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This gets a little gray, but turns out good....(long) Posted by Mike Lynch [Email]  (#81) [Profile/Gallery]
(more from Mike Lynch) on Fri, 19 Aug 2005 10:48:53
In Reply to: Mike -Lynch Re: GM Emplyee is no hassle no haggle..., Rafe, Fri, 19 Aug 2005 07:17:12 Members do not see ads below this line. - Help Keep This Site Online - Signup |
The GM Employee price vs the MSRP is a pretty fixed thing, The GMS price being roughly 10% less than MSRP throughout GM and substantially less than invoice. What's gray and slippery is the amount of the incentive or rebate. When Saab/GM drastically lowered the price with the GM discount the incentives/rebates where reduced somewhat. The net effect for being that the new actual transaction price wasn't drastically lower than the previous price after negotiating with the dealer and getting a larger pre-GM Employee rebate/incentive.
Speficially, and this is why we've been out of 9-2X Aero sticks for so long now, the pre GM Employee deal was $6,000 incentive pre-tax, plus $1,000 GM Bonus cash pre-tax, plus a dealer could give another $1,000 out of his profit for a total discount of around $8k. This was in May the month before GM Employee pricing. When GM Employee Pricing came along in June the $1,000 bonus cash went away, the dealer discount went away, so that's $2,000 in total discounts the consumer didn't get, but that was offset by the 10% ish GM Employee discount. What evened it out pretty much was that the $8,000 in discounts in may was pre tax, where as the continuing $6,000 incentive part of that reverted to a consumer rebate for June and GM Employee Pricing, ("dealer incentives revert to consumer rebates for GM Emplyees") and became taxable. In SoCal thats 7.75% times $6,000 rebate is $465 in tax added to the trans action. The net effect on a $32k list 9-2X was the total out the door stayed almost the same, but only for the 9-2Xs and their massive taxable incentives. The rest of the Saab line went down substantially as the effect of the rebate being taxed wasn't so great.
From time to time GM will promote an Employee only incentive for a particular model, which is what was going on in May, there was an extra $1k for GM Employees, so $6k normal incentive, plus $1k Bonus Cash, plus another $1k GM Employee Incentive, plus the 10% (roughly $2.5-3k) GM Employee discount, or around $10k off, less a little sales tax. Well let's just say the big winners were GM Employees who bought 9-2X Aeros in May.
In sum, the GM Employee price scheme, even with slightly reduced incentives, was the best net transaction price offered year to date and some of the best pricing ever. And the beauty of it was, and this can't be over stated, is that it was *perceived* as such by the average consumer and was indeed true. The GM Employee Price is also a no hassle no haggle format, another big plus for the consumer and another big part of the consumer consciousness about GM Employee Pricing. That's why it was so successful, because it was true and because it was easy for the consumer. Give a customer an inentive and a discount and they're still suspicious, the dealer is still holding all the cards face down. Give 'em genuiune GM Employee pricing and a rebate and consumer confidence goes way up as all the cards on the table are face up.
, Thu, 18 Aug 2005 13:36:51, Fri, 19 Aug 2005 10:20:26, Thu, 18 Aug 2005 14:08:45, Fri, 19 Aug 2005 10:48:53 <-- Viewing This Message
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