Used car dealership profits

[testorossa1989]

Hey guys in curious if anyone can give a incredibly generalized number. I'm wondering what the average percentage used car dealers make off cars. I'm selling privately and I'm curious how anyone can possibly make profit in this industry when the average turn around is 22-30days besides just having sheer bulk inventory

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[VENOM1]

The used car market is at an all time high across the nation. They’re making money hand over fist. In terms of averages or how much is hard to say but in Metro Detroit as well as Colorado they’re having a hard time keeping preowned cars on the lot and unless you get some sort of employee discount you don’t really see the savings between new and used anymore. Especially so in larger SUV’s and trucks.

 

[MFE]

The margin on used cars themselves is generally very slim, thanks to online competition. Where they make their money is in financing and add-on service plan bullshit.

 

[08mojo]

The margin on used cars themselves is generally very slim, thanks to online competition. Where they make their money is in financing and add-on service plan bullshit.

This has to be true... I am able to view the wholesale/auction prices. Comparing wholesale to retail does not leave as big of markup as you'd think!

 

[Hunter98SVT]

Very slim to none.

 

[BME]

you don’t really see the savings between new and used anymore. Especially so in larger SUV’s and trucks.

I've found this particularly true in the wrangler market. I've been on the search for a JKU for over a year now and just cannot justify the prices of a used Jeep. You throw $2,000 worth of upgrades on one, drive it 80k miles in 6 years, and they want just as much as a brand new one. Albeit the used may have a hard top, but whoopty do, I can find one for a grand in no time. It's a frustrating hunt and as much as I don't want to tackle another car payment, it's looking like I'll eventually purchase new. JLU 2019 here I come I guess?

 

[testorossa1989]

I'm pulling around a 30% profit margin however I noticed the higher the value item, the less you get. Which are more difficult to rid because of financing related issues ect.


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[testorossa1989]

I mean I know when you get into high volume dealers that get kickbacks from banks they'll make 6k or so but you get into exposure, clients, ect. Most places aren't turning 3-5 used cars a week

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[SM0KE]

This has to be true... I am able to view the wholesale/auction prices. Comparing wholesale to retail does not leave as big of markup as you'd think!

How can you see the wholesale/auction prices? I'm currently in the market for one of the VW Passat TDI's that had the emissions fix done. A bunch of dealerships across the nation bought them from auctions and I'd like to know the range of prices they bought them from these auctions.

 

[testorossa1989]

How can you see the wholesale/auction prices? I'm currently in the market for one of the VW Passat TDI's that had the emissions fix done. A bunch of dealerships across the nation bought them from auctions and I'd like to know the range of prices they bought them from these auctions.

I'm curious as well. I'd like to get my dealer license one day but would like to see what's going on. Many require you to have your dealer ID ready upon signing up with the auction house

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[Grabber]

I think this varies dealer to dealer and by what is being traded in. I've been involved with cars I've traded in and was told what they sold for.

07 Mustang GT - 65K Miles, Vortech, mint condition. Freshly detailed by a professional detailer (myself) fresh brakes, oil change, etc. I got $14,000 for it and they sold it for $18,800 within a week.

2014 Mustang GT - 3,500 miles - Stock, absolutely mint condition, leather recaros, nav, track pack. Traded it in for $27,000, dealer sold it for a tick over $31,000.

Dealers didn't need to put any money into these two cars. They were at the point where they were so cleaned and well maintained they could be sold right away.

I've also seen the opposite -

My 05 GT with 70K or so miles, vortech blower, I received $10,500 for it, sold it same day for $11,500. Not much off a margin.

 

[gasyone]

Depends on dealer too. Some work on less profit per unit but move a ton of units vs. other dealers wanting gross. The best thing a used dealer can do is move inventory and keep it fresh.


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[08mojo]

How can you see the wholesale/auction prices? I'm currently in the market for one of the VW Passat TDI's that had the emissions fix done. A bunch of dealerships across the nation bought them from auctions and I'd like to know the range of prices they bought them from these auctions.

I'm curious as well. I'd like to get my dealer license one day but would like to see what's going on. Many require you to have your dealer ID ready upon signing up with the auction house

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I work for one of the largest private auto auctions in the world. I basically use the information to know whether or not a dealer is serious about selling me a car. It really helps to keep the dealerships honest.