How many times have you heard the “Invoice” price of a car is what the dealership pays for it? This has been said for decades since the internet started posting dealer invoices. Obviously, manufacturers had to do something to keep the dealers profitable. That’s when they started decreasing the margins consumers see from MSRP to Invoice and adding more to the back end. Over the last 20 years the margins from MSRP to Invoice went from 16% down to 6% and some even 4% on many brands. Has this extra 10+ percent disappeared? Of course not! This is why if you know what you’re doing when negotiating the price of a new car, you’re able to work a deal 5% to 10% behind the so-called invoice price.
What really pisses me off though is the greedy getting Greedier! For the last 3 years Land Rover/Range Rover dealers have been making a killing on all of their models. Those people who decided to lease a new Range Rover instead of purchasing one really paid a premium with all the back end profit dealers make. (Btw, all the Range Rover lease deals I’ve had in the last 3 years have saved many customers $200 to $500 per month off the lease price they were quoted while still paying MSRP). For the 2016 models, Range Rover decided to cut their margins between MSRP and Invoice and put more in the back end for dealers to profit off of. This helps them continue selling at high profits while offering customers minimal discount because they say they have less to work with. See this very transparent proof below with the dealer’s invoices on a 2015 and 2016 Land Rover LR4.