Dealer Holdbacks on all models? - Mercedes-Benz Forum

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post #1 of 2 (permalink) Old 12-09-2005, 04:17 PM Thread Starter
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Dealer Holdbacks on all models?

Hi everyone,

Anyone know for sure if Mercedes dealers get holdbacks on all models they sell, or is it just selected ones (similar to rebates)?

I recently negotiated the price on a CLK350. The research I did showed Mercedes gets a 3% holdback on all its models, and there are factory->dealer rebates on models on some models in addition (none for the CLK). Anyway, when I was talking to the guy I indirectly referred to the dealership's cost being lower than invoice (i.e., holdback) but he seemed to indicate no further cost reductions below invoice applied. Anyway I took his word for it and after we agreed on a price (based on no holdback) I regretted it.

If there isn't a holdback on some models, I think I did well, but it looks like the holdback is irrespective of the model. Anyone know for sure?

Thanks in advance.
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post #2 of 2 (permalink) Old 12-09-2005, 09:38 PM
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RE: Dealer Holdbacks on all models?

The dealer has a "holdback" on all models. This is part of the manufacturer's pricing structure with dealers. Manufacturers also can offer what in the industry is called "advertising money" and there can be special incentive money if certain volumes are sold.

A few years ago, Mercedes-Benz North America, lowered the retail price markup from (I believe) 12% to 6% markup over the "invoice" price. I know that salespeople that have been with Mercedes dealers for more than a few years bemoan the fact that they now how to potentially sell twice the dollar amount to make the same amount of money.

I believe that at many U.S. dealers, the salesperson gets most of the markup over the "invoice" price. The dealership makes it's money on the holdbacks and other backend money.

Mercedes-Benz takes the approach most of the import luxury brands as well as Honda, and that is that they do not offer direct to consumer discounts such as rebates. The route they tend to take if they want to move certain models is to offer discount lease programs. It is a way to offer incentives without discounting the car.

Bottom line: If you got any significant discount off the price, feel good and enjoy the car!
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