What is the total profit for a Maverick?

[ejgroth2620]

They may have understated the profit made. A new car sale.
You'd be surprised about the service and parts department
The Service and Parts Department is the real workhorse of dealership profits, representing both revenues and gross profit. For the Penske Automotive Group, which has operations in the United States and in the United Kingdom, service and parts represented 13 percent of annual revenues, but 44 percent of the gross profits.
American Auto makers also have
dealer holdback, is a payment from an automaker to a car dealership for selling a new vehicle. The amount is a percentage of the vehicle's invoice price or manufacturer's suggested retail price (MSRP), and is usually between 2% and 3%. The holdback is credited to the dealer annually to offset the costs of interest and insurance while the vehicle is on the lot.

I'd guess the dealers also make a tidy sum from Ford doing all the recall work.

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[realshelby]

You can see the "cost" of the Maverick to the Dealer in posts above. That amount IS what the Dealer is charged at the time the new Maverick is built ( give or take a day or two).
No, that isn't all the profit the Dealer makes when they sell a Maverick for Ford.
There is a 3% Dealer Holdback that is received about 45 days after the vehicle is reported as sold.
There is also a ( typically hidden) Finance Charge reimbursement Ford gives. This is to cover the first few weeks of finance charges. That varies and can be $150 to $1000. If you are paying interest on your inventory, that rarely adds to your profit margin...Remember, the Dealer starts paying the finance charge way before the vehicle arrives. If, like we were, you don't finance the vehicle but pay in full at time of invoice you can call that profit. Two ways to look at that, you are certainly not making interest on YOUR money, but you also don't have to kiss Ford's ass about going over your floor plan ceiling! Remember, there are some Dealers with MILLIONS of dollars of inventory.....
Retail rebates should always be passed on to Customer. Up to customer to research that and make sure Dealer isn't hiding that amount to "lower" price you get.
Then there are Dealer Cash programs. Basically a hidden rebate to help Dealers move a certain model. I highly doubt there were/is any program like that for the Maverick.
There are also volume incentives. We knew those as "stair-step" programs. You are given a volume of each model to meet. Once you meet that amount you can go from like $250 per unit to $1000 or more per unit. That is paid to the Dealer after contest ends within about 45 days. There might be some cases where any vehicle sold helps with that including a Maverick. For instance, to qualify for the program you might have to sell 10 cars to qualify for the F-150 program.
There is also a small amount of money paid to "Make Ready" the vehicle. Basically that is to inspect it, check wheel torque, fluids, and insure it is built correctly. I think that is still under $200.
Dealers would not be in business selling at "invoice" without a good trade-in, Service profits, and finance department revenue. The only time I can remember taking off 25-30% was back when the window stickers on cars and trucks......did NOT have the MSRP written on them! Dealer could set the "sticker" price $5000 or more over cost! Trucks were still sold in the 80's with no MSRP listed on the sticker!

 

[wax87]

Ain't none of our business, If you like the product and the price, you buy it

 

[B2000]

I could tell my dealer was not happy when I did not buy the paint and interior protection insurance or finance it with them or buy a warranty. I'm sure they did not make much.

But then again they were not aware of the the order window in 2022 until I told them about it so that probably helped them- they could have lost out on many other orders.

 

[Old Farmer]

I doubt that any of us non-Dealer members have any accurate idea, and I'm sure that Dealer personnel won't give up the numbers.

HRG

Stopped by a local dealer this morning, they STILL have $5K wax job markup stickers added to their Mavericks. Even on non-Hybrid models.

I waited from March 2022 to January 2024 because I refused to pay the penalty.
I love the truck.
It's a shame the demand is making money for the dealers at the expense of those who may need a vehicle and can't wait.
Maybe they need to get a beater and go back when the demand slumps.

 

[Canadian Guy]

You can lease through other sources besides Ford Credit ( yes, they handle the lease programs too).
Whomever gives the lease contract OWNS the vehicle. NOT the retail customer!!! NOT Ford Motor Company. Ford Credit is a different division of Ford.

Dealers do NOT own or have any particular rights to the leased vehicles once they are driven away by the customer.

With a Ford Credit lease the Dealer MAY be able to buy it back when/if returned to that dealer for Acquisition. But usually that amount is well above market value. So, while the Dealer may have it on their lot, it cannot be sold by the Dealer. Ford Credit sends an inspector to go over the car, then the Lease contract is settled ( don't think those bald tires won't be noticed and charged against your lease contract!). From there it is picked up and shipped, typically, to one of the large Wholesale auctions. Dealers buy from there, and usually pay less than Ford or other Lease Agents ask directly for them.

The manufacturer gets its money/profit in total when the Lease Agent buys the car. From there the manufacturer is OUT of the equation.

The Dealerships that sell these auctioned vehicles ( that may be a used car dealer 500 miles away, does not have to be a new car dealer) pay ACV or actual cash value for them. This amount is what sets the standard for used car values. What they bring at auction.....which is what the actual value in a given moment is. Just like a "new" car, they have to cover the cost of buying the car, transporting it to the Dealer, and inspection/repair/make ready for sale costs. So....FAR from 100% profit!

Things have changed since the 90's then. It was also before the popularity of auto auctions, dealers sold their own trade-ins & lease returns.
Regardless.....it doesn't cost what we think to build a vehicle. I run a very small hustle on weekends and my profit is astronomical too. If Ford can do it, so can I, lol.

 

[mav_kev]

American Auto makers also have dealer holdback, is a payment from an automaker to a car dealership for selling a new vehicle. The amount is a percentage of the vehicle's invoice price or manufacturer's suggested retail price (MSRP), and is usually between 2% and 3%. The holdback is credited to the dealer annually to offset the costs of interest and insurance while the vehicle is on the lot.

Don't forget the dealer's holdback, usually 0-3 % of the sales, paid by Ford to each dealer.

There are a lot of ways dealers make money, but holdback isn't one of them.

I'll continually bang this drum: holdback is not profit, it is a reimbursement. All manufacturers do this. The holdback percentage is paid to the manufacturer by the dealer as part of the invoice price. Once the related vehicle is sold, that money is returned to the dealer, typically quarterly. The manufacturers are giving the dealerships their own money back.

More on topic, the gross margin at MSRP for my fully loaded Lariat EB was $1100-1200 using the invoice sheets posted here at the time. That corresponds to about 3%. The Maverick isn't designed to be a big money maker though - it's to get you into the Ford ecosystem so that you buy a higher margin vehicle next time.

 

[Brianx]

new vehicle sales is the LEAST transparent business model that i know of.

 

[James K]

So can someone explain the Granger Ford Business Model. Per these charts, they are losing money on every Maverick they sell at 3% below MSRP. In addition, the great majority of those sold never see their "money-making" service department. Sort of makes me believe not to believe everything I read..........

That price sheet appears to have 0% holdback because it's in line with what I saw in the 80s, percent wise (high demand vehicles have the lowest holdback). Like folks mention, service and parts are major revenue streams. Financing also adds to dealership profit. I'm not familiar with Grangers contracts, so not sure where they make profit. Back when I sold Fords, the Escorts were a few hundred dollars profit but there were other incentives besides holdbacks, so it was worth selling them. Even salespeople got in on that. I know once I sold a base Escort that had been sitting on the lot for several months and between Ford and the Dealership I pocketed over $500, which was more than the original markup.

 

[commadorebob]

Most dealerships make more money in the garage than on the sales floor. That's why most are not huge fans of the "maintenance free" EVs beyond the fact the non-Tesla EV market has saturated.

My own local dealership has allocated roughly 75% of their entire property to various garages and pay their sales reps a salary. I honestly think they only sell vehicles to keep the blue oval out front.

 

[atomguy245]

The markup on a Maverick MSRP is very low. But the dealer is charging at least a dealer processing fee ($899 on my last purchase) on every vehicle, then makes money from the financing, extended warranties, then future service department visits. The Maverick keeps service departments busy with a steady stream of recalls. So yeah the salesman makes a minimum commission, but the all in profit for the dealer could be thousands

 

[PNWMaverick]

The dealer kept telling me that he only made $600 on that deal. My salesman said he only made $150 commission on that sale.

This tends to be true as there isn't (typically) a lot of money in a new car sale and your salesman was likely being paid a "mini", or the minimum guaranteed commission. When it comes to new cars the dealer is making money on the trade, warranties, services, and finance reserve.

Used cars are the big money when it comes to individual car deals.

The question I have is what did they really make from the sale and what does Ford kick back to them for that sale?

Ford isn't kicking anything back to the dealer. The trucks sitting on the dealer's lot are "owned" by the dealer and not by Ford. What this means is that Ford makes their money when they sell the vehicle to the dealer. The money between that price and the MSRP, or final sale price, is not where Ford makes money. That is were the dealer is making it.

 

[john grant]

If you had the dealer finance it and in must states doc fees is extra dealer profit ,with dealer prep and all extra B.S. ( like nito in tires, paint protection, clear vinyl for front and all dealer add-ons) and ext warranties( most states it a 50% profit on anything the finance manager can add in ( that includes vehicle warranty)So a dealer can make $5000.00 to $10,000.00 profit and that not including your trade-in profit

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