At just about every store, service and parts, or fixed operations as it's called internally...are much more profitable than the front of the house. In this day and age, new car deals are losses. Sales departments make up for things with add ons to the deal. Service contract, extended warranty, paint protection, LoJack, points on third party financing, and several other bits. Preowned and CPO vehicles are far more profitable since the buyer doesn't have any clue what we paid for the car. But one thing is for sure, I don't know if any manager getting $300k. GM getting a piece of the store? Maybe.
How do you know how profitable new car sales are? Because people from the owner on down keep parroting it? That doesn't make it so. Dealers have been pushing lojack, warranties, etc. and bumping interest rates for decades. The present is no different than then.
Have a look at
https://carbuying.caranddriver.com/ . When putting in my zip code I get a price of 47,354 on a 51,300 MDX. That paltry discount of 7.7% off is a price every Tom, Dick, and Harry obtain after a couple of keystrokes. When I choose a 26,050 Accord I'm getting 23,253. That 10.7% discount pales relative to the good 18 to 20% off deals that are out there. So, through simple deduction, and knowing that even at 20% off on an Accord that it's a profitable deal to the seller, we can easily conclude that as a percent of MSRP 6, 7, 8, or anywhere near that percent off on an MDX is leaving a lot of money on the table.
You're also wrong about people not knowing how much used cars cost the dealer. Whether using black book, Galves, or NADA one can get a very good estimate of what the wholesale is on a particular car, and therefore what a dealer gave on said car. In this day and age, one can even trace a specific car to whatever auction it was sold at, down to the dollar. Of course, you can add the transport cost to the total; either way, there's not thousands of dollars of discrepancies, unlike in new cars where most of the back end money is top secret.
The true cost of a $50k car is invoice minus whatever backend money there is. Some things like a RLX have a ton of that right now. Others like the MDX don't have so much. Someone pinging every internet manager within 500 miles offering $45k for a $50k MDX is going to have absolutely nothing in their driveway to show for it because no dealer is going to lose money on that deal.
Hmm, a whole lot of people reporting buying 51,000 MDXs for 45 and change in the last month.
https://forums.edmunds.com/discussi...a-mdx-awd-price-paid-and-buying-experience/p4
I guess they're all liars; at least that's what a stealer will allege. The one I was at actually did.
