On 9/24/2015 3:31 PM, Frank wrote:

snip

I have it on good authority that my Subaru dealer makes more money off
of selling used Subaru's than he does new ones.

Subaru and Lexus had the highest resale values across the entire line
for 2015.

Used cars have been more profitable for many dealers than new cars for a
long time. Not just because naive buyers drive up the cost of used cars
but because the dealer is more likely to be able to sell an extended
warranty.

For 2014, four of the the top ten vehicles for resale value were
Toyotas, with the #1 model retaining 70% of its value after five years.
And that's 70% of MSRP, not 70% of the street price. Toyota's typically
sell for 10-20% under MSRP, so the percentages are actually much higher.

Toyota keeps saying that they want to stop the big promotions that lead
to such a big disparity between MSRP and ASP (average selling price) but
they never seem to be able to have the will to achieve it because it
would mean reducing production. It's like oil producing companies saying
that they need to cut production to keep prices higher, they don't do it
because they don't want to lose market share and because even at $40 per
barrel oil is enormously profitable once you've paid for all the
infrastructure.

I also think that keeping high MSRPs is partly political. If they
reduced the MSRP and reduced promotions then they would come under
attack by the government (even though they make a large percentage of
their vehicles in the U.S.).

I also get new at under invoice.

Does anyone pay over invoice?

One relative bought a Camry when there were three separate incentives
going at the same time. $2000 factory to buyer, $1000 for current Toyota
owners, and $500 for cash instead of 0% financing. And that was in
addition to the discounted price from the dealer through USAA (generally
better than the Costco discounts).