The markup at dealerships on used cars?

[FoxTrot]

I talked to a couple and one said that

1) they dont price their used cars that come in, something like some agency does and goes by the blackbook value. Thought it sounded like bogus to me.

2) Because they dont price their cars and theyre priced at blackbook value, they have very little to no mark up on them and most are already marked at their lowest price they can sell at. Ya right.

This has to be the most adsurd thing ive ever heard. Ive been told dealers mark up used cars 3-4x what they pay for them. A car they pay the customer 5 for, they will sell for 15+

[Disoblige]

I read this in another thread:


Originally posted by RickDaTuner
a delear can mark up anything from 500 to 20k, back in the day when i used to move cars for Nissan we had a 2001 prelude come in from an auction they were selling it for 27k i think, mind you this was back in 2002, when i talked to the operations manager he told my they picked her up for the bargain price of 3k :eek:

so my advice would be milk them for all you can:thumbsup:

That's probably the most I ever saw a non high end car marked up lol..

[2002civic]

Somewhere in the middle is the truth. And each car is different depending how the trade went.

[corsvette]

The markup is usually $1,000- $2,000 on a cheaper car >$15,000.
Higher end stuff is $2,000-$5,000 markup. Dealers are not buying cars for $5,000 and selling them for $15,000. Maybe some trade ins they can make a decent number, but not 2-3x what they paid for it.

[T-Dubbs]

Originally posted by corsvette
The markup is usually $1,000- $2,000 on a cheaper car >$15,000.
Higher end stuff is $2,000-$5,000 markup. Dealers are not buying cars for $5,000 and selling them for $15,000, maybe some trade ins they can make a decent number, but not 2-3x what they paid for it.

:thumbsup:

[Scat E46]

And now factor in 500 dollars commission to the sales person.

To have that car on the lot, lights, power, rent, someone cleaning it, and they sold it for 2k (less 500 commision), they made 1500.

It's not free to show you a car, let you drive it with their gas, the sales man wasting time on you etc.

People just don't understand how business works.

It's not free for ANY retail store to show you anything - think of it as they are doing you a favour!

[PeterGTiR]

I sold my car to a dealership in Edmonton and they told me that they typically give you a value as quoted on the Canadian Black Book website. The condition of the car would probably be up to interpretation though:

http://www.canadianblackbook.com/

From there, they probably resell it at what they think the market will pay.

For my car:

The dealership gave me a trade in value of $8,438 (the trade in value on Canadian Black Book was between $4,000-$8,000) whereas I thought I could have sold it privately for $9,500 - $10,000. I had it listed on Kijiji for $9,500 but only got two calls about it over a period of a month. I probably could have gotten what I asked for it but wasn't willing to spend the time to do it.

I checked the dealership's website and they have it listed for $12,500 but its been almost three months now.

So if they get what they're asking, it's about a 33% profit margin which sounds about right for any business.

[Canucks3322]

It's my understanding that new car dealers (including their used car division) make their $$ from the service and parts divisions....that leaves independent lots, they make their profits off straight up ripping people off by selling them shit cars in shit condition which are new car dealer rejects from trade ins and also from auctions... at market or above prices, they are basically car curbers who have an actual store front.