manufacturers to the dealer, intended to help move the metal. They do have to be disclosed, and finding out what they are is critical if you’re to get not (^)
the best deal possible.
Some of the bigger sites like Edmunds.com and TrueCar.com list these, butyou’ll have to give them some personal information—which they may sell to
dealers—to get the information. It is important to know what the incentivesare though, as they can run into the thousands of dollars.
As most of the relationships I have with my fleet managers go back over adecade (and they’re competing for my business with others), there’s trust
that they’ll let me know about most incentives without prompting. But evenhere, there is a particular type of incentive that makes life hard for everyone
—consumers, brokers and even the dealer. It’s called the “stair step,” andbasically, it pays the dealer retroactively for selling a certain number of a
particular model in a given period of time—say 20 cars over a month or 100over a sales quarter. And the cash back to the dealer goes up as they hit
higher levels. Subaru, Honda and others use stair steps to motivate dealersto grow and sell more.
The challenge is that it distorts the market; the pricing offered at one dealer(often a higher-volume store) can be lower than at others, because that
dealer has already reached (or is about to reach) a stair step level that willpay him back perhaps $500 or $1,000 on each car. This means he can sell (^)
his cars cheaper than the dealers that haven’t hit the same stair step andstill make the same profit—or more.
barry
(Barry)
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