Maybe he is confusing invoice and MSRP. At invoice, it makes sense (especially if they sell a warranty, etc.).

 

Yeah I was referring to invoice. On new cars, dealers buy them at MSRP and try to mark them up a little bit because nowadays you can go online and buy a new car straight from the factory.

I know exactly what they paid and how much they marked them up because I had access to the log books. Perks of the job.

 

I worked for/around new car dealers many years ago, unless things have changed radically the dealers bought them at invoice and tried to sell them as close to MSRP (what's on the window sticker) as they can. While I know percentages and margins have gone down over the years ('60s/'70s full size cars had markups of 20-22%, intermediates had 16-18% and what were considered compacts had 12% if I remember correctly), there is still a healty profit in a vehicle sold at MSRP (especially if you add back in the "floor-planning" incentives, the additional percentage that goes back to the dealer for each unit sold, dealer incentives/promotions, etc. Dealers would like for you to think they aren't making much at MSRP, but I don't think that is true. And you may not have seen all of "the log books". As late as 1995 dealers were more than willing to sell at $200-$250 over invoice as they still reaped the incentives, rebates, promotions, etc. on top of that and did OK, I have not bought a new vehicle lately so I don't know what they are willing to do today. All of that said, we still have to deal with the long awaited return of the Camaro and need to be aware that there are dealers that will take advantage of initial small supply situations and go for full MSRP (or greater) and there will be reputable dealers that will market in a more traditional manner that is "customer friendly".
Clyde