How Factory-to-Dealer Incentives Work (Aka How Car Dealers Actually Make Money)

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[sibylb]

I learned so many buying car tips from both of you. A big thank you for helping me negotiate my new Bolt. I walked into the dealership informed and able to sit down and negotiate the OTD price with CONFIDENCE. It worked! You guys rock!

[officesuperhero]

I swear this has become my favorite channel. Ray, you are an incredible wealth of knowledge!

[howethomas]

Ray, you’re a great teacher. Thank you for doing these videos.

[billpolera]

I enjoy watching you and your Son. Your videos are informative and interesting.
But what I like the most is the relationship between you two.
The world needs more of what you two have...I think it's called love and respect.

[debbiemay]

Very interesting and informative! I would have never thought that happens or how it follows the later value of the car! That’s why you feel dirty after a trip to a dealership!

[gonnafish]

Thanks for giving me a new perspective!

[tamjacobite]

Enjoy your channel. Very practical information and advice without the bull

[markpashia]

You finally hit the nail on the head in the very end. Why not do away with the salesman, the incentives and all of the other stuff and just sell the cars at a fair price. No games, no rip offs, no nonsense. Like the Tesla model. This is the price, here is your nearest store and they have a service center that is certified by the brand. They can still have sales when they want but they are everywhere at once. Suddenly there are no winners or losers between the buyers. No one feels abused by the fraudulent system. And if they can give the dealer that much incentive then the prices are way over inflated to start with. They insult our intelligence with all the crap games. Just like the dealers doing all of the unwanted garbage add ons to run up the price before they put them in inventory. They know they would never sell them as a true add on at sale, so they force them on us. BS. I ain't buying. I cannot wait until Tesla gets to the point that it works for me. I will switch in a heart beat when I can do so. Just to avoid the bad dealer experience!!!

[rockbay]

Mr. Ray, I personally appreciate your sharing of experience to we the public. I have learned several things from watching your channel. Your Son seems like a really nice young man as well. Again, thanks for all your help!

[sabastiantaylor]

I always negotiate so much off cars. I have never paid msrp on a car. Now I understand why I always received such a great deal at BMW. It makes sense sticker 67k purchase for 45k. I totaled it 11 months later and got money back from the insurance company

[dax]

Im new to this channel and very impressed learning tons of information. Please keep up the videos. I have been burned when I bought my vehicle but past is the past moving on forward. With the title of this video, does the incentives apply to new cars only or both new and used?

[pawelmagnowski]

This is fine, in the whole picture, the pricing already includes all the effects of these incentive quirks

[djspher]

backtrack to today. used vehicles percentages are higher than ever. 100k miles/5 yrs later and shaving $4k off the msrp on f250. values are all nuts.

[ahmedhashmi]

He’s smooth talking me into subscribing to his channel like a dealer would to a customer at a dealership just kidding, just subscribed

[douglasgrant]

Hi Ray
You have a radio voice... Reminds me of and sound very similar to Mason Adams... Take care and thanks for sharing..

[geecheetone]

Seems like it crushes everybody...EXCEPT the guy who purchases used vehicles that have already absorbed the initial depreciation

[techniciana]

It has become apparent, after have visited 4 dealers, that you have to have to be a car salesman, with a gm card, with a 10year or less old vehicle to trade in that has provisions for a disabled person, and your loved one has had to have served in the military, been a costco member for over 3 months and now works in the healthcare field and volunteers at the local fire department to qualify for all the b.s. "incentives " they offer.

Knowing well that nobody will hardly wind up in that scenario, dealers hooking you in with these incredible markdowns on the internet, the car buying experience just is soo sad.
We finally agreed in a price that made fiscal and logistical sense but as soon as the finance manager visited their financing, and subsequently most other banks, to find out they want to charge 5.9% a.p.r. on a 50k vehicle with 15k down with a 814 credit score.

Gotta pass on the deal if it doesn't make sense. Bottom line.
Keep up the good informal videos for those that would pay $790 a month on a $35, 000 loan over 72 months because there are too many out there that are encouraging banks, in addition dealers, to do this.
Subscribed

[russellseilhamer]

I am interested in this stuff. I consider myself kind of an economics wonk who wants to know how all this machinery is set up in a car dealership. It’s a business that fascinates me. Btw... I’m probably going to be in the used/new car market by September. I do like the Honda CRVs but I do like the Hyundai Santa Fe for its styling, it’s 100k warranty and I currently have a Hyundai Elantra that has served me well. The Hyundai is a little cheaper than the Honda but I’m on the fence— Any advice on what to buy?

[frankciampaglia]

i thought you said they loose money on new car still a salesman!

[jess]

It’s a classic situation: people would rather pay $250 for a flight with $100 baggage fees than pay for a $340 flight.

An $80, 000 car for $65, 000 sounds better than just a plain ole $65, 000 car.