What margin do dealers make on cars roughly?

[karimi2009]

If a dealer is selling say a S CLASS for £25k what price would he have roughly paid for it ?

are margins very tight

i thought margins are quite good as whenever i want to sell a car they bid me 20% below the trade price i see in autotrader etc

 

[gIzzE]

Depends on the car, sometimes they may have £4-5k in it, sometimes they may already be selling at a loss.

I always in and offer around 10% under, and take in details of other cars from similar dealers, so if an approved used car the best buys from other main dealers, and use that to haggle with.
Just look around to see how it compares, you will know then if they are good value already or at the top end, be firm but be fair, they will want to shift it but they will also need to make something out of it otherwise they wouldn't be there.

 

[bolide]

There's a big difference between margins on new and used cars. Most large dealerships make their money through the service department, not new car sales

Dealerships can't buy what they want to - with every car they buy from the manufacturer that is in high demand they have to take a few low-margin, unpopular cars from the same range. And once the agreement is set up the cars arrive whether the dealer wants them or not, whether they can store them or not, whether they can sell them or not. And the payment is taken by direct debit...

So many dealers have fields full of unsold cars. It's an odd business!

Nick Froome

 

[Noodle-Pulp]

I've got a discounted price on 2 out of 3 of my purchases from MB dealerships.
The trick is to find out when their end of financial quarter is, and 2-3 weeks before hand check their stock, if you see a car you like, check back 5 days before the end of their quarter, if it's still there they'll want to get it off the forecourt.

(the same process can apply for when they plan to buy some more in at auction, again they need the space to show their new purchases).

 

[kth286]

the poster is talking about secondhand cars and the disappointment with offer from dealer for his trade-in.

So, it is not about the margin on the individual car, it is about the total deal and the margin to be made on the total deal.

the dealer will know how much potential profit in the vehicle he is selling, as he knows what he paid for it.

he therefore has to weigh up the realistic price he would get for your car when selling and how much he can afford to give you to make his total deal work, for a total profit.

so there are no hard rules - it is not a science more an art and experience.

 

[jaymanek]

As above, no hard rules... 10% is probably an average margin. The dealer is never going to offer retail price less 10% though as EVERY trade in has to have money spent on it...

You may think your car wants for nothing, but I can promise you, its easy for a good dealer to spend £1000 preparing a car that looks perfect to start with.

 

[Sparky 371]

so on a purchase with no trade in and cash sale (on the day bargaining ) you could expect at least a 10% discount? say £700 on a £7k car??

understand with dealers that certain times are better than others ie end of month/financial period etc but a local garage that would be less important i suspect

 

[StevenN]

I wouldn't be supprised if a rebate structure is applied to the dealerships purchases.
In my industry rebates play a big part enabling you to sell at the perceived cost of an item or at very little margin but still make a profit



Steve