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Comment by bluGill | Hacker News Reader

Everyone checks KBB, edmunds, and all the others before buying a car. Thus everyone knows exactly what the dealer is paying for the car before walking in. Nobody is willing to leave the dealer a reasonable profit margin or the salesman a living wage. There are plenty of other dealers and nobody is loyal so odds are they won't see you again no matter how good the experience is (if you are a corporation buying for a fleet you get different service). As such dealers look to other places to make money.

If people would decide to allow the dealers a reasonable profit margin things could change. Right now though dealers just see a sucker when someone does that though. I'm not hopeful things will change, but that is the first key.

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I personally don't think what the dealer paid matters. If a car is desirable, a few are available, we're going to sell for as much as possible.

If a car is undesirable, and many are available and we need to move them, we will sell them for a loss.

I don't blame people for buying cars we sell for at a loss (although sometimes I wonder why these people don't stop and wonder why this car is so heavily discounted). And they shouldn't blame us for charging more for something many people want and is in short supply.

You could probably make a post on dealer allocations by manufacturers. Dealers are effectively obligated to move the cars sent to them, the crap and the gold.

Then there’s the gold that only gets short-listed to customers that have been long-time customers and sometimes helped you move the crap (but that’s probably only on the higher-end of things).

> Thus everyone knows exactly what the dealer is paying for the car before walking in.

Myth, I think. That information (the real wholesale cost) is not public.

And hard to genuinely calculate with the Hollywood accounting that goes on with promos/rebates/incentives for the dealers themselves.

How do you allocate a $x promo for selling Y cars in a month, when some of those cars were unpopular crap and others sold themselves?

Beyond even what you mentioned, there's crazy payment bonus (holdback) structures based on so many variables it really doesn't make much sense to try to figure out what a dealer paid for a car.

A dealer for example will get more back per car sold, if they have the most modern building style. (a way manufacturers entice dealerships to remodel to latest corporate recommended aesthetics/experience).

They also pay more if your dealership is stand alone. A joint VW/Audi/Porsche dealership will end up paying more for cars (getting less money back technically) than a standalone dealership.

I could go on and on about the various metrics for getting more or less rebate money back.

Would you really pay more for your car because a dealership paid more because they hadn't remodeled recently? Of course not. You compare to what others are doing and that should be enough, unless you really want to try and randomly guess just how low they might go that day and walk and try again everywhere?

The cost is known, dealers leak this.

As others have said things like holdbacks and incentives are not known. (And since incentives depend on number sold they can't be known) Still buyers have good information and take advantage of that.

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