Employee Pricing

[BigMikeVA]

The truck I ordered is coming in at the end of this month and the way GM truck month is set up I would only be looking at a $1250 cash rebate with my employee pricing. MSRP is about $47k, Employee pricing before rebates is low $42k and Truck Month pricing with rebates is a little under $43k.

Does anyone know if employee pricing is negotiable? Or if anything is negotiable past the GM Truck month pricing? Been seeing alot of posts about people getting 7-8k if not more off MSRP, just want to make sure I'm getting the best deal I can.

[furb30]

I know that employee pricing is not negotiable at all. I save 6k on my last truck in june of 2013. I'm saving 6500 on my new truck that I order in January 2014 if it shows up.... That's before rebates.

[BigMikeVA]

So if employee price is non-negotiable do you know if that is from GM saying in order to use employee pricing it has to be that exact price? Or is it because there is no room to negotiate underneath it? I read that the NBS is 4-5k more profitable for GM than the last, and I know a dealership still makes money when they sell a vehicle at employee pricing so I'm just curious of how much of a cushion a dealership has. Are they only making their money on holdbacks and for moving a specific number of units or is their a couple grand between what they paid and employee pricing?

[TJay74]

none, if you want employee pricing you take the offer, otherwise try and get a better deal on your own. The dealer sells you the truck at invoice with no more than a $75 title processing fee, dealer only makes holdback on the deal (around $1200-1500 on trucks) and that is it unless you buy extended warranty or use their financing thru the dealer.

[lefty421]

I just purchased a truck using employee pricing, and paid less than employee pricing.

 

Every dealer I went to, when looking at a truck, I had them print out the GM invoice sheet, clearly showing the MSRP, Supplier Pricing, and Employee Pricing, along with destination charge, etc...

 

When I would ask them for a OTD price on the truck, they all started with the stated employee price on the invoice, then would add their various documentation fees, etc... and figure tax, and give me an OTD price... All of their various fees were different between dealers... one dealer quoted a $224 doc fee, while another quoted $166.. etc... so their fees vary. You can easily get them to match the other dealer's lower doc fees. All of these dealer built-in fees are pure profit for them and completely negotiable.... After I got them to match the other dealer's lower fees, I would ask for their new (lower) OTD price. Then you mull it over and say " Knock another $300 off and throw in a bedliner, (or whatever you want) and you have a deal!" or something similar. The dealer will almost always bite on any counter offer like that to make the sale. I was able to get the dealer to throw in a spray-in bedliner, and also replace all the black door handles and mirrors with the chrome ones, while getting them to knock even more money off the bottom line. So yes, you most certainly can negotiate even further off employee pricing.

 

Contact as many dealers as you can, the more you contact the more likely it is that you will find one willing to deal at that time. There will always be a dealership, a sales manager, a salesman, etc... that just needs 1 more sale to get that bonus, free trip, GM award, etc... The more you contact the more likely you will find the deal you are looking for. I ended up driving 5 hours to go to the dealer that offered me the "best employee price".

[ricci151]

Employee pricing is NOT a good deal. You can do better. Find out what the dealer invoice is. Then ask them what there holdback is. Minus that from dealer invoice. If you ask they will show it t you. Thats your number. Then minus your rebates. Most dealerships have GM coupons as well and they dont advertise it. These coupons can be up to 1200 depending on how many they have left. And you will always get your best price at the end of the quater. Dealer may not make money on selling the truck but they have really hefty incentives from GM if they meet their quaterly quota.

My MSRP was 51,700. I paid 41,900 not including trade. Its all about timing. And you wont get a good deal if you order from GM

No dealership is going to advertise or offer you their bottom price initially. FACT

[TJay74]

If your dealers are charging more than $75 for the dock fees then they are scamming you, that amount is set in the GM Employee program.

[nvrnuf4me]

I would have to agree with Chevy all the way. Dealer pricing is not all that great. I got a really good deal on my '14 Silverado in January through incentives and negotiations (39,900 list - 31,500 paid). However, my wife was really iching for a new car and was not willing to wait until next month. We bought her a '14 Malibu using the dealer pricing just this last weekend. Per invoice, we were only going to recognize a $750.00 savings. We worked with our sales person for two days before making the deal. It was tough, but we were able to get a little more off of the car.

 

I suppose the moral of the story is, unless you are comfortable with negotiating or ok with just walking away, I would say that dealer pricing is not a good thing and you should wait until next month to purchase in order to take advantage of more incentives. If you do not mind going toe to toe with your sales person and their manager in the pricing ring, then maybe you will be able to accomplish what lefty421 was able to and get a decent deal with freebies.

 

On a side note, I will say that our sales person did mention that it would be better to wait until June, July, and Aug to purchase a truck due to the amount of incentives offered by GM to clear out the current model year.

[lefty421]

I'm not sure what you guys mean by 'dealer pricing'.... I don't see that anywhere on a GM invoice sheet.

 

There is preferred pricing, also called supplier pricing, and then there is employee pricing.

Supplier/preferred pricing is basically invoice price and is not a good deal, and no amount of rebates/incentives will make it a good deal. Employee pricing is 4% under invoice, and combined with factory incentives/rebates and negotiating from there will get you a pretty good deal depending on your skills.

 

As far as employee pricing, In addition to any holdback the dealer gets from the factory, GM automatically lowers the price a dealer has to pay for that vehicle by 5% when somebody buys it using a GM employee discount.

 

In other words, a dealer pays less for a truck that is sold to an employee than one that is not.

 

Dealers have to pay for the vehicles on their lots. They finance them and pay interest on that financing until the truck is sold. When the truck is sold, they also get holdback and other kickbacks from GM.

 

For instance.. A truck with an MSRP of $45,000 is taken possession of by a dealership. The dealerships true cost on this truck is say $30,000 from GM. They finance the $30,000 and pay interest on this financing until the truck is sold. When the truck is sold, they pay off their financing and pocket the differance.

 

Now when a dealership sells a vehicle to a GM employee, GM automatically lowers the dealers true cost of that truck by 5% of MSRP, in the form of another kickback. When the dealer sells a truck to an employee, GM sends the dealer back a check for 5% of MSRP.

 

So if a dealer sells the above truck to a non-GM employee, their cost for that truck is $30,000. If they sell the same truck to a GM employee, GM lowers the true cost of that truck another 5% of MSRP or another $2250.

 

So a dealers true cost on that truck would be either $30,000 if sold to a non-employee, but only $27,750 if sold to a GM employee. Which truck do you think that dealer is going to be willing to sell for less $$$ ???

 

A dealership will always BE ABLE to sell a vehicle to a GM employee for less than they could that same vehicle to a non-employee, but that doesn't mean it always happens that way. As we have seen, many non-gm employees are good negotiators, while a GM employee may not be and they may end up getting a worse deal than the non-employee, but that isn't because the dealer couldn't give them a better deal, they just didn't.

 

As we all know, dealers have more and more tricks to hide their true costs, but with the way GM currently prices their vehicles to dealers, they are currently able to offer the best deal to those that get employee pricing.

 

The fact that the factory lowers the true cost of the vehicle by 5% means the dealer has an additional 5% to dip into when selling to an employee, that they just do not have when selling to a non-employee. Whether they do or not, is up to the negotiating skills of the buyer and willingness to do so by the dealer.

 

If you don't qualify for employee pricing, then you will not get the best possible deal. If you do qualify for employee pricing, then you still many not get the best deal possible, but you are likely to get a better deal than if you weren't an employee.

 

My dealer threw in his 5% kickback as yet another dealer incentive/rebate that combined with all the current factory rebates in our deal, which is how he was able to beat the next best 'employee pricing' by almost $2K. His incentive/rebate package was over $6,500 in total, compared to the other dealers who were only offering the $3900 in factory (presidents day) incentives.

My dealer could not have thrown the extra 5% kickback in had he been selling to a non-employee, as he wouldn't' have been getting that kickback at all.

 

Again, employee pricing is every bit as negotiable as any other pricing, and should only be a starting point for negotiating. It just gets you down to a lower starting point than starting at supplier/preferred pricing, and actually gives the dealership more room to deal than if you aren't using it.

[lefty421]

 

On a side note, I will say that our sales person did mention that it would be better to wait until June, July, and Aug to purchase a truck due to the amount of incentives offered by GM to clear out the current model year.

 

Completely true! Cars don't get more expensive as the model year goes on, they get cheaper.

 

But the problem with waiting till August, is will you be able to find exactly what you are looking for at that time...? if you will take anything available, then waiting will surely pay off. If you think you might have trouble finding exactly what you are looking for, then better start looking early. The truck I just purchased was the only truck within 400 miles of me that had exactly what I was looking for.... If you are going to be picky, then don't wait too long.

[Cordovakid]

Excellent explanation of the process, lefty421. Just one thing - I thought dealers were absolutely NOT allowed to offer price reductions, "freebies", etc. when using the employee purchase program? Or, perhaps, would the 5% kickback be considered an "incentive", and not a true price reduction, and therefore not a violation of the program?

[nvrnuf4me]

I'm not sure what you guys mean by 'dealer pricing'.... I don't see that anywhere on a GM invoice sheet.

My apologies for the incorrect terminology. I did in fact mean to say "supplier pricing", not dealer pricing.

 

Also, as stated just above, great explanation.

[lefty421]

Excellent explanation of the process, lefty421. Just one thing - I thought dealers were absolutely NOT allowed to offer price reductions, "freebies", etc. when using the employee purchase program? Or, perhaps, would the 5% kickback be considered an "incentive", and not a true price reduction, and therefore not a violation of the program?

 

I have no idea what the dealers are allowed and what they aren't. But I am absolutely positive that they have much much more leeway in "making the numbers work" than they let on.... and certainly more than what other posters here seem to think...

 

For instance;

On my contract,whatever dollars the dealer was throwing into the deal was apparently lumped into a single dollar amount and given as an incentive (credit) called out as Dealer Allowance on my contract. this was above and beyond the normal factory incentives. On my incentive/rebate roundup sheet, my incentives totaled over $6.5K. The regular $3900 at the time for the presidents day offers and an additional $2600 Dealer Allowance incentive. This was in addition to employee pricing.

 

There was also no line item for the destination charge anywhere on my contract. Was it also just lumped into this mysterious Dealer Allowance credit also? I have no idea...?? For all I know, this mystery Dealer Allowance could have been the %5 kickback and also the destination fee... Again, I have no idea.

 

Like I said earlier, I made them an offer for the truck I wanted plus the accessories I wanted. They accepted the offer. As long as the bottom line worked, I didn't really care how they got there. In getting to that bottom line, my contract was apparently structured in a way that others here are saying isn't possible....

 

Which again, leads me to think that they can do a lot more on pricing and working the numbers than they let on....

 

I also know for a fact that my deal was contingent on my employee pricing illegibility. If I didn't have a valid GMS authorization code, then they couldn't do my deal. There was actually a few tense moments when the computers showed my GMS code had already been used, but a quick call to GM customer service cleared it up and the deal was back on...

[ricci151]

This is where people pay to much. You dont want to go in having an offer or a price in your head that you want to pay.You need to do research in advance. ANd this is by knowing what the dealer invoice is and what there holdback is.

[lefty421]

Not sure I understand... By doing research, you are able to determine before hand what would be a good price... You go in knowing this and don't sign until you get your price, or less. That's what I did. I knew what would be a good price for the truck I wanted before I stepped foot in the dealership.