05fordgt

JACK TELNACK?!! VERY COOL!!! If he's your grandfather's brother, then he would be your granduncle. Not Z-Plan eligible, but eligible for X-Plan definitely. If its Telnack, he may be able to pull a few strings to get you a Z-Plan PIN, since he was so instrumental in Ford's past design.

Five Oh Brian

Didn't Telnack design the 1979 Mustang???

bar

Yep=> http://en.wikipedia.org/wiki/Jack_Telnack

RCSignals

Or, he can buy the car himself with Z-plan, and 'sell' it to his grand-nephew in, what is it, 6 months?

RCSignals

My understanding is that in any X-plan sale, the dealer retains the difference between the X-plan amount and whatever the A-plan amount is for that vehicle. In this way the dealer always makes some money in an X-plan sale. In this way Ford makes sales by X-plan attractive to dealers, and everyone involved, the buyer and dealer have an good sale.

ShelbyDude

No, that is not correct.

Here is how it works.

This is based on an Actual GT Mustang

MSRP $32,325

Dealer Invoice $30,037.02

Dealer Invoice is what the dealer has to pay Ford for the vehicle. This is the amount the dealer pays floor plan on. About 9.25% through Ford Credit.

If a dealer does a dealer trade with another dealer to get a vehicle for their customer the dealer has to pay the other dealer the full invoice amount.

A/Z Plan on this vehicle is $28,814.02

So a buyer that gets A/Z Plan actually gets to buy this vehicle for $1,223 below dealer cost.

So at first when the dealer sells on A/Z Plan the dealer actually takes a $1,223 loss until Ford pays the commission on the A/Z Plan sale.

The Commission on this vehicle on A/Z Plan is $1,930.56

So you take the A/Z Plan price of $28,814.02 + $1,930.56 commission = $30,744.58.

$30,744.58 is the total amount the dealer collects on the sale.

Then the dealer pays Ford the invoice amount of $30,037.02

$30,744.58 - $30,037.02 = $707.56

$707.56 is the dealers GROSS PROFIT on this deal. Out of that the dealer pays all overhead costs plus the sales person's commission. After all cost is deducted that leaves the dealer with their profit before taxes.

There is several hundred in holdback, but in most cases that has been long eaten up in interest paying the floor plan cost, advertising, utilities, insurance, rent, payroll, and a lot of other costs that comes from Ford.

X Plan on this car is $29,991.87

Invoice $30,037.02 - $29,991.87 = $45.15 below dealer invoice.

So at first the dealer sells at a $45.15 loss on X Plan until Ford pays back the dealer the commission on X Plan sales.

The X Plan commission on X Plan for this car is $477.48

X Plan Price $29,991.87 + $477.48 commission = $30,469.35

$30,469.35 is the total amount the dealer collects on X-Plan from selling this car.

$30,469.35 - $30,037.02 invoice = $432.33 Gross Profit to the dealer.

Out of that the dealer pays the sales person's commission plus all other overhead costs.

The dealer doesn't make a profit of $432.33 on X-Plan or $707.56 on A/Z Plan.....that is the GROSS PROFIT BEFORE ALL EXPENSES.

Basically, the customer on a plan sale is able to buy the vehicle for less than what the dealer can buy it for from Ford.

In most cases, all consumers actually end up paying less than what the dealer pays after accounting for rebates that are available and in many cases resulting in the customer being able to buy the vehicle for thousands less than what the dealer has to pay Ford for the vehicle.

If you buy a vehicle at $100 over invoice and there is a $2,500 rebate, you are buying it for $2,400 less than what the dealer can buy it for.

If it wasn't for the service department, parts department, body shop, and used car sales, new car dealers would not exist because they could never pay the overhead to support the dealership from selling new vehicles. New vehicle sales is more of a good will service being offered because of the service, parts and body shop departments.

This is also why so many new car dealerships have been closing and going out of business. They can't pay the bills based on the little to no profit in new car sales.

Whammer

^
Thanks for the extensive write up. New cars have a high sticker price but that doesn't mean the dealer is making high profits off of them.
I just can't image the cost of running a large dealership? Big showroom, lot's of cars in stock that you're paying interest on.

Five Oh Brian

Shlebydude, did you just migrate over here from SU? If so, good to see you again, and thanks for taking the time to elaborate on plan pricing.

AFBLUE

That's a nice and informative 1st post ShelbyDude. Glad to see you over here too.

1 COBRA

If the interest on the one Bullitt on ebay is an indication, there will be no ADMs or if dealers try they will prolong the showroom residency.

05fordgt

Dave, your so right about this. Its why we haven't remodeled our showroom yet. The big dealers around us, who spent millions of $$$$ for new buildings ARE NOT making the money back. Those places have mortgage payments out the wazoo and I sure wouldn't want that burden. But yeah, new car sales are NOT what people make them out to be. For a salesperson, if you sell a car at invoice (or a few hundred over), all you get is a "mini-deal", usually a flat pay $50-$100 commission, depending on dealer. This is all we make on a new car sold at invoice. Oh, and that is BEFORE tax! We don't make much on new cars at all (just so you all know).

05retro

The dealer that I plan on getting my Bullitt from is marking up their orders. This came from the SM. However they agreed not to mark up mine because I am a repeat customer. I got my 05 from the same place.

05fordgt

Thats good to hear, taking care of a previous customer. A good deal is a state of mind. If your happy with getting one at MSRP, thats all that matters!

Whammer

Jeff, I don't think many people realize how little (relative to the price of the car) commission you guys make. I asked one salesman what he made and he said what you just wrote. I thought the guy was lying, but he wasn't.
It's a tough business with lots of competition.

I know we all want a great deal on a car, but sometimes it helps to think that people at the dealership have families to provide for and would like to make a decent wage.
I'm a firefighter and make a salaried wage- I know I have it pretty good (pay wise), so I don't begrudge prices being what they are because like I said- everyone wants to make a decent living.

05fordgt

Dave, believe me he wasn't lying. It does get tough, I won't lie. The thing is, when you get in this business, you have to gut it out for several years to get established if you've never sold cars before ( plus anyone can sell used, but you have to KNOW your product to be sucessful at new sales IMO). If you can survive, you can make a living out of it. I was thankful I started at 20 years old and still lived at home (so I had NO bills to pay, other than all my medication I take). I got to save up money for my car and for the closing costs on the house I bought with my sister and brother-in-law. But with the housing prices in my area, I shudder in fear to own one alone, as I would be working month to month to pay everything, since I work on commission only. Sometimes I do wish I had salary (a guaranteed paycheck), but things aren't like that in this business.

Also, this topic goes right into why I believe there aren't real experienced salespeople at every dealer around. Its because the pay detracts them from working there. We have people coming in looking for a job, and want a guaranteed $3,000-$4,000 a month! When I hear this, I say WHAT?! I sell 10-17 cars a month, and don't make anywhere near that per month (commission plus draw). I tell people, if you want a guaranteed paycheck, DON"T get into a sales job that relies on commission only (unless you are prepared). The dealers who pay salary plus a small commission is where I think the pay plans will go to eventually. If they all don't, it will be VERY hard to get people to stay at one place for a career.

Five Oh Brian

Jeff, I work in mgmt, so I am paid about 2/3 salary and 1/3 commission (based on the performance of my sales staff). But, I did sell cars for 2 years when I first started in the car biz 8 years ago. Luckily, I work at a "one-price" dealership (kinda like all the Saturn dealers). Post our best price upfront and no negotiating. This means our guys aren't paid on commission in the old "percentage-of-gross-profit" sense. They get a flat fee per car regardless of which car they sell (as they have no control over the price or profit). This means they can sell a GT500 for $10K over MSRP, or the loss-leader Focus S for way below invoice in this week's ads, and either way they are paid the same flat fee (no mini deals). Keeps them focused on selling what the customer wants - not what they think they can make more money on. Customer doesn't have to fight to get a good deal as it's already there.

This keeps their pay more consistent, plus we don't have swarms of salesmen huddling around ready to pounce. Usually, just 2 or 3 new car salesman working per shift. They are long-term employees, most have been here 5, 10, 15, 20+ years. No greeters, no strong-arm closers (or closers of any kind!), just the customer and one salesman. Very friendly and relaxed.

This also benefits the customers as they are treated better, can come back and see a familiar face to buy their next rig from, refer friends to, etc. VOC is super high here, and we've won 12 President's Awards (including the last 7 years in a row). We know this is where the industry will eventually go to attract & retain not just better employees, but also customers.

You, me, and all the other Ford dealers did one-price selling a couple years ago (Ford Family Plan promotion in 2005). Remember how customers really liked knowing the price upfront and how many more rigs we sold during those couple of months? That's what we do year-'round as a normal way of business.

I had previously mentioned that all 2008 Bullitts are priced at MSRP here. That's our one-price philosophy in action. Same price for anyone. Nobody gets whacked with an ADM to make up for the guy that negotiated a better deal. Everyone gets the same deal at a competitive price. So simple that it's beautiful.

05fordgt

Brian, a very good read my friend. Your store sounds just like ours. While I'm only a salesperson, I've been doing this long enough that my boss trusts me do to basically everything with no worry about having to "check out". Plus he even lets me on this site during work hours (as I've sold close to 10 cars to members). I'll most likely be the SM when he retires in a few years. Having a customer base of over 10 years is HUGE in this business (especially when your only 31, lol )

About us, we only have 4 salespeople right now (2 and 2). The experience goes 24, 18, 11, and 5 years here! Two people in the am and two people in the PM. 1 sales manager, and 1 general manager, thats it! No T.O specialist, no aftermarket guy, nothing. We've been in business since 1921, and in the same area, so the repeat business is always coming in. Just your local friendly Ford dealer.

I remember vividly when employee pricing was on these cars. I also remember all cars had spins!! That was great. I sold 30 one month (that is big by our store's standards). Was very enjoyable time then. As to the Bullitt, I am hoping we can sell them X-Plan. We have a Merck campus (over 15,000 employess), so it most likely will help. I really don't mind plan deals at all. The more cars out, the better I'm doing. Plus the customer is happy and they refer friends and relatives.

Five Oh Brian

It's good to hear about other nice Ford stores like yours. We have a couple really nice small-town Ford stores around here. In fact, one is so nice (and just far enough away from us to not really compete with us) that we've done ads with them. The other handles Roush products (we don't) so I refer them Roush business any chance I can.

There are some real nasty dealers around us, too, as we're near a major metropolitan area. A couple have the worst reputations imaginable, with the better business bureau ratings in the toilet, and customer horror stories that rival anything in the business. It's actually good for us to have some nasty dealers nearby, so that customer get a better appreciation for what we do.

Nice to have tenured guys who can really help customers when they visit! Glad you've got that in your dealership. A coworker of mine is on this site frequently (he has an 07 Mustang) and he tells me that you're quite helpful around here. I would have figured that out without him telling me. Thanks for being a great resource around here.

We've sold a fair amount of vehicles through forums like these, too, but I think this time I just want to be an enthusiast among enthusiasts here at TMS, so I've kept my employer's info out of the equation.

I hope for your sake that your Merck neighbors will be able to apply X-plan toward Bullitts, but as of now there is still no X-plan commission showing for Bullitts when I pull up a VINCENT using the VIN we have for our first Bullitt. We have a lot of Microsoft employees nearby who get X-plan, so we'd be happy if X-plan becomes available.

Poisoned Pony

I can tell you from experience that the 2 Ford dealers we have here are marking up. The dealer closest to me is a small town one, has 1 CS/GT on the lot that's marked up $5k right now. The larger one in the larger town by our post has a couple Shelby GT's on the lot marked up $10k. When the GT500 came out right before I deployed, they were asking $75k for their's. I may stop in tomorrow to see what they're asking for the Bullitt.

Five Oh Brian

Gosh, that's sad! We have two GT/CS's here today - both 2008's. Publicly priced to anyone below MSRP...

Blue Coupe MSRP = $34,775. Our Price = $33,169 - $1,000 rebate = $32,169.

Redfire Vert MSRP = $37,490. Our Price = $35,775 - $1,000 rebate = $34,775.

Why any dealer thinks they'll get an ADM is beyond me. We special order GT/CS's for just $599 over invoice (which is well below MSRP).

Now, keep in mind that a serious buyer at your local dealership will likely end up buying one of those cars for much less than the initial asking price, so it would be interesting to know the actual sale price when all is said and done. I firmly believe Bullitts will be widely available for MSRP (or less).