What does dealer get for a Supplier sale?
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I have read that they get a few incentives back from GM plus 3 to 4 percent above invoice on a supplier deal but don't know if that is really what they get. It sounded like the formula. Supplier, employee, holdback are on the invoice. I have been told by a dealer they make less from a supplier sale then a GM employee. It seems to be top secret with the dealer owners. I called around and the dealer that is doing supplier for me said he would accept supplier on a order only with a deposit, but that is how they sell all of the Corvettes he told me. It seems that it has to do with turnaround, days in stock time from when the car shows up to the dealer and the customer pick's it up. It may help the dealer when they have a fast turnaround time also.
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A dealer ends up making about 5% in an employee or supplier sale vs. about 12% on a full MSRP sale, this is inclusive of all incentives and hold back. The dealership makes exactly the same on an Employee or Supplier deal but a salesman will see a difference because hold back is usually never calculated in the salesman's compensation.
There's been a lot of FUD online about these programs but they really aren't that complicated. Here's a sample invoice (mine). I'll explain the numbers.
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Here are the important numbers on that invoice:
TOTAL 66980.00 (MSRP) 61761.58 (Invoice, as seen on most Internet pricing sites)
TOTAL LESS HOLDBACK AND APPROX WHOLESALE FINANCE CREDIT 58927.03 (this is ultimately what the car costs the dealer when all is said and done)
On a full MSRP deal the dealer will make ~66980.00 - 58927.03 = $8052.97 + any other fees they charge.
Now, here's how to calculate what the car will cost you under the program and how much the dealer makes vs. a full MSRP deal
Employee Plan:
Your Cost = $58530.73
Dealer Cost = $58927.03
Dealer Incentives = $3716.53 (EMPINC on the invoice)
Net to dealer = 58530.73 - 58927.03 + 3716.53 = $3320.23
Supplier Plan:
Your Cost = $60921.80
Dealer Cost = $58927.03
Dealer Incentive = $1325.46 (SUPINC on the invoice)
Net to dealer = 60921.80 - 58927.03 + 1325.46 = $3320.23
So, to boil it down, a dealer can make $8052.97 (12%) on a full MSRP deal and $3320.23 (5%) on either of the GM programs.
NOTE: Many of the numbers here have to be "earned" by the dealership and are only returned if they meet certain sales goals. What I put here is only a guide so you can understand what a dealer is facing and why many don't participate in the programs.
There's been a lot of FUD online about these programs but they really aren't that complicated. Here's a sample invoice (mine). I'll explain the numbers.
Here are the important numbers on that invoice:
TOTAL 66980.00 (MSRP) 61761.58 (Invoice, as seen on most Internet pricing sites)
TOTAL LESS HOLDBACK AND APPROX WHOLESALE FINANCE CREDIT 58927.03 (this is ultimately what the car costs the dealer when all is said and done)
On a full MSRP deal the dealer will make ~66980.00 - 58927.03 = $8052.97 + any other fees they charge.
Now, here's how to calculate what the car will cost you under the program and how much the dealer makes vs. a full MSRP deal
Employee Plan:
Your Cost = $58530.73
Dealer Cost = $58927.03
Dealer Incentives = $3716.53 (EMPINC on the invoice)
Net to dealer = 58530.73 - 58927.03 + 3716.53 = $3320.23
Supplier Plan:
Your Cost = $60921.80
Dealer Cost = $58927.03
Dealer Incentive = $1325.46 (SUPINC on the invoice)
Net to dealer = 60921.80 - 58927.03 + 1325.46 = $3320.23
So, to boil it down, a dealer can make $8052.97 (12%) on a full MSRP deal and $3320.23 (5%) on either of the GM programs.
NOTE: Many of the numbers here have to be "earned" by the dealership and are only returned if they meet certain sales goals. What I put here is only a guide so you can understand what a dealer is facing and why many don't participate in the programs.
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I have had a GM Card rewards card for over 20 years. Over the years, I have purchased two GM vehicles, each time getting over $3000 applied to the purchase price. I understand that using these GM Card rewards toward the purchase price costs the dealer nothing. In any event, I am a member of a credit union, which makes me eligible for the credit union discount. The credit union discount is the same, I believe, as the supplier discount.
When I place my order on a 2015, I will again have about $3000 in GM Cards rewards that can be applied toward the purchase. However, from reading the FAQ on the www.mygmdiscount.com site, the only GM Card awards that can be combined with the credit union discount are the Extended Family Card and the Business Card, neither of which I have. If the dealer I am planning on ordering through allows the credit union discount, a lot of which comes out of its bottom line, I think I will try to negotiate a price with a combined discount from MSRP and my GM Card rewards that exceeds the savings from the credit union discount.
Anybody see any flaws to this strategy?
When I place my order on a 2015, I will again have about $3000 in GM Cards rewards that can be applied toward the purchase. However, from reading the FAQ on the www.mygmdiscount.com site, the only GM Card awards that can be combined with the credit union discount are the Extended Family Card and the Business Card, neither of which I have. If the dealer I am planning on ordering through allows the credit union discount, a lot of which comes out of its bottom line, I think I will try to negotiate a price with a combined discount from MSRP and my GM Card rewards that exceeds the savings from the credit union discount.
Anybody see any flaws to this strategy?
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Nope, that seems like a fine strategy. Hope it works out for you.
Ok, but lacking any incentive from GM, a) why accept supplier certificate since it is optional and b) why would dealer not negotiate off MSRP? I too want to use GM Card earnings but since it is either (MSRP-earnings) or (supplier price), the latter is lower. GM must provide something....
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That does sound very logical. I hope you can find a dealer who will see the logic and work with you to get it done.
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Apparently they do it to make a sale they would otherwise would not make. They still make a profit, and it still counts as a sale to help them increase their allocation for the next year.
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I have always been of the understanding that using a GM credit card has zero financial consequence to the dealer. Love this program. As a long term, 1st generation GM credit card holder, have, on two Corvettes and a Cruze, gotten $11,372 off (dollar for dollar), and over $1,100 toward my Z06. Was told by GM, when I was about ready to use it first time, not to even mention the GM credit card until after the final pricing terms were negotiated, in writing, signed by the sales manager.
Before computers, when I redeemed my GM card that first time, it was even three-way phone call negotiated, where the GM credit card company, called me, and the dealer (different parts of the country), and asked me how much of my $3,672 I wanted applied to my C5, and when I said all of it, the GM credit card rep said to the dealer, "I will thus send you a check for $3,672."
Before computers, when I redeemed my GM card that first time, it was even three-way phone call negotiated, where the GM credit card company, called me, and the dealer (different parts of the country), and asked me how much of my $3,672 I wanted applied to my C5, and when I said all of it, the GM credit card rep said to the dealer, "I will thus send you a check for $3,672."
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There are 2 major reasons dealers accept the programs.
1. Dealers located within close proximity to large GM locations use it as a differentiators against other dealerships. It's like a gas station dropping the price to match the one across the street, they want to capture sales they wouldn't otherwise get.
2. Most vehicles end up getting sold at or near Invoice these days BEFORE you start tacking on factory incentives. Many dealers live off holdback alone and a GMS/GMU deal actually puts more money in their pocket.
With the Corvette it's a bit different since most dealers still feel they can get MSRP they are more inclined to go that route but you are starting to see more dealers participate as they have inventory on the ground getting close to costing them floorplan $$$$
Hell, I remember about 6 years ago I could purchase any C6, including the Z06 from my local dealer under the program because they live by flipping inventory.
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Yes, Elegant, that is what they say. Negotiate your best price, and only after the best price is negotiated, then tell them you will be using GM Card rewards to pay for part of the purchase. They then just call a GM Card reward center with your CC number and name, and they get a voucher for the amount of your GM Card earnings.
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Yes, the net cost I used in my example is inclusive of holdback.
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It wasn't until recently that the details on the program have been uncovered, GM and the dealers did a damn good job keeping the info private. The program has changed many times in the 20 years I have been using it so what is true today quite likely wasn't true a few years ago. In fact, GM revamped the supplier program just last year to level out the price differences between models so for all I know the plan as it is today compensates the dealers differently than it did just a year or so ago.
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On the flip side DO NOT wait until you have negotiated a price to spring the Supplier Program on them. The program explicitly states the first thing you should do when you start talking is tell them you have a program control number. If, from that point they decide they want to negotiate then they ARE NOT using the plan, it's against the plan rules to negotiate.
However, there are some times in the life cycle of a car model that they, for whatever reason, are willing to make you a better deal straight up than running it through the supplier program. I haven't quite figured out how that can be but there are pages upon pages on the GM truck forums with people claiming to get better deals that supplier! I suspect it really isn't a better deal because most consumers don't know exactly what national and regional incentives they qualify for and even though, under the program the dealer is obligated to apply all of them to the supplier price many simply lie and claim their "special" deal is better so let's not use that supplier code....... Dealers NEVER do something that puts less money in their pocket unless they are forced to which means that "better" deal really just cost YOU money but you will never know it.
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Does the GM College/Military/Family First Auth codes get you the supplier price? I have an authorization, but cant find a dealer that will give me the supplier price. They just call the discount off MSRP a college discount if they don't just flat out say we don't accept the code.
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I have no idea if the three programs you listed are the same as supplier. Go to the website you registered on to get the code and run through the build and price section, that will tell you what your price is, at least on a 2014.
Keep trying, depending on which model you want many of the large forum dealers will honor it. Les Stanford in Michigan will honor all codes. As for local dealers, it's a crap shoot but 99% of them don't.
My guess is less than 2000 people actually bought their 2014 at a program price, it just sounds like more because most of us are on the forums
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