$500 over invoice a good deal?

[iamweasel]

Originally Posted by justanokie

Dealers make way more than $500 on a $25K car. If that was all they made then they wouldn't be in the business.

No business runs on a 2% margin...especially not one with high overhead like a dealership. Well..maybe grocers do.

You are wrong about this. $500 profit on a $25K car is not out of the ordinary.

Overall, the average car dealer has a 4% return on sales, and the biggest margins come from service labor and parts. Dealers make money in sales by volume, not because they are making 20% profit on every car sale.

[iamweasel]

Originally Posted by orca17

http://invoice-pricing.com/


https://www.carsdirect.com/car-prici...voice-pricing/


https://www.truecar.com/


And this is just from a few seconds of research. There are lots more.

None of those will help you get the best deal. All have directionally accurate data but they do not help you find true dealer cost on a car.

[iamweasel]

Originally Posted by SoCalCpl2

Yes, true.. Check an invoice amount in Los Angeles compared to Omaha, NE and they are waaay different...

AND line of credit does not mean they OWN them.. Far from it.. It means they have a certain amount for inventory and nothing else....

Dealers own the cars. They are assets on their financial statements. If one catches on fire, the dealer is responsible for paying off the car with the floorplan lender.

[iamweasel]

Originally Posted by justanokie

I know for a fact that they are making about 10% on avg, just on the sale.

No know doubt what separates a dealership that makes money from one that doesn't is volume, keeping the right kinds and amounts of cars on hand, dealer add-ons, extended warranty, and dealer servicing. This comes down in a large part to the finance guys ability to sell those extra products.

So many things factor into what a car truly costs a dealer that the only people that know for sure is going to be the dealer. First they don't even look at it that way. They look at the monthly totals for an avg per car margin. How long a car sits on the lot, how many cars sold, customer satisfaction and other factors determine it.

10%?

I'm calling BS on this one. Are you talking Net Profit, Selling Gross or simply the Gross Margin on the car? Does that include F&I income or is that 10% only related to the car?

If you think a dealer makes $2,500 Net Profit per Ford Fusion sold, on the car alone, you're not even close.

I'd like to hear how your came up with that and what your assumptions were.