How much profit does a used car dealership makes of a used car. eg. 2002 mazda protege 100 km?

Question

Does anyone know about the breakdown

Answer 1

Not as much as people think and believe. Lets go through the process.

Dealer goes to auction and buys a used car, lets say yours for sake of arguement and lets say he paid $10,000 for it.

Next he has to pay auction fee's of around $550 on the car and then transportation charges to get the car to his dealership, another $250. So now the dealership has $10,800 invested in the car.

Now the car is at the dealership and it goes through a detail/clean up service....thats easy $75, then the touch up paint guy goes over it, another $75, then the dent guy, $150, then if needed a windshield guy, interior repair guy, smell guy, pinstripe guy but lets just leave them off since its a 2002. So now the dealership has $11,100 invested.

Next it goes to the mechanic to be checked over, since its a 2002 nothing is really done but rotating the tires, changing oil, checking other fluids, filters, making sure all the bells and whistles work. Since its a 2002 we'll just put this at $100. So now they have $11,200 invested in the car.

It is put on the dealers lot for sale now, stickers, price stickers, floor mat protectors, license plate frame and insert, plus basic cost of electric, gas, water, rent on the building plus salary of the employees, secretary, etc. With this most dealers have a set figure they add to each car as a base amount that covers all that I have listed. Lets say its $1000, most are around this point. So now that car has cost them $12,200.

Now they'll list it for say $13,995 to try to make $1800 profit on the car. But they only get that if you walk in with all cash and do no haggling of the price. But most do loans or special finance so the dealer has to pay fee's to the banks to run credit reports, carfax reports and basic loan fee's. All this can easily add up to another $800. So now they have a clean $1000 profit in the car unless you haggled some, so lets give you $500 off.

So after all that work, almost a week of work on a car from start to finish before its sold and talking to at least 20 customers for that one car to try to sell it to them....they made out with $500 profit.

Not much is it. Now some deals they might make more, some deals they make less, some deals they take a loss on just to get rid of the car to bring in a better selling car. The days of dealerships making thousands and taking the customers to the cleaners left almost 15 yrs ago. The general public just never realized it.

I have worked as an outside service for dealerships for 10 yrs.....I laugh at the attitudes and thoughts people walk in with. They are so misinformed its almost hillarious.

Answer 2

km = not american, but I'll do my best.

Any used car lot gains their inventory two ways. Through customer trade ins, or by purchasing their cars in from an dealer auto auction. This purchase price, is then their "base".

All base to a dealership is then added appropriate expenses for that car, thus making base + expense = cost.

The cost then has a "pack" added to it cost + pack = customer invoice. Pack consists of paying the hourly lot techs, or receptionship, lighting bills, marketing etc etc etc.

Customer invoice is then given an appropraite mark up, to make Customer retail price, or the price that you are shown.


Then the question is, how to get the "best" deal. There is NO "used" car dealership in the world that will sell their car for the price they paid for it. Base = NOT Realistic Cost = Not Realistic Customer Invoice = Target.

After doing your N.A.D.A. homework, (finding loan value - retail) realise that most dealers by their cars for 1k or so under loan value. (If they have a good inventory manager) And then they sell for retail. This is typically $4,000. Obviously their are many different variables when looking at a specific car. But for a rule of thumb, 4k off of their asking price is about the best you can do at a used car lot.


So for your question, there is no way anyone can even come close to predict the profit a used car dealership would make on a 2002 protege with 100 km. But do your research, and with what i've just explained, you should at least make a good purchase on that car.

Answer 3

and you in all hazard have automobile coverage meaning which you would be coated so which you're able to in all hazard flow on from this dealership because of the fact he's hiding something from you. i understand that sellers have become extra protecting approximately try drives because of the fact of cutting-edge violence and thefts yet once you're generating all your information as you suggested than you do need to have a try rigidity.