Howard wrote:

> Bob wrote:
>
>>No one is forcing the dealer to give the car away. They have the choice;
>>either make the "deal" or not. Do you really think >they wouldn't sell it
>>for MSRP if they could get away with it? Undoubtably the car dealers favor
>>the negotiating process of >purchasing a car. If not they would set price
>>and stick to it.
>
> Bob,
> I don't really disagree with you. My point is, how low can a person in a
> business be expected to lower their prices and still remain in business.
> There's a reason for the MSRP.

It's completely artificial. For starters, the MSRP makes no account of
any holdbacks the factory is offering dealers.

<snip>

> Say the dealer paid $24,000 for that car. Sticker is $26,800. He sells for
> even $100. over invoice and he gets a holdback of 3% (I heard it was 2%)
> $720. He's got $820. What about transportation charges, cleanup charges, and
> technicians PDI labor(Pre Delivery Inspection - required), floor planning,
> advertising, rent, electricity, personnel, etc. OK, so cut the $820 in half
> (very conservative) and he doesn't have even 2% profit. How many businesses
> do you know that thrive on 2% profit?

Please, the dealers' only source of revenue is *not* just from the sale
of new cars. If you're going to cry "fair" on new car sales, how about
used car sales, parts & service? The dealer has economic muscle far in
excess of anyone buying just one car. What sort of deals do you think
Hertz & National get when buying their fleets?