One other thing to consider -- the dealer also makes money at least five other ways:
- Dealer-added options
- Service plans
- Your trade-in
- Dealer financing
- Dealer fees
If they don't have dealer-added options, you have no trade-in, finance elsewhere, and they have reasonably small standard fees, then yes, I agree with this thread.
That said, some fraction of folks stating that they got a significant percentage under invoice are likely to have not noticed that their dealer shifted the profit to one of these other areas. For example, they may have traded in a vehicle at far less than they could have gotten elsewhere. Even if you sell at wholesale (the max of what the dealer should normally be willing to pay...but often they offer less), they may be able to flip your trade for a 1 or 2k profit. I have a friend who sold cars for years who stated that this is where his dealership made most of their profit.
Furthermore, many folks who look at their paperwork carefully notice that the dealer financing paperwork doesn't always agree with the deal that they thought that they negotiated.
- Negotiate each aspect of the deal separately
- Never pay for dealer-added options. Tell them they have no value to you. If they resist, tell them they can remove them. They won't.
- Consider selling your trade to a private party instead. You will get closer to the retail blue book value...and craigslist is free. An extra 1 or 2k here is worth a heck of a lot more than an extra 1% under invoice.
- Don't finance - buy a car that you can afford to pay for with cash on hand. It is a depreciating asset...and financing depreciating assets is usually a bad idea.
- If you do need to finance, shop around. You can usually do better than the dealer...unless there is a special manufacturer promotional rate. Also, if you need to finance for more than 48 months, you are probably buying too much car for your current financial situation.
- Check your paperwork carefully...and ensure that it agrees with the deal that you negotiated.