Actual Vs. MSRP

[mstephens]

Our unit has a factory generated "window sticker" listing all the options and a final total MSRP. That figure was $69,500. We paid $55,000. That's about 20% off the MSRP, and I believe that is around the middle or consensus of what most people pay.

My observation about trailer dealers is that it costs a LOT of money to operate a good dealership, and the sales volume is relatively low compared to cars. That means the profit per trailer has to be quite substantial to make it work out for the owners. Our dealer had around 30 employees. Can you imagine the fixed cost of that each month? And then you have your property and maintenance costs, advertising, insurance, and so on. I would guess that on our $69,500 trailer, the dealer grossed about $10,000. My guess would be that he builds his business model around that kind of profit. If he gets a bit more from some, and a bit less from others, he will do ok.

We negotiated directly with 3 dealers for the same trailer and options, plus or minus a few hundred dollars. Interestingly, the "final best price" from all three dealers was within $2,500. That tends to confirm the idea that around 20% off MSRP is a pretty good target.

[Safari-Rick]

20%

)

[HeavyAssault]

I find the comments regarding the dealers and how much they need to make off the sale extremely interesting. EVEN when selling 20% off MSRP they are still around.....hhmmmmmm I wonder why. Do they sell other units at MSRP to cover the "loss" on a 20% discounted unit?? Now I would hate to buy a unit and then see the dealership going down a year or two later. So let's be realistic.

I'm sure they have a floating benchmark for the total units needed to sell and still make a decent profit every month. I'm not surprised at all when I see any RV priced over $100k MSRP marked down to $79k. They are still making money somewhere in the matrix. Trust me they might not eat filet mignon off your sale but that next guy is going to fill their belly. Most dealers sell more than one brand so their sales mix helps maintain the monthly bills and fill their own pockets with extra cash.

I count 4 different brands/types of RVs sold at Colonial in NJ. They know their market, provide a great product, back it all up with good sales and service. In the end the numbers play to their advantage.

[Zia]

My experience, you should be able to get anywhere from 15-20% based on all the factors mentioned above.
Good lucK on your purchase. No matter what you finally pay, rest assure that you will enjoy the Airstream

[Protagonist]

Originally Posted by HeavyAssault

They are still making money somewhere in the matrix. Trust me they might not eat filet mignon off your sale but that next guy is going to fill their belly. Most dealers sell more than one brand so their sales mix helps maintain the monthly bills and fill their own pockets with extra cash.

I'm kind of cynical about salesmen, having known an automobile dealer in my hometown since he was in high school, long before he inherited the family business. I've heard from him about a lot of the tricks that dealers use to nickle-and-dime their profits out of every sale, even if they are supposedly selling "at cost." Some of those methods are sneaky. Some are despicable. But they're all legal, and they all work, on a significant fraction of customers who don't know any better.

But in all fairness, the only people who are in business to lose money are farmers, who buy everything for retail prices and sell everything for wholesale prices. Everybody else is in business to make money. That includes the dealer, the salesmen who work on commission, the jurisdiction that property taxes are owed to, the utility company that the dealer pays to keep the lights on in his lot, etc. Everybody from the salesman to the Federal Government gets their slice of what you paid.

It's a truism that any vehicle or RV you buy is worth 10% less than you paid for it, the monent you take it off the dealer's lot. The reason for that is because the dealer's overhead charges and his profit, that are part of what you paid, are not part of your new acquisition's value. Absolutely guaranteed, you paid more for it than it's worth, and probably around 10% more. Even if you buy it supposedly "at cost" the dealer will find a way to ensure that his expenses and profit are included in the price you pay.

In fact, a savvy buyer will take a look at this year's and last year's NADA books, and see how much the value of his dream vehicle has dropped in one year for last year's model. Then he'll adjust the price of this year's model down an equivalent amount. The result will be very close to the dealer's actual wholesale price. I won't say close to "dealer's invoice" because (1) they'll never show you the invoice; and (2) even if you saw an invoice, how can you be sure that's what they actually paid? "Dealer invoice" is a vague, amorphous term that means almost as little as does "MSRP." Anybody who ate at a nice restaurant on the company's dime, and got an inflated receipt for tax or reimburesement purposes knows that an invoice doesn't always match the disbursement.

But it's also true that "Mammon, the patron saint of salesmen" sometimes sends them a customer who doesn't negotiate— or at least doesn't negotiate well— and pays far more than he should without realizing it. Often because the poor customer "falls in love" with his soon-to-be purchase and makes the mistake of letting the salesman know it.

[PharmGeek]

I found it a bit funny how at the end of the sale I had to sign a paper saying that I denied the extended warranty...it gives an interesting impression....

[ROBERTSUNRUS]

Originally Posted by PharmGeek

I found it a bit funny how at the end of the sale I had to sign a paper saying that I denied the extended warranty...it gives an interesting impression....

Hi, That's proof to the management that the salesperson attempted an up-sale. [also a ploy to make you think about changing your mind] Accessories, details, warranties, financing, and many more are how they get that 20% discount back and sometimes even more. And their biggest profit maker is your trade-in.

[Protagonist]

Originally Posted by ROBERTSUNRUS

And their biggest profit maker is your trade-in.

Usually when the customer foolishly allows the salesman to negotiate price including trade-in, rather than negotiating price first, then negotiating trade-in separately. The dealer gets the trade-in for almost nothing.

[switz]

A chap at a dealer stated the gravy comes from the trailer/vehicle sales. The operational overhead costs of the entire operation are covered in the service and parts departments.

Kind of explains the $100+ per hour service charge for employees making just above minimum wage...

[mstephens]

I think it is structured like this. The numbers may vary, but the concept is:

Retail Sticker Price: $100,000
Average Selling Price: $80,000
Real Net Invoice Cost**: $70,000

Trailers are not purchased by the dealer. They are purchased by the dealer's bank. The bank charges a flooring charge for each month it is on the dealer's lot. The flooring charge is based on current interest rates, which are VERY LOW. For today, call it 2% a year. So, on a $70,000 invoice, they are paying about $120 a month to have it on the lot. When it finally sells for $80,000, the banker gives the dealer $10,000 minus all finance charges. Let's say 5 months at $120 a month = $600, so the dealer would get $9400 as his gross profit.

This is why they can have so many trailers on the lot. A good dealer with good credit can have as many trailers as they want. Banks are flush with money to loan.

I think a good dealer would need to be making about $10,000 or so on a big trailer. My dealer had more than 35 employees. That is a TON of overhead to be paid for, and we know there has to be a significant profit left over. Buildings, taxes, benefits, insurance, it really adds up. No dealer is selling any trailer at "cost" - that's an absurdity.

** Net invoice is not that phony paper they drag out to show the buyer. That invoice is a Gross Invoice. It doesn't represent rebates, promotions, dealer volume discounts, advertising allowances and many things that will reduce the dealer's payment.

[ROBERTSUNRUS]

Originally Posted by Protagonist

Usually when the customer foolishly allows the salesman to negotiate price including trade-in, rather than negotiating price first, then negotiating trade-in separately. The dealer gets the trade-in for almost nothing.

Originally Posted by mstephens

** Net invoice is not that phony paper they drag out to show the buyer. That invoice is a Gross Invoice. It doesn't represent rebates, promotions, dealer volume discounts, advertising allowances and many things that will reduce the dealer's payment.

Hi, this pretty much covers how it works.

[Zigidachs]

We received an equitable deal locally from Airstream Adventures NW in the Portland area. We traded in a fifth wheel……even tho we "got a great deal", let's be honest: they had to make a sufficient profit to remain in business……BUT the main benefit for us is that we "bonded" with the sales and service departments ( even the owners--who are terrific folks) .

If I call and cite a problem, the service department will usually have me come in the SAME day! SERVICE and FOLLOWUP…..don't discount those advantages with your purchase. ZIGI

[davcarv]

My problem is that there are no Airstream dealers in Ga. for me to bond with. ...

Apparantly Georigians are too poor to support an Airstream dealership.

[m.hony]

Where in GA? Closer to which states? We drove 4 hours to by ours.

[PharmGeek]

Originally Posted by davcarv

My problem is that there are no Airstream dealers in Ga. for me to bond with. ...

Apparantly Georigians are too poor to support an Airstream dealership.

If someone lives in say ATL (just as an example) you are very far from any dealer...outdoorsmart, bates, foley.....they used to do a bit over there in anniston, AL, but dandy (as I understand) would not agree to keep enough on the lot for AS to continue to keep them on....

long drive- depending on where in GA, it could mean well over 5 hours or more to closest dealer?

[HeavyAssault]

In the end if the deal suits you the papers will get signed or for some cash is exchanged. I for one focus on "my price" and what works for my budget. As long as I get to my goal the dealer can have whatever they make off the sale. I'm ITCHING to get to that point to close on a AS. I just need a little more time and it's off to the dealer lot to play the game.

[davcarv]

We've been to the AS in TNN. They had two Sports and four Flying Clouds. Flying Clouds are thier, 'Sweet Spot'.
Damn this addiction I've aquired. ....