OSU05stangfan said:
this is probably a dumb questoin...is there any difference between invoice and dealer cost?
Not a dumb question.
The answer is YES there is a difference between the invoice and what the dealer really pays for the car (cost).
First there is what is called the "Holdback". This is a rebate that Ford gives the dealer to help them finance the cost of having cars on their lot. Holdback is 3% of invoice. The holdback goes to the dealer who ordered the car, This is one of the bottlenecks in having dealers swap cars.
Next there are monthly volume incentives. If a dealer makes a certan sales volume for the month they get an extra rebate from Ford. Monthly volume incentives are a closely guarded secret.
Then there is the annual volume incentive, like the monthy incentive, but happens once a year based on the dealer sales for the entire year.
There is the Blue Oval Certified rebate, for dealers that meet Ford's Blue Oval program there is another 1% rebate. This is probably going away.
Finally there is "dealer cash". This is similar to customer rebates, but they are given to the dealer for each car they sell. Some models do not have dealer cash others do. Usually fast selling models do not have dealer cash, but slow selling models will, because Ford wants to incent the dealers to get rid of them. Dealer cash is usually a closely guarded secret, neither Ford nor the dealers will ususally admit to what it is. Dealer cash usually changes on a monthly basis.
Lets look at an example:
2005 Mustang GT MSRP $25,0000
Dealer Invoice $23,000 (my estimate)
Dealer Holdback $750
Blue Oval Certified: $250
Monthly sales volume incentive: $500 (just my guess, don't know for sure)'
Annual sales volume incentive: $200 (again just a guestimate)
Dealer Cash: $0 - I wouldn't expect any dealer cash on 2005 Stangs until August 2005 when they need to clear them out before the 2006's arrive.
Actual dealer cost: $21,300.
This is why a dealer can sell you a car at or below invoice and still end up making a profit.