Technical question about discounts

[Sean_W]

Hey,

Just wondering, who actually eats the cost of the discount? If the dealership decides to accpept a discount, does the dealer that sold the car still get his/her full commision? When it comes to the bottem line, who pays for the discount?

Thanks,
Sean

[GamerGuyZ28]

Corporate GM reimburses the dealer I'm sure

[Mr_Draco]

Originally Posted by GamerGuyZ28

Corporate GM reimburses the dealer I'm sure

Yep. GM reimburses the dealer the cost of the discount if it is a GM discount.

[Sean_W]

So the dealer doesn't lose out on anything. So why would a dealer feel like they couldn't accept the discount.

[trm0002]

Originally Posted by Mr_Draco

Yep. GM reimburses the dealer the cost of the discount if it is a GM discount.

That my friend is incorrect. The dealer does NOT get rebated.

[LT1Jeep]

i asked this same question and found out that the dealerships to get a refund but not as much as the discount they give. kinda bs for GM to do it that way IMO.

[gss9909]

the dealer does not get the money of the discount back from gm. The dealer is just out the profit. Yes they do give some money back for the sale but it is not much at all during employee price sale we where making an average of $400 profit on Trucks and about $200 on cars so after commission to sales people floor plan gas for delivery paying the detail guy and the office girls we have a negative profit.

[Supermans]

Originally Posted by Sean_W

So the dealer doesn't lose out on anything. So why would a dealer feel like they couldn't accept the discount.

Those dealers want to markup the car above MSRP which gives them even more money for the sale. In other words the dealer already makes a profit selling MSRP however any markup above that is even more profit. Red Tag events and other discounts get them money back from GM along with any other discount. With any discount, they only make up to the same amount if they sell it MSRP...

[NUCAR]

Originally Posted by Supermans

Those dealers want to markup the car above MSRP which gives them even more money for the sale. In other words the dealer already makes a profit selling MSRP however any markup above that is even more profit. Red Tag events and other discounts get them money back from GM along with any other discount. With any discount, they only make up to the same amount if they sell it MSRP...

Not so my friend. The reimbursement takes it up to invoice.

[ucla1ove3]

i say pm camaroscotty if you want the most accurate answer.

[CatiaJockey]

Originally Posted by gss9909

the dealer does not get the money of the discount back from gm. The dealer is just out the profit. Yes they do give some money back for the sale but it is not much at all during employee price sale we where making an average of $400 profit on Trucks and about $200 on cars so after commission to sales people floor plan gas for delivery paying the detail guy and the office girls we have a negative profit.

I won't pretend to know the in's and outs of selling a car, but I have a lot of problems with this post. You said 400 profit on a truck and 200 on a car.... profit is whats left after all expenses, therefore negative profit is a totally incorrect statement, there is no such thing, it would be classified as a loss. If your dealership is sending cars off the lot with a loss it won't be in business for long. I doubt very seriously that GM endorses a dealer to lose money.

[card21doc]

I work in the finance end, not the front sales part. I don't know the exact percentage, but on the invoice is a line called memo. The $$ beside the memo plus part of the advertising cost is the amount GM will reimburse the dealer. It is enough to make a profit; but it doesn't come close to MSRP.

Some dealers will honor GMS on "in stock or ordered cars," but will charge extra for a "dealer trade." Others will honor GMS on ordered cars only.

On a "hot car" dealers may not want to honor GMS; that is their perogative. Certain cars may not carry GMS discounts; that is up to GM.

[UCF w00t]

Most dealers will not honor discounts on the Camaro. When I was talking to the various local dealers a few months ago, they mostly laughed at the idea that GM would honor the supplier discount. Now, they may just say "no, we're doing MSRP only" or you may be able to find a couple that will agree to it.

[CamaroScotty]

Originally Posted by gss9909

the dealer does not get the money of the discount back from gm. The dealer is just out the profit. Yes they do give some money back for the sale but it is not much at all during employee price sale we where making an average of $400 profit on Trucks and about $200 on cars so after commission to sales people floor plan gas for delivery paying the detail guy and the office girls we have a negative profit.

This is fairly accurate.