How much profit does a car dealership make on the sale of one car?

Answer 1

At my dealership I reguire my managers to have at least a $2000 avg. per deal. I start paying bonuses at a $2500 avg per deal. and I fire them at a $1500 avg per deal. My current store avg is $3165 per car.

Answer 2

I see dealer "jackets" all the time. The actual folder that contains the bill of a sale from the auction, all the bills on the car from the mechanic, touch up company, dent removal company, pin striper, detailer, body shop, etc etc.

Average profit after all said and done is around $1300. But that is not taking into consideration the rent on the building, the electric, cable, gas, water, sewer, trash bills, salary of the employees, taxes on the business, etc.

I have been in the car business, not as sales but as an outside vendor, for the past 10 years. The myth that dealers are all thieves, make a killing on cars, rip off everyone that walks through their doors....its just that....all myth.

The car business is no different than any other business except they do more flare in advertising cause if you think about it....they are just selling a car...big whoop...something that moves you around on wheels. So they have to "dress it up".

A basic retail store, say a pet store, makes more money per item in mark up than a dealership does. Ex GF use to work as a mgr at a pet store and for what they paid for say a cat toy, it was marked up 1500%....yes 1500%. So who really is the thief? The car dealers or the retail stores?

Like any business there are bad apples and there are some in cars. In my 10 yrs and over 100 dealerships....I've encountered 1 thief....ONE. Pretty low odds if you ask me.

Plus many customers walk into a dealership with this image of being ripped off, being taken to the cleaners, etc. So they walk in with an attitude, chip on their shoulder, etc. How else do they expect the salesmen to act besides rude?

If I walked into your office and started to demand things and called you a liar and that you cheat....how would you treat me standing there in your office? Pretty nasty I must say.

Answer 3

The dealers have a margin of around 10-20% on the car.
So hard bargaining can often lead to huge dealer discounts.

The dealers have a bigger cut on the car accessories. Stuff like the stereo, teflon coating, seat covers etc are available at a way cheape r price outside the showroom.

HTH.

Answer 4

Not much, depending on a number of factors. Most dealers are willing to take a low margin because they have the financing which makes them the real money (incentives from lending institutions). Foreign car dealers also tend to take a lower margin, although that is changing. Also, factory to dealer incentives are big.

Used car dealer tend to make more, thats why there's more of them and they are independent.

Answer 5

It depends on the car, the manufaturer and the model.
The more expensive the car, the more the profit.

For the average car it's somewhere around 1,000 to 1,500.

More money to be made on dealer installed options, extended warrantees, and finacing.

Answer 6

around 2 grand, if you can't talk them down.