Quote:
Originally Posted by COLB
64% is not a routine dealer markup. I think 20% is a more normal goal.
The big advantage dealers have is that can buy & sell without paying taxes, title, or registration fees. And their professional association (NADA) guards those perks jealously.
That is 4-8% depending on locality.
Then they also have lower marginal costs for detailing, paint facilities, mechanics, etc.
A dealer makes money on velocity -- not getting absolute top dollar for a car. Better to sell two cars for $3000 profit each per week than to sit on one for two weeks to earn $5000. However, on this car I think the dealer got such a low price they can afford to swing for the fences.
Plus sometimes dealers will hold onto cars like this that generate traffic for their website and their lot -- it is free advertising.
|
Matt and trader220 covered it well.
My only extra would be to say that dealers do not mark up by percent but to market price. For instance if a dealer brought a car for $10,000 and it will retail for $30,000 the will list it for $30,000. regardless of purchase price they will list for retail market price. Now it they brought for $28,000 and retail is $30,000 guess what, list will be $30,000.
What the dealer paid for a car has no bearing on listing/sale price, just the dealers profit margin. The "end users" or retail market, dictates listing price for the dealer.