Comments on: Chevy Dealers Need a Jolt from the Volt http://gm-volt.com/2008/02/09/chevy-dealers-need-a-jolt-from-the-volt/ Real-time news, information, and discussion about the Chevrolet Volt. Mon, 22 Mar 2010 02:44:37 +0000 http://wordpress.org/?v=2.9.1 hourly 1 By: Bobster http://gm-volt.com/2008/02/09/chevy-dealers-need-a-jolt-from-the-volt/#comment-30147 Bobster Mon, 11 Feb 2008 19:57:48 +0000 http://www.gm-volt.com/2008/02/09/chevy-dealers-need-a-jolt-from-the-volt/#comment-30147 I believe that there are state laws in many states "requiring" that new car be sold through dealerships. Probably a joint concern from the dealership associations (about losing sales) and the state (about losing sales taxes etc.) if sales went to the (relatively) unregulated and untaxed Internet. BTW: IMHO there is no such thing as "price gouging." It's all a measure of "Supply and Demand." You can't "gouge" a price that someone is willing to pay. Once supply goes up, the price has to come down. Perhaps not as quickly as we would like, but, barring government intrusion, supply and demand works. I believe that there are state laws in many states “requiring” that new car be sold through dealerships. Probably a joint concern from the dealership associations (about losing sales) and the state (about losing sales taxes etc.) if sales went to the (relatively) unregulated and untaxed Internet.

BTW: IMHO there is no such thing as “price gouging.” It’s all a measure of “Supply and Demand.” You can’t “gouge” a price that someone is willing to pay. Once supply goes up, the price has to come down. Perhaps not as quickly as we would like, but, barring government intrusion, supply and demand works.

]]> By: noel park http://gm-volt.com/2008/02/09/chevy-dealers-need-a-jolt-from-the-volt/#comment-30128 noel park Mon, 11 Feb 2008 16:52:51 +0000 http://www.gm-volt.com/2008/02/09/chevy-dealers-need-a-jolt-from-the-volt/#comment-30128 Grizzly, #14, et al: Again, Roger Penske is trying to get pretty close to this model with the Smart. Deposits on-line, each car built to order, minimal dealer inventory, overhead and infrasturcture. Granted that the Smart is sort of an ultimate niche car, it has to start somewhere. I have never seen The Captain as Mr. Personality, but he is one smart SOB nonetheles. Wait for it. Grizzly, #14, et al:

Again, Roger Penske is trying to get pretty close to this model with the Smart. Deposits on-line, each car built to order, minimal dealer inventory, overhead and infrasturcture.

Granted that the Smart is sort of an ultimate niche car, it has to start somewhere. I have never seen The Captain as Mr. Personality, but he is one smart SOB nonetheles.

Wait for it.

]]> By: Jon P. http://gm-volt.com/2008/02/09/chevy-dealers-need-a-jolt-from-the-volt/#comment-30123 Jon P. Mon, 11 Feb 2008 15:10:34 +0000 http://www.gm-volt.com/2008/02/09/chevy-dealers-need-a-jolt-from-the-volt/#comment-30123 Gm Delaers barely make any money off the sale of the car to the consumer. Believe me my family has been in the Car buisness for 30 years. If they make $500 dollars on the sale of a new car it's alot. Now the volt you will probably pay a premium in the 1st year, but same thing for the viper, corvette, sh*t even the 2door civic SI has a premium the 1st year. Dealers make all of their money on what's called the holdback. It was designed by ford in the early 90's to bail out their dealerships. Basically it's comes down to this. With the internet everyone knows the invoice price of a car (not the MSRP) the invoice price is what the dealer pays. The holdback is usually 3% of the cars value built into the invoice price. The manufacturer then cuts a check to the dealers every month or quarter for the holdback x number of cars bought from the manufacturer. (not sold, ordered) So honestly the only money dealers make off the consumer is: Cut of the financing money (interest paid on loan) Any extended warranties (they get usually 15% of the cost of the warranty) Maybe $500 up front, $1000 would be alot Any aftermarket parts, alarms, window etching, etc. If all in all a dealer makes $2500 bucks on the front side (consumer) of the deal its alot. the average would probably be more like $1500-$2000. Then they get another $600-$1200 depending on the price of the car on the back side (manufactuer). Making most new car sales worth an avg. of $2500. Which isn't alot if you figure a car worth $25,000 and their total profit is usually around 10%. If you want to see ridiculos profit margins work up the numbers on a factory recertified(off-lease), or used cars. Dealers routinely make $2500-3000 just of the consumer, before extended warranties(alot more popular on a used car), but there's no dealer holdback. Gm Delaers barely make any money off the sale of the car to the consumer. Believe me my family has been in the Car buisness for 30 years. If they make $500 dollars on the sale of a new car it’s alot. Now the volt you will probably pay a premium in the 1st year, but same thing for the viper, corvette, sh*t even the 2door civic SI has a premium the 1st year.
Dealers make all of their money on what’s called the holdback. It was designed by ford in the early 90’s to bail out their dealerships. Basically it’s comes down to this. With the internet everyone knows the invoice price of a car (not the MSRP) the invoice price is what the dealer pays.
The holdback is usually 3% of the cars value built into the invoice price. The manufacturer then cuts a check to the dealers every month or quarter for the holdback x number of cars bought from the manufacturer. (not sold, ordered)
So honestly the only money dealers make off the consumer is:
Cut of the financing money (interest paid on loan)
Any extended warranties (they get usually 15% of the cost of the warranty)
Maybe $500 up front, $1000 would be alot
Any aftermarket parts, alarms, window etching, etc.
If all in all a dealer makes $2500 bucks on the front side (consumer) of the deal its alot. the average would probably be more like $1500-$2000. Then they get another $600-$1200 depending on the price of the car on the back side (manufactuer). Making most new car sales worth an avg. of $2500. Which isn’t alot if you figure a car worth $25,000 and their total profit is usually around 10%.

If you want to see ridiculos profit margins work up the numbers on a factory recertified(off-lease), or used cars. Dealers routinely make $2500-3000 just of the consumer, before extended warranties(alot more popular on a used car), but there’s no dealer holdback.

]]> By: John Schupp http://gm-volt.com/2008/02/09/chevy-dealers-need-a-jolt-from-the-volt/#comment-30113 John Schupp Mon, 11 Feb 2008 12:14:35 +0000 http://www.gm-volt.com/2008/02/09/chevy-dealers-need-a-jolt-from-the-volt/#comment-30113 I don't think GM can cut the dealers out by selling on line. I think it is against their franchise agreement. GM cannot even discuss prices with dealers. That would be price fixing and it is strictly illegal. The only way GM can insure the dealers don't price gouge is to make sure there are enough Volts to go around. Competition with other dealers is the only thing that will control pricing. I don’t think GM can cut the dealers out by selling on line. I think it is against their franchise agreement.

GM cannot even discuss prices with dealers. That would be price fixing and it is strictly illegal. The only way GM can insure the dealers don’t price gouge is to make sure there are enough Volts to go around. Competition with other dealers is the only thing that will control pricing.

]]> By: microsrfr http://gm-volt.com/2008/02/09/chevy-dealers-need-a-jolt-from-the-volt/#comment-30096 microsrfr Mon, 11 Feb 2008 02:40:19 +0000 http://www.gm-volt.com/2008/02/09/chevy-dealers-need-a-jolt-from-the-volt/#comment-30096 The dealers better make enough money on the sale to support their operation for there basically won't be any service revenue. The brakes will last practically forever since most of the braking energy is regenerated back into the battery and the gas engine will operate less than 5% of the time. Maybe they can go into the add on and detailing business because, other than rotating the tires and replacing the wiper blades, there will be basically nothing to service! Chevy dealers -- be careful what you wish for. The dealers better make enough money on the sale to support their operation for there basically won’t be any service revenue. The brakes will last practically forever since most of the braking energy is regenerated back into the battery and the gas engine will operate less than 5% of the time. Maybe they can go into the add on and detailing business because, other than rotating the tires and replacing the wiper blades, there will be basically nothing to service!

Chevy dealers — be careful what you wish for.

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