How much does a car dealer make per vehicle sale on average?
November 14th, 2009 | by admin | Free Car Quote! Free Car Quote! Free Car Quote!I know it’s more on used than new but how much for each? 15% profit on a new car sale and 30% off a used is my guess.
The profit margin on new cars has been getting smaller and smaller over the years. The manufactures do not want to raise the MSRP as much as they do the invoice cost, so the dealer is squeezed more each year.
There are also other costs to consider. The dealer has a physical location that he has to pay for (cost of buildings, utilities, maintenance). He also most likely has to borrow the money to pay for the cars that he has on the lot (this is called a floorplan). The manufacturer is paid for the car as soon as it is delivered to the dealer. Most dealers to not have the money to pay for 50-200 cars that they keep in stock, so they must borrow that money.
On a normal new vehicle (and this depends on market conditions, supply and demand) a dealer will be lucky to have a gross profit of $600. Used cars have a bit more profit, but they are closer to $900.
If there was 15% profit in each new car, and 30% in used cars, I would be a much richer person!
Tags: Borrow Money, Car Dealer, Car Sale, Floorplan, Gross Profit, Guess, Lot, Lucky, Msrp, new car, new cars, Physical Location, Profit Margin, Stock, Supply And Demand
By scobbiedoo on Nov 15, 2009
New car they usually make between 800$ – 1800$ depending on Manf. rebates. Used cars forget about it, aberage 2000$ and up, depending on make and model and year.
References :
By FreedomLover on Nov 15, 2009
On cars the margins are tighter…figure 1500/vehicle…AFTER they pay the Salesman. On Full Size SUV’s the margins can run 6-8000 easily.
Not that there is anything wrong with them making a profit!
References :
By fire4511 on Nov 15, 2009
The profit margin on new cars has been getting smaller and smaller over the years. The manufactures do not want to raise the MSRP as much as they do the invoice cost, so the dealer is squeezed more each year.
There are also other costs to consider. The dealer has a physical location that he has to pay for (cost of buildings, utilities, maintenance). He also most likely has to borrow the money to pay for the cars that he has on the lot (this is called a floorplan). The manufacturer is paid for the car as soon as it is delivered to the dealer. Most dealers to not have the money to pay for 50-200 cars that they keep in stock, so they must borrow that money.
On a normal new vehicle (and this depends on market conditions, supply and demand) a dealer will be lucky to have a gross profit of $600. Used cars have a bit more profit, but they are closer to $900.
If there was 15% profit in each new car, and 30% in used cars, I would be a much richer person!
References :
26 years in the auto business