Originally Posted By: Patman
That is definitely true with GM, as I was able to utilize the GM employee discount (from a family member) by ordering my Corvette, but that same discount would not apply to cars sitting on the lot, since the dealer already paid a higher price to acquire that car then they would if they placed the order with the employee discount in place.
They must do it differently in the States than they do in Canada. Employee pricing is the same here for the same car ordered or picked up off of the lot, although there may be other factors that impact the out the door price. US dealers pay the same amount for the car, but they get a check back (actually credit) from GM when they sell it to someone who used the GM Family First program to compensate them for selling at a reduced price. For a car in limited supply like a Corvette is at times, a dealer may not want to sell a lot car for the GM employee's price when he knows he will likely get more for it from a regular customer. Plus he may have had flooring fees that an ordered car will not incur.
Another factor is you are usually able to stack discounts and rebates that are in effect when the car is delivered on top of the employee discount. For a car you buy on the lot, you know what they are, but they may be different, more or less, when you take delivery of an ordered vehicle.
I generally like to order a new car to get exactly what I want, and avoid paying for options I have no use for. The last two trucks I purchased were off of the lot because I was able to stack discounts and get close to $10k and $14k respectively off of list price - something I couldn't have done with a special order because a number of the rebates and discounts were expiring.
Used to be the GM discount was significant - it amounted to dealer invoice less holdback, plus the dealer was not allowed to add additional dealer markup in the form of excessive Documentation Fees, prep, "Desert Protection Package", etc. Now, with everybody having access to dealer invoice on a car via the internet, the discount (because the margin between list price and invoice is much less) has shrunk, with dealers getting a lot of that shrinking margin back secretly through the back door.
I've purchased 10 GM vehicles in the last 21 years using the employee discount, with an additional Chevy truck using USAA buying services, which beat the employee price by about $300 even after factoring in the $500 doc fee. That was a one time deal I have been unable to repeat.
Least we cry for the dealers because their margin between list and invoice has shrunk, be aware there are massive amounts rebated back to the dealer from the manufactures. Dealers that order lot cars with high profit option packages get more back, dealers that meet volume levels get more back, dealers with outstanding customer feedback reports get more back. It's a way dealers can sell cars for less than "cost" and still make money. There is no way I've found to determine these refunds to the dealer and it's a way in the information age to keep the consumer from knowing the real cost of a vehicle. Owners are able to use this to also reduce salesmen commissions by not revealing the true margin on a vehicle sale.