Join Date: Sep 2015
Car Year: 2017
Car Model: FXT Touring
Feedback Score: 0 reviews
Invoice is a true cost number. However, dealers make most of their money on incentives. For example, there may be a month where a dealer can receive $500 per car for the first 50 cars sold. The incentive typically increases at certain thresholds. For example, it may go up to $900 per car if they sell more than 50 cars.
The most important part is that incentives are often retroactive to the first car sold. In other words:
Sell 48 cars, get $24,000
Sell 51 cars, get $45,900
Obviously they are going to do whatever is necessary to get more than 50 sales.
And Yes as pointed out above, they make money on financing and LOTS of money on used cars. Subaru buyers special order their cars, pay cash for their cars, and purchase "Subaru Added Security" plans (Subaru-backed extended warranty) at rates higher than industry averages. Dealers make a significant per-car profit on the extended warranties. And many US dealers have introduced dealer fees over the last 20 years or so. Those fees provide a certain minimum revenue per car.