Used car dealer markups/margins

Well I don't know about all dealers, but some guy at VW the other day tried to make me believe he was selling a car he purchased for 8.5k for just under 9k. I can hardly believe they would not mark it up more ( 400 quid profit). Obviously they paid well under 8.5k but the dealer was talking out his ass and trying to believe they were going to be making only a small profit on the car. :rolleyes:
 
rare said:
Thing is, like you say it needs paint doing, it will be valeted, No doubt it will be checked over, have its oil changed etc etc. Then when someone comes in with a part exchange they think is worth way more than what it actually is, the dealer needs some margin to play with.
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He wont of done anything bar put it through a car wash.
If Rotty goes and looks at his car again he will probably find those same stone chips and dents still there.
 
remember they may put it up @ 14 k or whatever, but they wont sell it for that,, they will get haggled down. plus they have an extra car on their forecourt now taking up space/money/maintinence and insurance?
 
When working out a price for your part-ex the dealer doesn't just take into account how much it will cost them to get your car up to scratch. They also take into account how much the car you're buying "owes" them. If they didn't make a great profit on the car you're interested in when they took it in part-ex then you're going to get less for the car you want to trade in.

If they're only gonna make £500 profit selling you car "A" for example, they will usually offer you less for your part ex to keep their margin up.

On the other hand if you were buying car "B" which has either already made them a good profit or is due to when its sold then they'll be willing to give you a bit more for your part ex.

I'll have a word with my old man later if he comes online and ask see what sort of total margin his place works on.

ANdy
 
Mr.T said:
Well I don't know about all dealers, but some guy at VW the other day tried to make me believe he was selling a car he purchased for 8.5k for just under 9k. I can hardly believe they would not mark it up more ( 400 quid profit). Obviously they paid well under 8.5k but the dealer was talking out his ass and trying to believe they were going to be making only a small profit on the car. :rolleyes:
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Its perfectly possible that they're not making a huge profit on the Golf. Chances are that whoever traded the Golf in bought something which made the dealer a tidy profit. The dealer may have offered more than they normally would for the Golf as they had excess profit to play with and wanted to secure the deal.

Andy
 
Yea, I guess that might be the case, however it just seemed too coincidental that the dealer said they brought the car for exactly the same amount that my Mum said we wanted to spend on it (after we told them the figure - probably not a wise move)... Therefore the guy used that as an excuse why he could not sell for that price.
 
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