FYI, I got a glimpse of the Dealer Holdback on my 2016 Prius 3 w/.ATP (dealer invoice including accessories,Toyota Dealer Advertising fee, and Delivery, Processing, and Handling (DPH) fee was $27,964). The holdback was $657 or 2.35% of the vehicle's invoice. So as I understand it dealer profit on the vehicle sale is Sale Price - Dealer Invoice + Dealer Holdback. So if you purchased the car at the invoice price, the Dealer Holdback would be the actual dealer profit. There as another holdback item called "PPO Holdback" that was $93. Not sure what the PPO holdback is all about. p.s.: I will be picking up my new Prius 3 tomorrow!
PPO = Post Production Option... which are any accessories that are added to the car after it is built such as Carpet Floor Mats
Thanks for that. In the case of my invoice it actually states "Note: Holdback amount includes PPO holdback". I think this mean the PPO holdback is actually rolled into the Dealer Holdback, although for whatever reason they broke out the Post Production Options (i.e., "accessories") contribution to the Dealer Holdback as a separate line item. Perhaps the holdback percent of invoice is different for Accessories vs the Factory Production components, hence they are broken-out separately.
being in another business as a middleman between mfg and consumer for over 30 years, i can testify that there are a million ways to skin the cat, and no one outside each relationship will ever know dealer profit per car.
Yes, I can only imagine. The main takeaway is dealer profit is greater than Sale price - Invoice cost. The Dealer Holdback is another source of revenue, although honestly the dealer has other costs of sales (building costs, utility costs, employee costs, etc.) which erode the "profit" produced by this simple math.
right. you're talking 'gross profit' before expenses. the irs sees net profit after expenses. and that, only from honest dealers, which pretty much means zero. the great thing about posting prices paid here, is the window of information becoming available to potential purchasers. (not great for dealers) it's not about how much the dealer is making, but the best price you can get on a car. and knowledge is power.
That is the .35% extra on the hold back percentage. Toyota hold back is 2% Yes the hold back helps dealers pay for everything from porters to receptionists. Plus most salespeople don't get paid from hold back. Just remember that.
