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Does it really matter what he paid for the car? I am not defending the price on this car, which I think is too rich, but what anyone, dealer or not, sells their good for has nothing to do with what they paid for them
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I'm not questioning that a dealer is going to price a car at what he thinks he can sell it -- and the market determines that, not what he paid for it.
My point is that a dealer doesn't necessarily view things the way a private owner does. A private owner wants top dollar for his car, and can continue to drive it while it is for sale, so he is often willing to sit on a car for months unless he is under duress, or gets the price he wants. That is why you routinely see consignment dealers have cars forever -- the owners won't budge because they tend to look at the sale as a one time transaction, not as the velocity of money.
A dealer generally has a fixed budget for inventory, and then has to generate revenue from turnover. He knows how much inventory he can afford, and how much revenue he has to generate to pay his bills. Of course he is not going to sell a car for 20% more than he paid if he can get 40% in the market. But maximizing revenue on his inventory is a function of both margin per car and number of cars sold. A dealer that sells 30 cars per year for top dollar, clearing a 30% margin per sale, will make less money than a dealer that sells 60 per year at 20% margin (if the cars are of equal value.)
So what explains why a dealer would overprice a car like the GR CE Coupe? One possible explanation is that a dealer might over price a desirable car in a hot market car if he has enough margin on the car that he can afford to hold it for a while, and still make money if he fails to find a gullible punter, and has to sell it at a more realistic market price.
Part of it is a probability calculation. He may be unlikely to sell it at $37k, but if he does, he makes a lot of money. But a dealer may only gamble like that if he has already hedged his bet by getting the car cheaper than normal. He can afford the low probability of a high return because he has enough profit margin locked into the car to meet his revenue target if he can't sell it near asking for a long time.
So, if a dealer was in the car for $26k, he would be much more interested in turning it over quickly for $30k because he is not just interested in the margin, but in the opportunity cost of keeping inventory money on the lot in cars that are not selling.
However, if he is in it for $22.5, he might gamble for a while longer to maximize his revenue because he knows he can sell it cheaper without affecting his revenue stream. Selling it in 8 weeks for 60% margin nets him more revenue per day than selling it in three weeks for 20% margin.
However, after 9-10 weeks on the lot, the return on investment starts to level out -- had he sold it for less, sooner, he could have pocketed the profit, acquired a different car with the returned principle, and be looking at another 20% sale.
And again, if the car is generating a lot of website and lot traffic (and they definitely measure hits different ads generate) then they might hold onto a car longer than they would otherwise because it brings traffic to the business.
Sure a dealer will try to sell a car for the most he can get, but maximizing revenue is not the same thing as selling every car for top dollar.