What's the true "cost" to the dealer?

[ClemsonU88]

(I did a quick search on dealer cost and didn't find anything, so I figured I'd do a post)

My 2025 Maverick is on the way, and I'm trying to get the most for my '22 XLT Hybrid Maverick w/ 43k miles. Here's my offers:
Carvana: $23,200 on 12/16 and $22,200 on 12/26.
Dodge: $22,400 (but I'm not sure if that's a trade-in price or a sell it to them price).
Ford & Carmax both offered me $21,000. (I'll save about $700 in sales tax if I trade in my '22 to Ford, so their offer is effectively $21,700)
Carmax is selling 2022 XLT Hybrid Mavericks with 43k miles on them for $25k-$29k.

According to the Invoice/MSRP comparison I saw in an MTC post, MSRP is about $730 more than invoice, so the dealership is making about $730 profit. My 2022 Maverick salesman said she only got $150 commission on the Maverick, so that would knock Ford's profit down to $580 on the truck. But is $580 really their total profit on the '25, or do they get dealer incentives, kickbacks, and/or rebates?

Here's my 4 questions:

1) Do dealers really only make $580 profit on a Maverick, or are there incentives/rebates?

2) $21,000 for my 2022 seems low to me. Does it seem low to y'all?

3) Is there any leverage I have to encourage Ford to raise their offer (aside from telling them about Carvana & Dodge's offers, which I will do)?

4) What's the best way to sell a vehicle for the most money these days? (I've listed it in Auto Trader, Cars.com, Craigslist, and Facebook Marketplace), but 90% of responses are people trying to get me to buy a report similar to Carfax before they'll come look at my truck...aka a scam).

All positive comments are welcome. I may already have considered what you're going to say, but I'd rather hear an idea I already thought of than miss a great idea I haven't thought of (even one you think it's obvious). Thanks.

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[Gvmumbral]

2022 hybrid XLT might be around $24K with your mileage.

 

[slashsnake]

1) Do dealers really only make $580 profit on a Maverick, or are there incentives/rebates?

I don't think they have incentives or rebates now, not likely to with the 2024's even with a refresh coming since not many are on lots or struggling to move. I will say when I worked weekends for a dealership selling, I made mini's on most every new truck. Meaning their profit was so low I got the minimum sales commission (I think it was $300 then rather than 25% or whatever out of the profit.

2) $21,000 for my 2022 seems low to me. Does it seem low to y'all?

If Carvana has 23,200 then yes... Run your trade in value on edmunds or something and see what they say...

Instant Used Car Value And Trade In Value | Edmunds

3) Is there any leverage I have to encourage Ford to raise their offer (aside from telling them about Carvana & Dodge's offers, which I will do)?

Sure, you can always walk. Absolutely show them the higher Carvana deal. Explain to them you have no problem trading there if need be.

4) What's the best way to sell a vehicle for the most money these days? (I've listed it in Auto Trader, Cars.com, Craigslist, and Facebook Marketplace), but 90% of responses are people trying to get me to buy a report similar to Carfax before they'll come look at my truck...aka a scam).

That's tough. I think the first two are solid. The most money would be private sale. But you are missing out on your tax difference if trading in. Which is North Carolina is only 3%, so 600 bucks. I guess the good thing is you can just hold out for the best deal if you want to sell to a dealer. For me, it's not worth the time/risk. I don't want to be letting someone else drive my vehicle that I don't know, dealing with exchanging money (especially since my credit union is a long ways away), detailing my vehicle beyond a quick clean, etc. If there's someone I know that's interested, absolutely, otherwise lately I've been trading.

Don't forget... if Ford doesn't budge... WALK. I traded my car when I got my Mav. They were stuck at a number, I stuck to mine of what was fair and said it's fine, I'll write the check and buy the truck and sell my car to the dealer that had the higher amount tomorrow... 10 minutes later... "well sir, we can match that". Same when I bought the car I traded... trade offer was really low, Ok, I've got X offer here, I'll be selling it there instead. They came up. I liked that as car sales tax was 6.5% here so that's a bigger dent.

 

[am_fm_radio]

Here's my 4 questions:

1) Do dealers really only make $580 profit on a Maverick, or are there incentives/rebates

ANSWER:
If a dealer meets "quotas" from Ford, they receive 3% (or so) back at the end of the year...
So selling you the car at "dealer invoice" or "$50 under Dealer invoice.. and they will show you the invoice, they still can make 3% at the "end of the year"..possibly more..

Granger Ford in Iowa is one of the Dealers that offers below invoice pricing..

I visited Louisburg Ford in Louisburg, Kansas and they were selling $50 over invoice when all the dealers in Kansas city were getting $10K over MSRP.. Louisburg Ford had no Mavericks at the time, but wanted me to order by placing a "refundable $500 deposit" with my order.. No guarantee as to when delivery woul dtake place.
It was when Ford dropped the hybrid as the standard engine and the base engine became the echoboost. meaning my base no frills Maverick was going to be at least $1500 higher over the previous year.. Any dealer within 500 miles of me that did have a hybrid was $7-10 grand over MSRP..
Only a fool would pay that.. So I got back on my bicycle and left.

Remember when you couldn't buy a Harley, but dealers would deliver if you paid over retail...they just happend to have a new one that the deal just fell through. Now there's a glut of Harleys.

I had a perfectly good vehicle that got 31-33 mpg.. The only way I would buy would be to improve my cost of operating. Especially during the horrable inflation regime the last 4 years we've suffered with. The Hybrid did that - as I am getting 42mpg on my 2024.

The $20K maverick really never existed and in 4 years an $8k increase in the same item, places inflation at roughly a conservative 25% percent.. Is it any wonder Americans are fed up. Now Toyota is talking a pickup that will sell for $8K.. Well, I doubt we'll ever see that.. Like my ELIO deposit.. I got the T-shirt however still in the plastic bag. The new vehicle market is going to tank- manipulated by politics I say..

I have high hopes, and am going wait 3 months to see if we can make sense of this crazyness.

 

[zacatac]

Dealerships have told me before that they couldn't match another locations trade in offer and try to tell me I should just trade in with them because of the tax saving, even though it would still be a net loss for me.

I then tell them I'm going to just sell it to the higher bidder and pay the taxes so I can save the extra money and the higher bidding dealership can make the profit off reselling. 2/3 have then matched the trade in once they realized I was serious about not trading in. The 1/3 didn't get my trade in and I actually sold it to the other dealership.

 

[Johnny maverick]

I'm going to see what they give me on the 31st. They will sell a vehicle and loose money on the sale to make their numbers and make it up on the other end. F150 lariat powerboost might be in my driveway this new year.

 

[adam2023Lariat]

I ran Ford Dealers for over 10 years as a Salesman, Sales Manager and Finance person. True Cost for the Dealer is generally what the DPlan or A plan is on the unit actual Invoice. That amount formula is the invoice amount minus hold back of 3 percent and advertising national and local funds. The only other variables that would effect the cost on a unit above wouldn't apply to Maverick because they sell so rapidly. What a Salesman gets paid on is the amount of money from what the invoice is and MSRP plus any added equipment less cost for the adds and a Pack which is a amount of money the dealer assigned to every unit that covers his overhead and any other chargebacks to a inventory. The Salesman on a Maverick would 99 percent of the time receive a minimum commission payout. The only other area a salesman earns commission on a individual deal is the trade in that area would be the amount of money between what the Actual Cash Value of the trade in is and what he shows you as trade over or under allowance. If he over allows for a trade like example the trade ACV is 500 and shows 1000 he loses 500 from his deal in gross profit. If your ACV on trade is 6500 and he shows you 1500 he adds 5000 to his gross profit. The Salesman gets 25-30 percent of the gross profit and any other unit bonuses monthly as commissions plus any minimum commission where he has no gross profit or lost money on above scenarios

 

[Robert_C]

My dealer bemoans that he only makes $600 on this truck, so this seems to be pretty much in line with what he is saying.

 

[Tony Pandy]

I ran Ford Dealers for over 10 years as a Salesman, Sales Manager and Finance person. True Cost for the Dealer is generally what the DPlan or A plan is on the unit actual Invoice. That amount formula is the invoice amount minus hold back of 3 percent and advertising national and local funds. The only other variables that would effect the cost on a unit above wouldn't apply to Maverick because they sell so rapidly. What a Salesman gets paid on is the amount of money from what the invoice is and MSRP plus any added equipment less cost for the adds and a Pack which is a amount of money the dealer assigned to every unit that covers his overhead and any other chargebacks to a inventory. The Salesman on a Maverick would 99 percent of the time receive a minimum commission payout. The only other area a salesman earns commission on a individual deal is the trade in that area would be the amount of money between what the Actual Cash Value of the trade in is and what he shows you as trade over or under allowance. If he over allows for a trade like example the trade ACV is 500 and shows 1000 he loses 500 from his deal in gross profit. If your ACV on trade is 6500 and he shows you 1500 he adds 5000 to his gross profit. The Salesman gets 25-30 percent of the gross profit and any other unit bonuses monthly as commissions plus any minimum commission where he has no gross profit or lost money on above scenarios

Factual information. I held similar positions as you back in the Mid 80's and this is inline with my experience even way back. The Dealership makes more on some models and less on others. Larger Dealerships also gets better incentives payback on higher volume (My time was quarterly / end of year). Dealers make more money selling used than selling new and more money on Backend (Finance & Insurance etc.) and the bread & butter is Service department.

 

[Scott Asheville]

I suspect the only person on MTC who knows is Tim B. Consumers are imbeciles who think they are more informed than they really are. I was friends with several salesmen over the years, and they told me a lot of insider stories. It's different between dealers.

Volume dealers often chase OEM volume discounts from OEMs. Small dealers maybe not. The number and variety of secret kickbacks to dealerships is immense and widely varied, including by maker, dealer size, region, and the time of year or the state of the market.

What I'm basically saying is that trying to know whether the dealership is making money on your sale is a Don Quixote type of exercise. You will never know. And anyone who tells you they know (other than the owner of the dealership or somebody higher up in sales management at that specific dealership) is feeding you cow doo doo.

And remember that what your salesman makes and what the dealer makes are completely different things. Salesman are often a step above slave labor at some dealerships. Don't hate them.

It's widely accepted that dealerships make the majority of their profit from service. That's why I chuckle when people obsess over buying from their local dealership. The owner doesn't care. He wants you to come in for a $150 oil change and tire rotation.

I once had a two hour long conversation with a salesman who used to own a dealership. It was enlightening in the extreme. I've found if you treat most sales guy decently and professionally, and walk in educated but not know-it-all snarky, they'll return the favor. It's their profession, and the better ones want you to come back in a few years.

 

[Merrick]

(I did a quick search on dealer cost and didn't find anything, so I figured I'd do a post)

My 2025 Maverick is on the way, and I'm trying to get the most for my '22 XLT Hybrid Maverick w/ 43k miles. Here's my offers:
Carvana: $23,200 on 12/16 and $22,200 on 12/26.
Dodge: $22,400 (but I'm not sure if that's a trade-in price or a sell it to them price).
Ford & Carmax both offered me $21,000. (I'll save about $700 in sales tax if I trade in my '22 to Ford, so their offer is effectively $21,700)
Carmax is selling 2022 XLT Hybrid Mavericks with 43k miles on them for $25k-$29k.

According to the Invoice/MSRP comparison I saw in an MTC post, MSRP is about $730 more than invoice, so the dealership is making about $730 profit. My 2022 Maverick salesman said she only got $150 commission on the Maverick, so that would knock Ford's profit down to $580 on the truck. But is $580 really their total profit on the '25, or do they get dealer incentives, kickbacks, and/or rebates?

Here's my 4 questions:

1) Do dealers really only make $580 profit on a Maverick, or are there incentives/rebates?

2) $21,000 for my 2022 seems low to me. Does it seem low to y'all?

3) Is there any leverage I have to encourage Ford to raise their offer (aside from telling them about Carvana & Dodge's offers, which I will do)?

4) What's the best way to sell a vehicle for the most money these days? (I've listed it in Auto Trader, Cars.com, Craigslist, and Facebook Marketplace), but 90% of responses are people trying to get me to buy a report similar to Carfax before they'll come look at my truck...aka a scam).

All positive comments are welcome. I may already have considered what you're going to say, but I'd rather hear an idea I already thought of than miss a great idea I haven't thought of (even one you think it's obvious). Thanks.

You can usually take your Carmax offer to the dealership and they will accept it. You win because it will count as a trade-in for tax purpose. Just let the dealer make an offer before you show them your Carmax offer.

 

[Draxo]

Sold my 24 to carvana for 33k to get my 25. Carvana offered more then any dealer in the area by 3k, very easy deal, they came to pick it up and gave me a check, I know there value on buying vehicles is location based. As far as sales tax, in Missouri you have 180 days to buy a new vehicle, and you can apply your sold one against the new price, my case trade was 33k, new one on A plan is 36k, si I will only need to pay tax on 3k. Always need told that A plan price is actually under dealers true cost, but at the end of the year the dealer gets what is called ''Hold Over'' money on each vehicle they move, plus it adds to their allocation's for the next year.

 

[Rcrew]

Here's my 4 questions:

2) $21,000 for my 2022 seems low to me. Does it seem low to y'all?

In preparation for possible used vehicle price bump from tariffs, I started checking current offers for my 2024 Lariat Hybrid with 4,000 miles. I’m only seeing $30-32K. Carvana, CarMax, Echo Park.

I just wanted to get a comparison base.

So, $21K for your 2022 XLT doesn’t seem low to me.

 

[Draxo]

In preparation for possible used vehicle price bump from tariffs, I started checking current offers for my 2024 Lariat Hybrid with 4,000 miles. I’m only seeing $30-32K. Carvana, CarMax, Echo Park.

I just wanted to get a comparison base.

So, $21K for your 2022 XLT doesn’t seem low to me.

Yep, Caravana just gave me 33 for my 24

 

[Rcrew]

Yep, Caravana just gave me 33 for my 24

Nice! Carvana was the lowest offer I got, only $30,000. Carmax was $33,000.

My sticker was around $39,000. California out the door about $42,000.

Won’t be selling for almost 10k loss at this point.

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