How much profit do you really think a dealer has in cars?

Question

From the $10,000 to the $100,000 car, what do you really think the bottom line is? I sell cars and it seems that everyone thinks there is a ton of profit in a car, what do you think?

Answer 1

no... i'm with ya...

there is not that much as ppl think...

i'd say it would b between $100 - $5000 per car (depending on the original cost from source & custum taxes)...

so... am i right ?!

Answer 2

Used cars are more profitable to the dealership than new vehicles. Depending on the make and demand for the car, an average dealer will make about $500-$800 on a new car and $1000-$1500 on a used vehicle. Out of this the dealer has to pay the sales force, (and manager). They also must pay for utilities and maintenance on the building!

A dealer has to pay for the cars that he has on his lot. Usually he will have to borrow money and pay interest on that money to buy the cars. That cost has to be considered too.

This does not take into account the governmental fees and requirements. Most dealers must post a bond, and pay for a dealership license. In many states each salesperson must also be licensed, and there is a fee for each salesperson.

Most new car dealerships are lucky to have the sales department break even. The parts and service departments are the profit centers. They keep the sales only because they need to sell cars to keep their franchise.

Answer 3

Not as much money as most people think. Manufactures Suggested List Price gives the dealer about 4,000 to work with. Those cars out on the lot are financed and the dealer would like to move entire inventory every 100 days special prices year end sale dealer takes less. Dealer financing Dealer gets a little money. It is the packages where they rake in the money. Like installing trailer hitch truck bed covers wheels and Leather seat covers added. The actual money to keep the dealership open comes from the service department.

Answer 4

The profit in new cars is generally 8-10 per cent and in older/ second hand cars still lower and it is steadily coming down, given the ever-increase in cars the World-over. At one point of time one of my friends was in the refurbishing of old cars and that was about 15 years back when we did not have the so-called 'explosion' of the automotive industry in my country. But you can always think of specialising in one component of the car. For example the a/c or the shockers and people will flock to you over a couple of years' time as you have earned credibility / repute since you are in this field already. GIve it a thought and may be you will become more rich, famous and sough-after. Good luck!

Answer 5

There is at least a 75 percent markup from the factory to the dealer. A car costing 4 grand at the factory sells for 20 grand on the floor with the salesmans commission! Anyone who tells you different is nuts! My uncle owns a dealership!

Answer 6

Well, they must have enough to pay for the place to be open and all the land and pay for all the salesman and managers. They also profit enough to change their prices as much as 10,000 so i would say that the average dealer makes about 4,000 per car. especially if you look at the difference between what they give you for trade in versus what they ask for retail. and exotic cars i am sure are a profit of like 25,000 per car.

Answer 7

for used cars they make about $1500
new about $3 to $4 grand a car that's here in Australia

Answer 8

I think the profitt margin is very good esp. since the MSRP is not what the dealer pays.