How Does Employee Pricing Work?
Car companies have all sorts of ways to bring customers into their dealerships, with one of the most common tactics being “employee pricing”. Employee pricing is what you would expect it to be, it’s the idea that any customer can walk into a dealership and pay what an employee of the dealership would pay for a car. While it’s a sales tactic that has been around for years, is it truly a great deal for the customer? In this article, we’ll try and answer that question for you.
What is Employee Pricing?
Employee pricing, which is also known as invoice pricing offers a non-negotiable price on a car by reducing the MSRP. The MSRP is reduced to a point where the dealership is no longer making a profit margin on the vehicle. Not all manufacturers offer employee pricing and most of the manufacturers who do all treat it differently. Let’s look at how three different manufacturers approach employee pricing.
Ford Employee Pricing
Ford has been offering employee pricing for the last 15 years and claims that any customer can pay the exact same price as any Ford employee would on a vehicle. However, Ford only offers this promotion for a limited time and it’s usually during the summer months. An example of a deal you might find with Ford employee pricing is on a new Ford Escape with an MSRP of $29,000 and an “invoice price” (what the dealer pays) of $23,000. With Ford’s employee pricing, you may get 2% off the invoice price and that could save you around $6,000 on a Ford Escape.
GM Preferred Pricing
GM approaches “employee pricing” a little bit differently than Ford in that they are more selective in who qualifies for the special pricing. In order to be eligible for GM Preferred Pricing, you need to be an employee of an eligible preferred pricing company or the spouse of an eligible employee. Similarly to Ford, it’s usually 2% less than the invoice price. The other thing with GM’s preferred pricing program is that they don’t advertise it in commercials, so to see if you qualify ask your employer or your spouse’s employer if this is something you qualify for.
FCA Employee Pricing
Fiat Chrysler Automotive (FCA), which owns companies like Dodge and Jeep work similarly to GM where discounts are available to employees and affiliate companies. However, FCA extends this promotion so everyone has access to their special employee pricing. Employee pricing with Fiat Chrysler Automotive can go below 5% of the invoice price
Pros of Employee Pricing
- If you’re a loyal customer to a particular car manufacturer, employee pricing can be a great way to save money on a vehicle
- Most people don’t enjoy the negotiation process of car buying, with employee pricing, you don’t need to do any negotiating as you’re already saving thousands of dollars
- Employee pricing often makes the car buying process much more simple and direct
- Depending on the dealership, you may be able to combine employee pricing with other promotions like $0 down
Cons of Employee Pricing
- Not all vehicles qualify for employee pricing, so if you have an eye on a particular vehicle it may not be eligible for the discount
- Usually, employee pricing is only available on new cars, costing you a bit more money
- If you’re confident in your ability to negotiate, you could potentially get a better deal that way
- Employee pricing is not year-round, meaning you may have to wait a while until the promotion starts
How to Save on a Car Without Employee Pricing
1. Do Your Research. Don’t buy a vehicle that doesn’t suit your lifestyle well just because it has a discount! You need to decide what type of vehicle makes the most sense for your lifestyle and then narrow down your model options. It doesn’t matter the discount, if a vehicle doesn’t work for your lifestyle, it’s not going to be worth the money saved.
2. Get Pre-Approved For Financing. Getting pre-approved and knowing what vehicles you qualify for before you go into a dealership will make the car buying process so much easier. Knowing exactly what you can afford will save you time and tell the dealers that you’re really in the market for a vehicle. Get pre-approved for financing right now with Car Loans Canada!
3. Consider Buying a Used Car. As we discussed earlier, employee pricing is usually only available on new cars. Used cars however are a great way to save money on a car you know is going to be reliable. Buying a used car means you’re saving the costs of depreciation of the vehicle, which can cost thousands of dollars in only a year!
4. Work on Improving Your Credit Score. Having a good credit score is the difference between getting approved for great financing and mediocre financing. If you want to save money on interest, having a great credit score is the best way to do it. Luckily, Car Loans Canada can help you get approved for a car loan with great terms regardless of your credit score, but the higher the better!
Be Confident in the Used Car Your Buying with Car Loans Canada!
If you’re looking for a reliable used car, fill out our short application and get approved for a car loan in minutes! Once you’ve been approved we’ll match you with one of our many certified dealers across Canada!