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Originally Posted by bolkar
Hi,
I was reading the forum as I am planing to order a 2006 S. From my visit to the dealer, I learned that dealers buy the options at 85% of the cost. So, if they are selling an option at 100, it costs them 85%.
This being said, its a 17.65% markup. So its higher than 12 or 15% people are talking about.
In general, I am thinking to make an offer of 5% markup of the total car MSRP (including options) for a full car costing $79,115 (MSRP $68,352). I will offer $72,000
Hope, this will help...
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I tried to follow you, but I'm not sure I understand what you mean by "cost" and "MSRP" as you use those terms in your example. (I'm unsure, because you have both the "cost" and your intended offer as higher than the MSRP.)
Before we get to what I think I understand from your post, first I have to ask whether you've seen what the dealer invoice is for a MY 2006 Boxster S.
The MSRP for an S has gone up (in the US) from $53,100 for MY2005 to $54,700 for MY2006.
Sites like edmunds.com are still showing the 2005 info -- the prior (MY 2005) MSRP of $53,100 was based on an invoice to the dealer of $46,314, a markup to retail of $6,786 or nearly 15% over invoice (0.14652%)
If the dollar markup is the same for MY 2006, the invoice is $47,914. If the percent markup is the same for MY 2006, the invoice is $47,710. Until we know the actual invoice, why not split the difference at an assumed MY 2006 Boxster S invoice of $47,800, before options.
Then, look at all of the options at MSRP and calculate the actual dealer cost by assuming a 17.65% increase from dealer cost to MSRP for the options (which is 85% of the MSRP for the options). Is that correct?
Then, combining the dealer cost (invoice) for the Boxster S (before options) with the estimated dealer cost for all the options, you get a total dealer cost for your special order car. And to that you intend to offer a 5% markup over that cost for the dealer's profit.
So assuming that the combined dealer cost -- invoice plus options -- is $68,352, you're going to add 5% of that total dealer cost and offer $72K (rounding up from the actual 5% figure of $71,769.60).
Is that right?
Please post back and let us know how your plan works. It would be great to know whether an LA dealership would be willing to order a new MY 2006 987S (loaded with options as yours must be), for a 5% profit over the combined "invoice" plus "dealer cost" for the options.
Does anyone else think 5% over invoice plus cost of options is a fair dealer profit for a 2006 S? Are there other incentives and dealer rebates that make the dealer's profit even more (or is that the type of confidential information the dealership would not even tell its salespeople)?