[ZTWsquared]

Focused,Feb 26 2009, 03:44 PM Wrote:

ZTWsquared,Feb 26 2009, 12:11 PM Wrote:

Focused,Feb 26 2009, 11:54 AM Wrote:

06gtpony,Feb 25 2009, 04:17 PM Wrote:The "we offer better prices because we're a high-volume dealer" is a big crock of s*** that dealers use to suck people in.  If you're an X-Plan customer, then the best price you will get is X-PLAN (plus any addition dealer cash-backs or incentives offered by Ford).
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+1 - this is true
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Hey guys - don't get too hung up on the semantics ... yes the actual price of the vehicle will not change from one dealer to another, but Ford of Canada has all kinds of programs that incent dealers at different amounts depending on the volume the dealer generates ... sometimes it's a different amount depending on Dealer Size Category (A, B, C, D) where the larger-volume dealers get a bigger incentive ... and then there are progressive pay or stair-step programs where the first few units pay a certain amount and then the amount per unit gets higher as the volume gets higher ... so a larger volume dealer has the potential to pay less per unit on a net basis factoring in the various cash amounts Ford gives back to them.

So in this case you're all wrong except me. I win. ;-/
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WELLLL..

This statement is a little misleading ....should be clarified

our dealer versus another higher volume dealer will be issued the exact same FOC incentives to pass on to the customer (delivery allowance, loyalty money, AXZ money, etc..) This is standardised across all of the Ontario Region.

The cases where one dealer gets more money than another is when it's a tiered "dealer cash" program. Dealer cash programs are not usually passed on to the customer (dealers have to make money too). If those savings are passed on to the customer, it is a very rare instance - at least in all of the dealers I know - which is several.
Hence the name "dealer cash" as opposed to "Customer incentive". Not to mention some incentives can not be applied to A/X/Z/D/F plan members - this is not often the case, but does happen from time to time.

So don't get mis-lead into thinking one dealer has greater lateral movement verus another simply on volume.
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Right ...which is why I said don't get hung up on the semantics ... if the money a dealer gets back from Ford varies from one dealer to the next, whether it be based on volume or CSI or whatever, it changes their cost structure and it can enhance their ability to live with smaller grosses.

And speaking of smaller grosses, a high volume dealer has a greater opportunity to cover their fixed costs with a smaller per unit portion of the gross, thus allowing them to live with a smaller average gross ... and a high-volume service dealer probably has a higher percentage absorption - which again would allow them to live with a smaller average gross per unit on the sales side ... so I would say that all things being equal, a high-volume dealer would in fact have greater ability to price lower than a small-volume dealer.

Is it absolute - absolutely not ... but from their relationship with Ford, and given the economics of scale ... it is more likely than not that a high-volume dealer could price lower than a small-volume dealer and still remain viable.