9%, then the "real" profit number is 16-20%. That fits.
I have no problem with a dealer making 6-10% profit on selling a car, they're a business, I get it. I have a problem with them pretending like 2% on a new 911 S is doing someone a favor or that they're making zero on selling SUV's at big discounts. And as I said, I understand supply and demand exists and that is why some 911's are discounted 5% or literally marked up tens of thousands of dollars. But can we please stop dealers from pretending that they can only take 5% off a 911 because they're only making 5% on it, as opposed to the actual truth, that supply and demand allows them to do those discounts, and until the supply grows larger, they aren't willing to go higher.
They can't and won't admit that though, because they know that then people will always want discounts. That's the story of the modern retail business, customers want discounts because they're conditioned to want discounts, so now places like Ralph Lauren run 40% off discounts incessantly...they're not making less on the clothes, they just raise the "original MSRP" to 40% higher than they intend to sell for.
12-18-2019, 07:47 PM
#195
Cayman and Boxster depreciation is no joke. They don't hold their value like the 911s and their depreciation is among the worst of Porsche cars.
Why is this?
Well, let's start with the fact that there are still 350 brand new 2019 Caymans sitting on dealer lots unsold and we're just a couple of weeks away from year end. When you look at Porsche's sales numbers, the 718 is barely registering and the number of unsold cars is not insignificant compared to the total imported. When there is a glut of new cars being heavily discounted to get them off of the lot, the values of that model used suffers that much more greatly. It's a demand problem.
Is the 718 a bad car? No, but it very much lives in the shadow of the 911. Many potential new car buyers start adding options to their 718 and realize that they're very quickly into 911 money. Do you buy a new 718 that will drop like a rock in value? Or do you pick up a used 911 (that also performs better and has greater utility)? SPOILER ALERT: Of the few people who actually are considering a new 718, a lot of them choose the latter and this demand is why the 911 fares so much better when it comes to depreciation. People want the 911 for a multitude of reasons. There has always been demand for the 911. The Cayman/Boxster just don't have the cachet of the 911 and that hurts demand for those cars.
Beyond that formidable challenge within the Porsche line-up, there's the matter of buyer/market tastes. People aren't buying spendy little two seaters anymore. Mercedes dropped the SLC. BMW is dropping the Z4 in its second year (that factory is shifting to all Supras). Audi's TT was a 2+2 in name only and also dropped. Fiat dropped the 124 aka the Fiata. I would not be surprised if Porsche makes a similar decision around the 718. Mazda is the automaker that can do any volume in this segment, because they've kept their car cheap enough to be a toy.
It's important to remember that a used car is only worth what people in the market are willing to pay. Unfortunately, the market isn't willing to pay much. You'll find used Caymans/Boxsters under $30k, under $20k, under $15k, with cars sitting on the market for months. Maybe the Cayman/Boxster will experience a little renaissance and upswing? Anything is possible, but Porsche made a freak ton of these things and supply very much exceeds demand at the moment.
(Yes, I know that people said the same about 914s, but they have since shot up in value. Well, remember, corrosion dramatically reduced the supply of those cars and many of the 914s er uh... returned to the earth. Then, there's the matter that the insane aircooled 911 prices managed to elevate in interest in other Porsches of that era.)
Why is this?
Well, let's start with the fact that there are still 350 brand new 2019 Caymans sitting on dealer lots unsold and we're just a couple of weeks away from year end. When you look at Porsche's sales numbers, the 718 is barely registering and the number of unsold cars is not insignificant compared to the total imported. When there is a glut of new cars being heavily discounted to get them off of the lot, the values of that model used suffers that much more greatly. It's a demand problem.
Is the 718 a bad car? No, but it very much lives in the shadow of the 911. Many potential new car buyers start adding options to their 718 and realize that they're very quickly into 911 money. Do you buy a new 718 that will drop like a rock in value? Or do you pick up a used 911 (that also performs better and has greater utility)? SPOILER ALERT: Of the few people who actually are considering a new 718, a lot of them choose the latter and this demand is why the 911 fares so much better when it comes to depreciation. People want the 911 for a multitude of reasons. There has always been demand for the 911. The Cayman/Boxster just don't have the cachet of the 911 and that hurts demand for those cars.
Beyond that formidable challenge within the Porsche line-up, there's the matter of buyer/market tastes. People aren't buying spendy little two seaters anymore. Mercedes dropped the SLC. BMW is dropping the Z4 in its second year (that factory is shifting to all Supras). Audi's TT was a 2+2 in name only and also dropped. Fiat dropped the 124 aka the Fiata. I would not be surprised if Porsche makes a similar decision around the 718. Mazda is the automaker that can do any volume in this segment, because they've kept their car cheap enough to be a toy.
It's important to remember that a used car is only worth what people in the market are willing to pay. Unfortunately, the market isn't willing to pay much. You'll find used Caymans/Boxsters under $30k, under $20k, under $15k, with cars sitting on the market for months. Maybe the Cayman/Boxster will experience a little renaissance and upswing? Anything is possible, but Porsche made a freak ton of these things and supply very much exceeds demand at the moment.
(Yes, I know that people said the same about 914s, but they have since shot up in value. Well, remember, corrosion dramatically reduced the supply of those cars and many of the 914s er uh... returned to the earth. Then, there's the matter that the insane aircooled 911 prices managed to elevate in interest in other Porsches of that era.)
https://www.porschesouthbay.com/
The last front page headline of that website is "Porsche wins four 2019 KBB Best Resale Value Awards including Best Resale Luxury Brand for the 3rd year in a Row" Lol.
Btw, there are 250 New 2020 911's for sale within 500 miles of me in the Los Angeles area. 250. Is there really a supply and demand issue?