What sort of margin does a dealer put on a used car?

[Yoda]

Hi,
I am actually looking at a secnd hand 4wd at a dealer.
Geerally what sort of margin would a dealer have on a used car on the lot?
10-15 Points?

IE car is listed at 52K, Redbook say $46-49K private. This car is very tidy and very low klms.

Cheers

[Hulkssv]

all depends on the sort of car mate, if its a tidy looking car they wanted, they could of paid a bit for it. However, if your talking cars around 50k, dealer would of paid somewhere around 40. then there will be sayyy 2k hold back on there. + rego costs etc and stuff for roady, there will be about 5k margin in it. on average, all depends on their buyer and stuff though.

Let me know what sort of car your looking at, and i can give you a better idea.

[whitels1ss]

there will be sayyy 2k hold back on there.
Hold back on a used car? :confused::stupid:

[Wonky]

How long is a piece of string? :confused: There are many factors involved..........

[kangavxss]

On most of the second hand vehicles i have purchased from dealers I have rung the previous owners for details on the car and how much trade in $ they got for their car from the dealer ,then comprared the dealers asking price on the used car and usually on average its around 5 grand profit for the dealer.

[VNV8]

I would love the know the sort of profit a dealer would make on a new car (at the sticker price)... I hear it isnt much but still curious.

[GPT]

I would love the know the sort of profit a dealer would make on a new car (at the sticker price)... I hear it isnt much but still curious.

Around 8-10% of list price for most models.

[blackbettyhsv]

a mate just traded his VE SS on a VE clubby, $31 trade in they sold it 2 days later for $36,
5 grand seems the norm

[LS1HK]

Of course it depends on the location, dealer, car and age (days in stock) but at my yard in regional nsw, our average retained gross per unit on used cars is $2750, and has been around this figure for a few years now, down from approx $4k pre internet! Higher margins are required often by city dealers to cover larger overheads, so if you can buy a similar car from a regional dealer sometimes they own more of the business (ie the building/stock/etc) and may be able to sell the car a little cheaper. Food for thought...

[Hulkssv]

Hold back on a used car? :confused::stupid:

yes? there is hold back on every car sold at a dealership.

[Hulkssv]

I would love the know the sort of profit a dealer would make on a new car (at the sticker price)... I hear it isnt much but still curious.

at mazda it varies. on a mazda 3 at full retail there is about 2k + holdback which is like 1200 i think. so 3200 total profit.

mazda 2 there is nothing, CX-9 grand touring, top of the range they are like 69121 retail sticker price, there is room to move on them enough to sell them at 60 flat, occasionally lower. so there is like 11k in that.

RX-8's and mx-5's there isnt much because they are a bitch to get rid of, hence dealers only usually having one, and thats only because mazda australia forces them too. the only way salesman make money on them is the bonuses from the car being in stock too long.

[VNV8]

very interesting, thanks very much! I figured it wouldnt be alot judging by the pressure on aftermarket sales (tint etc.) to get some more profit.

[Hulkssv]

very interesting, thanks very much! I figured it wouldnt be alot judging by the pressure on aftermarket sales (tint etc.) to get some more profit.

Welcome, warranties are the big thing on the usedies. They are useless things and to be honest I treat them as meaning nothing. But it's $100 commission to the salesman straight away if it gets sold.

Also, never get aftermarket at a dealer, ridiculous mark up on it. Tint is 450, costs 150. So 300% mark up, paint protection is $1495, costs 495. 300% again.. Rip off

[Spoolin]

There are many factors. You may think 5K is a huge profit on a 50K sale, but the overheads are massive and one of the other factors is the Statuatory Warranty a dealer has to give you.

[whitels1ss]

yes? there is hold back on every car sold at a dealership.

"Hold back" is a rebate (or factory bonus) only on new cars, it is given back to the dealer every few months by the manufacturer. It is like a bonus from the manufacturer to the dealer for selling their products. (Sometimes they have to reach their set sales targets to even get it.)
A dealer does not get a rebate on a used car, once a car has been sold new the manufacturer would not care if it is sold again, wrecked or anything.
Why would the manufacturer or anyone pay a used car dealer a rebate or bonus for selling a used car? :doh::stupid:

[QIKMIK]

Many moons ago, a mate and I were looking for a new ride on Brissy's Moorooka mile and saw a VS HSV-enhanced SS on the lot in Brisbane for $28k. Not a bad car but it needed a little work. Little bit of paint, the old 5L was a little noisy and the exhaust had copped a ding or two during its life.

We talked the dealer down to $24k and they included an engine freshen up (top end), full respray and a new exhaust in that price. Didn't take it but found out later that the car had been traded in at our local Holden dealer for $19k so even after the work, they were still making a few bucks.

What's the margin....whatever they think the right person will pay.

Mick

[whitels1ss]

Many moons ago, a mate and I were looking for a new ride on Brissy's Moorooka mile and saw a VS HSV-enhanced SS on the lot in Brisbane for $28k. Not a bad car but it needed a little work. Little bit of paint, the old 5L was a little noisy and the exhaust had copped a ding or two during its life.

We talked the dealer down to $24k and they included an engine freshen up (top end), full respray and a new exhaust in that price. Didn't take it but found out later that the car had been traded in at our local Holden dealer for $19k so even after the work, they were still making a few bucks.



Mick


Mick, the percentage profit on the outlay is rather small in actual fact.
Hey compare this with the can of soft drink which we buy from a service station for $2.40 which we all know we can buy from a supermarket by the carton for around 60c.
Okay, well someone else might have paid less than $24,000 for it in the end?

Your example.....
you reckon the dealer paid $19,000 for the car,
plus they spent $2,000 for the full respray?
plus they spent $1,000 on the engine freshen up?
plus they spent $500 on the new exhaust
plus they spent $200 on a detail
plus a sales commission of say $100 (that is the minimum commission in most dealerships these days)
plus they would have spent at least another $300 on a service & safety check with usual stuff like brake pads, machining rotors etc?
(That is up to $3,900 spent plus their original outlay of $19,000 = $22,900)
plus they have to allow for a warranty...
plus they have to pay GST out of the profit...
It does not leave a very high percentage profit from their outlay does it?
Then they have the wages, rent and all the other overheads