You knew that there had to be more money for those greedy car dealerships right? Well this is where we talk about the car dealer cash and secret money that manufacturers provide to help move cars and potentially make more profit for the dealer. Dealer cash is not published or shown anywhere in automobile advertising because it is not a rebate, cash incentive or special allowance for the car buyer. It’s exactly what it says it is “Dealer Cash”. That means that it is up to the dealer to use this extra money in anyway they see fit when they sell a car.
The dealer can add to their profit of each sale, they can keep dealer cash or it can be used to lower the price to the buyer when they purchase a car to make more sales. This extra money provided by the automakers is for the dealer to do as they please and the consumer or manufacturer has no input as to how it’s used. The car buyer is not entitled to this dealer cash and the only way that the car buyer can benefit is if the dealer makes an allowance or price reduction to the new car.
What is Dealer Cash?
Auto manufacturers have programs and contests from time to time for dealers as a way to sell more vehicles ad hopefully earn more (or buy more) market share. Some manufacturers use rebates to stimulate sales and some auto manufacturers use dealer cash and some use both. These dealer cash programs are usually to increase market share, but they are also used to help stimulate sales of specific model vehicles that have been slow sellers or vehicles that have excess inventory both at the dealerships and the distribution centers. This type of dealer cash program can also help to clear out an old model before a new model is introduced. This type of dealer program is not for specific dealers, but for every dealer in a region regardless of volume or size.
What About Car Dealer Secret Money?
Yes, there are more moneys for the car dealer to make money when they sell cars. Another one of these ways to add more profit is the car dealer secret money. Car dealer secret money is not holdback, we already covered that, but secret money is usually based on past sales, programs and contests. I wrote a post in December 2013 about best time for car deals that talked about a Honda program earned an extra $3,000 per car sold after they passed their December 2012 sales volume. This program capped them at 20% over past volume, but this is some substantial cash. In other words if a dealer sold 100 cars in December 2012 for every car they sold December 2013 over 100 units they received an extra $3,000 per car up to 120 units. Twenty cars times $3,000 is $60,000 and that’s a lot on money.
This car dealer secret money program was not announced to the public or the media, but it was leaked on the web. I am sure most of the dealers used this money to make additional sales in any way possible to earn that extra money, but the facts remains that buy a car at the right time can save you money. I will talk more about the best time to buy a new car in this car buying guide.
The above was just one example of a program or contest hosted by automakers to earn car dealer secret money. These programs are standard operating procedure, they are used to move inventory and earn market share, but they can help you save some extra money. We will try to keep you updated on the newest car dealer cash and secret money programs through updates as we become aware of them to help you save more when you buy a car.