I'm a retired salesman

monkey44 wrote:
"From a lay-person's perspective, all of that is logical. From a Dealer's perspective it makes very little sense and has very little to do with why transaction prices are negotiated and not constant."

Then tell us why prices are negotiated if it not because of the difference between trade-in and new price. Yeah, part of it is volume, but the actual buyer should not have to pay a different price just because a dealer has low volume and gets less carry-back.

The price variation is exactly why people believe dealers deceive them. Whether a dealer deceives a customer or not is irrelevant - the fact that a dealer can negotiate a price at all is what makes customers believe a dealer is squeezing every dollar possible out of a transaction.

The interesting part is, a dealer knows exactly what price they can sell for at the minute a transaction begins. But they won't share that number, ever.

And, yes to P and C above - we live in a society that thinks lying is okay as long as it gets you on top of any bargain. That is one of the things many people fail to teach their kids nowadays ... deceit is not okay. And look at advertising - we're exposed to lies and manipulation so often, it becomes a way of life that's just expected and accepted.

Instead of honesty, we have both sides of a transaction inspecting and investigating the other side because as a society, we have come to expect everyone is a cheat.

This conversation has been going on for a hundred years and at the end of the day, there has never been a successful long lasting retail model done that sells vehicles, autos or recreational, at a fixed price.

There are literally dozens of real world variables that determine price. Inventory availability, geography, competition, hot/cold market, hot/cold models, time of year, training, manufacturer represented,incentives and capitalization will all factor into transaction prices. These and many other factors that change almost daily will determine final gross margins.

After 40+ years of owning and operating multiple dealerships, I will guarantee you the dealer's ultimate goal is to maximize his ROI on every vehicle sold. Not to make sure the public receives the lowest possible price. When you sign your name to a five-ten million dollar investment per each location, you understand this very clearly.

It is an incentive driven business. The salesman is paid on what he sells, the manager is paid on what the salesman sells, and in many stores even the office clerks have an incentive based on sales. The more you sell, the better your financial life is. The more you make on each unit you sell, the better the house you live in. It is the American Free Enterprise system at work and the stakes are high, win or lose.