How is the dealer compensated under X plan pricing? Does the dealer receive additional money from Ford like a rebate or is it just here is the price going into it and there is no bickering. Seems like if that's the case he could stick it to you on the trade and make up the difference. Since you are suppose to go into the trade telling them you are Xplan. The next thing they do is look at your trade and can then pay you wholesale or below since you are buying at wholesale. Whats stopping this? :scratch:

 

That's pretty much what they try to do. When I bought my Mazda, they low-balled me on my trade. I negotiated for quite awhile until I got a deal I was satisfied with. I don't think I got what my trade was worth but it was close enough that I thought it was a good compromise. I got a nice a deal and the dealer was still going to make a decent profit off my trade.

 

Ford gives dealerships Plan incentives. They get cash for Plan sales. It behooves a dealership to sell on a Plan if one comes in, its an easy sell, (the customer is getting a great price) and they still get thier money.

My dealer told me not to give him my trade, because they automatically take the Kelly number, subtract 2k, and thats what they offer. He said generally selling private can earn you 2-5k over what the dealership will give me for it. He said he doesnt even want to hear I have a trade, in his mind, going to just be buying a car from him, no trade.

 

We are payed a commision by Ford to compensate some for the lost profit. For example, on one of our incoming GT's the commision from Ford would be $426.69. It definately doesn't end up making them whole if they planned on charging you sticker, that is why there is sometimes "resistance" to letting the programs being used.

It's easy to stop this, don't trade. If the dealer makes an offer on your car that you don't like, don't sell it to them. The retail value on your car is almost always considerably higher than a trade value. You should try to maximize both sides of the equation. Like they say, "Buy Low, Sell High".

 

It is amazing what the difference on KBB is. I can put my car in there for dealer trade in and it is $2000. But I put it in there for private dealer and it is $5000.

I know the dealer needs some money to make up for the cost of paperwork, cleaning the vehicle up, and the cost of sales (and a little profit). But does that really equal $3000?

 

Probably not...they're not just giving cars away right? When someone else comes in to buy your car, they're going to expect to pay as much as $5000...and hopefully bargain that down.

Perhaps I've got some numbers mixed up here (as in resell value vs. purchase value), but I don't think it's that far off.

 

WOW, I figured I would check again to make sure I was stating things right.

According to Kelly Blue Book (as of Oct 12) a 1997 V8 T-Bird with 115,000 miles:

Dealer Trade-in $1990
Private Dealer $3555
Retail $5685

What a difference! That is $3695 between what I could trade it into a dealer for and what I could buy it from a dealer for. I would only expect the differecen between Private and Retail to be the necessary cost for dealership cost. That would be $2130, which is a 60% markup on a private dealer.

 

Thats why car dealers live like kings. used car markup in ....as much as you can get for it... $2k, 4K, 10K....