Ferrari Mailing List: Re: The clYde testimonial

[Jim Conforti (lndshrk]

Hans - when did you leave being a dealer, and WHERE did you
work (what geo. area).

On 2/2/2010 6:26 PM, Hans E. Hansen wrote:
> Sorry, Ken, but that's not even close.  I was a Chevrolet
> dealer for nearly 30 years.  Of the profit on a typical sale,
> only a small portion is attributable to the dealer reserve
> on the note.  In fact, most of  the paper written these days
> is low interest "incentive" type of financing.  On those 0%
> advertised rates, GMAC would give us a flat $50 for the
> contract.  Period.  That's all we made on the paper.  Excepting
> that $50, ALL of the profit was made on the sale.
> 
> Hans.
> 
> On Tue, Feb 2, 2010 at 5:17 PM, Paul K Rentiers <rentiers [at] me.com> wrote:
>>
>> On Feb 2, 2010, at 11:11 AM, Michael James wrote:
>>
>>> Well, this is where Clyde and I part company, slightly - I realize that the 
>>> Dealership must make a profit if it is to stay in-business.
>>
>> Not really. Perhaps excepting exotic cars, but in mainstream auto sales they 
>> are not selling cars. They are selling paper.
>>
>> Michael buys a $25,000 Chevy and the helpful sales manager reduces the 
>> payments by spreading them over 5 years. At 12%. Michael buys a $33,367 
>> note. The dealer then delivers the car, and flips the note to MegaAcceptance 
>> at a discount. Car gone. Profit turned. The delaer makes what he can on the 
>> car sale, but really doesn't care about the price too much as long as he 
>> doesn't lose money. It's the note he is after.
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