By on March 17, 2009

Regular readers of this site know that I’m math challenged. To paraphrase Blanche Dubois (tragic heroine, not TV psychic), I have always depended on the calculations of strangers. Which is one reason I NEVER sign ANYTHING at a dealership without having my good friend Steven Lang give it the once over. Of course, that’s looking at the car sales paperwork from the customer side. Pity the poor Chevrolet dealer. Given the farrago of sales incentives, discounts, cash-back deals, financing offers, etc. how do they set a price? Seriously. Even a dealer who wants to give his customer the best possible deal has the devil’s own time establishing what that actually means. Check out this Top Secret(ish) Powerpointery and tell me that Roger Smith’s no-haggle Saturnalia wasn’t the way forward. Oh well, too late now. And, as we reported last night, there’s more post-bailout deals a brewin’. Good luck with that. [Thanks to you know who you are.]

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20 Comments on “Chevy Launches New Dealer Incentive Program. Huh?...”


  • avatar
    John Horner

    You know, if we didn’t have computers then we wouldn’t have a lot of the complicated, fast changing pricing there is in the world today. Airlines wouldn’t have dozens of different prices for the same flight and wouldn’t change them multiple times a day. The tax code would have to be 1/10th its current size. Home Depot wouldn’t change hundreds of item prices in every store, every day.

    Sometimes technological progress just makes it possible to do stuff which shouldn’t have been done in the first place.

    I would much prefer a new car marketplace modeled on the original Saturn premise. Good products, reasonable prices, everyone pays the same. But then you wouldn’t need nearly as many tactical marketing gurus doing their voodoo, eh?

  • avatar
    minion444

    Ok, I downloaded that mess. Is Lang available for me too.
    I shouldn’t need a lawyer and an accountant with me to buy a car.

    Why can’t they just give one net price and a low finance rate. Advertise the hell out of it and stop having the buyer feel like he either has to be a dick to the salesperson to get the best price or that the dealer is going to &#($ him.

  • avatar
    Gregg

    Paraphrasing Blanche who was paraphrasing Scarlet Ohara, maybe?

  • avatar
    Redbarchetta

    That document is proof GM has too many accountants and marketing hacks working there. It’s like an endless maze of financial mumbo jumbo with exceptions everywhere. I wonder if one of the highly trained engineers could easy figure out how much he should be paying for a car if he wanted to buy one from his own company.

    Anybody with an accounting degree want to give is a model by model break down of the max dicount, I’m getting head ache just looking at it.

  • avatar
    superbadd75

    You know, if we didn’t have computers then we wouldn’t have a lot of the complicated, fast changing pricing there is in the world today.

    The information is good. If it wasn’t as readily available, dealerships everywhere would be sitting on as much rebate as possible on every car sale. Not to mention the ability to look for the car you want before you even put your shoes on, and being able to find invoice pricing on the car you want.

    Besides, if there were no internet, there would be no TTAC!

  • avatar

    it’s this insane marketing that is killing GM. price a Honda, it’s simple, easy to understand and quick. hence they are able to focus on selling engineering, safety, reliability, and value. GM sells the deal and it’s so darn confusing as to alienate buyers and frustrate salespeople. not good.

  • avatar
    zoneofdanger

    This Powerpoint is proof that GM is the worst managed company in the world.

  • avatar
    creamy

    lads, these new incentives are quite simple.

    when the moon is waxing gibbous and orion is in ascension in the first quarter of the chinese new year and the dealer’s name begins with a vowel – having an even number of letters of course, as long as it is not eight – and is a water sign then they don’t have to let the customer know about the new incentives and can withhold said incentives (except on a tuesday in the last quarter of a solar cycle when the sun’s surface magnetism and solar irradiance are greatest, in which case the dealer must sacrifice a goat to the great space turtle and offer an extra $250 cash back to loyal customers who are willing to buy the same make/model they are trading in) however if the dealer’s name begins with a consonant or has an odd number of letters (or eight) then the dealer must buy an extra allotment of mid-sized sedans that month and will hopefully qualify for quantity incentives even if they are a fire sign and have recently communicated with cthulhu via chicken entrails because we all know how difficult that can be when the bank is breathing down your neck for that floorplan loan payment and the bloody customer won’t just buy the (eternally) damned car already.

  • avatar
    Point Given

    That’s quite something, pulls back the curtain a bit on some of the bucks the dealer gets that the salesman doesn’t know about.

    This is likely why every dealer has it’s own full time accountant who’s always busy. “Ok we sold an 08 Tahoe that was on the lot for 96 days, so I get which acryonms of cash?”

    Interestingly, the money off that we as a rental company get is quite different from all this nonsense. It’s invoice minus big number. big number comes from a volume requirement nothing more….that I know about.

  • avatar
    petrolhead85

    Wow. After downloading that mess I actually think I feel a little bit of sympathy for Chevrolet dealers. OK, maybe “sympathy” is too strong a word.

    I’ve got six years worth of university science and math classes behind me and even I can’t begin to figure out what applies to what vehicle. Although I think creamy is onto something…

  • avatar
    Redbarchetta

    OK I have one question for anyone who can make heads or tails of the thing. Do I(the customer) get a better deal if I buy from a dealer that has 100 or 125 of the car I want sitting on the lot or does the dealer get a better deal because he has WAY too many in stock. It’s not even like they are all optioned out different, they are ususally 20 or so all in line in white or tan or that ugly maroon color that have exactly the same trim package and options.
    Is this an incentive for people to buy cars from the dealers or for the dealers to buy cars from the mothership and lots of them?

  • avatar
    MM

    Brilliant post… nondisclosure agreements aside, it would be fascinating to see similar hidden incentives for other makers as well.

    It is amazing that GM has $5,500 on the hood of a $22K Malibu… yet are STILL moving 23% fewer ‘Bu’s year to year. How can it get worse? (We’ll see on April 2nd…)

  • avatar
    63CorvairSpyder

    ….another perfect example or evidence if you will of the “mystical maze” the Big 2.5 and their cohorts, the dealers have constructed to screw both the public, the salesmen and managers.

    I am sure there many out there, probably even some of the B&B who have driven home in their new car thinking they got a great rockbotttom deal but really left alot of money on the table.

    As an ex-carsalesman/mgr I am convinced that these programs are designed to confuse and befuddle both the salesmen and the buyers. Only the dealer and the accountant/comptroller really knows what they are making on a given sold unit and it is always more than the salesman is led to believe.

    And for certain, the salesmen aren’t getting paid commission on the lions share of the profit on most deals. You get screwed out of the pack, the doc fees, the holdback, the factory money and other goodies that the dealer is racking in.

    Rage vent…..off.

  • avatar
    Chris Inns

    I don’t think this is designed to be that confusing, the problem is that GM keeps adding more and more incentives to try and move vehicles, without first redesigning or removing existing ones.

  • avatar

    Couldn’t possibly be this idiotic if not on purpose, get real dude. the insanity portruding from the Ren Cen shows how totally incompetent these fools are and why a complete housecleaning is in order. they have had more than ample opportunity and have failed miserably. time to say goodbye to both Red Ink Rick and Mark LaNaive.

  • avatar
    Landcrusher

    It’s confusing on purpose. The industry relies on that so that in the end, they can change their minds and not pay up. It’s a barrel full of rotten apples. Been there, done that, gotta clue, left.

  • avatar

    How To Get a Free Vehicle
    Jim Dollinger
    Wednesday, July 11, 2007

    Did you hear about the customer who went into a GM dealership? He qualified for the following:

    AARP
    GM Discount
    Recent College Grad
    Active Military
    Olds Owner
    Resident of North Central Region
    GM Cardholder
    Father who was a UAW Retiree
    Owned Import
    Took Overnight Test Drive
    Incremental Allowance
    Bonus Cash
    Matching Downpayment

    Needless to say, the car was FREE. He passed, saying he’d prefer to pay for a Toyota. The sales manager came in for the close and offered Two On Us. Didn’t work. The car was already FREE. As a last ditch effort, the manager offered to remove the emblems.

    Customer left saying he’d get back in touch.

    Who is John Galt?

  • avatar
    NulloModo

    Some of that is pretty confusing, but some is fairly straightforward. Ford’s incentives are thankfully somewhat easier to understand, but here is the rundown for what most of that Chevy document is saying –

    You get manufacturer rebates or 0% financing, not both. There is nothing new about that.

    Aged inventory has extra cash on the hood. Again, nothing new about this, but as it is dealer cash, instead of customer cash, the dealer has the option to hold it if it can. I am not quite sure about how GM calculates which vehicles get it and which don’t, Ford does it in a much simpler way.

    The lessee cash is something fairly new. Basically since the domestics have severely cut back leasing, they are offering customers coming out of leases extra cash if they are willing to buy a new vehicle in order to keep them away from going to one of the import brands that still offer leases. This is also why the charts show this money being able to be combined with the other incentives.

    The whole IVC and family plan thing I can’t comment on, because again, these things are done completely differently at GM, and I don’t quite get what is going on.

    When it comes down to buying a car however, in most case it is mandated either by state law or by the manufacturer that the dealer has to give you all rebates, so, you don’t have to worry about the dealer keeping them. Dealer cash is the exception, but, it is much rarer than regular customer cash, usually isn’t as much, and is usually only put on items that are selling very slowly to give the dealer either some profit in case he has to cut the deal to the bone to move the unit, or to offer that last minute incentive to push a customer over the edge.

  • avatar
    Accords

    BUICKMAN..
    Good to hear from you… A Celebrity in the house as it were.

    You used to post on TCC.com, place has gone down hill. I wouldnt buy domestic either.. definately not after finding out the car is free.

    As for as CREAMY:
    Dude, I read two lines of your post.. and fell down laughing so hard.. I WAS CRYING.

    But your post makes 1000x more sense than the pp presentation. Thank you for the laugh and the sensibility.

  • avatar

    Accords,

    I remember you also and agree TCC isn’t worth even looking at. this site is one of my favs and am glad to see you’ve come on board.

    best…

    jd

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