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Old 11-25-2015, 06:56 AM   #5
XDCX
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Join Date: Nov 2007
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Quote:
Originally Posted by DealerEx View Post
Buying a vehicle or "giving a few away" to hit a quarterly incentive number is not at all uncommon among large volume stores in my experience, and it's a lot more than $20,000 at stake most of the time. Got a buddy that has a store selling 100+ units a month that I know has done it several times. For example on a 90 day stair step incentive retro to first unit at different volume levels. last week of the 90 days, he's at 100% level paying$1,000 per unit and is just 10 units away from hitting $1500 at 125%...those 10 units are GOING to be sold to friends or family members at a huge discount...maybe with the agreement that they will buy them back in 30 days at the discounted price. that's $500 per unit back to unit #1...comes up to $150,000+ difference on the payment. Give'm away at $5k back of cost and make an extra $100k net.
You make an excellent point.

In many ways our industry has reinforced the old theory that the best time to go shopping for a new vehicle is at the end of the month or the end of a quarter. Dealers will often do crazy things on an individual car deal if it allows them to hit a store objective.

I've often wondered if a broker couldn't make a decent living by finding customers who wanted to by cars under cost and then shopping those deals with dealers who needed extra units to hit a program incentive. Hell, I'm sure there are dealers who would sell units at a loss just to make the MSR pressures go away.
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