Essentially, employee pricing sets a fixed, no-haggle price tag on a vehicle that is below the dealer’s invoice cost – the price the dealer paid for the car. However, in exchange for setting such a low price on the vehicle, Chrysler, Ford and GM have reduced the size of the rebates and incentives available on most models, and have boosted the dealer holdback a couple of percentage points to help the dealership recoup lost profits. The end result is that employee pricing is a terrific marketing strategy, but the actual transaction price of the vehicle isn’t much different from back in May, when smart negotiators could get the same exact deal.
