They're just trying to unload 718s at this point. Porsche and their dealers are taking a bath on those cars. That's why see you such substantial discounting on those cars and at least part of it is supported through incentives -- this is the "money on the hood", "money in the trunk" scenario described in an earlier post. You can't use the 718 as a discount metric for other Porsche cars.

You would be shocked at the relatively small margins that new car dealers make on sale of new cars. That financing and leasing have become critically important for them as a source of revenue. There's a reason that they put you in the "box" to upsell you on warranties, maintenance, etc. There are much bigger margins on those things than the cars themselves.

Trade-ins and used cars are where money can actually be made. Trade-ins have never been a great deal for the consumer, but selling a car yourself privately is seldom easy or fun -- so, most people take the hit to avoid the hassle.

 

Just as an update to my previous/quoted message. My BA didn't make an offer and instead insisted I make my offer first -- I found that annoying and rude after waiting 72 hours on him to make his offer (since that's what he said he would do), so I made an offer of 8% on Monday morning and never heard back from him...*radio silence*

I reached out to a different dealership yesterday who stated all of his customers are paying MSRP for builds and lot inventory. Damn, must be nice.

Finally reached out to a Rennlister on here and took his recommendation for a dealership/BA and going from there

 

Well, those 911s are 2020 cars that just landed on the lots. It's not the same thing.
You can find brand new, unsold, 2018 and 2019 718s that have been sitting there forever. If Porsche dropped the 718 today, they could boast even better resale value numbers in a couple of years.

 

The margin on the stripper is actually slightly better, now thats the % margin not the net dollars. They calculate the hold back a little differently, its slight. But essentially YES you're correct.

 

Porsche almost never does "trunk money" and they absolutely don't do it on 911's. The Cayenne is new for 19, there is no trunk money.

 

Read Trader220 response above (I believe he was a Porsche store manager). Trust me no dealers are keeping the lights on from discounting Macan's and Cayenne's at 9-10% or blowing out dead merchandise that has accumulated a nice chunk of flooring fees like the 718. There is really no secret when it comes to profit at Porsche dealers on new cars. It's a tough & highly competitive business that favors big dealer groups that can afford high volume sales at lower margins.

 

I was talking about the highly discounted 718 models. I believe there has to be some type of cash on them in order for dealers to discount them so much.

 

I mean, Porsche dealerships in Southern California were advertising 9% off 2019 Cayenne's without any negotiation, in like, June of 2019 when my parents got it. Why would they be advertising a deal that makes them 1%? Cause they can't be making 1%, they must still be making 5-10% when all is said and done. Maybe it's not 20-25%, but they're not making $750 on a Cayenne sale, that makes no sense. The dealership my parents wound up buying the car from is a smaller dealer, not one of the big ones...definitely not high volume. And they matched the offer, after lying about the money factor, of course.

The larger point is dealerships are not honest about their margins because they have no incentive to be honest. People feel like they're hearing the truth when their salesperson says "our kickback is this" because that makes them feel like they're getting inside information. They lie about trade in value and money factors and tell you what something costs retail when they pay wholesale. I don't care that they make a profit, I just don't want to be lied to and manipulated. Dealerships hate it when customers lie to them, but that's what they do to the customers too.

 

The price that every single Porsche dealer in the country pays to PCNA for any model Porsche is exactly 10% less than the MSRP. Beyond that dealers get between 0 and 5% of MSRP depending on how the particular dealership rates with Porsche in a number of category's. That's it end of story.... matters not if you believe me or not, that wont change the facts. On occasion they have dealer incentive money, sometimes as much as $1500 a car on mid engines, but not all that often. Sometimes when a model is coming to the end of a cycle they'll do other incentives like, for every three of the outgoing model you sell, they'll give the dealer $5000 in cash back and the dealer can apply it to any of the three cars divided up any what the dealer wants Guess what else? The salesperson doesn't make much either. He probably gets a "mini" which is usually a couple hundred bucks and gets credit for another sale. These days his salary is probably based on his rolling monthly average of units sold.

I don't have to have to parrot any company lines, I left Porsche nearly 2 years ago.

So when you get 9% off on a Cayenne that's a good deal, and the dealer is basically making the hold back, and what ever he makes in finance or aftermarkets. Thats it, not a dime more.

Used margins are typically better.... sure, it would be nice to sell more used Cayenne's..... where are you going to get them from? Used car margins can be nice but only if you BUY the car right or trade the car right.


You're right though, its not actually $2900 for the dealer to buy the CPO warranty from Porsche, its actually $2970 these days. Again, I could care less if you don't believe me, that does not change the facts. Guess what else.... there is no wholesale / retail on the CPO warranty. If you sell a car as a CPO and enter it into the Porsche system as a sold CPO car in order to validate the warranty and start the clock Porsche automatically bills the dealership $2970. There is NO way around it. That's not including the costs your shop and parts people are going to charge you for the CPO check out and what ever work and parts the car needs to meet CPO. You know what else... the used car manager is typically the service departments best customer if he's a good used car manager. He pays retail for service and parts, because otherwise the service department and the parts department are going to devote their resources to what makes them the most money. It works like that at every single dealership no matter if its Porsche or friggin Toyota. LOL. If the used car manager is buried in a car sometimes the service manager or parts manager will cut them a break but they dont count on it.

Any dealership that quotes someone $499 for just an oil change is a fool, no one is going to pay that, and now you've lost a customer for the future, thats why they dont do it.

I don't know a single Porsche dealer who charges $275 bucks per labor hour, in this region the going rate is $155 to $175, and you're right, it doesn't cost that much in labor, the dealership needs to make money on labor because labor has down time and some times sits around doing nothing costing the dealership money. The dealer is allowed to make money. LOL

I could care less if you believe me or not and you can claim your brothers girlfriends fathers sister works in the back office at a Acura dealer and your fiancees grandfather's uncle actually owned a Porsche dealer in the 80's or 90's.... None of that changes the facts. Plenty of guys on these forums who worked or still work for Porsche, they all say the same thing, if they're allowed.

 

Porsche would ring their necks for advertising 9% off on all brand new un punched Cayennes. They can advertise a lease special which works out to 9% off but Porsche will ring their necks if they run an ad anywhere that says come on in and we are having a 9% off sale on all Cayennes. They're not allowed and Porsche is strict about it. It's almost pointless to have this discussion because from your post you already believe that every single dealer lies about everything.

 

I don't know what the current program is on the 718 models. Porsche has been a bit more aggressive on incentive money on 718's. If I had to make an educated guess based on 10 years with Porsche I would say they have something like $1500 per car in incentive or some multiple deal like for every three 718's you sell in a period, you get $5000 to divide up any way you like.

 

If a Porsche dealership could average 8% margin across the model range in a year they would easily be the top margin dealership in the country. Having sat in on dozens and dozens of regional sales meetings my guess is the only ones close are small dealers who don't have many dealers near them and are in sparsely populated areas and sell less that 150 cars a year. The only thing they would have working against them is they probably only get 1 maybe 2 GT cars in years there are GT cars. Those are the margin kings.

Its worse if you're something like a Honda or Toyota dealer. They make a couple hundred bucks a car on average in new car sales. Now they tend to do better in finance and after markets. They sell 200 plus cars a month on average and thats 200 plus cracks at selling finance and after markets.

 

$50k over is a little high in the secondary market these days but not crazy high.

 

Clearly you need to spend more time in LA, cause $250-275 an hour is the going rate here. So on a car that's discounted 9%, the dealership gets 1% in profit, plus their factory kickback, which is let's say 5%, so that's 6%, plus their lease kickback...what's that, another 1-2%, so their profit on a 9% discount is actually closer to 7-8%. That makes sense. That means the profit on a 911 that's discounted at 2%, which is what many dealers want to give you these days, for the same lease and kickback rate, is actually 13-14%. 14% is $18,900 on a $135,000 car. On a $200k GT3RS with a $20k ADM, 16% markup is $32,000 plus the $20k markup, or a $52,000 profit. Obviously there's not a high volume of those cars, but I mean...dealerships are making money.

What doesn't make sense is that the dealer is making 1% on a car. I'm not saying 9% isn't a good discount, I'm saying that what started this discussion was someone saying 8% is dealer markup on a 911. That is inaccurate. When all is said and done, it's closer to 15% or more, at a significant number of dealerships, as you yourself are saying. 10% + 0-5% with PCNA, assuming the best kickback rate, is 15%, plus whatever bank kickbacks they receive. You're agreeing with me, at least on that point. Most customers are uninformed of what to actually ask for, they hear 8% as total dealer profit, and ask for a 4% discount and think they've gotten a deal. 4% is actually 10-12% profit for the dealer. 9% is a good discount, as you say, but I'm the exception to the rule. So they're not making 1% margins, they're making much more.

The CPO thing just makes no sense, I'm looking at Macan Forum and someone purchased a 6 year, 60,000 mile warranty on a Macan for $3600 retail. So Porsche charges the dealer $3000 to CPO a 36 month lease return that sells after 3 months with 33 months of warranty left on it? Makes no sense. (https://www.macanforum.com/threads/o...rranty.168445/)

 

Fellas, first of all... this has got to be one of the most entertaining threads I have read anywhere in years. The fact that at least two bona-fide Porsche retail employees are actively participating means I have learned more about Porsche sales reading these condensed posts than I have everywhere else for the last several years. So thanks.

I can only lend my personal experience, which is this.

We pre-ordered our 2019 CTT in January of 2018. We agreed to MSRP and $1,000 refundable deposit at our dealer. Understand, we were Porsche newbies at the time; my wife wanted the car in the worst way, as I'd offered it to her as an anniversary present. I wanted to make her happy, despite the fact that I'd never paid MSRP for a damned thing in my whole life. The last car we'd purchased, a new 2016 Chevy SS 6MT, was sold to us at 20 percent off MSRP during one of GM's heralded 20 percent off sales. No skill involved on my part; just lucked out.

Over time, the deal finalized into just under 4 percent off MSRP by the time we signed on the dotted line and took delivery in December of 2018. I was fine with the deal. Brand-new model, second delivery at our dealer, blah blah blah. I see all kinds of folks posting about eight to 12 percent discounts and beyond. I have no idea if they're true. And frankly I don't care. My wife loves her car, and so do I. I'm about to order a 992 at whatever discount I can finagle, which I expect to be four percent or less. Maybe much less. That's life.

I am a capitalist. I want our Porsche dealer to make a reasonable profit. I want our SA to take home a decent commission -- he's the same guy who has taken the time to answer all of our our silly questions, and handed us the keys to two brand-new 911s (991.2 and 992) to evaluate at our leisure. That costs money. I won't even talk about the time he put into us on our CTT, or the freebie spiffs he offered at the end (Porsche all-weather floormats; billet-aluminum Cayenne model that's worth at least $300 and elicits all sorts of oohs in my office on a regular basis; tint and keychains and other baubles which don't cost much but add up to real money for him). There are real people at all levels at our dealership who are working their asses off to support themselves and their families. I think it's selfish to try chip away at every last nickel of dealer profit so I can ride home saving a few thousand dollars at the expense of these folks. My wife and I come from very humble beginnings, and know what it is to work yourself to the bone in service to others to make a living.

We are blessed at every level. We are regular people who have worked hard; invested well; lived conservatively (at least, until recently when Porsche got its damned claws into us; effing damned company); and managed our money with success. We're in a financial position to buy cars that make zero sense on any rational level. I'll be damned if I'm gonna monetarily cut out the employees who have in many ways made the Porsche experience that much more enjoyable.

Will we pay a price that allows our dealer to make an unconscionable profit? No. Absolutely not. Conversely, will I be that guy who demands an extra two hundred bucks after the deal and trade are finalized, or I walk? Ridiculous. A good business deal for me has always been defined as one in which all parties are vaguely dissatisfied. I'm a hard negotiator, but I hope not an unfair one. With our prospective 992, I hope to continue the trend.

Thanks again for the great dialogue. I love this place. Go get a good deal, but don't forget real people are trying to make a living. It's a hard thing to do in any country, even these United States. Know this, and remember.