A friend just bought a brand-new Everest. He is in DBN and eventually went with a deal offered by (Motus?) Ford JHB. Ford in DBN could not compete.
What the dealer is doing is they get a kick-back from the finance house for signing up clients with "in-house" finance. They use some of this kick-back to discount the price of the vehicle below what other dealers are offering.
Moral of the story, don't just trust the price you see on the manufacturers website/autotrader. Phone around to all the dealerships and get them to compete on pricing. Tell them you plan to finance the vehicle, and they will factor this into the final price.
There are so many things that come into play when it comes to getting the best price on a vehicle from the dealerships.
On new vehicles the dealership may have a vehicle that has been in stock for 6 months and has had 2 price increases of 3% in the last 6 months. So if the vehicle is on their floor with a retail of price of R 641,000.00, and it has a 10% margin, that means they stocked the vehicle for a price in the region of R 550,000.00. If they keep R20k they can give a discount on the vehicle of R70k!
Most if not all large dealerships also have what's called a floorplan with the banks. This will apply to new and used vehicles. They don't buy the vehicles in cash. Imagine a dealership with 80 new vehicles in stock. Thats a lot of money to pay cash for cars! They don't do that.
The floorplan can also be to your advantage.
The floorplan is a revolving credit plan with the banks. There may also be an agreement where if a vehicle is sold within 30 days of it being stocked the dealership will not pay interest on the vehicle. However, vehicles that have been in stock longer than 30 days will then gather interest and the dealership must pay x amount per month. The longer it's in stock, the more interest the dealership pays.
What's better? Try close the deal and keep R20k on the vehicle or rather sell it for cost to avoid paying another R10k next month for the interest?
If I was a DP in that situation, I would cut my losses. Give it to the client at cost provided we do the finance through our dealership. That way we will get maybe R15k incentive from the bank and avoid further interest on the vehicle while its in stock. You then also take smash n grab, tracker, towbar, VPS. So we make a little incentive, some profit, and report an extra vehicle sold to the board. We happy. My boss is happy. And the client is happy they got a good deal.
Bottom line, shop around!!!! I have said this many times and I will keep saying it. Dont just assume the offer in front of you is the best offer. Always keep yourself open to the idea that there will be a better deal somewhere.
It is the same with the finance. Shop around.