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Ridiculous car deals


Dasher

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Years ago, I remember reading in an industry magazine that GMs cost of building an Impala vs a Deville was like $1,200 (back when an Impalla was like 6K and the Deville was 10K)

That is, the difference between the upgrade cost of every material to make the Caddy more luxurious.

Today, even with the difference in infliation, I'm sure a Deville's complexities would account for a much larger upgrade cost. But, the relationship must still exist to some extent. The cost of building Any car has a baseline and the quality and amount of extra or upgraded materials certainly isn't just "added-on" to reach MSRP :)

Like anything else in the consumer market, houses, electronics, clothing, the "high-end" has a much higher profit margin - and that's OK, they sell much fewer of them, and I believe the end user actually wants to pay more because he feels he deserves it, he's special ;)

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Larry, I agree. There's no way the General is making only $1,000 profit on a caddy. NO WAY. At $1,000 profit each it would not be profitable enought to continue to build them.

That doesn't make any sense. Think about it! If they make $1000 profit on each Cadillac, it is in fact profitable enough to build them...exactly $1000 profitable each. ;)

Remember that we're not talking direct cost to build vs. total sale price. There is a LOT of overhead in a company as large as General Motors, with investments, retirement plans, benefits, etc. As Bruce stated before, he speculated that it might cost GM $30k to build a new Deville, and they may sell it for $45k if they're lucky. On the surface, it looks like they just made a profit of $15,000! But when you realize all the other "stuff" that goes into car production (including R&D, marketing, HR, facilities, etc), the actual profits are much less. Less than $1000/unit as stated in that website. Facts are facts.

Remember, profits are (theoretically) calculated after ALL other expenses are claimed, including payrolls, retiree benefits, marketing efforts, etc. So after ALL that, in general, they were on the plus side $1000/unit back in 1998 or whenever that website was published. The plus side is a good place to be!

I absolutely agree with the statement that the General's most "profit" comes from new vehicle loans (their GMAC program I guess).

Jason(2001 STS, White Diamond)

"When you turn your car on...does it return the favor?"

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I'm really getting a kick out of this post. Though it has drawn a huge number of responses, it has really moved far away from the original post. It's all been interesting.

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Yeppers! You see this for any model out there. Just the other night I saw an ad for Mercedes. I thought, WOW! I can drive a Mercedes for that! Not.. I have friends that have new ones and hate the problems.. Also, a friend of mine bought a new Jaguar and said it has been an electronical nightmare! He'll be reimbursed for the car. He said no thanks for a replacement.

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If you actually go to the dealer to try to get the super cheap advertised lease deal, you'll always find out that there is a catch somewhere and your real price out the door is way higher. Sometimes it takes a while to find the catch, but it's always there.

The dealers never lose money on a deal.

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As an aside, a local Mercury dealer is running a pretty dang good deal on new Grand Marquis models. MSRP is $24k and you get it for $17k after discounts. They listed all the included discounts on the next screen (which went away pretty quickly!). Some of the discounts everyone gets. Most of them you probably won't get, like:

- Military Incentive Bonus ($1000) [no deal unless you're in the service]

- FOMOCO Loyalty Cash ($500) [must have already bought a new Ford]

- AARP Discount ($1000) [unless you're collecting Social Security, you don't get this discount]

Yes, you gotta read ALL the fine print to see how "good" the deal really is!

Jason(2001 STS, White Diamond)

"When you turn your car on...does it return the favor?"

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My brother, who manages a new car dealership in Ohio, says that Ohio has a very tough law on the books about the old "bait and switch" tactic and that the attorney general really enforces it so dealers have to be careful whether they want to or not.

Moral: Buy your cars in Ohio!

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Different company, different car, different market but according

http://www.motortrend.com/features/news/112_news007/

But Ford earns $7,000 to $10,000 on each Crown Vic and Grand Marquis, which sell for about $23,000, according to estimates from Wall Street analysts. Not bad for a car that hasn't had a substantial redesign in over a decade. Ford officials won't disclose earnings for the models but acknowledge they are very profitable.

Anything above $7,000 would make the Crown Vic and Grand Marquis among the most profitable vehicles sold and close to the estimated $10,000 or more some automakers earn on their biggest earners, full-size trucks and sport-utility vehicles.

I think they START at $23k, but a full-boat Grand Marquis is $35k+.

Ford also makes big money on the models because expensive start-up costs to develop them and configure a plant to build them were spent in the early 1970s. Ford long ago got a return on that investment.

Bruce

2023 Cadillac CT4-V Blackwing

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once again, i have to agree with dasher. the times that i have gone into a new car dealership and shopped around for cars, there's no trace of high-pressure salesmen or bait and switch tactics. imo, they're too darn busy selling cars!! they

don't need to resort to unethical or illegal tactics. obviously, it occurs, but i haven't seen it. i suspect that a customer that is "deemed" ignorant of the invoice and msrp prices and rebates and holdbacks will have a much better chance of getting the run around...thank god for state attorney generals. jackg

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