How much does a Mercedes dealer make per car?
We uncloak the REAL dealer cost
For those of you who have been Benz fans for as long as us, you remember the days when there was 12% percent markup on every car in the product line.
Then in 96 the new E-class appeared and all the dealers started feeding us the strory that MB was screwing them and cutting their margins down to 7% and that they could no longer give the healthy discounts of the past.
And we BELIEVED them...
What they neglected to tell everyone was that the only people getting screwed, were the MB dealer salesperson and the customer.
Their commissions were being cut and our discounts were less, but the dealer principal was still making the SAME profit as before.
How did they get around it?
What MB did was lower the MSRP to invoice profit but ended up backending the holdback...So what used to be 12% straight has turned in to 7% to invoice and a whopping 5% dealer holdback, hence a 12% percent total profit to the dealer.
There are some stipulations to the dealer for them to collect the full amount, like maintaining a certain CSI (Customer service index) score (over 97%) and participating in dealer center upgrades, etc.
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