All - Main Dealer Profit Margin For New Vehicles

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Mon 3 Jul 2017 20:13
All - Main Dealer Profit Margin For New Vehicles - carl233

My neighbour is a retired Ford Dealership owner and he states in his time the margin in general was 7.5% on the retail price. Does anyone have any information on other manufacturers? I was a little suprised that the margin was so low. Obviously money to be made on the finance packages etc but thought the base car margin would have been higher than 7.5%.

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Mon 3 Jul 2017 21:11
All - Main Dealer Profit Margin For New Vehicles - SLO76
It varies depending on the size of chain and volumes they sell. The likes of Arnold Clark can buy job loads in the hundreds if not thousands at a time and obtain bigger margins which they pass on in discounts but independent dealers tend to work on between 5-8%.

Some base models had tiny margins and existed solely to make the range entry point look artificially cheap. The Proton Compact 1.3L at £7777 had a margin of £277 back in 1998 for example while the next step up (1.3LSi) was around £700.

The margins on new cars isn't as good as you'd think. Profit is made from the finance and other add-ons and as this situation worsened our firm gave up new car sales altogether and now runs 7 sites all used.
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Fri 7 Jul 2017 08:48
All - Main Dealer Profit Margin For New Vehicles - daveyK_UK
I have heard of margins as low as <0.5% (Base model Dacia Sandero when they first came to the UK) to as high as 15% (Mini Countryman high spec special edition).

Margins can be difficult things to ascertain in a deal as you also have the financial company revenue if a finance option is selected and the manufacturer target bonus for the month or period that can make a huge difference

I know of a chap who purchased a Fiat last day of the month and the price he got there was no way they made any money from the actual sale but it certainly helped the senior sales manager and the branch hit their manufacturer target and not have to pre register another vehicle
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Fri 7 Jul 2017 10:54
All - Main Dealer Profit Margin For New Vehicles - RobJP

If the margin really was 7.5% on the retail price, then how on earth could dealers afford to have so many pre-reg cars for sale, usually at 20-30% off list price ?

The facts of the matter are slightly different. Whilst the margin might technically only be 7.5% on one car, when dealers hit a certain number of cars sold in a month / quarter, they become eligible for additional discounts on ALL cars sold in that time period. In addition, they get bonuses (and/or commission) for selling finance, GAP insurance, 'paint protection' packs, etc. They also (they hope) get servicing at huge markup ofr the next few years.

The headline figure is most definitely not the whole story.

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Fri 7 Jul 2017 12:01
All - Main Dealer Profit Margin For New Vehicles - Stanb Sevento

If the margin really was 7.5% on the retail price, then how on earth could dealers afford to have so many pre-reg cars for sale, usually at 20-30% off list price ?

The facts of the matter are slightly different. Whilst the margin might technically only be 7.5% on one car, when dealers hit a certain number of cars sold in a month / quarter, they become eligible for additional discounts on ALL cars sold in that time period. In addition, they get bonuses (and/or commission) for selling finance, GAP insurance, 'paint protection' packs, etc. They also (they hope) get servicing at huge markup ofr the next few years.

The headline figure is most definitely not the whole story.

Totally agree, its much more complex than a fixed margin. Go to buy a new car on the last day of their month when they have not met thier target and they will sell their soul to get you to buy a car. The best deal on offer changes week to week and dealer to dealer and even model to model.

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